Pendergast v. Sprint Nextel Corp.
| Decision Date | 20 August 2012 |
| Docket Number | No. 09–10612.,09–10612. |
| Citation | 56 Communications Reg. (P&F) 853,691 F.3d 1224,23 Fla. L. Weekly Fed. C 1435 |
| Parties | 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. |
| Court | U.S. Court of Appeals — Eleventh Circuit |
OPINION TEXT STARTS HERE
Douglas F. Eaton, Eaton & Wolk PL, William Gregg Wolk, Homer, Bonner & Delgado, Miami, FL, for Appellant.
David E. Mills, Daniel D. Prichard, Dow Lohnes PLLC, Washington, DC, and Peter Canfield, Dow Lohnes PLLC, Atlanta, GA, for Appellees.
Appeal from the United States District Court for the Southern District of Florida.
Before CARNES and HULL, Circuit Judges, and GOLDBERG,* Judge.
Plaintiff–Appellant James Pendergast, a former wireless telephone customer of Defendants–Appellees Sprint Solutions, Inc. and Sprint Spectrum, L.P., (collectively, “Sprint”), sued Sprint on behalf of himself and a similarly situated class, alleging Sprint charged improper roaming fees for calls placed within Sprint's coverage areas. Sprint moved to compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), as provided by the Terms and Conditions of Sprint's service contract with Pendergast.
The district court granted Sprint's motion to compel arbitration and dismissed the case. The district court found that the arbitration and class action waiver provisions in the Terms and Conditions are valid and enforceable.
Pendergast appealed. Pendergast argued that the class action waiver is unconscionable under Florida law, the arbitration clause and class action waiver clause are not severable, and thus the invalidity of the class action waiver is fatal to the arbitration clause as well.
On January 4, 2010, this Court found that resolution of the appeal depended on unsettled questions of Florida law and certified four questions to the Florida SupremeCourt. Pendergast v. Sprint Nextel Corp., 592 F.3d 1119, 1143–44 (11th Cir.2010). The Florida Supreme Court accepted certification of the questions.
On April 27, 2011, after oral argument in the Florida Supreme Court but before it issued a decision, the United States Supreme Court decided AT&T Mobility LLC v. Concepcion, ––– U.S. ––––, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011). In Concepcion, the United States Supreme Court held that the FAA preempted California's judicial rule on the unconscionability of class action waivers in consumer contracts. Id. at 1753.
On May 4, 2011, Sprint moved this Court to withdraw the certified questions and to affirm summarily in light of Concepcion. Out of deference to our state court colleagues, we denied Sprint's motion so that the Florida Supreme Court would have the opportunity to decide whether it wished to answer the questions we certified or decline jurisdiction and return the case to us for further proceedings in light of Concepcion.
Sprint moved the Florida Supreme Court to decline jurisdiction. On July 17, 2012, the Florida Supreme Court granted Sprint's motion and the case returned to this Court. After review, we affirm the district court's judgment granting Sprint's motion to compel arbitration.
The factual background is set forth in detail in our earlier opinion. See Pendergast, 592 F.3d at 1121–31. We repeat only the most pertinent details here.
In August 2001, Pendergast bought a wireless telephone from Sprint, agreed to a two-year service contract for Sprint wireless service, and began using Sprint wireless service. The contract included Sprint's then-applicable Terms and Conditions of Service. At that time, Sprint's May 2001 Terms and Conditions were in effect, and they contained a “changes to agreement” clause providing that: (1) Sprint could change the terms of its agreement with Pendergast at any time; (2) Pendergast accepted such changes by using his phone on or after the changes' effective date; and (3) Pendergast could terminate his service if he did not wish to accept the changes. The contract provided Pendergast with fourteen days after activating his phone to terminate Sprint service without penalty.
The May 2001 Terms and Conditions also contained an arbitration clause that required arbitration of disputes between Pendergast and Sprint and stated that the FAA governed whether a claim was subject to arbitration:
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 CLAIM IS SUBJECT TO ARBITRATION.
The May 2001 Terms and Conditions did not include a class action waiver.
In July 2005, Pendergast bought a new phone from Sprint and signed a new contract with Sprint, a two-year PCS AdvantageAgreement. Pendergast's account number with Sprint remained the same.1
The June 2004 Terms and Conditions were in effect when Pendergast entered into the PCS Advantage Agreement. The June 2004 Terms and Conditions provided that: (1) Pendergast accepted the Terms and Conditions by using or paying for Sprint service; (2) Sprint could change the Terms and Conditions at any time, and using or paying for service on or after the date of the change constituted acceptance of the change; and (3) Pendergast could terminate the agreement without penalty within 30 days after material, adverse changes were made.
The June 2004 Terms and Conditions also contained an arbitration clause that required arbitration of all disputes except for those within small claims court jurisdiction. Importantly, the new arbitration clause included a class action waiver. The June 2004 arbitration clause stated:
MANDATORY ARBITRATION OF DISPUTES: INSTEAD OF SUING IN COURT, YOU AND SPRINT AGREE TO ARBITRATE ANY AND ALL CLAIMS, CONTROVERSIES OR DISPUTES AGAINST EACH OTHER ARISING OUT OF OR RELATING TO THIS AGREEMENT .... THE FEDERAL ARBITRATION ACT APPLIES TO THIS AGREEMENT AND ITS PROVISIONS, NOT STATE LAW, GOVERN ALL QUESTIONS OF WHETHER A CLAIM IS SUBJECT TO ARBITRATION. THIS PROVISION DOES NOT PREVENT EITHER YOU OR SPRINT FROM BRINGING APPROPRIATE CLAIMS IN SMALL CLAIMS COURT ....
YOU AND SPRINT FURTHER AGREE THAT NEITHER SPRINT NOR YOU WILL JOIN ANY CLAIM WITH THE CLAIM OF ANY OTHER PERSON OR ENTITY IN A LAWSUIT, ARBITRATION OR OTHER PROCEEDING; THAT NO CLAIM EITHER SPRINT OR YOU HAS AGAINST THE OTHER SHALL BE RESOLVED ON A CLASS–WIDE BASIS; AND THAT NEITHER SPRINT NOR YOU WILL ASSERT A CLAIM IN A REPRESENTATIVE CAPACITY ON BEHALF OF ANYONE ELSE ....
....
If any portion of this Mandatory Arbitration of Disputes section is determined to be invalid or unenforceable, the remainder of the Section remains in full force and effect.
In January 2007, Sprint again changed its Terms and Conditions.2 As with the previous Terms and Conditions, the January 2007 version provided that use of or payment for Sprint service constituted acceptance, and that Sprint could change the Terms and Conditions unilaterally but the customer could terminate his or her contract. The January 2007 Terms and Conditions contained an expanded “dispute resolution” provision. According to this provision, all claims not properly triable in small claims court must be arbitrated. The dispute resolution provision also contained both (1) a class action waiver and (2) a non-severability provision stating that if the class action waiver were held to be unenforceable, the agreement to arbitrate did not apply:
DISPUTE RESOLUTION
We each agree to first contact each other with any disputes and provide a written description of the problem ....
We each agree to finally settle all disputes (as defined and subject to any specific exceptions below) only by arbitration ....
(6) We each agree not to pursue arbitration on a classwide basis. We each agree that any arbitration will be solely between you and us (not brought on behalf of or together with another individual's claim). If for any reason any court or arbitrator holds that this restriction is unconscionable or unenforceable, then our agreement to arbitrate doesn't apply and the dispute must be brought in court.
....
Either of us may bring a qualifying claim in small claims court ....
The January 2007 Terms and Conditions contained a second class action waiver outside and immediately following the dispute resolution provision:
No Class Actions
TO THE EXTENT ALLOWED BY LAW, WE EACH WAIVE ANY RIGHT TO PURSUE DISPUTES ON A CLASSWIDE BASIS; THAT IS, TO EITHER JOIN A CLAIM WITH THE CLAIM OF ANY OTHER PERSON OR ENTITY, OR ASSERT A CLAIM IN A REPRESENTATIVE CAPACITY ON BEHALF OF ANYONE ELSE IN ANY LAWSUIT, ARBITRATION OR OTHER PROCEEDING.
In January 2008, Sprint again amended its Terms and Conditions.3 The January 2008 Terms and Conditions relevant to Pendergast's appeal are not materially different from the January 2007 Terms and Conditions. In particular, the January 2008 Terms and Conditions still contained an arbitration provision, a class action waiver, and a non-severability provision stating that: (1) the parties “agree not to pursue arbitration on a classwide basis”; (2) the parties “agree that any arbitration will be solely between you and us (not brought on behalf of or together with another individual's claim)”; and (3) if the class action waiver were held to be unconscionable or unenforceable, “our agreement to arbitrate doesn't apply and the dispute must be brought in court.”
Pendergast was a Sprint customer from August 6, 2001 until January 20, 2008, which was after the effective date of the January 2008 Terms and Conditions.
To continue reading
Request your trial
-
Wert v. Manorcare of Carlisle Pa, LLC, 62 MAP 2014
...Advance Illinois, LLC,724 F.3d 787, 789 (7th Cir.2013); Khan v. Dell, Inc.,669 F.3d 350 (3d Cir.2012); Pendergast v. Sprint Nextel Corp.,691 F.3d 1224, 1236 n. 13 (11th Cir.2012); Brown v. ITT Consumer Fin. Corp.,211 F.3d 1217, 1222 (11th Cir.2000); Wright v. GGNSC Holdings LLC,808 N.W.2d 1......
-
Saleemi v. Doctor's Assocs., Inc.
...in other jurisdictions as well. E.g., Gove v. Career Sys. Dev. Corp., 689 F.3d 1, 4 (1st Cir.2012); Pendergast v. Sprint Nextel Corp., 691 F.3d 1224, 1230 n. 5 (11th Cir.2012); Baldwin v. Regions Fin. Corp., 98 So.3d 1210, 1212 n. 4 (Fla.Dist.Ct.App.2012); Brumley v. Commonwealth Bus. Coll.......
-
Mckenzie Check Advance of Fla., LLC v. Betts
...reasoning in Concepcion.” Id. at 1215. More recently, the Eleventh Circuit again rejected this argument in Pendergast v. Sprint Nextel Corp., 691 F.3d 1224, 1235 (11th Cir.2012), stating that “[t]he reasoning of Cruz applies equally here. The Supreme Court in Concepcion expressly rejected t......
-
Torrence v. Nationwide Budget Fin., QC Holdings, Inc.
...and that § 5 may be used to appoint a substitute. Khan v. Dell, Inc., 669 F.3d 350 (3d Cir.2012); Pendergast v. Sprint Nextel Corp., 691 F.3d 1224, 1236 n. 13 (11th Cir.2012); Brown v. ITT Consumer Financial Corp., 211 F.3d 1217, 1222 (11th Cir.2000). The Supreme Court must have assumed thi......
-
State Consumer Protection Laws
...denying motions to compel arbitration were not preempted by the Federal Arbitration Act (FAA).) 874. Pendergast v. Sprint Nextel Corp., 691 F.3d 1224, 1231-32 (11th Cir. 2012); Cruz v. Cingular Wireless, 648 F.3d 1205, 1214-15 (11th Cir. 2011). 875. 648 F.3d 1205 (11th Cir. 2011). 876. Cruz......
-
Trial Practice and Procedure
...severable from the arbitration provision and the invalidity of the former did not affect the latter. Id. at 1282. 248. Id. at 1284.249. 691 F.3d 1224 (11th Cir. 2012).250. Id. at 1234.251. Id. at 1225.252. Id.253. Id. On appeal, the Eleventh Circuit originally found that "resolution of the ......
-
Barras v. Bb&t: Charting a Clear Path to Apply Concepcion Through a Quagmire of Divergent Approaches
...2011).100. Id. at 1208.101. Id. at 1213.102. Id.103. Id. at 1213-14.104. Id. at 1214.105. Id.106. Id. at 1214-15.107. Id. at 1215.108. 691 F.3d 1224 (11th Cir. 2012).109. 648 F.3d 1205 (11th Cir. 2011).110. Id. at 1235. 111. Id.112. Id.113. 685 F.3d at 1275-76.114. Id. at 1276.115. 131 S. C......
-
Employment Discrimination
...or administering such risks that are based on or not inconsistent with State law." Id.; see also 42 U.S.C. § 12201(c)(2).138. Seff, 691 F.3d at 1224.139. Id. at 1222. 140. Id. at 1224.141. Id.142. Id.143. 683 F.3d 1283 (11th Cir. 2012).144. Id. at 1298.145. See, e.g., Ash v. Tyson Foods, In......