Firchow v. Citibank

Filed 1/10/07  Firchow v. Citibank CA2/7

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 977(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 977(b).  This opinion has not been certified for publication or ordered published for purposes of rule 977.

  IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION SEVEN

                      APPEAL from an order of the Superior Court of Los Angeles County, Carl J. West, Judge.  Affirmed.

                      Stroock & Stroock & Lavan, Julia B. Strickland, Andrew W. Moritz and Marcos  D. Sasso for Defendant and Appellant.

                      Hagens Berman Sobol Shapiro, Lee M. Gordon and Steve W. Berman for Plaintiff and Respondent.

_______________________

                      Citibank (South Dakota), N.A. appeals from an order denying its petition to compel arbitration of a putative statewide class action lawsuit filed by Dale Firchow, a Citibank credit card member.  The lawsuit alleges Citibank and Ford Motor Company (Ford)[1]  prematurely and improperly terminated a credit card rebate program in violation of the Consumer Legal Remedies Act (CLRA) (Civ. Code, § 1750 et. seq.) and California's false advertising and unfair competition laws (Bus. & Prof. Code, §§ 17500, 17200).  Citibank unsuccessfully sought arbitration of the dispute in accordance with a provision in the applicable credit card agreement that subjects such disputes to individual binding arbitration and prohibits proceeding in arbitration on a class or representative basis.

                      On appeal Citibank contends the trial court erred in finding the class action waiver provision unconscionable under California law and denying the motion to compel arbitration.  Citibank urges the trial court should have applied South Dakota law in accordance with the choice-of-law provision in the credit card agreement and contends under South Dakota law the arbitration clause, including the class action waiver provision, is enforceable.  We affirm. 

FACTUAL AND PROCEDURAL BACKGROUND

                      1.  Ford-Citibank's Rebate Program and Termination of the Program

                      In February 1993 Citibank began issuing a co-branded Ford-Citibank credit card. According to the terms of the credit card agreement, users of the card (either a VISA or Mastercard) could earn with card purchases up to $700 in rebate credits annually, and up to $3,500 in rebate credits over a five-year period, to apply to the purchase of a new Ford vehicle.  Rebate credits would expire five years from the calendar quarter in which they were earned. 

                      In June 1997 Citibank notified cardholders, including Firchow, that it was terminating the rebate program effective December 31, 1997.  According to the written notice of termination, after December 31, 1997 cardholders would no longer earn rebates on purchases made with the Ford-Citibank card.  Rebates that had already been earned would expire five years after the calendar year in which they had been earned ‑ ‑ but only if the cardholder kept the account open and in good standing.  Card members who wished to close their accounts in light of the cancellation of the rebate program would receive Ford rebate certificates that would expire 45 days after the account was closed.  Firchow did not close his account. 

                      2.  Citibank's Modification of the Card Agreement by Requiring Arbitration and                                 Waiver of a Card Holder's Right to Participate in a Class Action Proceeding

                      In October 2001 Citibank mailed Firchow a â€