Katz v. P'ship
| Decision Date | 12 December 2013 |
| Docket Number | 12 CV 9193 (VB) |
| Parties | MICHAEL A. KATZ, individually and on behalf of all others similarly situated, Plaintiff, v. CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, Defendant. |
| Court | U.S. District Court — Southern District of New York |
Plaintiff Michael Katz brings this putative class action against defendant Cellco Partnership, doing business as Verizon Wireless ("Verizon"), asserting claims under New York state law for breach of contract and consumer fraud based on an administrative charge assessed by Verizon. Plaintiff also seeks a declaratory judgment that the arbitration agreement included in Verizon's customer agreement with plaintiff is not enforceable with respect to plaintiff's claims because, plaintiff argues, compelling plaintiff to arbitrate pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1-16, is an improper delegation of Article III power to a non-Article III forum in violation of the United States Constitution.
Now pending are plaintiff's motion for partial summary judgment on his declaratory judgment claim (Doc. #17), and defendant's cross-motion to compel individual arbitration. (Doc. #21). For the following reasons, plaintiff's motion is DENIED, and defendant's motion is GRANTED.
The Court has subject matter jurisdiction pursuant to the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332(d).
The parties have submitted briefs, statements of facts, and declarations with supporting exhibits, which reflect the following factual background.
Verizon provides wireless telephone service to more than one million customers with New York State area codes. These customers have been charged and have paid a certain "Administrative Charge." The parties agree plaintiff Michael Katz was one such New York customer from at least February 2001 until at least July 2012.
According to the amended complaint, the Administrative Charge is a monthly per-line charge ranging from $0.40 when it was first implemented in October 2005 to $0.99 when this action was commenced. Plaintiff alleges Verizon's customer agreements, monthly bills, and other customer information imply the Administrative Charge is being imposed for the recovery of government-mandated or government-related costs. Plaintiff alleges the Administrative Charge is not, however, imposed for those reasons - rather, it is a discretionary pass-through of Verizon's general costs. In effect, plaintiff argues, the Administrative Charge is a concealed rate increase.
Plaintiff asserts New York state law claims for breach of contract and consumer fraud and seeks to represent a class of Verizon's New York customers.
By motion for summary judgment on his declaratory judgment claim, plaintiff "seeks a declaration that the application of the FAA to Plaintiff's state law claims violates Article III of the United States Constitution, and thus that Verizon's Arbitration Agreement is not enforceable with respect to Plaintiff's claims and Plaintiff cannot be judicially compelled to arbitrate those claims."
Defendant's cross-motion to compel individual arbitration is based on the following provisions in plaintiff's February 28, 2011, Verizon customer agreement:1
Defendant's statement of facts asserts plaintiff agreed to the above-quoted arbitration agreement and the Verizon customer agreement dated February 28, 2011, as a whole, when he purchased a new cell phone on February 28, 2011, and agreed to a twenty-four month term of service. Defendant contends plaintiff signed a statement as part of that agreement, which provides in relevant part:
I AGREE TO THE CURRENT VERIZON WIRELESS CUSTOMER AGREEMENT . . . . I UNDERSTAND THAT I AM AGREEING TO . . . SETTLEMENT OF DISPUTES BY ARBITRATION AND OTHER MEANS INSTEAD OF JURY TRIALS.
Plaintiff does not dispute that his signature appears at the end of the document bearing this statement, but otherwise claims he is "unable to respond to the truth of the matters asserted" by Verizon including the matters asserted in the document. Because he does not dispute he purchased a phone on February 28, 2011, or deny he signed an agreement for wireless services for a term of twenty-four months, the Court deems these facts admitted. Additionally, plaintiff agrees his claims are arbitrable pursuant to the arbitration agreement in his customer agreement if his declaratory judgment claim fails.
"In the context of motions to compel arbitration brought under the Federal Arbitration Act, the court applies a standard similar to that applicable for a motion for summary judgment." Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003) (citations omitted). Accordingly, the Court must grant a motion to compel arbitration if the pleadings, discovery materials before the Court, and any affidavits show there is no genuine issue as to any material fact and it is clear the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
A fact is material when it are not material and thus cannot preclude summary judgment. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
A dispute regarding a material fact is genuine if there is sufficient evidence upon which a reasonable jury could return a verdict for the nonmoving party. See id. The Court "is not to resolve disputed issues of fact but to assess whether there are any factual issues to be tried." Wilson v. Nw. Mut. Ins. Co., 625 F.3d 54, 60 (2d Cir. 2010) (citation omitted). It is the moving party's burden to establish the absence of any genuine issue of material fact. Zalaski v. City of Bridgeport Police Dep't, 613 F.3d 336, 340 (2d Cir. 2010).
"A party to an arbitration agreement seeking to avoid arbitration generally bears the burden of showing the agreement to be inapplicable or invalid." Harrington v. Atl. Sounding Co., Inc., 602 F.3d 113, 124 (2d Cir. 2010) (citing Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91-92 (2000)).
"The FAA was enacted in 1925 in response to widespread judicial hostility to arbitration agreements." AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1745 (2011). Section 2 of the FAA declares that arbitration agreements are "valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. "[T]he FAA does not require parties to arbitrate when they have not agreed to do so," Volt Info. Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989); however, "any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). Thus, the FAA reflects "both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract." AT&T Mobility LLC v. Concepcion, 131 S.Ct. at 1745 (internal quotation marks and citations omitted).
Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. 662, 682 (2010) (quoting Volt Info. Scis., Inc. v. Bd. of Trustees, 489 U.S. at 479) (internal citations omitted). "This is because an arbitrator derives his or her powers from the parties' agreement to forgo the legal process and submit their disputes to private dispute resolution." Id.
Under Section 4 of the FAA, any party to an arbitration agreement may seek an order directing the parties to arbitrate in accordance with their agreement. See 9 U.S.C. § 4 ().
Whether the parties have agreed to submit their dispute to arbitration is a question for the Court to decide. See Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 130 S. Ct. 2847, 2855 (2010). Here, plaintiff concedes his state-law claims are arbitrable.2 Thus, unless there is some reason the Court may not enforce the parties' agreement to arbitrate, the Court must direct the parties to arbitrate plaintiff's claims in accordance with their agreement. See 9 U.S.C. §§ 3-4.
Plaintiff argues the arbitration agreement should not be enforced because application of the FAA to his state law claims violates Article III of the United States...
To continue reading
Request your trial