On March
20, 2001, the United States District Court for the District of
Montana, in striking down defendant MBNA's motion to stay proceedings
and compel arbitration, held that the mandatory arbitration amendment
to a customer's credit card agreement cannot be enforced, nor
can any such agreement to arbitrate be implied from the company-customer
relationship.
Beginning
in 1997, plaintiff Vera Myers held two cards from MBNA. Shortly
after January 23, 1999, Myers received an account statement from
MBNA and contacted them to contest certain charges. Myers requested
that MBNA close the account, which it did. At some point during
this company-customer relationship, MBNA issued an amendment to
its customer agreement, stating that any claim or dispute is to
be resolved by binding arbitration. This "Arbitration Section"
became effective February 1, 2000.
Myers argued
that the arbitration clause was unenforceable under Montana law
because she never agreed under the contractual relationship between
the parties to arbitrate her dispute with MBNA. MBNA argued that
the clause is enforceable and valid as an amendment that Myers
agreed to allow when she accepted a card and credit line from
MBNA in 1997.
In striking
down MBNA's motion to compel arbitration, Chief Judge Donald W.
Molloy found that the Arbitration Section cannot be enforced,
and that no such agreement to arbitrate could be implied. Observing
that MBNA's proposal of the Arbitration Section as a change in
the terms of the parties' relationship that would be effective
unless rejected by the cardholder, Chief Judge Molloy declared
that, in affect, "MBNA skipped offer and went straight to acceptance."
"If MBNA's
argument that Myers agreed' to arbitration ... there would be
no reason to stop at arbitration," Molly added. "MBNA could amend'
the Agreement to include a provision taking a security interest
in Myers' home or requiring Myers to pay a penalty if she failed
to convince three friends to sign up for MBNA cards."
Myers v.
MBNA America and North American Capitol Corporation, CV 00-163-M-DWM
(D.Mont., March 20, 2001) is not yet available online.
