Brown v. DIRECTV, LLC

• Decision Date: 26 June 2013
• Docket Number: Case No. CV 12-08382 DMG (Ex)
• Court: U.S. District Court — Central District of California
• Parties: JOSHUA D. BROWN, on behalf of himself and all others similarly situated, Plaintiff, v. DIRECTV, LLC, THE CMI GROUP, INC., THE CMI GROUP GP, LLC, and CREDIT MANAGEMENT, LLP, Defendants.

JOSHUA D. BROWN, on behalf of himself and all others similarly situated, Plaintiff,

v. DIRECTV, LLC, THE CMI GROUP, INC., THE CMI GROUP GP, LLC,and CREDIT MANAGEMENT, LLP, Defendants.

Case No. CV 12-08382 DMG (Ex)

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

DATED: June 26, 2013

ORDER RE DIRECTV'S MOTIONS TO COMPEL ARBITRATION

This matter is before the Court on Defendant DIRECTV, LLC's motions to compel arbitration. [Doc. ## 27, 68.] The Court held a hearing on June 21, 2013. After careful consideration of the parties' moving papers, exhibits, and arguments at the hearing, and for the reasons set forth below, the Court concludes that Plaintiff agreed to the arbitration provisions, the claims at issue fall within the scope of the arbitration provisions, and all the claims against DIRECTV are arbitrable. Accordingly, DIRECTV's motions are GRANTED.

I.PROCEDURAL BACKGROUND

On November 19, 2013, Plaintiff Joshua D. Brown, on behalf of himself and all others similarly situated, filed a First Amended Complaint ("FAC") against Defendants DIRECTV LLC ("DIRECTV"), The CMI Group, Inc., The CMI Group GP, LLC, and Credit Management, LLP, raising claims for violations of the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227 et seq. [Doc. # 17.] On December 18, 2012, DIRECTV filed its first motion to compel arbitration ("TCPA Mot."). [Doc. # 27.] On January 16, 2013, Brown filed his opposition [Doc. # 45], and on January 30, 2013, DIRECTV filed a reply.

On December 31, 2012, Brown filed a motion for leave to amend his FAC, which the Court granted on March 13, 2013 [Doc. # 65.] On March 18, 2013, Brown filed the operative Second Amended Complaint ("SAC"), retaining the prior TCPA claim and adding a claim under the Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code § 17200 et seq. [Doc. # 67.] On February 11, 2013, Brown filed a motion to take arbitration-related discovery and subsequently to file a surreply to DIRECTV's motion to compel. [Doc. # 56.] The Court granted this motion on March 13, 2013, permitting both a surreply and a response from DIRECTV. Brown filed a surreply on May 13, 2013 [Doc. # 70], and DIRECTV filed a response on May 20, 2013 [Doc. # 72].

On April 10, 2013, DIRECTV filed a second motion to compel arbitration, in response to the UCL claim raised in the SAC ("UCL Mot."). [Doc. # 68.] On May 10, 2013, Brown filed an opposition [Doc. # 69], and on May 17, 2013, DIRECTV filed a reply [Doc. # 71].

II.FACTUAL BACKGROUND

On August 3, 2008, Brown completed an online order for DIRECTV's satellite television service. (Decl. of Joshua D. Brown ("Brown Decl.") ¶ 4 [Doc. # 45-1]; Decl. of Shoshana B. Riss ("Riss Decl.") ¶ 2 [Doc. # 47-1].) Before finalizing orders on theDIRECTV website, all new subscribers are directed to a "Checkout: Payment" page, where they must confirm their payment. (DIRECTV Resp. to Interrogatory No. 1 at 5 (Decl. of Daniel M. Hutchison ("Hutchison Decl."), Ex. C) [Doc. # 70-1]. At the payment page, under the phrase "DIRECTV Terms and Conditions," appears a text box with three bullet points. The text box also contains a scroll bar, indicating that there is more information not present on the screen. (Id.; Riss Decl. ¶¶ 3, 5, Ex. A.)¹ The terms include, inter alia, the following bullet point:

You and DIRECTV® agree that any dispute arising under or relating to your agreements or service with DIRECTV®, which cannot be resolved informally, will be resolved through binding arbitration as fully set forth in the DIRECTV® Customer Agreement (a copy is sent with your first bill but may also be viewed at DIRECTV.com). Arbitration means you waive your right to a jury trial.

(Riss Decl., Ex. A, at 5.) Before completing the payment process, a customer must check a box affirming that he "ha[s] read and accept[s] all of the terms and conditions above, including the DIRECTV® Customer Agreement" ("the Agreement"). (Riss Decl., Ex. A.) During checkout, the title of the Agreement appears as a hyperlink, which directs the customer to the text of the Agreement itself. (Hutchison Decl., Ex. C at 6). The customer cannot complete the process without checking the box. (Id.) Brown does not recall reading the Customer Agreement or seeing the arbitration clause during checkout. (Brown Decl. ¶ 6; Opp'n at 3 (arguing that the Agreement was only sent with the first bill and did not appear online).)

On August 5, 2008, DIRECTV technicians installed equipment at Brown's residence. On the same date, Brown signed a form entitled "DIRECTV Equipment LeaseAddendum" ("Equipment Lease"). (Hutchison Decl, Ex. E.) The Equipment Lease includes the following clause:

ARBITRATION. You and DIRECTV agree that both parties will resolve any dispute arising under this Equipment Lease Addendum, the DIRECTV Customer Agreement or any other addendum thereto, or regarding your DIRECTV programming service, through binding arbitration as fully set forth in the DIRECTV Customer Agreement.

(Id.) On August 6, 2008, DIRECTV mailed Brown his first bill, which included a copy of the Agreement. (Decl. of Valerie W. McCarthy ("McCarthy Decl.") ¶ 3, 11 [Doc. # 27-2].)

The arbitration clause of the Customer Agreement² provides, in relevant part, as follows:

9. RESOLVING DISPUTES

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:

* * *

(b) Formal Resolution. Except as provided in Section 9(d), if we cannot resolve a Claim informally, any Claim either of us asserts will beresolved 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 (referred to as the "JAMS Rules") and under the rules set forth in this Agreement. If there is a conflict between JAMS Rules and the rules set forth in this Agreement, the rules set forth in this Agreement will govern. ARBITRATION MEANS THAT YOU WAIVE YOUR RIGHT TO A JURY TRIAL. . . . If you decide to initiate arbitration, . . . [u]nless we agree to pay your fee for you, you only need to pay an arbitration initiation fee equal to [the filing fee required to initiate a lawsuit in the appropriate court of law in your state], not to exceed $125; we agree to pay any additional fee or deposit required by JAMS to initiate your arbitration. We also agree to pay the costs of the arbitration proceeding. Other fees, such as attorney's fees and expenses of travel to the arbitration will be paid in accordance with JAMS Rules. The arbitration will be held at a location in your hometown area unless you and we both agree to another location or telephonic arbitration. . . .

* * *

(d) Exceptions. Notwithstanding the foregoing . . . any dispute involving a violation of the Communications Act of 1934, 47 U.S.C. § 605, the Digital Millennium Copyright Act, 17 U.S.C. § 1201, the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510-2521 or any other statement or law governing theft of service, may be decided only by a court of competent jurisdiction.

(McCarthy Decl., Ex. A, at 8-9.)

Brown attests that he cancelled his DIRECTV service in July 2009. (Brown Decl. ¶ 9.) DIRECTV attests that Brown stopped paying for service in July 2009, but continued to receive service until October 2009. (McCarthy Decl. ¶ 14.) Some time after October 2009, DIRECTV transferred Brown's account to Defendant CMI Group for collection action. (Id. ¶ 15.) Brown attests that between January 18, 2013 and March 3, 2013, he received automated phone calls from Defendant Credit Management, L.P.(Brown Decl. ¶ 14.) Those phone calls form the underlying factual basis for Plaintiff's claims.

III.LEGAL STANDARD

The Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, provides that written provisions to arbitrate disputes are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." AT&T Mobility LLC v. Concepcion, __ U.S. __, 131 S. Ct. 1740, 1744, 179 L. Ed. 2d 742 (2011) (quoting 9 U.S.C. § 2) (internal quotation marks omitted). This provision reflects "both a 'liberal federal policy favoring arbitration' and the 'fundamental principle that arbitration is a matter of contract.'" Id. at 1745 (quoting Rent-A-Center, West, Inc. v. Jackson, __ U.S. __, 130 S.Ct. 2772, 2776, 177 L.Ed.2d 403 (2010); 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)) (internal quotation marks omitted).

As long as an arbitration clause is not itself invalid under "generally applicable contract defenses, such as fraud, duress, or unconscionability," id. at 1746 (quoting Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116 S.Ct. 1652, 134 L.Ed.2d 902 (1996)) (internal quotation marks omitted) (citing Perry v. Thomas, 482 U.S. 483, 492-93 n.9, 107 S.Ct. 2520, 96 L.Ed.2d 426 (1987)), it must be enforced according to its terms, id. at 1745 (citing Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478, 109 S.Ct. 1248, 103 L.Ed.2d 488 (1989)). See also Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218, 105 S.Ct. 1238, 84 L.Ed.2d 158 (1985) ("By its terms, the [FAA] leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." (citing 9 U.S.C. §§ 3, 4)). Thus, this Court's role under the FAA is limited to determining "(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Kilgore v. Keybank, Nat. Ass'n, __ F.3d __, No. 09-16703, 2013 WL 1458876(9th Cir. 2013) (en banc) ("Kilgore II") (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)).

IV.DISCUSSION

A. Brown Assented to the Arbitration Clause

Brown argues that h...