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Jeffries v. Wells Fargo & Co.

United States District Court, N.D. Alabama, Southern Division

July 25, 2017

DOUGLAS JEFFRIES, et al., Plaintiffs,
WELLS FARGO & COMPANY, et al., Defendants.


          L. Scott Coogler United States District Judge.

         Plaintiffs Douglas Jeffries (“Mr. Jeffries”) and Joann Jeffries (“Ms. Jeffries”) (collectively, “Plaintiffs”) bring this action against Defendants Wells Fargo & Company and Wells Fargo Bank National Association (collectively, “Defendants” or “Wells Fargo”), alleging that Wells Fargo used its existing customers' personal information to open additional accounts in those customers' names without their knowledge or consent. Plaintiffs purport to represent a class of all affected Wells Fargo customers in Alabama. Before this Court are Defendants' motions to compel arbitration. (Docs. 6, 27.) For the reasons explained more fully herein, the motions are due to be granted.

         I. Background

         On February 5, 2014, Plaintiffs opened a joint checking account and a joint savings account at their local Wells Fargo branch in Gulf Shores, Alabama. In so doing, they executed a Consumer Account Application, which stated above the signature line,

I have received a copy of the applicable account agreement, the privacy policy, and the Direct Deposit Advance Service Agreement and Product Guide* (as each may be amended from time to time) and agree to be bound by their terms. I also agree to the terms of the dispute resolution program described in the foregoing agreements. Under the dispute resolution program, our disputes will be decided before one or more neutral persons in an arbitration proceeding and not by a jury trial or before a judge.

         (Doc. 7-2 (filed under seal) (bolded text in original).) According to Plaintiffs, they did not receive a copy of the April 1, 2013 Consumer Account Agreement upon applying for their accounts, but they did receive a package labeled “New Business Account Kit”-with the word “business” scratched through-that contained a book of deposit and withdrawal slips.

         On April 25, 2014, Plaintiffs completed two Consumer Deposit Account Relationship Change Applications-one for each account-to add another individual to their accounts. That same day, Ms. Jeffries and the third individual also opened a joint checking account with Wells Fargo. The Consumer Deposit Account Relationship Change Applications and the Consumer Account Application for the new account included a bolded statement nearly identical to that on the initial Consumer Account Application Plaintiffs completed when they opened their accounts.[1] Plaintiffs used their joint checking and savings accounts regularly until August 7, 2014, when the accounts were closed. The third account held jointly by Ms. Jeffries and the other individual was in use as late as November 2016.

         According to Wells Fargo, the “applicable account agreement” mentioned in the Consumer Account Application is the Consumer Account Agreement.[2] The “dispute resolution program” section of this Agreement explains that any disputes between Wells Fargo and the customer “will be resolved through the arbitration process as set forth in this part.” (Doc. 7-3 at 8.) It defines “dispute” to include “any disagreement relating in any way to services, accounts or matters; to your use of any of the Bank's banking locations or facilities; or to any means you may use to access your account(s).” (Id. (emphasis in original).) It further provides that “[t]he arbitrator shall decide any dispute regarding the enforceability of this arbitration agreement.” (Id.)

         After opening their accounts, Plaintiffs received three Wells Fargo credit cards that, according to Plaintiffs, “they neither requested nor authorized.” Plaintiffs allege that Wells Fargo told them that the first credit card was an error and requested that they return it to the bank, and Plaintiffs did so. Plaintiffs claim that they cut up the other two cards, but at some point Mr. Jeffries opened a credit card account with Wells Fargo and used this card to make two purchases in May 2014. Plaintiffs believe that they received the cards because Wells Fargo's employees used their personal information to open the credit card accounts without Plaintiffs' knowledge or consent.

         Plaintiffs filed this action in Alabama state court on November 4, 2014, alleging that Wells Fargo's employees used their personal information to open additional, unauthorized accounts and purporting to represent all Alabama consumers whose personal information was also used to create such accounts. Defendants removed the case to this Court on December 13, 2016, and filed a motion to compel arbitration shortly after.

         This action is one of several suits alleging similar claims against Wells Fargo that have been filed in other courts across the United States, and the plaintiffs in one such case moved to have all cases consolidated before the Judicial Panel on Multidistrict Litigation. See In re Wells Fargo Fraudulent Account Opening Litig., MDL No. 2766, 2017 WL 1283679, at *1 (J.P.M.L. Apr. 5, 2017) (mem) (to be published in F.Supp.3d). The Panel denied the motion because the parties had “reached a nationwide class settlement in principle” in Jabbari, v. Wells Fargo & Company, , No. 3:15-cv-02159-VC, currently pending in the Northern District of California. Wells Fargo Fraudulent Account Opening Litig., 2017 WL 1283679, at *1. The settlement was preliminarily approved by the district court on July 8, 2017, and a class action fairness hearing is set for January 4, 2018. The Jabbari settlement would encompass Plaintiffs' claims in the action before this Court.

         II. Standard of Review

         In ruling on a motion to compel arbitration, this Court applies a standard similar to review of a motion for summary judgment. See In re Checking Account Overdraft Litig., 754 F.3d 1290, 1294 (11th Cir. 2014) (describing an order compelling arbitration as “summary-judgment-like” because it is “in effect a summary disposition of the issue of whether or not there has been a meeting of the minds on the agreement to arbitrate”). A motion for summary judgment is due to be granted upon a showing that “no genuine dispute as to any material fact” remains to be decided in the action and “the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). A fact is material “if, under the applicable substantive law, it might affect the outcome of the case.” Hickson Corp. v. N. Crossarm Co., 357 F.3d 1256, 1259 (11th Cir. 2004). A genuine dispute as to a material fact exists where “the nonmoving party has produced evidence such that a reasonable factfinder could return a verdict in its favor.” Waddell v. Valley Forge Dental Assocs., Inc., 276 F.3d 1275, 1279 (11th Cir. 2001).

         Further, the parties appear to agree that the Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., governs any arbitration agreement between them. “The FAA makes enforceable a written arbitration provision in ‘a contract evidencing a transaction involving commerce.'” Jenkins v. First Am. Cash Advance of Ga., LLC, 400 F.3d 868, 874 (11th Cir. 2005) (quoting 9 U.S.C. § 2). It embodies “a clear presumption . . . in favor of arbitration” by “requir[ing] the courts to enforce an arbitration provision within a contract . . . unless [the provision is] defeated by ...

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