Michael Savetsky v. Pre-Paid Legal Services, Inc., No. 3:2014cv03514 - Document 48 (N.D. Cal. 2015)
Court Description: ORDER denying 34 motion for leave to file a motion for reconsideration. (sclc2, COURT STAFF) (Filed on 4/3/2015)
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Michael Savetsky v. Pre-Paid Legal Services, Inc. Doc. 48 1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 MICHAEL SAVETSKY, individually and ) Case No. 14-03514 SC on behalf of all others similarly ) ) ORDER DENYING MOTION FOR situated, ) LEAVE TO FILE MOTION FOR Plaintiff, ) RECONSIDERATION ) v. ) ) PRE-PAID LEGAL SERVICES, INC. ) d/b/a LegalShield, ) ) Defendant. ) ) ) ) ) ) 10 For the Northern District of California United States District Court 9 11 12 13 14 15 16 17 18 19 20 I. INTRODUCTION Now before the Court is Defendant LegalShield's1 motion for 21 22 reconsideration of the Court's order denying Defendant's motion to 23 compel arbitration in this putative consumer class action. 24 33 ("Order"), 34 ("Mot."). 25 under Federal Rule of Civil Procedure 60(b), as discussed below the 26 motion is properly considered under Civil Local Rule 7-9, which 27 1 28 ECF No. While LegalShield brings its motion Defendant is actually named Pre-Paid Legal Services, Inc., but does business as LegalShield. For simplicity the Court will refer to Defendant as LegalShield. Dockets.Justia.com 1 requires parties to obtain leave from the Court to file a motion 2 for reconsideration. 3 leave to file motion for reconsideration. 4 further submissions were necessary, and issued a clerk's notice 5 vacating the hearing date originally noticed with this motion 6 pursuant to Civil Local Rule 7-9(d). 7 Notice"). 8 for reconsideration is DENIED. Thus the Court construes this as a motion for The Court found no ECF No. 36 ("Clerk's For the reasons set forth below, leave to file a motion 9 United States District Court For the Northern District of California 10 11 II. BACKGROUND This is a putative class action alleging that LegalShield, a 12 company that provides pre-paid legal services, violated California 13 consumer laws by automatically charging recurring payments to 14 California consumers without sufficient consent or disclosure. 15 Named Plaintiff Michael Savetsky purchased a pre-paid legal 16 services plan on LegalShield's website. 17 contract it formed with Savetsky requires he arbitrate his disputes 18 against LegalShield individually and in arbitration. 19 disagrees, arguing he never agreed (or "assented") to arbitration. 20 The Court agreed with Savetsky and denied LegalShield's motion 21 under the Federal Arbitration Act, 9 U.S.C. Section 4, to compel 22 Savetsky to arbitrate. 23 because Savetsky never manifested assent to the arbitration 24 agreement either online (by simply purchasing the LegalShield 25 subscription) or later on (after receiving a mailed copy of 26 LegalShield's membership contract), he is not bound to its terms. 27 28 In Defendant's view, the Savetsky In doing so, the Court concluded that Now LegalShield asks the Court to reconsider that decision, arguing that the Court did not consider relevant contract language 2 1 and, regardless of that language, newly uncovered facts show that 2 Savetsky did agree to arbitrate. 3 4 5 III. LEGAL STANDARD As a preliminary matter, LegalShield argues that this motion 6 is governed by Rule 60(b) because, unlike Civil Local Rule 7-9 7 (which only applies to "interlocutory, non-appealable orders") Rule 8 60(b) applies to motions seeking "relief from final, appealable 9 orders." Mot. at 1, 7. Because LegalShield may (and has, ECF No. United States District Court For the Northern District of California 10 35 ("Notice of Appeal")) appeal as of right from the Court's order 11 denying its motion to compel arbitration, LegalShield concludes the 12 Court's order cannot have been interlocutory. 13 (permitting appeals from orders "denying a petition under section 5 14 of this title to order arbitration to proceed . . . ."). 15 See 9 U.S.C. § 16 This argument rests on the erroneous premise that if an order 16 is appealable as of right it cannot be an interlocutory order. 17 an interlocutory order is simply any order that does not dispose of 18 a case, without regard to whether that order is appealable as of 19 right. 20 "by . . . statute, most jurisdictions allow some types of 21 interlocutory orders . . . to be immediately appealed." 22 result, the fact that an order may be appealed is not enough, 23 standing alone to render it a final (rather than interlocutory) 24 order, outside the scope of Civil Local Rule 7-9. 25 v. Cottman Transmission Sys., LLC, No. C 08-03402 SI, 2009 WL 26 330353, at *1 n.1 (N.D. Cal. Feb. 10, 2009) (citing Wright & 27 Miller, Fed. Prac. & Proc. § 2651 n.6 (listing appealable 28 interlocutory orders)) (finding that while an order compelling See Black's Law Dictionary 1130 (8th ed. 2004). 3 Yet Indeed, Id. As a See Bencharsky 1 arbitration is appealable, "[i]t does not necessary follow, 2 however, that an order compelling arbitration is not also an 3 interlocutory order" covered by Civil Local Rule 7-9). Moreover, "an order granting or denying a motion to compel 4 5 arbitration is a final decision only if such an order was the full 6 relief the parties sought." 7 Cir. 1997). 8 arbitration is clearly ancillary to Mr. Savetsky's California 9 consumer law allegations against LegalShield. Alcoa v. Beazer, 124 F.3d 551, 562 (3d Here, the Court's order denying the motion to compel Because Rule 60(b) United States District Court For the Northern District of California 10 plainly only applies to final judgments or orders, a Rule 60(b) 11 motion is clearly improper. 12 the Court to "[o]n motion and just terms," "relieve a party . . . 13 from a final judgment, order, or proceeding") (emphasis added); see 14 also Santamarina v. Sears, Roebuck & Co., 466 F.3d 570, 571 (7th 15 Cir. 2006) (Posner, J.) ("[Rule 60(b)], by its terms limited to 16 'final' judgments or orders, is inapplicable to interlocutory 17 orders."); Prudential Real Estate Affiliates, Inc. v. PPR Realty, 18 Inc., 204 F.3d 867, 880 (9th Cir. 2000). See Fed. R. Civ. P. 60(b) (allowing a As a result, LegalShield's motion is DENIED to the extent it 19 20 relies on Rule 60(b). 21 or modify its order denying LegalShield's motion to compel 22 arbitration rests on its inherent, discretionary power to 23 reconsider or modify its interlocutory orders. 24 Angeles, Harbor Div. v. Santa Monica Baykeeper, 254 F.3d 882, 885 25 (9th Cir. 2001) (quotation omitted) ("As long as a district court 26 has jurisdiction2 over the case, then it possesses the inherent 27 2 28 Instead, the Court's authority to reconsider See City of Los Because the appeal of an order denying a motion to compel arbitration is the appeal of an interlocutory order, the Court retains jurisdiction to reconsider its previous orders and issue 4 1 procedural power to reconsider, rescind, or modify an interlocutory 2 order for cause seen by it to be sufficient."). 3 Civil Local Rule 7-9 lays out a procedure by which a party 4 may, after obtaining leave of the court, file a motion for 5 reconsideration of an interlocutory order. 6 moving party must "specifically show reasonable diligence in 7 bringing the motion," as well as one of the following: 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 Under that Rule, the (1) That at the time of the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or (2) The emergence of new material facts or a change of law occurring after the time of such order; or (3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order. 17 18 Civ. L.R. 7-9(b)(1)-(3). Furthermore, "[n]o motion for leave to 19 file a motion for reconsideration may repeat any oral or written 20 argument made by the applying party in support of or in opposition 21 to the interlocutory order which the party now seeks to have 22 reconsidered." 23 reconsideration is committed to the sound discretion of the court." 24 Navajo Nation v. Confederated Tribes & Bands of the Yakama Indian 25 Nation, 331 F.3d 1041, 1046 (9th Cir. 2003). Id. at (c). "Whether or not to grant 26 27 28 subsequent orders. See Britton v. Co-op Banking Grp., 916 F.2d 1405, 1411-12 (9th Cir. 1990). 5 1 2 IV. DISCUSSION LegalShield's motion presses two points. First, it argues 3 that the Court overlooked certain language in LegalShield's 4 membership contract (which was presented to the Court in the prior 5 motion), and as a result mistakenly concluded that "a reasonable 6 consumer reading the membership contract would have no way of 7 knowing that failing to cancel his membership could be construed as 8 assent to arbitrate all disputes with LegalShield." 9 Second, it contends that newly discovered evidence shows that Order at 13. United States District Court For the Northern District of California 10 Savetsky had actual and inquiry notice of the membership contract's 11 terms and questions whether Savetsky misled the Court in his 12 declaration "in which he implies that he did not know a contract 13 existed . . . ." Mot. at 2. 14 The Court will address these points in order. 15 A. 16 First, LegalShield points out that the membership contract Assent and Contract Formation 17 states in its first line that "[i]n consideration of your payment 18 of the membership fee and your abiding by the terms and conditions 19 of this contract and any attached endorsements, you will receive 20 the herein contained benefits." ECF No. 18-1 ("Pinson Decl.") Ex. 21 C ("Membership Contract") at 2. LegalShield contends that this 22 language, coupled with the right (appearing six pages later in the 23 contract) of members to cancel their membership with LegalShield, 24 is "analytically indistinguishable from that in Carnival Cruise 25 Lines, Inc. v. Shute, 499 U.S. 585, 587 (1991) in which ticket 26 purchasers were told that acceptance of the ticket would be 27 considered acceptance 'of all of [its] terms and conditions.'" 28 Mot. at 10. 6 1 In the prior order, the Court considered and rejected the 2 argument that Savetsky's acceptance of the terms in the membership 3 contract could be "'inferred from inaction in the face of a duty to 4 act . . . and from retention of the benefit offered . . . .'" 5 Order at 13 (quoting Golden Eagle Ins. Co. v. Foremost Ins. Co., 20 6 Cal. App. 4th 1372, 1385-86 (Cal. Ct. App. 1993) (citations 7 omitted). 8 membership contract indicated that inaction by Savetsky would 9 constitute assent to the terms of the contract." As the Court previously stated, "nothing in the Id. In so doing, United States District Court For the Northern District of California 10 the Court rejected precisely this argument, albeit without citation 11 to the specific contract language to which LegalShield now points. 12 Given that LegalShield did not point to this language in its 13 earlier motion, and the Court categorically rejected the argument 14 that the terms of the membership contract communicated that 15 Savetsky could assent to terms by failing to cancel the agreement, 16 this does not constitute a "manifest failure by the Court to 17 consider material facts or dispositive legal arguments." 18 7-9(b)(2). 19 motion for reconsideration on this point is DENIED. 20 Civ. L.R. As a result, LegalShield's motion for leave to file a Moreover, even if the Court were to grant leave to file a 21 motion for reconsideration on this issue, LegalShield's arguments 22 are unavailing. 23 to a reasonable consumer both that terms are being presented and 24 that they can be adopted through the conduct that the offeror 25 alleges constitutes assent." 26 F.3d 110, 123 (2d Cir. 2012) (internal quotation marks and 27 alterations omitted); see also DeFontes v. Dell, Inc., 984 A.2d 28 1061, 1071 (R.I. 2009) ("This language certainly informed This contract language simply does not "make clear Schnabel v. Trilegiant Corp., 697 7 1 plaintiffs that defendants intended to bind them to heretofore 2 undisclosed terms and conditions, but it did not advise them of the 3 period beyond which they will have indicated their assent to those 4 terms."). 5 argument it would not change the Court's conclusion. As a result, even if the Court were to consider this 6 Similarly, LegalShield's arguments about actual or inquiry 7 notice are simply improper attempts to relitigate the motion to 8 compel arbitration. 9 had actual or inquiry notice of the membership contract based on The Court rejected the argument that Savetsky United States District Court For the Northern District of California 10 LegalShield's contracting process. LegalShield's new arguments 11 were not presented to the Court on the prior motion to compel 12 arbitration, and thus the Court could not have "manifest[ly] 13 fail[ed] . . . to consider" them. 14 (requiring a manifest failure to consider legal arguments "which 15 were presented to the Court before" its prior order); see also In 16 re Cathode Ray Tube (CRT) Antitrust Litig., No. 07-cv-5944, 2014 WL 17 4446294, at *6 (N.D. Cal. Sept. 8, 2014) (declining to consider 18 factual arguments not presented at the time of the earlier order). 19 Thus, LegalShield's motion for leave to file a motion for 20 reconsideration on this point is also DENIED. See Civ. L.R. 7-9(b)(3) 21 B. New Evidence 22 Finally, LegalShield argues that newly-discovered evidence 23 shows (1) that Savetsky's declaration was "misleading," and "gave 24 the Court a false picture of Plaintiff's actual or inquiry notice 25 about his contracts . . . ," and (2) that Savetsky further assented 26 to the contract by seeking to maintain his pre-paid legal services 27 subscription through LegalShield even after filing suit. 28 2. 8 Mot. at 1 When seeking reconsideration based on newly-discovered facts 2 that "material[ly] differ[] . . . from that which was presented to 3 the Court before entry of the" prior order, the party seeking 4 reconsideration must show that "in the exercise of reasonable 5 diligence the party applying for reconsideration did not know such 6 fact[s] . . . at the time of the" prior order. 7 9(b)(1). 8 diligence" in its submissions aside from conclusorily stating the 9 standard is satisfied. Civ. L.R. 7- LegalShield makes no attempt to show "reasonable Mot. at 1 ("LegalShield has exercised United States District Court For the Northern District of California 10 'reasonable diligence' in bringing this Motion . . . ."). 11 LegalShield has not carried its burden of showing that in the 12 exercise of reasonable diligence it did not know of these facts at 13 the time of the prior order, the motion is DENIED. 14 Because Nonetheless, the Court pauses to address LegalShield's 15 accusation that Savetsky misled or presented a false picture to the 16 Court in his prior declaration. 17 declaration the Court finds no support for LegalShield's conclusion 18 that the declaration was false or misleading. 19 Decl."). 20 to, paragraphs 11 and 16, are perfectly consistent with 21 LegalShield's subsequent discoveries (1) that Savetsky sent 22 LegalShield an email months after the subscription process 23 described in his declaration asking for "a copy of the contracts I 24 signed" or (2) because of the process of entering into a different 25 agreement (containing an arbitration clause) with LegalShield, 26 Savetsky knew about the membership contract and its terms. 27 contrary, paragraph 11 describes Savetsky's enrollment process, and 28 paragraph 16 describes his receipt of a membership booklet "the After reviewing Savetsky's ECF 24-1 ("Savetsky On the contrary, the two paragraphs LegalShield points 9 On the that he did not read or retain the documents. 3 Neither of these statements appears to be untrue or even misleading 4 in light of the other facts LegalShield has discovered, because 5 Savetsky's declaration simply describes the process by which 6 Savetsky purchased his LegalShield membership without discussing 7 the previous contract he signed with LegalShield or his after the 8 fact email. 9 accusations of fraud or misleading the Court, particularly in 10 United States District Court last 10 pages of which were a legal services contract" and states 2 For the Northern District of California 1 declarations signed under penalty of perjury, very seriously. 11 the future, counsel should refrain from making such insinuations 12 when they lack a basis in fact. Id. at ¶¶ 11, 16. The Court reminds the parties that it takes In 13 14 15 16 V. CONCLUSION For the reasons set forth above, the motion for leave to file a motion for reconsideration is DENIED. 17 18 IT IS SO ORDERED. 19 20 21 Dated: April 3, 2015 UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 10
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