SE Texas Record

Wednesday, December 11, 2019

Dallas federal court orders One Technologies credit report case to arbitration

By John Myers | Jul 31, 2017

General court 07

DALLAS – The Dallas Division of the Northern District of Texas has granted a motion to compel arbitration and to dismiss a case regarding a free credit report with prejudice.

One Technologies LP, One Technologies Management LLC and One Technologies Capital LLP had filed a motion to compel arbitration in a case filed against them by plaintiff Vickie Forby, who had filed a class action in April 2015 in Illinois over allegations of violations of the Illinois Consumer Fraud Act and other counts.

The events leading up to the lawsuit began when Forby allegedly discovered that the free credit report she claims to believe she had signed up for was actually charging her $29.95 per month for credit protection services. When she realized what was happening, she filed a class action complaint in Illinois state court against the defendants.

On July 21, 2015, the defendants contended that both parties had entered into a valid contract that required that the dispute be resolved by arbitration in Dallas. Once the lawsuit had been moved to the jurisdiction of the Northern District of Texas, the defendants moved to compel arbitration and have it dismissed with prejudice, to stay the proceeding and for a protective order regarding discovery pending resolutions of the motion to compel.

According to the documents published by the court, in order to determine if both parties can be compelled to enter arbitration it must be determined if they agreed to do so in the first place. Second the court must determine if there are any other legal constraints preventing the arbitration from going forward. In addition, the court notes that there is a heavy burden placed on any party contending to have the right to have its arbitration waived. 

For the arbitration to be successfully waived, the court explained that the party seeking the waiver must demonstrate that is there is prejudice, which it defined as “inherent unfairness in terms of delay, expense, or damage to a party’s legal position that occurs when the party’s opponent forces it to litigate an issue and later seeks to arbitrate that same issue.”

In this case, the plaintiff alleged that the defendants' actions had exposed her to prejudice caused by the delay, expenses, and damage to her legal position after the defendants waited almost 13 months after the case was transferred to compel arbitration.

However the court disagreed with Forby’s claims, arguing that she had not suffered prejudice to the extent required by existing precedent and 5th Circuit authority.

“The only prejudice that Forby has adequately demonstrated is delay, and delay alone is insufficient to establish that Forby has been prejudiced by defendant's’ invocation of the judicial process,” the court stated in its official document.

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Dallas Division of the Northern District of Texas