Errato v. American Express Co.

          RULING AND ORDER ON MOTION TO COMPEL ARBITRATION AND STAY ALL PROCEEDINGS

          Victor A. Bolden Victor A. Bolden United States District Judge.

         On August 28, 2018, Robert Errato (“Plaintiff”), sued American Express Company (“American Express”), LinkedIn Corporation (“LinkedIn”), Google, LLC (“Google”), and David Whitaker (collectively “Defendants”), alleging multiple state law causes of action arising from $600, 000 in charges that were placed on his credit card account. Complaint, dated Aug. 28, 2018 (“Compl.”), annexed as Ex. A to Notice of Removal, dated Sept. 28, 2018, ECF No. 1-1, at 6-23.

         On September 28, 2018, American Expressed removed Mr. Errato's action to this Court. Notice of Removal, dated Sept. 28, 2018, ECF No. 1.

         On December 6, 2018, under 9 U.S.C. §§ 3-4, American Express moved for this Court to compel Mr. Errato to arbitrate his claims against American Express, and to stay all proceedings in this action pending arbitration. American Express Bank's Motion to Compel Arbitration and Memorandum of Law in Support (“Arb. Mot.”), dated Dec. 6, 2018, ECF No. 38

         For reasons explained below, American Express's motion to compel arbitration and stay all proceedings pending arbitration is GRANTED.

         I. FACTUAL AND PROCEDURAL BACKGROUND

         A. Factual Allegations

         Mr. Errato allegedly is a holder of an American Express Platinum Card “bearing account number ending in 6005.” Amended Complaint, dated Nov. 13, 2018 (“Am. Compl.”), ECF No. 31, at 2, ¶ 9. In addition, he allegedly holds an American Express Business Gold Card bearing account number ending in 5005, a Business Gold Card ending in 6003, a Platinum Card ending in 7001 and/or 7003, and another Platinum Card ending in 8001.” Id. at 2-3, ¶¶ 10-13.

         Mr. Errato alleges that, beginning in September 2014 and continuing through 2016, more than $600, 000 in “unauthorized and/or fraudulent charges” were made to his American Express cards by ISODOC, Inc, d/b/a ISO Developers, or by its principals, agents, or employees. Id. at 3, ¶ 15.

         Mr. Errato alleges that he properly disputed the charges, “pursuant to the terms of the Cardmember Agreement, ” and that American Express carried out an investigation. Id. at 3, ¶¶ 16-17. The investigation allegedly revealed that “the principal of ISODOC, [Mr. Whitaker], was a convicted felon who was convicted for crimes pertaining to fraud and other crimes involving moral turpitude.” Id. at 4, ¶ 17(A).

         Mr. Errato alleges that “ISODOC and/or Mr. Whitaker charged $41, 000 to Google AdWords, ” and that he had neither personally communicated with Google, or authorized such a charge. Id. at 4, ¶ 17(B).

         Mr. Errato alleges that when American Express investigated the Google AdWords charge, Google presented it with “documentation stating that [Mr. Errato] was ‘Project Manager' of ISO Developers, as well as a LinkedIn profile listing [Mr. Errato] as ‘Project Manager of ISO Developers.'” Id. at 4, ¶ 17(C). American Express then allegedly claimed that Google's information substantiated that the charges were authorized. Id.

         But Mr. Errato alleges that Google's information was false, and that he was not-and is not-affiliated with ISO Developers. Id. at 4, ¶ 17(D). He alleges that he “was never employed by it, has never set up a LinkedIn account, and was not aware that any LinkedIn account in his name had ever been created.” Id.

         Mr. Errato alleges that “[h]undreds of [t]housands of [a]dditional unauthorized charges for personal purchases such as clothing, event tickets, gym memberships advertising-services, computers and technology equipment were all fraudulently charged to [his] two American Express accounts by ISODOC, David Whitaker[, ] and/or its principals or employees, ” for which Mr. Errato “never received any product or benefit.” Id. at 4, ¶ 17(E).

         B. Procedural History

         On August 28, 2018, Mr. Errato sued American Express, LinkedIn, Google and Mr. Whitaker in the Superior Court, Judicial District of New Haven, Connecticut, alleging twelve causes of action. Compl.

         Mr. Errato alleged that American Express: (1) breached its cardholder agreement with Mr. Errato by holding him responsible for the $600, 000 fraudulent charge made to his account by a third entity called ISODOC, id. at 3, ¶¶ 9-10; 3-4, ¶ 12; 4, ¶ 14; and 6, ¶ 16; (2) breached its duty of care to Mr. Errato by continuing to honor the fraudulent charges made by ISODOC, id. at 6, ¶¶ 16-18; (3) participated in perpetuating fraud against him by continuing to honor the fraudulent charges being placed against the plaintiff's accounts, id. at 8, ¶ 19; and (4) committed unfair trade practices under the Connecticut Unfair Trade Practices Act, Conn. Gen. Stat. § 42-110a (“CUTPA”), ” id. at 9, ¶ 16.

         Mr. Errato alleged that Mr. Whitaker made the fraudulent charges to Mr. Errato's account in his capacity as a claimed authorized representative of ISODOC and ISO Developers, id. at 10, ¶ 17, and that his actions constituted civil theft and/or civil fraud under Connecticut law, id. at 12, ¶ 19.

         Mr. Errato alleged that Google breached the duty of reasonable care it owed to him and participated in the fraud against him. Id. at 13 ¶ 16; 14-15, ¶ 18.

         Mr. Errato alleged that LinkedIn breached its duty of care to Mr. Errato by failing “to remove false, fictitious and/or phony profiles on its website” and participated in the fraud against him. Id. at 15, ¶ 16; 17, ¶ 18.

         Mr. Errato also alleged that Mr. Whitaker, Google, and LinkedIn committed unfair trade practices under CUTPA., Id. at 18, ¶ 1.

         On September 28, 2018, American Express removed this case from the Superior Court, Judicial District of New Haven, Connecticut, to the United States District Court for the District of Connecticut, under 28 U.S.C. 1446. Notice of Removal, dated Sept. 28, 2018, ECF No. 1. American Express alleged that this Court has jurisdiction over this action under 28 U.S.C. § 1332 because there is complete diversity between Mr. Errato and Defendants, and because the amount in controversy is greater than $75, 000. Id. ¶ 2. American Express alleged this District is a proper venue for removal under 28 U.S.C. 1441(a) because it “encompasses Hamden, Connecticut, where this action is now pending.” Id. ¶ 16.

         That same day, Google acknowledged and consented to removal of this case from Connecticut Superior Court to the United States District Court of for the District of Connecticut. See Consent to Removal, dated Sept. 28, 2018, ECF No. 3.

         On October 1, 2018, LinkedIn Corporation consented to removal of this case from Connecticut Superior Court to the United States District Court for the District of Connecticut. See Consent to Removal, dated Oct. 1, 2018, ECF No. 10.

         On November 6, 2018, Mr. Whitaker answered Mr. Errato's complaint. Defendant David Whitaker's Answer to Plaintiff's Complaint, dated Nov. 6, 2018, ECF No. 28.

         On November 13, 2018, Mr. Errato filed an Amended Complaint. Am. Compl. In addition to his initial allegations, Mr. Errato alleges under Count 1 that at all times he was a holder of the following American Express cards: a Business Gold Card ending in 6003, a Platinum Card ending in 7001 and/or 7003, and another Platinum Card ending in 8001. Id. at 3, ¶ 11-13.

         On December 3, 2018, Mr. Whitaker answered the Amended Complaint. Defendant Whitaker's Answer to Am. Compl., dated Dec. 3, 2018, ECF No. 37.

         On December 6, 2018, American Express moved to compel arbitration under 9 U.S.C. §§ 2 and 4. Arb. Mot. American Express argues that Mr. Errato has agreed to resolving disputes through arbitration, upon assent of the “Cardmember Agreement corresponding to each account” with American Express. Id. at 1-2. American Express argues that because both parties are bound by the agreement, and because Mr. Errato's claims are within the scope of the agreement, the Court must compel Mr. Errato to arbitrate his claims against American Express. Id. at 4. American Express further argues that the Court should stay all the proceedings in this action, under 9 U.S.C. § 3, pending the outcome of the arbitration. Id. at 4-5.

         On December 7, 2018, LinkedIn moved to dismiss all of Mr. Errato's claims against LinkedIn. LinkedIn Corporation's Motion to Dismiss, dated Dec. 7, 2018 (“LinkedIn Mot.”), ECF No. 39; see also LinkedIn Corporation's Memorandum of Law in Support of Motion to Dismiss, dated Dec. 7, 2018 (“LinkedIn Mot. Mem.”), ECF No. 39-1. Specifically, LinkedIn argues that: (1) the Communications Decency Act (DCA), 47 U.S.C. § 230, bars Mr. Errato's claims against LinkedIn, since LinkedIn is an interactive computer service, Mr. Errato's claims against LinkedIn are based on information provided by a third party, and Mr. Errato's claims treat LinkedIn as a publisher, LinkedIn Mot. Mem. at 8-13; (2) that “Mr. Errato failed to plead a plausible negligence claim since he failed to allege a legal duty of care or causation as to LinkedIn, ” id. at 15-16; (3) that Mr. Errato failed to plead his fraud claim with the particularity required under Federal Rule of Civil Procedure 9(b), id. at 18; and (4) that Mr. Errato failed to plead a plausible claim under CUTPA, id. at 21-23.

         Also, on December 7, ^, 2018, Google moved to dismiss all of Mr. Errato's claims against Google. Defendant Google, LLC's Motion to Dismiss, dated Dec. 7, 2018 (“Google Mot.”), ECF No. 40; see also Memorandum of Law in Support of Google Mot., dated Dec. 7, 2018 (“Google Mot. Mem.”), ECF No. 40-1. Google argues that: (1) it owed no duty to Mr. Errato because his alleged harm was unforeseeable, it is not within the public's interest to impose such a duty on Google, and Mr. Errato had no special relationship with Google, Google Mot. Mem. at 5-9; (2) the fraud claim against Google is insufficiently pleaded because it only states allegations as to the first element of a fraud claim, id. at 9-10; and (3) since Mr. Errato's CUTPA claims are based on his allegations that Google's actions alleged in counts 8 and 9, and he has failed to sufficiently plead those counts, his CUTPA claim also fails, id. at 11.

         On December 14, 2018, LinkedIn responded to American Express's motion to compel arbitration. LinkedIn Corporation's Response to Arb. Mot., dated Dec. 14, 2018 (“LinkedIn Arb. Resp.”), ECF No. 43. LinkedIn took no position on “the merits of Amex's Motion [to Compel Arbitration].” Id. at 1. LinkedIn argued, however, that the Court should rule on its motion to dismiss before taking up the question of arbitration. See Id. at 2 (“[I]t would be more efficient for the Court and the parties for the Court to consider LinkedIn's dispositive motion - which could completely resolve the claims against LinkedIn - before the entry of any stay.”). LinkedIn argued that it would be “prejudicial to keep [it] in this case - while Errato and Amex arbitrate their issues” when outright dismissal of Mr. Errato's claims against LinkedIn “may be warranted.” Id.

         On December 20, 2018, Google responded to American Express's motion to compel arbitration. Defendant Google, LLC's Response to Arb. Mot., dated Dec. 20, 2018 (“Google Arb. Resp.”), ECF No. 47. Google did not object to the request for arbitration, but notes that “the motion [to Compel Arbitration] does not seek to have [Mr.] Errato's claims against Google included within the arbitration, not could it, and Google does not consent to the arbitration of those claims.” Id. at 1-2. In addition, Google joined American Express's request to stay this action pending the outcome of the requested arbitration, arguing that “the Court should allow the primary dispute to resolve in arbitration before determining whether there are any claims left to proceed.” Id.

         On December 21, 2018, American Express replied to LinkedIn's response to its motion to compel arbitration. American Express Bank's Reply to Linked Arb. Resp., dated Dec. 21, 2018, ECF No. 49. American Express argued that the Court should not delay its ruling on American Express's Motion to Compel Arbitration on the basis of LinkedIn's request. Id. at 1. American Express argues that there is no reason for LinkedIn's motion to be ruled on first, as opposed to American Express's motion, but notes that the decision whether to do so is entirely within this Court's discretion. Id. at 1.

         On December 27, 2018, Mr. Whitaker responded to American Express's Motion to Compel Arbitration. Defendant David Whitaker's Response to American Express's Motion to Compel Arbitration, dated Dec. 27, 2018 (“Whitaker Arb. Resp.”), ECF No. 50. Like Google, Mr. Whitaker has no objections to the request to compel arbitration, but notes that he is neither requesting nor consents to any claims against him being moved into arbitration. Id. at 1. Mr. Whitaker also joined the request to stay the action “pending the outcome of the requested arbitration.” Id.

         On January 11, 2019, American Express replied to Mr. Whitaker's response to the motion to compel arbitration, affirming that it is “not moving to compel arbitration of any of [Mr. Errato's] claims against. [Mr. Whitaker].” American Express National Bank's Reply to Whitaker Arb. Resp., dated Jan. 11, 2019, ECF No. 51.

         On January 11, 2019, Mr. Errato opposed the Google and LinkedIn motions to dismiss. Plaintiff's Response and Objection to Google Mot., dated Dec. 11, 2019 (“Pl.'s Google Opp.”), ECF No. 52; Memorandum of Law in Support of Pl.'s Google Opp., dated Jan. 11, 2019, ECF No. 53; Plaintiff's Response and Objection to LinkedIn Mot., dated Jan. 11, 2018 (“Pl.'s LinkedIn Opp.”), ECF No. 54; Memorandum of Law in Support of Pl.'s LinkedIn Opp., dated Jan. 11, 2019, ECF No. 55.

         That same day, Mr. Errato also opposed American Express's motion to compel arbitration. Plaintiff's Response and Objection to Arb. Mot., dated Jan. 11, 2018 (“Pl.'s Arb. Opp.”), ECF No. 56; Memorandum of Law in Support of Pl.'s Arb. Opp., dated Jan. 11, 2018 (“Pl.'s Arb. Mem.”), ECF No. 57. Mr. Errato argues that “the arbitration provisions alleged by Amex only pertain to two of the five charge cards alleged in the complaint” and that compelling arbitration would still leave claims based on the other three cards in this Court, unnecessarily bifurcating the dispute “between this [C]ourt and arbitration, ” Pl.'s Arb. Mem. at 4. Mr. Errato also argues that the arbitration provisions of the cardholder agreement are not enforceable because he does not recall any such provisions and does not recall receiving any particular amendment to his Cardmember Agreement containing them. Id.; see Affidavit of Robert Errato in Support of Pl.'s Arb. Opp., dated Jan. 11, 2019 (“Errato Aff.”), ECF No. 57-1.

         On January 25, 2019, both LinkedIn and Google replied to Mr. Errato's opposition to their motions to dismiss. Reply in Support of LinkedIn Mot., dated Jan. 25, 2019, ECF No. 60; Reply in Support of Google Mot., dated Jan. 25, 2019, ECF No. 61.

         On February 13, 2019, American Express replied to Mr. Errato's response to its motion to compel arbitration. American Express National Bank's Reply to Pl.'s Arb. Opp., dated Feb. 13, 2019 (“Arb. Mot. Reply”), ECF No. 62. Specifically, American Express argues that all of Mr. Errato's claims fall within the scope of the arbitration clauses of the cardholder agreement between American Express and Mr. Errato because (1) while Mr. Errato had five card numbers over the course of his relationship with American Express, he only had two accounts, id. ...