Thompson v. Sutherland Global Servs., Inc.
| Decision Date | 03 April 2019 |
| Docket Number | No. 17 C 3607,17 C 3607 |
| Parties | JAMES THOMPSON, Plaintiff, v. SUTHERLAND GLOBAL SERVICES, INC., Defendant. |
| Court | U.S. District Court — Northern District of Illinois |
MEMORANDUM OPINION AND ORDER
James Thompson ("Plaintiff"), on behalf of himself and a putative class of individuals who allegedly received unsolicited telephone calls, brings this action against Sutherland Global Services, Inc. ("Defendant") pursuant to the Telephone Consumer Protection Act ("TCPA"), 47 U.S.C. § 227. .) Before the Court is Defendant's renewed motion to compel arbitration and stay this case pending arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 3-4. (R. 69, Renewed Mot. at 1; R. 69-1, Mem. at 12.) For the reasons stated below, the Court grants Defendant's motion.
The following facts are undisputed unless otherwise stated. The Court presumes familiarity with the material facts and allegations as described in its order issued on September 24, 2018, which related to Defendant's previous motion to compel arbitration. (R. 66, Order.) To summarize, Plaintiff is an individual who resides in the Northern District of Illinois and allegedly received unsolicited phone calls from Defendant about AT&T U-Verse Internet service. (Id. at 1-2.) Defendant is a New York corporation headquartered in Pittsfield, New York, that AT&T Services, Inc. ("AT&T") contracted with to call AT&T customers. (Id.)
Plaintiff registered for AT&T's U-verse Internet service and accepted the accompanying terms of service in March 2016. (Id. at 2.) The terms of service provide that "AT&T and you agree to arbitrate all disputes and claims between you and AT&T." (R. 49-3 at 22, Terms of Service.) "AT&T" is defined in the terms of service to include "AT&T Corporation"1 and all local entities that provide AT&T U-Verse Internet service, which for Plaintiff—who resided in Illinois—was Illinois Bell Telephone Company ("Illinois Bell"). (Id. at 6, 29 n.1.) The arbitration agreement states that any references to "'AT&T,' 'you,' and 'us' include our respective subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns, as well as all authorized or unauthorized users or beneficiaries of [U-verse] . . . under this or prior Agreements[.]" (Id. at 22.) The arbitration agreement covers "[c]laims arising out of or relating to any aspect of the relationship between us[;] . . . [c]laims that arose before this or any prior Agreement . . . [;] [c]laims that are currently the subject of purported class action litigation in which you are not a member of a certified class[;]" and "[c]laims that may arise after the termination of this Agreement." (Id.)
Michael Shannon Barker ("Barker"), AT&T's Vice President of Service Delivery, declares that AT&T hired Defendant to make phone calls to AT&T customers as part of AT&T's proactive churn management ("PCM") program.2 (R. 69-2, Barker Decl. at 1-2.) The services under this program were carried out in accordance with a "Call Center Master Service Agreement" ("MSA") and a separate work order ("PCM Order").3 (Id.) Under the PCM Order, Defendant was to provide English and Spanish customer service support over the telephone to AT&T customers for the purpose of reducing AT&T customer chum by, among other things, proactively troubleshooting and resolving customer connectivity, home computer, and network issues. (Id. at 4; R. 70-2, PCM Order at 3.) Pursuant to the PCM program, Defendant made three calls to Plaintiff on December 24, 2015. (R. 69-2, Barker Decl. at 5; R. 69-3, Baker Decl. Ex. C. at 2.) Defendant placed these calls because Plaintiff had registered for AT&T's U-Verse service but had not yet installed the necessary equipment. (Id.)
Under the MSA and PCM Order, AT&T reserved the right to set Defendant's target call volume, the number of Defendant's employees working on the PCM program, and the personnel structure for the PCM program. (R. 70-2, PCM Order at 3-5.) AT&T also retained the right to be notified if any employment changes occurred, to set the hours that Defendant's employees would be available to work, and to designate the location from which Defendant's services would be provided. (Id.) In addition, AT&T reserved the right to choose and provide the technology that Defendant used to cany out PCM services. (Id. at 5-8.)
Kristina Carter ("Carter"), AT&T's Lead Product Marketing Manager, declares that AT&T retained control over both the manner and means of Defendant's calls on AT&T's behalf, and that AT&T required Defendant to hold itself out as AT&T when making calls to AT&T customers. (R. 69-4, Carter Decl. at 3.) The customers to be called by Defendant were selected by AT&T. (Id. at 3-4.) Any data generated from Defendant's calls were provided to AT&T. (Id. at 4.) AT&T prepared training materials for Defendant's customer service representatives to use, Defendant's managers were directly trained by AT&T personnel, and AT&T placed an onsite manager with Defendant who "was responsible for overseeing [Defendant]." (Id. at 5-7.) Additionally, Defendant's employees were instructed by AT&T to tell AT&T customers that the calls were from "AT&T customer service" and not Defendant. (Id. at 4.) AT&T also provided scripts for Defendant's employees to follow when making calls to AT&T customers. (Id.)
Though Defendant had freedom to hire its own employees, AT&T "set the head count" for the PCM program, and Defendant's employees "were segregated from representatives [who] worked on other . . . projects, including other work [Defendant] did for AT&T." (Id. at 5.) AT&T obligated these employees "to have their own floor space at [Defendant's] call centers that required badge access[,] and to not share computers, printers, or other equipment with other [Defendant] projects." (Id.) AT&T held weekly performance meetings with Defendant that involved "measuring [Defendant's] results against AT&T's targets according to a variety of metrics identified by AT&T." (Id. at 6.) AT&T also held regular meetings to address Defendant's performance, and AT&T had access to Defendant's call centers to conduct regular site visits and review Defendant's work. (Id. at 5-6.) AT&T even had control over the music that AT&T customers would listen to when Defendant placed them on hold. (R. 70-2, PCM Order at 17.)
On May 12, 2017, Plaintiff filed a complaint against AT&T Corporation alleging violations of the TCPA. Plaintiff amended his complaint twice, and the second amended complaint, filed on May 10, 2018, is the operative complaint. (R. 40, Second Am. Compl.) It advances one count for violation of the TCPA against AT&T, Illinois Bell, and Defendant for the allegedly unsolicited calls that Plaintiff received. (Id. ¶¶ 2, 5, 15-52.) Plaintiff brings this action on behalf of himself and a putative class consisting of persons who received phone calls from Defendant on or after May 12, 2013, and persons who received a pre-recorded message from Defendant. (Id. ¶¶ 53-61.) On June 19, 2018, Plaintiff voluntarily dismissed AT&T and Illinois Bell from this action without prejudice. (R. 57, Voluntary Dismissal.)
On June 15, 2018, Defendant moved to compel arbitration. (R. 56, First Mot. at 3.) The Court denied Defendant's motion without prejudice, finding that the U-Verse terms of service are enforceable and rejecting Plaintiff's argument of unconscionability. (R. 66, Order at 12.) The Court concluded, however, that Defendant had failed to provide sufficient evidence that it was AT&T's agent so as to warrant the arbitration agreement's application in this case. (Id. at 12-15.) As a result, the Court permitted Plaintiff to take discovery on the relationship between Defendant and AT&T to test whether Defendant was AT&T's agent. (Id. at 16-17.)
On January 11, 2019, after discovery concluded on the agency issue, Defendant filed a renewed motion to compel arbitration. (R. 69, Renewed Mot.; R. 69-1, Mem.) Defendant argues that it acted as AT&T's agent when it made calls to Plaintiff, thereby making the arbitration agreement enforceable as to any dispute between Plaintiff and Defendant. (R. 69-1, Mem. at 8-12.) In support of its motion, Defendant presents declarations from AT&T employees and the contract between Defendant and AT&T. (R. 69-2, Barker Decl.; R. 69-4, Carter Decl.)
Defendant argues that this evidence shows it was AT&T's agent because AT&T retained significant control over how Defendant was to carry out its obligations. (R. 69-1, Mem. at 8-9.) Defendant also contends that it had actual authority to affect AT&T's legal relationships. (Id. at 10-11.) Defendant argues that, as a result, any disputes between it and Plaintiff are covered by the arbitration agreement in the U-Verse terms of service. (Id. at 12.)
Plaintiff, on the other hand, argues that no enforceable arbitration agreement exists between Plaintiff and Defendant. (R. 75, Resp. at 4-8.) In Plaintiff's view, the calls at issue arose before Plaintiff accepted the online terms of service containing the arbitration provision. (Id.) Plaintiff also argues that Defendant has no right to enforce Plaintiff's arbitration agreement with AT&T because Defendant is neither a party to that contract nor an intended beneficiary under the contract. (Id. at 8-9.) Plaintiff contends that the arbitration agreement is between Plaintiff and Illinois Bell and Illinois Bell's agents, not between AT&T and its agents. (Id.) Thus, according to Plaintiff, it does not matter if Defendant was AT&T's agent because the arbitration agreement only covers Illinois Bell's agents. (Id.) Finally, Plaintiff argues that Defendant was not an agent of AT&T but instead hired by AT&T as an independent contractor. (Id. at 9-15.)
Under the FAA, courts compel arbitration if the following three elements are shown: "(1) an agreement to arbitrate, (2) a dispute within the...
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