TSADILAS v. PROVIDIAN NATIONAL BANK (2004)

Order, Supreme Court, New York County (Walter B. Tolub, J.), entered February 25, 2004, which, in a putative class action for breach of a contract governed by New Hampshire and federal law, breach of the covenant of good faith and fair dealing, and violation of General Business Law § 349, granted defendant's motion to stay the action pending arbitration, unanimously affirmed, with costs.

 Defendant sufficiently proved that it sent the arbitration provision to plaintiff (see e.g. Kurz v. Chase Manhattan Bank USA, 319 F.Supp.2d 457, 464 [S.D.N.Y.2004] ).   Plaintiff consented to it by failing to opt out (cf. Providian Natl. Bank v. Screws, 894 So.2d 625, 2003 WL 22272861) and by continuing to use her credit cards (see e.g. Kurz, 319 F.Supp.2d at 465-466).   Plaintiff is bound by the arbitration provision even if she did not read it (see e.g. Brower v. Gateway 2000, 246 A.D.2d 246, 252, 676 N.Y.S.2d 569 [1998] ).  Continental Ins. Co. v. Seppala & Aho Constr. Co., 121 N.H. 374, 430 A.2d 157 [1981] and Storms v. United States Fid. & Guar. Co., 118 N.H. 427, 388 A.2d 578 [1978] do not avail plaintiff because the arbitration provision is clear;  therefore, one need not inquire beyond its language to determine plaintiff's reasonable expectations.

 The arbitration provision is enforceable even though it waives plaintiff's right to bring a class action (see e.g. Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 32, 111 S.Ct. 1647, 114 L.Ed.2d 26 [1991];  Rosen v. SCIL, LLC, 343 Ill.App.3d 1075, 1082, 278 Ill.Dec. 770, 776, 799 N.E.2d 488, 494 [2003], lv. denied 207 Ill.2d 627, 283 Ill.Dec. 141, 807 N.E.2d 982 [2004] ).   Even if plaintiff cannot bring a class action, the Attorney General of the State of New York can bring an action to enforce General Business Law § 349 (see e.g. Pyburn v. Bill Heard Chevrolet, 63 S.W.3d 351, 366-367 [Tenn. App. 2001] ).   While the New Hampshire consumer protection statute provides for class actions (see N.H. Rev. Stat. Ann. § 358-A:10-a), plaintiff chose to sue under the New York consumer protection statute.   Under New York law, “a contractual proscription against class actions ․ is neither unconscionable nor violative of public policy” (Ranieri v. Bell Atl. Mobile, 304 A.D.2d 353, 354, 759 N.Y.S.2d 448 [2003], lv. denied 1 N.Y.3d 502, 775 N.Y.S.2d 240, 807 N.E.2d 290 [2003] ).

 Plaintiff contends that the arbitration agreement exposes her to potentially unaffordable fees.   However, “[t]he ‘risk’ that [plaintiff] will be saddled with prohibitive costs is too speculative to justify the invalidation of an arbitration agreement.   To invalidate the agreement on that basis would undermine the ‘liberal federal policy favoring arbitration agreements' ” (Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79, 91, 121 S.Ct. 513, 148 L.Ed.2d 373 [2000] ).   Furthermore, since plaintiff has failed to make use of her contractual right to ask defendant to pay her arbitration fees, her claim that the arbitration provision is unenforceable and unconscionable due to the potentially high arbitration fees is premature (see Dobbins v. Hawk's Enters., 198 F.3d 715, 717 [8th Cir.1999] ).

 Plaintiff's argument that the credit card agreement as a whole is unconscionable is for the arbitrators, rather than this Court, to decide (see e.g. Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 403-404, 87 S.Ct. 1801, 18 L.Ed.2d 1270 [1967] ).   The arbitration provision alone is not unconscionable because plaintiff had the opportunity to opt out without any adverse consequences (see e.g. Providian Natl. Bank, 894 So.2d 625, 2003 WL 22272861, supra;  Hutcherson v. Sears Roebuck & Co., 342 Ill.App.3d 109, 119, 276 Ill.Dec. 127, 133-134, 793 N.E.2d 886, 892-893 [2003], lv. denied 205 Ill.2d 582, 281 Ill.Dec. 78, 803 N.E.2d 482 [2003] ).   Arbitration agreements are enforceable despite an inequality in bargaining power (see e.g. Gilmer, 500 U.S. at 33, 111 S.Ct. 1647;  Mills v. Nashua Fed. Sav. & Loan Assn., 121 N.H. 722, 433 A.2d 1312 [1981] ).

 Plaintiff may not invoke the type-size requirements of CPLR 4544 because her own claims against defendant depend on paragraph 4 of each credit card agreement, which appears to be in the same size type as the rest of the agreement (see King Enters. v. O'Connell, 172 Misc.2d 925, 927-928, 660 N.Y.S.2d 283 [1997] ).   Even if, arguendo, she could invoke that statute and it were not preempted by the Federal Arbitration Act, it is plaintiff's burden to prove that the credit card agreements violate the type-size requirements of CPLR 4544 (see Monarch Prop. Assoc. v. Benjamin, 108 Misc.2d 251, 252, 437 N.Y.S.2d 531 [1981], mod. 114 Misc.2d 502, 454 N.Y.S.2d 173 [App. Term. 1982] ).   Plaintiff has not met that burden;  she submitted no evidence whatsoever on the type size of the credit card agreements.   Finally, even if the credit card agreements could not be considered, defendant could still insert an arbitration provision pursuant to statute (see N.H. Rev. Stat. Ann. § 384-G:12;  Personal Property Law § 413 [3][e] ).

 Defendant's reply papers were properly considered because they directly responded to plaintiff's opposition papers (see e.g. Kelsol Diamond Co. v. Stuart Lerner, Inc., 286 A.D.2d 586, 730 N.Y.S.2d 218 [2001] ).