Dodev v. Citibank N.A.

• Court: District Court, D. Arizona
• Decided: August 15, 2025
• Docket: 2:24-cv-02931
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Ivaylo Dodev, No. CV-24-02931-PHX-SHD

10 Plaintiff, ORDER

11 v.

12 CitiBank NA, et al.,

13 Defendants. 14 15 Pending before the Court are Defendant Citibank, N.A.’s (“Citibank”) motion to 16 compel arbitration, (Doc. 14), and Plaintiff Ivaylo Dodev’s motion for leave to file a sur- 17 reply in opposition to Citibank’s motion to compel arbitration, (Doc. 23). For the reasons 18 explained below, Citibank’s motion is granted and Dodev’s motion is denied.1 19 I. FACTUAL BACKGROUND 20 Dodev has a Citi Custom Cash credit card (the “Citi Card”) with Citibank, which 21 was issued “on or about July 5, 2022.” (Doc. 1 ¶¶ 2–3; Doc. 14-1 at 2.)2 22 During a “vacation in Bulgaria,” Dodev’s Citi Card was “charged twice while 23 procuring a rental vehicle” from EasyRent Bulgaria. (Doc. 1 ¶¶ 5, 32.) Dodev was 24 “sideswiped by the vehicle driving behind him,” which “only scuffed” the rental car, but 25 1 The parties did not request oral argument, so the Court decides these motions 26 without holding a hearing. See LRCiv 7.2(f). 2 Evidence submitted by the parties in connection with a motion to compel arbitration 27 may be considered. See, e.g., Perez v. DirecTV Grp. Holdings, LLC, 251 F. Supp. 3d 1328, 1336 (C.D. Cal. 2017) (“A court may consider evidence outside of the pleadings, such as 28 declarations and other documents filed with the court, using a standard similar to the summary judgment standard.” (citation modified)). 1 police “cited [Dodev] for not having his [United States driver’s license] legalized or having 2 an International Driving Permit.” (Id. ¶¶ 34–35.) The police also removed the license 3 plates from the vehicle and towed the car back to EasyRent’s office because the “rental 4 vehicle did not have a proper document of ownership . . . and insurance, as required under 5 Bulgarian traffic laws, prior to renting it to a client.” (Id. ¶ 35 (emphasis omitted).) 6 EasyRent “assured [Dodev] he would get a better vehicle” “under the terms of the 7 initial contract.” (Id. ¶ 37 (emphasis omitted).) EasyRent then proceeded to “stage [a] 8 phone call to [an] accomplice” posing as the traffic authority to mislead Dodev into 9 believing that physical proof of insurance was not required for rental vehicles. (Id. ¶¶ 40– 10 42.) 11 Thereafter, Dodev “discovered that his Citi Card was charged an additional 7,056.00 12 leva (Bulgarian currency, equivalent at this time to $3,734.48).” (Id. ¶ 45.) When he called 13 EasyRent, it “promised him,” “even showed him on [EasyRent’s] office computer,” that 14 “the terms of the second vehicle rental were identical to the original car rental contract,” 15 and stated that the additional charge was a “hold” that would be released. (Id. ¶¶ 45–46 16 (emphasis omitted).) The charge was not rescinded. (See id. ¶¶ 55–56.) 17 Dodev disputed the charges on his card, and after he received the “first periodic 18 statement reflecting the alleged billing errors,” he “sent a written certified communication” 19 to Citibank. (Id. ¶¶ 24, 56.) Citibank “failed to respond in writing to [the] certified 20 communication.” (Id. ¶ 27.) 21 On September 30, 2024, Dodev “contacted the Citi[bank] executive office and 22 spoke to” a representative of Citibank, who stated that “Citibank’s choice to side with 23 EasyRent was now final because Citibank had no way of recovering the funds.” (Id. ¶¶ 7– 24 8 (citation modified).) Citibank “alleged that the $3,734.28 charge” represented “a charge 25 for the damaged vehicle during the accident” and, later, that Dodev “had kept the second 26 vehicle for six months.” (Id. ¶¶ 70, 74.) Dodev alleges he “diligently provided [Citibank] 27 with a preponderance of evidence regarding the scam,” including “flight itineraries, police 28 reports, and factual statements refuting [EasyRent’s] baseless claims,” as well as “a score 1 of internet . . . reviews and complaints depicting the same . . . scam” by EasyRent. (Id. 2 ¶¶ 86, 89.) 3 On October 21, 2024, Citibank “closed the dispute” at Dodev’s request. (Id. ¶¶ 12, 4 59.) 5 Dodev alleges Citibank “deliberately and conspicuously left the disputes 6 unresolved” to “prevent [him] from seeking a legal recourse.” (Id. ¶ 62.) He asserts 7 statutory claims under Ariz. Rev. Stat. § 44-7803, the Federal Credit Billing Act, and the 8 Truth in Lending Act, and common law claims for infliction of emotional distress, breach 9 of contract, breach of the implied covenant of good faith and fair dealing, and fraud. (Id. 10 at 22–31.) 11 II. PROCEDURAL HISTORY 12 On October 28, 2024, Dodev filed the Complaint. (Doc. 1.) 13 On December 18, 2024, Citibank moved to compel arbitration. (Doc. 14.) On 14 January 2, 2025, Dodev filed a response, (Doc. 16), and on January 9, 2025, Citibank filed 15 a reply, (Doc. 19). 16 On April 22, 2025, months after the parties fully briefed the motion to compel 17 arbitration, Dodev moved for leave to file a sur-reply. (Doc. 23). On May 1, 2025, 18 Citibank filed a response. (Doc. 24.) Dodev did not file a reply, and the time to do so has 19 now expired. See LRCiv 7.2(d). 20 III. MOTION TO COMPEL ARBITRATION 21 A. Legal Standard 22 The Federal Arbitration Act (“FAA”) applies to contracts “evidencing a transaction 23 involving commerce.” 9 U.S.C. § 2. It provides that written agreements to arbitrate 24 disputes “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at 25 law or in equity for the revocation of any contract.” Id. Thus, absent a valid contractual 26 defense, the FAA “leaves no place for the exercise of discretion by a district court, but 27 instead mandates that district courts shall direct the parties to proceed to arbitration on 28 issues as to which an arbitration agreement has been signed.” Dean Witter Reynolds, Inc. 1 v. Byrd, 470 U.S. 213, 218 (1985) (emphasis omitted). 2 In general, a court’s role under the FAA is “limited to determining (1) whether a 3 valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses 4 the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 5 (9th Cir. 2000). These two issues are sometimes referred to as the “gateway” questions of 6 arbitrability. Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68–69 (2010). Although 7 the gateway questions are ordinarily resolved by the court, parties may agree to arbitrate 8 one or both of the gateway issues by including a delegation clause in the arbitration 9 agreement: “An agreement to arbitrate a gateway issue is simply an additional, antecedent 10 agreement the party seeking arbitration asks the federal court to enforce, and the FAA 11 operates on this additional arbitration agreement just as it does on any other.” Id. at 70. 12 The evidence of the parties’ intent to delegate such issues to the arbitrator must be “clear 13 and unmistakable.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). 14 B. The Arbitration Agreement 15 Dodev’s use of his Citibank Card is subject to a Card Agreement, which Citibank 16 provided to Dodev, “along with the physical credit card, to his address on file when he 17 opened the Account.” (Doc. 14-1 at 2.) “Federal law and the law of South Dakota” govern 18 the Card Agreement. (Id. at 21.) The Card Agreement contains an arbitration clause with 19 the following language: 20 Covered Claims 21 • You or we may arbitrate any claim, dispute, or controversy between 22 you and us arising out of or related to your Account, a previous related Account or our relationship (called “Claims”). 23 • If arbitration is chosen by any party, neither you nor we will have 24 the right to litigate that Claim in court or have a jury trial on that Claim. 25 Except as stated below, all Claims are subject to arbitration, no matter what legal theory they’re based on or what remedy (damages, or injunctive or 26 declaratory relief) they seek, including Claims based on contract, tort 27 (including intentional tort), fraud, agency, your or our negligence, statutory or regulatory provisions, or any other sources of law; Claims made as 28 counterclaims, cross-claims, third-party claims, interpleaders or otherwise; 1 Claims made regarding past, present, or future conduct; and Claims made independently or with other claims. This also includes Claims made by or 2 against anyone connected with us or you or claiming through us or you, or 3 by someone making a claim through us or you, such as a co-applicant, authorized user, employee, agent, representative or an 4 affiliated/parent/subsidiary company. 5 6 (Id. at 20.) The Card Agreement provides for arbitration to be “conducted by the American 7 Arbitration Association (‘AAA’) according to this arbitration provision and the applicable 8 AAA arbitration rules in effect when the claim is filed (‘AAA Rules’), except where those 9 rules conflict with this arbitration provision.” (Id.) 10 The Card Agreement also contains an opt-out provision, stating in relevant part: 11 You may reject this arbitration provision by sending a written rejection notice to us . . . . Your rejection notice must be mailed within 45 12 days of Account opening. Your rejection notice must state that you reject 13 the arbitration provision and include your name, address, Account number and personal signature. No one else may sign the rejection notice. 14 15 (Id. at 21.) Citibank does not have any record that Dodev opted out of the arbitration 16 provision, which it would have saved to Dodev’s file if it had received an opt-out 17 notification. (Id. at 3–4; Doc. 19-2 at 2.) 18 C. Discussion 19 Citibank argues Dodev’s claims are subject to arbitration, requiring its motion to be 20 granted. (Doc. 14 at 4–5, 7–8.) Citibank also argues that, under South Dakota law, a valid 21 agreement to arbitrate exists because “the Account was opened in [Dodev’s] name, 22 [Dodev] received the Card Agreement (containing the Arbitration Agreement), did not 23 reject or opt out of the Arbitration Agreement, and continued to use and pay for the 24 Account . . . after its receipt.” (Id. at 6–7.) Finally, Citibank requests that this action be 25 stayed pending completion of arbitration. (Id. at 8–9.) 26 Dodev argues that he opted out of the arbitration provision, stating that he “found a 27 draft of the Agreement’s rejection in his computer that was sent via USPS first class mail 28 on or about August 1, 2022.” (Doc. 16 at 4.) Furthermore, Dodev argues that resolution 1 of this issue—whether he opted out of the arbitration provision—is a factual dispute that 2 requires a jury trial. (Id. at 5.) Dodev also argues that, even if he did not opt out, the Card 3 Agreement is not binding under Arizona law because the arbitration provision uses the 4 permissive term “may” rather than the binding term “shall” or “must.” (Id. at 8–9.) Dodev 5 contends Citibank waived its right of arbitration “by choosing litigation,” stating that a 6 “high-level Citibank, N.A. executive” told him during a “recorded phone call” that Dodev 7 could pursue “a litigation.” (Id. at 10 (emphasis omitted).) Finally, Dodev argues the 8 arbitration agreement is unconscionable. (Id. at 11–13.) 9 In reply, Citibank argues that the arbitration agreement has delegated arbitrability 10 to the arbitrator, through the incorporation of the AAA rules that provide for the arbitrator’s 11 power to rule on issues of jurisdiction, the scope and validity of the arbitration agreement, 12 and arbitrability of any claims. (Doc. 19 at 2–3.) Citibank argues that the arbitrator must 13 therefore decide “whether there is a valid agreement to arbitrate between the parties as well 14 as . . . [Dodev’s] argument that he rejected the arbitration provision.” (Id. at 3.) Citibank 15 further contends there is no genuine dispute of material fact that Dodev failed to opt out of 16 the arbitration provision, because Dodev “does not offer admissible evidence that he 17 rejected arbitration,” such as an “affidavit declaring under penalty of perjury that the letter 18 was actually sent on the date he alleges.” (Id. at 5–6.) Finally, Citibank disputes that it 19 waived its right to compel arbitration and argues that Dodev did not meet his burden of 20 showing unconscionability. (Id. at 8–10.) 21 Dodev does not dispute that he and Citibank generally formed a contract through 22 the Card Agreement. (See Doc. 16 at 8–13 (arguing the agreement to arbitrate is not 23 binding and unconscionable); Doc. 1 ¶ 118 (alleging in claim for breach of contract that he 24 and Citibank “entered a valid and enforceable agreement when [Citibank] approved [his] 25 Citi Card application”).) See, e.g., Estep v. Yuen Yung, 2015 WL 1062995, at *2 (E.D. Cal. 26 2015) (“Plaintiffs cannot sue for breach of contract and then, in an effort to avoid a 27 contractual provision, argue that they are not parties to the contract.”). 28 As mentioned, the “gateway issues” of arbitrability can “be expressly delegated to 1 the arbitrator where the parties clearly and unmistakably” do so. Brennan, 796 F.3d at 2 1130 (citation modified). Incorporation of the AAA’s rules “constitutes clear and 3 unmistakable evidence that contracting parties agreed to arbitrate arbitrability.” Id. 4 (citation omitted). If an arbitration agreement “clearly and unmistakably delegates 5 arbitrability questions to the arbitrator, the only remaining question is whether the 6 particular agreement to delegate arbitrability . . . is itself unconscionable.” Id. at 1132. 7 General challenges of unconscionability—to either the contract or the arbitration provision 8 as a whole—are insufficient to “have the federal court address [the] unconscionability 9 challenge.” See id. at 1133. 10 Citibank is correct that the arbitration agreement expressly delegates the gateway 11 issue of arbitrability to the arbitrator. The arbitration agreement provides that “arbitration 12 shall be conducted by the [AAA] according to this arbitration provision and the applicable 13 AAA arbitration rules in effect when the claim is filed.” (Doc. 14-1 at 20.) This is like the 14 delegation provision enforced by the Ninth Circuit in Brennan, which provided that claims 15 would “be settled by binding arbitration in accordance with the Rules of the American 16 Arbitration Association.” 796 F.3d at 1128. The AAA Consumer Rules3 provide that the 17 “arbitrator shall have the power to rule on their own jurisdiction, including any objections 18 with respect to the existence, scope, or validity of the arbitration agreement or the 19 arbitrability of any claim or counterclaim,” which clearly and unmistakably evidences the 20 parties’ agreement to arbitrate arbitrability. Am. Arb. Ass’n, AAA Consumer Arbitration 21 Rules and Mediation Procedures 11 (May 1, 2025), 22 https://www.adr.org/media/yawntdvs/2025_consumer_arbitration_rules.pdf 23 [https://perma.cc/DN4S-PP6B]; see also Brennan, 796 F.3d at 1130 (containing similar 24 rule). Courts have held that similar delegation provisions clearly and unmistakably 25 3 The AAA Consumer Rules were amended in May 2025. See Am. Arb. Ass’n, AAA 26 Consumer Arbitration Rules and Mediation Procedures (May 1, 2025), https://www.adr.org/media/yawntdvs/2025_consumer_arbitration_rules.pdf 27 [https://perma.cc/DN4S-PP6B]. Although Citibank included with its briefing a copy of the previous AAA Consumer Rules, (Doc. 19-1), it is unnecessary to decide which Rules are 28 in effect because the relevant rule pertaining to the arbitrator’s jurisdiction is substantively identical. 1 delegated arbitrability and required the arbitrator to decide the gateway issues. See, e.g., 2 Zenelaj v. Handybook Inc., 82 F. Supp. 3d 968, 971–74 & 971 n.1 (N.D. Cal. 2015) 3 (delegation provision providing that “arbitration will be commenced and conducted under 4 the Commercial Arbitration Rules . . . of the American Arbitration Association” required 5 “questions regarding the arbitration provision’s validity, scope, or application to [the] 6 dispute [to] be decided by the arbitrator”). 7 But whether an agreement to arbitrate even exists, which Dodev disputes on grounds 8 that he opted out of the arbitration agreement, is not an issue properly delegated to the 9 arbitrator because it pertains to contract formation, rather than validity. See AT & T Techs., 10 Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 648 (1986) (stating that arbitration “is a 11 matter of contract and a party cannot be required to submit to arbitration any dispute which 12 he has not agreed so to submit”); see also Rent-A-Center, 561 U.S. at 70 n.2 (“The issue of 13 the agreement’s validity is different from the issue [of] whether any agreement between 14 the parties was ever concluded . . . .” (quotation marks omitted)). If Dodev opted out of 15 the arbitration agreement, he has not agreed to submit any dispute to arbitration, let alone 16 questions of arbitrability. See AppTech Payments Corp. v. NCR Payment Sols., LLC, 2023 17 WL 7413355, at *4 (S.D. Cal. 2023) (“If Plaintiff had indeed opted out, there would be no 18 arbitration agreement.”). 19 Other courts have similarly concluded that, if one party disputes whether they opted 20 out of the arbitration provision entirely, a court must resolve this issue before compelling 21 arbitration, even if the arbitration agreement contains a delegation provision. See Rolen v. 22 Va. CVS Pharmacy, LLC, 2025 WL 757593, at *3–4 (W.D. Va. 2025) (holding that the 23 court must decide the issue of whether the plaintiff opted out of the arbitration agreement 24 because a delegation provision “does not preclude a court from deciding that a party never 25 made an agreement to arbitrate any issue” (citation omitted)); Deverze v. Uber Techs., Inc., 26 2020 WL 10111001, at *2, 4 (N.D. Ga. 2020) (holding the “determination of whether an 27 arbitration agreement exists falls under the purview of [the] court,” even with a delegation 28 provision, where the plaintiff “contend[ed] that he sent timely written notification of his 1 decision to opt-out of the arbitration provision”); Mendez v. LoanMe, Inc., 2020 WL 2 6044098, at *2–4 (S.D. Cal. 2020) (holding that the court must resolve the issue of whether 3 the plaintiff opted out of the arbitration provision, even where a delegation provision was 4 present, because “[w]hether or not Plaintiff assented to the Arbitration Provision— 5 including the delegation clause—is wholly contingent on whether or not he successfully 6 opted out of the Arbitration Provision”). Indeed, as one court put it, if the “issue of whether 7 a [party] has opted out of the Arbitration Provision” must be determined by the arbitrator, 8 this would “seemingly render the ability to opt-out illusory, at least as to the delegation 9 provision”: “how does one opt out of a delegation provision that requires you to arbitrate 10 whether you opted out?” Lee v. Uber Techs., Inc., 208 F. Supp. 3d 886, 893 n.8 (N.D. Ill. 11 2016). 12 Accordingly, whether Dodev opted out of the arbitration provision will be resolved 13 first before the parties can be compelled to arbitrate. See In re StockX Customer Data Sec. 14 Breach Litig., 19 F.4th 873, 880 (6th Cir. 2021) (stating that courts must first “resolve any 15 challenge that pertains to the formation or existence of the contract containing the 16 delegation provision” before determining whether challenges were made to the delegation 17 provision specifically). 18 In analyzing “whether an agreement to arbitrate existed, a court should apply a 19 summary-judgment-style standard.” Card v. Wells Fargo Bank, N.A., 611 F. Supp. 3d 20 1080, 1083 (D. Or. 2020); see also Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 670 21 (9th Cir. 2021) (“The summary judgment standard is appropriate because the district 22 court’s order compelling arbitration is in effect a summary disposition of the issue of 23 whether or not there had been a meeting of the minds on the agreement to arbitrate.” 24 (quotation marks omitted)). Thus, “only when there is no genuine issue of fact concerning 25 the formation of the agreement should the court decide as a matter of law that an agreement 26 to arbitrate existed.” Card, 611 F. Supp. 3d at 1083 (citation modified). “Conversely, to 27 deny the motion to compel arbitration, rather than hold a trial on arbitration agreement 28 formation, the Court must find no reasonable trier of fact could find an agreement was 1 made.” Singh v. Adobe Inc., 2025 WL 2197142, at *2 (N.D. Cal. 2025). 2 There is no genuine issue of fact concerning whether Dodev opted out of the 3 arbitration agreement. Citibank offered declarations from Judy Delage, one of its 4 employees, who averred that Citibank has no record that Dodev gave written notification 5 that he opted out of the arbitration agreement and that it would have such record if Dodev 6 had done so. (Doc. 14-1 at 4 (stating “Citibank’s regular practice [is] to notate in the 7 account records when a card member chose to reject the arbitration provision” and that her 8 “review of [Dodev’s] Account records” revealed that there was not a notation in Dodev’s 9 account); Doc. 19-2 ¶¶ 7–11.) Furthermore, Delage stated that it is Citibank’s practice to 10 (1) save correspondence from a customer to that customer’s account file, (2) send a “denial 11 or approval letter back to the customer confirming the decision regarding the customer’s 12 opt-out request” if Citibank receives a letter rejecting arbitration, and (3) save 13 correspondence to customers from Citibank to that customer’s account file. (Doc. 19-2 14 ¶¶ 7–9.) Dodev’s account does not contain any record of such correspondence. (Id. ¶¶ 10– 15 11.) 16 Dodev does not offer any evidence to rebut Delage’s testimony, such as a sworn 17 statement that he sent the opt-out notice or a copy of any receipt or proof of service. 18 Instead, Dodev argues that he “found a draft of the Agreement’s rejection in his computer 19 that was sent via USPS first class mail on or about August 1, 2022.” (Doc. 16 at 4.) Dodev 20 could not find any letter from Citibank acknowledging his rejection of the arbitration 21 agreement. (Id.) Dodev also argues—without evidence—that Citibank’s “record keeping 22 . . . is highly insufficient and subject to human errors and manipulation” and is, at least, a 23 dispute of fact entitling him to a jury trial. (Id. at 5.) 24 This is insufficient to rebut Citibank’s evidence. First, Dodev’s unsworn allegations 25 in his response are not evidence. Coverdell v. Dep’t of Soc. & Health Servs., 834 F.2d 758, 26 762 (9th Cir. 1987) (holding that “unsworn factual allegations” in briefing “do not 27 constitute evidence”). Second, the draft letter does not establish that Dodev mailed it to 28 Citibank. At most, the draft letter shows that Dodev contemplated opting out of the 1 arbitration agreement, not that he actually did so. Dodev’s arguments that Citibank’s 2 recordkeeping is insufficient and subject to manipulation and error does not change this 3 result, as an opposing party “must do more than simply show that there is some 4 metaphysical doubt as to the material facts.” See Matsushita Elec. Indus. Co. v. Zenith 5 Radio Corp., 475 U.S. 574, 586 (1986); see also Tomada v. Home Depot U.S.A., Inc., 2014 6 WL 2538792, at *6 (N.D. Cal. 2014) (stating the nonmoving party “may not rest upon mere 7 allegation, speculation, or denial of the adverse party’s evidence”). Instead, “the 8 nonmoving party must come forward with affirmative evidence from which a jury could 9 reasonably render a verdict in its favor.” Banga v. First USA, NA, 29 F. Supp. 3d 1270, 10 1275 (N.D. Cal. 2014). Dodev has not provided any affirmative evidence, so a trial is not 11 warranted because “the record taken as a whole could not lead a rational trier of fact to find 12 for [Dodev].” See Matsushita, 475 U.S. at 587 (quotation marks omitted). 13 Having determined that no genuine issue of material fact exists as to whether Dodev 14 opted out of the arbitration agreement, the next question is whether Dodev challenged the 15 delegation provision in the arbitration agreement specifically, as opposed to the arbitration 16 provision or the contract as a whole. See Brennan, 796 F.3d at 1133; see also StockX, 19 17 F.4th at 880. Dodev has not made any such argument, as his challenges concern the 18 arbitration provision generally, not the delegation provision itself. (Doc. 16 at 8–10 19 (arguing the arbitration agreement is not binding because it uses permissive language), 11– 20 12 (arguing the arbitration provision is unconscionable because it “lacks clear and 21 straightforward language necessary to enforce binding arbitration” and is ambiguous such 22 that it would require court interpretation and increase financial burdens).) Absent a 23 challenge to the delegation provision itself, Dodev’s arguments about the validity and 24 enforceability of the arbitration provision should be directed to the arbitrator. See Brennan, 25 796 F.3d at 1130–33. The same is true for Dodev’s arguments that Citibank waived its 26 right to arbitrate. See Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002) 27 (stating that the “presumption is that the arbitrator should decide allegations of waiver, 28 delay, or a like defense to arbitrability” (citation modified)). 1 Citibank’s motion to compel arbitration is thus granted. This action is stayed 2 pending conclusion of the arbitration, per Citibank’s request. (Doc. 14 at 8–9.) See 9 3 U.S.C. § 3; Smith v. Spizzirri, 601 U.S. 472, 475–76 (2024) (“When a federal court finds 4 that a dispute is subject to arbitration, and a party has requested a stay of the court 5 proceeding pending arbitration, the court does not have discretion to dismiss the suit on the 6 basis that all the claims are subject to arbitration.”). 7 IV. MOTION FOR LEAVE TO FILE A SUR-REPLY 8 On April 22, 2025, several months after the motion to compel arbitration became 9 fully briefed, Dodev moved for leave to file a sur-reply in opposition to Citibank’s motion 10 to compel arbitration, arguing that Citibank’s reply “raise[d] new arguments, including 11 delegation of arbitrability” and “misappl[ied] South Dakota law.” (Doc. 23 at 1–2.) He 12 states that his proposed sur-reply would argue that Arizona law governs, the permissive 13 language in the arbitration agreement “voids the agreement” and “negates ‘clear and 14 unmistakable’ delegation,” and that judicial scrutiny is warranted “in adhesion contracts 15 where [Citibank is] alleged [to be] complicit[] in fraudulent charges.” (Id. at 5–6.) Of 16 these arguments, Dodev classifies the delegation and applicable law arguments as “new 17 arguments” in Citibank’s reply, but the other arguments are titled “Need to Clarify.” (Id. 18 at 3–4 (emphasis omitted).) 19 Citibank opposed the motion, arguing that the arguments to which Dodev seeks to 20 respond are not “new arguments” that could justify a sur-reply, and as for the arguments 21 Dodev seeks to “clarify,” a sur-reply is not proper to “embellish or clarify new arguments.” 22 (Doc. 24 at 2–3.) 23 A. Legal Standard 24 “A sur-reply is appropriate when a party raises new issues or new evidence in a 25 reply brief.” ML Liquidating Tr. v. Mayer Hoffman McCann P.C., 2011 WL 10451619, at 26 *1 (D. Ariz. 2011) (footnotes omitted). “Arizona Local Rule of Civil Procedure 7.2 27 generally does not allow sur-replies,” Kurchack v. Life Ins. Co. of N. Am., 725 F. Supp. 2d 28 855, 857 n.1 (D. Ariz. 2010), nor do the Federal Rules of Civil Procedure, absent prior 1 court leave, Lee v. City of Kingman, 124 F. Supp. 3d 985, 986 n.1 (D. Ariz. 2015). To 2 warrant a sur-reply, the movant must “provide a compelling reason,” Kurchack, 725 F. 3 Supp. 2d at 857 n.1, because sur-replies are “generally discouraged and only allowed in 4 the most extraordinary of circumstances,” Mesa v. DeJoy, 2025 WL 1248926, at *7 (D. 5 Ariz. 2025) (quotation marks omitted). 6 B. Discussion 7 Dodev’s motion for leave to file a sur-reply is denied. First, Dodev has not shown 8 a compelling reason to justify this relief, particularly because he waited until the motion to 9 compel arbitration had been fully briefed for months before moving to file a sur-reply. 10 Second, some of the arguments Dodev seeks to address in his proposed sur-reply do not 11 respond to alleged new arguments in Citibank’s reply, but instead pertain to arguments he 12 already made in his response. (See Doc. 23 at 3–4.) Dodev is also incorrect that Citibank’s 13 reference to South Dakota law is a “new argument,” (id. at 3), as Citibank argued in its 14 motion that South Dakota and federal law applied to the arbitration agreement, (Doc. 14 at 15 6–7), and Dodev argued in his response that Arizona law applied, (see generally Doc. 16; 16 id. at 4). Dodev was therefore not prejudiced by any argument made by Citibank in its 17 reply. See Lu v. United States, 921 F.3d 850, 864 n.12 (9th Cir. 2019) (affirming denial of 18 leave to file sur-reply where the movant could not “show that it was prejudiced” by the 19 denial). Moreover, even if the question of what law applied to the arbitration agreement 20 was a new argument Citibank made in its reply brief, this issue is not pertinent to resolution 21 of the motion to compel arbitration in light of federal precedent requiring arbitration of 22 arbitrability and other issues. See Walker v. Gallegos, 167 F. Supp. 2d 1105, 1108 n.3 (D. 23 Ariz. 2001) (denying request to file sur-reply where it would “not aid the decisional process 24 given the Court’s determination . . . of the governing law”). 25 Third, to the extent Dodev is correct that delegation was a new argument in 26 Citibank’s reply brief, Dodev’s proposed arguments would not alter the result that 27 arbitration is required. Dodev does not offer any argument or evidence that would create 28 a genuine issue of material fact about whether he opted out of the arbitration agreement. 1|| Cf Flowers-Carter v. Braun Corp., 530 F. Supp. 3d 818, 853 (D. Ariz. 2021) (denying || motion for sur-reply where the proposed “evidence did not affect the outcome of either □□ party’s motion for summary judgment’). He also does not specifically challenge the 4|| delegation provision, as opposed to the arbitration agreement as a whole, that would require || court resolution. (See Doc. 23 at 4 (“Defendant’s delegation argument assumes the 6|| Arbitration Agreement’s validity. Plaintiff must argue that the permissive language 7\|| invalidates the agreement’s formation, including the AAA Rules’ delegation clause... .” 8 || (emphasis added)). See Brennan, 796 F.3d at 1133. Furthermore, Dodev does not propose 9|| any arguments that would distinguish the binding precedent discussed above requiring 10 || arbitration. 11 Because many of the arguments Dodev proposes are not the proper subject of a sur- reply, and any proposed new arguments would not change the Court’s analysis or 13 || conclusions, there is not a “compelling reason” or “extraordinary circumstances” 14]| warranting a sur-reply, so Dodev’s motion is denied. DeJoy, 2025 WL 1248926, at *7; || Kurchack, 725 F. Supp. 2d at 857 n.1. 16 Accordingly, 17 IT IS ORDERED that Citibank’s motion to compel arbitration (Doc. 14) is || granted. 19 IT IS FURTHER ORDERED that this action is stayed pending completion of the 20 || parties’ arbitration. 21 IT IS FURTHER ORDERED that the parties shall file a Joint Status Report within 22 || one week of the arbitrator’s decision or six months of this Order, whichever is sooner. 23 IT IS FURTHER ORDERED that Dodev’s motion for leave to file a sur-reply (Doc. 23) is denied. □ 25 Dated this 15th day of August, 2025. 26 27 28 H □ le Sharad H. Desai United States District Judge

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