Damian Langere v. Verizon Wireless Services, LLC, No. 2:2015cv00191 - Document 38 (C.D. Cal. 2016)
Court Description: ORDER GRANTING DEFENDANTS MOTION TO COMPEL ARBITRATION 12 , 29 , 37 . Counsel to file a status report six months from todays order by Judge Dean D. Pregerson (lc). Modified on 9/23/2016. (lc).
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Damian Langere v. Verizon Wireless Services, LLC Doc. 38 1 2 O 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 CENTRAL DISTRICT OF CALIFORNIA 10 11 12 DAMIAN LANGERE, on behalf of himself and others similarly situated, 13 Plaintiff, 14 15 v. VERIZON WIRELESS SERVICES, LLC, 16 Defendants. 17 ___________________________ ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. CV 15-00191 DDP (AJWx) ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION [Dkt. 12, 29 and 37] 18 19 Presently before the court is Defendant Verizon Wireless 20 Services, LLC (“Verizon”)’s Motion to Compel Arbitration. 21 considered the submissions of the parties and heard oral argument, 22 the court grants the motion and adopts the following Order. 23 I. 24 Having Background Plaintiff activated a wireless service account with Defendant 25 Verizon June 6, 2011. (Citizen Decl., Ex. 1.) 26 signed a sales receipt containing the the following statement: 27 I AGREE TO THE CURRENT VERIZON WIRELESS CUSTOMER AGREEMENT (CA), INCLUDING THE CALLING PLAN, (WITH EXTENDED LIMITED WARRANTY/SERVICE CONTRACT, IF APPLICABLE), AND OTHER TERMS AND CONDITIONS FOR SERVICES AND SELECTED FEATURES I HAVE AGREED TO PURCHASE AS REFLECTED ON THE RECEIPT, AND WHICH 28 He electronically Dockets.Justia.com 1 2 3 HAVE BEEN PRESENTED TO ME BY THE SALES REP. AND WHICH I HAD THE OPPORTUNITY TO REVIEW. I UNDERSTAND THAT I AM AGREEING TO . . . SETTLEMENT OF DISPUTES BY ARBITRATION AND OTHER MEANS INSTEAD OF JURY TRIALS AND OTHER IMPORTANT TERMS IN THE CA. 4 (Citizen Decl., Ex. 1 at 8.) 5 was not explained to him and the receipt was “densely-worded, 6 written in small font, and was difficult to read.” (Langere Decl. 7 ¶¶ 2-3.) 8 9 Plaintiff states that the information Plaintiff was also given a document entitled “Your Guide,” which contained the full Customer Agreement (“2011 Customer 10 Agreement”) referenced in the sales receipt, including an 11 Arbitration Agreement. 12 The Arbitration Agreement in the 2011 Customer Agreement applied to 13 “ANY DISPUTE THAT RESULTS FROM THIS AGREEMENT OR FROM THE SERVICES 14 YOU RECEIVE FROM” Verizon, and specifically prohibited class 15 arbitrations. (Citizen Decl., Ex. 2 at 45.) 16 Verizon also emailed Plaintiff a notification of activation, which 17 included a link to a confirmation letter. 18 Decl., Ex. 3.) 19 where he could view the Customer Agreement at any time. (Id.) 20 (Citizen Decl. ¶ 5; Citizen Decl., Ex. 2.) On June 9, 2011, (Mot. at 3; Citizen The letter directed Plaintiff to Verizon’s website, On October 30, 2012, Plaintiff upgraded his phone and entered 21 into a new two-year service contract. 22 electronically signed another sales receipt that contained a 23 statement nearly identical to the one he had signed on June 6, 24 2011.1 25 and brochures,” including a thirty-two page “Your Guide” containing 26 the Customer Agreement (“2012 Customer Agreement”), which, like the (Id.) (Citizen Decl., Ex. 4.) He Plaintiff was then provided with “various documents 27 1 28 The October 30, 2012 statement did not abbreviate the terms “representative” or “Customer Agreement.” 2 1 2011 Customer Agreement, included an Arbitration Agreement. (Id. 2 ¶ 11; Citizen Decl., Ex. 5.) 3 referred to “ANY DISPUTE THAT RESULTS FROM THIS AGREEMENT OR FROM 4 THE SERVICES YOU RECEIVE FROM” Verizon, the 2012 version applied to 5 “ANY DISPUTE THAT IN ANY WAY RELATES TO OR ARISES OUT OF THIS 6 AGREEMENT OR FROM ANY EQUIPMENT, PRODUCTS AND SERVICES YOU RECEIVE 7 FROM” Verizon. 8 Arbitration Agreement, the 2012 Arbitration Agreement specifically 9 prohibited class or collective arbitrations. While the 2011 Arbitration Agreement (Citizen Decl., Ex. 5 at 23.) Like the 2011 (Id.) On November 2, 10 2012, Plaintiff received a letter with a notification of upgrade 11 and details about his account. 12 (Citizen Decl., Ex. 6.) When Plaintiff upgraded his phone and entered into the new two 13 year agreement on October 30, 2012, he also purchased Total 14 Equipment Coverage (“TEC”), and received an accompanying TEC 15 brochure. 16 a combined service that offers an Extended Warranty and Wireless 17 Phone Protection plan at a discounted rate. 18 Citizen Decl., Ex. 7.) 19 electrical defects for a phone after a manufacturer’s warranty 20 expires. (Citizen Decl. ¶ 13; Citizen Decl., Ex. 7.) 21 Phone Protection provides insurance for loss, theft, and damages to 22 a device. 23 activation or device upgrade, and is available only to Verizon 24 customers who have service with Defendant and have, therefore, 25 agreed to the Customer Agreement. 26 Plaintiff’s service summary reflects “Tec Asurion”2 as a “Current (Citizen Decl. ¶ 14; Citizen Decl., Exs. 4, 5.) (Id.) TEC is (Citizen Decl. ¶ 13; The Extended Warranty covers mechanical or Wireless TEC must be purchased within thirty days of (Citizen Decl. ¶¶ 7, 13.) 27 2 28 Liberty Mutual Insurance company, or one of its affiliates, (continued...) 3 1 Feature[]” on his device at the rate of $9.99 a month. 2 Decl., Ex. 6 at 71.) 3 (Citizen According to the terms of the 2011 and 2012 Customer 4 Agreements, a customer’s “Plan” includes the customer’s “monthly 5 allowances and features.” 6 Decl., Ex. 5 at 19.) 7 Optional Services you select are your Service.” (Id.) 8 Arbitration Agreement section, separated by a horizontal line and 9 “Important Information,” the 2012 Customer Agreement lists several 10 11 12 13 14 15 16 17 18 19 (Citizen Decl., Ex. 2 at 42; Citizen The terms state that “your Plan and any After the categories of “Optional Services Terms and Conditions”: • • • • • • • • • • • • • • • • • Media Center and Verizon Apps Messaging Programs Usage Controls Caller ID Home Phone Connect Adaptor Device (“Device”) & Home Phone Connect Service (“Service”) HomeFusion Broadband Service Content Filters VZ Navigator VZ Navigator Global Push to Talk Group Communication Verizon Wireless Roadside Assistance International Eligibility International Long Distance International Roaming Cruise Ship Service Plan and Feature Discounts 20 (Citizen Decl., Ex. 5 at 25-29.) The Extended Warranty and 21 Wireless Phone Protection plans provided under TEC are not 22 specifically listed as Optional Services. 23 The 32-page “Your Guide” document concludes with a final 24 section titled “Extended Limited Warranty or Service Contract.” 25 26 2 27 28 (...continued) underwrites the policy for Wireless Phone Protection. Asurion Insurance Services, Inc. is “the agent and provides the claims servicing under this program.” (Citizen Decl., Ex. 7.) 4 1 (Citizen Decl., Ex. 5 at 31.) 2 from the “Optional Services” section, and is listed in a more 3 prominent style similar to that used for preceding sections such as 4 “Account Manager,” “Wireless Safety & Assistance,” and “Return & 5 Exchange Policy.” (Id. at 29-30.) 6 The heading of this section differs The language in both “Your Guide” and a separate “Verizon 7 Wireless Extended Limited Warranty or Service Contract” brochure 8 specify that if a device is purchased in California, the document 9 is a “SERVICE CONTRACT” rather than an “EXTENDED LIMITED WARRANTY.” 10 (Citizen Decl., Ex. 5 at 31; Esensten Decl., Ex. B at 22.) 11 contract has an arbitration clause that mandates arbitration for 12 “[a]ny disputes . . . arising under this Warranty” between 13 Defendant and residents of Connecticut. 14 32; Esensten Decl., Ex. B at 23.) 15 within it are Defendant’s “complete Warranty or Service Contract 16 for [the] product.” (Id.) 17 Phone Protection insurance policy terms, which provided that 18 “disputes or controversies of any nature whatsoever . . . arising 19 out of, relating to, or in connection with” the policy be subject 20 to nonbinding arbitration. 21 The (Citizen Decl., Ex. 5 at It also states that the terms The TEC brochure contained the Wireless (Citizen Decl., Ex. 7 at 74.) The crux of Plaintiff’s Complaint is that the extended 22 warranty “does not provide any greater protection for the first 23 year than does the phone manufacturer’s identical warranty.” 24 (Compl. ¶ 19.) 25 be purchased within thirty days of the initial transaction, 26 Plaintiff contends that customer will make a year’s worth of 27 monthly payments for no benefit because the first year of extended 28 warranty coverage overlaps with coverage already provided by the In other words, because the extended warranty must 5 1 phone’s maufacturer. 2 that no reasonable person would “have reason to believe that his 3 first twelve payments to Verizon for the ‘extended’ warranty 4 portion of the ‘Total Equipment Coverage’ were both duplicative and 5 unnecessary.” (Id. ¶ 28.) 6 (Id. ¶¶ 17-18.) Plaintiff further alleges Plaintiff alleges violations of violations of the Federal 7 Communications Act, 47 U.S.C. § 151, et seq. and California’s 8 consumer protection laws, including the Consumers Legal Remedies 9 Act (“CLRA”), Cal. Civil Code § 1750 et seq.; the Unfair 10 Competition Act (“UCL”), Cal. Business & Professions Code § 17200 11 et seq.; and the False Advertising Law (“FAL”), Cal. Business & 12 Professions Code § 17500 et seq. 13 compel arbitration. 14 II. 15 (Id. ¶ 8.) Verizon now moves to Legal Standard A party to an arbitration agreement may petition a district 16 court for an order directing that arbitration proceed as provided 17 for in the agreement. 18 Act (“FAA”), 9 U.S.C. § 1 et seq., a written agreement requiring 19 controversies between the contracting parties to be settled by 20 arbitration is “valid, irrevocable, and enforceable, save upon such 21 grounds as exist at law or in equity for the revocation of any 22 contract.” 23 policy favoring arbitration agreements” and creates a “body of 24 federal substantive law of arbitrability.” 25 Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). 26 therefore preempts state laws that “stand as an obstacle to the 27 accomplishment of the FAA’s objectives.” 28 Concepcion, 563 U.S. 333, 343 (2011). 9 U.S.C. § 4. 9 U.S.C. § 2. Under the Federal Arbitration The FAA reflects a “liberal federal 6 Moses H. Cone Mem. The FAA AT&T Mobility LLC v. This includes “defenses that 1 apply only to arbitration or that derive their meaning from the 2 fact that an agreement to arbitrate is at issue,” as well as state 3 rules that act to fundamentally change the nature of the 4 arbitration agreed to by the parties. 5 DirectTV, Inc. v. Imbrugia, 136 S.Ct. 463, 471 (2015). 6 III. Discussion Id. at 339, 1750; See also 7 A. 8 Verizon contends that the arbitration provision of the 2012 9 Applicability of 2012 Customer Agreement Customer Agreement applies, and that Plaintiff must therefore 10 arbitrate his warranty coverage claim. 11 whether the parties agreed to arbitrate a certain matter, “courts 12 generally . . . should apply ordinary state-law principles that 13 govern the formation of contracts.” 14 v. Kaplan, 514 U.S. 938, 944 (1995). 15 or expression of assent is the controlling factor” when determining 16 contract terms. 17 Cal.Rptr. 347, 350 (Ct. App. 1972). 18 (Mot. at 12.) To determine First Options of Chicago, Inc. “[T]he outward manifestation Windsor Mills, Inc. v. Collins & Aikman Corp., 101 The 2012 Customer Agreement contained the 2012 Arbitration 19 Agreement, which states that the customer agrees to arbitrate “ANY 20 DISPUTE THAT IN ANY WAY RELATES TO OR ARISES OUT OF THIS AGREEMENT 21 OR FROM ANY EQUIPMENT, PRODUCTS AND SERVICES YOU RECEIVE FROM” 22 Verizon. 23 has no bearing on his extended warranty-based claims. 24 argues that the 2012 Customer Agreement includes an integration 25 clause “regarding Service,” disclaims any warranties “about your 26 Service [or] your device,” and specifically states that “your Plan 27 and any Optional Services you select are your Service.” Plaintiff responds that the 2012 Arbitration Agreement 28 7 Plaintiff Although 1 the Customer Agreement does include a section regarding extended 2 warranties, such warranties are not listed as “Optional Services.” 3 Plaintiff contends that his warranty claims are covered not by 4 the 2012 Customer Agreement, but rather by a separate Extended 5 Warranty Contract.3 6 describes the terms and conditions of the warranty program and 7 provides for monthly payments specifically for warranty coverage, 8 which terms are not mentioned in the Customer Agreement. 9 purported Extended Warranty contract further provides that only According to Plaintiff, this separate document The 10 Connecticut residents must arbitrate “any disputes” arising under 11 the extended warranty contract. 12 The court is not persuaded that the language of the TEC 13 brochure constitutes a distinct “Extended Warranty Agreement” 14 wholly separate from the Customer Agreement. 15 warranty coverage under the TEC plan is only available to existing 16 Verizon customers, who have by definition accepted the Customer 17 Agreement. 18 refers to “any equipment, products, and services” received from 19 Verizon. 20 “your Plan and any optional services.” 21 is defined as “monthly allowances and features.” 22 Asurion” coverage, of which extended warranty coverage is a part, 23 is listed in Plaintiff’s service summary as a “current feature.” 24 There appears to be little doubt, therefore, that Plaintiff’s First, extended Second, the Customer Agreement’s arbitration language The Agreement further defines “Service” as comprised of The term “plan,” in turn, Plaintiff’s “Tec 25 26 27 3 28 It is unclear to what document Plaintiff refers. presumes Plaintiff refers to the TEC brochure. 8 The court 1 extended warranty coverage is part of the “Service” provided by 2 Verizon.4 3 The language of the 2012 Arbitration Agreement covers 4 Plaintiff’s claims here. 5 and controversies “arising out of or relating to” an agreement is 6 “a broad arbitration clause.” 7 Conklin Mfg. Co., 388 U.S. 395, 398 (1967). 8 clauses are not limited to claims that literally arise under the 9 contract but embrace all disputes between the parties having a An arbitration clause that covers claims See Prima Paint Corp. v. Flood & “Broad arbitration 10 significant relationship to the contract, regardless of the label 11 attached to the dispute.” Rhodall, 2011 WL 4036418 at *4 (citing 12 Pennzoil Exploration & Production Co. v. Ramco Energy Ltd., 139 13 F.3d 1061, 1067 (5th Cir. 1998)). 14 recognized the distinction between arbitration clauses that govern 15 disputes “arising under” an agreement and those that govern 16 disputes “related to” an agreement. 17 Nat’l Envtl. Servs. Co., 42 F.3d 1292, 1295 (9th Cir. 1994). 18 arbitration language here, which refers to “ANY DISPUTE THAT IN ANY 19 WAY RELATES TO OR ARISES OUT OF THIS AGREEMENT OR FROM ANY 20 EQUIPMENT, PRODUCTS AND SERVICES YOU RECEIVE FROM” Verizon, is 21 sufficiently broad to encompass Plaintiff’s warranty-based claims. 22 B. The Ninth Circuit has also See Tracer Research Corp. v. The Unconscionability 23 24 4 25 26 27 28 Even if warranty coverage were not part of the “Plan” provided by Verizon, it is difficult to imagine how such coverage would not constitute an “optional service,” notwithstanding the omission of extended warranty coverage from the list of possible optional services contained within the Customer Agreement. As Plaintiff himself points out, he need not have exercised the option to obtain TEC coverage. Plaintiff did, however, opt for that additional service. 9 1 “[A]greements to arbitrate may be invalidated by generally 2 applicable contract defenses, such as fraud, duress, or 3 unconscionability.” Concepcion, 563 U.S. at 339; See also Kilgore 4 v. KeyBank, Nat. Ass’n, 673 F.3d 947, 963 (9th Cir.2012) 5 (“Concepcion did not overthrow the common law contract defense of 6 unconscionability whenever an arbitration clause is involved. 7 Rather, the Court affirmed that the [FAA’s] savings clause 8 preserves generally applicable contract defenses such as 9 unconscionability . . . .”); Community State Bank v. Strong, 651 10 F.3d 1241, 1267 n.28 (11th Cir. 2011) (“The ability of such 11 contractual defects to invalidate arbitration agreements is not 12 affected by the Supreme Court’s decision in [Concepcion]. . . .”). 13 Unconscionability has both a “procedural” and “substantive” 14 element. 15 describes an absence of meaningful choice on the part of one of the 16 parties, while the latter applies to contract terms which are 17 unreasonably favorable to the other party. 18 Inc., 51 Cal. App. 4th 1519, 1531 (1997). 19 agreement, like any other contractual clause, is unenforceable if 20 it is both procedurally and substantively unconscionable.” Pokorny 21 v. Quixtar, 601 F.3d 987, 996 (9th Cir. 2010). 22 apply a “sliding scale” analysis in making this determination. 23 “[T]he more substantively oppressive the contract term, the less 24 evidence of procedural unconscionability is required to come to the 25 conclusion that the term is unenforceable, and vice versa.” 26 Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83, 27 114 (2000). 28 be present for a contract to be declared unenforceable, but they See Kilgore, 673 F.3d at 963. The former generally Stirlen v. Supercuts, “[A]n arbitration California courts Both procedural and substantive unconscionability must 10 1 need not be present to the same degree. 2 Ultimo, 113 Cal. App. 4th 1402, 1406 (2003). 3 4 1. Id.; See also Harper v. Procedural Unconscionability Procedural unconscionability “concerns the manner in which the 5 contract was negotiated and the respective circumstances of the 6 parties at that time.” 7 Inc., 298 F.3d 778, 783 (9th Cir. 2002). 8 factors for procedural unconscionability: (1) oppression, which 9 focuses on bargaining power disparity, absence of meaningful Ferguson v. Countrywide Credit Indus., Courts examine two 10 choice, and lack of negotiation; and (2) surprise, which refers to 11 hidden terms, prolix forms, and whether the contractual terms meet 12 the reasonable expectations of the weaker party. 13 See id. Plaintiff first argues, briefly, that the Customer Agreement 14 is procedurally unconscionable because it is a contract of 15 adhesion. 16 however, “is not, alone, sufficient to render it unconscionable.” 17 Malone v. Superior Court, 226 Cal. App. 4th 1551, 1561(2014); See 18 also Zaborowski v. MHN Gov't Servs., Inc., 936 F. Supp. 2d 1145, 19 1152 (N.D. Cal. 2013), aff’d, 601 F. App'x 461 (9th Cir. 2014). 20 Indeed, as Concepcion acknowledged, “the times in which consumer 21 contracts were anything other than adhesive are long past.” 22 Concepcion, 563 U.S. at 346-47. 23 highlighting contracts of adhesion as significant factors in the 24 unconscionability analysis, those cases arose in the employment 25 context, and did not concern consumer contracts. 26 citing Elite Logistics Corp. v. Mol Am., Inc., 2012 WL 2366397 27 (C.D. Cal 2012) and Poublon v. Robinson Co., No. 12-cv-06654-CAS, 28 2015 WL 588515 (C.D. Cal. Jan. 12, 2015).) (Opp. at 17-18.) The fact that a contract is adhesive, Although Plaintiff cites to cases 11 (Opp. at 17-18, In the consumer 1 setting, “absent unusual circumstances, use of a contract of 2 adhesion establishes a minimal degree of procedural 3 unconscionability.” 4 12cv153 DMS, 2014 WL 5100330 at *6 (S.D. Cal. Sept. 25, 2014) 5 (citing Gatton v. T Mobile USA, Inc., 152 Cal. App. 4th 571 6 (2007)). 7 Hahn v. Massage Envy Franchising, LLC, No. Plaintiff further contends that the Arbitration Agreement is 8 procedurally unconscionable because Verizon concealed its terms 9 from Plaintiff and did not allow him to review those terms until 10 after he had agreed to them. 11 does not know all of the terms of the offer may still accept the 12 terms by demonstrating acceptance through his conduct. 13 Mills, 101 Cal.Rptr. at 350. 14 when he later “notic[es] the statement of terms but den[ies] 15 reading it closely enough to discover the agreement to arbitrate.” 16 Hill v. Gateway 2000, Inc., 105 F.3d 1147, 1148 (7th Cir. 1997). A party who has received an offer but Windsor A customer cannot avoid arbitration 17 Here, Verizon argues that Plaintiff signed an electronic 18 receipt that alerted him to the existence of the Customer Agreement 19 and additional terms, including the settlement of disputes by 20 arbitration. 21 “various documents and brochures,” including a thirty-two page 22 “Welcome Guide” containing the Customer Agreement. 23 ¶ 11; Citizen Decl., Ex. 5.) 24 IMPORTANT INFORMATION” is displayed in large, capital letters no 25 smaller than other section identifiers. 26 Arbitration Agreement within the Customer Agreement is displayed 27 beneath a subheading that reads, “How Do I Resolve Disputes With 28 Verizon Wireless?” (Citizen Decl., Ex. 4.) He was then provided with (Langere Decl., The heading “CUSTOMER AGREEMENT & Furthermore, the In addition, the Arbitration Agreement, unlike 12 1 other portions of the Customer Agreement, is displayed entirely in 2 capital letters. 3 did not conceal the terms of the Arbitration Agreement. 4 Thus, contrary to Plaintiff’s argument, Verizon Nor does the fact that Plaintiff did not receive the Customer 5 Agreement prior to his purchase establish a high degree of 6 procedural unconscionability. 7 considerations involved in selling services to mass consumers . . . 8 make it acceptable for terms and conditions to follow the initial 9 transaction.” “[T]he economic and practical Bischoff v. DirecTV, Inc., 180 F. Supp. 2d 1097, 10 1105 (C.D. Cal. 2002) (citing ProCD, Inc. v. Zeidenberg, 86 F.3d 11 1447, 1451 (7th Cir.1996)). 12 “[C]ashiers cannot be expected to read legal documents before 13 ringing up sales. 14 when vendors skip costly and ineffectual steps such as telephonic 15 recitation, and instead use a simple approve-or-return device. 16 Competent adults are bound by such documents, read or unread.” 17 Gateway, 105 F.3d at 1149. 18 . . . . As the Gateway court explained, Customers as a group are better off Here, Plaintiff acknowledged that he had the opportunity to 19 review the Customer Agreement when he signed the receipt. 20 importantly, even if Plaintiff was not privy to the exact terms of 21 the Arbitration Agreement at the time he accepted the Customer 22 Agreement, by the terms of the Customer Agreement, Plaintiff had 23 fourteen days after acceptance to review the terms of the Customer 24 Agreement and cancel his service if he so desired. 25 Ex. 5 at 20.) 26 More (Citizen Decl., Given the practical realities making it unrealistic for 27 communication service providers to negotiate all terms with 28 customers before beginning to provide the service, the sufficiently 13 1 prominent wording of the Customer Agreement and Arbitration 2 Agreement, and Plaintiff’s ability to return the device and 3 repudiate the agreement within fourteen days of purchase, the 4 Customer Agreement at issue here is only minimally procedurally 5 unsconscionable. 6 7 2. Substantive Unconscionability Substantive unconscionability focuses on the one-sidedness of 8 the contract terms. 9 arbitration agreement is concerned, the agreement is unconscionable Armendariz, 24 Cal.4th at 114. 10 unless the arbitration remedy contains a ‘modicum of 11 bilaterality.’” 12 “Where an 319 F.3d at 117). 13 Ting v. AT&T, 319 F.3d at 1149 (citing Armendariz, The majority of Plaintiff’s argument regarding 14 unconsionability appears to pertain not to the Arbitration 15 Agreement, but to other portions of the Customer Agreement. 16 example, although Plaintiff is correct that portions of the 17 Customer Agreement appear to limit available damages, the 18 Arbitration Agreement itself states that “AN ARBITRATOR CAN AWARD 19 YOU THE SAME DAMAGES AND RELIEF . . . AS A COURT WOULD.” 20 Decl., Ex. 5 at 23.) 21 analysis is confined to the terms of the Arbitration Agreement. 22 See Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 23 403 (1968) (“[I]n passing upon a[n] application for a stay while 24 the parties arbitrate, a federal court may consider only issues 25 relating to the making and performance of the agreement to 26 arbitrate.”). For (Citizen This court’s substantive unconscionability 27 Plaintiff argues that the Arbitration Agreement is 28 substantively unconscionable because it exempts small claims 14 1 actions. (Opp. at 23.) Plaintiff appears to suggest that because 2 it is more likely that Verizon will pursue small claims actions 3 against customers than the reverse, this provision lacks 4 bilaterality, citing the district court’s Order in Merkin v. Vonage 5 America, No. 13-cv-08026 CAS, 2014 WL 457942 (Feb. 3, 2014) 6 (“Merkin”). 7 court’s denial of the defendant’s motion to compel arbitration, and 8 remanded with instructions to grant the motion. Merkin v. Vonage 9 Am., 639 Fed. Appx. 481 at 482 (9th Cir. 2016). Furthermore, the The Ninth Circuit, however, reversed the district 10 district court did not conclude that the exemption of small claims 11 from arbitration weighed in favor of unconscionability. 12 2014 WL 457942 at 10. 13 provision exempting small claims and three other categories of 14 claims from arbitration and determined that the exclusion of the 15 other categories of claims, but not small claims, rendered the 16 provision one-sided. 17 contends that the preservation of both parties’ rights to bring 18 actions in small claims court works against his and consumers’ 19 favor, this court disagrees. 20 Merkin, Rather, the court examined a contractual Id. at 10-11. To the extent Plaintiff In some cases, barriers to pursuing statutory remedies, such 21 as “filing and administrative fees attached to arbitration that are 22 so high as to make access to the forum impracticable,” can warrant 23 invalidating an arbitration agreement. 24 Italian Colors, 133 S. Ct. 2304, 2310-11. 25 are absent here. 26 the parties agree otherwise, arbitration will take place “in the 27 county of [the customer’s] billing address.” 28 at 23.) American Express Co. v. Those barriers to entry The Arbitration Agreement provides that, unless (Citizen Decl., Ex. 5 The Arbitration Agreement further provides that if the 15 1 consumer is unable to pay the filing fee, Verizon will pay the 2 filing fee and “any administrator and arbitrator fees charged 3 later.” 4 less than $5,000 but greater than any settlement offer prior to 5 arbitration, the Arbitration Agreement obligates Verizon to pay 6 $5,000, plus attorney’s fees and expenses. 7 though Plaintiff’s claims involve charges of $1.85 to $3.00 per 8 month, the low value of claims is not itself a barrier to pursuing 9 a claim. (Citizen Decl., Ex. 5 at 24.) If a plaintiff is awarded (Id.) Thus, even See Concepcion, 563 U.S. at 3251-52 (agreeing with 10 appellate court that arbitration agreement providing an award of “a 11 minimum of $7,500 and twice [plaintiffs’] attorney’s fees if they 12 obtain an arbitration award greater than [the] last settlement 13 offer” was “sufficient to provide incentive for the individual 14 prosecution of meritorious claims that are not immediately 15 settled.”). 16 The Arbitration Agreement here is only minimally procedurally 17 unconscionable, and is not accompanied by any significant 18 substantive unconscionability. 19 therefore, enforceable. 20 IV. 21 The Arbitration Agreement is, Conclusion For the reasons stated above, Defendant’s Motion to Compel is 22 GRANTED. 23 // 24 // 25 // 26 // 27 // 28 // 16 1 Counsel to file a status report six months from today’s order. 2 3 IT IS SO ORDERED. 4 5 6 Dated: September 23, 2016 DEAN D. PREGERSON United States District Judge 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 17
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