FILE.D I FILE COpy I NntL%t~tij~~, 1m fEB 25 Mol \I : 30

ERK. flPPi:.LL~iE COURTS IN THE SUPREME COURT OF THE STATE OpLALASKA

B'(;-:O~EP~u~r~<cL:rf'RRKK-JANBT HUDSON, ON BEHALF OP HBRSELP AND )

ALL O1lIERS, ) Petitioners, ) Supreme cowtNo.

v. ) S-14740 )

~(SO~DAKOTA)NA,ALAsKALAw ) Trial Cowt Case No. OPPICES, INc. AND CLAYTON W ALKHR. ) 3AN-ll-09196CI

Resoondents. )

Consolidated with CYNTHIA STEWART, ON BEHALF OP HERSELF AND )

ALL OTHERS WHO ARE SIMILARLY SITUATED, ) Petitioners, ) Supreme Cowt No.

v. ) S-14826 )

MIDLAND FuNDING LLC, ALAsKALAW OPPICES, ) Trial Cowt Case No. INc. AND CLAYTON W ALKHR. ) 3AN-1l-120S4CI

ResDOndent~. )

ON PETI110NPORREv!EW FROM8uPERIOR CoURT, nmm JUOICIALDIsTR!CT AT ANcHORAGE,

'THE HONORABLE FRANK A. PFIFFNER, PRESIDING

PETITIONERS' EXCERPT OF RECORD

Filed in the Supreme Court of the State of A1~

VOLUMEIOF2

MArnmw W JI. WEssLER Admitted pro hac vice

PuBLIc JUSTICE, P.C. 1825 K Street NW, Suite 200 Washington, DC 20006 (202) 797-8600

Attorneys for Petitioners

this ~ day o(J:~k ...... r., 2013. MarilynMay~ -

By: ~ Deputy Clerk

TABLE OF CONTENTS

VOLUME lOF2

Excerpts of Record in Hudson v. Citibank (South Dakota) NA, et ala No. S-14740

First Amended Class Action Complaint (Aug. 2, 2011) ............. .......... ...... ..................... 1

Motion of Defendant Citibank, N.A., Successor in Interest to Citibank (South Dakota), N.A., to Compel Arbitration and to Stay Action (Aug. 21, 2011) ............. ........................... .... ............... ........... ..... .............................. 10

Affidavit of Cathleen A. Walters (filecj in support of Defendant Citibank's motion to compel arbitration) (executed Aug. 15,2011; filed Aug: 24, 2011) .. 12

Walters Affidavit, Exh. 2, Notice of Change in Terms (Oct. 2001) ................ ... 18

Walters Affidavit, Exh. 9, Card Agreement (Mar. 2005) .... ............................ ... 21

Walters Affidavit, Exh. 10, Credit Card Statements (July 21,2005; Aug. 22, 2(05) ............................................................ .................................................. 26

Alaska Law Offices and Walker's Joinder in Motion to Compel Arbitration (Sept. 6, 2011) .. ....... ........................... .. .. ..... ............................ ..... ........ .. 31

Memorandum in Opposition to Defendants ' Motions to Compel Arbitration and in Support of Plaintiff's Cross-Motion for Partial Summary Judgment (Sept. 30, 2011) ................... .. ......... ...... ................. .... ................ ..... .... ... ... 39

Certificate of James J. Davis, Jr. in Opposition to Defendants' Motions to Compel Arbitration and in Support of Plaintiffs' Cross-Motion for Partial Summary Judgment (Sept. 30,2011) ...... .. .......... ................... ................. . 66

Davis Certificate, Exh. 2, Pleadings in Citibank (South Dakota) NA v. Hudson, No. 3KN-10-1139CI (Nov. 4, 2010 - May 25, 2011) ....... .............. 68

Davis Certificate, Exh. 2, Docket in Citibank (South Dakota) NA v. Hudson, No. 3KN-10-1139CI (Sept. 29, 2011) .......................................... .. ............... 81

Davis Certificate, Exh. 4, Final Default Judgment in Citibank (South Dakota)NA v. Hudson , No. 3KN-lO-I139CI (Feb. 11 , 2011) .. .... .. ............... 83

Davis Certificate, Exh. 5, Walker Affidavit of Actual Attorney Fees in Citibank (South Dakota) NA v. Hudson, No. 3KN-10-1139CI (Jan. 28, 2011) ........... 84

Davis Certificate, Exh. 6, Records ofCittbank Litigation in Alaska (various) .. 85

Consolidated Reply in Support of Motion to Compel Arbitration and to Stay Action and Opposition to Plaintiff's Cross-Motion for Partial S1!mmary Judgment (Oct. 19, 2011) ... .. ... ................. ... .. ........... ...... .. .......... ... ..... ... . 120

Consolidated Reply Memorandum in Support of Plaintiff's Cross-Motion for Partial Summary Judgment (Nov. 21, 2011) ...... ......... .. ............ 144

Appendices to Plaintiff's Response to this Court' s March 1, 2012 Order (Mar. 19, 2012):

Excerpts of App. A, Alaska State Legislature, House Judiciary Committee Meeting (Excerpt), February 9,1998 (RE HB 203) ............. .......... 173

Excerpts of App. B, Alaska State Legislature, House Judiciary Committee Meeting (Excerpt), April 1, 1998 (RE HB 203) .. .. ..................... .... 197

VOLUME20F2

Excerpts of Record in Hudson v. Citibank (South Dakota.) NA. etoL, No. 8-14740 (cont.)

Order (granting motion to compel arbitration) (Apr. 30,2012) ..... .......... .................. .. 205

Excerpts of Record in Stewart v. Midbznd Funding. LLC. et oL, No. S-14826

First Amended Class Action Complaint (Nov. 28, 2011) ...... .. .... .. .......... ..... ..... ... .. ..... 269

Midland Funding, LLC's Answer to First Amended Complaint (Jan. 11,2012) ........ 277

Alaska Law Offices, Inc. and Clayton Walker's Answer to First Amended Complaint (Jan. 11, 2012) ................ ............ ....... ......... ........ ................... ................. .. .................... 289

Midland Funding, LLC's Motion to Compel Arbitration and Stay Action (Apr. 9, 2012) .............. ..... .. .... ....... .. .... ................................. .. ... ..... .................. ... .. ....... 296

Notice of Filing of Declaration of Regularly Conducted Business Activity (filed in support of Midland Funding, LLC's motion to compel arbitration) (Apr. 9, 20 12) .. ................ .... .................. .... ... ...................... .......................... .. ... 298

Alaska Law Offices' and Walker's Joinder in Motion to Compel Arbitration (Apr. 29, 2012) ..... .... .......... .... ............. ..................... ..... ...................... ........... ... ... .. . 329

ii

Plaintiff's Memorandum in Opposition to Defendants' Motion to Compel Arbitration and in Support of Plaintiff's Cross-Motion for Partial Summary Judgment (May 30, 2012) ... ........... ... ............ ....... ............. ......... ... ...... ... 341

Certificate of Ryan Fortson in Opposition to Defendants' Motions to Compel Arbitration and in Support of Plaintiffs' Cross Motion for Partial Summary Judgment (May 30, 2012) .. .... .. ............... ............. ........... ...... 373

Fortson Certificate, Exh. 2, Final Default Judgment in Midland Funding ILev. Stewart, No. 3AN-IO-12555 (Feb. 10,2011) ........................ .. .. .... .. 376

Fortson Certificate, Exh. 3, Docket in Midland Funding ILC v. Stewart, No. 3AN-l 0-12555 .... ............. ......... ....... ..... ... ...... ................................... ........... 377

Fortson Certificate, Exh. 4, Walker Affidavit of Actual Attorney Fees in Midland Funding ILC v. Stewart, No. 3AN-l 0-12555 ................... ............ 379

Consolidated Reply in Support of Motion to Compel Arbitration and to Stay Action; and Opposition to Plaintiff's Cross-Motion for Partial Summary Judgment (June 21, 2012) .................... .... ......... .......... ............. ..... .......................... .......... ...... 380

Reply Re: Plaintiff's Cross-Motion for Partial Summary Judgment (July 12, 2012) .. 405

Order Granting Defendant's Motion to Compel Arbitration and Stay Action (July 25, 2012) ................... ..... ................................ ........... ............. ....... ...... ...... ..... 417

Order Denying Plaintiff's Cross-Motion for Partial Summary Judgment (July 25, 2012) ................................ .......................................... ........................ ...... 419

111

•

JANET HUDSON, on behalf of herself and all others similarly situated,

Plaintiffs,

v.

CITIBANK (South Dakota) NA, ALASKA LAW OFFICES, INC. and CLAYTON WALKER,

• ) ) ) ) ) ) ) ) ) ) ) )

Case No. 3AN-1l-9196C1 Defendants.

----------------------) FIRST AMENDED CLASS ACI'lON COMPLAINT

COMES NOW Janet Hudson, by and through counsel, the Northern Justice

Project, LLC, and as her First Amended Complaint against the defendants alleges

and requests relief as follows:

INTRODUCI'lON

1. Defendants have a pattern and practice of seeking attorney's fees against

defaulted consumers in debt collection cases that grossly exceed the amount allowed

under the. Alaska Rules of Civil Procedure. Defendants' practice violates Alaska' s

Unfair Trade Practices and Consumer Protection Act ("VTPA''), AS 45.50.471 et seq.

'Ibis class action is brought to put an end to defendants' illegal practice.

FlRST AMENDED CLASS ACTION COMPLAINT Janet Hudson, eJ aL v. Citibanlc (South Dakota}NA., et oJ .• Cas. No. 3AN-1l-9196 CI Page 1 of8

000328

• • JURISDICI'ION AND VENUE

2. This Court has jurisdiction over this action pursuant to AS 22.10.020.

3. Venue is proper under AS 22.10.030 and Civil Rule 3(c).

PARTIES

4. Plaintiff Janet Hudson is a resident of Kenai.

5. Defendant Citibank (South Dakota) NA ("Citi'') issues credit cards to

numerous Alaskan consumers.

6. Alaska Law Offices, Inc. ("ALO") is an Anchorage law firm which

regularly engages in the collection of debts. ALO is a "debt collector" under the UfP A

and the .federal Fair Debt Cdllection Practices Act ("FDCPA''). ALO regularly

represents Citi in debt collection cases filed in Alaska's courts.

7. Clayton Walker is a lawyer in Anchorage, the owner of ALO, and a

"debt collector" under the lITPA and the FDCPA. Walker regularly engages in the

collection of debts.

FACTS AND GENERAL ALLEGATIONS

8. Defendants sued plaintiff for an alleged credit card debt in February

2010 in Kenai District Court, Case No. 3KN-10-1139 CI. Defendants averred in

their complaint that plaintiff owed Citi $24,170.20.

9. Plaintiff did not respond to the complaint and, on February 3, 2011,

defendants moved to default plaintiff. In moving to default plaintiff, defendants filed

an Affidavit of Actual Attorney Fees (hereafter "Affidavif'). In their Affidavit,

FIRST AMENDED CLASS ACl10N COMPLAINT Jand lhIdsoll, .1 aL v. Cit/bank (Solllh Dalrota) NA., .1 aL, Case No. 3AN-1l-9196 CI Poge2of8

2 000329

"II) (I"

. " , • • defendants averred that their "actual attorney fees charged in this case are $4,834.05."

Defendants further averred that "$4,834.05 exceed the Alaska Civil Rule 82

undisputed attorney's fees default rate of 10%. Accordingly, the attorney's fees under

Alaska Rule 82 should be $2417.02."

10. Plaintiff is informed and believes and thereupon alleges that fr.~

$4,834.05 in "actual attorney fees" averred by the defendants in the Affidavit were

based upon a 20% contingency fee agreement between ALOlWalker and Citi.

11. Based on defendants' Affidavit, the cotnt awarded Citi $2417.02 in

attorney's fees against the plaintiff.

12. Under Alaska Civil Rule 82(b)(4), when judgment is entered by default,

a plaintiff may recover "its reasoI!llble actual fees which were necessarily incurred"

or 10% of the judgment, whichever is less.

13. It is well settled under Alaska law that a contingency fee agreement is

not a proper measure of the "reasonable actual fees" incurred by a party in a lawsuit.

Rather, "reasonable actual fees" must be determined according to the number of hours

actually worked on the case and the attorney' s reasonable hourly rate.

14. Defendants' Affidavit injured plaintiff. By wrongfully basing its "actual

attorney fees" of $4,834.05 on a contingency fee agreement, as opposed to the number

of hours typically spent by debt collecting lawyers in prosecuting a consumer default

(i.e., less than 2 hours), defendants obtained a radically inflated judgment against

FIRST AMENDED CLASS ACTION COMPLAINT Janel Hudson, el aL v. Cilibank (SUIIlhDakoIa) NA., eI 01., Case No. 3AN-11-9196 Cl Page 3 of8

3 00033 0

() . \ .... " ') • •

plaintiff, That is, defendants obtained a fee award of $2417.02 instead of

approximately $250.00.

15. Plaintiff is informed and believes that defendants have filed hundreds of

similar affidavits in Alaska's courts over the past several years, injuring hundreds of

other Alaskans in the same way that they injured plaintiff.

16. By seeking and collecting attorney's fees in excess of the amount

permitted by law, defendants violated the UTP A.

CLASS AcrION ALLEGATIONS

17. Plaintiff brings this complaint on her own behalf and on behalf of all

persons similarly situated, pursuant to Rule 23 of the Alaska Rules of Civil Procedure.

18. The class is defined as: All individuals against whom defendants

obtained a default judgment including attomey's fees since July IS, 2009.

19. All requirements of Rule 23(a) are met in this case. Specifically,

a. The class is so numerous that joinder of all members is

impracticable. The number of individuals in the above-defined class, although

presently unknown, is believed to be in the hundreds.

b. 'There are questions of law or fact common to the class: Whether

defendants violate the Alaska Rules of Civil Procedure and/or the UTP A by

obtaining attorney fees against defaulted consumers in the aforesaid fashion.

c. The claims of the representative party are typical of those of the

class.

FIRST AMENDED CLASS ACTION COMPLAINT JIJIJd Hudson, e/ al. v. Citibank (SOlIIhDakota) NA. e/ aL, Case No. 3AN-11-9196 CI Page4of8

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..,1')

r~ . ...... • • d. The representative party will fairly and adequately represent the

class. Neither the representative plaintiff nor her counsel have interests which

might cause them not to vigorously pursue this action.

20. Certification of a class under Alaska Civil Rule 23(b )(3) is appropriate

because:

a. The questions oflaw or fact common to the members of the class

predominate over any questions affecting only individual class members; and

b. A class action is superior to other available methods for the fair

and efficient adjudication of this controversy since: (1) the class is readily

definable and should be easily identified by examination of defendants' records;

(2) prosecution of this case as a class action will eliminate the possibility of

repetitious litigation and will provide redress for claims which othenyise would

be too small to support the expense of individual litigation against defendants;

(3) undersigned counsel are aware of no other pending class actions regarding

the subject matter in this case; (4) it is desirable to concentrate the litigation of

these claims in Anchorage because, upon information and belief, the majority

of class members are in Anchorage; and (5) there are no problems which will

make this case difficult to manage as a class action.

COUNT I: VIOLATION OF UTPCP A

21. Plaintiff repeats and inCOIpOrates by reference the allegations in each of

the preceding paragraphs.

FIRST AMENDED CLASS ACTION COMPLAlNT JanotHwison, etal. v. Citlbank(SouthDakolo)NA., e/aL, CasoNo. 3AN-Il-9196 Cl P~50f8

5 000332

• • 22. By seeking and collecting attomey's fees in excess of the amount

permitted by law, defendants have violated the UTP A.

23. Plaintiff and the putative class members have been injured by

defendants' unfair actions.

24. Plaintiff and the putative class members are entitled to actual andior

statutory damages.

25. Plaintiff and the putative class members also seek an injunction against

defendants in accord with the UTP A whereby defendants are ordered to cease and

desist from their illegal conduct; ordered to file corrected judgments; and ordered to

disgorge to all class members any and all illegal fees that were obtained.

COUNT IT: DECLARATORY RELmF AND INJUNCTIVE RELIEF

25. Plaintiff repeats and incorporates by reference the allegations in each of

the preceding paragraphs.

26. Plaintiff contends that defendants' practices violate the Alaska Civil

Rules and the UTP A. Defendants deny the same. This Court should enter declaratory

and injunctive relief on the parties' dispute and should order defendants to cease and

desist from their illegal conduct; order defendants to file corrected judgments; and

order defendants to disgorge to all class members any and all illegal fees that were

obtained.

FIRST AMENDED CLASS ACDON COMPLAINT Janet Hudson, et aL v. CitihanJ: (SoJahDaImla) NA, et aL. Case No. 3AN-1l-9196 Cl Page 6 orB

6 000333

.... " I' .". ... • •

PRAYER FOR RELIEF

WHEREFORE, plaintiff prays the Court to order a speedy hearing and advance

this matter on the calendar, pursuant to Civil Rule 57( a), and award the followillg

relief:

(1) Certification of the proposed class;

(2) Dec1aratory and injunctive relief as prayed for above;

(3) A judgment awarding plaintiff and the class members three times their

actual damages or statutory damages, whichever is greater;

(4) An award to the plaintiff of her costs and expenses of litigation;

(5) An award to plaintiff of her full attorney's fees; and

(6) Any such other and further relief as this Court may deem just under the

circumstances.

DAmn: AU' 'J, JOlr NORTHERN JUSTICE PROJECT Attorneys for Plaintiff

J es. DaVlS, r., AK Bar No. 9412140 G . e Dudukgian, AK Bar No. 0506051 Ryan Fortson, AI( Bar 0211043

FIRST AMENDED CLASS AcnON COMPLAINT JaMi Hudson, et aL ~. CiJibank (SoJllh Dakota) NA. et al •• ease No. 3AN-1l-9196 CI Page 7 of8

7 000334

"'" ' ... GI , . .' . •

CERTIFICATE OF SERVICE

I hereby certify that on thiS date a true 8Ild correct copy of the foregoing was served via U.S. Mail on:

Alaska Law Offices Inc. 921 w. Sixth Avenue, Suite 200 Anchorage, AK 9950 I

Clayton Walker 921 W. Sixth Avenue, Suite 200 Ancborage, AK 99501

Vikram Pandit. CEO CitiBank (South Dakota) NA 425 Park Avenue, 2'" Floor New York, NY 110043

FIRST AMENDED CLASS ACTION COMPLAINT

•

Janet Hudson, et aI. v. e/tibank (S0IIIh Dakota) NA. et aI., Case No. 3AN-11-9196 CI PageS oU

8 0003 35

..... • CERTIFICATE OF SERVICE

I hereby certify that on this dam a true and COIreCt copy of the foregoing was served via U.S. Mail on:

Ion S. Dawson Davis Wright Tremaine, LLP 701 W. 8th Avenue, Suite 800 Anchomge, AK 99501

Attomoy for Citibank, N.A.

Man: G. Wilhelm Richmond & Quinn 360 K Street, Suite 200 Anchorage, AK 99501

Attorney for Alaska Law Offices, Tnc. And CIavtn.r"I!r.i1:I-.r

FIRST AMENDED CLASS ACTION COMPLAINT Janu Hudson, 81 aL v. Citibank (South Dakota) NA, et aI., ease No. 3AN-11-9196 cr PageS ofs

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• Jon S. Dawson DAVIS WRIGHT TREMAINE LLP 701 W. 8th Avenue, Suite 800 Anchorage, Alaska 99501-3468 Telephone: (907) 257-5300 Facs1Illile: (907) 257-5399

. I

Attomeys for defendant Citibank, NA, successor to Citibank (South Dakota), NA

• FBed il U!e Trial Couns

mtE OFAIASM, TItRO DISTRICT

AUG 242011 CIIrII "fIo1lilll CIuto

By "op1y

IN TIm DISTRICT COURT FOR THE STATE OF ALASKA

TIIIRD JUDICIAL DISTRICT AT ANCHORAGE

JANET HUDSON, on behalf of herself and all others similarly situated,

Plaintiffs,

vs.

CITIBANK (South Dakota) NA, ALASKA LAw OFFICES, INC. and CLAYTON WALKER,

Defendants. Case No. 3AN-I1-09196 CI

-I~ MOTION OF DEFENDANT CrfIB~ N.A.. SUCCESSOR IN INTEREST TO CITffiANK (SOUTH DAKOTA). N.A.. TO '::OMPEL

ARBITRATION AND TO STAY ACTION

Defendant Citibank, N.A. I (''Citibank''), through its undersigned attomeys, hereby

moves pursuant to Federal Arbitration Act, 9 U.S.C. §§ I, et seq. (the ''FAA''), and AS §

09.43.020 and 09.43.150, for an Order compelling plaintiff Janet Hudson ("Plaintiff',) to

arbitrate her claims in this action on an individual (i.e., non-class, non-consolidated)

basis, and to stay the instant action pending the outcome of the arbitration proceedings,

pursuant to the valid, enforceable and irrevocable agreement to arbitrate between Plaintiff

and Citibank that encompasses all claims brought by Plaintiff. This motion is supported

1 Effective July 1,2011, CitibaDk (South Dakota), N.A. merged into Citibank, N.A.

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• • by the Memorandum in Support, the Affidavit of Cathleen A. Walters and the Request for

Judicial Ni/;ti fil~,rewith. and by pleadings and record herein.

D : 2EI/ II DAVIS WRIGJHHT~~~LLP ~ Attorneys for Dc Citibank, NA.

<&rtifjcaIe of Service

On the1f/-day ofAugust,2011, a true and correct copy of the f=going document was sent by courier to the followin8 parties:

James 1. Davis, Ir. Northern 1usti<:e Project 310 K Street, Suite 200 Aru:hDnlgCO, AK 99501

Marc Wilhelm Riclunond & Quinn PC 360 K Street, Suite 200 AnchOOBge,AK 99501

MOTION TO COMPEL ARBITRATION AND TO STAY ACTION Hudson v. Cilibank (S0IlIh DaJwta) NA, Case No. 3AN-I 1-09196 CI Page 2 oU

11 DWT 1 87743.20061257-000302 000306

"

r'·~ • 1 - • ,

-

,

• • IN THE SUPERIOR COURT FOR THE STATE OF ALASKA

TIlIRD JUDICIAL DISTRICT AT ANCHORAGE

JANET HUDSON, on behalf of herself and all ) others similarly situated, )

Plaintiffs,

v.

ClTIBANK (SOUTH DAKOTA), N .A., ALASKA LAW OFFICES, INC. and CLAYTON WALKER,

Defendants

) ) ) ) ) ) ) )

.,f'J. AFFIDAVIT

STATE OF NEW YORK

COUNTY OF QUEENS

BEFORE ME, the undersigned authority personally appeared CATHLEEN A.

WALTERS who being over the age of21 and upon being first duly sworn, deposes and

says:

1. My name is Cathleen A. Walters and I am over the age of21, have never

been convicted of a felony, and am competent to testify to the statements set forth in this

affidavit. I am a Senior Vice President of Citicorp Credit Services, Inc., a servicing

company for Citibank, N.A., successor to Citibank (South Dakota), N.A ("Citibank"), the

issuer of Plaintiff Janet Hudson's ("Hudson'') credit card account at issue in the above-

referenced action. Citibank is a national banking association with its principal place of

business in South Dakota. I have been employed by Citicorp Credit Services, Inc. or its

predecesson; for approximately 15 years. Since 2000, my responsibilities at CCSI have

included creating, maintaining and distributing credit card agreements and change-in-

tem1s notices to Citibank cardmembcrs.

1 12 000273

• • •

2. In my capacity as Senior Vice President, I have knowledge and access to

information in the normal course of business regarding the practices of Citibank and

certain of its affiliates with respect to the channels by which notices are sent on behalf of

Citl"ank to cardmembers. I also have knowledge of, and am generally familiar with, the

ongoing credit card business operations and practices of Citibank. I have access to the

business records relating to credit card accounts issued by Citibank, including the credit

card account issued to Ms. Hudson.

3. The exhibits to this Affidavit are all true and correct business records

created and maintained by Citibank, or its affiliates, in the course of regularly conducted

business activity, and as part of the regular practice of Citibank to creste and maintain

such records, and also were made llt the time of the act, transaction, occurrence or event

or within a reasonable time thereafter. Certain information on the Exhibits has been

redacted to protect Ms. Hudson's privacy. The statements set forth in this affidavit are

true and coxrect to the best of my knowledge, information and belief. Except where

based "upon inf'onnation provided by persons working under my direction" and

supervision, the statements contained herein are based on my personal knowledge or

review of Citibank's records, including records pertaining to CitJ."ank's records of a

Citibank credit card account issued to Janet Hudson.

4. Citibank's records reflect that there is a Citi Driver's Edge Platinum Select

Card - Options Rbts Account ending in 9673 issued in Ms. Hudson's name (the

"Account"). Like any other credit card account, Ms. Hudson's Account is subject to

written tenns and conditions that are reflected in a Card Agreement, as amended from

2 13 000 274

"

, 'i- • ' . time to time. Attached hereto as Exhibit 1 is a copy of the form of Card Agreement that

. was sent to Ms, Hudson when the Account was opened in April1~99,

5. In October 2001, Citloank caused to be mailed to Ms. Hudson a Notice of

Change-in-Terms (the "Arbitration Change-in-Tmns") with her October 2001 periodic

statement for the Account. A true and correct copy of the Arbitration Change-in-Terms

for the Account is attached hereto as Bx1noit 2 to this Affidavit The Arbitration Change­

in-Terms changed the Card Agreement for the Account to provide that disputes regarding

the Account would be resolved through arbitration if Ms. Hudson or Citibank so elected.

6. Based upon my review of Ms. Hudson's Account records, I have

ascertained that Ms. Hudson received the Arbitration Change-in-Terms with her October

2001 statement. Pursuant to the Card Agreement, Citloank caused a statement fOr the

Account to be printed each month (other than months in which no statement may have

been required under applicable law), and mailed to Ms. Hudson's then current billing

address in Poplar Bluff, Missouri. In October 2001, a monthly periodic statement for the

Account, along with the enclosed Arbitration Change-in-Terms, was mailed to Ms.

Hudson's address. A true and correct copy of the statement transaction detail sent to Ms.

Hudson on her October 2001 statement for the Account is attached hereto as Exlnoit 3 to

this Affidavit (the "October 2001 Statement") (redacted for privacy). A special message

was printed on the face of the October 2001 Statement, stating as follows:

PlEASE SEE TIlE ENCLOSED CHANGE IN TERMS NOTICE FOR IMPORTANT INFORMATION ABOUT THE BINDING ARBITRATION PROVISION WE ARE ADDING TO YOUR ClTlBANK CARD AGREEMENT.

3 14 000275

• ',. 1

• , • • Attached as Exhibit 4 to this Affidavit is a true and correct copy of a printout of the

computer screen from the records for Ms. Hudson's Account that reflects that the

Arbitration Change-in-Terms was sent to Ms. Hudson (redacted for privacy).

7. Furthermore, in November 2001, a monthly periodic statement fur the

Account was mailed to Ms. Hudson's address. A true and correct copy of Ms. Hudson's

November 2001 statement 1nmsaction detail for the Account is attached as Exlubit 5 to

this Affidavit (the "November 2001 Statement'') (redacted for privacy). A special

message was printed on the:face of the November 2001 Statement, stating as follows:

WITHIN THE LAST 30 DAYS YOU SHOULD HAVE RECElVED AN IMPORTANT NOTICE ABOUT ADDING BINDING ARBITRATION TO YOUR CITIBANK CARD AGREEMENT. IF YOU WOULD LIKE ANOTHER COpy PLEASE CALL TIlE CUSTOMER SERVICE NUMBER LISTED ABOVE.

8. It was, and is, Citibank's practice to include a note in customc:rs' Account

records when statements are returned by the post office. I have checked Cib.bank' s

records for the Account and there is no record that the post office returned Ms. Hudson's

October or November 2001 Statements. In addition, if the mail for Ms. Hudson address

had been returned for two consecutive months, Ci1J.'bank would have discontinued majljng

statements until a good address was obtained. Statements for November and December

2001, and January and February 2002 were mailed toMs. Hudson. This finther confirms

that the October and November 2001 Statements for the Account were not returned by

the post office.

9. Ms. Hudson, like other recipients of the Arbitration Change-in-T erms, was

permitted, by taking certain steps as set forth in the Arbitration Cbange-in-Terms, to opt

out of the arbitration provision. (See Exhibit 2, last paragraph entitled "Non-Acceptance

Instructions''). Ms. Hudson did not opt out of the arbitration Change-in-Terms. I can

4 15 00 0276

• • det=ine this because it was Ciuoank's practice to include a note in AccoUIrt records of

customers who chose to opt out. The records for the Account do not reflect any such

note.

10. In addition, thc:re is an indicator on the Account records to indicate if the

Account is subject to arbitration. Attached hereto as Exhibit 6, to this Affidavit is a true

and correct copy of the computer screen that shows the arbitration indicator (redacted fur

privacy). That indicator is marked ''Y.'' This means the AccolDlt is subject to arbitration.

The relevant field on Exlnoit 6 has been marked. If Ms. Hudson had opted out of the

Arbitration Change-in-Teons, this field would show an "N." The computer system was

programmed to place an "N" in this field when an opt out was noted on the system during

the opt out period for the Arbitration Change-in-TCIIIIS.

11. The Arbitration Change-in-Terms provided that the Arbitration Agreement

would become effective on the day after the Statement/Closing date indicated on Ms.

Hudson's November 2001 billing statement. See Ex. 2. The Statement/Closing date was

November 28, 2001. See Ex. 5. Thus, the Arbitration Agreement became effective on

November 29, 2001. Cilloank's records reflect that Ms. Hudson continued using the

Account after the Arbitration Change-in-Terms became effective.

12. In February 2005, Citibank caused to be mailed to Ms. Hudson a Notice of

Change-in-TCIIIIS (the ''February 2005 Change-in-Terms'') for the Acco1lll1. The

February 2005 Change-in-Terms made certain amendments to the arbitration provision,

removing JAMS as an arbitration provider and revising the severability clause. A copy

of the form of February 2005 Change-in-Terms sent to Ms. Hudson is attached hereto as

Exhibit 7. Attached as Exlnoit 8 to this Affidavit is a copy of the February 2005

5 16

000277

, • i "

. ' • • statement transaction detail for the Account advising Ms. Hudson of the February .2005

Change-in-T= (redacted for privacy). As with the Arbitration Change-in-Terms, Ms.

Hudson had the opportunity to opt out of the changes to the arbitration provision (not the

arbitration provision itself), but did not do so, Instead, Ms. Hudson continued to use and

make payments on the Account after receiving the February 2005 Change-in-Terms.,

13. Citibank's records reflect that, in June 2005, a complete Card Agreement

was sent to Ms. Hudson in connection with a pricing change on the Account Attsched

hereto as Exlubit 9 is a copy of the form of Card Agreement sent to Ms. Hudson as a

t:esult of the pricing change. The Card Agreement contains the same arbitration

agreement as provided in the Arbitration Change-in-Terms, as modified by the February

2005 Change-in-Tmns. After receiving the complete Card Agreement, Ms. Hudson

continued to use the Account as reflected in the statement transaction detail sent to Ms.

Hudson in June and July 2005, copies ofwbich are attached hereto as composite EXhibit

10 (redacted for privacy).

FURTHER AFFIANT SA YETH NAUGHT.

STATE OF NEW YORK COUNTY OF tf(", {feW J

~)(t:R Cathleen A. Walters

2~

SWORN AND SUBSCRIBED before me, the undersigned Notary Public, on this I. "< day of August, 2011, by Cathleen A. Walters, as ..r.. ... ,. ~ V.c~ 1 .... ~I;;,&,l'of c.tl&~"e C,..t.JoT"""'-'<-J ~. . who is personally known to me or who has provided identification.

~~ / Notary Public

"

My Commission Expires: r .-

6 17

MICHAel E. SCHIFFRES Notary Public. State of IlewYork

No. 02SC49673nn f11} 8 Qua,jflad in Westchestel tbtdl

Commission Expires May 29. 20

. . • • , .

EXHIBIT 2

18

NON·ACCEPTANCE INSTRUCTIONS: .. ·ro··.· ''''' ,~,. \',.f,h r., .1. '"'liV. ,...·lWY.lIl~ d'bt-'.lhCYII" ...... If,.~ (A')I1Io "I ~I w, In-I> ,J .. llo()oII 'U h. -1'l •.• I'. 'lt. 10 \~""I Jllu!ol'lOtof;' "", .1'\ ,',"fIJI' •• ",.:11 ... \ :",. ILI'r~ .llk' ",\,:iI' t&.. .. ,-.of"\~no "oJlu ItIt1ll;dlUCI \., ~ 1.01 ~~I""I'lH • (", '''''l)ll,f,lh.1r.ul '1 ""'-no )u..;r tw1f, /V'.cep. I • .r .. u VoGI ... W· ,..x" , ' ,I".I,l :,.'lI.r..::.i • • Wlo. ,\Cr-t'l..lf't ,." .. 11.0.", ana nlo.l • " . ;;.,W.on~ .. ~\·"·"'";"'ftIII. P,) 'it.Jrl4·U:)1 J;~f.OI1y,4t h.."lI,ft, .';".t.H · ·U.', It ,."'J'''-';'''' \HI lh ~ tfhuln,,1 V'Jl'Wllo)( .. ," .1(<1 ~uu 1""\111", '''11'1:1.11.,):1 ~~ ... _,. .. "':"'1UIInu:J If' tlhti ellcll'\()il J . klfl, .). " --. .. -" \' ''J , :,MI tw . .. " I ..... :.' ,,~)\AJfl (.uI~It') ..... oUW \'LU I \.:,:II'J 1'''I'1VoIIN. :111.1 I,J ,III' .. ~ ,'uIi'ur.1 '''l:mlJut_t",. ~ ItI' 11"' I'o(l '~'':~ ~"I 'LJi " I ,'''' I: .... ~"'.l ,',I:ol!U,I\It..1 u: La". AJ rf\lll l~ ~" ...... , •• 01.: .,,,' llt. . ·': ... ·~I ... 'I \.~,. ?oHllJu al*..: "'pay .". ~Cll" ........ f,u .... ~llU ... l. .. . , ,; ... 1, ,",tJilIIJ '01'1111_

•

.-

-.

'1OO11t toNJt

Notice of Change in Terms Regarding Binding Arbitration to Your Cltlbank Card Agreement f:ltaClMl on tno day :that lhO SllIlemGOC/OOIlng Oa.Ina~ted on )'CUI Jolo:NetntJ(,r ?CXlI blllU1g Ifalltmont. we Ird amendfog

lJ".)

(X)

N o C)

o

)"\A.II G)',1Itng Clhbank Card "gr •• monllo 1nC~ Ihe loIow1ng PlOVlr.al regarding binding ItfblraUon TtoO bcndtng &tDIII.llon lJfavis.oo doas 0Ql apply 10 1000VKkJai eta'"" of named parMln any HawW.l Mirved an us balar. the ellaclivtt data. Of lO ClamS u)' Uf'Inarr.ed rnBlY"tDeril 01 a c." '" any (",filled class action II orJta 005 '*&1\ p.-OVdad 10 lhe CIUI by coort directlClO bek,... Iha: efk:&cIiIte oat. II i'W cIo not~. I() ac~ ltw.. btndlng arbl"ahon provtIIOI'\. r ...... sse U .. NON·ACC£PTANCE INSTRUCTIONS on panel S at tis r'IOllCW

ARBITRATION: PlEASE READ THIS PROY18lOH Of THE AGREI!IIEItT CARiRlLLY.1T PAlWlDE8 THAT AllY DlSPlITI! !lAY BI RESOLVED BY BINDING AIIIIITIIATION. ARBITIIA110H REPLACEBTHE RIGHTTO GOTO cOUR)'J!:I.~THe RJG/ITTO A JURY ANOTHE RJGHTTO PA/uKilPATE IN A ClASS ACTION DR 8I111UR __ IN AIIIIITllAo TION. A DlSl'lITI! IS IlUOLIII!D BY AN ARBITRATOR INSTEAD Of A JUDGI! DR JURY. ARBITRATION PAOC£­DUR£S ARE SIUPLRI AHD IIORE UIllTEDTHAN COUIIT PROCEDURES.

A_nt to AItoll,..., E.1ther you or w. ma)'. withOlJllnfl OIhe1". consent .lect mM\da· 1Of),. bmcLt\o Ilbdletfon 101' InV (;111111, ctllpufa. at COf"IlfOYar5y bltwa811 you and Ullcalleu -CUllIi").

CIIIIm. eo ... ,.." • What ChIn. ..... ",Ieot to IIIttllr.Uon1' All CIIlma rolaring 10 ~ ICCOtR. a prior relailid ICccunt. at our rlJlabOn. shop ant lUbl8lllD atbolflllon. 1IICUling CIIImI ~d«>g Iho opplico''''" ..... caal>ili'(. Of "'"'PI"Ialicn diNs l1l'<I \his WlfatlOll pnMsiOA AI, Claims Af81UbfOC1 to. atIon, no matIW wtll1lDoat Ihoory lhey are OIted on at what remedy ("""_ Of..;,net ... or dec:lot ... V _, Ihey ... k. Thl. iIa..0&5 CliI"1'\I. wsed on conttacl, 1ot1l1'\C1udtng ItUnIICII'laI 00, Itoil.ld. ag6t'1Cy. yOU' or our negligence. sra~ or regula·

•

•

.·(,.:. •• .,.c .. , ·.·" ':"~!io ~lII1tb tlirO·patl)' cl •. allill. ItIIQtPINdeI'; 01 \NIIJf ..... . W; .". ... S CkHifoS I~ 'ClOl..'lHoOeNty IV WlIIl colhel' cl&mv I, ~IV ",,00 u..oo1*5 a pr.:.ceodlng If' court may oIecl Ulbll,atMl .,..th "'''fK"I."1lD P'", (hl\ tld/.,l'M .... d .1 UUft proc:oodlng tty .ulV nIIO pottv CI...",. ,,",I "",l8C)l:5 SWQrII as pan at d dill ".1W'JO. It: O,,:U • .cIOr(luy !~MuI()f uhof ,ttpt~tvO acll(Wl aUf 1U¥Gt " .. ' l'I)II"~.u' c.n JI' II .ontlduilt '00f'I.Q,)a.s, to\-ft:pt'~1 " ,1 .... '1. ,lOad UICI Atbh::.\uI n"',y Jw:.td ,,, ... 1 CJd.I on iUl.,\drv1d\1iI! "".111-(:""". f'lOIl-"","(llIU!itilllYt'l M6

t wtto •• Claim •• re ....... ul to ... lIratl_1 No, 00'1 ,kJI'~ ur.u ycJUI"I"", tt1£O r.'Ulmllo mitdo bVOf dQ8Inlt anyoon r .. ..nnc:clot'l wen ..... Or you Of ClaIIlWtg IhrOUQO Uij Of you. 11JI.."n IIIi ,I' ~n' ... vpltl::1I'I1 (~ Bulh,Ji"ZeU LltU' 01 youf account 1111 ttmpIoyeo. ',qMI. rosJl~~nluh·~u. ~"'1IIb1Od l.ullJ)af\Y. pred&caSSOf or SUC' ~"..U'",,;4". "ull dI\blU'Of,I.OI IrUi-IOO 1" naI1N'Upk .. ),

• Whailima frame ",".'10 ca. ...... aubJ .. llo arWllatl ... , C""",ltJ 811W'y 11\ dllJ p..t pr~S(Jt" . Of IUk. .... Ifl(Judtl\tJ t."ltMI.mloluu b6JOftt thEe 01*'11"1:1 01 'fOOl lIccoonl. BID ~.r1rftt:l \.) 3ftrw~

• Ikoad •• t Inl..-pnl'.tton. My lIJIIl&lIOOs nbouI WheJhef c.: .... I1" ....... ""UiUl..11U tllbow.\\I(1I1 Shall be resotved by Incerpr8l1ng .... ~ arbitrnttOO otOYfilOllIfl IhO broadesI Witi lho law Mt iIIIaW illO IWlonbrOil lhto. .. t.1rullOO provrsIon. gowwnad by 1M fedefal AlillIfnhofi Act Itho ~"".;) ._. ____ .. ____ 7

Q::lIIn:-. r;k.fl til. tl}a.Ji d.'Wl'Iei ccut 8.16 no. S\JDlol~ II,) arbtIallOn, so IOOIJ OB the malltH rtflUflS III auch (xu. and advanC8I only an v.oo"",tu,\J (nao·dIM.. OOfH~esanlaWB) 0aIm.

Haw ArItI., ..... n 1forIrI:: • How doe_ • ,MY ",tlat. m"'elton? The PDfly ~1InU &11 \ ,trlne .... "'.II"'ItA crt""" lI(m ulliN 1CICIO*.ng "11'_ orbtlr .... hlll~ .,,10 w.,!;ow 1!.'U!mo UIM.t pr~ tot it..cfdUng and pur­""""'I oJlo .ItUlII.JIIlIf\ AI1",,,l\,;;'lI. AUltlf'alk'lfl ~tltlIl. JAMS. end I~:I: ;')11.,1 Att.'mllUl f-('\r~ .. n ,"I.J.ry .... botratlClfl i'MIOtlng :1'101 ',<)u aU8l'Id HI .. hr ......... : ~ lIIl1C:h dOQIL'" by 11"" arbltral""I'un, tnl'" SIOM) l'1ly ... to tsa' ll~; O.bUot;' en..,1 c.1fJ'.,..lJI1illo yOUt ,hen Ctltenl billing r"kln·", ... I:" cU 1tkJIrw.. tAro .. , ptace lU .tlCh you and "" 80'"" ,,,,,,,,t() 'fu. Ih.l~ oUtlol'fl cupitjl oIlhe curiei'll rUiN 01 Mdl 01" lIWOU olIlM1falJOll kiM JJ'IO IUffns DOd mlmcoohllof inIIlottng IJ'1 LJlb.l" ......... ' b1 ~ncttng IlIIIM ~ Iodoitl

..... ""''''...., ArI1"'itt""l ~ .YJdQ s.r.:.w.'Wodrorg : t:\:) Mowbtlnn Av.')flfJlI noor 10 ,,!tNl YQI1I: "IY lflO17··1Cn.

. ,

... -.. , .. - .... . ~ -- ....... -....... -........ -----

l.D CO N

= o o

lheta •• gOOd I88SOOlIol rllqWflt"J U511) til, IoU Of ,I yW'~ l4 And we CJeletJrinto lho'& JI UtJ'IIJ fl:Jlnll lot """~IIO lHcf11l8r1y wjl baaI II .. expeI'IftI nt lhrM pOIIV', »ucmlOy$. ~jlpOJ1\t a"\d y,:d. I"e$S8I ont.I C'lllhal exparu;et.. fIlDWd\M:f 01 'IIIIIC' gQlt'( fAI'I ...... bule p.any may leOOVC/f 8"'1011111 "JlIk1,WJllJl""..unthet patty If the art>ltlklf. APP'v''l.I ttppItt.,1bfn III\\,. :0 Oi4<ltn"'~

• Who 08ft 1M • ..-rtv' OftIfTII "....\1 bo l~.n1hC natM at an IOOIVlUlI'*IUII 01' er'~y ""td IT'IJII ~efd un II'lIllCfwoO­UAI (non·de". non·'eprllPf"CatNfl) Oil" TI)Q arIJllrltor \'tIU no: 8watd reIIeC lor 01 agalOll MiOOC wM IJ naI _ Pall'f If y(IU 01' we requwe 81bltfSI%ln 01 Q '.lftlm. fleill'M" you. WOo I1QI Any ether person nW!iy IUIiiUG ltv!: CI".1/1T1 \rl flrbIlullllOn IS U claP DC'~. ptNatY <'UomPY g&t\II'IU ncll, .. W'1 {V o1h., fOl)tlr.ftl'l$OtlVf' Ilr.tIOfl. root

may 5lr)1 Claim bf'I PlJIUlIl'tI un VC'U nr IlIJI bOJ1u11 W'l at'IY Wigataon In any courl (':J;lln'lC IIll'IUtIt"" ,",Ii (lI 'ttct l:talfT'lOl, nlt" ... 1'_ P'oIM'O persons may noI Dt' " ,lined or CflhGuflll.1I<'C1 oI'1\IW, aa:lIn .mlllP· lion Howavar. RPCWtanJ~. I'· ·I'If>lJhCI ... tb. ,..,;.cwllud u:;Cf'!'O 1'" II aifl9le acc«1f'III and~ ,"atod 1M,·UUf'\ttt 01 ,.toIlJOf,)tO ,.!b)."~$ .. 0 hwe r.onadtHlld .. ON t.)tlfRM

• When .. an .... llraU ... W ..... ftMI? Too atbctrator s • ao.Vkd lS.naI MU boIoUtt'U 011 chn JJWtlC'rl ~ 11' ...... ly .tlIjwabi. it ~ wrlMg to ... _rbI1.,taW'l t. tn WlIhir' lot: ... dftytl 011'1("4100 0& Uta il~d The.,.,.cj nll.M MlMJC!" U I"'" 1VbII1utfJn ooltlfu a..­oIltveo tWltrRl.,bIW:MQls rtM.IOtlQktd by 11111 ........ "' ..... eN:fti linn Tt. p.~ will con.JnI uI t3Ctowi .... d IO\wU IS-.uQS:\!'ION. ~ ... P"W nU' lltal appt)' ~" pt()CaOlMll UIW'I9 ;l ~ .rb6uaIor, ill ad ~ ~ w.aod CW\ "IP vete 01","· "I'IdlUI'lIy Costs *" be!\lloC.(aled IIIhP sarno Wit'f Ihoy .0 aIOl' .. '\lod 10' IUb\I8bOnbebO a IInglIa ",blilutor AI ' nwerd by" ","WId" ~ 8I'd tJndIng oult\e uactlft ohw IilIGen duys hili pidosod A )tnil ana ~ Iwwd II aubfltCl to jod\l~ tcrllfJ'N And Ul1$(vQlf1l8n1 81 pr~ ny tho FAA C)I \1"10' 1Ipf~lJ\,l IHIoV

llurvlv.' ............. .",,,. of T.,....,. • TI"f. atD"U\Pon 1')I1'MI\1OrllOllS. """"'L hIIU.I1'o1\'IUU' I UI changollll'llho AIJte«nonl. 11'10 accUlJl"ll :W"".IO ,rtY ... ,.\¥I\ItJ boIween yuu Itnli US c()nc: .... tvng In., .lCco.,,\I. (III "' .... ·I:".nlmJJ)lcy of any party. iIf\d III ·) ,..,., IIDllllfU .• '110 01' UUIQ"loont o! yOIl' ElCCOUOI 01 any 41'1'\1.1UI'II1 OW(td Ofl ~ ,)I!t;I.)UIII. to 1U'1 0IhtW" pefSOf'l or enti.Iy II ant IIO'loOf1 oa 11'11' IUhlUMtUn pn'MSO'll$ d8em8d maliO 0( unctnlotcHftbk!. tI' P ICIIl&l'U'Q poi'lKW"lS hholIl !"O'I1t1hetes$ tIIfNII\ 101cwr.c. Any dlfklfflill .tA,IWIUCnI 'lJUIIfdlng ;Yb .... ln\ mC1 be "",eoo to oil Wf/lMlR

_ .... ----_ ... --_ ... _ .. ----

, . , - " • •

. EXHIBIT 9

21

• • t- • o •

•

. . . , ' ,

i . •

\1 .. ,. . , .

~ ! IW i Iii !i ,iUn itlifi "IU ~'U i

: i ii!f!!ii!!!D~,lli=ri~ ii!lil S [i!iii ib til : . f -1 wl""'Ji ,i'Uaa; ;t!. i E.r • iii .... : .Il_~i~ifm i!iDi '16i t~ !.

000 299

.... ,I r • . .' l • • •

EXHIBIT 10

26

• 07/21/05

MiiiIlWj

• $1140B.26 $234.32 SITE:JX-CI

~'~ ~lfi fIltlJ

NO

CITI CARDS PO BOX 688901 DES MOINfS. IA

5036B-8'01

Citi" Driver's Edpeo Platinum Select Card-Options Rbts --41iiiiiliiiiiiiil ..... 13

1.·100· "'7 ~ 1500 101 600D

f.t .... Cr .... M' LIIW ......,......trMlkL ... ,,\t¥I .... tA", If ... ~ $200 $20600 $91.1 •• I. __ l/

... nlOW ... THE LUES •• , 1'163-6000

CI~D.w 06/H/200S

Cr •• " 1,1 ... $0.00 •

pcst 0-$0.00 •

6/20 01191182

0/07 6/01 lrvIIlITOO

6/Z3 6/23 zalLDl'L

6/1:1

6/l7

Pa, ... t$~.Crw4'tl , 'dtl.t.~nt. PUMDIT _"NIt YOU TO 0000 0000

51 .. dard 'urell YAM·TAHOO SM BUS/MAIL ~08-J49·5151 CA 61 A-'Bl6US 22Z2 CHAUVIN COFfEE COMPANY SAINT LOUtS MD 61 A5999US l2ZZ PUACHA5[5-ftRAHC[ OHARG£·PERIODIC a.TE .. 0000

"I.~c. lr.n,'er - C'ar,ed To Ofter , PURCHASES·f'l .. AJlC( CHARCPPEllOOlC RA rE .. 0000

DRIYE"S EDGE REBATES SUMMARY Activity Tbis Purchose aebal~s £arn~d Ad,ust~ntJ I Ex~fred

Per;od 8 -z

HE. DAIVER'S EDGE R£BATtS

Purchase Rebates earned PREVIOUS DRIVER'S EDGE REBATES

Tatal fota Tot:al Total

Rebates £.,arnocl Reb."le5 Elqlired Rcb.alt!s iHftnII!d Qeb.t~. ~yail.b\e

• ProviDUS Balance

'08 ". Li retl~ Activity ,.,

.0 o

Sublli tted ".

hd~ble .7<

o o

114

Purehan Rebates Dr1n- ReAteI' Bantu Rebates TOTAL nR1Y[R'S lOGE RUoUts

o

Ranu$ AcbOtes "1 lake one ta two bell 'IRQ e,~les to appeor OQ your stateMent. ptco.e re er to the speclrjle ter.s and condtttons ~rt:aihinq to t:hu pra-ot on for hlttlter detailS.

ton~r.tulnt(ons on your reGent credit fine increa.el Please note your new totnf creG't line.

t.portAnt: [nfor~t I DO: PI~,se see eacloscd Insert for dl'counts and otters fro_ Hert! especial I, tor Drivet" EOg~tR) [~id~rs.

27

TM:LG-8200 07/20/11

cit!"

N ....... _

$11408.26

... ..:.!.t"": $234.32 -

-JOO.oo

5543U65Lsl1

•U

741.01 8501186815115

U3.n 0000000000

6.59 0000000000

...

ACID:JALG040 18:48:50:

000301

'. ,.,l!> 4 rJ·.jI L ...

JAHET HUDSON

Account su.nm.,.,. PURCHASES ADYANCtS TOTAL

PURCHASE"i Shndord Pur'" Offer 9

ADVANC£S S Uln".,,., o\d¥

• •

torn .ore everydoyl t~rn J~ rebetes for purch.s~J .ade at ~uper-arket5 . druQltores • • nd qas f,.Cions. to t .n&! .KS1t~tilCle of thue ;lIIfdad rab.te-Ii 5 IlPly enroll af ; www.cltieard' ,co.t Select 'Manaqe wy Account', then 'S~ccial orr.rs'.

S~ve TI-a. SGv~ Paper. 5tqn up for l11 Eluctronic. 10u'11 have ln$tant access to your statement online. without t~t pile of paper. Get an e-mail notice When your statomont Is ready. Reqister ar ~IQn-on to www.ctticards . cOlll and chOose Il;tn.aqe ltV Acccunt ..

PrevIous ( .... PurC./"UlUS (-) p.ymanrs {+j FiNXNtl e .. I..,., i AdY'nc.'s 'Crtdll:s CHARGE

SiO,SiS • 98 STS8.96 $100 . 00 S.llO.J2 0 . 00 ~.OO $0.00 10.00

$10. 82S.98 S1 .96 Sloa ,00 SllO.)2

A.lan.:. Sdbi!tf to periOdiC NGnlJft&1

1=1 N~" "i,M', 111"r. , 26

0 . 00 hL.Aaa. 26

ANNUAL j:"'''If\c.~ ChN;!" Rat. 4 •• PERCENTAGE RATE

f·· .. '·Zl Q.Q3671'{P~ 1l.400"" D ... 00,\ l. 15:5. 12 0.01641'\(0 5.99~ S.'~M

$ •• 00 O.0575'~(Dl lO.9901. ZO . 99~

'" 28 000302

• OS/2UOS ~. ,

J AN ET HUDSON

POPL~R Blur, 639 01'(3000 00

$11290.11

iiiili!'JI'§<t1

110

• $Z33.09 SITE:JX'CI

tM!Iil.!IlL! CITI CARDS PO 80X 688901 DES MOINES. !A

S016S-S901

Citr Driver's Ed\le' ~~l(lum Select Card-Options Rbts tiiiiili-. '673

cUlttmw •• !'!!cc .... ~~t\_

$9309

TM : LG·BZOO OrilO/ll

effr

M_ ..... e.. $l1l90.11

1-aoo· ,'" · ... 00 101 6000 THE LAKES , IV 1916)-'000

~n:: $0.00 + $

.... tk. 0.00 +

... ..,... ~1_Dft ~231.09 c

~..:::::r:.:: SZ31 . 09

7/18 13107111

1/08 7/08 fl<l00500

7/16 7/1' 5D96Ct24

7/17 7111 T&OKXNn.

.T/ZI

7/l7

DR[YER'S EDGE REB~TES su~ A~tlvlty Pure base Rebates ~rned

T .. is Period 0.'1

-9.62 Adjust.ents I_~~~irc~ NEw ORIY[A'5 EDGE I[BATES

PurcnBS~ Rebot~s t.rnnd PREviOUS DRiYER ' S EDGE RElATES

-9 . 01

Previous l~lance In.5] 173 .53

Lt'eti~ Actlv l lV 18).64 19.1l 0.00

16~ . 52

5 .. 1 ttl!!'d Rcd~ble 164 .52

0.00 0.00

164.52

Purchase ReOate. DrIve Rcbat~$ 0.00 80nus Rebotrrs rOTAL DRIVER 'S fOG[ REBATES

Bonus A~~tc' mo, t~ke Dft~ to two bfll l .q ~,eles to ~p~r on ~our st.t~n\. Plt~se ref~r to lh~ speC I fic t~r-s ~d condltionl pert4 inlnq to tnc pr~ttDn tor further dOt4ils .

Cit i Dr l v.,.'s EdIlC Card Opt ions reboiu e-xpirc S Te.1,... after tflcy .re G"rltCd. (apired rcbaT~S wi J ~ deducted fr~ your rcbat~ ~~counl .

Q.Z) rdNI:tes .'Il uplt~ on AUQlSr Z& , 200s

29

--300.00

11 . 95 5S4321651B'

Zl . al O~16015197

Z1 .00 05"]015198

US . B2 0000000000

5. 27 0000000000

'"

ACID : JAlG040 lS:4B : ~0 :

'000303

. ,. ) , .. L..

JANET HUDSON

Ac:cuant Surftm.ry

PURCH""SES .. OVA-NelS TOTAL

PUACHA5E:.S stomJOlrd Pur," Of fer 9

AOVAHCts 5 tilRt13rrl "ch

• •

tonQr.tulntioos on your recent credit 1;~e 'RCrt.~.! Pl~~s~ n~te your new total credit line.

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0003 04

• • fILED S¥'JE OF ALAS:1A

IN THE SUPERIOR COURT FOR THE STA~Dc%S~£1KA .-

201 i SEP -6 ~.:. TIllRD JUDICIAL DISTRICT AT ANCHORA .

. CLERK TRIAL C 'R1S

JANET HUDSON, on behalf of herself and ) BY: all others similarly situated, ) ;:;:DE~P;;;U-;-;TY;;-C;:-;L-;:E""ilK:-:---

) PlaintITt: )

) v. )

) CITIBANK (South Dakota) NA, ALASKA - ) LAW OFFICES, INC., and CLA Y'tON ) WALKER, )

) Defendants. )

) Case No. 3AN-1l-9196 CI

-----------------------) ALASKA LAW OFFICES AND WALKER'S JOINDER IN MOTION TO

COMPEL ARBITRATION

COME NOW defendants Alaska Law Offices, Inc., and Clayton Walker ("ALO

defendants"), by and through counsel, RICHMOND & QUINN, and hereby join in the

-Motion of Defendant Citibank, N.A. ("Citibank"), Successor in Interest to Citibank

(South Dakota), NA., to Compel Arbitration and to Stay Action. Citibank's Motion to

Compel Arbitration sets forth persuasive reasons why plaintiff must arbitrate her claims

in this action on an individual basis, and to stay the instant action pending the outcome of

the arbitration proceedings. Because there is a binding arbitration agreement in the credit

card agreement governing plaintiff's credit card account, and because the arbitration

agreement encompasses the dispute at issue in the current litigation, defendant Citibank's

Motion to Compel Arbitration should be granted.

31 000183

.,

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• • •

• • L BACKGROUND

Plaintiff: Jennifer Hudson, on behalf of p.erself and a putative class, brings this

current litigation against defendants alleging violations of the Alaska Unfair Trade

Practices and Consumer Protection Act ("UTPA''), AS 45.50.471, et seq. Specifically,

plaintiff alleges that defendants violated the UTP A by filing affidavits for defaul!

judgment requesting attorney's fees by determining "actual fees" under Civil Rule

82(b)(4) based on a contingency fee agreement. See Plaintiff's First Amended Complaint

at 3. While ALO defendants dispute plaintiff's claims, I the merits of plaintiff's claim are

not relevant to this motion. Plaintiff Hudson is barred from bringing this claim in the

first instance bec811se, under the Citibank Card Agreement, plaintiff's claim must be

arbitrated. See Citibank Card Agreement and Notice of Change in Terms Regarding

Binding Arbitration to Your Citibank Card Agreement, attached to Citibank's Motion Ex.

1 and Ex. 2.

II. DISCUSSION

The current dispute is governed by the Federal Arbitration Act ("FAA"), which

applies to all written contracts involving interstate or foreign co=erce and provides in

relevant part that arbitration agreements contained within such contracts "shall be valid,

I See, e.g., Korean Air Lines Co .. Ltd. v. State. 779 P.2d 333, 340 (Alaska 1989)(Where client's obligation to pay fees is based on contingency fee agreement, those contingency fees represent actual fees under Rule 82); Municipality of Anchorage v. Gentile, 922 P .2d 248,263 (Alaska 1996)("Actual" fees ~ those the PattY agrees to pay its lawyer) .

Joinder in Motion to Compel Arbitration Hudson v. Citibank (South Dakota) NA, et ai, Case No. 3AN-11-9196 CI Page 2 of8 32

000184

". • • irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the

revocation of any contract." 9 U.S.C. § 2. WhCll an arbitration provision exists, the role

of the court is limited to determining (1) whether the arbitration provision is valid and

enforceable and, if so, (2) whether the provision encompasses the diSpute at issue.

Chiron Corp. v. Ortho Diagnostic SYStems, Inc., 207 F.3d 1126, 1130 (9th Cir. 2000).

The arbitration agreement in the Citibank Card Agreement is governed by the

FAA and presumed to be valid and enforceable. See Citibank's Motion to Compel

Arbitration at 12. Moreover, the dispute at issue, i. e. whether defendants violated the

U1PA while attempting to collect plaintiff's debt, is a dispute encompassed within the

Arbitration Agreement.

A. Plaintiff's Claim is within the Scope of the Arbitration Agreement

Any claim arising out of defendants' efforts to collect plaintiff's debt owed under

the Citibank. Card Agreement is subject to arbitration. The Arbitration Agreement, wl'ich

is incorporated in the Citibank Card Agreement that governs plaintiff Hudson's use of the

credit card, states:

What Claims are subject to arbitration? All Claims relating to your account, a prior related account, or our relationship are subject to arbitration. including Claim§ regarding the application, enforceability, or interpretation of this Agreement and this arbitration provision. All Claims . are subject to arbitration, no matter what legal theory they are based on or what remedy (damages, or injunctive or declaratory relief) they seek. Ibis includes Claims based on contract, tort (including intentional tort), fraud, agency, your or our negligence, statutory or regulatory provisions, or any other sources of law; Claims made as counterclaims, cross-claims, third­party claims, interpleaders or otherwise; and Claims made independently or with other claims. A party who initiates a proceeding in court may elect

Joinder in Motion to Compel Arbitration Hudson v. Citibank (South Dakota) NA, et al, Case No. 3AN-11-9196 CI Page 3 of8 33 0001 85

. \ • • arbitration with respect to any Claim advanced in that proceeding by any other party. Claims and remedies sought as part of a class action, private attorney general or other representative a~tion are subject to arbitration on an individual (non-class, non-representative) basis, and the arbitrator may award relief only on an individual (non-class, non-representative) basis. See Citibank's Motion to Compel Ex. 2.

Plaintiff's claim clearly falls within the Arbitration Agreement as it relates to the

account. The current claim alleges unlawful activity by the defendants while attempting

to collect plaintiff's debt owed under the Citibank Card Agreement. The dispute

regarding the collection of money owed under the cardholder agreement is a controversy

relating to the account and the relationship between plaintiff and ALO defendants. See

Koch v. Compucredit Corp., 543 F.3d 460 (8th Cir. 2008)(A dispute over the collection ,

of a debt incurred under the credit agreement is a "controversy arising from or related to

... this Agreement."); Hodson v. Javitch, Block & Rathbone, LLP, 531 F. Supp. 2d '827,

831 (N D. Ohio 2008)(finding all of Hodson's claims in this case subject to arbitration

because they all related to m & R's conduct in attempting to collect the amount Hodson

owed under the Capital One cardholder agreements); Ventura v . 1st Fin. Bank USA, 2005

WL 2406029 (N.D. Cal. Sept. 29, 2005)(holding claims that collection practices violated

the Fair Debt Collection Practices Act clearly fall within the arbitration provision in the

parties' credit card agreement).

In. the Eighth Circuit decision of Koch v. Compucredit Corp., 543 F.3d 460 (8th

Cir. 2008), the plaintiff brought suit against her credit card company, its assignee and

attorneys, alleging violations of the Fair Debt Collection Practices Act C"FDCP A'') and

Joinder in Motion to Compel Arbitration Hudson v. Citibank (South Dakota) NA, et al, Case No. 3AN-11-9196 CI

Page40f8 34 000186

• • Arkansas Deceptive Trade Practices Act for attempting to collect on a debt that Koch had

already paid. The defendants motioned the co~ to compel arbitration pursuant to the

credit card agreement. The Koch Court found that the ability to compel arbitration is

limited to "matters and disputes arising out of the relation governed by contract," stating:

Even assuming that Koch's debt had been extinguished before the assignment, and that the .collection attempts by the defendants were erroneous, the heart of the dispute-the occurrence and alleged payment of the debt-is one founded in the credit agreement... To be subject to arbitration, the dispute must also fall within the scope of the arbitration . clause. See Litton, 501 U.S. at 205,111 S.Ct. 2215; Nolde Bros., 430 U.S. at 252-53, 97 S.Ct. 1067. The arbitration clause here is broad, covering "any claim, dispute, or controversy arising from or related to either this Agreement or the relationships that result from this Agreement." A dispute over the collection of a debt incurred under the credit agreement is a "controversy arising from or related to ... this Agreement."

Koch v. Compucredit Corp., 543 F.3d 460, 466-67 (8th Cir. 2008).

Plaintiff Hudson's claim regarding the manner in which defendants

attempted to collect the money due and owing under the Citibank Card Agreement

similarly relates to that agreement. The Ninth Circuit has held that arbitration

agreements which encompass all disputes arising in connection with an agreement

must be construed liberally. See Simula. Inc. v. Autoliv. Inc., 175 F.3d 716, 720

(9th Cir. 1999)(:£i.nding arbitration clause containing the phrase "any and all

disputes arising under the arrangements contemplated hereunder," or similar

language, must be interpreted liberally). Additionally, the United States Supreme

Court has found that statutory claims may be the subject of an arbitration

agreement. See Gilmer v . Interstate/Johnson Lane Corporation. 500 U.S. 20, 26,

Joinder in Motion to Compel Arbitration Hudson v. Citibank. (South Dakota) NA, et al, Case No. 3AN-1l-9196 CI Page 5 of8 35

000187

• Z~§g . ~I· ~ = • Id !: • : ~ ~ :i " • hl=t ;:

~ 0 ~ III 0 !

~ 5i; ~ • « " a: =8 « z «

• • 111 S.Ct. 1647, 114 L.Ed.2d 26 (1991)(finding nei!her !he text of !he Age

Discrimination in Employment Act ("ADEA"), its legislative history, nor an

exam.lnation of !he ADBA's underlying purpose reveals any indication that

Congress intended to preclude ADBA claimants from resolving their disputes in

arbitration.). A statutory claim, such as the FDCP.<\, is thus subject to valid

arbitration agreements.

Several federal jurisdictions have enforced arbitration agreements when

violations of fair debt collection practices were alleged. Sherer v. Green Tree

Servicing LLC, 548 F.3d 379, 380 (5th Cir. 2008Xenforcing arbitration agreement

in FDCPA claim); Smith v. Steinkamp, 2002 WL 1364161 (S.D. Ind. May 22,

2002) afl'd., 318 F.3d 775 (7th Cir. 2003)(granting defendants' motion to compel

arbitration ofFDCPA claim, amongst other claims); Tickanen v. Harris & Harris,

Ltd., 461 F. Supp. 2d 863, 870-71 (E.D. Wis. 2006)(finding arbitration required

for FDCP A claims when a valid arbitration provision exists).

A liberal construction of the CilJ"bank Card Agreement and accompanying

Arbitration Agreement requires a finding !hat plaintiff Hudson's claim regarding

!he manner in whi,ch defendants attempted to coHect a debt under !he Citibank

Card Agreement must be resolved in arbitration. Piaintitrs allegations against

defendants relate to !he Citibank Card agreement and are subj ect to the arbitration

provision.

Joinder in Motion to Compel AIbitration Hudson v. Citibank (South Dakota) NA, et ai, Case No. 3AN-11-9196 CI

Page 6 ofS 36 a a a I 8 B

" • • B. Alaska Law Offices, Inc. and Clayton Walker are Representatives

of Citibank and Can Enforce the Arbitration Agreement.

Citibank hired Alaska Law Offices, Inc. ("ALO") and Clayton Walker to represent

it in collecting the debt owed by plaintiff. ALO and Clayton Walker are authorized

representatives of Citibank and thus subj ect to the arbitration agreement. The Arbitratio::J

Agreement states:

Whose Claims are subject to arbitration? Not only ours and . yours, but also Claims made by or against anyone connected with us or you or claiming through US or you, such as a co-applicant, authorized user of your account, an employee, agent, representative, affiliated company, predecessor or successor, heir assignee, or trustee in bankruptcy. See Citibank's Motion to Compel Ex. 2.

Since Citibank hired ALO and Clayton Walker to pursue collection actions under

the cardholder agreement Hudson signed with Citibank, ALO and Walker are "authorized

representatives" wi1hin the meaning stated in the cardholder agreement. Hodson v.

Javitch, Block & Rathbone, LLP, 531 F . Supp. 2d 827,831 (N.D. Ohio 2008)(finding the

law firm Capital One hired to collect debts under cardholder agreement is an authorized

representative under the arbitration agreement). As authorized representatives, claims

against ALO and Walker fall within the scope of the arbitration clause.

m. CONCLUSION

The current litigation must be stayed pending completion of the arbitration

proceedings. ALO defendants will refrain from restating all of the compelling arguroents

presented by defendant Citibank in its Motion to Compel Arbitration, but will join in

Joinder in Motion to Compel AIbi1ra1ioD HudsoD v. Citibank (South Dakota) NA, et al, Case No. 3AN-1l-9196 CI Page 7 of8 37

000189

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•

• • Citibank's motion and incorporate the arguments contained in the motion by reference.

For the foregoing reasons, ALO defendants request the com! grant 1he Motion to Compel

Arbitration.

DATED this 6th day of September, 2011, at Anchorage, Alaska.

By:

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was served by mail this 6th day of September, 2011 on:

James J. Davis, Jr. Goriune Dudukgian Ryan H. F omon Northern Justice Project 310 K Street, Suite 200 Anchorage, AK 99501.

Jon S. Dawson Davis Wright Tremaine, LLP 701 W. 8th Avenue, Suite 800 Anchorage, AK 99501 Attorney for Citibank

v4?a~~~ R1tiIMOND & QUINN 2331.002\PLD\Joindcr Compol Arbill'ltitn

Joinder in Motion to Compel Arbitration

RICHMOND & QUINN Attorneys for Defendants Alaska Law Offices, Inc., and Clayton Walker

Marc Willlelm Alaska Bar No. 8406054

Hudsoll v. Citibank (South Dakota) NA, et al, Case No. 3AN-1l-9196 CI

Page 8 of8 38 000 I 90

r-. 'I' ,

iii M, • • IN 1HE1SUPERIOR COURT FOR 1HE STATE OF ALASKA

TIllRD JUDICIAL DIS1RICT AT ANCHORAGE

JANET HUDSON, on behalf of herself and all others similarly situated,

PIaintifiS,

v.

CITIBANK (South Dakota) NA, ALASKA LAW OFFICES, INC., and CLAYTON WALKER,

Defendants.

) ) ) ) ) ) ) ) ) ) ) )

Case No. 3AN-11-9196CI

~------------------- ) ).} MEMORANDUM IN OPPOSITION TO DEFENDANTS' MOTIONS TO

COMPEL ARBITRATION AND IN SUPPORT OF PLAINTIFF'S CROSS­MOTION FOR PARTIAL SUMMARY JUDGMENT

L INTRODUCTION

Plaintiff Janet Hudson opposes defendant CitJ."ank (South Dakota) NA's

Motion to Compel Arbitration and defendant Alaska Law Offices, Inc.'s "Joinder" in

that motion. Plaintiff also cross-moves for partial summary judgment, asking this

Court to hold that Citibank's arbitration provision is unenforceable.

Defendants' motions should be denied for four primary reasons. First, on-point

caselaw from the Alaska Supreme Court provides that where, as here, one party

reserves the UDjlatera! right to change an arbitration agreement, that agreement is void

as against public policy.

MEMORANDUM IN OPPOSITION TO MOTIONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS-MOTION FORPAR11AL SUMMARY JUDGMENT Janet Hudson, et 01. v. Citibank (South Dakota) NA. et 01., No. 3AN-1l-9196 CI Page 1 oe27 39

000 133

• • Second, on-point caselaw from the A1aska Supreme Court provides that where,

as here, a plaintiff's statutory claims cannot be vindicated in the arbitral forum,

arbitration is not required.

Third, caselaw from around the country teaches that where, as here, one party

has sought judicial relief against the other, that party has waived its right to da.mand

arbitration by the second party.

Finally, a review of the record before this Court and applicable caselaw shows

that the Citi and plaintiff never agreed to arbitrate this dispute.

As detailed below, defendants pin their motions almost exclusively on the

United States Supreme Court's decision in AT&T Mobility, LLC v. Conception.! But

defendants are over-reading that case, as are many corporate defendants around the

country. To be sure, Conception bars any and all state laws that target arbitration

provision. And this is for good reason: it is well-settled that arbitration is strongly

favored as a means of dispute resolution. However, state laws that do not target

arbitration provisions but, instead, are generally applicable to all contracts, were not at

issue in. Conception and remain valid in its wake. Indeed, the United States Supreme

Court recently reaffirmed this very principle. Rent-A-Center, w., Inc. v. Jackson,

_U.S.--> 130 S. Ct. 2772, 2776 (2010) ("The FAA thereby places arbitration

agreements on an equal footing with other contracts, and requires courts to enforce

them according to their terms. Like other contracts, however, they may be invalidated

_U.S.-, 131 S.Ct. 1740 (2011).

MEMORANDUM IN OPPOSITION TO MOTIONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT Janet Hudson, .t al. v. Citi/xmk (SouthDakota) NA, et al.. No. 3AN-1l-9196 CI Page 2 of27 40

000134

\ . • • by 'generally applicable contract defenses, such as fraud, duress, or

unconscionability. "') (citations and quotations omitted).

Partial summary judgment should be granted to plaintiff holding that the at-

issue arbitration provision is not enforceable for any and all class members who: (1)

had arbitration unilaterally imposed on them by Citibank; or (2) whose arbitration

provision was unilaterally modified by Citibank; or (3) who where the subject of

litigation over the same credit card by defendants.

n. RELEVANT BACKGROUND

In April 1999, Citibank C"Citij and plaintiff entered into a contract for the

issuance of a credit card (hereinafter "Card Agreement',).2 The contract that Citi and

the plaintiff entered into did not contain any arbitration provision.3

In October 2001, Citi acted to unilaterally modify its contract with plaintiff by

adding an arbitration provision.4 Citi attempted to effectuate this unilateral change by

mailing to plaintiff a notice with her billing statement. 5 Caselaw refers to this practice

of attempting to change a contract with an inset to a billing statement as a "bill

stuffer.'.6

2

3

• ,

See Affidavit of Cathleen Walters, filed by Citi ("Walters Aff.").

Id at Exhibit l.

Id. at 16. Id

• See Badie v. Bank of America, 67 Cal. App. 4th 779, 803 (Cal. App. 1998); Kortwn-Managhan v. Herbergers NBGL, 204 P.3d 693,695 (Mont. 2009).

MEMORANDUM IN OPPOsmON TO MonONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT JDnel HwIs"", rt al. v. Ctt/banI< (SovthDalwtq) NA, or aL, No. 3AN-1I-9196 CI peg.3m27 41

000 135

, 1

, • • In February 2005, Citi acted to unilaterally modify the at-issue arbitration

provision.7 Citi attempted to effectuate this unilateral change to its arbitration

provision by mailing plaintiff another "bill stuffer."B

Subsequently, plaintiff fell behind on her credit card payments. Citi retained a

debt collector law finn, "Alaska Law Offices, Inc." ("ALO"), to sue plaintifI.9 ALO

and Citi sued plaintiff in the Alaska state district court in Kenai over the at-issue credit

card.IO Defendants thereafter obtained a judgment against plaintiff in the Alaska state

court concerning the at-issue credit card.n Defendants thereafter began using the

Alaska state court to collect on the judgment they obtained against plliintiff concerning

the at-issue credit card.12 Defendants' Alaska state court lawsuit against plaintiff over

the at-issue credit card is still pending and active. 13

The default judgment that defendants took against plaintiff contained grossly

excessive and illegal attorney's fees.14 This inflated fee award was based on

defendants' intproper request for a contingency fee award, instead of the fees tltat are

• Walters Aff. at ,12 .

Id.

• Alaska Law Offices refers to itself as a "debt collector." See Exhibit I to the Certificate of James J. Davis, Jr. (,'Davis Cert.") filed and served herewith.

10 Id.

11

12

13

14

Id. at Exhibit 2.

Id

Id at Exhibit 3.

Id at Exhibit 4.

MEMORANDUM IN OPPOSmONTO MOTIONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS-MOTION FOR PARTIAL SUMMARY JUDGMENT Janet Hudson. et al. v. Citibank (S0flth Dakota) NA. et aJ., No. 3AN-11-9196 CI Page 4 of27 42 0001 36

, , . • • mandated by the plain language of Civil Rule 82.15 The court system's records show

that defendants have acted in this precise same way vis-a-vis hundreds of other Alaska

consumers.16

Plaintiff filed suit against defendants on July 15, 2011. In her lawsuit plaintiff

seeks an injunction as a ''private attorney general" in accord with fue express

provisions of Alaska's Unfair Trade Practices and Consumer Protection Act

("UfPA"), AS 45.50.471 et seq.17 The UTPA's grant of broad injunctive power to

15 Defendants filed an Affidavit of Actual Attorney Fees (hereafter "Affidavit"). Davis Cm at Exhibit 5. In their Affidavit, defendants averred that their "actual attorney fees charged in this case are $4,834.05." Defendants further averred that "$4,834.05 exceed the Alaska Civil Rule 82 undisputed attorney's fees default rate of 10%. Accordingly, the attOrney's fees under Alaska Rule 82 should be $2417.02."

Based on defendants' Affidavit, the court awarded defendants $2,417.02 in attorney's fees against fue plaintiff. Davis Cert. at Exhibit 4.

Under Alaska Civil Rule 82(bX4), when judgment is entered by default, a plaintiff may recover "its reasonable actual fees which were necessarily incurred" or 10% of the judgment, whichever is less. It is well settled under Alaska law that a contingency fee agreement is not a proper measure of the "reasonable actual fees" incurred by a party in a lawsuit. Rather, "reasonable actual fees" must be determined according to the number of hours actually worked on the case and the attorney's reasonable hourly rate.

Defendants' Affidavit injured plaintiff. By wrongfully basing their "actual attorney fees" of$4,834.05 on a contingency fee agreement, as opposed to the number of hours typically spent by debt collecting lawyers in prosecuting a consumer default (ie., less than 2 hours), defendants obtained a radically inflated judgment against plaintiff. That is, defendants obtained a fee award of$2,417.02 instead of approximately $250.00 -an overcharge of over 950"10.

\6 Davis Cert. at Exhibit 6.

17 The UTPA's "private attorney general" provision, AS 45.50.535(a), provides private litigants with the right to seek injunctive relief regardless of whether that individual was banned personally:

MEMORANDUM IN OPPOSITION TO MOTIONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS·MOTION FORPARTlAL SUMMAllY JUDGMENT Janel HwlsolI, et al. v. Cilibank (SouJhDa/tDIa) NA, et aI, No. 3AN-11-9196 CI Page 5 of27 43

000137

1 ' • • private citizens, qua private attorney generals is not particularly unique. The term has

been in use for over 60 years 19 and thirty-three states authorize private injunctive

actions under their consumer protection acts.20 The private attorney general doctrine

recognizes ''that privately initiated lawsuits are often essential to the effectuation of the

fundamental public policies embodied in constitutional or statutory provisions.''"') .As

the Washington Supreme Court stated in Hocldey v. Hargitt,'ll

[P]ublic policy is best served by permitting an injured individual to enjoin future violations of [Washington's Consumer Protection Act] even if such violations would not directly affect the individual's own private rights. If each consumer victim. were limited to injunctive relief tailored to his own individual interest. the fraudulent practices might well continue unchecked while a multiplicity of suits developed. On the other hand, if a single litigant is allowed to represent the public and consumer fraud is proven, the multiplicity of suits is avoided and the illegal scheme brought to a halt Both results are in the public interest and

Subject to (b) of this section and in addition to any right to bring an action under AS 45.50.531 or other law, any person who was the victim of the unlawful act, whether or not the peI1lon suffered actual damages, may bring an action to obtain an injunction prohibiting a seller or lessor from continuing to engage in an act or practice declared unlawful under AS 45.50.471.

1. The term was first used by the United States Supreme Court in C.C. v. Nat'l Broad. Co., Inc., 319 U.S. 239, 265 n.1 (1943) (Douglas, J., dissenting) (quoting Assoc. Indus. ofNr:w Yorkv. Ickes, 134 F .2d 694 (2d Cir. 1943».

,. See Dee Prigdon, CONSUMBRPR.OTECTION & TIlE LAw § 6:9 (2005).

21 See Ann K. Wooster, Annotation, Private Attorney General Doctrine - State Cases, 106 AL.R. 5th 523 (citing Cal. Civ. Proc. Code 1021.5; People ex rei. Dep't of Conservation v. E1 Dorado County, 108 Cal. App. 4th 672 (3d Dist 2003».

22 510 P.2d 1123 (Wash. 1973).

MEMORANDL'MIN OPPOsmON TO ManONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS·MOTION FOR PARTIAL SUMMARY JUDGMENT Janet Hudson, et aL 11. CUibonk (Soll1h DakDIa) NA • • 1 aL, No. 3AN-ll·9196 CI Page 6 of27 44

000138

• • consistent with the liberal construction of our Consumer Protection Act.23

The availability of such relief reflects the important role that state consumer

protection acts, including the UTP A. have in allowing a private attorney general to

supplement the efforts of law enforcement and regulatory agencies in combating unfair

business practiceS.24

In her complaint, plaintiff seeks an injunction against defendants under the

UTP A whereby defendants will be ordered to cease and desist from their illegal

conduct, will be ordered to file conected judgments vis-a-vis the hundreds of other

injured Alaska consumers, and will be required to disgorge to these consumers any and

all illegal attorney's fees.2S

Defendants now move to compel arbitration of plaintiff's lawsuit and argue that

plaintiff should not be allowed to use the state court to address their own misuse of the

23 Id. at 1133. See also Consumers Union of United States, Inc. v. Fisher Dev., 208 Cal. App. 3d 1433, 1439 (Cal. App. 1989) (''The courts in California have consistently upheld the right of both individual persons and organizations under the unfair competition statute to sue on behalf of the public for injunctive relief as 'private [attorneys] general,' even if they have not themselves been personally harmed or aggrieved. ").

l4 See Smallwood v. Cent. Peninsula Gen. Hosp., 151 P.3d 319, 328 n.43 (Alaska 2006); see also Kraus v. Trinity Management Serv., 23 Cal. 4th 116, 138 (Cal. 2000) (directing the trial court on remand to order landlord to "identify, locate, and repay to each former tenant charged liquidated damages the full amount of funds improperly acquired from that tenant") (emphasis added).

25 See First Amended Complaint 1[23; see also Davis Cm. at Exhibit 7 (the cease and desist letter that plaintiff sent to defendants in accord wi1h the UTP A).

MEMORANDUM IN opPOsmON TO MOTIONS TO COMPEL ARBITRATION AND IN SUPPOR.T OF CROSS-MOTION POR. PAR.TIAL SUMMARY JUDGMENT JarwJ Hudson, et al. v. ClJibank (South Dalwta) NA, et aJ., No. 3AN-II-9196 CI Page 7 of27 45

000139

, • • state courts. Citi' s arbitration provision explicitly prohibits plaintiff; and any

consumer, from acting as a private attorney general.26

Defendants have not acted to shift their pending state court case against plaintiff

into arbitration. A1> noted above, that case remains active: on July 18, 2011, after

plaintiff had filed this lawsuit, defendants received a disbursement from the Kenci

district court after seizing money from defendant?7

m. ARGUMENT AND AUTHORITIES

The parties share some common ground. They agree that this Court, and not

any arbitrator, must decide whether arbitration is required. 2& Second, they agree that

arbitration is generally preferred.29

A1>ide from agreeing on these two issues, the parties disagree about most of the

remaining legal issues.

A. In Alaska, the Unilateral Power to Change an Arbitration Provision Renders it Unconscionable.

Citi does not hide the fact that it had the unilateral power to add, and to change,

its arbitration agreement with plaintiff. In fact, Citi touts its unilateral power. 30 The

20

27

See Citi's Br. at 5, lines 7-9.

Davis Cert. at Exhibit 3.

2. See Classified Emples. Ass 'n Y. Matanuska-Susitna Borough Sch. Dist., 204 P.3d 347, 353 (Alaska 2009) (holding that arbitrability is a threshold question for the court, not the arbitrator.).

29 See Gibson Y. NYE Frontier Ford, Inc., 205 P.3d 1091, 1096 (Alaska 2009) (''The FAA e"Vinces a strong policy in favor of the arbitration of disputes. Alaska's Uniform Arbitration Act and Revised Uniform Arbitration Act reflect the same policy at the state le"Vel.").

MEMORANDUM IN opposmON TO MOTIONS TO COMPEL ARBITRATION AND IN SUPPORT OF CROSS-MOTION FOR PARTIAL SUMMARY ruDGMENT Janel Hudson, et al. v. embank (StnlIh Dakota) NA. et al.. No. 3AN-II-9196 CI Page 8 of27 46

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