YOUSSOFI v. CREDIT ONE FINANCIAL (2018)

MEMORANDUM **

Credit One Bank, N.A., (Credit One)¹ moved to compel arbitration of Ziba Youssofi's claims arising out of Credit One's collection calls to Youssofi. Youssofi opposed the motion on the ground that she had not validly waived her constitutional right to litigate her claims in court. We hold that enforcement of the arbitration clause against Youssofi implicated no state action, and so no Petition Clause right. Accordingly, no “knowing, intelligent, and voluntary” waiver of that constitutional right was required before the arbitration agreement was enforced against her. We therefore affirm.

“Because the First Amendment right to petition is a guarantee only against abridgment by the government, state action is a necessary threshold” for a Petition Clause claim. Roberts v. AT&T Mobility LLC, 877 F.3d 833, 837 (9th Cir. 2017) (internal citations and quotation marks omitted), petition for cert. filed (Mar. 9, 2018) (No. 17-1287). For the heightened waiver standard to apply, see Leonard v. Clark, 12 F.3d 885, 889 (9th Cir. 1993), Youssofi must demonstrate state action in the alleged infringement of her Petition Clause rights.

“[N]o state action is present in simply enforcing [an arbitration] agreement.” Duffield v. Robertson Stephens & Co., 144 F.3d 1182, 1201 (9th Cir. 1998), overruled on other grounds by EEOC v. Luce, Forward, Hamilton & Scripps, 345 F.3d 742 (9th Cir. 2003). See Roberts, 877 F.3d at 838 n.1 (“It is well established that judicially enforcing arbitration agreements does not constitute state action.”) (citing Duffield, 144 F.3d at 1202).

Nor was state action present in the enforcement of Youssofi's arbitration agreement because the district court applied a substantive rule of law “in a manner alleged to restrict First Amendment freedoms.” Cohen v. Cowles Media Co., 501 U.S. 663, 668, 111 S.Ct. 2513, 115 L.Ed.2d 586 (1991) (listing cases); New York Times Co. v. Sullivan, 376 U.S. 254, 265, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964). Unlike the substantive laws at issue in Sullivan and Cohen, which were state-created and state-imposed, “the requirement that [Youssofi] actually arbitrate her lawsuit ․ is found in her private contract, not in federal law.” Duffield, 144 F.3d at 1201; see Roberts, 877 F.3d at 844. Had Youssofi abided by the agreement to arbitrate, see 9 U.S.C. § 4, there would have been no involvement by the courts at all.

In the district court's enforcement of her arbitration agreement, Youssofi failed to demonstrate state action. The district court's order granting Credit One's motion to stay proceedings and compel arbitration is AFFIRMED.

FOOTNOTES

1.   Although the caption names “Credit One Financial,” Credit One Bank, N.A., is the properly named defendant-appellee.