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A federal court in Missouri confirmed an arbitration award where a credit card holder argued that she never received the credit card contract despite her own testimony that she received the credit card and an agreement containing terms and conditions of the credit card contract.
In Reeves v. Chase Bank USA, NA, No. 4:07CV1101 HEA, 2008 WL 2783231 (E.D. Mo. July 15, 2008), Reeves opened a credit card account with Chase and began using her new Chase credit card. Under the credit card contract, use of the credit card served as acceptance of the contract's terms, and the contract contained an arbitration agreement.
Reeves stopped paying her credit card bill, so Chase initiated arbitration with the National Arbitration Forum. The arbitrator found that the parties had entered into a written agreement to arbitrate their dispute, that no party had asserted that the arbitration agreement was invalid or unenforceable, and that the agreement was valid and governed all the issues in dispute. An award was issued in favor of Chase.
Chase moved to confirm the award, and Reeves moved to vacate the award. Reeves argued that no valid agreement to arbitrate existed because she never received the credit card contract. Her only evidence was her own declaration that she had not received it, in spite of her testimony that she received the credit card and an agreement containing terms and conditions of the credit card contract.
The Court rejected Reeves' argument and held that such a "vague and conclusory declaration fails to dispute the authenticity" of the credit card contract. The Court further held that by using Chase's credit card, Reeves demonstrated an intent to be bound by the terms of the contract, and thus agreed to the arbitration provisions within it.
Reeves also argued that the arbitration agreement was unconscionable because it was a contract of adhesion. The Court rejected this argument as well, holding that Reeves got what she bargained for, i.e., use of the credit card. In addition, the Court held that the arbitration agreement was not one-sided because it afforded both parties the opportunity to use arbitration to resolve a dispute, and both parties were given the opportunity to be present at the arbitration and present evidence and arguments. Consequently, the Court held that the arbitration agreement was not unconscionable.
Reeves also argued that Chase should have first obtained judicial determination of arbitrability. The Court responded that "[s]uch argument is patently without merit. Section 4 [of the Federal Arbitration Act] clearly states that an aggrieved party may petition the Court for an arbitrability review; there is nothing mandatory in the terms of Section 4 and a judicial determination is therefore not required by any party prior to arbitration." As a result, the Court granted Chase's motion to confirm the arbitration award.
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