Numerous California state and federal decisions discuss arbitration clauses. But recently only a few federal court decisions had addressed the specific situation of whether FDCPA claims fall within or outside an arbitration agreement. (E.g. Gerber v. Citigroup, Inc. 2008 WL 596112 (E.D.Cal.2008) (FDCPA claim not arbitratable because valid arbitration agreement between parties not found); Tickanen v. Harris & Harris, Ltd., 461 F.3d 863 (E.D.Wis. 2006) (Credit cardholders’ claims against debt collection agency for violations of Fair Debt Collection Practices Act were subject to arbitration, even though arbitration clause was in cardholders’ agreement with credit card company, and company was not subject to FDCPA, where cardholders agreed to permit company to assign its claims and to submit claims against company and its assignees to arbitration); Karnette v. Wolpoff & Abramson, L.L.P. 444 F.Supp.23d 640 (E.D.Va. 2006) (denying petition to compel arbitration of FDCPA claim); Miller v. Northwest Trustee Services, Inc. 2005 WL 1711131 (D.Wash. 2005) (petition to arbitrate FDCPA claim granted); Goetsch v. Shell Oil, Co. 197 F.R.D. 574 (W.D.N.C.2000) (court ordered parties to arbitration under credit card agreement, despite FDCPA claims)).
In a very recent decision, the Eighth Circuit Court of Appeal has addressed the issue. In Koch v. Compucredit Corp., __ F.3d __, 2008 WL 4305903 (8th Cir. 2008), the Court of Appeals for the Eight Circuit examined whether an FDCPA claim fell within the creditor’s arbitration agreement, and whether the debt collect could rely on it when the consumer claimed that the debt had been paid in full to the creditor.
To be subject to arbitration, the dispute must also fall within the scope of the arbitration clause. See Litton, 501 U.S. at 205; Nolde Bros., 430 U.S. at 252-53. The arbitration clause here is broad, covering “any claim, dispute, or controversy arising from or related to either this Agreement or the relationships that result from this Agreement.” A dispute over the collection of a debt incurred under the credit agreement is a “controversy arising from or related to … this Agreement,” so Koch’s claim “would have been subject to [arbitration] had it arisen during the contract’s term.” Nolde Bros., 430 U.S. at 252. Nothing in the arbitration clause excludes from its operation a dispute which arises under the contract, but which is based at least in part on events that occur after its termination. Id at 252-53. Thus, the arbitration provision applies to the dispute between Koch and Jefferson Capital.