In Townsend v. National Arbitration Forum, Inc., 2012 WL 12736 (C.D.Cal. 2012), Judge Fairbank found that Plaintiffs failed to state a claim under the CLRA for conspiring to “rig” arbitration procedures by forcing consumers to agree to unfair arbitration clauses that disfavor consumers in connection with bank and credit card accounts.  


Plaintiff’s CLRA claim alleges that had Plaintiff known allegedly concealed information concerning NAF arbitration procedures, he would not have entered into the cardholder agreements with the various Bank Defendants. TAC ¶ 83. The Court finds this insufficient to confer standing on Plaintiff as to this claim. For example, Plaintiff fails to allege that he read the cardholder agreements before signing them, or that the representations concerning the NAF were a factor in Plaintiff’s decision to enter into the cardholder agreements. See, e.g., Sickrath v. Globalstar, Inc., 527 F.Supp.2d 992, 996 (N.D.Cal.2007). Thus, Plaintiff has not sufficiently demonstrated Article III standing for his CLRA claim.    . . . Plaintiff’s CLRA claim also fails for another reason. In order to implicate the CLRA, the alleged violations must be actions “undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Cal. Civ.Code § 1770. CLRA further defines “services” as “work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods.” Id. at § 1761.    Here, while Plaintiff alleges his CLRA claim relates to NAF arbitration services (TAC ¶ 76), this is insufficient. In Berry v. American Express Publishing, Inc., 147 Cal.App.4th 224, 54 Cal.Rptr.3d 91 (2007), the California Court of Appeal considered whether an arbitration clause and class action waiver in a cardholder agreement entered into between the plaintiff and defendant American Express could violate the CLRA. Id. at 227, 54 Cal.Rptr.3d 91. After determining that a credit card was not a “good” under the CLRA, the court considered whether defendant’s issuance of credit could constitute a “service.” Id. at 229, 54 Cal.Rptr.3d 91. After examining the text of the CLRA and its legislative history, the court concluded that “neither the express text of CLRA nor its legislative history supports the notion that credit transactions separate and apart from any sale or lease of goods or services are covered under the act.” Id. at 233, 54 Cal.Rptr.3d 91.    Berry is analogous to the present situation, in that Plaintiff contends that an arbitration procedure to determine amounts owed under a cardholder agreement constitutes a “service” under the CLRA. For the same reasons articulated in Berry, the Court concludes that it does not. Also persuasive by analogy is Fairbanks v. Superior Court, 46 Cal.4th 56, 92 Cal.Rptr.3d 279, 205 P.3d 201 (2009), in which the California Supreme Court ruled that “life insurance” was not a “service” under the CLRA, because “[a]n insurer’s contractual obligation to pay money under a life insurance policy is not work or labor, nor is it related to the sale or repair of any tangible chattel.” Id. at 61, 92 Cal.Rptr.3d 279, 205 P.3d 201. Plaintiff’s contractual obligation to arbitrate before the NAF is, similarly, not “work or labor, nor is it related to the sale or repair of any tangible chattel.” Accordingly, Plaintiff’s first claim for CLRA violations is DISMISSED as to all defendants with prejudice.