Free Complaint - District Court of California - California

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Plaintiffs allege:
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I. Introduction 1. The action deals only with Chase credit cards for which an annual fee is paid by the card

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holder, and presents three overarching issues:
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(a)
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Did Chase commit fraud in the inducement of the card holder agreement

arising from its practices and knowing misrepresentations as to the legality and conscionability of the agreements or portions thereof (excluding the arbitration provision) that were relied upon by Plaintiffs and the persons whom they seek to represent in entering into the agreement and making fee payments thereunder? (b) As a separate matter, does the card holder agreement drafted by Chase

(and excluding any reference to the arbitration provision it contains) contain unconscionable and illegal terms in violation of various California consumer protection statutes entitling Plaintiffs to statutory remedies? (c) Is the arbitration provision drafted and inserted by Chase in its card

agreements (without reference to the unconscionability of the card agreement
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itself) unconscionable or illegal, and thereby in violation of various California
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consumer protection statutes entitling Plaintiffs to statutory remedies? In each instance and as a result of the unconscionability and illegality of the arbitration provision and entire agreement, respectively, that make one or both unenforceable, the feepaying card holder suffered damage by receiving something worth monetarily less than that for which he/she contracted and paid (as well as by the loss of use of that portion of the fee following its payment). In the context of California's consumer protection laws, Plaintiffs were
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thereby damaged and suffered an "injury in fact" and a "loss of money or property" entitling them to statutory relief. In the context of the fraud cause of action which is made only with regard to the agreement as a whole (excluding the arbitration provision), 1 receiving less than that for which they paid is the requisite injury necessary to give rise to a right of rescission and restitution, in whole or part, of the fees paid. 2. The payment of the fee for the respective card provides Plaintiffs and similarly situated

persons, among other things, a contractual right to mandatory arbitration that has pecuniary value: i.e., the right to demand (pursuant to an enforceable arbitration agreement) mandatory arbitration of any "claim" they have against Chase and the business/person supplying the goods or services for which payment was made using the credit card. However, the card holder

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received something worth monetarily less than that for which he/she paid the fee because of the
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unconscionability and illegality of Chase's arbitration provision (an amount to which the value
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of the loss of the use of money paid as fees must be added): e.g., rather than getting a legal and enforceable arbitration provision that endows the card holder with the right to invoke mandatory binding arbitration, they got only an unconscionable and illegal (and thereby unenforceable and invalid) arbitration provision that they can not, as a matter of fact and law and public policy, invoke or use against any one. That is an "injury in fact" and results in a "loss of money" (but which does not constitute recompensable "damages" since "damages" are not allowed under the UCL and are not sought under the CLRA causes of action) mandating that statutory restitution and injunctive relief be ordered. 3. The scheme from which Plaintiffs' "injury in fact" and resultant monetary loss results

with regard to the arbitration provision is the systematic and continuing violation of California's
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Unless otherwise specified, reference to the "card agreement" or "card agreement in whole" shall mean the "card agreement (excluding the arbitration provision)."
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consumer protection laws resulting from the unconscionability and illegality of its terms. The terms of that provision and, indeed, the provision itself is unconscionable and illegal in that it: was imposed on all card holders on a "take it or leave it" basis with no opportunity by the card holder to negotiate any term thereof; was contained in an adhesive form agreement prepared by Chase and concerning which Chase was in a much stronger bargaining position than the card holder; provides that "ANY DISPUTE WILL BE RESOLVED BY BINDING ARBITRATION" and "YOU WILL NOT BE ABLE TO BRING A CLASS ACTION OR OTHER REPRESENTATIVE CLAIM IN COURT SUCH AS

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THAT IN THE FORM OF A PRIVATE ATTORNEY GENERAL ACTION;
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NOR
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WILL

YOU

BE

ALLOWED

TO

BRING

ANY

CLASS

IN

ARBITRATION AS A CLASS ACTION OR OTHER REPRESWENTAIVE ACTION ...." in a context where predictably only "small" amounts of money are involved (the fee) and as part of a scheme to deliberately cheat large numbers of its card holders out of the individually "small" amounts represented by the fees paid for the card (capitalization in original); provides "neither you nor we agree to any arbitration on a class or representative basis, and the arbitrator shall have no authority to proceed on such basis. That means that even if a class action lawsuit or other representative action, such as that in the form of a private attorney general action, is filed, any Claim between us related to the issues raised in such lawsuits will be subject to an

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individual arbitration claim if either you or we so select" in a context where
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predictably only "small" amounts of money are involved (the fee) and as part of a scheme to deliberately cheat large numbers of its card holders out of the individually "small" amounts represented by the fees paid for the card; provides that even in the event of the certification of a class by some other card holder, all other card holders cannot become members of that class, a complete derogation of Fed.R.Civ.P. 23; provides that "Claims subject to the Arbitration Agreement include Claims regarding the applicability of this Arbitration Agreement or the validity of the entire Cardmember Agreement or any prior Cardmember Agreement"; provides that the arbitrator "will not have the power to award relief to,

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against, or for the benefit of any person who is not a party to this proceeding"
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thereby forbidding the entry of any injunctive relief in the arbitration;
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provides "No arbitration will be consolidated with any other arbitration proceeding without the consent of all parties" in a context where predictably only "small" amounts of money are involved (the fee) and as part of a scheme to deliberately cheat large numbers of its card holders out of the individually "small" amounts represented by the fees paid for the card; provides that all "Claims, whether such Claims are based on law, statute, contract, regulation, ordinance, tort, common law, constitutional provision, or any legal theory of law such as respondeat superior, or any other legal or equitable ground and whether such Claims seek as remedies money damages, penalties, injunctions, or declaratory or equitable relief";

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provides that in arbitration all claims shall be resolved by "one of two arbitration administrators: Arbitration Forum"; provides no alternative means by which some other arbiter or arbitral organization may be chosen by the card holder; provides that arbitration "will be conducted under the applicable procedures and rules of the arbitration administrator that are in effect on the date the arbitration is filed unless those procedures or regulations are inconsistent with the Arbitration Agreement, in which case this Arbitration Agreement will prevail..."; American Arbitration Association or National

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provides no way for the card holder to know at the time he/she initially
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agreed to arbitrate what the rules would be at the time of the arbitration as well as
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what inconsistencies existed between the agreement and the Code because Chase has given itself the unilateral right to amend the arbitration provision at any time (including before, during, or after any arbitration) and the arbitration provision otherwise makes the applicable arbitration rules those in effect when the arbitration is filed; provides that "[i]f any portion of this Arbitration Agreement is deemed invalid or unenforceable, the remaining portions nevertheless remain in force" even though all determinations as to severability of the provision is a matter exclusively reserved for the Courts; provides, relative to the costs of arbitration, that Chase "will reimburse

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you for the initial arbitration filing fee paid by you up to the amount of $500 upon
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receipt of proof of payment. Additionally, if there is a hearing, we will pay any fee of the arbitrator and arbitration administrator for the first two days of that hearing... All other fees will be allocated in keeping with the rules of the

arbitration administrator and applicable law"; provides that "Each party will bear their own fees, costs and expenses for any appeal, but a party may recover any or all fees, costs and expenses from another party, if the majority of the panel of arbitrators, applying applicable law, so determines"; and, provides only a vague and overbroad statement of what effect arbitration will have on the legal rights of card holders.

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4.
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The unconscionable and illegal terms of the arbitration provision is a continuing act or

practice: (a) in violation of California's Unfair Competition Law, Bus. & Prof. Code §§ 17200, et seq. ("UCL"), on the basis that the arbitration provision and its terms are unlawful and unfair; and, (b) (as to Plaintiff Lee) in violation of California's Consumer Legal Remedies Act, California Civil Code § 1770(a)(19) ("CLRA"), which makes insertion of an unconscionable provision in a contract an unlawful act. Plaintiffs, on behalf of themselves and/or all other similarly situated consumers and residents, respectively, in California are thus entitled to: (1) a Declaratory Judgment declaring the arbitration provision to be unconscionable, illegal and unenforceable, and severable from the remainder of the card agreement; (2) statutorily authorized injunctive and restitutionary relief (including disgorgement of profits) as to the UCL causes of action; (3) (as to Plaintiff Lee) statutorily authorized injunctive and restitutionary relief, and punitive damages as to the CLRA causes; (4) prejudgment interest; and, (5)
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attorney's fees (including costs) specifically authorized by the CLRA, and otherwise available in UCL causes of action under the laws and precedents of California. 5. The claim regarding the card agreement as a whole (excluding its arbitration provision)

centers on its inclusion of a variety of terms that are unconscionable and illegal under controlling California and Ninth Circuit law as well as Chase's fraud in inducing card holders to enter the agreement and make payment thereunder. Having paid a fee for that agreement and the rights contained therein, Plaintiffs and similarly situated persons receive something worth monetarily less than that for which they paid: they receive only an unconscionable and

unenforceable agreement which causes them "injury in fact" and a loss of money as a result. On the one hand and reflecting the misrepresentations made by Chase that are of a nature calculated

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to induce the making of a contract and payment and display a lack of fair dealing, the inclusion
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of those unconscionable or illegal terms gives rise to a non-statutory cause of action for fraud
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and deceit that, due to the permeation of the unconscionable terms, requires non-statutory rescission of the agreement as a whole and common law restitution of the fees paid. These unconscionable terms include, in addition to the adhesive nature of the contract itself, such matters as Chase's unilateral right to change any term of the agreement at its will and without any reason (which is denied to the card holder), Chase's unilateral right to take any action without waiving its rights under the agreement which is denied to the card holder, and its statement that the laws of Delaware are the controlling laws. On the other hand, the mere inclusion of those unconscionable and illegal terms (without consideration of any fraud in inducing the agreement) is an unlawful and unfair practice, respectively, that has, is and continues to occur: (a) in violation of UCL on the basis that the

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unconscionable terms are illegal and unfair; and, (b) (as to Plaintiff Lee) in violation of the
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CLRA, which makes insertion of an unconscionable provision in a contract an unlawful act. Similar to the arbitration provision, the card holder simply gets less than that for which he paid due to the inclusion of these unconscionable terms and conditions which, alone or in tandem, render the agreement itself unconscionable. With regard to the consumer statute causes of action, Plaintiffs, on behalf of themselves and/or all other similarly situated consumers and residents, respectively, in California are entitled to: (1) a Declaratory Judgment declaring the card agreement to be unconscionable, illegal and unenforceable; (2) statutorily authorized injunctive and restitutionary relief (including disgorgement of profits) as to the UCL causes of action; (3) (as to Plaintiff Lee) statutorily authorized injunctive and restitutionary relief, and punitive damages as to the CLRA causes of action; (4) prejudgment interest; and, (5) attorney's

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fees (including costs) specifically authorized by the CLRA, and otherwise available in UCL
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causes of action under the laws and precedents of California.
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II. The Parties 6. Plaintiff David J. Lee ("Lee") is an individual who, at all relevant times herein

mentioned, resided in the City of Kentfield, Marin County, State of California and, hence, within the geographic boundaries of this District Court. 7. Plaintiff Daniel R. Lloyd ("Lloyd") is an individual who, at all relevant times herein

mentioned, resided in the City of Paso Robles, San Luis Obispo County, State of California. 8. Plaintiffs respectively bring this as a class action composed of all similarly situated

"consumers" (as to the CLRA causes of action and Plaintiff Lee alone as representative) and "persons" (as to all other causes of action) residing in the State of California more fully

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described in paragraph 94 below.
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9.

Defendant JPMorgan Chase & Company ("JPMorgan") is a Delaware corporation whose

principle place of business is located in the State of New York. 2 It is the parent company of all other presently named Defendants. Plaintiffs are advised and believe, and thereon allege, that

during some or all of the periods mentioned herein, it has been or is, among other things, in the business of opening Chase credit card accounts with individuals and/or business entities for which an annual fee is paid. JPMorgan is authorized to conduct business within the State of California. 10. Defendant Chase Manhattan Bank U.S.A., N.A. (Chase Manhattan), is a Delaware

corporation having its principle place of business in New York. It is a wholly owned subsidiary of JPMorgan and Plaintiffs are advised and believe, and thereon allege, that it is, among other

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things, in the business of issuing Chase charge credit cards to persons and/or business entities.
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It is authorized to conduct business within the State of California.
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11.

Defendant Chase Manhattan Bank U.S.A., N.A. d.b.a. Chase Bank U.S.A., N.A. ("Chase

Bank") is a wholly owned subsidiary of JPMorgan and related to Chase Manhattan which, from time to time, does business as Chase Bank. As relevant here and without limitation, at the present time it, among others, issues the following Chase credit cards for which an annual fee is paid: Chase Contractor Cash Rewards card, Continental Airlines Business card, Marriott

Rewards Vista Business Card, Priority Club Rewards Business card, Southwest Airlines Rapid Rewards Visa Business Card, United Mileage Plus Platinum Business card, British Airways card, Continental WorldCard, Marriott Rewards, Priority Club Rewards Visa Signature card, Southwest Airlines Rapid Rewards Visa Signature Card, United Mileage Plus Signature Visa Card, and Marriott Rewards Premier Visa Signature Card. The "business" cards can be used for

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2

Unless otherwise specified, all Defendants are referred to collectively as "Chase."
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either business or personal/household use just as the non-business cards can be used for either business or personal/household use. 12. The true names and capacities of the defendants sued herein as Does 1 through 100 are

unknown to Plaintiffs who therefore sue them by such fictitious names. Plaintiffs will amend this complaint to allege the true names and capacities of these defendants when they have been determined. Each of the fictitiously named defendants is responsible in some manner for the acts alleged herein. 13. At all times mentioned in the causes of action alleged herein, each and every defendant

was an agent and/or employee of each and every other defendant. In doing the things alleged in the causes of action stated herein, each and every defendant was acting within the course and

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scope of this agency or employment and was acting with the consent, permission and
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authorization of each of the remaining defendants. All actions of each defendant as alleged in
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the causes of action stated herein were ratified and approved by every other defendant or their officers or managing agents, and by agreeing to actively conceal the true facts regarding the acts and omissions, as alleged herein, engaged in conspiratorial conduct with each other. III. Jurisdiction and Venue 14. Since Plaintiffs on their own behalf and on behalf of similarly situated consumers and

residents of California, respectively, are requesting restitutionary relief, statutory restitutionary relief (including disgorgement of profits), punitive damages, and prejudgment interest totaling an amount in excess of $5,000,000.00, jurisdiction arises under 28 U.S.C. § 1332 (diversity). 15. Venue is proper in this Court pursuant to 28 U.S.C. § 1391 because: the products at

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issue are advertised, promoted, sold and used in the geographic parameters of the United States
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District for the Northern District of California; Defendants have received substantial compensation from the sale of the products at issue in this District by engaging in acts and practices that constitute unfair competition and violation of law within this District and which had an effect in this District; and, Plaintiff Lee is a resident of this District. IV. The Facts A. The Facts Concerning Chase Credit Cards

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16.

As relevant here, Chase issues, for an annual fee, "credit" cards that are revolving credit

instruments that do not need to be paid off in full at the end of the monthly billing cycle, upon which no late fee is charged as long as the minimum payment is timely made but which charges a late fee when payment is untimely, and which carries a balance forward as a loan charging interest. 3 Credit cards are a necessity in today's world: they are required to rent a car, reserve airline tickets, stay at a hotel, make a purchase on the internet, or cash a third-party check at Wells Fargo Bank.

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17.
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Chase credit cards are means of and used to obtain goods and/or services (including

services furnished in connection with the sale or repair of goods) from any person or business who accepts the respective card in payment for the goods or services provided. That includes cards denominated as "business" cards. 18. The purchase of a Chase credit card cardmembership (for which a fee is paid) relative to

a credit card purchases and provides a "convenience service" even when "credit" can be implicated if the monthly balance is not paid in full upon receipt of the monthly billing statement. It provides a means of payment which leaves the option open to the card holder to

Unless otherwise specified, all Chase credit cards referred to herein are credit cards for 11

which an annual fee is charged.
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either pay his/her monthly statement in full upon its receipt (and thus not incur any interest indebtedness or otherwise use the "credit" service of the card) or to not pay the bill in full and use the revolving credit feature. Regardless of which option is chosen by the card holder, the use of the credit card has distinct advantages over cash, checks, and other means of payment: i.e., the credit card not only minimizes the need to carry cash and allows the user to defer payment and establish a favorable credit history but also, importantly, increases the card holder's ability to purchase goods and services and in so doing avoid the red tape involved in obtaining a personal loan. Plaintiffs are informed and believe, and on that basis allege, that

some holders of credit cards do, from time to time or all of the time, pay the monthly balance in full upon receipt of the monthly billing statement and do not avail themselves of the credit

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feature of the card.
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19.
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Plaintiffs are informed and believe, and on that basis allege, that Chase maintains records

identifying ­ for at least the last four years preceding the filing of this Complaint -- each holder of a specific Chase credit card and their current/last known address, the amount of fees paid by him/her, the date(s) upon which a card was issued to that person, the charges made by that person on his Chase card, and other means by which each card holder may be identified. 20. Upon information and belief, Plaintiffs allege that Chase has currently approximately

79,500,000 credit card accounts in the United States, approximately and at least ten (10) per cent of which are issued to California consumers and/or residents, respectively. Upon information and belief, Plaintiffs further allege that Chase receives a "merchant fee" for each charge made on the card, payable by the merchant based on a percentage of the sales price.

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24.

During some or all of the four years preceding the filing of the Complaint and three

years preceding the filing of the Complaint, respectively, Chase issued credit cards at the following annual fees: (a) Chase Contractor Cash Reward card -- $50.00 annual fee. A true and

correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 1 and is incorporated herein by reference; (b) Continental Airlines Business Master Card ­ $75.00 annual, $20.00 annual

fee for each additional card. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 2 and is incorporated herein by reference;

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(c)
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Marriot Rewards Visa Business Card ­ first year's fee free, $30.00 annual

fee for each year thereafter. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 3 and is incorporated herein by reference; (d) Priority Club Rewards Business Card ­ first year's fee free, $29.00 annual

fee for each year thereafter. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 4 and is incorporated herein by reference; (e) Southwest Airlines Rapid Rewards Visa Business Card -- $59.00 annual

fee. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 5 and is incorporated herein by reference;

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(f)

United Airlines Mileage Plus Platinum Business Card; $75.00 annual fee,

$25.00 for each additional card. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 6 and is incorporated herein by reference; (g) British Airways card -- $75.00 annual fee. A true and correct copy of the

Chase official Internet website setting for the terms and conditions for this card is Exhibit 7 and is incorporated herein by reference; (h) Continental WorldCard Master Card -- $85.00 annual fee for World card

holders, $65.00 for Platinum card holders. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is

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Exhibit 8 and is incorporated herein by reference;
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(i)
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Marriott Rewards Card -- fee free for first year, $30.00 fee for each

following year. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 9 and is incorporated herein by reference; (j) Priority Club Rewards Visa Signature Card -- free fee first year, $29.00

annual fee in each following year. A true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 10 and is incorporated herein by reference; (k) Southwest Airlines Rapid Rewards Signature Visa Card -- $50.00 annual

for Signature card holders, $39.00 annual fee for Classic card holders. A true and correct copy of the Chase official Internet website setting for the terms and

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conditions for this card is Exhibit 11 and is incorporated herein by reference;
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(l)

Marriott Rewards Premier Visa Signature Card -- $65.00 annual fee. A

true and correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 12 and is incorporated herein by reference; and, (m) United Mileage Plus Signature Visa Card --$60.00 annual fee. A true and

correct copy of the Chase official Internet website setting for the terms and conditions for this card is Exhibit 13 and is incorporated herein by reference. B. 25. 1990s. Plaintiffs' Facts

Plaintiff Lee obtained a Chase United Airlines credit card from Chase in or about the late He obtained the card for, among other things, personal and/or household use to

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purchase, among other things, goods or services (including services furnished in connection
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with the sale or repair of goods) for his personal or household use. He has annually paid the fee
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charged by Chase on that credit card. A true and correct copy of the cardmember agreement applicable to Plaintiff Lee's credit card is Exhibit 14 hereto and incorporated herein by reference. The cardmember agreement by which his card is governed is Exhibit 14 hereto. That agreement has been, from time to time during the period in which Lee has been a card member, amended (including amendments to the arbitration provision) and the amendment sent to Plaintiff as a "bill stuffer." 26. Plaintiff Lloyd obtained a Chase United Airlines Mileage Plus Platinum card in or about

2000. He has paid the annual fee in each of the years thereafter until the present time. He obtained the card for his personal use to purchase, among other things, goods or services (including services furnished in connection with the sale or repair of goods) for his personal or

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household use. The cardmember agreement by which his card is governed is Exhibit 14 hereto.
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That agreement has been, from time to time during the period in which Lloyd has been a card member, amended (including amendments to the arbitration provision) and the amendment sent to Plaintiff as a "bill stuffer." 27 In making the payments of the fees owed by him, Plaintiffs Lee and Lloyd relied upon

the statements and misrepresentations made by Chase as specifically set forth in this Complaint. 28. In accepting the contractual terms presented to them by Chase on a "take it or leave it"

basis ­ which was effected by the use of the card rather than by formal written agreement or other writing ­ and paying their respective annual fees Plaintiffs acted as reasonable consumers who were unwary and trusting of Chase. 29. In accepting the contractual terms presented to them by Chase on a "take it or leave it"

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basis and paying their respective annual fees, Plaintiffs relied upon the honesty of Chase that it
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would not insert illegal, unconscionable and/or unenforceable terms and conditions in the
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arbitration provision of the agreement or other terms of the agreement, respectively, since, among other things, they had no duty to and did not suspect the dishonesty of Chase. 30. Plaintiffs, as reasonable consumers, were unaware of the illegality or unconscionability

of the arbitration provision or of the card agreement as a whole, respectively, at the times they entered into their agreement with Chase and paid the fees requested from them. 31 Arbitration, pursuant to a contractual arbitration provision, is a speedy and inexpensive

means of dispute resolution in comparison to judicial proceedings that can, under a conscionable and enforceable arbitration provision, be beneficial to the card holder. 32. The arbitration provision is a material term of the Chase card agreement.

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33.

The ability to demand arbitration under an arbitration provision is an important and

material factor relied upon by Plaintiffs in agreeing to enter into the Chase agreements and to pay their fees. 34. Plaintiffs are advised and believe, and thereon allege, that the right to mandatory

arbitration has a pecuniary value that reflects, in whole or in part, the fees paid by them for their cards and their respective use of their cards. 35. Plaintiffs are advised and believe, and thereon allege, that if the arbitration provision

contained in the agreement relating to their credit cards is unconscionable, illegal and unenforceable, Plaintiffs received something lower in value than that for which they paid and, as a result, they have lost money as a result of the unconscionability, illegality, and

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unenforceability of the Chase-imposed arbitration provision.
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36.
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Plaintiffs are advised and believe, and thereon allege, that the rights provided them by

the card agreement to Chase's credit cards have a pecuniary value that reflects, in whole or in part, the fees paid by them for their cards and their respective use of their cards. 37. Plaintiffs are advised and believe, and thereon allege, that if the cardmember agreement,

in whole or in part, is unconscionable, illegal and unenforceable, Plaintiffs received something lower in value than that for which they paid and, as a result, they have lost money as a result of the unconscionability, illegality, and unenforceability of the Chase-imposed card agreement. 38. In accepting the contractual terms presented to them by Chase on a "take it or leave it"

basis and paying their respective annual fees, Plaintiffs contracted with Chase in reliance with their reasonable belief that Chase would not commit an illegal, unfair, or fraudulent act upon them in presenting them with a form agreement on a "take it or leave it" basis that contained an

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arbitration provision and other provisions, respectively, that were and are illegal, unfair, unconscionable, and invalid. 39. Plaintiffs had no meaningful choice of reasonably available alternative sources for credit

cards free of the terms claimed to be illegal, unconscionable, invalid, and unenforceable since seemingly all credit cards issued by Chase and its competitors (including Capital One, American Express, Bank of America, and HSBC) contain the same or similar arbitration and other provisions challenged in this action. 40. Plaintiffs, on behalf of themselves and similarly situated persons, have a technically

arbitrable claim against Chase relating solely to the card agreement: i.e., that they were induced to enter into the agreement and paid the fees by them as a result of Chase's fraud, deceit, and

11

misrepresentations.
12

41.
13 14 15 16 17 18 19 20 21 22 23

Plaintiffs, on behalf of themselves and similarly situated persons, are and have been

willing to immediately invoke the Chase arbitration provision so that their fraud claims against Chase would be decided in the arbitral context by an arbitrator if the arbitration provision is conscionable, legal, and enforceable. 42. Plaintiffs are advised and believe, and thereon allege, that their claim of fraud against

Chase in the inducement of the card agreement is an issue that should be decided by an arbitrator under an enforceable, valid, and conscionable arbitration provision. See, e.g.,

Nagrampa v. Mailcoups, Inc., 469 F.3d 1257 (9th Cir. 2006); Buckeye Check Cashing Inc. v. Cardegna, 546 U.S. 440, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006); Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 87 S.Ct. 1801, 18 L.Ed.2d 1270 (1987). 43. Plaintiffs are advised and believe, and thereon allege on behalf of themselves and

24

similarly situated persons, that their invoking the arbitration provision relative to their fraud
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claims and seeking arbitration of that claim would be against public policy and would otherwise be an illegal act by seeking to enforce an illegal and unconscionable arbitration provision. Plaintiffs further are advised and believe, and thereon allege, on behalf of themselves and similarly situated persons that it would be futile to invoke arbitration under the unenforceable arbitration provision and that doing so would be a waste of time and money. See Bertero v.

Superior Court, 216 Cal. App. 2d 213, 230 Cal. Rptr. 719 (1963) (parties improperly ordered to arbitrate "would be put to the unnecessary delay and expense of an arbitration, further court proceedings, and an appeal, after which they would be required to start over"), disapproved on other grounds in St. Agnes Medical Center v. PacifiCare of California, 31 Cal.4th 1187, 1192, 8 Cal. Rptr. 3d 517, 82 P.3d 727 (2003).

11

44.
12 13 14 15 16 17 18 19 20 21 22 23

Plaintiffs are advised and believe, and thereon allege on behalf of themselves and

similarly situated persons, that the exercise of their contractual right to demand mandatory arbitration of their fraud claim against Chase would and/or could waive their right and ability to challenge the unconscionability of the arbitration provision and/or the agreement as a whole, respectively. 45. The harm to Plaintiffs' interest, as well as of the interest of similarly situated persons,

arising from the inability to enforce the arbitration provision in order to arbitrate their fraud and consumer statute claims (relating only to the agreement and not the arbitration provision) due to its/their unenforceability/unconscionability/illegality, is actual or imminent. 46. On March 26, 2007, the Motion to Compel Arbitration and Stay by Chase in Davis v.

Chase Bank U.S.A., N.A., et al., Case No. CV 06-04804 DDP (PJWx) (C.D.Cal.), a case in which the issues of the conscionability and legality of the Chase arbitration provision is

24

involved. A true and correct copy of the Order Denying Motion to Compel Arbitration and Stay
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is Exhibit 15 hereto and is incorporated herein by reference. The basis for that Ruling was that many of the arbitration provisions challenged here which were directly before the court were unconscionable and illegal (including the class action waiver). Plaintiffs are advised and

believe, and thereon allege, that no writ or interlocutory appeal of that Order has been timely filed. Plaintiffs are further advised and believe, and thereon allege, that in view of the recent Ninth Circuit opinion in Shroyer v. New Cingular Wireless Services, Inc., 2007 U.S.App.LEXIS 19560 (9th Cir. 2007), that is a final and binding ruling on the issue of the unconscionability and unenforceability of the Chase arbitration agreement. 47. Plaintiffs are advised and believe, and thereon allege, that it has been, is and will

continue to be the practice of Chase to uniformly advise its card holders, directly or by
11

implication that the card holder agreements are conscionable and legal, and governed by the
12

laws of the State of Delaware.
13 14 15 16 17 18 19 20 21 22 23 24 25

C. 48.

The Chase Card Agreements

The 2007 version of the amended and standardized contractual agreement (which is

presently used) entered into between Plaintiffs Lee and Lloyd (and similarly situated persons they seek to represent) and Chase relating is an Arbitration Agreement. It in pertinent part, provides "IT PROVIDES THAT ANY DISPUTE MAY BE RESOLVED BY BINDING ARBITRATION. ARBITRATION REPLACES THE RIGHT TO GO TO COURT. YOU WILL NOT BE ABLE TO BRING A CLASS ACTION OR OTHER REPRESENATIVE ACTION IN COURT SUCH AS THAT IN THE FORM OF A PRIVATE ATTORNEY GENERAL ACTION, NOR WILL YOUBE ABLE TO BRING ANY CLAIM IN ARBITRATION AS A CLASS ACTION OR OTHER REPRESENTATIVE ACTION. YOU WILL NOT BE ABLE TO BE PART OF ANY CLASS ACTION OR OTHER REPRESENTATIVE ACTION BROUGHT BY ANYONE ELSE OR BE REPRESENTED IN A CLASS ACTION OR OTHER REPRESWENTATIVE ACTION IN THE ABSENCE OF THIS ARBITRATION AGREEMENT. YOU ANDE WE MAY OTHERWISE HAVE HAD A RIGHT OR OPPORITUNITY
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TO BRING CLAIMS IN A COURT BEFORE A JUDGE OR JURY, AND/OR TO PARTICIPATE OR BGE REPRESENTED IN A CASE FILED IN COURT BY OTHERS (INCLUDING CLASS ACTIONS AND OTHER REPRESENATATIVE ACTIONS). OTHER RIGHTS THAT YOU WOULD HAVE IF YOU WENT TO A COURT, SUCH AS DISCOVERY OR THE RIGHT TO APPEAL THE DECISION MAY BE MORE LIMITED. EXCEPT AS OTHERWISE PROVIDED BELOW, THOSE RIGHTS ARE WAIVED. ... "Either you or we may, without the other's consent, elect mandatory, finding arbitration of any claim, dispute or controversy by either you or us against the other, or against the employees, parents, subsidiaries, affiliates, beneficiaries, agents or assigns of the other, arising from or relating in any way to the Cardmember Agreement, any prior Cardmember Agreement ... The Arbitration Agreement governs all Claims, whether such claims are based on law, statute, contract, regulation, ordinance, tort, common law, constitutional provision , or any legal theory of law such as respondeat superior, or any other legal or equitable ground and whether such Claims seek as remedies money damages, penalties, injunctions, or declaratory or equitable relief. Claims subject to the Arbitration Agreement include Claims regarding the applicability of this Arbitration Agreement or the validity of the entire Cardmember Agreement or any prior Cardmember Agreement. "Claims subject to arbitration include Claims that are made as counterclaims, cross claims, third party claims, interpleaders or otherwise, and a party who initiates a proceeding in court may elect arbitration with respect to any such Claims advanced in the lawsuit by any party or parties.... "No arbitration will be consolidated with an other arbitration proceeding without the consent of all parties... "The party filing a Claim in arbitration must choose one of the following two arbitration administrators: American Arbitration Association, or National Arbitration Forum. ... You may obtain copies of the current rules of each of the two arbitration administrators, information about arbitration and arbitration fees, and instructions for initiating arbitration by contacting the arbitration administrators ... "... The arbitration will be conducted under the applicable procedures and rules of the arbitration administrator that are in effect on the date the arbitration is filed unless those procedures and rules are inconsistent with this Arbitration Agreement, in which case this Agreement will prevail. ... The arbitrator ... will not have the power to award relief to, against, or for the benefit of any person who is not a party to the proceedings. .... "We will reimburse you for the initial arbitration filing fee paid by you up to the amount of $500 upon receipt of proof of payment. Additionally, if there is a
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hearing, we will pay any fees of the arbitration and arbitration administrator for the first two days of that hearing. ... All other fees swill be allocated in keeping with the rules of the arbitration administrator and applicable law. However, we will advance or reimburse filing fees and other fees if the arbitration administrator or arbitrator determines there is good reason for requiring us to do so or you ask us and we determine there is good cause for doing so. Each party will bear the expense of the fees and costs of that party's attorneys fees, witnesses, documents, and other expenses, regardless of which party prevails, for arbitration and any appeal ... except that the arbitrator shall apply any applicable law in determining whether a party should receive any or all fees and costs from another party." "The appeal must request a new arbitration before a panel of three neutral arbitrators designated by the same arbitration organization. The panel will r4econsider all factual and legal issues anew ... Each party will bear their own fees, costs and expenses for any appeal, but a party may recover any or all fees, costs and expenses from another party, if the majority of the panel of arbitrators, applying applicable law, so determines. Exhibit 14.

11

49.
12 13 14 15 16 17 18 19 20 21 22 23 24 25

The relevant provisions of the cardmember agreement (excepting the arbitration

provision) include: "We can change this agreement at any time, regardless of whether you have access to your account, by adding, deleting, or modifying any provision. Our right to add, delete, or modify provisions includes financial terms, such as the APRs and fees, and other terms such as the nature, extent and enforcement of the rights and obligations you or we may have relating to this agreement. Modifications, additions, or deletions are called `Changes' or a `Change.'" "We can delay enforcing or not enforced any of our rights under the agreement without losing out right to enforce them in the future. If any of the terms of this agreement are found to be unenforceable, all other terms will remain full force." "THE TERMS AND ENFORCEMENT OF THIS AGREEMENT AND YOU ACCOUNT WILL BE GOVERENDED AND INTERPRETED IN ACCORDANCE WITH FEDERAL LAW AND, TO THE EXTENT STATE LAW APPLIES, THE LAW OF DELAWARE. WITHOUT REGARD TO CONFLICT-OF-LAW PRINCIPLES, THE LAW OF DELAWARE, WHERE WE AND YOUR ACCOUNT ARE LOCATED, WILL APPLY NO MATTER WHERE YOU LIVE OR USE THE ACCOUNT." (Capitalization in original) Ibid.

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VI. Causes of Action First Cause of Action (Arbitration Provision --Violation of Bus. & Prof. Code 17200 et seq. Due To Illegal Practice Under Civil Code § 1670.5 And The Common Law) 50. Plaintiffs repeat and re-allege each of the allegations contained in paragraphs 1-4, 6-36,

and 38-48 as though fully set forth herein. 51. California Bus. & Prof. Code § 17200 provides, in relevant part: "As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice... 52. California Bus. & Prof. Code § 17203 provides, in relevant part: "Any person who engages, has engaged, or proposes to engage in unfair

11 12

competition may be enjoined by any court of competent jurisdiction. The court
13 14 15 16 17 18 19 20 21 22 23 24 25 23 David J. Lee, et al. v. Chase Manhattan Bank U.S.A., N.A., et al., Complaint

may make such orders or judgments ... as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition .... or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition. Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 [that he "has suffered injury in fact and has lost money or property as a result of such unfair competition"] ...." 53. California Code of Civil Procedure § 382 provides, in relevant part:

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"... when the question is of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all." 54. California Civil Code § 1670.5 is the codification of the common law relating to

unconscionability of contracts and/or contractual provisions and provides, in relevant part: "(a) If the court as a matter of law finds the contract or any clause of the

contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result."

11

55.
12 13 14 15 16 17 18 19 20 21 22 23

The arbitration clause, which was inserted into the contract between Chase and Plaintiffs

(and other similarly situated persons), is unconscionable, illegal and thereby violates California Civil Code § 1670.5 and the common law relating to unconscionability of contracts and contractual provision in that, among other reasons, it (a) was imposed on all card holders on a "take it or leave it" basis with no

opportunity by the card holder to negotiate any term thereof (see Discover Bank v. Superior Court, 36 Cal.App.4th 148, 159-160, 40 Cal.Rtpr.3d 76 (2005); Armanderiz v. Foundation Health Psychcare Services, Inc., 24 Cal.4th 83, 113114, 99 Cal.Rptr.2d 745, 6 P.3d 669 (2000); Shroyer v. New Cingular Wireless Services, Inc., 2007 U.S.App.LEXIS 19560 (9th Cir. 2007)); (b) was contained in an adhesive form agreement prepared by Chase and

concerning which Chase was in a much stronger bargaining position than the card
24

holder (ibid.; Gentry v. Superior Court, 2007 Cal.LEXIS 9376 (2007));
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(c)

provides that "ANY DISPUTE WILL BE RESOLVED BY BINDING

ARBITRATION" and "YOU WILL NOT BE ABLE TO BRING A CLASS ACTION OR OTHER REPRESENTATIVE CLAIM IN COURT SUCH AS THAT IN THE FORM OF A PRIVATE ATTORNEY GENERAL ACTION; NOR WILL YOU BE ALLOWED TO BRING ANY CLASS IN

ARBITRATION AS A CLASS ACTION OR OTHER REPRESWENTAIVE ACTION ...." in a situation, as here, involving a class action waiver in the context where predictably only "small" amounts of money are involved (the annual fee) and as part of a scheme to deliberately cheat large numbers of its card holders out of the individually "small" amounts represented by the fees paid for

11

the card and the diminution in value of that which Plaintiffs and similarly situated
12

card holders received (Gentry v. Superior Court, supra Discover Bank, supra;
13 14 15 16 17 18 19 20 21 22 23

Schroyer, supra (adopting Discover Bank as the law of the Ninth Circuit); Ting v. AT&T, 319 F.3d 1126, 1150 (9th Cir. 2003); Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1176 (9th Cir. 2003)); (d) provides "neither you nor we agree to any arbitration on a class or

representative basis, and the arbitrator shall have no authority to proceed on such basis. That means that even if a class action lawsuit or other representative action, such as that in the form of a private attorney general action, is filed, any Claim between us related to the issues raised in such lawsuits will be subject to an individual arbitration claim if either you or we so select" in a context where predictably only "small" amounts of money are involved (the fee) and as part of a

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scheme to deliberately cheat large numbers of its card holders out of the individually "small" amounts represented by the fees paid for the card (see, ibid.); (e) provides that even in the event of the certification of a class by some other

card holder, all other card holders cannot become members of that class, a complete derogation of Fed.R.Civ.P. 23; (f) provides that "Claims subject to the Arbitration Agreement include Claims

regarding the applicability of this Arbitration Agreement or the validity of the entire Cardmember Agreement or any prior Cardmember Agreement" in direct contravention of Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006), Nagrampa v. Mailcoups, Inc., 469 F.3d

11 12

1257 (9th Cir. 2006), Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 405-404, 87 S.Ct. 1801, 103 L.Ed.2d 1038 (1967), Flores v. TransAmerica

13 14 15 16 17 18 19 20 21 22 23

Home First, Inc., Cal.App.4th 846, 113 Cal.Rptr.2d 376 (2001), and Stirlin v. Supercuts, Inc., 51 Cal.App.4th 1519, 60 Cal.Rptr.2d 138 (1997) ; (g) provides that the arbitrator "will not have the power to award relief to,

against, or for the benefit of any person who is not a party to this proceeding" thereby forbidding the entry of any injunctive relief in the arbitration even though statutory injunctive relief under the UCL and CLRA are unwaiveable (Broughton v. Cigna Healthplans, 21 Cal.4th 1066, 90 Cal.Rptr.2d 334, 988 P.2d 334 (1999); Cruz v. PacificCare Health Systems, Inc., 30 Cal.4th 303, 133 Cal.Rptr.2d 58, 66 P.3d 1157 (2003); Davis v. O'Melveny & Meyers, 485 F.3d 1066, 1080 (9th Cir. 2007); Nagrampa v. Mailcoups, Inc., supra, 469 F.3d at 1289-1293;

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(h)

provides "No arbitration will be consolidated with any other arbitration

proceeding without the consent of all parties" in a context where, as here, predictably only "small" amounts of money (the fees) are involved and as part of a scheme to deliberately cheat large numbers of its card holders out of the individually "small" amounts represented by the fees paid for the card (see Discover Bank v. Superior Court, supra, 36 Cal.App.4th at 153; Szetla v. Discover Bank, 97 Cal.App.4th 1094, 118 Cal.Rptr. 862 (2002); Comb v. PayPal, Inc., 218 F.Supp.2d 1165, 175 (N.D.Cal. 2002)); (i) provides that all "Claims, whether such Claims are based on law, statute,

contract, regulation, ordinance, tort, common law, constitutional provision, or any
11

legal theory of law such as respondeat superior, or any other legal or equitable
12

ground and whether such Claims seek as remedies money damages, penalties,
13 14 15 16 17 18 19 20 21 22 23

injunctions, or declaratory or equitable relief" even though, for instance, injunction requests under the CLRA and UCL are never arbitrable (Broughton v. Cigna Healthplans, supra; Cruz v. PacificCare Health Systems, Inc., supra); (j) provides that in arbitration all claims shall be resolved by "one of two American Arbitration Association, or National

arbitration administrators: Arbitration Forum"; (k)

provides no alternative means by which some other arbiter or arbitral

organization may be chosen by the card holder; (l) provides that arbitration "will be conducted under the applicable

procedures and rules of the arbitration administrator that are in effect on the date
24

the arbitration is filed unless those procedures or regulations are inconsistent with
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the Arbitration Agreement, in which case this Arbitration Agreement will prevail..." but fails to advise of any specific inconsistency those codes may have with the Arbitration Provision and, further, does not provide the card holder with copies of the rules of those arbitration organizations or specify which of several codes of procedure applies to the arbitration (see Ultimo v. Harper, 113 Cal.App.4th 1402, 7 Cal.Rptr.2d 418 (2003); Fitz v. NCR Corp., 118 Cal.App.4th 702, 721, 13 Cal.Rptr.2d 88 (2004); Dunham v. Envtl. Chem. Corp. 2006 U.S.Dist.LEXIS 61068 (N.D.Cal. 2006)); (m) provides no way for the card holder to know at the time he/she initially

agreed to arbitrate what the rules would be at the time of the arbitration as well as
11

what inconsistencies existed between the agreement and the Code because Chase
12

has given itself the unilateral right to amend the arbitration provision at any time
13 14 15 16 17 18 19 20 21 22 23

(including before, during, or after any arbitration) and the arbitration provision otherwise makes the applicable arbitration rules those in effect when the arbitration is filed (see Net Global Marketing, Inc. v. Dialtone, Inc., 217 Fed.Appx. 598, 2007 U.S.App.LEXIS 674 (9th Cir. 2007); Ingle v. Circuit City Stores, Inc., 328 F.3d at 1179; Geoffrey v. Washington Mutual Bank, 484 F.Supp.2d 1115, 1123 (S.D.Cal. 2007); Bragg v. Linder Research, Inc., 487 F.Supp.2d 593, 609 (E.D.Pa. 2007)(applying California law); Conglamur v. Circuit City Stores, Inc., 2004 Cal.App.Unpub.LEXIS 8140 at *13-14 (2004)); (n) provides that "[i]f any portion of this Arbitration Agreement is deemed

invalid or unenforceable, the remaining portions nevertheless remain in force"
24

even though all determinations as to severability of the provision is a matter
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exclusively reserved for the Courts (see California Civil Code § 1670.5 (a); Armanderiz, supra, 24 Cal.4th at 1121-24; Stirlin, supra; Flores, supra); (o) provides, relative to the costs of arbitration, that Chase "will reimburse

you for the initial arbitration filing fee paid by you up to the amount of $500 upon receipt of proof of payment. Additionally, if there is a hearing, we will pay any fee of the arbitrator and arbitration administrator for the first two days of that hearing... All other fees will be allocated in keeping with the rules of the

arbitration administrator and applicable law" in violation of Nagrampa and Armanderiz; (p) provides that "Each party will bear their own fees, costs and expenses for

11

any appeal, but a party may recover any or all fees, costs and expenses from
12

another party, if the majority of the panel of arbitrators, applying applicable law, so
13 14 15 16 17 18 19 20 21 22 23

determines" (ibid.); and, (q) provides only a vague and overbroad statement of what effect arbitration will

have on the legal rights of card holders. 56. Plaintiffs, as set forth below in paragraph 94 (the allegations of which are incorporated

herein by reference), bring this action on behalf of themselves and similarly situated persons in 2 subclasses, all of which qualify for certification pursuant to California Code of Civil Procedure § 382 on the grounds that: (a) the classes as defined are ascertainable since membership therein is

defined by and limited to persons (either California consumers or residents of California depending on whether the class is under the CLRA, the UCL, or the

24

fraud cause of action) having a Chase credit card for which a fee was paid during
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the period covering the limitations period and the time of final judgment under a card agreement containing the same or similar arbitration provision or agreement terms, respectively, as Plaintiffs (copies of which agreements and arbitration provisions are referenced in the class definition). Those classes, each of which is likely to contain at least hundreds of thousands of persons (either consumers or residents) are identifiable by Chase which keeps the records of all such persons, including their last known billing addresses. (b) there is a commonality of interests by and between Plaintiffs and the

members of the classes they seek to represent that is patent in that (1) predominant common questions of law or fact are exclusively

11

involved: i.e., the unconscionability of terms in the arbitration
12

provision and card agreement, respectively, that are common to all of
13 14 15 16 17 18 19 20 21 22 23

the form provisions and agreements imposed by Chase on a "take it or leave it" basis on the card holders; as to the fraud cause of action, common representations and reliance on the misrepresentations by Plaintiffs and class members exists; (2) the Plaintiffs, as class representatives, are typical of the

classes and have only claims and defenses that are typical of those of the respective classes in that, for instance, the claims for and quantum of injunctive and restitutionary relief are identical for each member of each class (i.e., the amount of the fee(s) paid by them) or easily subject to proof without separate adjudications; and,

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(3)

Plaintiffs can and will adequately represent the interests of

the class since they are committed to maintaining the action and are represented by counsel knowledgeable and experienced in consumer and class action law. (c) The issues which may be jointly tried (most of which are singularly ones

of law), when compared with the issues requiring separate adjudication, are so numerous or substantial that the maintenance of a class action is advantageous to the judicial process and to the litigants. Second Cause of Action (Arbitration Provision --Violation of Bus. & Prof. Code 17200 et seq. Due To Illegal Practice Under Civil Code §§ 1668 and 3513 57. Plaintiffs repeat and re-allege each of the allegations contained in paragraphs 1-4, 6-36,

12

38-48, and 50-56 as though fully set forth herein.
13 14 15 16 17 18 19 20 21 22 23

58.

California Civil Code § 1668 provides, in relevant part, "All contracts which have for their object, directly or indirectly, to exempt anyone from responsibility for his own fraud, or willful injury to the person or property of another, or violation of law, whether willful or negligent, are against the policy of the law."

59.

California Civil Code § 3513 provides, in relevant part, "Any one may waive the advantage of a law intended solely for his benefit. But a law established for a public reason cannot be contravened by a private agreement.

60.

The Chase arbitration provision violates Civil Code §§ 1668 and 3513, respectively,

including, but not limited to, its provisions that no class or representative action can be
24

maintained, and no injunctive relief may be given to any card holder. See, e.g., Stroyer v. New
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Cingular Wireless Services, Inc., supra, 2007 U.S.App.LEXIS 1560 at * 30; Discover Bank v. Superior Court, supra, 36 Cal.4th at 160-163, 165; Gentry v. Superior Court, supra. Third Cause of Action (Arbitration Provision --Violation of Bus. & Prof. Code 17200 et seq. Due To Illegal Practice Under Code of Civil Procedure § 1281.4 61. Plaintiffs repeat and re-allege each of the allegations contained in paragraphs 1-4, 6-36,

38-48, and 50-56 as though fully set forth herein. 62. Code of Civil Procedure § 1281.4(a), in pertinent part, provides: "No neutral arbitrator or private arbitration company shall administer a consumer arbitration under any agreement or rule requiring that a consumer who is a party to the arbitration pay the fees and costs incurred by an opposing party if the

11

consumer does not prevail in the arbitration, including, but not limited to, the fees
12

and costs of the arbitrator, provider organization, attorney, or witnesses."
13 14 15 16 17 18 19 20 21 22 23

63.

The Chase arbitration provision violates Section 1281.4. Fourth Cause of Action (Arbitration Provision --Violation of Bus. & Prof. Code 17200 et seq. Due To Unfair Practice

64.

Plaintiffs repeat and re-allege each of the allegations contained in paragraphs 1-4, 6-36,

38-48, 50-56, and 61-63 as though fully set forth herein. 65. Chase's arbitration provision, due to its unconscionability and illegality, is an unfair

practice that either "offends an established public policy [as represented by Civil Code §§ 1670.5, 1281.4, 1668 and/or 3513] or ... is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers," [Smith v. State Farm Mutual Automobile Ins. Co., 93 Cal.App.4th 700, 718-719, 113 Cal.Rtpr.2d 399 (2001)], or which violates public policy

24

tethered to specific constitutional, statutory or regulatory provisions such as Sections 1670.5,
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1281.4, 1668, and/or 3513. Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 187, 83 Cal.Rptr.2d 548, 973 P