WILLIAM H. STEELE, Chief District Judge.
This matter comes before the Court on the Motion to Compel Arbitration and Stay Judicial Proceedings (doc. 5) filed by defendants Verizon Wireless, LLC, Verizon Wireless and Verizon (collectively, "Verizon"). Also pending are dueling Motions to Strike Affidavits (docs. 15 & 26) filed by plaintiff and Verizon during the course of briefing the Motion to Compel Arbitration.
Allen Campbell, a retired attorney proceeding pro se,
Sometime after terminating his Verizon contract, the Complaint alleges, Campbell learned that Verizon claimed that he owed $148.44 for a contract for 4G Internet service that Campbell had allegedly entered into at a Verizon store in Harvey, Louisiana in October 2011. Campbell denies having agreed to a service contract with Verizon in October 2011. He further denies signing up for or receiving 4G service or equipment from Verizon, or having any contact in October 2011 with a Verizon store in Harvey, Louisiana. Far from signing up for 4G service, as Verizon's bills reflected, Campbell alleges that he "had declined an upgrade to 4G service" from Verizon on his existing service contract. (Id., ¶ 17.) The Complaint states that, even as Verizon representatives apologized and acknowledged the error, Verizon continued to bill Campbell for the disputed $148.44 amount, referred the matter to defendant Diversified Consultants, Inc. for collections, and made derogatory credit reports about Campbell to defendants Experian Information Solutions, Inc. and TransUnion, LLC. According to the Complaint, Experian and TransUnion both failed to conduct reasonable investigations or correct Verizon's erroneous reporting information when Campbell notified them of the dispute. As for Diversified Consultants, the Complaint alleges that this defendant harassed Campbell with repeated collection calls to his cell phone demanding immediate payment of both the Verizon invoice and a separate collection fee, despite being placed on notice that Campbell had disputed the debt, and informing him that the harassing calls would never stop unless he paid Diversified Consultants directly.
Based on these factual allegations, Campbell's Complaint interposes claims against defendants for violation of the Fair Debt Collection Practices Act, 15 U.S.C. §§ 1692 et seq. ("FDCPA"); violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681 ("FCRA"); violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA"); negligence per se for "caller ID spoofing" by Diversified Consultants, in violation of the Truth in Caller ID Act, 47 U.S.C. § 277;
The Verizon defendants now seek to compel arbitration of Campbell's claims against them, reasoning that such claims are within the ambit of arbitration provisions in a pair of written agreements that Campbell executed in February 2008 and May 2010. As to the former, on February 4, 2008, Campbell entered into a two-year agreement with Verizon for a "BroadbandAccess" calling plan.
As to the latter agreement, on May 25, 2010, Campbell visited a Verizon store, "likely for a replacement wireless card." (Doc. 1, ¶ 10.). At that time, Campbell signed another agreement in which he acknowledged, "I agree to the current Verizon Wireless Customer Agreement (CA) ... for services and selected features I have agreed to purchase as reflected on the receipt .... I understand that I am agreeing to ... settlement of disputes by arbitration and other means instead of jury trials and other important terms in the CA." (Dalmida Decl., at Exh. 3.) The referenced "Customer Agreement" includes a provision labeled "How Do I Resolve Disputes with Verizon Wireless?" (the "2010 Arbitration Clause") and set off from the remainder of the Agreement in a separate box. The 2010 Arbitration Clause states that "[y]ou and Verizon Wireless both agree to resolve disputes only by arbitration or in small claims court," confirms that "[t]he Federal Arbitration Act applies to this agreement," and specifies that "any dispute that results from this agreement or from the Services you receive from us ... will be resolved by one or more neutral arbitrators." (Id. at Exh. 4, p. 4.) The parties appear to concur that Campbell received a copy of this iteration of the Customer Agreement (including the 2010 Arbitration Clause) contemporaneously with signing the agreement on May 25, 2010.
The Federal Arbitration Act ("FAA") provides that written agreements to arbitrate "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.
In construing arbitration agreements under the FAA to give effect to the parties' intent, courts must take into account the strong federal policy favoring enforcement of arbitration agreements. In that regard, "federal courts interpret arbitration clauses broadly where possible," such that "any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration." Solymar Investments, Ltd. v. Banco Santander S.A., 672 F.3d 981, 988 (11th Cir. 2012) (citations omitted). "When interpreting an arbitration agreement, due regard must be given to the federal policy favoring arbitration, and ambiguities to the scope of the arbitration clause itself resolved in favor of arbitration." Inetianbor, 768 F.3d at 1353 (citation and internal quotation marks omitted); see also Martinez v. Carnival Corp., 744 F.3d 1240, 1246 (11th Cir. 2014) ("When parties agree to arbitrate some matters pursuant to an arbitration clause, the law's permissive policies in respect to arbitration counsel that any doubts concerning the scope of arbitral issues should be resolved in favor of arbitration.") (citation and internal quotation marks omitted). Of course, this presumption in favor of arbitrability is applied "only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand, and where the presumption is not rebutted." Martinez, 744 F.3d at 1246 (citation and internal quotation marks omitted). Notwithstanding the federal policy favoring arbitration agreements, "this policy does not override the wishes of parties who have restricted the circumstances under which they agree to arbitrate disputes." Ehlen Floor Covering, Inc. v. Lamb, 660 F.3d 1283, 1288 (11th Cir. 2011); see also Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004) ("the FAA's strong proarbitration policy only applies to disputes that the parties have agreed to arbitrate"). These principles inform the Court's analysis of the pending Motion to Compel Arbitration.
In the Motion to Compel Arbitration, Verizon makes a substantial, uncontested showing that Campbell and Verizon entered into two agreements containing binding arbitration clauses and that such contracts involved interstate commerce. By doing so, Verizon has satisfied its initial burden in support of its Motion. See King v. Cintas Corp., 920 F.Supp.2d 1263, 1267 (N.D. Ala. 2013) (recognizing that under Alabama law, "a party seeking to compel arbitration must prove (1) the existence of a contract containing an arbitration agreement and (2) that the underlying contract evidences a transaction affecting interstate commerce") (citation omitted). Accordingly, the burden shifts to Campbell "to present evidence that the arbitration agreement is not valid or that it does not apply to the dispute in question." Id.
Although he raises a plethora of arguments opposing referral of his claims against Verizon to arbitration, Campbell leans heavily on his objection that this case is outside the scope of the 2008 and 2010 Arbitration Clauses. Simply put, Campbell's position is that "[t]here is no claim in this case that `arises out of and relates to the Customer Agreement' or any other obligation associated with the two signed Verizon Wireless contracts." (Doc. 14, at 2.) He reasons that "[t]his is not a contract case" and insists that his Complaint includes no claims seeking to hold Verizon liable "for acts relating to the performance of the two signed agreements." (Id. at 3.) He elaborates that, in his view, the 2008 and 2010 agreements ended in April 2013 when he canceled his Verizon service, and that Verizon's alleged wrongful acts animating his Complaint "occurred after the contracts had ended" and thus "had nothing to do with the performance of any signed contracts." (Id. at 3-4.)
Campbell's argument that his claims against Verizon exceed the scope of the Arbitration Clauses because they are unrelated to performance of the signed agreements is unpersuasive. As an initial matter, contrary to the crabbed, narrow reading that Campbell assigns them, the relevant provisions of these contracts are worded expansively. In particular, the 2008 Arbitration Clause specifies that "
Campbell interprets the Arbitration Clauses as covering
Specifically, on its face, the 2008 Arbitration Clause applies to "any controversy or claim arising out of relating to this agreement." The provision does not purport to be limited to disputes concerning 3G wireless hotspot service, nor does it purport to be temporally constrained to the period in which the 3G service contract is in effect.
Moreover, even assuming that Campbell's narrowly circumscribed interpretation of the Arbitration Clauses were reasonable, Verizon has identified alternative reasonable constructions of those provisions that would favor their application here. In Verizon's view, the 2008 Customer Agreement established and governed the customer/provider relationship between Campbell and Verizon beginning in February 2008. Under that logic, a dispute between them over whether Verizon had properly invoiced Campbell for services provided or whether it had engaged in fraudulent or otherwise unlawful billing or debt collection practices as to those invoices could reasonably be viewed as a "controversy or claim arising out of or relating to" the 2008 Customer Agreement (again, the contract on which the parties' entire relationship for provision of and payment for wireless services was based), so as to be arbitrable under the 2008 Arbitration Clause.
In response, Campbell blasts Verizon's argument as "a reach" that this Court should not indulge. (Doc. 14, at 7.)
In opposing the Motion to Compel Arbitration, Campbell has indeed raised doubts as to whether the scope of the arbitration agreements he entered into with Verizon upon buying 3G hotspot services in 2008 and a replacement wireless card in 2010 is broad enough to encompass allegations of billing/collections misconduct and fraud by Verizon with respect to 4G services after cancellation of the previous service contract. However, given the unambiguous federal mandate to interpret arbitration clauses broadly where possible, those doubts raised by Campbell as to the scope of arbitral issues must be resolved in favor of arbitration. Stated differently, it cannot be said with positive assurance that the arbitration clauses at issue in this case are not susceptible of an interpretation that covers Campbell's claims against Verizon; therefore, arbitration must be compelled.
Campbell also seeks to avoid arbitration by arguing that the subject arbitration clauses contain only a "promise to arbitrate contractual disputes." (Doc. 14, at 6.) He reasons that the tort claims presented in his Complaint lie beyond the reach of the Verizon arbitration agreements because those agreements are somehow limited to contract claims. The Court disagrees. The general premise that contractual arbitration clauses do not allow for arbitration of independent tort claims is incorrect, as a matter of law. See, e.g., Gregory v. Electro-Mechanical Corp., 83 F.3d 382, 384 (11th Cir. 1996) ("The law is clear that tort claims and claims other than breach of contract are not automatically excluded from a contractual arbitration clause."); Hersman, Inc. v. Fleming Companies, Inc., 19 F.Supp.2d 1282, 1285 (M.D. Ala. 1998) ("Tort claims may be subject to contractual arbitration provisions."). Moreover, the Verizon arbitration clauses' broad language covering "any controversy or claim" or "any dispute" necessarily calls for arbitration of all species of claims, not merely contract claims. See Bullard v. Capital One, F.S.B., 288 F.Supp.2d 1256, 1258 (N.D. Fla. 2003) (construing arbitration clause covering "any legal claim" as "includ[ing] arbitration of contract, tort, and civil theft claims, as well as any other `legal claim' between" the parties regarding the subject account).
As an alternative argument against arbitration, Campbell posits that the arbitration clauses are "voidable" under "generally applicable contract defenses," and that the Motion should be denied on that basis. (Doc. 14, at 11.) Plaintiff is correct that "[u]nder the so-called saving clause of FAA § 2, an arbitration agreement may be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability." Cruz v. Cingular Wireless, LLC, 648 F.3d 1205, 1210 (11th Cir. 2011) (citation and internal quotation marks omitted). However, Campbell comes forward with neither specific facts nor cogent argument that any such "generally applicable contract defenses" would operate to strike down the Verizon arbitration agreements in the circumstances presented here. Instead, he simply offers a conclusory statement that the arbitration clause "is voidable due to the fraud alleged." (Doc. 14, at 11.) Campbell has developed this contention neither legally nor factually. He has identified no alleged fraud by Verizon or anyone else relating to formation of the 2008 or the 2010 agreements. This Court can neither fill in the blanks on his behalf nor accept his blanket statement that the "arbitration clause" (both of them or just one, he does not specify) has been tainted by unspecified "fraud" by Verizon to the point where it is unenforceable. Plaintiff having failed to develop this contention either factually or legally, Verizon's request to compel arbitration will not be struck down on that basis.
Next, plaintiff opposes the Motion to Compel Arbitration on the theory that Verizon has waived its right to arbitrate this dispute. This argument is meritless. To be sure, black-letter law teaches that "[a]rbitration should not be compelled when the party who seeks to compel arbitration has waived that right." In re Checking Account Overdraft Litigation, 754 F.3d 1290, 1294 (11th Cir. 2014) (citation omitted). But no circumstances that might rationally support a finding of waiver have been identified or presented in this case.
The test for waiver of a right to arbitrate has the following two elements: (i) whether "under the totality of the circumstances, the party has acted inconsistently with the arbitration right," such as by "substantially invok[ing] the litigation machinery prior to demanding arbitration;" and (ii) whether such inconsistency by the party seeking to compel arbitration "has in some way prejudiced the other party," taking into account such factors as "the length of delay in demanding arbitration and the expense incurred by that party from participating in the litigation process." Garcia v. Wachovia Corp., 699 F.3d 1273, 1277 (11th Cir. 2012) (citations omitted). Here, no facts have been offered to lend credence to either element. The totality of the circumstances does not support a finding that Verizon acted inconsistently with the arbitration right. On the contrary, Verizon filed its Motion to Compel Arbitration mere days after being served with process, and just 32 days after Campbell filed suit against it. The Court finds that Verizon's utilization of the debt-collection process with Campbell before this lawsuit commenced is in no way inconsistent with the exercise of its right to settle this dispute via binding arbitration once Campbell sued Verizon for alleged misdeeds in attempting to collect the debt.
Finally, Campbell appeals to public policy, insisting that his federal statutory claims "should not be subject to compulsory arbitration." (Doc. 14, at 13.) An avalanche of binding authority conclusively refutes this argument. Indeed, the Supreme Court has clarified that courts must enforce agreements to arbitrate according to their terms "even when the claims at issue are federal statutory claims, unless the FAA's mandate has been overridden by a contrary congressional command." CompuCredit Corp. v. Greenwood, ___ U.S. ___, 132 S.Ct. 665, 669, 181 L.Ed.2d 586 (2012) (citations and internal quotation marks omitted).
Having found that Campbell's claims against Verizon are properly subject to arbitration under the terms of the 2008 Arbitration Clause and/or the 2010 Arbitration Clause, the Court now turns to Verizon's request for a stay. By the express terms of the FAA, the finding that Campbell's claims against Verizon are properly referred to arbitration warrants a stay of those claims in this proceeding. See 9 U.S.C. § 3 (where case involves arbitrable claims under a written arbitration agreement, the court "shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement"). Accordingly, the request for stay is
But Verizon's request for stay is broader than that. Indeed, Verizon's position is that "the Court should stay this entire action pending arbitration" (doc. 5, at 19). A stay of "this entire action" would encompass Campbell's claims against defendants Diversified Consultants, Inc., Experian Information Solutions, Inc. and TransUnion LLC. None of those defendants have moved to compel arbitration or asserted that Campbell's claims against them are subject to binding arbitration agreements. By all appearances, those claims are nonarbitrable. Verizon offers neither explanation nor authority for why the 9 U.S.C. § 3 stay entered in this case should (or properly could) extend to those nonarbitrable claims as well.
Fortunately, applicable law is clear. "When confronted with litigants advancing both arbitrable and nonarbitrable claims, ... courts have discretion to stay nonarbitrable claims." Klay v. All Defendants, 389 F.3d 1191, 1204 (11th Cir. 2004). "That decision is one left to the district court ... as a matter of its discretion to control its docket." Moses H. Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 20 n.23, 103 S.Ct. 927, 74 L.Ed. 765 (1983) (citation omitted). "In this instance, courts generally refuse to stay proceedings of nonarbitrable claims when it is feasible to proceed with the litigation." Klay, 389 F.3d at 1204 (noting exceptions where "arbitrable claims dominate" or "the outcome of the nonarbitrable claims will depend upon the arbitrator's decision"). In the circumstances presented here, the Court perceives no reason (and Verizon has identified none) why it would not be feasible to proceed with Campbell's nonarbitrable claims against the other defendants in this litigation, even as his arbitrable claims against Verizon move forward in the arbitral forum. To the contrary, it appears that staying the nonarbitrable claims pending arbitration of the Verizon claims would needlessly delay resolution of Campbell's nonarbitrable claims, with no countervailing benefits in terms of efficiency or conservation of litigant or judicial resources. To use the Klay vernacular, the arbitrable claims do not appear to dominate over the nonarbitrable claims, nor does it seem likely that the outcome of Campbell's nonarbitrable claims will hinge on the arbitrator's decision in the Verizon claims. For all of these reasons, the Court exercises its discretion by
For all of the foregoing reasons, it is
DONE and ORDERED.
