Murphy v. DirecTV, Inc., No. 11-57163 (9th Cir. 2013)
Annotate this CasePlaintiffs filed a putative consumer class action suit against DirecTV and Best Buy, alleging violations of California's consumer protection laws. The arbitration agreement at issue in this instance was a customer service agreement between DirecTV and individuals who believed they purchased DirecTV equipment from Best Buy stores. AT&T Mobility v. Concepcion held that Section 2 of the Federal Arbitration Act (FAA), 9 U.S.C. 2, preempted the State of California's rule rendering unenforceable arbitration provisions in consumer contracts that waive collective or class action proceedings. The court concluded that the arbitration agreement in this case was enforceable under Concepcion and, therefore, the district court did not err in compelling plaintiffs to arbitrate their claims against DirecTV. The court concluded, however, that plaintiffs were not required to arbitrate their claims with Best Buy. Accordingly, the court affirmed in part, reversed in part, and remanded for further proceedings.
Court Description: Arbitration. The panel affirmed the district court’s order compelling plaintiffs in this putative class action to arbitrate with satellite television provider DirecTV, and reversed the district court’s order compelling plaintiffs to arbitrate with electronic retailer Best Buy. Plaintiffs charged DirecTV and Best Buy with violations of state law, alleging that that Defendants presented certain DirecTV service equipment, such as receivers and digital video recorders, as though they were for sale at Best Buy stores when in fact the Defendants considered the transactions to be a lease rather than an outright purchase. The DirecTV’s Customer Agreement required arbitration of certain disputes, but Best Buy was not a party to that agreement. The panel held that the arbitration agreement between plaintiffs and DirecTV was enforceable under AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011), which held that Section 2 of the Federal Arbitration Act preempts the State of California’s rule rendering unenforceable — as unconscionable — arbitration provisions in consumer contracts that waive collective or class action proceedings. The panel held that Best Buy, which was not a party to the Customer Agreement, was not entitled to the benefit of the arbitration clause. The panel held that neither equitable estoppel nor the third-party beneficiary doctrine permitted Best Buy to enforce DirecTV’s arbitration agreement, and that the Independent Retailer Agreement between Best Buy and DirecTV expressly disavowed an agency relationship. The panel therefore reversed the district court’s order compelling plaintiffs to arbitrate with Best Buy.
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