Raizy v. Credit Plus Inc.

Background

Raizy Levy brought a proposed class action under the Fair Credit Reporting Act against Experian Information Solutions, Inc. She alleged that, after she settled her Capital One account in September 2019, Experian continued reporting that she owed money. According to the complaint, a credit report generated on April 30, 2020 showed the alleged obligation and hindered her from obtaining a loan. Levy also initially sued Credit Plus, Inc., Equifax Information Services, LLC, and Transunion, LLC, but the parties stipulated to dismissal of those entities.

The remaining dispute concerned Experian’s motion to compel arbitration. Levy had created a CreditWorks account operated by Experian Consumer Services on March 5, 2020. The account-creation page stated that clicking “Create Your Account” meant accepting the linked Terms of Use Agreement. The 2019 terms contained an arbitration provision covering Experian Consumer Services and its affiliates. Levy later accessed CreditWorks after updated terms took effect on May 5, 2022. Those terms broadly covered disputes relating to the services or websites, prohibited class actions and class arbitration, and assigned questions about the arbitration agreement’s scope and enforceability to an arbitrator.

Court’s Analysis

The court applied New York law to contract formation. It concluded that Experian Information Solutions was an affiliate of Experian Consumer Services and therefore a party entitled to enforce the arbitration agreement. The court relied on the terms’ reference to affiliates, the entities’ common parent, the references to Experian as a source of credit information, and a sworn declaration stating that the entities were affiliates.

The court also found that Levy had agreed to arbitrate. The arbitration notice was displayed in blue, bold text immediately above the account-creation button, and “Terms of Use Agreement” was a hyperlink to the full terms. Under the court’s analysis, a reasonable user would understand that clicking the button accepted the linked terms, whether or not the user opened the hyperlink.

The court determined that the 2022 terms governed because the earlier terms stated that continued access or use of the services signified acceptance of the then-current terms, and Levy undisputedly accessed CreditWorks after May 5, 2022. The court further held that the 2022 arbitration provision clearly and unmistakably assigned arbitrability questions—meaning questions about whether a dispute falls within the arbitration agreement—to the arbitrator. It cited both the incorporation of the American Arbitration Association rules and the provision stating that the arbitrator had exclusive authority over the agreement’s scope and enforceability.

Finally, the court rejected Levy’s argument that Experian had waived arbitration through litigation conduct. Nine months had passed between the start of the case and Experian’s request to file the motion, but the court found that period relatively short. The case had involved no dispositive motions and less than 200 pages of exchanged documents. The court therefore concluded that Experian had not knowingly given up its right to arbitrate.

Disposition

The court found that the arbitration agreement was valid, that the claims before it were arbitrable, and that Experian had not waived its right to compel arbitration. It granted Experian’s motion to compel arbitration, ordered the parties to arbitrate, and stayed further judicial proceedings pending completion of arbitration. The court also noted that the class-action waiver required Levy to proceed individually in arbitration. The Clerk of Court was directed to terminate the pending motion.