Cimillo v. Affirm, Inc.

Background

Alana Cimillo sued Experian Information Solutions, Inc. (EIS), alleging violations of the Fair Credit Reporting Act (FCRA) and the New York Fair Credit Reporting Act based on allegedly inaccurate reporting of credit information. She alleged that her former fiancé obtained loans from Affirm, Inc., in her name without permission and that EIS continued reporting the accounts after she disputed them. Affirm had previously been a defendant but was dismissed after Cimillo and Affirm reached a settlement.

EIS moved under the Federal Arbitration Act (FAA) to compel arbitration and stay the court proceedings. EIS relied on the terms that Cimillo accepted when she enrolled in CreditWorks, a credit-monitoring service provided by EIS’s affiliate, ConsumerInfo.com, Inc., which does business as Experian Consumer Services (ECS).

Agreement to Arbitrate

The court applied New York contract law to determine whether an arbitration agreement existed. The enrollment page stated, in bold text, that clicking the “Submit Secure Order” button meant the user accepted the Terms of Use Agreement. The phrase “Terms of Use Agreement” was a conspicuous hyperlink to the full terms, which included a broad arbitration provision covering disputes related to the services and websites. The provision also extended its references to ECS, the user, and the parties to include affiliates.

The court held that the webpage design and language clearly and conspicuously informed Cimillo of the arbitration terms and that clicking the enrollment button showed affirmative assent. Cimillo said she did not remember enrolling in CreditWorks, using it, seeing the arbitration agreement, or agreeing to arbitrate. The court held that her lack of recollection did not create a genuine factual dispute about whether she assented.

Who Decides the Scope of Arbitration

The arbitration provision stated that the arbitrator had exclusive authority to decide issues concerning the provision’s scope and enforceability. It also incorporated the American Arbitration Association’s rules, which authorize an arbitrator to decide questions of arbitrability. The court therefore held that the parties clearly and unmistakably agreed for an arbitrator—not the court—to decide the scope of the arbitration agreement, including whether Cimillo’s FCRA claims fell within it.

Federal Arbitration Act

Cimillo argued that the FAA did not apply because her FCRA claims did not arise from the Terms of Use Agreement. The court rejected that argument, reasoning that it concerned the scope of the arbitration agreement, which the parties had delegated to the arbitrator. The court found that the Terms of Use Agreement was a contract involving interstate commerce and was not an employment contract excluded from the FAA. The opinion also noted that Cimillo did not argue that Congress had barred arbitration of her FCRA claims.

Waiver

Cimillo argued that EIS waived arbitration by answering the complaint, participating in conferences and mediation, and taking part in discovery before moving to compel arbitration approximately nine months after the case began. The court considered EIS’s litigation conduct and held that EIS had not waived its arbitration right. It emphasized that the motion was EIS’s first substantive motion, no depositions had occurred, and the litigation and discovery were not sufficiently extensive to establish waiver.

Ruling and Disposition

The court granted EIS’s motion to compel arbitration and stay the action. It ordered the parties to arbitrate their dispute and stayed the litigation pending arbitration. The Clerk was directed to terminate the motion and administratively close the case, without prejudice to either party seeking to reopen it by letter motion within 30 days after the arbitration proceedings concluded.