Tuck v. DirectTV, No. 3:2016cv00160 - Document 27 (S.D. Cal. 2016)
Court Description: ORDER granting 14 Defendant DirecTV, LLC's Motion to Compel and Stay Proceedings, and Denying as Moot Defendant's Motion to Dismiss. The Court hereby grants Defendant's Motion to Compel Arbitration and denies as moot Defendant's Motion to Dismiss. (ECF No. 14.) Furthermore, pursuant to the FAA, the Court stays the judicial proceedings pending the outcome of any arbitration. Signed by Judge Janis L. Sammartino on 11/15/2016. (All non-registered users served via U.S. Mail Service)(kcm)
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Tuck v. DirectTV Doc. 27 Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 1 of 9 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 ROY TUCK, Case No.: 16-CV-160 JLS KSC Plaintiff, 12 13 v. 14 DIRECTV, a National satellite TV service provider, doing business in California, DOES 1 THROUGH 10, inclusively, 15 16 ORDER GRANTING DEFENDANT DIRECTV, LLC’S MOTION TO COMPEL ARBITRATION AND STAY PROCEEDINGS, AND DENYING AS MOOT DEFENDANT’S MOTION TO DISMISS Defendant. 17 (ECF No. 14) 18 19 Presently before the Court is Defendant DirecTV, LLC’s (“DirecTV”) Motion to 20 Compel Arbitration and Stay Proceedings or in the Alternative to Dismiss Plaintiff’s 21 Complaint. (“MTN,” ECF No. 14.) Plaintiff Roy Tuck filed a response in opposition to 22 Defendant’s motion (“Opp’n,” ECF No. 21), and Defendant filed a reply in support of its 23 motion (“Reply,” ECF No. 23). The Court vacated a hearing on the motion pursuant to 24 Civil Local Rule 7.1(d)(1). (ECF No. 24.) After considering the parties’ arguments and 25 the law, the Court GRANTS Defendant’s Motion to Compel Arbitration and DENIES AS 26 MOOT Defendant’s Motion to Dismiss. 27 /// 28 /// 1 16cv160-JLS-KSC Dockets.Justia.com Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 2 of 9 1 BACKGROUND 2 On March 16, 2016, Plaintiff filed an amended complaint (“FAC”) against 3 Defendant DirecTV alleging violations of the Telephone Consumer Protection Act 4 (“TCPA”), the Federal Fair Debt Collection Practices Act (“FDCPA”), and the California 5 Rosenthal Fair Debt Collection Practices Act (“Rosenthal Act”). (FAC, ECF No. 7.) 6 Plaintiff’s claims arise from consumer debt collection calls attributed to Defendant for 7 debts Plaintiff allegedly owes for DirecTV services. (FAC ¶ 33.) However, Plaintiff 8 claims that he “has no prior or present established relationship with defendants [DirecTV] 9 and Does 1-10 as it pertains to [any] negative consumer debt account, or any other alleged 10 accounts in any amounts.” (Id. at ¶ 30 (emphasis removed).) Additionally, Plaintiff claims 11 that he has no contractual obligation to Defendant “to pay them anything.” (Id. at ¶ 31 12 (emphasis removed).) 13 On May 26, 2016, Defendant filed the instant Motion to Compel Arbitration and 14 Stay Proceedings or in the Alternative to Dismiss Plaintiff’s Complaint. (ECF No. 14.) 15 Defendant principally argues that Plaintiff’s allegations are covered by the terms of the 16 arbitration provision in the DirecTV Customer Agreement (the “Agreement”), which 17 Plaintiff accepted when he became a DirecTV customer.1 (MTN 4, ECF No. 14-1.) 18 According to Defendant, DirecTV provides the Agreement to customers for their review 19 and acceptance at the time they accept service. (Id. at 4.) The Agreement is also available 20 online on the DirecTV website. (Id.) Additionally, Defendant contends that Plaintiff was 21 presented with an Equipment Lease Addendum at the time the equipment was installed at 22 his home, which itself contained references to some of the key provisions of the 23 Agreement, including the obligation to arbitrate disputes. (Id. at 5–6.) Section 9 of the Agreement, entitled “RESOLVING DISPUTES,” contains the 24 25 arbitration provision, which provides: 26 27 28 1 While Plaintiff argues that he has no contractual obligations to Defendant whatsoever, Defendant argues that Plaintiff became a DirecTV customer on January 31, 2008 when he ordered the DirecTV service. (MTN 5, ECF No. 14-1 (citing Declaration of Eva Kniley (“Kniley Decl.”) ¶ 4).) 2 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 3 of 9 1 In order to expedite and control the cost of disputes, you and we agree that any legal or equitable claim relating to this Agreement, any addendum, or your Service (referred to as a “Claim”) will be resolved as follows: ... [I]f we cannot resolve a Claim informally, any Claim either of us asserts will be resolved only by binding arbitration. The arbitration will be conducted under the rules of JAMS that are in effect at the time the arbitration is initiated . . . and under the rules set forth in this Agreement. 2 3 4 5 6 7 8 (Kniley Decl. Ex. A § 9.) 9 The arbitration provision additionally explains the meaning of the agreement to 10 arbitrate: “ARBITRATION MEANS THAT YOU WAIVE YOUR RIGHT TO A 11 JURY TRIAL.” (Kniley Decl. Ex. A § 9 (emphasis in original).) 12 Plaintiff does not argue that his claims are not governed by the arbitration clause, 13 nor does Plaintiff argue that the Agreement—or the arbitration clause—is unenforceable. 14 Instead, Plaintiff claims that he has never had an arbitration agreement with Defendant, 15 and that Defendant “has fabricated documents and is intentionally trying to confuse and 16 mislead the Court.” (Opp’n 1, ECF No. 21.) Additionally, Plaintiff claims that he has 17 “never seen these alleged agreement excerpts before and was not provided with them at 18 any time when opening [an] account with” Defendant.2 (Id. at 2 (emphasis in original).) The Court now considers the parties’ arguments and the law. 19 20 EVIDENTIARY OBJECTIONS 21 “[O]n a motion to compel arbitration, a court ‘may consider the pleadings, 22 documents of uncontested validity, and affidavits submitted by either party.’” Atlas Int’l 23 Mktg., LLC v. Car-E Diagnostics, Inc., No. 5:13-CV-02664-EJD, 2014 WL 3371842, at 24 *3 (N.D. Cal. July 9, 2014) (citation omitted); see also Xinhua Holdings Ltd. v. Elec. 25 26 27 28 This allegation directly conflicts with Plaintiff’s claim that he has never had a relationship with Defendant. Plaintiff makes other similarly contradictory claims. For instance, in his FAC Plaintiff alleges that the “same consumer business debt[s] allegedly owed to all of the [Defendants] arose out of a transaction that was primarily for personal, family, or household purposes.” (FAC ¶ 34 (emphasis added).) 2 3 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 4 of 9 1 Recyclers Int’l, Inc., No. 1:13-CV-1409 AWI SKO, 2013 WL 6844270, at *5 (E.D. Cal. 2 Dec. 26, 2013) (“For purposes of deciding a motion to compel arbitration, the Court may 3 properly consider documents outside of the pleadings.”) (citation omitted); Hotels Nev. v. 4 L.A. Pac. Ctr., Inc., 144 Cal. App. 4th 754, 761 (2006) (“[W]hen a petition to compel 5 arbitration is filed and accompanied by prima facie evidence of a written agreement to 6 arbitrate the controversy, the court itself must determine whether the agreement exists and, 7 if any defense to its enforcement is raised, whether it is enforceable.”). 8 With respect to evidence relied on by the Court in this order below, the Court 9 OVERRULES Plaintiff’s objections. (ECF No. 21.) Specifically, the Court finds the 10 service agreements attached to the declaration of Eva Kniley admissible for purposes of 11 this Motion. (See Kniley Decl., Exs. A, E, ECF No. 14-2.) 12 LEGAL STANDARD 13 The Federal Arbitration Act (FAA) governs the enforceability of arbitration 14 agreements in contracts. See 9 U.S.C. § 1, et seq.; Gilmer v. Interstate/Johnson Lane Corp., 15 500 U.S. 20, 24–26 (1991). If a suit is proceeding in federal court, the party seeking 16 arbitration may move the district court to compel the resisting party to submit to arbitration 17 pursuant to their private agreement to arbitrate the dispute. 9 U.S.C. § 4. The FAA reflects 18 both a “liberal federal policy favoring arbitration agreements” and the “fundamental 19 principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 20 U.S. 333, 339 (2011) (quotations and citations omitted); see also Kilgore v. Keybank, Nat’l 21 Ass’n, 718 F.3d 1052, 1057 (9th Cir. 2013) (en banc) (“The FAA was intended to overcome 22 an anachronistic judicial hostility to agreements to arbitrate, which American courts had 23 borrowed from English common law.”) (quoting Mitsubishi Motors Corp. v. Soler 24 Chrysler-Plymouth, Inc., 473 U.S. 614, 625 n.14 (1985)); Circuit City Stores, Inc. v. 25 Adams, 279 F.3d 889, 892 (9th Cir. 2002) (“The [FAA] not only placed arbitration 26 agreements on equal footing with other contracts, but established a federal policy in favor 27 of arbitration, [citation], and a federal common law of arbitrability which preempts state 28 law disfavoring arbitration.”). 4 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 5 of 9 1 In determining whether to compel a party to arbitration, the Court may not review 2 the merits of the dispute; rather, the Court’s role under the FAA is limited to “determining 3 (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 4 encompasses the dispute at issue.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 5 (9th Cir. 2008). If the Court finds that the answers to those questions are yes, the Court 6 must compel arbitration. See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). 7 In determining the validity of an arbitration agreement, the Court applies state law 8 contract principles. Adams, 279 F.3d at 892; see also 9 U.S.C. § 2. To be valid, an 9 arbitration agreement must be in writing, but it need not be signed by the party to whom it 10 applies as acceptance may be implied in fact. Pinnacle Museum Tower Ass’n v. Pinnacle 11 Mkt. Dev. (US), LLC, 55 Cal. 4th 233, 236 (2012). Further, “[a]n arbitration clause within 12 a contract may be binding on a party even if the party never actually read the clause.” Id. 13 ANALYSIS 14 For purposes of whether Plaintiff must, in fact, arbitrate these claims, the dispositive 15 questions are (1) whether Plaintiff accepted the terms of the Agreement, (2) whether the 16 arbitration clause in the DirecTV Customer Agreement covers this dispute and, if so, (3) 17 whether that clause is otherwise enforceable. 18 I. Plaintiff Accepted the Terms of the Agreement 19 The Court finds that Plaintiff accepted the terms of the Agreement, including the 20 arbitration clause. As Defendant explains, Plaintiff accepted the terms of the Agreement 21 by signing up for and continuing to receive DirecTV services, instead of rejecting the initial 22 contract or immediately cancelling service. (MTN 6 (citing Kniley Decl. ¶¶ 12–13).) 23 Additionally, Defendant provides a declaration and exhibits detailing the extent of 24 Plaintiff’s relationship with Defendant as a customer for DirecTV services. (See MTN 5– 25 6; see also Kniley Decl. Exs. B, C, D, F.) Thus, while Plaintiff argues he never saw the 26 Agreement, “[i]t is a well-established principle of California contract law that ‘the law 27 imputes to a person the intention corresponding to the reasonable meaning of his words 28 and acts’ based on ‘his outward expression’ and not ‘his unexpressed intent.’” Brown v. 5 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 6 of 9 1 DirecTV, LLC, No. CV 12-08382 DMG EX, 2013 WL 3273811, at *4 (C.D. Cal. June 26, 2 2013) (quoting Edwards v. Comstock Ins. Co., 205 Cal. App. 3d 1164, 1169 (1988)). Based 3 on the evidence in the record, the Court is not convinced by Plaintiff’s unsubstantiated 4 claim that he was never a DirecTV customer.3 Accordingly, the Court finds that Plaintiff 5 accepted the terms of the Agreement. 6 (confirming that DirecTV’s accept-or-return practice is a valid method of contract 7 formation and thus compelling arbitration). 8 II. 9 Claims See, e.g., Brown, 2013 WL 3273811, at *4 The Arbitration Clause in the DirecTV Customer Agreement Covers Plaintiff’s 10 The Court finds that the language of the arbitration clause contained in the 11 Agreement encompasses Plaintiff’s claims. The arbitration clause extends to “any legal or 12 equitable claim relating to this Agreement, any addendum, or [the customer’s] Service.” 13 (Kniley Decl. Ex. A § 9.) Additionally, the Agreement specifically contemplates collection 14 activities. (See Kniley Decl. Ex. A § 2(g) (“Collection Costs: To the extent permitted by 15 law, you will pay us any costs and fees we reasonably incur to collect amounts you owe 16 us.”) (emphasis in original).) Defendant argues that Plaintiff’s claims relate to and/or arise 17 under the Agreement and his service. (MTN 11, ECF No. 14-1.) Specifically, Defendant 18 argues that the collection calls were meant to recoup unpaid fees Plaintiff was obligated to 19 pay for the DirecTV services Defendant provided. (Id.) Indeed, Plaintiff’s FAC alleges 20 that his claims arise from consumer debt collection calls attributed to Defendant. (FAC 21 ¶ 33 (“[Defendant] . . . called [Plaintiff’s] cell phone numbers . . . more than fifty five (55) 22 times, many of these fifty five (55) harassing consumer debt collection calls were made in 23 the same business day . . . .” (emphasis in original).) Accordingly, the Court finds that 24 Plaintiffs claims relate to and/or arise under the Agreement and are thus governed by the 25 arbitration clause in the Agreement. Cf. McNamara v. Royal Bank of Scotland Grp., No. 26 11-CV-2137-L WVG, 2012 WL 5392181, at *7 (S.D. Cal. Nov. 5, 2012) (“Plaintiff’s 27 28 3 To the contrary, as discussed in footnote 2, Plaintiff seems to admit that he was a DirecTV customer. 6 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 7 of 9 1 TCPA claims relate to his Agreement with Defendants, and are consequently subject to 2 arbitration.”); see also Cayanan v. Citi Holdings, Inc., 928 F. Supp. 2d 1182, 1188 (S.D. 3 Cal. 2013) (calls made to plaintiffs “because Plaintiffs had failed to make timely payments 4 on their accounts,” “for the limited purpose of collecting money owed them,” were 5 “‘related to’ the delinquent credit accounts” and thus TCPA claims based on those calls 6 were governed by the arbitration clause). 7 III. 8 9 The Arbitration Clause in the DirecTV Customer Agreement Is Enforceable To make a case for unconscionability under California law, a party must show both procedural and substantive unconscionability. See Armendariz v. Found. Health 10 Pyschcare Servs., Inc., 24 Cal. 4th 83, 114 (2000). Courts use a sliding scale to analyze 11 these two elements: “the more substantively oppressive the contract term, the less evidence 12 of procedural unconscionability is required to come to the conclusion that the term is 13 unenforceable, and vice versa.” Id. 14 A. Procedural Unconscionability 15 Procedural unconscionability involves oppression or surprise flowing from “unequal 16 bargaining power.” Armendariz, 24 Cal. 4th at 114. “Any contract of adhesion is 17 minimally procedurally unconscionable, but absent other indicia of oppression or surprise, 18 a contract of adhesion has only a low degree of procedural unconscionability.” Brown, 19 2013 WL 3273811, at *8 (citing Ajamian v. CantorCO2e, LP, 203 Cal. App. 4th 771, 795 20 (2012)). 21 The Court finds that the arbitration agreement is only minimally procedurally 22 unconscionable. DirecTV acknowledges that its contract of adhesion by definition carries 23 with it at least some procedural unconscionability. (MTN 13, ECF No. 14-1.) But there 24 appears to be no other evidence of procedural unconscionability. To the contrary, Plaintiff 25 had at least two opportunities to review and reject the Agreement. Within 24 hours of 26 ordering service over the phone, Defendant sent Plaintiff an email with a copy of the 27 Agreement. (Id. at 5.) Additionally, Plaintiff was presented with an Equipment Lease 28 Addendum at the time Defendant installed the DirecTV service equipment at his home, 7 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 8 of 9 1 and Defendant would not install the equipment unless a customer accepted the terms of the 2 Equipment Lease Agreement (which references the arbitration clause). (Id. at 5–6.) 3 Nevertheless, as explained below, the Court finds that any procedural unconscionability is 4 outweighed by a lack of substantive unconscionability. 5 B. Substantive Unconscionability 6 Substantive unconscionability exists when a contract has “overly harsh or one-sided 7 results.” Armendariz, 24 Cal. 4th at 114 (citations and quotations omitted). The “ultimate 8 issue in every case is whether the terms of the contract are sufficiently unfair, in view of 9 all relevant circumstances, that a court should withhold enforcement.” Sanchez v. Valencia 10 Holding Co., LLC, 61 Cal. 4th 899, 912 (2015). Further, “the standard for substantive 11 unconscionability—the requisite degree of unfairness beyond merely a bad bargain—must 12 be as rigorous and demanding for arbitration clauses as for any contract clause.” Id. 13 Plaintiff has not shown substantive unconscionability, so this Court lacks discretion 14 to refuse to enforce the arbitration agreement on unconscionability grounds. 15 Armendariz, 24 Cal. 4th at 114. To the contrary, the arbitration clause contains many 16 consumer-friendly provisions. For instance, DirecTV pledges to pay all arbitration costs 17 beyond the $125 filing fee. (Kniley Decl. Ex. A § 9(b).) Additionally, DirecTV agrees to 18 hold the arbitration “at a location in your hometown area unless you and we both agree to 19 another location or telephonic arbitration.” (Id.) Moreover, in arbitration, a putative 20 plaintiff may “seek any and all remedies otherwise available to you pursuant to your state’s 21 law.” (Id.) Indeed, other courts have enforced the same DirecTV arbitration provision at 22 issue in this case. See, e.g., Hodsdon v. DirecTV, LLC, No. C 12-02827 JSW, 2012 WL 23 5464615, at *7 (N.D. Cal. Nov. 8, 2012) (“Because the Court finds DirecTV’s arbitration 24 provision lacks any indicia of substantive unconscionability, it is enforceable.”). 25 Consequently, because the Court finds that DirecTV’s arbitration clause in the Agreement 26 lacks any indicia of substantive unconscionability, it is enforceable. 27 IV. 28 See Motion to Dismiss In light of the Court’s conclusions that the arbitration clause in the Agreement covers 8 16cv160-JLS-KSC Case 3:16-cv-00160-JLS-KSC Document 27 Filed 11/15/16 Page 9 of 9 1 the claims alleged in this action and is enforceable, the Court does not reach Defendant’s 2 Motion to Dismiss. 3 CONCLUSION 4 For the reasons stated above, the Court concludes that the arbitration clause 5 contained in the Agreement (1) encompasses Plaintiff’s claims related to the debt collection 6 calls attributed to Defendant and (2) is enforceable. Accordingly, the Court hereby 7 GRANTS Defendant’s Motion to Compel Arbitration and DENIES AS MOOT 8 Defendant’s Motion to Dismiss. (ECF No. 14.) 9 Furthermore, pursuant to the FAA, the Court STAYS the judicial proceedings 10 pending the outcome of any arbitration. See 9 U.S.C. § 3 (“If any suit or proceeding be 11 brought in any of the courts of the United States upon any issue referable to arbitration 12 under an agreement in writing for such arbitration, the court in which such suit is pending, 13 upon being satisfied that the issue involved in such suit or proceeding is referable to 14 arbitration under such an agreement, shall on application of one of the parties stay the trial 15 of the action until such arbitration has been had in accordance with the terms of the 16 agreement, providing the applicant for the stay is not in default in proceeding with such 17 arbitration.”); Martin Marietta Aluminum, Inc. v. Gen. Elec. Co., 586 F.2d 143, 147 (9th 18 Cir. 1978) (holding that courts shall order a stay of judicial proceedings “pending 19 compliance with a contractual arbitration clause”). 20 21 IT IS SO ORDERED. Dated: November 15, 2016 22 23 24 25 26 27 28 9 16cv160-JLS-KSC
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