In re Centurylink Sales Practices & Sec. Litig.

• Decision Date: 04 December 2020
• Docket Number: MDL No. 17-2795 (MJD/KMM)
• Parties: IN RE: CENTURYLINK SALES PRACTICES AND SECURITIES LITIGATION This Document Relates to Civil File Nos. 17-2832, 17-4613, 17-4614, 17-4615, 17-4616, 17-4617, 17-4618, 17-4619, 17-4622, 17-4943, 17-4944, 17-4945, 17-4947, 17-5046, 18-1562, 18-1565, 18-1572, 18-1573
• Court: U.S. District Court — District of Minnesota

IN RE: CENTURYLINK SALES PRACTICES AND SECURITIES LITIGATION This Document Relates to Civil File Nos. 17-2832, 17-4613, 17-4614, 17-4615, 17-4616, 17-4617, 17-4618, 17-4619, 17-4622, 17-4943, 17-4944, 17-4945, 17-4947, 17-5046, 18-1562, 18-1565, 18-1572, 18-1573

MDL No. 17-2795 (MJD/KMM)

UNITED STATES DISTRICT COURT DISTRICT OF MINNESOTA

December 4, 2020

MEMORANDUM OF LAW & ORDER

Carolyn G. Anderson, Brian C. Gudmundson, Hart L. Robinovitch, and Michael J. Laird, Zimmerman Reed LLP, Plaintiffs' Interim Co- Lead and Liaison Counsel; Mark M. O'Mara, Alyssa J. Flood, and Caitlin Reese, O'Mara Law Group, and Mark J. Geragos and Benjamin J. Meiselas, Geragos & Geragos, APC, Plaintiffs' Interim Co-Lead Counsel; Daniel C. Hedlund and Michelle J. Looby, Gustafson Gluek PLLC, Plaintiffs' Executive Committee Chair; Richard M. Hagstrom and Anne T. Regan, Hellmuth & Johnson, PLLC, Roxanne Barton Conlin, Roxanne Conlin & Associates, PC, and Francois M. Blaudeau, W. Lewis Garrison, Jr., Christopher B. Hood, and James F. McDonough, III, Heninger Garrison Davis, LLC, Plaintiffs' Executive Committee; and T. Ryan Langley, Hodge & Langley Law Firm, P.C., Michael Fuller, Olsen Daines PC, Brandon C. Fernald, Fernald Law Group LLP, Bonner C. Walsh, Walsh PLLC, Alfred M. Sanchez, and Orin Kurtz, Gardy & Notis, LLP, Counsel for Plaintiffs and the Proposed Class.

Douglas P. Lobel, David A. Vogel, and Jeffrey M. Gutkin, Cooley LLP; Carolyn J. Fairless, Michael T. Williams, Andrew Unthank, and Theresa Wardon Benz, Wheeler Trigg O'Donnell LLP; and William A. McNab and David M. Aafedt, Winthrop & Weinstine, P.A., and Jerry W. Blackwell, Blackwell Burke P.A., Counsel for Defendant CenturyLink, Inc. and the Proposed Intervenors.

Warren D. Postman and Ashley C. Keller, Keller Lenkner LLC; and Robert J. Gilbertson, Samuel J. Clark, Faris Rashid, and Virginia R. McCalmont, Greene Espel PLLP; Counsel for Proposed Intervenors Keisha Covington, Daniel Sokey, Tiffany Van Riper, James Watkins, Jaclyn Finafrock, and Kelly Johnson.

I. INTRODUCTION

This matter is before the Court on the Proposed Intervenors and Movants' Motion to Intervene, Compel Arbitration, and Stay Proceedings. [Docket No. 596] The Court heard oral argument on June 23, 2020, and the parties provided further information on the status of the parties during the November 19, 2020 final approval hearing.

II. BACKGROUND

A. Movants

Movants Keisha Covington, Daniel Sokey, Tiffany Van Riper, James Watkins, Jaclyn Finafrock, and Kelly Johnson ("Movants") are current or former CenturyLink, Inc. ("CenturyLink") customers who wish to resolve their consumer contract disputes with CenturyLink through individual arbitration. (Covington Decl. ¶¶ 3-5; Sokey Decl. ¶¶ 3-5; Van Riper Decl. ¶¶ 3-5; Watkins Decl. ¶¶ 3-5; Finafrock Decl. ¶¶ 3-5; Johnson ¶¶ 3-5.) Movants aver that theyhave a right to individually arbitrate their claims against CenturyLink under their contract with CenturyLink. (Covington Decl. ¶ 4; Sokey Decl. ¶ 4; Van Riper Decl. ¶ 4; Watkins Decl. ¶ 4; Finafrock Decl. ¶ 4; Johnson ¶ 4.) All Movants are represented by the law firm of Keller Lenkner LLC ("Keller").

B. Keller's Interactions with CenturyLink and Settlement of the Consumer MDL

The relevant background regarding Keller's interactions with CenturyLink and the settlement of this consumer portion of the MDL is set forth in detail in the Court's Order denying CenturyLink's motion to disqualify Keller. See In re CenturyLink Sales Practices & Sec. Litig., No. CV 17-2832, 2020 WL 3513547, at *1-5 (D. Minn. June 29, 2020).

In December 2019, Keller submitted 1,000 simultaneous arbitration demands against CenturyLink to the AAA on behalf of a subset of its CenturyLink claimant clients. (Postman Decl. ¶¶ 26, 59; Unthank Decl., Ex. R.) Movants Covington, Sokey, Van Riper, and Watkins were among those claimants. (Belka Decl. ¶ 24; Keller Decl., Ex. 3.) Movants Jaclyn Finafrock and Kelly Johnson were not listed.

On January 9, CenturyLink informed Keller that it was exercising its contractual right to terminate and revoke the arbitration contracts. (UnthankDecl. ¶ 72; Unthank Decl., Ex. Y.) CenturyLink stated that Movants had "breach[ed]" the arbitration clause in their contracts with CenturyLink and that CenturyLink "is revoking and terminating your Arbitration Agreement effective immediately." (Unthank Decl., Ex. Y.) The letter further stated that the remainder of the contracts between CenturyLink and the consumers, apart from the arbitration clause in Paragraph 17, remained in place. (Id. ("If you are a current CenturyLink customer, your services and subscriber agreements (apart from your Arbitration Agreement) will remain in effect. CenturyLink reserves all rights and remedies under your applicable contracts.").)

C. Arbitration Contract

Movants seek to compel arbitration under the arbitration provision in Section 17 of the CenturyLink® High-Speed Internet Subscriber Agreement, V52.091819 ("Internet Agreement"), entitled the "Dispute Resolution and Arbitration" provision (the "Arbitration Contract"). (Keller Decl., Ex. 1 § 17.)

According to Keller, each Movant accepted a CenturyLink service agreement containing the following arbitration clause:

(a) Arbitration Terms. You agree that any dispute or claim arising out of or relating in any way to the Services, Equipment, Software or this Agreement (whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory), will be resolved by binding arbitration. This means that the arbitrator, and not anycourt, shall have exclusive authority to resolve any dispute or claim arising under or relating to (among other subjects) the interpretation, applicability, enforceability or formation of this Agreement, including but not limited to any dispute or claim that all of this Agreement, or any part of this Agreement other than this arbitration provision, is void, voidable, lacking in consideration, illusory, invalid, unconscionable, or for any reason unenforceable. The sole exceptions to arbitration are that either party may pursue claims: (1) in small claims court that are within the scope of its jurisdiction, provided the matter remains in such court and advances only individual (non-class, non-representative, non-consolidated) claims; and (2) in court if they relate solely to the collection of any debts you owe to CenturyLink. This section shall survive the termination of this Agreement to the greatest extent allowed by law. . . .

(i) Arbitration Procedures. Before commencing arbitration you must first present any claim or dispute to CenturyLink in writing to allow CenturyLink the opportunity to resolve the dispute. If the claim or dispute is not resolved within 60 days, you may request arbitration. The arbitration shall be conducted by the American Arbitration Association ("AAA"). . . . .

(ii) Costs of Arbitration. The party requesting arbitration must pay the applicable AAA filing fee, except that if you are an individual using the Services for household or personal use and you initiate arbitration against CenturyLink: (1) you must pay one-half the arbitrator's fees up to a maximum of $125 if your claim does not exceed $10,000 . . . . . . . . If any party files a judicial or administrative action asserting a claim that is subject to arbitration and another party successfully stays such action or compels arbitration, the party filing that action must pay the other party's costs and expenses incurred in seeking such stay or compelling arbitration, including reasonable attorneys' fees.. . .

(b) Waiver of Jury and Class Action. By this Agreement, both you and CenturyLink are waiving rights to litigate claims or disputes in court (except small claims court as set forth in paragraph (a) above). Both you and CenturyLink also waive the right to a jury trial on your respective claims, and waive any right to pursue any claims on a class or consolidated basis or in a representative capacity.

(Keller Decl. ¶ 4; Arbitration Contract ¶ 17.)

The contract between Movants and CenturyLink also provides that it will be governed by Colorado law. (Arbitration Contract ¶ 17(a)(i).)

CenturyLink considers the pre-filing presentation of claim requirement an important provision of the Arbitration Contract because it provides CenturyLink the opportunity to evaluate and resolve claims before incurring the costs of legal proceedings. (Belka Decl. ¶ 6.) CenturyLink avers that the pre-filing dispute resolution procedures resolve most customers' issues. (Belka Decl. ¶¶ 10-12.)

D. Movants' Current Status

During the November 19, 2020 final approval hearing, Keller informed the Court that Movants Covington, Sokey, Watkins, Finafrock, and Johnson had opted out of the Settlement Class to continue to pursue their arbitration claims. Movant Van Riper stopped responding to Keller and did not submit a valid opt-out request. As Keller previously admitted, many clients who initially wantedKeller to arbitrate their claims against CenturyLink later changed their mind and decided to join in the class settlement. ([Docket No. 715] Postman Decl. ¶ 42.)

III. MOTION TO INTERVENE

The Court grants Movants' motion to intervene to allow limited intervention solely for the purpose of litigating their motion to compel arbitration. CenturyLink agrees to this limited intervention.

A. Consideration of Movants' Motion

The Court concludes that it may properly consider Movants' motion to intervene. First, the Court concludes that Movants' motion to intervene is timely. Movants filed their motion less than two months after the Court entered the Preliminary Approval Order enjoining Movants from arbitrating their claims against CenturyLink.

Second, the Court rejects Plaintiffs' argument that the temporary injunction in the Court's Preliminary Approval Order prohibits Movants from intervening. The Preliminary Approval Order issued by the Court in this action temporarily enjoined putative Settlement Class Members from "filing, commencing,...