Bacon v. Avis Budget Grp., Inc.

• Citation: 959 F.3d 590
• Decision Date: 18 May 2020
• Docket Number: No. 18-3780,18-3780
• Parties: Abigail BACON; Arcadia Lee ; Jeannine Devries; Lisa Geary; Richard Alexander; Yvonne Wheeler; George Davidson, and on behalf of themselves and the putative class v. AVIS BUDGET GROUP, INC.; Payless Car Rental, Inc., Appellants
• Court: U.S. Court of Appeals — Third Circuit

959 F.3d 590

Abigail BACON; Arcadia Lee ; Jeannine Devries; Lisa Geary; Richard Alexander; Yvonne Wheeler; George Davidson, and on behalf of themselves and the putative class

v.AVIS BUDGET GROUP, INC.; Payless Car Rental, Inc., Appellants

No. 18-3780

United States Court of Appeals, Third Circuit.

Argued April 23, 2020

Opinion Filed: May 18, 2020

Jason E. Hazlewood, Kim M. Watterson [ARGUED], Reed Smith, 225 Fifth Avenue, Suite 1200, Pittsburgh, PA 15222, M. Patrick Yingling, Reed Smith, 10 South Wacker Drive, 40th Floor, Chicago, IL 60606, Counsel for Appellants

Lisa R. Considine, David J. DiSabato, The Wolf Law Firm, 1520 U.S. Highway 130, Suite 101, North Brunswick, NJ 08902, Greg M. Kohn [ARGUED], Nagel Rice, 103 Eisenhower Parkway, Roseland, NJ 07068, Counsel for Appellees

Before: AMBRO, SHWARTZ, and BIBAS, Circuit Judges.

OPINION

SHWARTZ, Circuit Judge.

Plaintiffs Richard Alexander, Abigail Bacon, George Davidson, Jeannine DeVries, Lisa Geary, Yvonne Wheeler, and Arcadia Lee rented cars from Payless Car Rental, Inc., a subsidiary of Avis Budget Group, Inc. Plaintiffs, on behalf of a putative class, sued Defendants Payless and Avis for unauthorized charges. Defendants moved to compel Plaintiffs to arbitrate their claims. Because the District Court correctly denied their motions, we will affirm.

I

A

Plaintiffs rented cars in 2016. Six plaintiffs rented cars in the United States ("U.S. Plaintiffs"), and one rented a car in Costa Rica. At the Payless rental counter, the U.S. Plaintiffs each signed identical one-page rental agreements ("U.S. Agreement"), which, among other things, itemized charges and fees and showed whether the customer had accepted or declined certain products and services. Each U.S. Plaintiff affixed his or her signature below the final paragraph, which provides: "I agree the charges listed above are estimates and that I have reviewed&agreed to all notices&terms here and in the rental jacket." J.A. 631, 685, 720, 784, 842, 875.

After the U.S. Plaintiffs signed their agreements, the rental associate folded the agreement into thirds, placed it into what Defendants call a "rental jacket," and handed the jacket to the U.S. Plaintiffs. The rental jacket bears the title "Rental Terms and Conditions" at the top of the front page, not the title "rental jacket," and contains thirty-one paragraphs. J.A. 220, 225. The word "jacket" appears in only the second paragraph, in the phrase "Rental Document Jacket." J.A. 220, 225. The twenty-eighth paragraph contains an arbitration provision, which provides that "all disputes ... arising out of, relating to or in connection with [the] rental of a vehicle from Payless ... shall be exclusively settled through binding arbitration." J.A. 223, 228 (emphasis omitted).

The rental jackets were kept at the rental counter, typically near the rental associate's computer terminal or printer. Payless rental associates are trained to give a rental jacket to each customer after the customer signs the U.S. Agreement and to any customer who requests one, but the associates are not trained to alert customers to the additional terms in the rental jacket. The rental associates said nothing about the rental jacket when the U.S. Plaintiffs reviewed their agreements.

Lee rented a car in Costa Rica from a licensee of Payless. The licensee uses a two-sided single page document for its rentals ("Costa Rica Agreement"). The front side contains the details of the transaction. The back side is titled "Rental Agreement" and includes pre-printed terms in English and Spanish. J.A. 204. The back side also includes a "Dispute resolution" clause, which requires that disputes related to the agreement be arbitrated. J.A. 204.

The front and back sides both have signature lines. On the front side, just before the signature line, the Costa Rica Agreement states: "By signing below, you agree to the terms and conditions of this Agreement, and you acknowledge that you have been given an opportunity to read this Agreement before being asked to sign." J.A. 203. The back side has a separate signature line at the bottom-right corner, preceded by the statement in English and Spanish: "By signing below, you agree to the terms and conditions of this Agreement." J.A. 204. Lee signed the front side of the Costa Rica Agreement but did not sign the back side. A video of Lee's rental transaction shows the rental associate instructing Lee to initial and sign on the front side of the Costa Rica Agreement but does not show the associate informing Lee about the back side. In addition, the video does not show that Lee turned the document over.

Five of the U.S. Plaintiffs used websites—Expedia.com, Hotwire.com, or Priceline.com—to reserve their Payless car rentals. Each of the websites’ terms of use included an arbitration provision.

B

Plaintiffs brought a putative class action against Defendants, alleging violations of the New Jersey Consumer Fraud Act, N.J. Stat. Ann. § 56:8-1 et seq., the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. § 501.201 et seq., the Nevada Deceptive Trade Practices Act, Nev. Rev. Stat. § 598.0903 et seq., the Nevada Statutory Consumer Fraud Act, Nev. Rev. Stat. § 41.600 et seq., and for common law unjust enrichment and conversion. Plaintiffs allege that Defendants charged them for products and services that they either had not authorized or had declined.

In response, Defendants moved to compel arbitration and to dismiss or stay the action pending arbitration pursuant to the Federal Arbitration Act ("FAA"). The District Court denied the motions and directed the parties to engage in discovery on arbitrability. It said that it would "accept one joint motion from [D]efendants for partial summary judgment on the motion to compel arbitration," and that Plaintiffs could then cross-move for summary judgment on arbitrability. Bacon v. Avis Budget Grp., Inc., Civ. No. 16-5939 (KM) (JBC), 2017 WL 2525009, at *16 (D.N.J. June 9, 2017) (emphasis omitted). Following targeted discovery, Defendants filed a new joint motion, styled as a "Motion for Summary Judgment to Compel Arbitration." ECF No. 81 at 1. In that motion, they "renew[ed] their request that [the] Court enforce the arbitration provisions in Plaintiffs’ rental contracts and compel bilateral arbitration ... consistent with the" FAA. ECF No. 81-1 at 8. Plaintiffs cross-moved for summary judgment on the arbitration issue, arguing that the undisputed facts showed that they had never agreed to arbitrate.

The District Court denied Defendants’ motion and granted in part Plaintiffs’ motion. Bacon v. Avis Budget Grp., Inc., 357 F. Supp. 3d 401, 432 (D.N.J. 2018). As to the U.S. Agreements, the Court denied Defendants’ motion and granted Plaintiffs’ motion on the ground that the undisputed facts showed that the U.S. Plaintiffs did not assent to the arbitration provision. Id. at 418-26. As to the Costa Rica Agreement, the Court denied both parties’ motions because a disputed factual issue existed as to whether Lee was on reasonable notice of the arbitration provision. Id. at 426-29. As to the motions based on the website terms, the Court held that the record was not sufficiently developed concerning assent and that the issue could be resolved after further discovery either via summary judgment or at trial. Id. at 429-32. Defendants appeal.

II¹

Before turning to the merits of this appeal, we must determine whether we have appellate jurisdiction. The order here addressed three items: (1) the request to compel the U.S. Plaintiffs to arbitrate their dispute; (2) the request to compel Lee to arbitrate her dispute; and (3) the request to compel arbitration pursuant to the arbitration clauses in the websites Plaintiffs used to make their reservations. The parties agree, correctly, that we have appellate jurisdiction over the order denying the request to compel the U.S. Plaintiffs to arbitrate. 9 U.S.C. § 16. The parties disagree, however, about whether we have jurisdiction over the other two aspects of the order. For the reasons set forth below, we have jurisdiction over those items, too.

Generally, the Courts of Appeals have jurisdiction over only the "final decisions" of district courts, 28 U.S.C. § 1291, which are decisions that "end[ ] the litigation on the merits and leave[ ] nothing for the court to do but execute the judgment," Weber v. McGrogan, 939 F.3d 232, 236 (3d Cir. 2019) (quoting Catlin v. United States, 324 U.S. 229, 233, 65 S.Ct. 631, 89 L.Ed. 911 (1945) ). The FAA sets forth an exception to the final decision rule in 28 U.S.C. § 1291, providing that an "appeal may be taken from ... an order ... refusing a stay of any action under [§] 3 of" the FAA, "denying a petition under [§] 4 of [the FAA] to order arbitration to proceed," or "denying an application under [§] 206 of [the FAA] to compel arbitration." 9 U.S.C. § 16(a)(1)(A)-(C).

Thus, whether § 16(a) gives us jurisdiction over the District Court's order hinges on whether the order involves a § 3 motion for a stay or a § 4 or § 206 petition or motion to compel arbitration.² 9 U.S.C. § 16. As a result, we first examine whether the order denied a motion to compel arbitration (as opposed to a ruling beyond compelling arbitration, such as an adjudication on the merits of the dispute). Devon Robotics, LLC v. DeViedma, 798 F.3d 136, 146-47 (3d Cir. 2015). If we conclude that the order denied a motion to compel arbitration, then we will exercise jurisdiction even if that order is not final. Sandvik A.B. v. Advent Int'l Corp., 220 F.3d 99, 102-03 (3d Cir. 2000).

To determine whether a district court was presented with a motion to compel arbitration, we examine (1) "the caption and relief requested in the underlying motion" and (2) "the label and the operative terms of the district court's order." Devon, 798 F.3d at 146-47. "[L]ook[ing] beyond the caption itself ... ensure[s] that a true motion to compel is not overlooked and ... that parties cannot game the captions of their motions in an effort to gain ...