Romero et al v. CenturyLink, Inc. et al
Filing
57
MEMORANDUM OF LAW & ORDER. IT IS HEREBY ORDERED: 1. Movants Edwin Miller, Vonita Taylor, and Patrick West's Motion for Leave to File Reply Brief 564 is GRANTED. 2. Movants Edwin Miller, Vonita Taylor, and Patrick West's Motion for Stay Pending Appeal 554 is DENIED. (Written Opinion) Signed by Judge Michael J. Davis on 2/21/2020. Associated Cases: 0:17-md-02795-MJD-KMM et al.(GRR)
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
IN RE: CENTURYLINK SALES
PRACTICES AND SECURITIES
LITIGATION
MDL No. 17-2795 (MJD/KMM)
This Document Relates to
Civil File Nos. 17-2832, 17-4613,
17-4614, 17-4615, 17-4616, 17-4617,
17-4618, 17-4619, 17-4622, 17-4943,
17-4944, 17-4945, 17-4947, 17-5046,
18-1562, 18-1565, 18-1572, 18-1573,
MEMORANDUM OF LAW & ORDER
Carolyn G. Anderson, Brian C. Gudmundson, Bryce D. Riddle, and Hart L.
Robinovitch, Zimmerman Reed LLP, Plaintiffs’ Interim Co- Lead and Liaison
Counsel; Mark M. O’Mara, Alyssa J. Flood, Channa Lloyd, and Caitlin Reese,
O’Mara Law Group, and Mark J. Geragos, Benjamin J. Meiselas, and Lori G.
Feldman, Geragos & Geragos, APC, Plaintiffs’ Interim Co-Lead Counsel;
Daniel C. Hedlund and Michelle J. Looby, Gustafson Gluek PLLC, Plaintiffs’
Executive Committee Chair; Richard M. Hagstrom, Anne T. Regan, Nicholas S.
Kuhlmann, and Jason Raether, Hellmuth & Johnson, PLLC, Roxanne Barton
Conlin, Roxanne Conlin & Associates, PC, and Francois M. Blaudeau, W. Lewis
Garrison, Jr., Christopher B. Hood, and James F. McDonough, III, Heninger
Garrison Davis, LLC, Plaintiffs’ Executive Committee; and T. Ryan Langley,
Hodge & Langley Law Firm, P.C., Michael Fuller, Olsen Daines PC, Brandon C.
Fernald, Fernald Law Group LLP, Bonner C. Walsh, Walsh PLLC, Alfred M.
Sanchez, and Orin Kurtz, Gardy & Notis, LLP, Counsel for Plaintiffs and the
Proposed Class.
Douglas P. Lobel, David A. Vogel, and Jeffrey M. Gutkin, Cooley LLP; Carolyn J.
Fairless, Michael T. Williams, Andrew Unthank, and Theresa Wardon Benz,
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Wheeler Trigg O’Donnell LLP; and William A. McNab and David M. Aafedt,
Winthrop & Weinstine, P.A., and Jerry W. Blackwell, Blackwell Burke P.A.,
Counsel for Defendant CenturyLink, Inc. and the Proposed Intervenors.
Warren D. Postman and Ashley C. Keller, Keller Lenkner LLC, and Jared D.
Shepherd, Hoff Barry, P.A., Counsel for Movants Edwin Miller, Vonita Taylor,
and Patrick West.
I.
INTRODUCTION
This matter is before the Court on Movants Edwin Miller, Vonita Taylor,
and Patrick West’s Motion for Stay Pending Appeal [Docket No. 554] and Motion
for Leave to File Reply Brief [Docket No. 564]. The Court heard oral argument
on February 20, 2020. For the reasons that follow, Movants’ motion for a stay
pending appeal is denied.
II.
BACKGROUND
A.
Procedural History of Settlement of the Consumer MDL
On October 16, 2019, Plaintiffs moved for an Order (1) granting
Preliminary Approval of the Settlement; (2) provisionally certifying the proposed
Settlement Class; (3) conditionally appointing the proposed Class
Representatives as the Settlement Class Representatives; (4) conditionally
appointing the proposed Class Counsel as the Settlement Class Counsel; (5)
approving the form and manner of notice, (6) ordering that notice be
2
disseminated to the Settlement Class; (7) establishing the deadlines for
Settlement Class Members to request exclusion from the Settlement Class, file
objections to the Settlement, or file Claims for a Settlement Award; and 8) setting
the proposed schedule for completion of further settlement proceedings,
including scheduling the final fairness hearing. [Docket No. 466] With that
motion, Plaintiffs filed a Proposed Order, which included a preliminary
injunction against the Releasing Parties from participating in, among other
things, arbitration relating to the Released Claims. ([Docket No. 474] Proposed
Order ¶ 10.) Defendant CenturyLink, Inc. and the Proposed Intervenors
(“CenturyLink”) filed a brief in support of Plaintiffs’ motion. [Docket No. 481]
On January 10, 2020, CenturyLink also filed a Supplemental Brief in
support of the motion for preliminary approval addressing Plaintiffs’ request
that the Court’s Preliminary Approval Order contain a temporary injunction of
all parallel proceedings, including arbitrations, by putative class members.
[Docket No. 508] CenturyLink specifically addressed the individual consumer
arbitrations brought against CenturyLink by clients of the law firms of Keller
Lenkner LLC (“Keller”) and Troxel Law LLP (“Troxel”). It represented that it
3
would serve Keller and the American Arbitration Association (“AAA”) with a
copy of its brief on January 10, 2020. (Id. at 3 n.3.)
On January 22, 2020, the Court held a hearing regarding the motion for
preliminary approval of the settlement. [Docket No. 524] None of Keller’s
clients appeared at the hearing; nor did they file any document in the MDL.
On January 24, 2020, the Court issued the Preliminary Approval Order,
which included the following language, as requested by Plaintiffs and
CenturyLink:
10. Injunction against Releasing Parties’ Pursuit of Released
Claims. Pending the Final Approval Hearing and issuance of the
Final Approval Order and Final Judgment, Releasing Parties are
hereby enjoined from filing, commencing, prosecuting, maintaining,
intervening in, participating in (as class members or otherwise), or
receiving any benefits from any class action or other lawsuit,
arbitration, or administrative, regulatory, or other proceeding in any
jurisdiction based on or relating to the Released Claims. The Court
finds that issuance of this preliminary injunction is necessary and
appropriate in aid of the Court’s jurisdiction over this action. The
Court finds no bond is necessary for issuance of this injunction.
([Docket No. 528] Preliminary Approval Order ¶ 10.)
“Releasing Party” is defined as “The Settlement Class Representatives, all
Settlement Class Members, and their respective heirs, executors, administrators,
4
representatives, agents, lawyers, partners, successors, and assigns.” ([Docket No.
469] Gudmundson Decl., Ex. A, Settlement Agreement § 1.35.)
B.
Arbitration Actions Brought by Keller’s Clients
In 2019, Keller began advertising through Facebook and other websites to
recruit arbitration claimants against CenturyLink. ([Docket No. 513] Unthank
Decl. ¶¶ 15, 19-21; Unthank Decl., Exs. C-D.) Keller claims that more than 22,000
CenturyLink customers have engaged its services to bring individual arbitration
claims against CenturyLink. (Unthank Decl. ¶ 51.)
a)
Keller’s Interactions with CenturyLink
On May 14, 2019, Keller sent a letter to CenturyLink on behalf of “[m]ore
than 9,000” clients who had retained Keller to pursue arbitration claims against
CenturyLink. (Unthank Decl. ¶ 30; Unthank Decl., Ex. H.) Two weeks later,
Keller sent a letter to CenturyLink identifying “nearly 3,000 additional”
claimants. (Unthank Decl. ¶ 35; Unthank Decl., Ex. I.)
On June 12, 2019, CenturyLink requested that Keller provide certain
information about the claims that CenturyLink claims to need in order to
evaluate and resolve each claim before proceeding to arbitration, as required by
the arbitration contracts. (Unthank Decl. ¶ 38; Unthank Decl., Ex. J.) Keller
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would not provide information such as account numbers, descriptions of
individual claims, or the amount of actual damages sought be each claimant. (Id.
¶¶ 38-39.) Keller did provide clients’ names, “current physical addresses, email
addresses, and phone numbers.” (Id. ¶ 39; Unthank Decl., Ex. K.) Keller stated
that it would not spend “15 minutes” to discuss each claim “on an individual
basis” with CenturyLink because “such a pre-demand ‘dialogue’ would consume
more than 3,500 hours.” (Unthank Decl. ¶ 40; Unthank Decl., Ex. K at 2.)
CenturyLink asserts that its initial review of Keller’s clients’ claims raised
concerns and a need for more information. (Unthank Decl. ¶¶ 42-44.) For
example, CenturyLink could not identify any potential customer account that
could be connected with some of Keller’s clients; some clients claimed to receive
services at addresses in states in which CenturyLink does not provide services;
and some clients owed money to CenturyLink and could be subject to
counterclaims. (Id. ¶ 44; Unthank Decl., Ex. L.)
Keller discussed the proposed MDL class settlement terms with
CenturyLink’s counsel in August 2019. (Unthank Decl. ¶ 12; Unthank Decl., Ex.
M at 3.)
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Keller continued to solicit clients after learning of the proposed class
settlement in this MDL. (Unthank Decl. ¶ 21; Unthank Decl., Ex. M at 3.) On
September 24, 2019, Keller informed CenturyLink that it had acquired “8,293
additional . . . clients,” for a total of more than 22,000 clients. (Unthank Decl. ¶
51; Unthank Decl., Ex. N.)
On October 8, 2019, CenturyLink informed Keller that it would soon be
proposing a class settlement in this MDL. (Unthank Decl., Ex. O at 4.) On
October 16, 209, Plaintiffs filed their Motion for Preliminary Approval of Class
Action Settlement and Provisional Class Certification. [Docket No. 466]
b)
Arbitrations Filed by Keller’s Clients
On November 21, 2019, Keller submitted 1,000 simultaneous arbitration
demands against CenturyLink to the AAA on behalf of a subset of its 22,000
CenturyLink claimant clients. (Unthank Decl. ¶ 56; Unthank Decl., Ex. R.) These
arbitration demands included information such as each claimant’s account
number, a description of the alleged billing error, and a statement of actual
damages. (Unthank Decl. ¶ 57; Unthank Decl., Ex. S.)
Movants Edwin Miller, Vonita Taylor, and Patrick West (“Movants”) were
not included among these 1,000 arbitration claimants. ([Docket No. 561] Sun
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Decl. ¶ 8.) Taylor and West were listed on a list of Keller’s clients provided to
CenturyLink as of September 24, 2019. (Sun Decl. ¶¶ 5-7.) Miller did not appear
on any such list. (Id. ¶ 7.) To date, no Movant has filed any arbitration against
CenturyLink. ([Docket No. 562] Barnes Decl. ¶¶ 4-5; Sun Decl. ¶ 8.)
On December 12, 2019, CenturyLink and Keller participated in a
conference call with the AAA regarding Keller’s first 1,000 arbitration demands.
(Unthank Decl. ¶¶ 63-65.) During that call, CenturyLink orally informed Keller
that Plaintiffs and CenturyLink were requesting a temporary injunction of all
arbitrations, including Keller’s arbitrations, through the Motion for Preliminary
Approval that had been filed on October 16. (Id.)
On December 13, 2019, CenturyLink provided Keller and the AAA with
copies of Plaintiffs’ Motion for Preliminary Approval and the proposed
Preliminary Approval Order and requested that the AAA stay the arbitrations
pending this Court’s preliminary review of the proposed class settlement.
(Unthank Decl. ¶ 66; Unthank Decl., Ex. W.) The letter informed Keller and the
AAA that this Court would hold the Preliminary Approval Hearing on January
22, 2020, during which the Court would consider the request for a preliminary
injunction against Keller’s clients’ arbitration claims. (Unthank Decl., Ex. W.)
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On December 27, 2019, Keller informed the AAA that it objected to a stay
of the arbitrations and argued that, if CenturyLink wished to stay the
arbitrations, CenturyLink should seek judicial intervention targeting Keller’s
clients’ arbitrations. (Unthank Decl. ¶ 67; Sun Decl., Ex. A at 2-3.)
On January 9, 2020, the AAA ruled that it will not stay the arbitrations
until all arbitration filing fees are paid by Keller and CenturyLink. (Unthank
Decl. ¶ 68; Unthank Decl., Ex. X.)
On January 10, 2020, CenturyLink filed a Supplemental Brief in this case to
inform the Court of its arguments in favor of enjoining Keller’s clients’ parallel
arbitrations. [Docket Nos. 508-09] On that same date, CenturyLink emailed
Keller with copies of the Supplemental Brief and the supporting declarations and
exhibits. (Sun Decl. ¶ 11; Sun Decl., Ex. B.) Keller did not respond to the
Supplemental Brief; nor did Keller or Movants appear at the preliminary
approval hearing.
C.
Movants’ Motion to Stay
On February 7, 2020, Movants filed a Notice of Appeal from the
Preliminary Approval Order. [Docket No. 534] Movants represented that they
are members of the provisionally certified class and appealed the order
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temporarily enjoining them from pursuing their claims against CenturyLink in
arbitration.
On February 10, Movants filed a Motion to Stay Pending Appeal, which
was refiled on February 12. [Docket No. 554]
Each Movant filed a declaration stating:
I want to arbitrate my claims against CenturyLink on an individual
basis, as is my right under my contract with CenturyLink and the
Federal Arbitration Act. I have no desire to pursue litigation against
CenturyLink in court and I do not want to participate in any classaction lawsuit or settlement against CenturyLink.
***
I want to arbitrate my claims with CenturyLink immediately
without any further delay.
([Docket No. 539] Miller Decl. ¶¶ 3-4; [Docket No. 540] Taylor Decl. ¶¶ 3-4;
[Docket No. 542] West Decl. ¶¶ 3-4.) They each aver: “I do not wish to
participate in the settlement or in any class-action lawsuit against CenturyLink.”
(Id. ¶ 7.)
III.
DISCUSSION
A.
Standard for Stay Pending Appeal
When deciding whether to issue a stay pending appeal, the Court
considers:
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(1) whether the stay applicant has made a strong showing that he is
likely to succeed on the merits; (2) whether the applicant will be
irreparably injured absent a stay; (3) whether issuance of the stay
will substantially injure the other parties interested in the
proceeding; and (4) where the public interest lies.
Hilton v. Braunskill, 481 U.S. 770, 776 (1987). The Court must “consider the
relative strength of the four factors, ‘balancing them all.’” Brady v. Nat’l Football
League, 640 F.3d 785, 789 (8th Cir. 2011) (citations omitted). “The most
important factor is the appellant’s likelihood of success on the merits. The
movant must show that it will suffer irreparable injury unless a stay is granted.”
Id. (citations omitted).
B.
Likelihood of Success on the Merits
Movants assert that the Court’s preliminary injunction against class
members pursuing the Released Claims, found in paragraph 10 of the
Preliminary Approval Order, violates the Federal Arbitration Act (“FAA”) and
the Due Process Clause of the United States Constitution.
1.
Federal Arbitration Act
a)
Court’s Authority to Temporarily Enjoin Class
Members under the All Writs Act
The All Writs Act provides:
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The Supreme Court and all courts established by Act of Congress
may issue all writs necessary or appropriate in aid of their respective
jurisdictions and agreeable to the usages and principles of law.
28 U.S.C. § 1651(a).
The power conferred by the [All Writs] Act extends, under
appropriate circumstances, to persons who, though not parties to the
original action or engaged in wrongdoing, are in a position to
frustrate the implementation of a court order or the proper
administration of justice, and encompasses even those who have not
taken any affirmative action to hinder justice.
United States v. N.Y. Tel. Co., 434 U.S. 159, 174 (1977) (citations omitted).
“Even before a federal judgment is reached [] the preservation of the
federal court’s jurisdiction or authority over an ongoing matter may justify an
injunction. . . .” In re Baldwin-United Corp. (Single Premium Deferred Annuities
Ins. Litig.), 770 F.2d 328, 335 (2d Cir. 1985) (cited with approval in In re Piper
Funds, Inc., Institutional Gov’t Income Portfolio Litig., 71 F.3d 298, 300 n.2 (8th
Cir. 1995)).
Under certain circumstances, the Court has authority under the All Writs
Act to temporarily enjoin class members from pursuing parallel litigation during
the notice and opt-out period in a complex class action. See, e.g., Liles v. Del
Campo, 350 F.3d 742, 746–47 (8th Cir. 2003) (holding that a district court “acted
within its discretion in issuing the injunction because enjoining related litigation
12
was necessary to ensure the enforceability of the order approving the
preliminary settlement and to prevent further draining of the limited settlement
fund”); In re Piper Funds, Inc., Institutional Gov’t Income Portfolio Litig., 71 F.3d
298, 300 n.2 (8th Cir. 1995) (“We agree with the district court that it has the
power, under Fed. R. Civ. P. 23 augmented by the All Writs Act, to control
conduct by absent class members that affects management or disposition of the
class action.”) (citing In re Baldwin–United Corp., 770 F.2d at 335–38).
In cases such as this, where parties to complex, multidistrict
litigation have reached a settlement agreement after lengthy,
protracted, and difficult negotiations—parallel proceedings can “
‘seriously impair the federal court’s flexibility and authority’ to
approve settlements in the multi-district litigation” and threaten to
“destroy the utility of the multidistrict forum otherwise ideally
suited to resolving such broad claims.”
In re Uponor, Inc., F1807 Plumbing Fittings Prod. Liab. Litig., No. 11-MD-2247
ADM/JJK, 2012 WL 13065005, at *9 (D. Minn. Jan. 19, 2012) (quoting In re
Baldwin–United, 770 F.2d at 337). See also, e.g., Busch v. Bluestem Brands, Inc.,
No. 16-CV-0644 (WMW/HB), 2019 WL 1976147, at *3 (D. Minn. May 3, 2019)
(pending final approval of the settlement, temporarily enjoining arbitration of
released claims by settlement class members until they opt out).
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Before the Court is a complex, multi-district action involving a Settlement
Class of more than 17 million consumers spread across dozens of states that was
settled after substantial motion practice, extended negotiations, and extensive
confirmatory discovery. The Court found that a temporary injunction of parallel
proceedings by the parties to this lawsuit was necessary to properly manage the
disposition of this case and enforce the Court’s Preliminary Approval Order,
including avoiding confusion among class members, ensuring proper notice, and
preserving resources. The Court’s Order set forth an orderly, efficient manner
for class members to opt out and, thus, pursue parallel actions, including
lawsuits and arbitrations, with little delay. The Court’s chosen process was
carefully crafted considering the practicality of efficiently managing a class of
more than 17 million consumers and, thus, the possibility of millions of opt-out
requests.
b)
The FAA and the Federal Rules of Civil Procedure
Movants note that the All Writs Act only allows injunctions that are
“agreeable to the usages and principles of law.” 28 U.S.C. § 1651(a). The FAA
provides that agreements to arbitrate “shall be valid, irrevocable, and
enforceable, save upon such grounds as exist at law or in equity for the
14
revocation of any contract.” 9 U.S.C. § 2. Movants argue that, by temporarily
enjoining them from arbitrating their claims against CenturyLink, the Court has
rendered their arbitration agreement unenforceable in violation of the FAA. In
particular, Movants assert that the injunction conflicts with the Eighth Circuit’s
holding in In re Piper Funds, Inc., Institutional Government Income Portfolio
Litigation, 71 F.3d 298, 300 (8th Cir. 1995).
In Piper Funds, a class action securities MDL was pending before the
district court when a putative class member, Park Nicollet Medical Foundation
(“Park Nicollet”), filed a demand for arbitration against the defendants with the
National Association of Securities Dealers (“NASD”) in January 1995. 71 F.3d at
299-300. Park Nicollet was an investor with a $4.5 million claim against the
defendants. Id. In its arbitration demand, as required by NASD rules, Park
Nicollet declared that it elected not to participate in pending putative class
actions. Id. at 300. A month later, the defendants and the class action plaintiffs
tentatively settled the class actions. Id. In March 1995, Park Nicollet informed
the district court that it had “1) chosen to have its dispute with [the defendants]
resolved in arbitration, 2) decided not to participate in the putative class actions,
and 3) irrevocably opted out of the putative class actions.” Id. The next day,
15
March 3, the district court entered an order conditionally certifying the
settlement class and enjoining arbitration by any class member until after the
court distributed class notice and ruled on requests to opt out of the class. Id.
“[T]he district court agreed that Park Nicollet ha[d] a right to arbitrate but
enjoined it from pursuing that remedy.” Id. at 302. “Park Nicollet moved to
vacate the March 3 Order, and to stay the class actions pending arbitration
pursuant to § 3 of the FAA.” Id. at 300. The district court denied the motion and
Park Nicollet appealed. Id.
The Eighth Circuit reversed. First, it reasoned, “Park Nicollet has a
contractual right to immediate submission of its securities law claims to
arbitration.” Id. at 303 (citations omitted). Second, “Park Nicollet’s contractual
and statutory right to arbitrate may not be sacrificed on the altar of efficient class
action management.” Id. Third, the Eighth Circuit did “not accept the class
action parties’ conclusory assertion that immediate arbitration by Park Nicollet
(and perhaps others) will frustrate their class action settlement.” Id. It reasoned
that “it may even assist the settlement process to have arbitration opt outs
identified before the final hearing on settlement approval.” Id. The Eighth
16
Circuit concluded that the district court had violated the FAA by enjoining Park
Nicollet from arbitrating its claim. Id.
The Eighth Circuit further held that the district court had erred in denying
Park Nicollet’s request to opt out. The Eighth Circuit noted that, generally, it had
“no quarrel with the usual practice of not allowing class members to opt out until
after the formal Rule 23(c)(2) notice to the class.” Id. at 304. “However, the usual
practice [wa]s not appropriate in this case . . . when a class member with an
immediate right to arbitrate its claim seeks to opt out.” Id. Park Nicollet had
“made an unrefuted showing” of four critical facts:
it (i) was represented by separate counsel; (ii) had a contractual right
to arbitrate any claim encompassed by the class action; (iii) had
submitted a claim to the NASD along with a declaration under §
12(d)(2) of the NASD Code that it elected not to participate in the
class action; and (iv) now elected irrevocably to opt out of the class
action.
Id. Based on these undisputed facts, the Eighth Circuit held that, under the FAA,
the district court was required to take one of three actions:
it could stay the class action while Park Nicollet’s claim is arbitrated;
it could deny the request to opt out (for example, because Park
Nicollet’s arbitration claim is not arbitrable or its request to opt out
was too late); or it could grant the request to opt out, in which case
Park Nicollet’s motion to stay the class action becomes moot.
17
Id. Because the district court did none of those, the Eighth Circuit reversed the
district court’s orders “insofar as (and only insofar as) they affect Park Nicollet,”
ordered the defendants to arbitrate Park Nicollet’s claim, and granted Park
Nicollet’s request to be excluded from the class. Id. at 304.
The Court concludes that, here, the Preliminary Approval Order did not
run afoul of the Eighth Circuit’s holding in Piper Funds, and that Movants are
unlikely to succeed on their claim on appeal that the Court’s preliminary
injunction violated the FAA.
Generally, Piper Funds does not stand for the proposition that a settlement
class member cannot be temporarily enjoined from arbitration during the notice
and opt-out period. In Piper Funds, the Eighth Circuit did not reverse the
preliminary approval order generally; nor did it alter the temporary injunction as
applied to all other class members. Rather, the appellate court narrowly allowed
Park Nicollet to opt out and pursue its arbitration, while leaving the temporary
injunction and preliminary approval in place as to the rest of the class.
In this case, Movants have submitted no evidence that they have “a
contractual right to arbitrate any claim encompassed by the class action.” Piper
Funds, 71 F.3d at 304. Nor have they shown “a contractual right to immediate
18
submission” of their claims to arbitration. Cf. id. at 303. No Movant has
presented any evidence of an arbitration agreement that applies to any services
they may have purchased. Keller has refused to provide basic information about
the Movants’ claims, depriving CenturyLink of the opportunity to evaluate and
resolve the claims before arbitration or determine if an arbitration agreement
applies. Moreover, the evidence in the record shows that Movants have not, in
fact, filed any arbitration claims against CenturyLink. This Court did not
“agree[] that [Movants] ha[ve] a right to arbitrate but enjoined [them] from
pursuing that remedy.” Cf. id. at 302. Unlike Park Nicollet, Movants have failed
to show that their claims are arbitrable, and the FAA does not render the
preliminary injunction erroneous. Cf. Piper Funds, 71 F.3d at 303-04.
Additionally, unlike in Piper Funds, Movants have not elected to
“irrevocably” opt out of the class action. Cf. Piper Funds, 71 F.3d at 300, 304. In
Movants’ Reply, they state that “the movants are not attempting to opt out of the
proposed class.” ([Docket No. 565] Reply at 3.) During oral argument, Movants
represented that if the Court’s preliminary injunction is lifted, they will opt
out. Thus, it is clear that, as of today, Movants have not attempted to opt out and
do not seek to opt out. Piper Funds does not stand for the proposition that class
19
members can choose to remain in a class and reap the benefits of a settlement,
while simultaneously pursuing arbitration against the same defendant for the
same claims, particularly when those class members have offered no evidence
whatsoever that they have a right to arbitrate their claims.
2.
Due Process Clause
Movants further assert that the Court’s preliminary injunction must be
reversed because their due process rights were violated by entry of an order
purporting to enjoin them without providing notice and an opportunity to be
heard. The Court finds no merit to this argument.
The Due Process Clause requires notice “reasonably calculated, under all
the circumstances, to apprise interested parties of the pendency of the action and
afford them an opportunity to present their objections.” United Student Aid
Funds, Inc. v. Espinosa, 559 U.S. 260, 272 (2010). “[A]ctual notice . . . more than
satisfie[s] [a movant’s] due process rights.” Id. See also Lind v. Midland
Funding, L.L.C., 688 F.3d 402, 406 (8th Cir. 2012) (“[A] person cannot complain
about the constitutionality of the method used to provide notice when he or she
has received actual notice (assuming it is timely), for he or she has suffered no
harm.”) (citation omitted).
20
Here, Movants had actual notice of the motion for preliminary approval,
including the request for the preliminary injunction, and of the hearing.
CenturyLink informed Movants’ counsel of the impending class settlement
multiple times, provided them with Plaintiffs’ motion for preliminary approval,
emailed them copies of CenturyLink’s Supplemental Brief, which focused solely
on the request to enjoin the arbitrations by Keller’s clients, and informed them of
the January 22 hearing date, all before the January 22, 2020 hearing. See In re
Land, 215 B.R. 398, 404 (B.A.P. 8th Cir. 1997) (imputing attorney’s knowledge of
bankruptcy filing to client); see also Restatement (Second) of Agency § 276 (1958)
(Oct. 2019 Update) (“‘Except for knowledge acquired confidentially, the time,
place, or manner in which knowledge is acquired by a servant or other agent is
immaterial in determining the liability of his principal because of it.’”). Movants
made the strategic decision to not file any opposition, seek to intervene, or
appear at the hearing. No due process violation occurred.
Because Movants received actual notice and the opportunity to be heard,
the Court need not reach the parties’ alternative arguments regarding
representation by Class Counsel as members of a duly certified Federal Rule of
Civil Procedure 23 settlement class. However, the Court notes that “[i]t is
21
familiar doctrine of the federal courts that members of a class not present as
parties to the litigation may be bound by the judgment where they are in fact
adequately represented by parties who are present, or where they actually
participate in the conduct of the litigation in which members of the class are
present as parties[.]” Hansberry v. Lee, 311 U.S. 32, 42-43 (1940).
C.
Irreparable Harm to the Movants
Movants bear the burden of showing that the irreparable “harm is certain
and great and of such imminence that there is a clear and present need for
equitable relief.” Iowa Utilities Board v. FCC, 109 F.3d 418, 425 (8th Cir. 1996).
Movants have failed to show that they will suffer irreparable harm absent a stay.
First, Movants cannot show a violation of their constitutional rights; nor can they
show a violation of their right to arbitrate under the FAA. Second, if Movants do
have a right to arbitrate, they can vindicate that right by opting out of the
Settlement Class. Third, although Movants have submitted three declarations in
which they state that they “want to arbitrate [their] claims with CenturyLink
immediately without any further delay,” they have, in fact, made no attempt to
arbitrate their claims. Fourth, although Movants were notified of the specifics of
the Motion for Preliminary Approval more than a month before the hearing, they
made no attempt to oppose the Motion for Preliminary Approval, instead,
22
waiting until two weeks after the Order had been entered and filing a Notice of
Appeal.
D.
Injury to Plaintiffs or Defendants
By attempting to remain in the Settlement Class while simultaneously
pursuing arbitration and staying the Preliminary Approval Order, Movants will
delay the costly and complex class notice process for a 17-million-person class
and delay class members’ opportunity to recover through the settlement. The
cost of class notice will increase if implementation of the Preliminary Approval
Order is further delayed. (See Sun Decl. ¶ 9 (averring that more than $37,000 has
been spent printing the billing notices).)
E.
Public Interest
The Court has found no violation of Movants’ due process rights or rights
under the FAA. Thus, the public interest weighs in favor of an efficient and
timely resolution of this complex, class action dispute. See, e.g., United States v.
Glens Falls Newspapers, Inc., 160 F.3d 853, 856-57 (2d Cir. 1998) (“Where a case
is complex and expensive, and resolution of the case will benefit the public, the
public has a strong interest in settlement.”).
Weighing all four factors, the Court concludes that a stay is not
appropriate in this case.
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Accordingly, based upon the files, records, and proceedings herein, IT IS
HEREBY ORDERED:
1.
Movants Edwin Miller, Vonita Taylor, and Patrick West’s
Motion for Leave to File Reply Brief [Docket No. 564] is
GRANTED.
2.
Movants Edwin Miller, Vonita Taylor, and Patrick West’s
Motion for Stay Pending Appeal [Docket No. 554] is DENIED.
Dated: February 21, 2020
s/ Michael J. Davis
Michael J. Davis
United States District Court
24
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