Jacobs et al v. Global Tel*Link Corporation
MEMORANDUM OPINION AND ORDER denying 63 Motion to Certify Class; and denying 67 Motion to Compel and Motion to Stay. Signed by Honorable Timothy L. Brooks on September 28, 2017. (tg)
IN THE UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF ARKANSAS
WALTER CH RUBY, et al.
CASE NO. 5:15-CV-5136
GLOBAL TEL*LINK CORPORATION
MEMORANDUM OPINION AND ORDER
Currently before the Court are:
Defendant Global Tel*Link Corporation 's ("GTL") Motion to Compel Arbitration and
Stay the Proceedings (Doc. 67) and Memorandum of Law in Support (Doc. 68);
Plaintiffs Walter Chruby's, Earl Reese 's, Stephen Orosz, Sr.'s, Stephen Orosz,
Jr.'s, Michael Veon 's, Stefanie Veon 's, Lewis Brooks's, Jacqueline Jacobs's, and
Shondra Caldwell 's (collectively, "Plaintiffs") Response in Opposition (Doc. 77);
GTL's Reply (Doc. 80) ; and Plaintiffs' Notice of Supplemental Authority (Doc. 83) ;
Plaintiffs' Motion for Class Certification , Appointment of Class Representatives,
and Appointment of Class Counsel (Doc. 63) and Memorandum of Law in Support
(Doc. 65) ; GTL's Opposition (Doc. 73) and Statement of Facts (Doc. 74) ; Plaintiffs'
Reply (Doc. 85) ; GTL's Supplemental Brief (Doc. 90); and Plaintiffs' Supplemental
Brief (Doc. 92).
For the reasons given below, both Motions are DENIED .
This case is one of four lawsuits on the topic of inmate calling services ("ICS")
currently pending in this Court. Two of them are concerned with interstate calls, and two
of them are concerned with intrastate calls . This is one of the intrastate cases. The
Defendant in this case , GTL, is also the defendant in one of the interstate cases. A
company called Securus Technologies, Inc. ("Securus") is the defendant in the other two
In the instant case , Plaintiffs filed their original Complaint (Doc. 1) in this Court on
June 12, 2015 , followed by an Amended Complaint (Doc. 25) on August 28 of that same
year. On May 17, 2016 , the Court entered an Order (Doc. 46) granting in part and denying
in part GTL's Motion to Dismiss (Doc. 28) . Soon thereafter, venue of a related case in
the Eastern District of Pennsylvania was transferred to this Court, and on July 25 of that
year, this Court entered an Order consolidating that case with this one. See Doc. 51.
This case, like all of the ICS cases, was brought as a putative Glass action . As in
the GTL interstate case, Plaintiffs "allege that GTL obtained exclusive contracts to provide
telephone services to inmates at correctional facilities throughout the United States in
exchange for the payment of kickbacks to those correctional facilities known as 'site
commissions. "' In re Global Tel*Link Corp. /CS Litig., 2017 WL 471571 , at *1 (W.D. Ark.
Feb. 3, 2017). And as in the GTL interstate case, Plaintiffs further allege "that GTL
charged them excessive rates to cover the costs of site commissions it paid to correctional
facilities, and charged them deposit fees that unreasonably exceeded the cost of
processing deposits into prepaid accounts. " Id.
In the GTL interstate case , the plaintiffs sought to recover these allegedly unjust
rates and fees through two claims for relief-one brought under the Federal
Communications Act ("FCA") through 47 U.S.C. §§ 201 (b) and 206 , and one brought
under the common-law doctrine of unjust enrichment.
See id. The plaintiffs in the
Securus interstate case made substantially identical allegations and asserted the same
two causes of action . See Mojica v. Securus Techs., Inc., 2017 WL 470910 , at *1 (W.D.
Ark. Feb . 3, 2017). In each interstate case , the Court eventually certified one nationwide
class for the FCA claims and several multi-state subclasses for the unjust enrichment
claims. See id. at *9-*10; In re Global Tel *Link Corp. JCS Litig. , 2017 WL 471571 , at *10*11 (W .D. Ark. Feb . 3, 2017).
However, in June of 2017, the Court of Appeals for the D.C. Circuit issued an
opinion in a separate proceeding that this Court was concerned might be binding authority
and might undermine this Court's justification for certifying the FCA classes. See Global
Tel*Link v. FCC, 859 F.3d 39 (D .C. Cir. 2017), amended and superseded by Global
Tel*Link v. FCC , 866 F.3d 397 (D.C. Cir. 20 17). Anticipating that a petition for rehearing
en bane would be filed in that D.C. Circuit case , this Court entered administrative stays
of both interstate cases pending the resolution of any such petition . The expected petition
was indeed filed on July 28 , 2017 . It was denied only earlier this week on September 26 ,
see D.C. Cir. Case No . 15-1461 , Doc. 1694853, but this Court has not yet lifted the stays
in the interstate cases. As for the Securus intrastate case , it was not filed until January
of th is year, and discovery is ongoing. No motion for class certification has yet been filed
in that case.
In the instant case, Plaintiffs originally brought their claims under the FCA, the
common-law doctrine of unjust enrichment, the Arkansas Deceptive Trade Practices Act
("ADTPA"), and California 's Unfair Competition Law ("UCL").
However, the Court
dismissed Plaintiffs' FCA claims without prejudice, essentially on the grounds that the
FCA does not apply to the sort of purely intrastate communications services described in
the Amended Complaint.
See Doc. 46 , pp. 5-8.
The case that was subsequently
consolidated with the instant one also brought claims under the Pennsylvania Unfair
Trade Practices and Consumer Protection Law ("UTPCPL").
On February 17 of this year, Plaintiffs filed their Motion for Class Certification ,
Appointment of Class Representatives, and Appointment of Class Counsel (Doc. 63). A
couple of weeks later, on March 1, 2017 , GTL filed its Motion to Compel Arbitration and
Stay the Proceedings (Doc. 67). Both Motions have been extensively briefed , and on
May 10 of this year the Court heard oral argument on them for several hours. Accordingly,
both Motions are ripe for decision. Below, the Court will address GTL's arbitration Motion
first. Then , the Court will take up Plaintiffs' class certification Motion.
II. GTL'S MOTION TO COMPEL ARBITRATION (Doc. 67)
GTL has moved to compel four of the Plaintiffs to arbitrate their claims: Shondra
Caldwell , Jacqueline Jacobs, Stefanie Veon , and Stephen Orosz, Sr. (collectively, "the
The Federal Arbitration Act ("FAA") provides that "[a] written
provision in .. . a contract evidencing a transaction involving commerce to settle by
arbitration a controversy thereafter arising out of such contract or transaction ... shall be
valid , irrevocable , and enforceable, save upon any grounds as exist at law or in equity for
the revocation of any contract. " 9 U.S.C. § 2.
The Supreme Court has repeatedly
recognized this to be the enunciation of a "liberal federal policy favoring arbitration ." AT&T
Mobility LLC v. Concepcion , 566 U.S. 333, 339 (2011 ) (quoting Moses H. Cone Mem.
Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)).
However, the Arbitrating Plaintiffs contend that here , GTL has waived any right it
may have to arbitrate their claims. "A party waives its right to arbitration if it '(1) knew of
an existing right to arbitration ; (2) acted inconsistently with that right; and (3) prejudiced
the other party by these inconsistent acts ."' Messina v. N. Cent. Distrib., Inc. , 821 F.3d
1047, 1050 (8th Cir. 2016 ) (quoting Lewallen v. Green Tree Servicing, LLC, 487 F.3d
1085, 1090 (8-th Cir. 2007)). The Arbitrating Plaintiffs bear-the burden of demonstrating
that these elements are satisfied here. See Stifel, Nicolaus & Co. Inc. v. Freeman , 924
F.2d 157, 158 (8th Cir. 1991 ). Whether these elements are met is an issue for this
Court-not an arbitrator-to decide. See N & D Fashions, Inc. v. DHJ Indus. , Inc., 548
F.2d 722 , 728 (8th Cir. 1976).
All three elements of waiver are easily satisfied with respect to Ms. Caldwell , Ms.
Jacobs, and Ms. Veon . GTL contends that all three of these individuals agreed to arbitrate
their claims before any of them filed their instant lawsuits, see Doc. 68 , p. 7, so GTL surely
knew of its right to arbitrate given that it possessed these arbitration agreements, see
Messina , 821 F.3d at 1050.1 Yet, GTL waited well over a year and a half after the instant
GTL insists that it did not know of its right to arbitrate until it recently received these
Plaintiffs' phone numbers in discovery and used those phone numbers to identify them
as the individuals who signed the arbitration agreements in question. The Court finds this
implausible. GTL has been aware of these Plaintiffs' names from the moment they served
it with copies of their complaints in this case , and GTL's counsel conceded during oral
argument that GTL had the ability to search their database of arbitration agreements for
these· Plaintiffs' names. See Doc. 88 , pp. 25- 26 . Given that there is no representation
or evidence in the record that any such search was ever attempted , the Court places no
stock in the theoretical possibility that, if such a search had been performed , it might have
litigation began before attempting to compel these Plaintiffs to arbitrate their claims . In
the meantime , GTL forced these Plaintiffs to defend against a motion before the
Multidistrict Litigation Panel to transfer all related actions to the Eastern District of
Pennsylvania , see E.D . Pa . Case No. 2:15-cv-2197, Doc. 10, pp . 1, 3, and forced Ms.
Jacobs and Ms. Caldwell to defend against a motion here in the Western District of
Arkansas that sought dismissal of their claims on the merits, see W.D. Ark. Case No.
5:15-cv-5136, Doc. 28 .
A party acts inconsistently with its right to arbitration "if it substantially invokes the
litigation mnchinery before asserting its arbitration right, whe n-;-for example , it . .. fails to
move to compel arbitration and stay litigation in a timely manner." Messina , 821 F.3d at
1050 (internal quotation marks and alterations omitted). And "[p]rejudice from a failure to
assert an arbitration right occurs when , for example , parties ... litigate substantial issues
on the merits, or when compelling arbitration would require a duplication of efforts ," or
when a party is "forced to defend against [a] motion to transfer venue ." See id. at 1051.
The aforementioned motion to dismiss was granted with respect to Plaintiffs' claims under
the FCA, and denied with respect to Plaintiffs' state-law claims-rulings which established
law of the case for all of the subsequently consolidated Plaintiffs as well . Seeking "an
immediate and total victory in the parties' dispute" in federal court, and then only
subsequently seeking to compel arbitration smacks of "want[ing] to see how the case was
going in federal district court before deciding whether it would be better off there or in
turned up multiple individuals with identical names. See id. "To safeguard its right to
arbitration , a party must 'do all it could reasonably have been expected to do to make the
earliest feasible determination of whether to proceed judicially or by arbitration ."'
Lewallen v. Green Tree Servicing, L.L.C., 487 F.3d 1085, 1091 (8th Cir. 2007) (quoting
Cabinetree of Wis ., Inc. v. Kraftmaid Cabinetry, Inc., 50 F.3d 388 , 391 (7th Cir. 1995)).
arbitration"-a form of "heads I win , tails you lose , which is the worst possible reason for
failing to move for arbitration sooner than it did ." See Hooper v. Advance Am. , Cash
Advance Ctrs. of Missouri, Inc., 589 F.3d 917 , 922 (8th Cir. 2009) (internal quotation
marks omitted) .
The issue of waiver would appear at first glance to be a bit closer with respect to
Mr. Orosz, Sr. GTL contends that he signed an arbitration agreement on May 4, 2016 ,
see Doc. 68 , pp . 7-8, which was half a year after contested briefing was completed on
the issue of venue in Mr. Orosz, Sr.'s case , see, e.g., Case No. 5:16-cv-5165 , Doc. 25 ,
and one month after contested briefing was completed on GTL's-motion to dismiss in the
case with wh ich Mr. Orosz, Sr. 's case was ultimately consolidated , see, e.g. , Case No.
5:15-cv-5136 , Docs . 45 , 51 .
After May 4, 2016 , GTL did not file any contested or
substantive motions until roughly ten months later, when it moved to compel arbitration.
GTL represents that it has demanded minimal discovery from the Plaintiffs during that
period . See Doc. 88 , p. 30 . If these facts were the whole story, then there might be a
good argument that Mr. Orosz, Sr. was not prejudiced by GTL's ten-month delay. Cf.
James v. Global Tel*Link Corp. , 2016 WL 589676 , at *10 (D.N.J. Feb . 11 , 2016) ("Here,
the discovery, while not de minimus, does not rise to a level sufficient to constitute
prejudice to the Plaintiffs .").
However, GTL knew this was a putative class action , see Case No. 5:16-cv-5165,
Doc. 1 (styled "Class Action Complaint") , and that at some point on or before February
17, 2017-nine months after it claims he signed the arbitration agreement-Mr. Orosz,
Sr. would move to certify a class and be appointed as a class representative, see Case
No. 5:15-cv-5136 , Docs. 52 , 57. Yet, GTL chose not to move to compel arbitration of Mr.
Orosz, Sr. 's claims until a month after the deadline had passed for him to move for class
certification , even though GTL contends that Mr. Orosz, Sr.'s arbitration agreement
prohibits him from arbitrating his claims on behalf of a class. See Doc. 68 , pp . 5-6 ; Doc.
,m 6, 8.
By this Court's tally, the Motion for Class Certification and supporting
documents that Mr. Orosz, Sr. and his fellow Plaintiffs filed on February 17, 2017 consist
of 3,191 pages. See Docs. 63-66 . Thus, if there is in fact a valid , enforceable arbitration
agreement between GTL and Mr. Orosz, Sr., and if that arbitration agreement means
what GTL says it means, then GTL's delay in moving for arbitration of Mr. Orosz, Sr.'s
claims resulted·-~A·'.him devoting some substantial amount of time £ nd effort towards the
litigation of class certification issues that would be of utterly no use to him in arbitration ,
and that he never would have undertaken if GTL had simply moved to compel arbitration
in a timely manner. That is a textbook example of prejudice .
Ultimately, then , all three elements of waiver are satisfied with respect to each of
the Arbitrating Plaintiffs. Therefore, GTL's Motion to Compel Arbitration will be DENIED .
Now the Court will turn to Plaintiffs' class certification Motion .
Ill. PLAINTIFFS' MOTION FOR CLASS CERTIFICATION (Doc. 63)
Plaintiffs seek certification of the following four classes:
Unjust Enrichment Class 1: All persons who at any time on or after April
24, 2011 , paid to use inmate calling services provided by Global Tel*Link
(including its operating subsidiaries) to make or receive one or more
intrastate phone calls from a correctional facility in Arkansas , California,
Indiana, or Vermont, during a period of time when Global Tel*Link paid the
facility a commission of any type in connection with the intrastate calls;
Unjust Enrichment Class 2: All persons who at any time on or after April
24, 2011, paid to use inmate calling services provided by Global Tel*Link
(including its operating subsidiaries) to make or receive one or more
intrastate phone calls from a correctional facility in Pennsylvania , Georgia ,
Florida , Maryland , Mississippi , South Dakota , or Virginia , during a period of
time when Global Tel*Link paid the facil ity a commission of any type in
connection with the intrastate calls;
ADTPA Class: All persons who at any time on or after June 12, 2010: (1)
paid to use inmate calling services provided by Global T el*Link (including
its operating subsidiaries) to make or receive one or more intrastate phone
calls from a correctional facility in Arkansas , during a period of time when
Global Tel*Link paid the facility a commission of any type in connection with
the intrastate calls ; and/or (2) paid deposit fees to Global Tel *Link in order
to fund a prepaid account used to pay for any intrastate calls within
Arkansas ; and
UCL Class: All persons who at any time on or after August 28 , 2011: (1)
paid to use inmate calling services provided by Global Tel*Link (including
its operating subsidiaries) to make or receive one or more intrastate phone
calls from a correctional facility in California , during a period of time when
Global T el*:Link paid the facility a commission of any type in ccmnection with
the intrastate calls; and/or (2) paid deposit fees to Global Tel*Link in order
to fund a prepaid account used to pay for any intrastate calls within
See Doc. 63, ,I,I 1-2; Doc. 85-1 , ,I 18; Doc. 88 , pp. 69-70 . Plaintiffs also initially sought
certification of a UTPCPL class, see Doc. 63 at ,I 2, but they have since withdrawn that
particular request , see Doc. 85 , p. 7 n.2; Doc. 85-1 , ,I 17. After reciting the legal standard
for class certification motions, the Court will discuss its application to Plaintiffs' request.
A. LEGAL STANDARD
The party seeking class certification bears the burden of proving that Rule 23's
requirements are satisfied . See Wal-Mart Stores, Inc. v. Dukes, 564 U.S. 338 , 350
(2011 ). The district court retains "broad discretion in determining whether to certify a
class, recognizing the essentially factual basis of the certification inquiry and . . . the
district court's inherent power to manage and control pend ing litigation ." In re Zurn Pex
Plumbing Prods. Liab. Litig., 644 F.3d 604 , 616 (8th Cir. 2011) (internal quotations and
citations omitted) . A district court must undertake "a rigorous analysis" to ensure that the
requirements of Rule 23 are met. Gen. Tel. Co. of the Sw. v. Falcon , 467 U.S . 147, 161
(1982) . "Frequently that 'rigorous analysis' will entail some overlap with the merits of the
plaintiff's underlying claim ." Wal-Mart Stores, 564 U.S. at 351 (2011 ). The district court
may "resolve disputes going to the factual setting of the case" if necessary to the class
certification analysis. Blades v. Monsanto Co. , 400 F.3d 562 , 567 (8th Cir. 2005).
An implicit requirement for any class certification inquiry involves a court's
assessment as to the ascertainability of the class. The description of a proposed class
must be sufficiently definite to permit class members to be identified by objective criteria .
See Sandusky Wellness Ctr. , LLC v. Medtox Sci. , Inc., 821 F.3d 992 , 996-97 (8th Cir.
2016). "The require :-:1ent that a class be clearly defined is designed pr:" arily to help the
trial court manage the class. It is not designed to be a particularly stringent test, but
plaintiffs must at least be able to establish that the general outlines of the membership of
the class are determinable at the outset of the litigation ." Bynum v. Dist. of Columbia ,
214 F.R.D . 27, 31 (D.D.C. 2003).
Under Rule 23 , certifying a class action requires a two-step analysis. First, the
Court must determine whether:
the class is so numerous that joinder of all members is impracticable
there are questions of law or fact common to the class ("commonality");
the claims or defenses of the representative parties are typical of the claims or
defenses of the class ("typicality''); and
the representative parties will fairly and adequately protect the interests of the
class (" fair and adequate representation").
Rule 23(a)(1 )-(4). Second, the Court must determine whether:
questions of law or fact common to class members predominate over questions
affecting only individual members ("predominance"); and
a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy ("superiority").
1. Definition and Ascertainability
As this Court observed in its interstate GTL class certification order, "the Eighth
Circuit, 'unlike most other-courts of appeals, has not outlined a ... separat e~ preliminary
requirement' of ascertainability that would require plaintiffs to demonstrate a method of
identifying class members that is administratively feasible ." In re Global Tel*Link Corp.
/CS Litig., 2017 WL 471571 , at *3 (W.D. Ark. Feb . 3, 2017) (quoting Sandusky Wellness ,
821 F.3d at 996). Instead ,
the Eighth Circuit simply adheres to a rigorous analysis of the Rule 23
factors , and while it recognizes that this analysis necessarily entails that a
class be 'adequately defined and clearly ascertainable ,' the focus of this
threshold inquiry is on whether the proposed class definition identifies class
members by objective criteria , rather than on the administrative concerns
that are already taken into account by the Rule 23(b )(3) factors of
predominance and superiority.
GTL argues that Plaintiffs' class definitions create choice-of-law problems by not
specifying where the class members were geographically located at the time they placed
an intrastate call. See Doc. 88, pp. 70-75. Without knowing where the class members
were located , the argument goes, we cannot know which state's law to apply to any given
class member's claims without conducting a choice-of-law multi-factor balancing test for
every single member. See id. But this concern, however legitimate it may be, has nothing
to do with whether the proposed class definitions identify class members by objective
criteria ; rather, it concerns whether common issues predominate over questions affecting
individual class members.
Apart from the foregoing issue , "GTL's position on ascertainability is the same in
this case as in the interstate case and incorporates the same arguments and evidence
here ." (Doc. 73 , p. 33). Likewise, for the same reasons as in the interstate case, those
arguments are unavailing here and Plaintiffs' proposed class definitions satisfy the
ascertainability requirement. See In re Global Tel *Link Corp. JCS Litig. , 2017-WL 471571 ,
at *3-*5 (W .D. Ark. Feb. 3, 2017).
2. Rule 23(a): Numerosity, Commonality, Typicality, and
Fair and Adequate Representation
The proposed classes are numerous, likely containing at least thousands of
members. Plaintiffs' claims are also typical of the proposed classes' claims, as all class
members' claims "are based on the same . .. remedial theory," Paxton v. Union Nat.
Bank, 688 F.2d 552 , 561-62 (8th Cir. 1982), which is that GTL violated several states'
consumer protection laws and common law of unjust enrichment "by charging them
exorbitant rates and deposit fees for [intra]state phone calls ." In re Global Tel*Link Corp.
JCS Litig. , 2017 WL 471571 , at *6 (W.D. Ark. Feb. 3, 2017). And Plaintiffs would fairly
and -adequately represent the classes' interests, which are aligned with their own ; as in
the interstate case , "they have vigorously prosecuted their own interests through qualified
counsel up through the present moment in this litigation, and the Court sees no reason to
believe this vigorous prosecution will abate following class certification ." Id. GTL has not
argued in its briefing that these three Rule 23(a) factors weigh against class certification,
and at oral argument counsel for GTL clarified that it has no arguments to offer with
respect to these three factors that this Court has not already rejected in the interstate
case. See Doc. 88, pp. 34-35.
Instead , GTL has focused its Rule 23(a) analysis on the factor of commonality,
which it has blended with its discussion of the Rule 23(b)(3) factor of predominance.
Although they implicate many of the same issues, the Court prefers to keep these two
factors analytically distinct. Here, as in the interstate case :
Plaintiffs allege that GTL recoups the site commissions it pays incarceration
facilities through the rates it charges users of its inmate calling services, that
GTL charges fees - -depositing funds in inmate prepaid accounts -that ·
grossly exceed the cost of processing those deposits, and that these
practices are the result of nationwide policies rather than of ad hoc
negotiations with individual consumers of GTL's services.
In re Global Tel*Link Corp . /CS Litig. , 2017 WL 471571 , at *5 (W.D . Ark. Feb. 3, 2017).
And here, as there , these particular allegations present factual questions that are
common to the class, in that their truth or falsity "do[es] not depend in any way on the
individual circumstances surrounding ind ividual payments by class members ." See id.
3. Rule 23(b)(3): Predominance and Superiority
However, whether such common questions predominate over individual questions
as required by Rule 23(b)(3) is a different matter. "The Rule 23(b) predominance inquiry
tests whether proposed classes are sufficiently cohesive to warrant adjudication by
representation ." Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 623 (1997). The Eighth
Circuit has explained that:
When determining whether common questions predominate , a court must
conduct a limited preliminary inquiry, looking behind the pleadings, but that
inquiry should be limited to determining whether, if the plaintiffs' general
allegations are true, common evidence could suffice to make out a prima
facie case for the class. While limited in scope , this analysis should also be
In re Zurn Pex Plumbing Prod. Liab. Litig., 644 F.3d 604, 618 (8th Cir. 2011) (emphasis
added) (internal citations and quotation marks omitted). In the interstate case, the Court
was persuaded that the aforementioned common allegations, if true, could suffice to make
out a prima facie case for the proposed FCA and unjust enrichment classes. However,
in the instant case, the Court does not believe these same common allegations could
suffice to make out a prima facie case for the proposed ADTPA and UCL classes.
Furthermore , new arguments raised in this case about one of GTL's defenses to Plaintiffs'
unjust enrichment claims have persuaded the Court that common issues do not
predominate with respect to the unjust enrichment classes either.
GTL offers a great variety of arguments on the topic of predominance, many of
which are ones that, if reached, the Court would find unpersuasive here for the same
reasons it found them unpersuasive in the interstate GTL case . The Court sees no point
in discussing those arguments in this Opinion , since they ultimately do not drive its
decision here. Instead, the Court will focus its discussion on the new arguments GTL has
offered, which have persuaded the Court that class certification is not appropriate here.
One of those arguments concerns the "voluntary payment doctrine ," which GTL
says it would assert as an affirmative defense in this case. This is not the first time the
voluntary payment doctrine has come up in these ICS cases, but it has a particular nuance
here that the Court has not previously explored. To provide some context for this new
twist, the Court will first recap what the voluntary payment doctrine is, and how the issue
arose in the two interstate cases.
The voluntary payment doctrine holds that "payments which are voluntarily made
cannot be recovered except for payments made as a result of duress, fraud , mistake or
failure of consideration. " Gautrau v. Long, 271 Ark. 394, 396 (Ark. Ct. App. 1980). Among
these ICS cases , the Court first encountered the voluntary payment doctrine in the
Securus interstate case . As previously mentioned , a plaintiff in that case , Susan Mojica,
was asserting claims under the FCA, as well as under the Arkansas common law of unjust
enrichment, to recover excessive calling rates and excessive credit card fees (a different
term for the aforementioned "deposit fees") that she had paid Securus in order to
communicate with an imprisoned loved one. Before any class had been certified ifl ·that
case, Securus moved for summary judgment against Ms. Mojica. For the most part, that
motion was denied , but there was one issue on which it was granted-and that issue
concerned the voluntary payment doctrine.
Securus contended that Ms. Mojica 's "claims regarding credit card fees are barred
by the common-law voluntary payment doctrine. " See Mojica v. Securus Techs. , Inc. ,
2016 WL 7650654, at *4 (W.D. Ark. Nov. 29 , 2016) (internal quotation marks omitted).
The Court rejected this argument with respect to Ms. Mojica 's claim under the FCA, ruling
that "[b]ecause the voluntary payment doctrine is a creature of state common law, it does
not apply to Ms. Mojica's statutory federal claim under the FCA .. . ." See id. (citing Allen
ex rel. Martin v. LaSalle Bank, N.A. , 629 F.3d 364 , 369 (3d Cir. 2011 ); Sayyed v. Wolpoff
& Abramson , 485 F.3d 226 , 231 (4th Cir. 2007)) . However, with respect to Ms. Mojica's
claim under Arkansas common law for unjust enrichment, the Court noted "the undisputed
fact that [Ms . Mojica] could have obtained Securus's services while avoiding paying any
credit card fees if she had used a non-credit card method of payment, such as check,
money order, or sending money to the inmate to pay from his own calling card or account,"
and found further that she had failed to come forward with any specific evidence that
would support applying any of the traditional exceptions to the voluntary payment doctrine
in her case. See id. at *5. Accordingly , the Court granted Securus partial summary
judgment on Ms. Mojica's claim for unjust enrichment, "to the extent that this claim is for
the recovery of credit card fees ." See id.
At the time the Court made this ruling , the motion for class certification in that case
had already been fully briefed and was still pending . In that class certification motion , the
plaintiffs were seeking certificatio ~ of one nationwide class for their FCA claims, and t·No
subclasses for their unjust enrichment claims.
Originally, all three of their proposed
classes sought recovery of excessive calling rates and excessive credit card fees . But in
light of the Court's summary-judgment ruling , they withdrew that portion of their classcertification request which pertained to unjust enrichment claims for credit card fees . A
few months later, in its Order granting what remained of their motion for class certification ,
this Court addressed one of Securus's arguments on the factor of predominance as
Securus argues that "individual questions arise under the voluntary
payment doctrine and bar certification of any deposit fee claim ." This Court
has already held that the voluntary payment doctrine does not apply to
Plaintiffs' FCA claims, and the argument is otherwise mooted by Plaintiffs'
withdrawal of their Motion with respect to the unjust enrichment claim for
Mojica v. Securus Techs., Inc. , 2017 WL 470910 , at *7 (W.D . Ark. Feb . 3, 2017) (internal
alterations and citations omitted).
Meanwhile, in the GTL interstate case , although GTL had not moved for summary
judgment on the issue of the voluntary payment doctrine , the plaintiffs in that case saw
the hand writing on the wall after the Court's summary-judgment ruling in Mojica , and
accordingly withdrew the ir request for certification of unjust-enrichment deposit-fee
subclasses in the same manner as the plaintiffs had in Mojica . Thus, in its Order granting
what remained of those plaintiffs' motion for class certification , the Court rejected GTL's
voluntary-payment predominance argument with respect to deposit fees in the same
manner it had rejected Securus's-finding the argument moot as to unjust enrichment,
and inapplicable to the FCA. See In re Global Tel *Link Corp. /CS Litig., 2017 WL 471571 ,
at *7 (W.D. Ark. Feb . 3, 2017). However, the Court addressed an additional wrinkle in
GTL's argument that had been lacking in Securus's, noting that "GTL contends that t-';e
voluntary payment doctrine ... raise[s] individualized fact issues with respect to class
members' claims that recoupment of site commissions [through excessive calling rates]
violates the common law of unjust enrichment. " See id. at *8 (emphasis added). The
Court rejected this argument, but with the caveat that it was doing so "on the basis of the
record currently before it. " See id. It explained , "[t]here is no evidence in the record that
any class members who wished to use inmate calling services had the option of not
paying recoupments of site commissions to GTL ; thus, whether these rates were
'voluntary' or the 'result of duress' under such conditions is a question that is common
among all class members." Id. (emphasis in original).
But now, in the instant intrastate case , GTL has directed the Court's attention to
concrete evidence that at least some class members who wished to use inmate calling
services did , in fact , have the option of not paying recoupments of site commissions to
GTL at least some of the time . It has provided the Court with a copy of a contract between
it and a county sheriff's office , that states in relevant part: "The [inmate telephone system]
shall allow free local telephone calls from the booking area or to selected telephone
numbers approved by [the sheriff's office] ." See Doc. 73-15 . It has identified relevant
transcript portions from the deposition of one of the class representatives in the interstate
case , Kaylan Stuart, who testified that while he was an inmate at a facility serviced by
GTL , he was able to make free calls from the front of the jail to his lawyer, his
grandmother, and his parents.
See Doc. 73-21, pp. 8-14.
It has also highlighted
deposition testimony of Thomas Sweeney, GTL's Vice President of Sales and Marketing ,
likewise taken through the interstate case , describing how inmates "have free calls at all
the booking phones." See Doc. 73-4, ,.,. 14:2
In addition to this evidence regarding free calling options , GTL has given the Court
a related set of arguments to ponder that was not raised in either of the interstate cases.
This family of arguments crops up in various guises throughout GTL's Responsesometimes as an argument about predominance , and at other times as an argument
about whether Plaintiffs have standing . But essentially, this family of arguments boils
Out of curiosity, the Court went back to the docket for the interstate GTL case, to explore
whether these particular deposition transcripts ever made it into the evidentiary record.
Interestingly enough, they did-but courtesy of the plaintiffs, rather than GTL. As best
the Court can tell, GTL never attached any deposition testimony of Mr. Sweeney to its
class certification and summary judgment briefing in that case. And although GTL did
attach some other excerpts (on other topics) from Mr. Stuart's deposition , it never
attached these particular excerpts. See In re Global Tel*Link Corp. /CS Litig., Case No.
5: 14-cv-5275, Doc. 106-8. However, among the plaintiffs' many exhibits in support of
their class certification briefing , were the entire deposition transcripts for both Mr.
Sweeney and Mr. Stuart-including the pages discussed above. See In re Global
Tel*Link Corp. /CS Litig., Case No. 5:14-cv-5275 , Doc. 93-4, pp. 171 , 1063-67, 108384. So actually, when the Court wrote in its class certification order in that case that
"(t]here is no evidence in the record that any class members who wished to use inmate
calling services had the option of not paying recoupments of site comm issions to GTL ," it
was incorrect. What it should have written was that no such evidence had been brought
to the Court's attention . But it is there , and now the Court is aware of it.
down to the following proposition : that GTL has not harmed anyone by simply offering a
service, at a fully and honestly disclosed price , to inmates who are perfectly free to take
or leave the offer as they wish , and then providing exactly what was promised to those
who choose to accept the offer.
To the extent this is an argument that Plaintiffs lack standing to bring their claims,
the Court does not buy it. Plaintiffs allege , inter alia , that GTL exploited an exclusiveprovider contract by charging them , and all proposed class members, excessive phone
rates that were designed to recoup the exorbitant site commissions GTL paid to acquire
the exclusive contracts in the first place . The Court simply does not see how it could rule
that this sort of allegation fails to describe a "concrete and particularized " injury that is "an
invasion of a legally protected interest," Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548
(2016), given that, for example , the Arkansas Supreme Court has affirmed a finding that
an entity violated the ADTPA by improperly exploiting economic leverage resulting from
exclusive-provider contracts. See Baptist Health v. Murphy, 365 Ark. 115, 128-29 (2006) .
But to the extent this is an argument not about standing , but about the voluntary
payment doctrine, the Court finds it much more persuasive, because it is a defense that
GTL could assert against every single member of the proposed unjust enrichment
classes. 3 True , Plaintiffs would then turn around and argue that one of the exceptions of
"fraud , duress , mistake of fact, coercion , or extortion " applied , see Douglas v. Adams
Trucking Co., Inc. , 345 Ark. 203 , 212 (2001 ), but that would be an inherently individualized
Importantly, the voluntary payment doctrine exists in every member state of the
proposed unjust enrichment classes. See Doc. 73-33, pp. 3-5 (collecting authorities).
For example, consider an unpopular inmate housed in a maximum-security facility
500 miles away from his nearest loved one, with no free-calling options. And then
consider a popular inmate at a minimum-security facility with free-calling options , whose
loved ones routinely visit him in person but every once in a blue moon chat with him on
the phone instead. The case for duress is obviously much easier to make for the former
than the latter. Or, instead of conversations between longed-for loved ones, consider
conversations between inmates and investigative journalists,4 or between inmates and
psychology students who are researching cognitive distortions common to criminal
Can the decision to pay for eit!-:er of those types of phone calls be fairly
characterized as having been made under duress? At a minimum , the Court is very
skeptical that they could be .
The Court's point in providing these hypothetical examples is not to suggest that
any of them is typical of the proposed class members , or to speculate about the
percentage of class members against whom GTL's voluntary payment defense would
actually succeed .
Rather, the Court's point is simply that GTL's voluntary payment
defense can be asserted in good faith against every member of the proposed unjust
enrichment classes, and that it cannot be resolved without an individualized inquiry every
time-not only into each member's personal circumstances , but even into the particular
circumstances surrounding each call. The Court is certainly mindful of the Supreme
Court's instruction that "[w]hen one or more of the central issues in the action are common
Listeners to the first season of the popular podcast "Serial" might recall the recorded
message that opened every episode of that season (and every phone conversation
between the show's host and the show's subject): "This is a Global Tel*Link prepaid call
from Adnan Syed , an inmate at a Maryland correctional facility ."
https://www.youtube.com /watch?v=cGD2H5Fg2Dc (last visited September 25 , 2017) .
to the class and can be said to predominate, the action may be considered proper under
Rule 23(b)(3) even though other important matters will have to be tried separately, such
as damages or some affirmative defenses peculiar to some individual class members ."
Tyson Foods, Inc. v. Bouaphakeo , 136 S. Ct. 1036, 1045 (2016) (internal quotation marks
omitted). But that is a far cry from the situation here . GTL's voluntary payment defense
overwhelms issues common to the unjust enrichment classes.
It plays every bit as
ubiquitous a formal role in the determination of liability as is played by the very elements
of the offense , and is countless times more labor-intensive.
· It is illuminating to contrast this partietJ~-ar defense of GTL's with a different one ,
which the Court does not believe would frustrate predominance: arbitration. GTL has
standard form arbitration agreements, provided to users of ICS in the form of automated
telephone messages or internet-browser check-the-box text.
The Court has already
found the telephonic arbitration agreement unenforceable in GTL's interstate case, for
reasons that would almost certainly apply with equal force to every single class member
against which GTL would assert that defense in this case. See In re Global Tel*Link Corp.
/CS Litig., 2017 WL 8311101 (W.D. Ark. Mar. 2, 2017). And assuming for the sake of
argument that the Court were to find the online arbitration agreement enforceable (other
than against the Arbitrating Plaintiffs discussed in Section II of this Order), identifying
class members against whom it should be enforced would require nothing more than a
very simple search for names in an electronic database. See pp. 5-6 n.1, supra; Doc.
88 , pp. 25-26 . That is very different from the administrative nightmare created by GTL's
voluntary payment defense, which is effectively a separate full-on trial on the merits with
respect to every single member of the unjust enrichment classes.
As for Plaintiffs' proposed statutory classes, the Court doubts that the voluntary
payment doctrine is available to GTL against any of their members. The Court has been
unable to find a single California case discussing the availability of the voluntary payment
doctrine as a defense against UCL claims, or a single Arkansas case discussing its
availability against ADTPA claims. Consumer protection statutes are intended to be
construed broadly in favor of the consumer, such that applying a common-law defense to
a consumer's claim may stymie the legislative intent. See Sobel v. Hertz Corp., 698 F.
Supp. 2d 1218, 1223-24 (D. Nev. 2010) (collecting cases discussing whether the
voluntary payment rule may be properly asserted as a defense to a statutory consumer
protection claim). Several courts have found that public policy does not favor allowing a
voluntary payment defense to a statutory claim. See Sayyed v. Wolpoff & Abramson , 485
F.3d 226 , 231 (4th Cir. 2007) (explaining that "common law immunities cannot trump the
[Fair Debt Collection Practices] Act's clear application"); Sobel, 698 F. Supp. 2d at 1224
(finding that Nevada's Deceptive Trade Practices Act was designed "primarily for the
protection of consumers" and that permitting the voluntary payment rule to be asserted
as a an affirmative defense would be contrary to public policy); Indoor Billboard/Wash.,
Inc. v. lntegra Telecom of Wash. , Inc. , 162 Wash. 2d 59 , 86 (2007) (find ing the voluntary
payment rule "inappropriate as an affirmative defense in the [Washington Consumer
Protection Act] context" because the Act should be construed "liberally in favor of
plaintiffs"); Huch v. Charter Commc'ns, Inc., 290 S.W.3d 721 , 727 (Mo. 2009) ("To allow
(defendant] to avoid liability [under Missouri's Merchandising Practices Act] for this unfair
practice through the voluntary payment doctrine would nullify the protections of the act
and be contrary to the intent of the legislature."); Ramirez v. Smart Corp., 371 Ill. App. 3d
797 , 804 (Ill. Ct. App. 2007) (holding that Illinois "has an interest in transactions that
violate 'statutorily-defined public policy"' such that "the voluntary payment rule will not be
However, the problems with predominance that characterize the voluntary
payment defense nevertheless also characterize Plaintiffs' classwide prima facie cases
under the ADTPA and the UCL. This is because these causes of action all require a
plaintiff to prove more than simply that GTL had a uniform practice of recouping site
commissions (and charging excessive deposit fees) , and that the plaintiff or class member
·· -:,aid -GTL a calling rate (or deposit fee) . They alsc require a plaintiff to prove things that
require inherently individualized inquiries , along similar lines to what has been discussed
above with respect to the voluntary payment doctrine.
For example, take Ark. Code Ann.§ 4-88-107(a)(8), which is one of the two prongs
of the ADTPA under which Plaintiffs bring their claims. That section requires that the
claimant be "reasonably unable to protect his or her interest because of: (A) Physical
infirmity; (B) Ignorance; (C) Illiteracy; (D) Inability to understand the language of the
agreement; or (E) A similar factor." Id. Factors (A) through (D) obviously all require
individualized inquiry, and just as obviously, none of those first four factors would be
common among all class members. Plaintiffs could try to argue that incarceration is a
"similar factor" under (E)-but then what about our hypothetical inmate who receives
regular visits from loved ones and feels no urgent need to call them on the phone as well ,
but nevertheless does so on rare occasions just because he finds it pleasant to do so
every now and then? What about an inmate who has free calling options but chooses for
whatever reason not to use them? What about our hypothetical investigative journalist or
psychology student? For that matter, what about literally any member of the class who
is not an inmate and not an inmate's loved one , but who simply wishes to speak over the
phone with an inmate on any topic at all that is not urgent and is willing to pay to do so?
It seems impossible to the Court that a prima facie showing of liability under (E) could be
made with respect to any such class member without delving into an individualized
The same problem is present under Plaintiffs' other ADTPA prong , Ark. Code Ann .
§ 4-88-107(a)(10) , which prohibits "[e]ngaging in any other unconscionable, false , or
deceptive act or practice in business, commerce , or--tf-ade." Plaintiffs are not alleging that
GTL has been lying to them , so presumably they intend to prove that GTL unconscionably
exploited its economic leverage by charging them excessive rates and fees . See, e.g.,
Universal Cooperatives, Inc. v. AAC Flying Serv. , Inc., 710 F.3d 790 , 795-96 (8th Cir.
2013). But when examining whether a contract is unconscionable under the ADTPA, "the
courts should review the totality of the circumstances surrounding the negotiation and
execution of the contract. " State ex rel. Bryant v. R & A Inv. Co. , Inc. , 336 Ark. 289 , 296
(1999) (quoting Ark. Nat'/ Life Ins. Co. v. Durbin , 3 Ark. App. 170, 174-75 (1981)). And
there we are right back in individualized-inquiry land .
As for the UCL, pursuant to this Court's Order last year on GTL's Motion to
Dismiss, although there are three ways of establishing liability under that statute , only one
is available to Plaintiffs here: the so-called "unfairness" prong . See Doc. 46 , pp. 17-18.
And as the Court observed in that same Order:
In cases where the plaintiff is a consumer alleging violation of the UCL's
unfairness prong , the California Supreme Court "has not established a
definitive test to determine whether a business practice is unfair." Drum v.
San Fernando Valley Bar Ass'n, 182 Cal. App. 4th 247, 256 (2010). In that
absence , a split of authority has arisen amongst the California Courts of
Appeal , producing at least three different tests. Id. Plaintiffs argue they
have alleged sufficient facts to support a claim under two of these tests,
known respectively as the "balancing test" and the "public policy test. " To
state a claim under the balancing test, the alleged business practice must
be "immoral, uneth ical , oppressive , unscrupulous or substantially injurious
to consumers ," and "the gravity of the harm to the alleged victim " must
outweigh "the utility of the defendant's conduct. " See id. at 257 (quoting
Bardin v. Oaimlerchrysler Corp. , 136 Cal. App. 4th 1255, 1260 (2006)). To
state a claim under the public policy test, the alleged business practice must
violate some public policy that is "tethered to specific constitutional ,
statutory, or regulatory provisions ." See id. (quoting Bardin, 136 Cal. App.
4th at 1260-61 ). A third test, which the parties have not argued , draws
guidance from the notion of unfairness expressed in the Federal Trade
Commission Act at 15 U.S.C . § 45(n), and requires the consumer to have
suffered an injury that is (1) "substantial ," (2) not "outweighed by any
countervailing benefits to consumers or competition ," and (3) one "that
consumers themselves could not reasonably have avoided. " See id.
(quoting Davis v. Ford Motor Credit Co., 179 Cal. App. 4th 581 , 597-98
(Doc. 46 , pp. 18-19).
The "balancing" test is the only test the Plaintiffs mention in their class certification
briefing. But once again , it explicitly demands an individualized analysis by requiring the
Court to weigh the "gravity of the harm to the alleged victim "-which, as described above ,
will vary dramatically from one victim to another-against the "utility of the defendant's
conduct. " As for the "public policy" test, Plaintiffs have put forward no theory of the case
under it, and the Court is unaware of any "specific constitutional, statutory , or regulatory
provision" on which they could rely for their claims. So the Court does not see how it
could certify a class under that test. And the third test, which Plaintiffs also have not
discussed , requires at least two elements of individualized analysis : whether the
claimant's harm is "substantial ," and whether the claimant could "reasonably have
avoided it. " As to the latter of those two , this would again turn on peculiar facts like the
availability of free-calling options , the ease and frequency with which their loved ones
could visit them in person , and the urgency of the need or desire for the particular phone
There simply is no path forward under the common law of unjust enrichment or the
statutory laws of ADTPA and the UCL that avoids the necessity of overwhelmingly
claimant-specific factual analysis.
Therefore, the Court cannot certify these classes.
Given that conclusion , there is no need to address the final Rule 23(b )(3) factor of
Some final comments are warranted. Throughout these four ICS cases, the Court
has e:1 deavored to keep its rulings as consistent from c:,e case to another as the facts
and law of each case permits. But the Court must acknowledge a certain inconsistency
in outcome between its decisions to certify unjust enrichment classes in the interstate
cases (particularly the GTL one) and its decision not to certify unjust enrichment classes
in the instant case. The Court would make three observations on this point.
First, GTL presented the Court this time with arguments that had not previously
been made to it, and which had not previously occurred to the Court. The Court finds
those new arguments persuasive where the old ones were not, and it believes it has a
duty to rule in accordance with what it presently understands the law to require here.
Second , the inconsistency will not be permanent.
"The court's duty to assure
compliance with Rule 23(a) continues even after certification," Hervey v. City of Little
Rock, 787 F .2d 1223, 1227 (8th Cir. 1986), and "[a]n order that grants or denies class
certification may be altered or amended before final judgment," Fed. R. Civ. P.
23(c)(1 )(C). As previously mentioned , both interstate cases are presently stayed , but the
event which prompted the stays appears to have recently been resolved. See supra , p.
3. After those stays are lifted , the Court will take whatever measures are appropriate at
that time to restore consistency to its rulings in these ICS cases.
Third , at least for now, the Court considers the D.C. Circuit's opinion in Global
Tel*Link v. FCC, 866 F.3d 397 (D .C. Cir. 2017), to be much more relevant to the issue of
FCA class certification in the interstate cases than the instant Opinion and Order is. As
previously noted , the Court does not believe the defense of voluntary payment is available
against claims brought under the FCA. And the Court's analysis of the ADTPA and UCL
proposed classes was grounded in the elements of those particular causes of actionnot in the elements of any cause of action under the FCA.
Of course , the instant case is not either of those interstate cases. But the Court
makes these observations here out of courtesy to the parties and in the interest of judicial
economy, knowing that counsel for GTL , Securus , and the plaintiffs in all four ICS cases
all read all of the opinions and orders that this Court files in all four cases. Beyond these
closing bare observations , the Court will not speculate any further here on this Order's
implications for the interstate cases.
IT 15 THEREFORE ORDERED that Defendant Global Tel*Link Corporation 's
Motion to Compel Arbitration and Stay the Proceedings (Doc. 67), and Plaintiffs Walter
Chruby's, Earl Reese 's, Stephen Orosz, Sr.'s, Stephen Orosz, Jr.'s, Michael Veon 's,
Stefanie Veon 's, Lewis Brooks's, Jacqueline Jacobs's, and Shondra Caldwell's Motion
for Class Certification , Appointment of Class Representatives, and Appointment of Class
Counsel (Doc. 63) are both DENIED .
IT IS SO ORDERED on this
day of Septemb
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