In re Directv Early Cancellation Fee Mktg. & Sales Practices Litig., Case No. ML 09–2093 AG (ANx).

• Decision Date: 06 September 2011
• Docket Number: Case No. ML 09–2093 AG (ANx).
• Citation: 810 F.Supp.2d 1060
• Parties: In re DIRECTV EARLY CANCELLATION FEE MARKETING AND SALES PRACTICES LITIGATION.This document relates to: Plaintiffs Annette Kahaly, John Mulea, Maureen Van Meter, Ira Boshnack, Sean and Tara Murray, Louis Wilson and Carolyn Forbes, Tracy Twyman, Keith and Jana Harper, Eben Paguirigan, Paul and Karen Brice, Joseph Lombardi, Kathleen O'Brien, Sandra Johannes, Gary Smith, Christine Slakans, Christine Schuessler, and Roberta and Edward Pifer.
• Court: U.S. District Court — Central District of California

810 F.Supp.2d 1060

In re DIRECTV EARLY CANCELLATION FEE MARKETING AND SALES PRACTICES LITIGATION.This document relates to: Plaintiffs Annette Kahaly, John Mulea, Maureen Van Meter, Ira Boshnack, Sean and Tara Murray, Louis Wilson and Carolyn Forbes, Tracy Twyman, Keith and Jana Harper, Eben Paguirigan, Paul and Karen Brice, Joseph Lombardi, Kathleen O'Brien, Sandra Johannes, Gary Smith, Christine Slakans, Christine Schuessler, and Roberta and Edward Pifer.

Case No. ML 09–2093 AG (ANx).

United States District Court, C.D. California.

Sept. 6, 2011.

Sarah P. Weber, Blake M. Harper, Lindsay J. Mertens, Hulett Harper Stewart LLP, San Diego, CA, Rosemary M. Rivas, Finkelstein Thompson LLP, Kristen Law Sagafi, Lieff Cabraser Heimann and Bernstein, San Francisco, CA, Joseph F. Rice, Motley Rice LLC, William E. Applegate, IV, Yarborough Applegate LLP, Mt. Pleasant, SC, J. Paul Gignac, Arias Ozzello and Gignac LLP, Santa Barbara, CA, for Plaintiffs/Defendant.

Danielle A. Stoumbos, Finkelstein Thompson LLP, Nicole D. Reynolds, Robert S. Green, Green Welling LLP, Ingrid M. Evans, The Evans Law Firm, Jennifer Lynn McIntosh, Waters Kraus & Paul, San Francisco, CA, Vincent Ian Parrett, William S. Norton, Motley Rice LLC, Mt. Pleasant, SC, Helen U. Kim, Kalcheim Law Group, Los Angeles, CA, for Plaintiffs.

Alfredo Torrijos, Brian S. Kabateck, Richard L. Kellner, Kabateck Brown Kellner, LLP, Melissa D. Ingalls, Michael E. Baumann, Robyn Eileen Bladow, Shaun Paisley, Kevin M. Askew, Kirkland & Ellis LLP, Los Angeles, CA, Anthony L. Vitullo, Fee Smith Sharp and Vitullo LLP, Dallas, TX, Barbara Dawson, Snell & Wilmer, Phoenix, AZ, Beth E. Terrell, Terrell Marshall and Daudt PLLC, Michael E. Withey, Law Offices of Michael Withey, Seattle, WA, Brian Morris Knowles, Knowles Law Firm, Summerville, SC, Deirdre C. McGlinchey, McGlinchey Stafford PLLC, Monroe, LA, Douglas J. McNamara, Cohen Milstein Sellers and Toll PLLC, Douglas G. Thompson, Tracy D. Rezvani, Finkelstein Thompson LLP, Andrew N. Friedman, Whitney R. Case, Cohen Milstein Sellers & Toll PLLC, Washington, DC, Eric Stoppenhagen, Eric Stoppanhagen Law Offices, Jonathan D. Selbin, Lieff Cabraser Heimann & Bernstein, New York, NY, George K. Lang, Jamie E. Weiss, Jeffrey A. Leon, Michael J. Lotus, Paul M. Weiss, Freed & Weiss LLC, Chicago, IL, James E. Cecchi, Carella Byrne Bain Gilfillan Cecchi Stewart and Olstein, Roseland, NJ, Jennifer E. Johnsen, Gallivan White and Boyd, Greenville, SC, Jonathan Shub, Seeger Weiss LLP, Marc I. Machiz, Cohen Milstein Sellers & Toll PLLC, Philadelphia, PA, Nimish R. Desai, Lieff Cabraser Heimann & Bernstein LLP, Joshua G. Konecky, Todd M. Schneider, Schneider Wallace Cottrell Brayton Konecky LLP, Tracy Tien, Finkelstein Thompson LLP, San Francisco, CA, Paul B. Mengedoth, Mengedoth Law Firm LLC, Scottsdale, AZ, Richard J. Burke, Richard J. Burke LLC, St. Louis, MO, Scott E. Brady, Bohrer Law Firm, Kevin Kleinpeter, Stephen Babcock, Babcock Law Firm, LLC, Baton Rouge, LA, William M. Sweetnam, Sweetnam LLC, Northbrook, IL, Tracy L. Rhodes, Vaughan & Evans, Cartersville, GA, Christa L. Collins, Christa L. Collins LLC, St. Petersburg, FL, Scott W. Weinstein, Morgan & Morgan PA, Fort Myers, FL, for Defendant.

ORDER DENYING MOTION TO RECONSIDER, GRANTING IN PART MOTION TO COMPEL, DENYING REQUEST FOR MORE DISCOVERY, AND ORDERING FURTHER BRIEFING

ANDREW J. GUILFORD, District Judge.

The Supreme Court's ruling in AT & T Mobility LLC v. Concepcion, –––U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) changes the arbitration landscape and thus alters the course of this case. This Court previously granted in part and denied in part a motion to compel arbitration filed by Defendant DirecTV (“Defendant”) in an order dated September 7, 2010 (“September 2010 Order”). After Concepcion appeared on the horizon, the Court stayed this multi-district litigation pending the outcome of that case.

Defendant DirecTV (“Defendant”) now brings a “Motion to Reconsider Under Local Rule 7–18 And Motion to Dismiss Or Stay Proceedings Pending Arbitration And To Compel Arbitration.” (Dkt. # 213.) The Court will break that down into three separate motions, all addressed in this Order. First, the Court addresses the Motion to Reconsider regarding the Court's ruling in the September 2010 Order denying Defendant's motion to compel as to certain Plaintiffs. Defendant has appealed the portion of the September 2010 Order it now asks the Court to reconsider, so the Court will address that procedural issue. Second, the Court addresses the Motion to Compel regarding Plaintiffs who were not included in Defendant's previous motion to compel. And third, the Court addresses the Motion to Dismiss Or Stay, which is applicable to any Plaintiffs who will now be subject to arbitration.

The Court ISSUES an indicative ruling regarding the Motion to Reconsider. The Court GRANTS in part and DENIES in part the Motion to Compel. The Court DENIES Plaintiffs' request for more discovery. The Court ORDERS further briefing on the Motion to Dismiss or Stay, as described in Section 4.

BACKGROUND

Plaintiffs' claims concern Defendant's alleged practice of charging improper early cancellation fees to their customers. The operative complaint is a Third Amended Class Action Complaint, filed on behalf of the named plaintiffs and a putative class.

Defendant's customers are subject to the DirecTV Customer Agreement (“Customer Agreement”). (Declaration of Valerie McCarthy, Ex. F.) Within the Customer Agreement is a section entitled “Resolving Disputes,” which provides for arbitration of most claims. (Id., Ex. F, § 9.) Section 9 is referred to by the parties and the Court as the “Arbitration Clause.” The Customer Agreement was revised in 2007, 2009, and 2010, but the relevant provisions are substantially identical. Various Plaintiffs are bound by different versions of the Customer Agreement. The Arbitration Clause also includes a class action waiver that is not severable from the rest of the clause, and a statement that if the class action waiver is unenforceable, then the arbitration clause is unenforceable. The Court addresses this in more detail later in this Order.

The first case in this multi-district litigation was filed in July 2008. The Judicial Panel on Multidistrict Litigation transferred to this Court the cases pending in various federal district courts. The parties have engaged in several rounds of motions regarding arbitration or dismissal of claims. In November 2010, the Court stayed litigation pending Concepcion. After the Supreme Court ruled on Concepcion, the Court lifted the stay in May 2011, and Defendant filed this Motion shortly thereafter. This Court, along with courts around the country, must now sort out the effect of Concepcion on previous rulings and on future rulings. See Gabe Friedman, Judges Grapple With Arbitration Clauses After Concepcion, Daily Journal, Aug. 5, 2011, at 1.

PRELIMINARY MATTERS

The parties have filed numerous objections. The Court has reviewed the objections filed here and relies only on admissible evidence. See F.T.C. v. Neovi, Inc., 598 F.Supp.2d 1104, 1118 n. 5 (S.D.Cal.2008) (“The parties have each filed evidentiary objections. However, in deciding the present motions, the Court has only relied upon admissible evidence.”); Schroeder v. San Diego Unified School Dist., No. 07cv1266–IEG (RBB), 2009 WL 1357414, at *2, n. 1 (S.D.Cal. May 13, 2009). See also, Doe v. Starbucks, Inc., No. SACV 08–0582 AG (CWx), 2009 WL 5183773, at *1 (C.D.Cal. Dec. 18, 2009).

The parties have also filed numerous supplemental recent decisions that address issues raised in the present Motions. The Court has reviewed the filings and has relied on them where necessary.

ANALYSIS

After Concepcion, Defendant now wants to compel arbitration with all Plaintiffs. Previously, Defendant chose not to seek to compel arbitration with some Plaintiffs because of clearly adverse state law. But the law has now changed. For purposes of these Motions, Plaintiffs fall into three categories. The procedural status of each Plaintiff affects what Defendant now asks the Court to do.

First, there are those Plaintiffs against whom Defendant previously did not seek to compel arbitration. These are Plaintiffs from California, New Jersey, Oregon, and Washington. Those states had rules that most consumer arbitration agreements with class action waivers were unenforceable, so Defendant determined that seeking to compel arbitration would be futile. Defendant now moves to compel arbitration with those Plaintiffs. Those are Plaintiffs Kahaly, Mulea, and Van Meter from California, Plaintiffs the Murrays from New Jersey, Plaintiffs Forbes and Wilson from Oregon, and Plaintiffs Twyman, the Harpers, Paguirigan, and the Brices from Washington.

Second, there are those Plaintiffs against whom Defendant previously moved to compel arbitration and the Court granted the motion to compel. Those are Plaintiffs Wilson and Jones from Louisiana, Plaintiff McBroom from South Carolina, and Plaintiff Folkerth from New York. These four Plaintiffs are not subject to the current Motion.

Third, there are those Plaintiffs against whom Defendant previously moved to compel arbitration and the Court denied the motion to compel. Some of these Plaintiffs filed suit in California although they are from other states. They are Plaintiffs O'Brien and Lombardi from Florida, Plaintiff Schuessler from Illinois, and Plaintiffs the Pifers from Virginia. The Court concluded that California law applied to those Plaintiffs and denied the motion to compel on that basis. For other Plaintiffs, the Court applied the law of their home state and determined that the Arbitration Clause was unenforceable. These Plaintiffs are Plaintiff Slakans from Arizona, Plaintiff Boshnack and Johannes from Florida, and Plaintiff Smith from Pennsylvania. Defendant asks the Court to reconsider its prior ruling as to these Plaintiffs.

The Court begins with the Motion to...