Local credit card dispute headed to Supreme Court

Wednesday, March 26, 2008

Discover Financial Services Inc., an affiliate of Discover Bank, sued Betty E. Vaden in Maryland courts in 2003 over nonpayment of a $10,000 credit-card balance, court papers state, and Baden filed counterclaims citing the state law’s protection against invalid fees and interest rates.

Discover Bank asked a federal district court to compel Baden to submit to arbitration in her credit card agreement, court papers state, leading to two rulings by a federal appeals court before the U.S. Supreme Court agreed this month to hear the matter.

‘‘I was blown away,” Lexington Park lawyer John A. Mattingly Jr. said last week on hearing that a writ of certiorari had been granted by the high court. ‘‘I was pretty excited.”

Mattingly said the Supreme Court agreed to hear both of two issues he raised after the latest ruling by the 4th Circuit U.S. Court of Appeals, which determined that the trial court properly compelled arbitration in the case because the true party of interest in Vaden’s claims is the bank, a federally insured institution.

Vaden has argued, court papers state, that Discover Financial Services is the true party of interest in her claim, removing the federal-insurance issue from the case, and that she also had no valid arbitration agreement with the bank.

Court papers state that Vaden obtained a Discover credit card in 1990 and was mailed a ‘‘platinum” upgrade with the arbitration requirement in 1999, but that she denied receiving the amended agreement in the mail.

JOHN WHARTON