Magistrate rules two class action claims against Debt Care must be arbitrated; but not the claims against co-defendant Global Client Solutions

Posted on: October 26th, 2011 by Steve Larson

I previously noted on this blog that a national class action had been filed against Debt Care USA by Tina and Gary Willis.   On October 24, 2011, Magistrate Janice Stewart granted in part Debt Care’s motion to compel arbitration of the two state law claims brought against Debt Care.  However, the court ruled that the arbitration could not take place in California as the arbitration clause required, but instead must occur in Oregon.  The court denied Debt Care’s motion to compel arbitration of the federal Credit Repair Organizations Act claim on which Tina and Gary Willis seek to recover a refund of all fees paid by them, as well as all class members across the country.  The court ruled that the CROA claim should be stayed until the U.S. Supreme Court rules on another CROA case pending before it – the Greenwood case.  The plaintiffs are considering whether to appeal the ruling to an Article III judge.

Magistrate Janice Stewart denied the Motion to Compel Arbitration filed by another defendant, Global Client Solutions.  The Magistrate found that Global Client Solutions had not disclosed the arbitration provision prior to the time Tina and Gary Willis entered into the contract with Global Client Solutions.