Adell v. Cellco Partnership

Filing 32

Order: Motion (ECF DKT # 21 ) of Defendant Cellco Partnership dba Verizon Wireless to Compel Arbitration and Stay Proceedings under the Federal Arbitration Act is GRANTED, Plaintiff's Motion (ECF DKT # 17 ) for Partial Summary Judgment on her Individual Claims for Declaratory Judgment is DENIED and the above-captioned matter is STAYED and removed from the active docket of this Court. Judge Christopher A. Boyko on 3/5/2019.(S,SR)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

LORRAINE ADELL, individually and on)
behalf of all others similarly situated,
)
Plaintiff,
)
)
vs.
)
)
CELLCO PARTNERSHIP dba
)
VERIZON WIRELESS,
)
Defendant.
)

CASE NO. 1:18CV623
JUDGE CHRISTOPHER A. BOYKO
OPINION AND ORDER

CHRISTOPHER A. BOYKO, J.:
This matter comes before the Court upon the Motion (ECF DKT #21) of Defendant
Cellco Partnership dba Verizon Wireless to Compel Arbitration and Stay Proceedings under
the Federal Arbitration Act or, alternatively, to Dismiss for Lack of Subject Matter
Jurisdiction. For the following reasons, the Motion to Compel Arbitration is granted,
Plaintiff’s Motion (ECF DKT #17) for Partial Summary Judgment on her Individual Claims
for Declaratory Judgment is denied and the above-captioned matter is stayed and removed
from the active docket of this Court.
I. BACKGROUND
Plaintiff Lorraine Adell has been a Verizon Wireless customer since September 3,

2015, when she purchased an IPhone at Costco Wholesale, an authorized third-party retail
outlet for Verizon products. By her signature, Plaintiff acknowledged her agreement to the
current Verizon Wireless Customer Agreement and acknowledged her agreement to important
terms, including “SETTLEMENT OF DISPUTES BY ARBITRATION INSTEAD OF JURY
TRIALS.” The operative Customer Agreement available online provided:
YOU AND VERIZON WIRELESS BOTH AGREE TO RESOLVE
DISPUTES ONLY BY ARBITRATION OR IN SMALL CLAIMS COURT.
ANY DISPUTE THAT ARISES OUT OF THIS AGREEMENT OR FROM
ANY EQUIPMENT, PRODUCTS AND SERVICES YOU RECEIVE FROM
US (OR FROM ANY ADVERTISING FRO ANY SUCH PRODUCTS OR
SERVICES), INCLUDING ANY DISPUTES YOU HAVE WITH OUR
EMPLOYEES OR AGENTS, WILL BE RESOLVED BY ONE OR MORE
NEUTRAL ARBITRATORS BEFORE THE AMERICAN ARBITRATION
ASSOCIATION (“AAA”) OR BETTER BUSINESS BUREAU (“BBB”).
THIS AGREEMENT DOESN’T ALLOW CLASS OR COLLECTIVE
ARBITRATIONS EVEN IF THE AAA OR BBB PROCEDURES OR RULES
WOULD. NOTWITHSTANDING ANY OTHER PROVISION OF THIS
AGREEMENT, THE ARBITRATOR MAY AWARD MONEY OR
INJUNCTIVE RELIEF ONLY IN FAVOR OF THE INDIVIDUAL PARTY
SEEKING RELIEF AND ONLY TO THE EXTENT NECESSARY TO
PROVIDE RELIEF WARRANTED BY THAT PARTY’S INDIVIDUAL
CLAIM.
IF FOR SOME REASON THE PROHIBITION ON CLASS ARBITRATIONS
SET FORTH IN SUBSECTION (3) CANNOT BE ENFORCED, THEN THE
AGREEMENT TO ARBITRATE WILL NOT APPLY.
On March 19, 2018, Plaintiff filed her Class Action Complaint (ECF DKT #1). She
asserts a claim for relief on behalf of a class of Verizon Wireless customers whose phones
have an Ohio area code, seeking damages for breach of contract for Verizon’s practices in
connection with the imposition of an “administrative charge.”
Plaintiff also asserts a claim for declaratory relief on behalf of all Verizon Wireless

-2-

telephone customers that: (1) “the waiver of their personal constitutional right to the exercise
of the Article III judicial power in connection with their state law claims against Verizon for
breach of contract brought within the diversity jurisdiction of the federal courts under the
Class Action Fairness Act of 2005 (“CAFA”) is not “voluntary,” and therefore not
enforceable, because of the absence of the right to refuse to consent to non-Article III
arbitration under the Federal Arbitration Act (“FAA”) and still receive their equipment and
services from Verizon;” and (2) “their agreements to bilaterally arbitrate their state law claims
brought within the diversity jurisdiction of the federal courts under CAFA are not enforceable
because of the “inherent conflict” between arbitration under the FAA and CAFA’s express
purposes as stated by Congress.”
Defendant moves to compel arbitration of Plaintiff’s state law claims and to stay
proceedings in this case.
II. LAW AND ANALYSIS
The Federal Arbitration Act (“FAA”) 9 U.S.C. §§ 1, et seq.
The FAA provides that an arbitration clause in a “transaction involving commerce ...
shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract.” 9 U.S.C. § 2 (2003). The FAA further mandates
that when the Court is “satisfied that the making of the agreement for arbitration ... is not in
issue, the court shall make an order directing the parties to proceed to arbitration in
accordance with the terms of the agreement.” 9 U.S.C. § 4 (2003).
The FAA establishes a liberal policy favoring arbitration agreements and any doubts
regarding arbitrability should be resolved in favor of arbitration over litigation. Masco Corp.

-3-

v. Zurich Am. Ins. Co., 382 F.3d 624, 627 (6th Cir. 2004); see Fazio v. Lehman Bros., Inc.,
340 F.3d 386, 392 (6th Cir. 2003). “A central purpose of the FAA is ‘to reverse the
longstanding judicial hostility to arbitration agreements ... and to place arbitration agreements
upon the same footing as other contracts.’” In re Olshan Foundation Repair Company, LLC,
328 S.W.3d 883, 891 (Tex.2010) (quoting Gilmer v. Interstate/Johnson Lane Corp., 500 U.S.
20, 24 (1991)).
The FAA requires courts to “rigorously enforce” arbitration agreements. Dean Witter
Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985). Yet, arbitration clauses are subject to the
same defenses or bars as other contract provisions. 9 U.S.C. § 4 (2003). The Court must
ascertain whether the parties agreed to arbitrate the dispute at issue. See Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985). A party cannot be required
to arbitrate any dispute if the party has not agreed to do so. Steelworkers v. Warrior & Gulf
Co., 363 U.S. 574, 582 (1960); Simon v. Pfizer Inc., 398 F.3d 765, 775 (6th Cir. 2005). The
FAA does not confer an absolute right to compel arbitration, but only a right to obtain an
order directing that “arbitration proceed in the manner provided for in [the parties’]
agreement.” Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior
University, 489 U.S. 468, 469 (1989). The “party resisting arbitration bears the burden of
proving that the claims at issue are unsuitable for arbitration.” Green Tree Financial Corp.Alabama v. Randolph, 531 U.S. 79, 91 (2000); Gilmer, 500 U.S. at 26.
In the case at bar, Plaintiff does not dispute that an arbitration provision is part of the
Verizon Customer Agreement she signed on September 3, 2015. (ECF DKT #23 at 6).
Plaintiff also does not contest that her state law breach of contract claim falls within the scope

-4-

of the arbitration clause. (Id.). In fact, the existence of the arbitration agreement and its
scope are “part of the undisputed factual predicate for Plaintiff’s declaratory judgment
motion.” (Id.).
Plaintiff contends that the waiver of an Article III adjudication of her class-wide
breach of contract claim against Defendant is not “voluntary” because of the absence of the
right to refuse FAA arbitration and still receive the Verizon equipment and services. Plaintiff
asks the Court to consider Wellness Intern. Network, Ltd. v. Sharif, 135 S.Ct. 1932 (2015).
Wellness concerned the issue of whether parties can consent to the bankruptcy court deciding
claims otherwise subject to adjudication by an Article III court; and the Wellness court held
that a litigant’s consent, whether express or implied, must be knowing and voluntary. 135
S.Ct. at 1949. The Supreme Court noted that the crucial inquiry is whether the litigants were
made aware of the need for consent and the right to refuse it. See id. at 1948.
Plaintiff acknowledges that the applicability of the Wellness consent standard in the
bankruptcy context to an arbitration procedure under the FAA is an issue of first impression
in the Sixth Circuit and nationwide. This Court declines to accept Plaintiff’s invitation to
extend the Wellness analysis in this fashion; and furthermore, finds that it is unnecessary to do
so.
Plaintiff’s agreement to arbitrate disputes pursuant to the Verizon Customer
Agreement was knowing and voluntary. Plaintiff signed below the conspicuous language
waiving the right to a jury trial and further acknowledged that she had the opportunity to
review all the terms of the current Customer Agreement. As the Wellness court instructed,
waiver of the right to a full trial before an Article III court can be waived like any other

-5-

personal constitutional right. Wellness, 135 S.Ct. at 1943.
Moreover, the Court finds it is evidently clear that Plaintiff possessed the right to
refuse to sign the Verizon Customer Agreement and to take her business elsewhere. Thus, the
right to refuse was part and parcel of her consent. When a party has “an alternative source
with which it could contract,” the agreement cannot be unreasonable or unenforceable. See
Andersons, Inc. v. Horton Farms, Inc., 166 F.3d 308, 323 (6th Cir. 1998).
The Court also finds in its reading of Wellness that the requirement of knowing and
voluntary consent applies to all the litigants, that is, to plaintiffs and defendants. Thus, to
allow Plaintiff to refuse to arbitrate disputes on an individual basis but still retain the Verizon
equipment and services would necessarily deprive Defendant of its rights and force Defendant
to accept contractual terms without its voluntary consent. The Court will not ignore
longstanding policy and Supreme Court jurisprudence to set such a precedent here.
Plaintiff’s second argument is that her agreement to bilaterally arbitrate with Verizon
is unenforceable because CAFA inherently conflicts with the FAA. Plaintiff disputes whether
the FAA can, in effect, “repeal” the expansive diversity jurisdiction over consumer class
actions that Congress vested in the federal courts pursuant to CAFA. (ECF DKT #18 at 23).
Defendant counters that nothing in CAFA expressly disapproves of – much less negates —
arbitration. (ECF DKT #21 at 24).
If a party suggests that two statutes cannot be harmonized, that party bears the burden
of showing a clearly expressed congressional intention. Epic Systems Corp. v. Lewis, 138
S.Ct. 1612 (2018).
In many cases over many years, [the Supreme Court] has heard and rejected
efforts to conjure conflicts between the Arbitration Act and other federal
-6-

statutes. In fact, [the Supreme Court] has rejected every such effort to date . . .
with statutes ranging from the Sherman and Clayton Acts to the Age
Discrimination in Employment Act, the Credit Repair Organizations Act of
1934, the Securities Act of 1933, the Securities Exchange Act of 1934, and the
Racketeer Influenced and Corrupt organizations Act. Epic, 138 S.Ct. at 1627.
The Epic court emphasized further that “the absence of any specific statutory
discussion of arbitration or class actions is an important and telling clue that Congress has not
displaced the Arbitration Act.” Epic, id., citing CompuCredit Corp. v. Greenwood, 565 U.S.
95, 103-104 (2012).
The respective merits of class actions and private arbitration as means of
enforcing the law are questions constitutionally entrusted not to the courts to
decide but to the policymakers in the political branches where those questions
remain hotly contested. . . .This Court is not free to substitute its preferred
economic policies for those chosen by the people’s representatives. Epic, 138
S.Ct. at 1632.
This Court agrees with Defendant that if Congress had wanted to override the FAA
and ban arbitration class action waivers, it could have done so manifestly and expressly in the
CAFA statute.
Thus, the Court determines that Plaintiff’s contentions (1) that her consent to
arbitration under the FAA was not voluntary and (2) that CAFA and the FAA are in conflict,
are without merit. So, Plaintiff’s assertion that the arbitration agreement with Verizon is
unenforceable fails.
III. CONCLUSION
Upon the application of one of the parties, the FAA requires the Court to stay
proceedings pending arbitration. 9 U.S.C. § 3.
Therefore, for all the reasons set forth in this Opinion, the Motion (ECF DKT #21) of
Defendant Cellco Partnership dba Verizon Wireless to Compel Arbitration and Stay
-7-

Proceedings under the Federal Arbitration Act is GRANTED, Plaintiff’s Motion (ECF DKT
#17) for Partial Summary Judgment on her Individual Claims for Declaratory Judgment is
DENIED and the above-captioned matter is STAYED and removed from the active docket of
this Court.

IT IS SO ORDERED.
3/5/2019
DATE: ___________
s/ Christopher A. Boyko
CHRISTOPHER A. BOYKO
United States District Judge

-8-