Dill v. JPMorgan Chase Bank, N.A.

Background

The plaintiffs brought a proposed class action concerning JPMorgan’s alleged failure to comply with state escheatment laws governing abandoned cashier’s checks. The plaintiffs stated that the checks were payable to them and other similarly situated payees. They alleged that federal law required the checks to be reported to the state where each check was purchased, or, if that state was unknown, to New York, and that JPMorgan instead reported thousands of checks—allegedly worth more than $118 million—to Ohio.

JPMorgan had filed a motion to compel arbitration, meaning a request to require the dispute to be decided through arbitration rather than in court. JPMorgan relied on arbitration provisions in 2012 deposit-account agreements. The plaintiffs disputed that those provisions applied to their claims and disputed that either plaintiff had agreed to them.

The Parties’ Positions

JPMorgan asked to adjourn the March 12, 2020 pretrial conference and stay proceedings, including discovery, while the court considered the arbitration motion. The plaintiffs agreed that discovery concerning the merits of the claims and class certification should be paused, but argued that they were entitled to discovery on the threshold question of whether an arbitration agreement existed.

The plaintiffs said neither of them had signed an arbitration agreement. Appleby disputed receiving the 2012 deposit-account agreement and questioned whether a signature card referenced by JPMorgan was from 2012 or from when an existing account was opened. Dill said he did not remember receiving the 2012 agreement and denied knowing about or knowingly agreeing to its arbitration provision. The plaintiffs also challenged the evidentiary support for JPMorgan’s account of how the agreement was distributed.

Court’s Analysis

The court recognized that it must first determine whether an arbitration agreement exists before enforcing one. When the existence of an agreement is disputed, the court explained, discovery may be needed before deciding the arbitration motion. The court also noted that the question whether the parties agreed to arbitrate is governed by state contract law.

The plaintiffs cited law concerning Connecticut and California agreements and argued that traditional evidence obtained through discovery—such as documents, testimony, and sworn statements—would be needed to determine whether either plaintiff entered an enforceable arbitration agreement. The court found that the plaintiffs had raised substantive questions requiring discovery about arbitrability, meaning whether the dispute is subject to arbitration.

Ruling

Judge Katherine Polk Failla ordered the parties to confer on a schedule for discovery relating solely to the existence of a valid arbitration agreement between the parties. The parties were directed to submit a joint letter to the court by March 5, 2020, either describing an agreed discovery schedule or explaining that they could not agree and providing the other information required by the court’s pretrial notice.

The order did not decide whether a valid arbitration agreement exists, whether the arbitration provisions cover the plaintiffs’ claims, or whether JPMorgan’s motion to compel arbitration should ultimately be granted or denied.