Selby v. Cingular Wireless
Filed 1/29/13 Selby v. Cingular Wireless CA4/3
California Rules of Court, rule 8.1115(a), prohibits courts
and parties from citing or relying on opinions not certified for publication or
ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115
IN
THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH
APPELLATE DISTRICT
DIVISION
THREE
AMANDA SELBY,
Plaintiff and Appellant,
v.
CINGULAR WIRELESS LLC,
Defendant and Respondent.
G045769
(Super. Ct. No. 04CC06353)
O P I N I O N
Appeal from a judgment
of the Superior Court
of
County, Kim
Garlin
Dunning, Judge. Affirmed.
Franklin & Franklin,
J. David Franklin; Law Offices of Anthony A. Ferrigno and Anthony A. Ferrigno
for Plaintiff and Appellant.
Mayer Brown, Donald M.
Falk; John Nadolenco for Defendant and Respondent.
* * *
INTRODUCTION
Plaintiff
Amanda Selby appeals from a judgment entered after defendant Cingular Wireless
(Cingular) made a successful motion for
judgment on the pleadings. Selby’s
lawsuit is for injunctive relief only; it is based on the theory seven
provisions of Cingular’s customer agreement violate California’s Consumer Legal
Remedies Act (CRLA), Civil Code sections 1750-1784.
violate the CRLA have ever been enforced against her – with one exception. Under Meyer
v. Sprint Spectrum L.P. (2009) 45 Cal.4th 634 (Meyer), unless a plaintiff has suffered some “damage†from the
enforcement of a contract provision which allegedly violates the CRLA, the
plaintiff has no standing to pursue a claim based on the theory the contract
provision violates the CRLA.
The
one exception complicates this case.
Back in 2005, about six years before the United States Supreme Court’s
decision in AT&T Mobility LLC v.
Concepcion (2011) ___ U.S. ___, 131 S.Ct. 1740 (Concepcion), Cingular filed a motion to compel arbitration of
Selby’s claims. The motion was
ultimately unsuccessful, because California
law at the time was clear a suit for injunctive relief only under the CRLA was
immune from contractual arbitration provisions.
(See Broughton v. Cigna
Healthplans (1999) 21 Cal.4th 1066 (Broughton).) In the process of opposing the motion to
compel, Selby may have incurred liability for about $25,000 in attorney fees.
However,
Concepcion
is clear that state law defenses to arbitration agreements which “derive their
meaning from the fact that an agreement to arbitrate is at issue†are preempted
by the Federal Arbitration Act (9 U.S.C. § 1 et seq.), a statute dating
back to 1925.
means Cingular had the right under federal law, back in 2005, to request
arbitration of Selby’s claims. The trial
court reasoned all of Selby’s claims failed, either because she had incurred no
damage per Meyer, or, with respect to
the claims based on the unsuccessful motion to compel arbitration, were
precluded by federal law per Concepcion. We therefore agree with the trial court’s
analysis and affirm.
name="_ftnref2" title="">[2]
FACTS
There are no “facts†to
relate here, in the sense of a narration of events leading up to the
litigation. Literally no events led up
to this litigation with the exception of Cingular’s widespread use of a
customer service agreement which contained certain terms.
Ball in May 2004. But Ball was not a
customer of Cingular and never had any dealings with Cingular. After Proposition 64 was passed in November
2004, Ball’s standing to sue a company with whom she had no dealings was called
into question. So in April 2005, the
complaint was amended to omit Ball and add Amanda Selby, the girlfriend of the
nephew of one of Ball’s attorneys, who was at least one of Cingular’s
customers. But while a customer of
Cingular, Selby had never actually had a billing dispute with the company – or
any dispute other than this lawsuit itself.
The operative pleading
is the second amended complaint filed in May 2009. The pleading challenges these provisions of
the Cingular customer service agreement:
(1) Its preclusion of both class action lawsuits
and class action arbitrations.
(2) Its provisions for allocating costs for any
arbitration.
(3) Its provisions which do not provide for
claimed sufficient pre-arbitration discovery.
(4) Its limitations on liability, its disclaimer
of any implied warranty, and its limits on remedies and damages.
(5) Its allowance of unilateral modification of
the arbitration provisions.
(6) Its requirement that American Arbitration
Association rules govern any arbitration, combined with the absence of anything
showing what those rules are.
(7) Its contractual statute of limitations of 100
days on any billing dispute.
All of these provisions
are alleged to be unconscionable under the CRLA.
makes no claims apart from violations of the CRLA.
No billing dispute or
any complaints about Cingular’s service are to be found in the second amended
complaint.
the customer agreement being wrong in the abstract.
LITIGATION HISTORY
It is somewhat unusual
for a suit that commenced in 2004 to still be around in 2012, and to then come
to the Court of Appeal after a motion that is typically made early on in civil
proceedings. A quick review of the
course of the litigation explains the delay.
As noted, the lawsuit
began in 2004 with a different plaintiff, Susanne Ball. Selby was substituted in for Ball in April
2005. Cingular quickly filed a motion to
compel arbitration. Cingular lost in the
trial court. Cingular appealed. This court, following the then-controlling
precedent Broughton, supra, 21
Cal.4th 1066, affirmed the order denying arbitration. (Selby
v. Cingular Wireless LLC (Aug. 25, 2006, G036158) [nonpub. opn.] (
Then, in 2007, this
court decided another case which presented an “identical claim†to
Selby’s. That case would later become
interim the parties decided to put this case on hold.
In 2009, the Supreme
Court handed down Meyer. The Meyer
decision held the plaintiff there could show no damage as a result of any of
the unconscionable terms about which she had complained, because none of those
terms had ever been “enforced†against her.
(Id. at pp. 641, 643.)
A few months after
Thierry Colaw) denied the motion, reasoning that Cingular’s previous attempt to
compel arbitration effectively sought to enforce an unconscionable arbitration
provision against Selby so she was
effected by the agreement. Further, he
noted that in any event, there was a triable issue of fact as to whether Selby
might, or might not, be obligated to pay roughly $25,000 in attorney fees for
fending off the 2005 attempt to compel arbitration.
Then came
this time via a motion for judgment on the pleadings. The motion was assigned to a new trial judge
(now Judge Kim Dunning). In the wake of
DISCUSSION
A. Procedural Arguments for Reversal
Selby’s two leadoff
arguments are procedural. First, relying
on section 1008 of the Code of Civil Procedure [requirement of new or different
circumstances or law required to bring motion for reconsideration], she asserts
the trial judge (that is, Judge Dunning) was without “jurisdiction†to grant
Cingular’s motion for judgment on the pleadings because another trial judge
(that is, Judge Colaw) had previously denied Cingular’s motion for summary judgment.
By its terms, however,
Code of Civil Procedure section 1008 allows for renewed motions if “new or
different facts, circumstances, or law†have intervened. Here, a significant United States Supreme
Court decision – Concepcion, so
significant a tanker of ink has been spilled about it in the less than the two
years after it was handed down – intervened between Judge Colaw’s decision and
Judge Dunning’s.
title="">[7]
Selby argues
for purposes of the motion for judgment on the pleadings because
merits of the initial motion for summary judgment.†We disagree.
Far from being wholly
collateral, the arbitration issue as presented in Concepcion was central to the unsuccessful motion for summary
judgment. An examination of Judge
Colaw’s order denying the motion for summary judgment reveals its focus was on
Cingular’s 2005 attempt to compel arbitration of this case, combined with the
possible liability which Selby might have incurred for fees in fending off that
attempt to compel arbitration. Judge
Colaw, relying on a pre-Concepcion
legal model, concluded that Meyer did
not apply because there had been a clear attempt to enforce the (putatively
unconscionable) arbitration requirement against Selby. Concepcion
may indeed be “collateral†to any of the attacked provisions which, for sake of
argument, might be independent of the arbitration requirement (or not
the change in the law it presented was most certainly not collateral to the
very reason the summary judgment motion was denied.
Significantly, because
of procedural deficiencies in Cingular’s moving papers, Judge Colaw did not
reach the issue of whether Meyer
precluded a challenge to any of the provisions of the contract
by noting that any attempt at summary adjudication,
as distinct from summary judgment, was “procedurally defective†under the
summary judgment statute because Cingular’s moving papers did not identify
whether it was attacking specific causes of action or was based on an
affirmative defense. He thus never
decided the merits of whether the lack of any attempt by Cingular to enforce
any of the allegedly unconscionable provisions of the contract other than those
relating to arbitration was dispositive under Meyer. Judge Colaw’s focus
was on the arbitration. His ruling did
not act as a bar to Judge Dunning’s ruling.
Selby’s second
procedural argument centers on the availability of declaratory relief. She argues that even if the motion for
judgment on the pleadings was correctly granted, the trial court erred in
dismissing her request for declaratory relief.
We defer discussion of this point until after we explain the
Selby’s substantive claims other than the ones involving the arbitration.
B.
In Meyer, as here, a subscriber to a cell phone service sought
injunctive and declaratory relief to the effect that a number of provisions in
her cell phone contract violated the CRLA – in fact, the plaintiff was Selby’s
actual predecessor in this case, Susanne Ball.
The plaintiff’s argument was that “the very presence of unconscionable
terms†in the cell phone contract violated the CRLA and, accordingly, allowed
her to sue for injunctive and declaratory relief. (Meyer,
supra, 45 Cal.4th at p. 641.) The
cell phone company countered with the argument the CRLA requires “some damage,â€
and the plaintiff hadn’t suffered any
damage, because none of the allegedly unconscionable provisions in the contract
had ever been enforced against her. (
The Supreme Court ruled
the cell phone company had the “better position.†(Meyer,
supra, 45 Cal.4th at p. 641.) The
court examined the language of the CRLA’s standing statute, section 1780,
subdivision (a), which provides that any consumer who “suffers any damage as a
result of†any of the practices considered unlawful by the CRLA may bring an action
under the CRLA. The court noted the
language of the statute required both that the consumer be “exposed†to the
unlawful practice and that “some kind
of damage must result.†(
The plaintiff in Meyer might
have been exposed to allegedly unconscionable terms in her contract, but she
certainly had not suffered “any damage†as the result of the enforcement of
those terms. (Id. at p. 643.) Moreover,
given the absence of standing to seek injunctive
relief, the high court held the trial court was certainly within its discretion
in dismissing the plaintiff’s declaratory
relief action as well, since declaratory relief, given the absence of any
damage incurred by the plaintiff, would not “have any practical
consequences.†(Id. at p. 648.)
Our case was considered
by the parties to be “identical†to Meyer
back in 2007, when they stipulated to put this case on hold until
Court. Now, in 2012, the only difference
is Cingular’s failed 2005 attempt to compel arbitration, which
$25,000 in liability to her attorneys for work in warding off the attempt.
Selby’s argument to take
this case out of the purview of Meyer
is that the potential liability represented by the $25,000 defense costs
concerning the motion to compel arbitration represents “transaction costsâ€
which the court in Meyer allowed as
within the purview of the “any damages†language in section 1780.
But the argument doesn’t
help Selby. To the degree that
Cingular’s motion to compel arguably caused Selby to incur a “transaction costâ€
as the law stood at the time Meyer
was decided, it was a transaction cost which Cingular had a federal right to
inflict, and for which our state’s CRLA can give no relief because such relief
would be preempted by federal law.
Concepcion is the large animal in this room. That case was a class action against this
very defendant, Cingular (called AT&T in the opinion), arising out of the
company’s charging sales tax on a “free†cell phone acquired by the named
plaintiffs in the class action. Cingular
moved to compel arbitration; the named plaintiffs countered that the contract’s
arbitration provisions were unconscionable.
(Concepcion, supra, 131 S.Ct.
at pp. 1744-1745.) The federal district
court denied arbitration, and the Ninth Circuit affirmed that decision on the
theory the arbitration provision was indeed unconscionable under California law
and California law on the point was
at p. 1745.) The Supreme Court, however,
reversed the Ninth Circuit, holding the California law on point interfered with
the federal right to have an enforceable arbitration agreement. (Id.
at p. 1750.) The court reasoned the FAA
made arbitration agreements valid and enforceable, and the exception set forth
in the “savings clause†of the FAA
(permitting arbitration agreements to be declared unenforceable “‘upon such
grounds as exist in law or in equity for the revocation of a contract’â€) did
apply only to arbitration or that derive their meaning from the fact that an
agreement to arbitrate is at issue.†(
Circuit had relied, Discover Bank v.
Superior Court (2005) 36 Cal.4th 148.
There is recent
California Court of Appeal authority which indicates that a state law
unconscionability defense to the assertion of an arbitration agreement survived
Concepcion. (E.g., Sparks
v. Vista Del Mar Child and Family Services (2012) 207 Cal.App.4th 1511, ___
[“Moreover, the United States Supreme Court in Concepcion did not eliminate state law unconscionability as a
defense to the enforcement of arbitration agreements subject to the Federal
Arbitration Act.â€]; see also Samaniego v.
Empire Today, LLC (2012) 205 Cal.App.4th 1138, 1150.)
But this case is
fundamentally different from the usual case where a party to a contract has a
claim against the other party and the other party invokes an arguably unconscionable
arbitration agreement. In this case,
Selby fired the first shot by suing Cingular on the basis of various provisions
in Cingular’s customer agreement before Cingular had enforced
including the arbitration provision. Had
Meyer been around at the time, it
would have been clear Selby had no standing to bring her suit at all. And so, when Selby filed her suit, Cingular
effectively had no choice but to invoke its arbitration provision. Not to have done so would have waived the
provision. (See generally
(2012) 205 Cal.App.4th 436, 446 [noting delays as short as four months could
result in waiver of right to arbitrate].)
Cingular’s posture was
thus defensive at the time it invoked its arbitration clause. It never asserted its arbitration clause in
response to claims which, for example, would have been cognizable under
Rather, when the case began back in 2004 with Susanne Ball as plaintiff,
the only dispute between Cingular and any party was one constructed by Selby’s
attorneys. And any dispute remains
wholly an abstract one, attacking contract terms “in the sky†as it were. Judge Dunning explicitly recognized, as do
we, that the arbitration motion was the direct “result†of Selby’s bringing a
suit that did not arise out of any real dispute in the first place.
It would be a perversion
of state law unconscionability doctrine – which is supposed to protect
consumers from oppressive contracts, including arbitration agreements which
deter consumers from seeking relief for their claims (see Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24
Cal.4th 83) – to apply it here where Selby, not Cingular, picked the fight in
the first place. If Selby indeed incurred
liability for $25,000 in fees for fending off Cingular’s invocation of its
arbitration right in response to a lawsuit where she had not suffered “any
damage†at all, those costs are the legal equivalent of a self-inflicted wound,
and cannot be regarded as recoverable transaction costs.
Other than the
“transaction costs†represented by the 2005 motion to compel arbitration, Selby
makes no claims of “any damage†from the non-arbitration
related provisions she attacks. None of
those provisions have been enforced against her. Thus what might survive Concepcion does not survive Meyer,
and vice versa.
Finally,
by the same token, as in Meyer, no
“practical consequences†would flow from consideration of Selby’s declaratory
relief claims. Her claims based on
Cingular’s enforcement of its arbitration right are covered by
based on the enforcement of the arbitration provisions are precluded under
enforced against her.
decision to preclude declaratory relief is exactly on point here.
DISPOSITION
The
judgment is affirmed. Cingular shall
recover its costs.
BEDSWORTH,
J.
WE CONCUR:
O’LEARY, P. J.
IKOLA, J.
name="_ftn1" title=""> [1] All further statutory references
are to the Civil Code unless otherwise indicated.
name="_ftn2" title=""> [2] Since 2007 Cingular has been
known as AT&T Mobility. (See
fn. 1 [“The Concepcions’ original contract was with Cingular Wireless. AT&T
acquired Cingular in 2005 and renamed the company AT&T Mobility in
2007.â€].) The caption for the judgment
in the trial court entered in August 2011, however, retained Cingular Wireless
as the named defendant. The notice of
appeal likewise only listed Cingular Wireless as the named defendant. For continuity’s sake, we will continue to
refer to the defendant as Cingular.
