United States District Court, D. Connecticut
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.
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