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A federal court in Delaware held that the Rooker-Feldman doctrine precluded federal litigation of a credit card holder's overcharge claims where a state court had already confirmed an arbitration award pertaining to the underlying account.
In Kelly v. MBNA America Bank, No. Civ.A.06.228 JJF, 2007 WL 1830892 (D. Del. June 25, 2007), Kelly held several MBNA credit cards. MBNA filed arbitration claims to collect the unpaid balance on six of the cards. After three of the resulting arbitration awards were confirmed by a Michigan court, Kelly sued MBNA for alleged overcharges.
MBNA moved for dismissal pursuant to the Rooker-Feldman doctrine, which precludes federal courts from reviewing disputes adjudicated in state courts. The Court held that the Rooker-Feldman doctrine precluded any overcharge claims where the state court confirmed an arbitration award pertaining to that account. As such, the Rooker-Feldman doctrine precluded any overcharge claim on three of the accounts.
Regarding the arbitration award not yet confirmed, MBNA argued that the doctrine of res judicata precluded any claim on that account. The Court rejected this argument on procedural grounds. Specifically, as the Court noted, res judicata is an affirmative defense that warrants dismissal only if the applicability of the defense is clear from the face of the complaint. The defense would be available to MBNA on a motion for summary judgment, however.
Finally, MBNA argued that Kelly's claims on the remaining accounts were subject to a valid arbitration agreement. However, in moving for dismissal, MBNA did not specifically address the remaining account numbers, which left the Court unable to conclude whether those accounts were subject to a valid arbitration agreement. Accordingly, the Court denied without prejudice MBNA's motion for dismissal in favor of binding arbitration.
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