Numrich v. CenturyLink, Inc.

Filing 38

OPINION AND ORDER: The Court GRANTS Defendants Motion 13 for Dismissal on the ground of lack of personal jurisdiction as to CenturyLink, GRANTS Defendants Motion 13 for Dismissal on the ground of lack of subject-matter jurisdiction as to Qwest, GRANTS Defendants Motion 33 to Strike Plaintiff's Surreplies, STRIKES Plaintiffs Requests 27 , 29 , 31 for Judicial Notice, and DISMISSES CenturyLink from this action for lack of personaljurisdiction without prejudice. The Court also GRANTS Plaintiff leave to file a Second Amended Complaint no later than May 22, 2015. Signed on 4/23/15 by Judge Anna J. Brown. (dls)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

EDGAR T. NUMRICH,
Plaintiff,
v.
QWEST CORPORATION, a Colorado
Corporation of itself and on
behalf of CENTURYLINK, INC.,
a Corporation of Louisiana,
Defendants.
EDGAR T. NUMRICH
200 Greenridge Drive
#1108
Lake Oswego, OR 97035-1496
[phone]
Plaintiff, Pro Se
CAREY CALDWELL
RICHARD J. KUHN
Hart Wagner, LLP
1000 S.W. Broadway
Suite 2000
Portland, OR 97205
[phone]
Attorneys for Defendants
1 - OPINION AND ORDER

3:14-CV-01864-BR
OPINION AND ORDER

BROWN, Judge.
This matter comes before the Court on the Motion (#13) for
Dismissal and Summary Judgment of Defendants Qwest Corporation
and CenturyLink, Inc.; Plaintiff Edgar T. Numrich’s First Request
(#27) for Judicial Notice; Plaintiff’s Second Request (#29) for
Judicial Notice; Plaintiff’s Third Request (#31) for Judicial
Notice; and Defendants’ Motion (#33) to Strike Plaintiff's
Surreplies.
For the reasons that follow, the Court GRANTS Defendants’
Motion for Dismissal on the ground of lack of personal
jurisdiction as to CenturyLink, GRANTS Defendants’ Motion for
Dismissal on the ground of lack of subject-matter jurisdiction as
to Qwest, GRANTS Defendants’ Motion to Strike Plaintiff's
Surreplies, and STRIKES Plaintiff’s Requests for Judicial Notice.

BACKGROUND
The following facts are taken from the Complaint and the
parties' materials filed in relation to Defendants’ Motion for
Dismissal.
At all relevant times Plaintiff was a resident of Oregon and
a subscriber to a residential land-line telephone and broadband
internet service.

Plaintiff received land-line telephone and

broadband internet services pursuant to the Qwest High-Speed
Internet Subscriber Agreement that contained the following
2 - OPINION AND ORDER

arbitration clause:
(a) Arbitration Terms. You agree that any dispute
or claim arising out of or relating to the
Services, Equipment, Software, or this Agreement
(whether based in contract, tort, statute, fraud,
misrepresentation or any other legal theory) will
be resolved by binding arbitration. The sole
exceptions to arbitration are that either party
may pursue claims: (1) in small claims court that
are within the scope of its jurisdiction, provided
the matter remains in such court and advances only
individual (non-class, non-representative,
nonconsolidated) claims; and (2) in court if they
relate solely to the collection of any debts you
owe to Qwest.
* * *
(b) Waiver of Jury and Class Action. By this
Agreement, both you and Qwest are waiving rights
to litigate claims or disputes in court. . . .
Both you and Qwest also waive the right to a jury
trial on your respective claims, and waive any
right to pursue any claims on a class or
consolidated basis or in a representative
capacity.
Decl. of Carey Caldwell, Ex. C at ¶ 17.

The Agreement further

provided the arbitration “shall be conducted by the American
Arbitration Association ("AAA")” and “[t]he Federal Arbitration
Act, 9 U.S.C. Sections 1-16 . . . shall govern the arbitration of
the dispute.”

Id.

CenturyLink is a Louisiana corporation with its principal
place of business in Monroe, Louisiana.

CenturyLink is a holding

company that has an ownership interest in more than 200 companies

3 - OPINION AND ORDER

including Qwest Corporation.1
CenturyLink is a registered corporation in Oregon, but it
does not maintain any offices, employees, bank accounts,
financial accounts, real estate, or personal property in Oregon.
On November 21, 2014, Plaintiff filed a Complaint in this
Court against CenturyLink alleging claims for violation of
Oregon’s Unlawful Trade Practices Act, Oregon Revised Statute
§ 646.605, et seq.; breach of the implied covenant of good faith
and fair dealing; usury; and mail and wire fraud.
On December 24, 2014, Plaintiff filed an Amended Complaint
against “Qwest Corporation . . . of itself and on behalf of
CenturyLink” alleging claims for violation of Oregon’s Unlawful
Trade Practices Act, usury, and mail and wire fraud.
On January 7, 2015, Defendants filed a Motion for Dismissal
and Summary Judgment in which they move to dismiss Plaintiff’s
claims against CenturyLink on the ground of lack of personal
jurisdiction, move to dismiss Plaintiff’s claims against Qwest on
the ground of lack of subject-matter jurisdiction, and/or move
for summary judgment on the merits of Plaintiff’s claims.
January 29, 2015, Plaintiff filed a Response.

On

On February 11,

2015, Defendants filed a Reply.
On January 9, 2015, the Court issued a Summary Judgment

1

Qwest Corporation is, in fact, a subsidiary of
CenturyLink.
4 - OPINION AND ORDER

Advice Notice to Plaintiff advising him that if he did not submit
admissible evidence in opposition to Defendants’ Motion for
Summary Judgment, summary judgment could be entered against him.
Between February 17 and 23, 2015, Plaintiff filed three
Requests for Judicial Notice.

On February 24, 2015, Defendants

filed a Motion to Strike Plaintiff’s Surreplies (i.e.,
Plaintiff’s Requests for Judicial Notice).

On March 4, 2015,

Plaintiff filed a Response to Defendants’ Motion to Strike.

The

Court took the matters under advisement on March 4, 2015.

PLAINTIFF’S REQUESTS FOR JUDICIAL NOTICE (#27, #29, #31)
and DEFENDANTS’ MOTION (#33) TO STRIKE SURREPLIES
As noted, Plaintiff filed three Requests for Judicial Notice
after Defendants filed their Reply.

Defendants move to strike

Plaintiff’s three Requests for Judicial Notice, which Defendants
characterize as Surreplies to their Motion for Dismissal.
I.

Standards
Federal Rule of Evidence 201 allows a court to take judicial

notice of facts that can be “accurately and readily determined
from sources whose accuracy cannot reasonably be questioned.”
Fed. R. Evid. 201(b)(2).

The court may take judicial notice of

documents that are matters of public record.

See MGIC Indem.

Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)(court may
take “judicial notice of matters of public record outside the

5 - OPINION AND ORDER

pleadings" when determining whether a complaint fails to state a
claim).
Federal Rule of Civil Procedure 12(f) provides the Court
“may strike from a pleading an insufficient defense or any
redundant, immaterial, impertinent, or scandalous matter.”
II.

Analysis
Defendants contend Plaintiff offers in his Requests for

Judicial Notice further legal argument rather than facts that can
be accurately and readily determined from sources whose accuracy
cannot reasonably be questioned, and, therefore, Plaintiff’s
Requests are, in fact, Surreplies.
Local Rule 7-1(f)(3) provides:

The Court agrees.
“Unless directed by the

Court, no further briefing is allowed other than the briefing
allowed under LR 56-1(b).”

Local Rule 56-1(b), in turn, provides

only “[i]f an evidentiary objection is raised by the moving party
in its reply memorandum [may] the non-moving party . . . file a
Surreply memorandum . . . addressing only an evidentiary
objection.”
Defendants do not raise any evidentiary objections in their
Reply, and Plaintiff does not address any alleged evidentiary
objections by Defendants in his Requests for Judicial Notice.
Plaintiff instead merely reiterates the legal arguments found in
his Response to Defendants’ Motion for Dismissal.

Moreover,

“surreplies are disfavored and the party seeking to submit one

6 - OPINION AND ORDER

has to demonstrate a compelling reason for permitting the
additional filing and such requests are routinely disallowed when
that burden is not met.”

Raybould v. JPMorgan Chase Bank, N.A.,

No. 6:13-CV-1966-TC, 2014 WL 7146962, at *1 n.2 (D. Or. Dec. 11,
2014)(citation omitted).

See also Queensridge Towers LLC v.

Allianz Global Risks US Ins. Co., No. 2:13–CR–197 JCM (PAL), 2015
WL 1403479, at *2 (D. Nev. Mar. 26, 2015)(“Surreplies are
disfavored and only authorized to address new matters raised in a
reply.”); Huskey v. Ahlin, No. 1:12–cv–00569–AWI–SKO (PC), 2014
WL 348449, at *1 (E.D. Cal. Jan 31, 2014)(“[S]urreplies are not
permitted as a matter of course and are disfavored.”).
Accordingly, the Court grants Defendants’ Motion to Strike
and strikes Plaintiff’s Requests for Judicial Notice.

DEFENDANTS’ MOTION (#13) FOR DISMISSAL FOR LACK OF
PERSONAL JURISDICTION AS TO CENTURYLINK
Defendants move to dismiss CenturyLink from this action
pursuant to Federal Rule of Civil Procedure 12(b)(2) on the
ground that this Court lacks personal jurisdiction over
CenturyLink.

Alternatively, CenturyLink moves for summary

judgment on the merits of Plaintiff’s claims.
CenturyLink asserts this Court lacks general jurisdiction
over CenturyLink, and Plaintiff appears to concede that point.
Plaintiff, however, contends this Court has specific personal

7 - OPINION AND ORDER

jurisdiction over CenturyLink.
I.

Standards
When "the existence of personal jurisdiction is challenged

and the defendant appears specially to contest its presence in
the jurisdiction, the plaintiff has the burden to come forward
with some evidence to establish jurisdiction."

Dist. Council No.

16 of Intern. Union of Painters & Allied Trades, Glaziers,
Architectural Metal & Glass Workers, Local 1621 v. B&B Glass,
Inc., 510 F.3d 851, 855 (9th Cir. 2007)(citing Schwarzenegger v.
Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004)).

"The

court may consider evidence presented in affidavits to assist it
in its determination and may order discovery on the jurisdictional issues."

Doe v. Unocal Corp., 248 F.3d 915, 922 (9th

Cir. 2001)(citing Data Disc, Inc. v. Sys. Tech. Assoc., Inc., 557
F.2d 1280, 1285 (9th Cir. 1977)).

If the court makes a

jurisdictional decision based only on the pleadings and
affidavits submitted by the parties and does not conduct an
evidentiary hearing, the plaintiff need make only a prima facie
showing of personal jurisdiction.
(citation omitted).

B&B Glass, 510 F.3d at 855

When determining whether the plaintiff has

met the prima facie showing, the court must assume the truth of
uncontroverted allegations in the complaint.

Ochoa v. J.B.

Martin and Sons Farms, Inc., 287 F.3d 1182, 1187 (9th Cir. 2002).
II.

Specific Personal Jurisdiction

8 - OPINION AND ORDER

"Personal jurisdiction over a nonresident defendant is
tested by a two-part analysis.

First, the exercise of

jurisdiction must satisfy the requirements of the applicable
state long-arm statute.

Second, the exercise of jurisdiction

must comport with federal due process."

Bauman v. Daimler

Chrysler Corp., 579 F.3d 1088, 1094 (9th Cir. 2009)(quotations
omitted).

"Oregon's long-arm statute confers jurisdiction to the

outer limits of due process under the United States
Constitution."

Pac. Reliant Indus., Inc. v. Amerika Samoa Bank,

901 F.2d 735, 737 (9th Cir. 1990)(citation omitted).

See also J.

McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2800 n.8
(2011)("State long-arm provisions allow the exercise of
jurisdiction subject only to a due process limitation in . . .
Oregon); Or. R. Civ. P. 4L.

Oregon's long-arm statute,

therefore, is co-extensive with the limits of due process.
Gleason v. Carter, No. 3:12-CV-01265-HA, 2012 WL 4482372, at *4
n.1 (D. Or. Sept. 25, 2012).
"The due process analysis, in turn, centers on whether [a
nonresident defendant] has 'certain minimum contacts' with [the
forum state], such that the exercise of jurisdiction 'does not
offend traditional notions of fair play and substantial
justice.'"

Fiore v. Walden, 688 F.3d 558, 573 (9th Cir. 2012)

(citing Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)).
The Ninth Circuit applies the following three-part test to

9 - OPINION AND ORDER

determine whether a district court constitutionally may exercise
specific jurisdiction over a nonresident defendant:
(1) The non-resident defendant must purposefully
direct his activities or consummate some
transaction with the forum or resident thereof; or
perform some act by which he purposefully avails
himself of the privilege of conducting activities
in the forum, thereby invoking the benefits and
protections of its laws;
(2) the claim must be one which arises out of or
relates to the defendant's forum-related
activities; and
(3) the exercise of jurisdiction must comport with
fair play and substantial justice, i.e. it must be
reasonable.
Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme,
433 F.3d 1199, 1205-06 (9th Cir. 2006)(quoting Schwarzenegger v.
Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004)).

"If

the plaintiff fails to satisfy either of [the first two] prongs,
personal jurisdiction is not established in the forum state.

If

the plaintiff succeeds in satisfying both of the first two
prongs, the burden then shifts to the defendant to 'present a
compelling case' that the exercise of jurisdiction would not be
reasonable."

Schwarzenegger, 374 F.3d at 802 (quoting Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)).
III. Analysis
Plaintiff alleges in his Complaint that the Court has
personal jurisdiction over CenturyLink because it is “a domestic
corporation regularly transacting business and engaging in

10 - OPINION AND ORDER

substantial activities within the state of Oregon.”

Plaintiff

concedes his service agreements are with a Qwest entity, but he
asserts Qwest provides services in Oregon on behalf of
CenturyLink.
As noted, CenturyLink is a Louisiana corporation and the
record reflects its principal place of business is in Monroe,
Louisiana.

Decl. of Joan Randazzo at ¶ 3.

CenturyLink is a

holding company that has an ownership interest in more than 200
companies.

Id.

As a holding company, CenturyLink acquires and

invests in companies in the communications and technology
industries with the goal of earning returns for its shareholders.
Id. at ¶ 5.

Although CenturyLink is registered in Oregon, it

does not maintain an office in Oregon; it does not have any
employees, bank accounts, or other financial accounts in Oregon;
it does not own any real or personal property in Oregon; it does
not make, use, sell, or offer to sell any products or services in
Oregon; it has never advertised or posted job openings for jobs
located in Oregon; it does not have any contracts with any entity
that specifically require performance in Oregon; and it does not
hold a license in Oregon authorizing it to provide any kind of
internet service nor has it applied for such a license in Oregon
or any other state.

Randazzo Decl. at ¶¶ 9-11.

In addition, although the record reflects Qwest is a
subsidiary of CenturyLink, CenturyLink does not exercise any

11 - OPINION AND ORDER

control or discretion over the day-to-day operations of Qwest.
Randazzo Decl. at ¶ 13.

CenturyLink also does not have any

involvement in billing customers for any services or products
provided by Qwest Corporation (or any of its other 200
subsidiaries), in the collection of payments from customers for
those services or products, or in the processing of customer
payments for those products or services.

Id. at ¶ 15.

Plaintiff asserts CenturyLink’s Form 10-K filed with the
Securities and Exchange Commission (SEC) shows CenturyLink is in
fact a “real party in interest” in this matter.

As CenturyLink

notes, however, the fact that it complied with SEC requirements
for filing a consolidated annual 10-K is not sufficient to
subject it to the jurisdiction of this Court.

Moreover, the fact

that Qwest is a subsidiary of CenturyLink is also insufficient to
subject CenturyLink to this Court’s jurisdiction.

See, e.g.,

Crystal Cruises, Inc. v. Moteurs Leroy-Somer S.A., 545 F. App’x
647, 647-48 (9th Cir. 2013)(“Corporations are treated as separate
and distinct entities and ‘the presence of one . . . in a forum
state may not be attributed to the other’ for determining jurisdiction.” (quoting Holland Am. Line Inc. v. Wartsila N. Am.,
Inc., 485 F.3d 450, 459 (9th Cir. 2007)).
In any event, Plaintiff fails to identify any evidence that
suggests CenturyLink is, in fact, the alter ego of Qwest or that
indicates the Court should pierce the corporate veil of either

12 - OPINION AND ORDER

CenturyLink or Qwest to establish personal jurisdiction.

In

fact, the record reflects the relationship between CenturyLink
and Qwest is like that described in Doe v. Unocal Corporation,
248 F.3d 915 (9th Cir. 2001).

In Doe the Ninth Circuit noted:

[When] a holding company is nothing more than an
investment mechanism[; i.e.,] a device for
diversifying risk through corporate acquisitions
the subsidiaries conduct business not as its
agents but as its investments. The business of
the parent is the business of investment, and that
business is carried out entirely at the parent
level.
Id. at 929 (quotation omitted).

CenturyLink stated in pertinent

part in its December 2013 Form 10-K:
As a holding company, substantially all of our
income and operating cash flow is dependent upon
the earnings of our subsidiaries and their
distribution of those earnings to us in the form
of dividends, loans or other payments. As a
result, we rely upon our subsidiaries to generate
the funds necessary to meet our obligations,
including the payment of amounts owed under our
long-term debt. Our subsidiaries are separate and
distinct legal entities and have no obligation to
pay any amounts owed by us or, subject to limited
exceptions for tax-sharing or cash management
purposes, to make any funds available to us to
repay our obligations, whether by dividends, loans
or other payments. State law applicable to each
of our subsidiaries restricts the amount of
dividends that they may pay.
Decl. of Carey Caldwell, Ex. H at 1.

Plaintiff does not offer

any evidence that CenturyLink is anything other than a holding
company.

In short, Plaintiff fails to establish that CenturyLink

has purposefully directed its activities or consummated
transactions with Oregon or Plaintiff or that it has performed
13 - OPINION AND ORDER

some act by which it has purposefully availed itself of the
privilege of conducting activities in Oregon.
Because Plaintiff “fails to satisfy [one] of [the first two]
prongs, personal jurisdiction is not established in the forum
state.”

The Court, therefore, concludes Plaintiff has not

established this Court has personal jurisdiction over
CenturyLink.
Accordingly, the Court grants CenturyLink’s Motion for
Dismissal on the ground of lack of personal jurisdiction.
Because the Court concludes it lacks personal jurisdiction over
CenturyLink, the Court does not address CenturyLink’s other
ground for dismissal.

DEFENDANTS’ MOTION (#13) FOR DISMISSAL FOR LACK OF
SUBJECT-MATTER JURISDICTION AS TO QWEST
Defendants move for dismissal of Plaintiff’s claims against
Qwest on the ground that this Court lacks subject-matter
jurisdiction over Plaintiff’s claims against Qwest pursuant to
the arbitration clause in the Agreement.

Alternatively, Qwest

moves for summary judgment on the merits of Plaintiff’s claims.
I.

Standard
Plaintiff has the burden to establish that the court has

subject-matter jurisdiction.
726, 728 (9th Cir. 2009).

Robinson v. Geithner, 359 F. App'x

See also Ass'n of Am. Med. Coll. v.

United States, 217 F.3d 770 (9th Cir. 2000).
14 - OPINION AND ORDER

When deciding a motion to dismiss for lack of subject-matter
jurisdiction under Rule 12(b)(1), the court may consider
affidavits and other evidence supporting or attacking the
complaint's jurisdictional allegations.
F.3d 1108, 1114 n.1 (9th Cir. 2013).

Rivas v. Napolitano, 714

The court may permit

discovery to determine whether it has jurisdiction.

Laub v.

United States Dep't of Interior, 342 F.3d 1080, 1093 (9th Cir.
2003).

When a defendant's motion to dismiss for lack of

jurisdiction "is based on written materials rather than an
evidentiary hearing, the plaintiff need only make a prima facie
showing of jurisdictional facts to withstand the motion to
dismiss."

Mavrix Photo, Inc. v. Brand Tech., Inc., 647 F.3d

1218, 1223 (9th Cir. 2011)(citation omitted).
II.

Arbitration Standards
Congress enacted the Federal Arbitration Act (FAA),

9 U.S.C. § 1, et seq., “in response to widespread judicial
hostility to arbitration.”

Am. Exp. Co. v. Italian Colors

Restaurant, 133 S. Ct. 2304, 2309 (2013).

The FAA provides

arbitration agreements generally "shall be valid, irrevocable,
and enforceable."

Knutson v. Sirius XM Radio, Inc., 771 F.3d

559, 564 (9th Cir. 2014).

See also 9 U.S.C. § 2.

[C]ourts must rigorously enforce arbitration
agreements according to their terms, including
terms that specify with whom [the parties] choose
to arbitrate their disputes and the rules under
which that arbitration will be conducted. That
holds true for claims that allege a violation of a
15 - OPINION AND ORDER

federal statute, unless the FAA's mandate has been
overridden by a contrary congressional command.
Am. Exp. Co., 133 S. Ct. at 2309 (quotations omitted).
“Under the FAA, the basic role for courts is to determine
(1) whether a valid agreement to arbitrate exists and, if it
does, (2) whether the agreement encompasses the dispute at
issue.”

Knutson, 771 F.3d at 564-65 (quotation omitted).

“[A] district court may either stay the action or dismiss it
outright when . . . the court determines . . . the claims raised
in the action are subject to arbitration.”

Johnmohammadi v.

Bloomingdale's, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014).

See

also 9 U.S.C. §§ 3, 4.
III. Analysis
It is undisputed that Plaintiff received service from Qwest
at all relevant times pursuant to Qwest’s Subscriber Agreement
that contains the following arbitration clause:
(a) Arbitration Terms. You agree that any dispute
or claim arising out of or relating to the
Services, Equipment, Software, or this Agreement
(whether based in contract, tort, statute, fraud,
misrepresentation or any other legal theory) will
be resolved by binding arbitration. The sole
exceptions to arbitration are that either party
may pursue claims: (1) in small claims court that
are within the scope of its jurisdiction, provided
the matter remains in such court and advances only
individual (non-class, non-representative,
nonconsolidated) claims; and (2) in court if they
relate solely to the collection of any debts you
owe to Qwest.
* * *
16 - OPINION AND ORDER

(b) Waiver of Jury and Class Action. By this
Agreement, both you and Qwest are waiving rights
to litigate claims or disputes in court. . . .
Both you and Qwest also waive the right to a jury
trial on your respective claims, and waive any
right to pursue any claims on a class or
consolidated basis or in a representative
capacity.
Caldwell Decl., Ex. C at ¶ 17.

The Agreement further provides

the arbitration “shall be conducted by the American Arbitration
Association ("AAA"),” and “[t]he Federal Arbitration Act, 9
U.S.C. Sections 1-16 . . . shall govern the arbitration of the
dispute.”

Id.

Qwest contends Plaintiff’s claims against it are subject to
the arbitration clause, and, therefore, this Court lacks subjectmatter jurisdiction over those claims.

In his Amended Complaint,

however, Plaintiff alleges the arbitration clause does not govern
his claims against Qwest because his claims “relate solely to the
collection of any debts [that Plaintiff] owe[s] to Qwest.”
Although it is not entirely clear, it appears Plaintiff also
asserts in his Response to Defendants’ Motion that the
arbitration clause is unconscionable.
A.

Applicability of the Arbitration Clause
As noted, Plaintiff asserts in his Amended Complaint

that the arbitration clause does not govern his claims because
his claims “relate solely to the collection of any debts [that
Plaintiff] owe[s] to Qwest.”

Defendants, however, assert

Plaintiff’s claims do not relate solely to the collection of any
17 - OPINION AND ORDER

debt he may owe Defendants.

As Defendants point out, Plaintiff

does not allege in his Amended Complaint that he owes money on
his account.

Plaintiff instead asserts Defendants charged

usurious interest rates on their accounts, Defendants used the
mail and the internet to issue invoices for services that were
charged at usurious rates, and Defendants’ activities as
described in the Amended Complaint violate Oregon UTPA, Oregon’s
usury laws, and the Racketeer Influence Corrupt Organization Act
(RICO), 18 U.S.C. §§ 1341, 1343.

Plaintiff alleges he is

entitled to statutory economic damages under the Oregon UTPA,
Oregon’s usury laws, and RICO.
The Supreme Court has made clear that courts “must
rigorously enforce arbitration agreements according to their
terms.”

Here the parties agreed to arbitrate “any dispute or

claim arising out of or relating to . . . this Agreement (whether
based in contract, tort, statute, fraud, misrepresentation or any
other legal theory).”

The parties agreed to a narrow exception

to that broad agreement for claims that “relate solely to the
collection of any debts you owe to Qwest.”

The Court may not

read out the word “solely” in the arbitration clause.

Thus, the

Court concludes the word “solely” in the context of the entire
arbitration provision limits the arbitration exception to actions
involving only debt collection.

Here Plaintiff’s claims do not

relate solely to the collection of a debt, but also include

18 - OPINION AND ORDER

statutory claims beyond the collection of a debt.
On this record the Court concludes Plaintiff’s claims
against Qwest do not fall under the exception to the arbitration
clause for actions related solely to the collection of any debt
owed by Plaintiff to Qwest.
B.

Unconscionability
Although it is not entirely clear, it appears Plaintiff

is asserting in his Response to Defendants’ Motion that the
arbitration clause is unconscionable because the late-charge
provisions in the Agreement are usurious, and, therefore,
unconscionable.2
When grounds "exist at law or in equity for the
revocation of any contract," courts may decline to enforce
arbitration agreements.

9 U.S.C. § 2.

Knutson, 771 F.3d at 564.

The Supreme Court recently “reaffirmed that the savings clause
preserves generally applicable contract defenses such as
unconscionability, so long as the doctrines are not ‘applied in a
fashion that disfavors arbitration.’”

Kilgore v. KeyBank, Nat.

Ass'n, 673 F.3d 947, 963 (9th Cir. 2012)(quoting AT&T Mobility
LLC v. Conception, 131 S. Ct. 1740, 1747 (2011)).
Pursuant to Oregon law, a “party asserting
unconscionability bears the burden of demonstrating that the
2

Plaintiff, however, specifically asserts in his Response
that he “is not contesting the whole cloth of Defendants’
Subscription Agreement.” Resp. at 24.
19 - OPINION AND ORDER

arbitration clause in question is, in fact, unconscionable."
Livingston v. Metropolitan Pediatrics, LLC, 234 Or. App. 137, 151
(2010)(citing W.L. May Co., Inc. v. Philco-Ford Corp., 273 Or.
701, 707 (1975)).

Whether a contract is unconscionable is a

"question of law to be decided based on the facts in existence at
the time the contract was made."

Livingston, 234 Or. App. at

151.
"In Oregon, the test for unconscionability has both
procedural and substantive components.”

Id. (citing Vasquez-

Lopez v. Beneficial Or., Inc., 210 Or. App. 553, 556 (2007)).
Procedural unconscionability refers to the
conditions of contract formation and involves a
focus on two factors: oppression and surprise.
Oppression exists when there is inequality in
bargaining power between the parties, resulting in
no real opportunity to negotiate the terms of the
contract and the absence of meaningful choice.
Surprise involves the question whether the
allegedly unconscionable terms were hidden from
the party seeking to avoid them.
Livingston, 234 Or. App. at 151.

Substantive unconscionability,

in turn, “generally refers to the terms of the contract, rather
than the circumstances of formation, and the inquiry focuses on
whether the substantive terms unfairly favor the party with
greater bargaining power.”

Id.

As noted, the basis for Plaintiff’s possible assertion
of unconscionability is not entirely clear.

To the extent that

Plaintiff asserts the arbitration clause is unconscionable
because the late-charge provisions in the Agreement are allegedly
20 - OPINION AND ORDER

usurious, the Court finds Plaintiff’s argument unconvincing.
Even if late-charge provisions in the Agreement are usurious
(which this Court does not decide) and usurious provisions are
unconscionable, unconscionability of one clause of a contract
does not render other clauses of the contract unconscionable,
particularly when, as here, the plaintiff “is not contesting the
whole cloth of Defendants’ Subscription Agreement.”
To the extent that Plaintiff asserts the arbitration
clause is unconscionable because Plaintiff and Qwest have unequal
bargaining power, Oregon courts have made clear that unequal
bargaining power without some evidence of deception, compulsion,
or unfair surprise is not sufficient to establish unconscionability.

See, e.g., Motsinger v. Lithia Rose-FT, Inc., 211 Or.

App. 610, 615 (2007).

In addition, Qwest points out that

Plaintiff has at least one other internet provider available in
his area, and, therefore, Plaintiff had the choice to select an
internet provider other than Qwest or to forego internet service
altogether.

The record, however, reflects Plaintiff contacted

Qwest and solicited discounted service for his account at least
four times:

August 2011, 2012, 2103, and 2014.

On each occasion

Plaintiff was offered and accepted a 12-month contract subject to
the High-Speed Internet Subscriber Agreement that contained the
arbitration clause at issue.

Plaintiff concedes he was aware of

the Agreement and that he was subject to the terms of the

21 - OPINION AND ORDER

Agreement at all relevant times.

In addition, the arbitration

clause in the Agreement is titled in bold and states:
READ THIS SECTION CAREFULLY.
OTHERWISE HAVE.

“PLEASE

IT AFFECTS RIGHTS THAT YOU MAY

IT PROVIDES FOR DISPUTES THROUGH MANDATORY

ARBITRATION . . . INSTEAD OF IN A COURT BY A JUDGE OR JURY.”
Caldwell Decl., Ex. C at 16.

Plaintiff has not alleged

compulsion, unfair surprise, or deception with respect to the
arbitration clause.
On this record Plaintiff has not established the
arbitration clause in the Agreement is unconscionable.

The

Court, therefore, concludes the arbitration clause in the
Agreement is valid.
Accordingly, the Court grants Qwest’s Motion for
Dismissal on the ground of lack of subject-matter jurisdiction.
Because the Court concludes it lacks subject-matter jurisdiction
over Qwest, the Court does not address Qwest’s other ground for
dismissal.
Because Plaintiff is proceeding pro se and because, as
noted, it is not entirely clear whether Plaintiff asserts the
arbitration clause is unconscionable, and, if so, what factual
basis would support that assertion, the Court grants Plaintiff
leave to file a Second Amended Complaint to the extent that
Plaintiff wishes to and is able to allege a basis for a defense
of unconscionability related to the arbitration clause of the

22 - OPINION AND ORDER

Agreement.

CONCLUSION
For these reasons, the Court GRANTS Defendants’ Motion (#13)
for Dismissal on the ground of lack of personal jurisdiction as
to CenturyLink, GRANTS Defendants’ Motion (#13) for Dismissal on
the ground of lack of subject-matter jurisdiction as to Qwest,
GRANTS Defendants’ Motion (#33) to Strike Plaintiff's Surreplies,
STRIKES Plaintiff’s Requests (#27, #29, #31) for Judicial Notice,
and DISMISSES CenturyLink from this action for lack of personal
jurisdiction without prejudice.
The Court also GRANTS Plaintiff leave to file a Second
Amended Complaint no later than May 22, 2015, limited to
clarifying and providing a factual basis to support his possible
assertion of the unconscionability of the arbitration clause in
the Agreement.

If Plaintiff does not file an Amended Complaint

consistent with this Opinion and Order by May 22, 2015, the Court
will dismiss this matter as to Qwest without prejudice.
IT IS SO ORDERED.
DATED this 23rd day of April, 2015.

/s/ Anna J. Brown
ANNA J. BROWN
United States District Judge
23 - OPINION AND ORDER