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Booth v. BMO Harris Bank, N.A.

United States District Court, E.D. Pennsylvania

August 11, 2014

PATRICIA BOOTH,
v.
BMO HARRIS BANK, N.A., ET AL.

MEMORANDUM

R. BARCLAY SURRICK, District Judge.

Presently before the Court is Defendant First International Bank & Trust's Motion to Compel Arbitration (ECF No. 34), Defendant BMO Harris Bank, N.A.'s Motion to Compel Arbitration (ECF No. 40), and Defendant North American Banking Company's Motion to Compel Arbitration (ECF No. 46). For the following reasons, Defendants' Motions will be granted.

I. BACKGROUND

Plaintiff allegedly obtained three "payday" loans at usurious rates from three online lenders. ( See Compl., ECF No. 1.) A payday loan is a small, high fee, short-term loan traditionally made to consumers in anticipation of an upcoming paycheck. ( Id. at ¶ 23.) In this case, the payday loans had interest rates of 30%. ( Id. at ¶¶ 79, 83.) To obtain a payday loan, a borrower must provide the lender with security for the loan amount by giving the lender a personal check or authorizing the lender to electronically debit the borrower's account. ( Id. ) On May 30, 2013, Plaintiff obtained a payday loan from One Click Cash by completing an online application. ( Id. at ¶ 82.) As part of the transaction, Plaintiff authorized One Click Cash to debit her checking account with Wells Fargo to repay the loan. ( Id. ) One Click Cash initiated a debit transaction on July 5, 2013. ( Id. at ¶ 85.) Plaintiff obtained a second payday loan on July 10, 2013, this time from a different online lender, My Cash Advance, and she again authorized the lender to debit her checking account. ( Id. at ¶ 78.) My Cash Advance debited Plaintiff's checking account on July 19, 2013. ( Id. at ¶ 81.) Finally, on July 24, 2013, Plaintiff obtained a third payday loan from a third lender, Plain Green. ( Id. at ¶ 74.) Plaintiff authorized Plain Green to debit her checking account, and Plain Green initiated a debit transaction on August 2, 2013. ( Id. at ¶ 77.)

To electronically deposit the loan proceeds and then to initiate the debit transactions of Plaintiff's checking account for repayments, One Click Cash, My Cash Advance, and Plain Green (collectively the "Lenders") needed access to the Automated Clearing House ("ACH") Network. ( Id. at ¶ 6-7.)[1] The Defendants here are Originating Depository Financial Institutes ("ODFIs") that are members of and have access to the ACH Network. (Compl. at ¶ 6.) For a fee, Defendants allegedly provided the Lenders with the access they needed to the ACH Network by "originating" the debits and credits on the payday loans. ( Id. ) Specifically, First International Bank & Trust ("FIB") originated transactions in connection with the May 30 loan from One Click Cash; BMO Harris Bank, N.A. ("BMO") originated transactions in connection with the July 10 loan from My Cash Advance; and North American Banking Company ("NABC") originated transactions in connection with the July 24 loan from Plain Green. ( Id. at ¶¶ 77, 81, 85.) Plaintiff claims that by providing the Lenders access to the ACH Network, Defendants violated the Racketeering Influenced and Corrupt Organization Act ("RICO") by knowingly participating in an enterprise's affairs through "collection of unlawful debt." Defendants allegedly knew that the Lenders were loaning at usurious rates but still allowed them to access the ACH Network. In addition, Plaintiff alleges that Defendants each conspired with the Lenders to violate RICO. Lastly, Plaintiff claims that each Defendant violated various Pennsylvania state laws.

When Plaintiff obtained each of her payday loans, she signed loan agreements with the Lender that provided the loan (collectively "Loan Agreements").[2] All the Loan Agreements contain arbitration provisions. First, the loan application and loan agreement with One Click Cash contains the following arbitration provision:

"We" or "Us" are SFS, Inc. dba OneClickCash and its directors, officers, employees, authorized representatives, agents and successors in interest acting within the scope of their authority.
....
If any dispute arises that We cannot resolve to your satisfaction, You and We hereby agree that we shall arbitrate that dispute in accordance with the terms of this Arbitration Provision.
....
The word "dispute" and "disputes" are given the broadest possible meaning and include, without limitation and whether past, present or future: (a) all claims, disputes or controversies arising from or relating directly or indirectly to the signing of this Loan Agreement, including the validity and scope of this Arbitration Provision, or any claim, dispute, or controversy relating to the interpretation, applicability, enforceability or formation of this Loan Agreement, including, but not limited to any claim that all or any part of this Loan Agreement or this Arbitration Provision is void, voidable, invalid or unenforceable; (b) all federal or state law claims arising from or relating directly or indirectly to this Loan agreement...; (c) all counterclaims, cross-claims and third party claims; (d) all common law claims, based upon contract, tort, fraud, or other intentional torts; (e) all claims based upon a violation of any state or federal constitution, statute or regulation...; (g) all claims asserted by You individually against Us, and/or any of our agents, consultants, or servicers and/or any of their employees, directors, officers, shareholders, managers, members, parents, subsidiaries, or any affiliated entities (hereinafter collectively referred to as "related third parties")...

(One Click Cash Agmt., Lin Decl. Ex. 1A, ECF No. 35 (emphasis added).) FIB originated the transactions related to the One Click Cash Loan Agreement. Next, the loan agreement with My Cash Advance similarly reads:

[T]he words "dispute and "disputes" are given the broadest possible meaning and include without limitations (a) all claims, disputes, or controversies arising from or relating directly or indirectly to the signing of this Arbitration Provision, the validity and scope of this Arbitration Provision and any claim or attempt to set aside this Arbitration Provision; (b) all federal or state law claims, disputes or controversies, arising from or relating directly or indirectly to the Loan Agreement... (c) all counterclaims, cross-claims and third-party claims; (d) all common law claims, based upon contract, tort, fraud, or other intentional torts;... (g) all claims asserted by You individually against Us and/or any of Our employees, agents, ...

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