Pendergast v. Sprint Nextel Corp., No. 09-10612.

CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)
Writing for the CourtHull
Citation592 F.3d 1119
Decision Date04 January 2010
Docket NumberNo. 09-10612.
PartiesJames PENDERGAST, individually and on behalf of all others similarly situated, Plaintiff-Appellant, v. SPRINT NEXTEL CORPORATION, Defendant, Sprint Solutions, Inc., Sprint Spectrum L.P., Defendants-Appellees.
592 F.3d 1119
James PENDERGAST, individually and on behalf of all others similarly situated, Plaintiff-Appellant,
v.
SPRINT NEXTEL CORPORATION, Defendant,
Sprint Solutions, Inc., Sprint Spectrum L.P., Defendants-Appellees.
No. 09-10612.
United States Court of Appeals, Eleventh Circuit.
January 4, 2010.

[592 F.3d 1120]

Douglas F. Eaton, William Gregg Wolk, Homer Bonner & Delgado, Miami, FL, for Plaintiff-Appellant.

Michael Kovaka, Dow Lohnes, PLLC, Atlanta, GA, Daniel Donohoe Prichard, David E. Mills, Dow Lohnes, PLLC, Washington, DC, for Defendants.

Appeal from the United States District Court for the Southern District of Florida.

[592 F.3d 1121]

Before CARNES and HULL, Circuit Judges, and GOLDBERG,* Judge.

HULL, Circuit Judge:


CERTIFICATION FROM THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT TO THE FLORIDA SUPREME COURT, PURSUANT TO FLA. CONST. ART. V, § 3(b)(6). TO THE FLORIDA SUPREME COURT AND ITS HONORABLE JUSTICES:

Plaintiff James Pendergast appeals the district court's order granting the motion to compel arbitration filed by Defendants-Appellees Sprint Solutions, Inc. and Sprint Spectrum, L.P. (collectively, "Sprint"). Plaintiff is a former Sprint wireless customer and sued Sprint, on behalf of himself and a similarly-situated class, for allegedly charging improper roaming fees for calls placed within Sprint's coverage areas. The district court found the arbitration clause and class action waiver contained in the Terms and Conditions of Plaintiff's contract with Sprint were valid and enforceable and barred this class action.

On appeal, Plaintiff does not contest the arbitration clause itself but claims the class action waiver in Sprint's Terms and Conditions is both procedurally and substantively unconscionable under Florida law. And because Plaintiff's contract provides the arbitration and class action waiver clauses are not severable, Plaintiff claims the arbitration clause fails because the class action waiver is unenforceable.

After review and oral argument, we determine conflicting decisions in the Florida intermediate appellate courts require that we certify certain questions to the Florida Supreme Court. Before addressing those legal issues, we provide a full factual background of this dispute.

I. FACTUAL BACKGROUND

A. August 2001 Service Contract And Samsung SCH-8500 Phone

On August 2, 2001, Plaintiff purchased a Samsung SCH-8500 wireless telephone from Sprint and agreed to a two-year service contract for Sprint wireless telephone service.1 On August 4, 2001, Sprint shipped Plaintiff's initial Samsung telephone to his address in Miami, Florida. Plaintiff began using Sprint wireless services on August 6, 2001. Plaintiff's initial bill, dated September 3, 2001, reflects that he held one account with Sprint, numbered 0071106751-0, and used wireless services through one phone number, 786-859-6129.

Plaintiff's initial two-year contract included Sprint's then-applicable Terms and Conditions. The packaging material on the outside of the box, containing Plaintiff's Samsung SCH-8500 phone, stated the box contained a copy of Sprint's Terms and Conditions. And the currently applicable version of Sprint's Terms and Conditions was always available on Sprint's website. Furthermore, Plaintiff's initial invoice, dated September 3, 2001, stated: "You may obtain a copy of the Terms and Conditions of Service for your Sprint PCS Services by writing our Customer Care Center or visiting our Internet site."

The May 22, 2001 Terms and Conditions, which were in effect when Plaintiff first began his service with Sprint, provided (1) Sprint could change the terms of its agreement with Plaintiff, (2) Plaintiff would accept any such changes by using the phone on or after the effective date of

592 F.3d 1122

the changes, and (3) Plaintiff could terminate his service if he did not accept the changes:

Agreement. Your agreement ("Agreement") with [Sprint] and any of its affiliates doing business as Sprint PCS providing Sprint Personal Communications Services ("Services") to you is made up of these Terms and Conditions of Service ("Terms") and the Service Plan that we agree to provide to you . . . .

. . . .

Changes to Agreement. We may change this Agreement at any time (but see Service Plan). Any changes to the Terms are effective when we publish the revised Terms. If you use our Services or make any payment to us on or after the effective date of the changes, you accept the changes. If you do not accept the changes, you may terminate Services (but see Termination and Changing Service Plans). For purposes of the Agreement, "use" includes keeping the right to access the Sprint PCS Network by not terminating Services. You may not modify the Agreement except for your Service Plan (see Termination and Changing Service Plans).

Another section of the May 2001 Terms and Conditions provided Plaintiff with a 14-day period after activating his initial phone, during which he could terminate his service with Sprint without penalty:

Termination: Term Service Plans. If you are on a Term Service Plan (1) your ability to terminate Services before the end of the term is limited, (2) your ability to change to another Service Plan before the end of the term may be limited, and may result in a termination or activation fee, (3) you may be required to pay a termination fee. No termination fee is charged if you terminate a Term Service Plan within 14 days of activation of your Sprint PCS Phone.

Sprint's May 2001 Terms and Conditions had a clause limiting Plaintiff's potential remedies against Sprint, specifically barring incidental, consequential, punitive, or special damages:

NO CONSEQUENTIAL OR OTHER DAMAGES. UNDER NO CIRCUMSTANCES ARE WE LIABLE FOR ANY INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR SPECIAL DAMAGES OF ANY NATURE WHATSOEVER ARISING OUT OF OR IN CONNECTION WITH PROVIDING OR FAILING TO PROVIDE SERVICES, PHONES OR OTHER EQUIPMENT USED IN CONNECTION WITH THE SERVICES, INCLUDING, WITHOUT LIMITATION, LOST PROFITS, LOSS OF BUSINESS, OR COST OF REPLACEMENT PRODUCTS AND SERVICES. THIS SECTION SURVIVES TERMINATION OF THIS AGREEMENT.

(emphasis and capitalization in original).2 The May 2001 Terms and Conditions contained a clause requiring arbitration of most disputes:

ARBITRATION OF DISPUTES. ANY CLAIM, CONTROVERSY OR DISPUTE, WHETHER SOUNDING IN CONTRACT, STATUTE, OR TORT, INCLUDING FRAUD, MISREPRESENTATION, OR ANY OTHER LEGAL THEORY, RELATED DIRECTLY OR INDIRECTLY TO THE SERVICES . . . SHALL BE RESOLVED BY ARBITRATION AS PRESCRIBED IN THIS SECTION. THE FEDERAL ARBITRATION ACT, NOT STATE LAW, GOVERNS THE QUESTION OF WHETHER A

592 F.3d 1123

CLAIM IS SUBJECT TO ARBITRATION.

The May 22, 2001 Terms and Conditions did not include a class action waiver as part of the arbitration clause.3

Plaintiff's affidavit states that: "Once I had contracted with Sprint in 2001, I could not have left Sprint for another Carrier without rendering my cell phone(s) useless, as they only worked on Sprint's network." However, Sprint presented evidence that Plaintiff was permitted to sell his mobile phone(s) to others, through websites such as www.ebay.com, without interference from Sprint. And third parties who acquire used Sprint mobile phones can activate those phones and use them on the Sprint network.

B. February 2003—Samsung SPH-A460 Phone

On February 24, 2003, Plaintiff acquired and activated a new Samsung model SPH-A460 mobile phone in person at a Sprint store in Coral Gables, Florida. Plaintiff retained his original account number (0071106751-0) and original mobile phone number (786-859-6129) when he acquired and activated this new mobile phone.

The telephone box for the Samsung model SPH-A460 wireless phone contained a copy of the phone's user guide, which contained a copy of Sprint's Terms and Conditions. The record does not reflect which version of Sprint's Terms and Conditions were printed in the user guide for Plaintiff's new Samsung model SPH-A460 phone. The packaging material on the outside of the box for the Samsung model SPH-A460 phone also stated that the box contained a copy of Sprint's Terms and Conditions.

C. July 2, 2005 Service Agreement And Samsung PM-A740 Phone

On July 2, 2005, Plaintiff signed a two-year PCS Advantage Agreement with Sprint. At the time he entered into the Advantage Agreement, Plaintiff also acquired a new Samsung PM-A740 mobile phone at a Sprint Store in Coral Gables, Florida and activated a second phone line with a second phone number (786-859-9624).

Sprint subsidizes the purchase price of the majority of wireless telephones it sells to its subscribers. However, the record does not reflect how much of the purchase price of Plaintiff's new Samsung PM-A740 mobile phone was subsidized by Sprint, although Plaintiff admits he received a "discount" on the purchase price of the phone. Similarly, there is no evidence in the record indicating what, if anything, Plaintiff paid for any of the phones in this case.

592 F.3d 1124

The telephone box for the new Samsung PM-A740 wireless phone Plaintiff acquired on July 2, 2005 contained a copy of the user guide for that phone, which contained a copy of Sprint's Terms and Conditions effective June 30, 2004.4 The box's exterior also stated it contained a copy of Sprint's Terms and Conditions.

Sprint's Terms and Conditions effective June 30, 2004 provide that the customer accepts the Terms and Conditions by using or paying for Sprint's Services:

This agreement ("Agreement") covers the terms on which we agree to provide and you agree to accept any service or product we make available to you, including your wireless services, wireless devices, etc. (collectively "Services"). You accept this Agreement when you do any of the following: (a) provide your written or electronic signature; (b) accept through an oral or electronic statement; (c) attempt to or in any way use any of the Services; (d) pay for any Services; or (e) open any materials...

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    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • March 11, 2020
    ...under the circumstances existing at the time of the making of the contract." U.C.C. § 2–302 ;24 Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1134 (11th Cir. 2010) ; Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E. 2d 362 (N.C. 2008). Generally, Plaintiff is required to a......
  • Parris v. Keystone Foods, LLC, Case No. 4:12–CV–777–VEH.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • August 7, 2013
    ...agreements are enforceable except where state or federal law provides grounds for their revocation. Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1133 n. 13 (11th Cir.2010) (citation omitted). “The FAA reflects the fundamental principle that arbitration is a matter of contract” and “pla......
  • Crewe v. Rich Dad Educ., LLC, No. 11 Civ. 8301(PAE).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • August 3, 2012
    ...on such a claim, a party must show both procedural and substantive unconscionability. See, e.g., Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1134 (11th Cir.2010) (“ both procedural and substantive unconscionability” are required) (emphasis in original); Rivera v. AT & T Corp., 420 F.S......
  • Town & Country Linen Corp. v. Ingenious Designs LLC, 18-cv-5075 (LJL)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • August 23, 2021
    ...(citing Dorward v. Macy's Inc. , 2011 WL 2893118, at *5 (M.D. Fla. July 20, 2011)) ; see also Pendergast v. Sprint Nextel Corp. , 592 F.3d 1119, 1135 (11th Cir. 2010) (stating the same four factors); Rodriguez v. JPay, Inc. , 2019 WL 11623936, at *4 (S.D. Fla. Oct. 17, 2019) (finding a cont......
  • Request a trial to view additional results
122 cases
  • Ponzio v. Mercedes-Benz USA, LLC, Civil Action No. 18-12544
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • March 11, 2020
    ...under the circumstances existing at the time of the making of the contract." U.C.C. § 2–302 ;24 Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1134 (11th Cir. 2010) ; Tillman v. Commercial Credit Loans, Inc., 362 N.C. 93, 655 S.E. 2d 362 (N.C. 2008). Generally, Plaintiff is required......
  • Parris v. Keystone Foods, LLC, Case No. 4:12–CV–777–VEH.
    • United States
    • United States District Courts. 11th Circuit. United States District Court of Northern District of Alabama
    • August 7, 2013
    ...agreements are enforceable except where state or federal law provides grounds for their revocation. Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1133 n. 13 (11th Cir.2010) (citation omitted). “The FAA reflects the fundamental principle that arbitration is a matter of contract” and “pla......
  • Crewe v. Rich Dad Educ., LLC, No. 11 Civ. 8301(PAE).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • August 3, 2012
    ...on such a claim, a party must show both procedural and substantive unconscionability. See, e.g., Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1134 (11th Cir.2010) (“ both procedural and substantive unconscionability” are required) (emphasis in original); Rivera v. AT & T Corp., 420......
  • Town & Country Linen Corp. v. Ingenious Designs LLC, 18-cv-5075 (LJL)
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • August 23, 2021
    ...(citing Dorward v. Macy's Inc. , 2011 WL 2893118, at *5 (M.D. Fla. July 20, 2011)) ; see also Pendergast v. Sprint Nextel Corp. , 592 F.3d 1119, 1135 (11th Cir. 2010) (stating the same four factors); Rodriguez v. JPay, Inc. , 2019 WL 11623936, at *4 (S.D. Fla. Oct. 17, 2019) (finding a cont......
  • Request a trial to view additional results

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