A.D. v. Credit One Bank

Judith Serrano allowed her 14-year-old daughter, A.D. (plaintiff) to use Serrano’s credit card issued by Credit One Bank (Credit One) (defendant) to purchase smoothies. Under the Telephone Consumer Protection Act (TCPA), it was unlawful to use an automatic dialing system to call a cellphone without the express consent of the person called. Consent was assumed given by an individual who provided her cellphone number to a creditor. Serrano provided her cellphone number to Credit One when applying for a credit card in 2003. Serrano also agreed to binding arbitration when she signed Credit One’s standard credit-cardholder agreement (agreement). The arbitration clause was binding on anyone making a claim that was “connected with” the account holder. The agreement contained an authorized-user provision defining the terms and specific procedures a cardholder must follow to add an authorized user to her account. The agreement also had a catchall phrase warning cardholders that if they allowed anyone to use their card, that person would be an authorized user. However, a person younger than 15 could not be an authorized user. In 2010, Serrano used A.D.’s phone to call Credit One. Using caller ID capture software, Credit One attached A.D.’s cellphone number to Serrano’s account. When Serrano fell behind on her credit-card payments, Credit One called A.D.’s number in an attempt to collect the debt. A.D., through Serrano, brought a class action alleging Credit One’s violation of the TCPA. It was undisputed that Nevada law applied to interpretation of the agreement. Credit One was unaware for more than 18 months of discovery that the relevant cellphone number belonged to Serrano, who had signed the cardholder agreement. On realizing this, Credit One moved to compel arbitration under the agreement. The district court granted the motion, noting A.D. was an authorized user under the agreement and therefore subject to the arbitration clause.