Chruby v. Global Tel*link Corp.
| Decision Date | 28 September 2017 |
| Docket Number | CASE NO. 5:15-CV-5136 |
| Parties | WALTER CHRUBY, et al. PLAINTIFFS v. GLOBAL TEL*LINK CORPORATION DEFENDANT |
| Court | U.S. District Court — Western District of Arkansas |
Currently before the Court are:
For the reasons given below, both Motions are DENIED.
This case is one of four lawsuits on the topic of inmate calling services ("ICS") currently pending in this Court. Two of them are concerned with interstate calls, and two of them are concerned with intrastate calls. This is one of the intrastate cases. The Defendant in this case, GTL, is also the defendant in one of the interstate cases. A company called Securus Technologies, Inc. ("Securus") is the defendant in the other two cases.
In the instant case, Plaintiffs filed their original Complaint (Doc. 1) in this Court on June 12, 2015, followed by an Amended Complaint (Doc. 25) on August 28 of that same year. On May 17, 2016, the Court entered an Order (Doc. 46) granting in part and denying in part GTL's Motion to Dismiss (Doc. 28). Soon thereafter, venue of a related case in the Eastern District of Pennsylvania was transferred to this Court, and on July 25 of that year, this Court entered an Order consolidating that case with this one. See Doc. 51.
This case, like all of the ICS cases, was brought as a putative class action. As in the GTL interstate case, Plaintiffs "allege that GTL obtained exclusive contracts to provide telephone services to inmates at correctional facilities throughout the United States in exchange for the payment of kickbacks to those correctional facilities known as 'site commissions.'" In re Global Tel*Link Corp. ICS Litig., 2017 WL 471571, at *1 (W.D. Ark. Feb. 3, 2017). And as in the GTL interstate case, Plaintiffs further allege "that GTL charged them excessive rates to cover the costs of site commissions it paid to correctional facilities, and charged them deposit fees that unreasonably exceeded the cost of processing deposits into prepaid accounts." Id.
In the GTL interstate case, the plaintiffs sought to recover these allegedly unjust rates and fees through two claims for relief—one brought under the Federal Communications Act ("FCA") through 47 U.S.C. §§ 201(b) and 206, and one brought under the common-law doctrine of unjust enrichment. See id. The plaintiffs in the Securus interstate case made substantially identical allegations and asserted the same two causes of action. See Mojica v. Securus Techs., Inc., 2017 WL 470910, at *1 (W.D. Ark. Feb. 3, 2017). In each interstate case, the Court eventually certified one nationwide class for the FCA claims and several multi-state subclasses for the unjust enrichment claims. See id. at *9-*10; In re Global Tel*Link Corp. ICS Litig., 2017 WL 471571, at *10-*11 (W.D. Ark. Feb. 3, 2017).
However, in June of 2017, the Court of Appeals for the D.C. Circuit issued an opinion in a separate proceeding that this Court was concerned might be binding authority and might undermine this Court's justification for certifying the FCA classes. See Global Tel*Link v. FCC, 859 F.3d 39 (D.C. Cir. 2017), amended and superseded by Global Tel*Link v. FCC, 866 F.3d 397 (D.C. Cir. 2017). Anticipating that a petition for rehearing en banc would be filed in that D.C. Circuit case, this Court entered administrative stays of both interstate cases pending the resolution of any such petition. The expected petition was indeed filed on July 28, 2017. It was denied only earlier this week on September 26, see D.C. Cir. Case No. 15-1461, Doc. 1694853, but this Court has not yet lifted the stays in the interstate cases. As for the Securus intrastate case, it was not filed until January of this year, and discovery is ongoing. No motion for class certification has yet been filed in that case.
In the instant case, Plaintiffs originally brought their claims under the FCA, the common-law doctrine of unjust enrichment, the Arkansas Deceptive Trade Practices Act ("ADTPA"), and California's Unfair Competition Law ("UCL"). However, the Court dismissed Plaintiffs' FCA claims without prejudice, essentially on the grounds that the FCA does not apply to the sort of purely intrastate communications services described in the Amended Complaint. See Doc. 46, pp. 5-8. The case that was subsequently consolidated with the instant one also brought claims under the Pennsylvania Unfair Trade Practices and Consumer Protection Law ("UTPCPL").
On February 17 of this year, Plaintiffs filed their Motion for Class Certification, Appointment of Class Representatives, and Appointment of Class Counsel (Doc. 63). A couple of weeks later, on March 1, 2017, GTL filed its Motion to Compel Arbitration and Stay the Proceedings (Doc. 67). Both Motions have been extensively briefed, and on May 10 of this year the Court heard oral argument on them for several hours. Accordingly, both Motions are ripe for decision. Below, the Court will address GTL's arbitration Motion first. Then, the Court will take up Plaintiffs' class certification Motion.
GTL has moved to compel four of the Plaintiffs to arbitrate their claims: Shondra Caldwell, Jacqueline Jacobs, Stefanie Veon, and Stephen Orosz, Sr. (collectively, "the Arbitrating Plaintiffs"). The Federal Arbitration Act ("FAA") provides that "[a] written provision in . . . a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon any grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The Supreme Court has repeatedlyrecognized this to be the enunciation of a "liberal federal policy favoring arbitration." AT&T Mobility LLC v. Conception, 566 U.S. 333, 339 (2011) (quoting Moses H. Cone Mem. Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)).
However, the Arbitrating Plaintiffs contend that here, GTL has waived any right it may have to arbitrate their claims. "A party waives its right to arbitration if it '(1) knew of an existing right to arbitration; (2) acted inconsistently with that right; and (3) prejudiced the other party by these inconsistent acts.'" Messina v. N. Cent. Distrib., Inc., 821 F.3d 1047, 1050 (8th Cir. 2016) (quoting Lewallen v. Green Tree Servicing, LLC, 487 F.3d 1085, 1090 (8th Cir. 2007)). The Arbitrating Plaintiffs bear the burden of demonstrating that these elements are satisfied here. See Stifel, Nicolaus & Co. Inc. v. Freeman, 924 F.2d 157, 158 (8th Cir. 1991). Whether these elements are met is an issue for this Court—not an arbitrator—to decide. See N & D Fashions, Inc. v. DHJ Indus., Inc., 548 F.2d 722, 728 (8th Cir. 1976).
All three elements of waiver are easily satisfied with respect to Ms. Caldwell, Ms. Jacobs, and Ms. Veon. GTL contends that all three of these individuals agreed to arbitrate their claims before any of them filed their instant lawsuits, see Doc. 68, p. 7, so GTL surely knew of its right to arbitrate given that it possessed these arbitration agreements, see Messina, 821 F.3d at 1050.1 Yet, GTL waited well over a year and a half after the instantlitigation began before attempting to compel these Plaintiffs to arbitrate their claims. In the meantime, GTL forced these Plaintiffs to defend against a motion before the Multidistrict Litigation Panel to transfer all related actions to the Eastern District of Pennsylvania, see E.D. Pa. Case No. 2:15-cv-2197, Doc. 10, pp. 1, 3, and forced Ms. Jacobs and Ms. Caldwell to defend against a motion here in the Western District of Arkansas that sought dismissal of their claims on the merits, see W.D. Ark. Case No. 5:15-cv-5136, Doc. 28.
A party acts inconsistently with its right to arbitration "if it substantially invokes the litigation machinery before asserting its arbitration right, when, for example, it . . . fails to move to compel arbitration and stay litigation in a timely manner." Messina, 821 F.3d at 1050 (internal quotation marks and alterations omitted). And "[p]rejudice from a failure to assert an arbitration right occurs when, for example, parties . . . litigate substantial issues on the merits, or when compelling arbitration would require a duplication of efforts," or when a party is "forced to defend against [a] motion to transfer venue." See id. at 1051. The aforementioned motion to dismiss was granted with respect to Plaintiffs' claims under the FCA, and denied with respect to Plaintiffs' state-law claims—rulings which established law of the case for all of the subsequently consolidated Plaintiffs as well. Seeking "an immediate and total victory in the parties' dispute" in federal court, and then only subsequently seeking to compel arbitration smacks of "want[ing] to see how the case was going in federal district court before deciding whether it would be better off there or inarbitration"—a form of "heads I win, tails you lose, which is the worst possible reason for failing to move for arbitration sooner than it did." See Hooper v. Advance Am., Cash Advance Ctrs. of Missouri, Inc., 589 F.3d 917, 922 (8th Cir. ...
To continue reading
Request your trial