Alwert v. Cox Commc'ns, Inc. (In re Cox Enters., Inc. Set-top Cable Television Box Antitrust Litig.)

• Decision Date: 26 August 2016
• Docket Number: No. 15–6076, No. 15–6077,15–6076
• Citation: 835 F.3d 1195
• Parties: In re: Cox Enterprises, Inc. Set-top Cable Television Box Antitrust Litigation. Andrew Alwert, Plaintiff–Appellant, v. Cox Communications, Inc., Defendant–Appellee. In re: Cox Enterprises, Inc. Set-top Cable Television Box Antitrust Litigation, Stanley Feldman, Plaintiff–Appellant, v. Cox Communications, Inc., Defendant–Appellee.
• Court: U.S. Court of Appeals — Tenth Circuit

835 F.3d 1195

In re: Cox Enterprises, Inc. Set-top Cable Television Box Antitrust Litigation.

Andrew Alwert, Plaintiff–Appellant,

v.Cox Communications, Inc., Defendant–Appellee.

In re: Cox Enterprises, Inc. Set-top Cable Television Box Antitrust Litigation,

Stanley Feldman, Plaintiff–Appellant,

v.Cox Communications, Inc., Defendant–Appellee.

No. 15–6076

No. 15–6077

United States Court of Appeals, Tenth Circuit.

August 26, 2016

Todd Schneider, Schneider Wallace Cottrell Konecky Wotkyns, L.L.P., San Francisco, California (Rachel Lawrence Mor, P.C., Oklahoma City, Oklahoma, Michael J. Blaschke, Michael J. Blaschke, P.C., Oklahoma City, Oklahoma, Allan Kanner and Cynthia St. Amant, Kanner & Whiteley, L.L.C., New Orleans, Louisiana, Jason Kim, Schneider Wallace Cottrell Konecky Wotkyns, L.L.P., San Francisco, California, Garrett W. Wotkyns, Schneider Wallace Cottrell Konecky Wotkyns, L.L.C., Scottsdale, Arizona, Joe R. Whatley, Jr., Whatley Kallas, LLP, New York, New York, Gregory P. Dileo, Gregory P. Dileo, APLC, New Orleans, Louisiana, Jeffrey P. Berniard, Berniard Law Firm, New Orleans, Louisiana, Joseph C. Peiffer, Peiffer Rosca Abdullah Carr & Kane, LLP, New Orleans, Louisiana, and John Dean Curtis, II, Burch & Cracchiolo PA, Phoenix, Arizona, with him on the briefs) for Plaintiffs–Appellants.

Alfred C. Pfeiffer, Jr., Latham & Watkins, LLP, San Francisco, California (Robert G. Kidwell, Mintz Levin Cohn Ferris Glovsky & Popeo, P.C., Washington, D.C., D. Kent Meyers, Crowe & Dunlevy, P.C., Oklahoma City, Oklahoma, Margaret M. Zwisler and Jennifer L. Giordano, Latham & Watkins, LLP, Washington, D.C., with him on the brief), for Defendant–Appellee.

Before HARTZ, PHILLIPS, and MORITZ, Circuit Judges.

HARTZ

, Circuit Judge.

Andrew Alwert and Stanley Feldman (Plaintiffs) brought putative class actions against Cox Communications, Inc. (Cox) claiming that it violated antitrust law by tying its premium cable service to rental of a set-top box. The district court granted Cox's motions to compel arbitration. It then certified the orders compelling arbitration for interlocutory appeal under 28 U.S.C. § 1292(b)

, and we granted Plaintiffs permission to appeal. They argue that the arbitration order is improper because (1) the dispute is not within the scope of the arbitration agreement, (2) Cox waived its right to invoke arbitration, and (3) Cox's promise to arbitrate was illusory, so the arbitration agreement is unenforceable. Exercising jurisdiction under 28 U.S.C. § 1292(b), we affirm. We hold that the arbitration clause in Plaintiffs' subscriber agreements with Cox covers the present litigation and that Cox did not waive its right to arbitration. We do not resolve Plaintiffs' argument that Cox's promises were illusory because the argument amounts to a challenge to the contract as a whole, which is a question to be decided in arbitration.

I. BACKGROUND

A. The Arbitration Agreement

Plaintiffs are Cox premium-cable subscribers who pay a monthly rental fee for the accompanying set-top box. They also subscribe to Cox's high-speed Internet service and have the identical Internet-subscriber agreement. Language in the second paragraph of the Introduction to the agreement gives Cox the right to modify it as it chooses: “Cox reserves the right to modify the terms of this Agreement and prices for the Service .... Cox may discontinue or revise any or all other aspects of the Service, including features or enhancements, in its sole discretion at any time by posting changes online.” Joint App., Vol. II at 179 (Alwert), 255 (Feldman). On November 18, 2011, Cox modified the agreements to add new dispute-resolution provisions that included an arbitration clause covering all Cox goods and services (not just Internet services). The clause states:

YOU AND COX AGREE TO ARBITRATE—RATHER THAN LITIGATE IN COURT—any and all claims or disputes between us (including any parents, subsidiaries, affiliates, officers, directors, employees, or agents of Cox) that arise out of or in any way relate to: (1) this Agreement; (2) services that Cox provides to you in connection with this Agreement; (3) products that Cox makes available to you; (4) bills that Cox sends to you or amounts that Cox charges you for services or goods provided under this Agreement; and (5) any services or goods that Cox or any of its affiliated entities provide to you under any other agreement ....

Id. at 186 (Alwert), 262 (Feldman). The new language also includes a provision allowing a subscriber to opt out of the arbitration clause by sending notice to Cox within 30 days of receipt.¹ And it includes a class-action waiver and a choice-of-law provision stating: “This Agreement is governed by the laws of the state in which your billing address in our records is located, and applicable federal law.” Id. at 186–87 (Alwert), 262–63 (Feldman). Because Cox did not mail notice of the modified agreement to Plaintiffs until March (Feldman) and April (Alwert) of 2012, Cox contends that the agreements did not take effect until April and May 2012. Plaintiffs make no argument disputing this analysis, so we adopt it. See Gen. Motors Corp. v. Urban Gorilla, LLC , 500 F.3d 1222, 1227 (10th Cir. 2007)

.

B. District Court Proceedings

In 2009 Cox subscribers in several jurisdictions filed putative class-action suits against Cox alleging illegal tying of its premium-cable service to rental of a set-top box. See Gelder v. Coxcom Inc. , 696 F.3d 966, 968 (10th Cir. 2012)

(per curiam). Neither Plaintiff was a named party. These cases were consolidated and transferred to the United States District Court for the Western District of Oklahoma. See id. The subscribers sought to certify a national class. See id. But on December 28, 2011, the district court denied the request, see id. ; and on August 8, 2012, we denied the subscribers' petition under Fed. R. Civ. P. 23(f) for permission to appeal the denial, see

id. at 967–68.

Subscribers then filed putative class-action suits for several geographic regions. See In re Cox Enterprises, Inc. Set – top Cable Television Box Antitrust Litig. , 790 F.3d 1112, 1115 (10th Cir. 2015)

. Alwert filed his complaint on behalf of Cox subscribers in its New Orleans market on September 27, 2012; and Feldman filed his complaint on behalf of Cox subscribers in its Arizona market on October 15, 2012. The various regional actions were again consolidated and transferred to the Western District of Oklahoma. See id. The parties then agreed to stay all the cases except the one brought on behalf of Cox subscribers in its Oklahoma City market (the Healy litigation), which was to be litigated as a bellwether on the merits of the claims. See id. After the district court granted class certification in that case, Cox moved to compel arbitration. See id. The court denied the motion. Cox appealed and we affirmed. On August 11, 2014, while that appeal was pending, the district court lifted the stay on the cases before us. Cox answered both complaints on September 25. Eighteen days later, Plaintiffs submitted interrogatories and requests for production of documents. Three days later, on October 16, Cox, which had not sought discovery, moved to compel arbitration in both cases.

The district court granted the motions. It held that the arbitration clauses covered the present litigation, that Cox had not waived arbitration, and that the arbitration clauses were supported by consideration, not illusory promises by Cox.

II. DISCUSSION

A. Scope of Arbitration Agreement

“[T]he first task of a court asked to compel arbitration of a dispute is to determine whether the parties agreed to arbitrate that dispute.” Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc. , 473 U.S. 614, 626, 105 S.Ct. 3346, 87 L.Ed.2d 444 (1985)

; see also

AT & T Techs., Inc. v. Commc'ns Workers of Am. , 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) (“Unless the parties clearly and unmistakably provide otherwise, the question of whether the parties agreed to arbitrate is to be decided by the court, not the arbitrator.”) Plaintiffs contend that their dispute with Cox concerning rental of cable-service set-top boxes does not come within the provision in the Internet-subscriber agreement to arbitrate “any and all claims or disputes between us ... that arise out of or in any way relate to ... (5) any services or goods that Cox or any of its affiliated entities provide to you under any other agreement.” Because the district court's interpretation of the arbitration agreement's scope was founded on “an analysis of the [contractual] language ... rather than upon the credibility of extrinsic evidence,” our review of its decision is de novo. Milk ‘N’ More, Inc. v. Beavert , 963 F.2d 1342, 1345 (10th Cir. 1992) (internal quotation marks omitted); see also

O'Connor v. R.F. Lafferty & Co. , 965 F.2d 893, 901 (10th Cir. 1992).

We begin with a strong presumption that the dispute is arbitrable. This presumption is not based on contract law but on the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq. (1925)

, which creates the “federal substantive law of arbitrability, applicable to any arbitration agreement within the coverage of the Act.” Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp. , 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983). The FAA provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The Supreme Court has described this section as “a congressional declaration of a liberal federal policy favoring arbitration agreements.” Moses H. Cone , 460 U.S. at 24, 103 S.Ct. 927. In particular, “any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.” Id. at 24–25, 103 S.Ct. 927 ; see

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