Alternative Dispute Resolution

It all started when Betty Vaden didn't pay her credit card bills. The amount she supposedly owed Discover Bank rose to around $10,000, so in June 2003 the bank's "servicing affiliate" Discover Financial Services (DFS) sued her in Maryland state court. Vaden replied with class act...

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Bibliographic Details
Published in:The IP Litigator : Devoted to Intellectual Property Litigation and Enforcement 2008-07, Vol.14 (4), p.40
Main Author: Skaff, Stephanie P
Format: Article
Language:English
Subjects:
Agreements
Alternative dispute resolution
Arbitration
Breach of contract
Consumer credit
Credit card fees
Declaratory judgments
District courts
Federal court decisions
Jurisdiction
Preemption
State court decisions
State courts
State laws
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Summary:It all started when Betty Vaden didn't pay her credit card bills. The amount she supposedly owed Discover Bank rose to around $10,000, so in June 2003 the bank's "servicing affiliate" Discover Financial Services (DFS) sued her in Maryland state court. Vaden replied with class action state law counterclaims against DFS, including breach of contract and claims that fees and interest rates violated Maryland consumer credit laws. Although holding that a federal question in the underlying controversy could provide federal jurisdiction to order arbitration, the court in Vaden I was not convinced that such a question was actually present in the case before it, and so remanded to the district court, suggesting that it consider whether Discover Bank was a federally insured bank, and was actually the real party in interest, and if so whether the counterclaims were "completely" pre-empted. The district court found in the affirmative on all points.
ISSN:1086-914X