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Valle v. ATM National, LLC

United States District Court, S.D. New York

January 30, 2015

JOSEFINA VALLE and WILFREDO VALLE, individually and on behalf of all others similarly situated, : Plaintiffs,



On October 3, 2014, plaintiffs filed this putative class action claiming that defendants improperly charged ATM fees and surcharges for using the Allpoint Network of ATMs. (ECF No. 1.) The Complaint alleges violations of the federal Electronic Funds Transfer Act ("EFTA") and banking Regulation E, unjust enrichment, and New York General Business Law ("GBL") § 349 and § 350. On October 20, 2014, defendant Popular Community Bank f/k/a/Banco Popular North America ("BPNA") gave plaintiffs written notice of its election to arbitrate the dispute. (Nieland Decl. ¶ 2, Ex. 1.) Four days later, plaintiffs filed an Amended Complaint wherein they abandoned their breach of contract claim and limited their claims to a time-period ending December 31, 2013, the month before plaintiffs' account agreements had been amended to add an arbitration provision. (ECF No. 12.)

On December 2, 2014, BPNA moved to compel arbitration on the ground that plaintiffs and BPNA are parties to an agreement giving either party the right to compel arbitration of their disputes. (ECF No. 28.) On December 8, 2014, remaining defendants Cardtronics and ATM National, LLC d/b/a Allpoint Network made substantively the same motion to compel arbitration. (ECF No. 44.) Cardtronics and Allpoint rely on plaintiffs' arbitration agreement with BPNA which states that plaintiffs agreed to arbitration with "not only the Bank" but also with "any party named as a co-defendant with us in a Claim asserted by you." (Contract at 10, ECF No. 34-2.) Accordingly, if the claims against BPNA must be arbitrated, so must the claims against the remaining defendants.

Separately from the arbitration motions, Cardtronics and Allpoint filed a motion to dismiss on December 2, 2014. (ECF No. 25.) On December 8, 2014, the Court stayed discovery of all kind pending resolution of the motion to compel arbitration. (ECF No. 43.)

For the following reasons, the Court GRANTS the motions to compel arbitration.


In September 1999, plaintiff Josefina Valle opened a savings account with BPNA in her name and in trust for her son, plaintiff Wilfredo Valles. (Compl. ¶¶ 10-11.) Neither party has been able to produce the contract in existence when plaintiffs' account was opened. (Randazzo Decl. ¶ 4, ECF No. 33.) In July 2010, BPNA announced that its deposit account customers could use thousands of Allpoint Network ATMs for "Free" and without being subject to ATM fees or surcharges by wither BPNA or Allpoint. (Compl. ¶ 28.) Despite Allpoint, Cardtronics and BPNA each representing the use of those ATMs as "free" and not subject to ATM fees or surcharges (Id. ¶¶ 29-31, 34-36), plaintiff alleges that each defendant ultimately imposed such fees (Id. ¶¶ 44-45).

In January 2014, BPNA issued a Personal Banking Disclosure and Agreement to its deposit account holders explaining that an Amended Agreement would become the operative agreement between BPNA and its deposit account holders. (Staker Decl. ¶ 3, Ex. 1 ("January 17 Letter").) The Amended Agreement contained an Arbitration Provision and Class Action Waiver ("Arbitration Provision") giving either party the right to arbitrate any "Claim" arising from "this Agreement or the deposit account." (Amended Agreement at 8.) A "Claim" is defined as including any "legal claim, dispute or controversy" that:

Arises from or relates in any way to... the deposit account including:... (ii) the fees or charges we or other parties impose in connection with... the deposit account... (v) any service or product offered or made available by or through us... including any associated fees, charges, terms or disclosures; and (vi) any documents, instruments, advertising or promotional materials that contain information about this... deposit account, or any other such service or product. "Claim" includes, without limitation, disputes concerning the validity, enforceability, arbitrability or scope of this Arbitration Provision or this Agreement, disputes involving alleged fraud or misrepresentation, breach of contract, negligence or violation of statute, regulation or common law; and disputes involving requests for injunctions or other equitable relief.

(Id. at 9-10.)

In the one-page January 17 Letter, BPNA said that deposit account holders could reject the Amended Agreement "by closing your account and withdrawing your funds within sixty (60) days of the date of this notice." (January 17 Letter.) The Amended Agreement also specified that deposit account holders could opt out of the Arbitration Provision by mailing a signed rejection notice to BPNA within 45 days of receipt of the Amended Agreement. (Amended Agreement at 8-9.) Plaintiffs took no affirmative action to reject either the Amended Agreement or the Arbitration Provision, and continued to use their account until June 27, 2014. (Randazzo Decl. ¶ 7.) They nonetheless allege that they "have not entered into any valid or enforceable agreement(s) to arbitrate any claim alleged in this action, with any defendant." (Am. Compl. ¶ 50.)


"[A]rbitration is simply a matter of contract between the parties; it is a way to resolve those disputes - but only those disputes - that the parties have agreed to submit to arbitration." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995). The Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., "creates a body of federal substantive law of arbitrability applicable to arbitration agreements... affecting interstate commerce." Alliance Bernstein Inv. Research & Mgmt., Inc. v. Schaffran, 445 F.3d 121, 125 (2d Cir. 2006) (internal quotation marks omitted). The parties do not dispute that the agreement at issue here affects interstate commerce and, accordingly, the FAA applies.

The Second Circuit has previously noted that "it is difficult to overstate the strong federal policy in favor of arbitration, and it is a policy we have often and emphatically applied." Arciniaga v. Gen. Motors Corp., 460 F.3d 231, 234 (2d Cir. 2006) (internal quotation marks omitted). Whether a dispute should be arbitrated depends on "(1) whether there exists a valid agreement to arbitrate at all under the contract in question... and if so, (2) whether the particular dispute sought to be arbitrated falls within the scope of the arbitration agreement.'" Hartford Acc. & Indem. Co. v. Swiss Reinsurance Am. Corp., 246 F.3d 219, 226 (2d Cir. 2001) (quoting National Union Fire Ins. Co. v. Belco Petroleum Corp., 88 F.3d 129, 135 (2d Cir. 1996)). The FAA provides that an arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. Accordingly, "generally applicable contract ...

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