Thomas v. Cricket Wireless, LLC

Decision Date10 December 2020
Docket NumberNo. C 19-07270 WHA,C 19-07270 WHA
Citation506 F.Supp.3d 891
Parties Jermaine THOMAS, Jeremain Miller, Jamie Postpichal, Ronald Ellison, Sarah Waters, Kamilah Riddick, Felicia Reddick, Tiara Cromwell, Lysha Encarnacion, Lanie Hale, Melizza Weaver, Alfredo Sanchez, and Clarissa Kelly, on behalf of themselves and other similarly situated, Plaintiffs, v. CRICKET WIRELESS, LLC, Defendant.
CourtU.S. District Court — Northern District of California

Daniel Timothy LeBel, Consumer Law Practice of Daniel T. LeBel, San Francisco, CA, Andrew R. Taylor, Pro Hac Vice, Bryce B. Bell, Pro Hac Vice, Mark W. Schmitz, Pro Hac Vice, Bell Law, LLC, Kansas City, MO, Ashley Scott Waddell, Pro Hac Vice, Austin P. Brane, Eric Barton, Pro Hac Vice, Melody Renee Dickson, Pro Hac Vice, Tyler William Hudson, Pro Hac Vice, Wagstaff and Cartmell, Kansas City, MO, for Plaintiffs.

Archis Ashok Parasharami, Daniel Edward Jones, Pro Hac Vice, Kevin S. Ranlett, Pro Hac Vice, Mayer Brown LLP, Washington, DC, Jarman Douglas Russell, Pro Hac Vice, Matthew David Ingber, Pro Hac Vice, Mayer Brown LLP, New York, NY, John Nadolenco, Mayer Brown LLP, Los Angeles, CA, for Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO COMPEL ARBITRATON

WILLIAM ALSUP, UNITED STATES DISTRICT JUDGE

INTRODUCTION

In this putative class action arising out of defendant's alleged false advertising of its wireless services, defendant moves to compel arbitration of three of the named plaintiffs. One of the plaintiff has since voluntarily dismissed herself from this action. Accordingly, this order considers defendant's motion only as to the other two plaintiffs, Jermaine Thomas and Sarah Waters. This order finds that Thomas must arbitrate his claims against Cricket, but not Waters. To the extent stated herein, therefore, defendant's motion to compel arbitration is GRANTED IN PART AND DENIED IN PART .

STATEMENT

At all relevant times, defendant Cricket Wireless, LLC, sold wireless telephone service as well as cellular telephones to consumers. Plaintiffs allege that, between 2012 to 2014, Cricket advertised that if offered "unlimited 4G/LTE" services throughout the United States and "required consumers to purchase a 4G/LTE-capable phone from Cricket" to access those services (Dkt. No. 16 ¶¶ 1, 144, 151). They allege that Cricket did not actually have the capability to provide "unlimited" and "nationwide" 4G/LTE services, however. Accordingly, they brought this action, alleging that Cricket's conduct violated various state false advertising laws, as well as the Racketeer Influenced and Corrupt Organization Act ("RICO"), 18 U.S.C. § 1961 et seq. They also bring claims for unjust enrichment and negligence.

In 2015, the plaintiffs in Barraza v. Cricket Wireless LLC , 2015 WL 6689396 (N.D. Cal. Nov. 3, 2015) (Judge William Alsup), made nearly identical allegations against Cricket. There, Cricket moved to compel arbitration of two of the plaintiffs based on the arbitration provision within a booklet — called "Quick Start Guide" — that Cricket enclosed inside of the plaintiffs’ phones boxes. Id. at *1. Until May 2014, when it was acquired by AT&T, Inc., Cricket advertised that it offered "No Contract" wireless service. After that acquisition, Cricket began advertising that its service had "No Annual Contract." Ibid. The plaintiffs had purchased wireless service with accompanying phones from Cricket-owned stores in 2013. The phones came in boxes, but when the plaintiffs selected their phones, the Cricket employees helping them went to the back of the store and returned with the boxes already open, and the employees activated the phones. One panel on those boxes provided, in relevant part, that "By activating Cricket® service, you agree to the enclosed terms and conditions of the service." Ibid. The full terms and conditions for Cricket's service were included in a 3x4 inch booklet, which was titled "Quick Start Guide." The front cover of that booklet included the title of the booklet, with the subtitle "A Simple Guide to Activating Your Phone." Ibid. It also included the instruction "Read Me First." The first page of the "Quick Start Guide" described Cricket as "the home of no contract, no hassle wireless," and did not mention that the booklet contained terms and conditions for the use of Cricket's service. Ibid. But Section 20(a) of the "Quick Start Guide" included an arbitration provision and class-action waiver. Id. at *2.

In Barraza , Cricket contended that when the plaintiffs there began using its wireless services, they accepted the terms and conditions set forth in the "Quick Start Guide," including the arbitration provision. The plaintiffs argued that they never agreed to a contract with Cricket because they lacked notice of the terms and condition in the "Quick Start Guide." Ibid. The plaintiffs submitted declarations in support of their contentions. Applying Missouri law, the undersigned denied Cricket's motion to compel arbitration, finding that a summary trial was necessary under Section 4 of the Federal Arbitration Act to determine whether the parties had formed a contract. Id. at *3–6.

Here, in its current motion to compel arbitration, Cricket contends that "[r]ather than relitigate Barraza and put the parties and the Court to the burden of a jury trial in this case, Cricket limits this motion to [two] plaintiffs whose circumstances are readily distinguishable from the ones at issue in Barraza " (Dkt. No. 50 at 2). Those plaintiffs are Jermaine Thomas and Sarah Waters. Unlike Cricket, Thomas and Waters do not submit any evidence herein. They argue that Cricket has failed to meet its burden to show that they have agreed to arbitrate their claims herein, and the submission of evidence on their part is thus unnecessary (Opp. at 17).

1. JERMAINE THOMAS .

"[L]ured" by Cricket's promise of "no contract," Thomas became a customer of Cricket in 2006 (Dkt. No. 16 ¶ 54–55). In late 2012, he purchased a Samsung Galaxy S3, a phone that had 4G/LTE capability from a Cricket store in Kansas City, Missouri. He began paying Cricket sixty dollars a month for "unlimited 4G/LTE service," so that he could utilize his phone's capability (id. at ¶¶ 56–59). Similar to the plaintiffs’ phones in Barraza , at the time Thomas purchased his Samsung Galaxy 3S phone, Cricket included its "Quick Start Guide" booklet — which included its arbitration agreement — in Galaxy 3S phone boxes (Garcia Decl. ¶ 12). That arbitration provision gave customers a sixty day opt-out window (Ibid. ). Cricket does not have any record of Thomas opting out (Phillips Decl. ¶ 7). The complaint alleges that Thomas did not open the Samsung phone box himself. Instead, the complaint alleges that a Cricket employee opened and activated the phone for him. In 2013, Thomas purchased another 4G/LTE-capable phone from the same Cricket store. Again, it is alleged that a Cricket employee, not him, opened the phone box (Dkt. No. 16 ¶¶ 60–64).

In 2014, AT&T Inc. acquired Cricket., leading Cricket to update its terms and conditions. According to Cricket's records, on May 22, 2014, it sent two text messages to Thomas, which hyperlinked Cricket's updated agreement. Both text messages provided (Garcia Decl. ¶ 16):

See Cricket's updated Terms and Conditions of Service, which includes your agreement to dispute resolution through binding individual arbitration instead of jury trials or class actions at http://mycrk.it/1km1Ten.

Clicking on the hyperlink would have taken Thomas to the full updated agreement, which was also published on Cricket's website. As relevant here, the updated agreement contained the following two provisions (Northington Decl. ¶ 4, Exh. 1 at 1, 9) (emphasis in original):

Your Agreement with Cricket begins when you accept the Ts&Cs by doing any of the following: (a) giving us a written or electronic signature or telling us orally that you accept, or by otherwise accepting through any other printed, oral, or electronic statement; (b) paying for Service; (c) activating the Service; (d) attempting to use or in any way using the Service; (e) upgrading or modifying the Service; or (f) opening any Device packaging, or starting any application, program or software that says you are accepting. If you do not want to accept the Terms and Conditions, do not do any of these things.
* * *
Cricket and you agree to arbitrate all disputes and claims between us. This agreement to arbitrate is intended to be broadly interpreted. It includes, but is not limited to: claims arising out of or relating to any aspect of the relationship between us, whether based in contract, tort, statute, fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in which you are not a member of a certified class; and claims that may arise after the termination of this Agreement.

Thereafter, Thomas continued to use Cricket's service and continued to make payments to it until 2015 (Garcia Decl. ¶¶ 17–18). By doing so, Cricket argues that, as a matter of Missouri law, Thomas agreed to the terms of the updated agreement, including the arbitration provision therein (Dkt. No. 50 at 12–13).

2. SARAH WATERS .

Waters became a Cricket customer in 2013 when she purchased a Samsung Galaxy S4 and accompanying 4G/LTE services from it. At the time, she was a resident of California, though she now resides in Missouri (Dkt. No. 16 ¶¶ 86–89). While not much else is known about Waters from the complaint, Cricket submits the following evidence (see Berg Decl. ¶¶ 1–25, Exhs. 1–18).

In December 2018, Waters became a customer of AT&T Mobility's wireless services. She signed the AT&T Wireless Customer Agreement at an AT&T retail store. The entire agreement was displayed to her on a digital device. The device gave her the option of printing the entire agreement. In addition to clicking the "Accept" button on the...

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