9th Circuit Urged to Affirm Denial of Verizon’s Motion to Compel Arbitration

Three advocacy groups urged the 9th U.S. Circuit Appeals Court to affirm the lower court’s denial of Verizon’s motion to compel the disputes of 27 California consumers to arbitration, in amicus briefs Friday. The 27 plaintiff-appellees argue the arbitration process that Verizon is attempting to foist upon consumers is an inferior and unfair forum that violates claimants’ rights under federal and state law (see 2303190001).

Corporations like Verizon “have fought for years to close the courts to consumers and restrict claims brought against them to individual arbitrations,” said the American Association for Justice. “They were ultimately successful,” it said. Forced arbitration requirements, including class-action bans, “are now a ubiquitous part of most consumer contracts,” it said. Consumers are relegated to individual arbitration as the “one remaining pathway to pursue claims,” it said.

As thousands of consumers pursue individual arbitrations, Verizon “has sought to shut that pathway down as well,” said AAJ. Verizon’s “take-it-or-leave-it contract” imposes a set of mass arbitration procedural requirements that, if upheld, would force its consumers “to wait years, even decades, before filing their claims if they decide to retain the same lawyer as other consumers,” it said. By “coupling” that “forced-delay requirement” with applicable statutes of limitations, Verizon’s contract “guarantees that most consumers’ claims will be time-barred,” it said.

The contractual provision that requires groups of jointly represented consumers to arbitrate claims against Verizon in consecutive, 10-case tranches “is unconscionable under California law,” said the nonprofit Public Citizen. Verizon attempts to “paint” the provision as “an efficiency-enhancing measure that promotes expeditious claim resolution,” it said. But the provision by its terms “operates to delay resolution of claims -- and potentially to chill consumers with meritorious but low-value claims from filing claims in the first place,” it said.

California law doesn’t permit the drafter of an “adhesion contract” to enforce a provision, like Verizon’s, “that creates unreasonable procedural obstacles for non-drafting parties who wish to vindicate their rights,” said Public Citizen. The district court correctly said the provision purporting to waive consumers’ right to seek public injunctive relief in any forum “was unconscionable under California law,” it said.

Verizon doesn’t dispute the provision’s “invalidity and unenforceability” under the California Supreme Court’s 2017 decision in McGill v. Citibank, said Public Citizen. Verizon argues the Federal Arbitration Act “preempts that state-law holding,” but the 9th Circuit “has already held that the FAA does no such thing,” it said.

Verizon “misled millions of consumers about the cost of its wireless plans,” said Public Justice. If Verizon’s arbitration agreement is enforced, as a practical matter, consumers can never hold Verizon “accountable for those actions,” it said. The 9th Circuit “should decline to grant Verizon immunity for its illegal actions,” it said.

The question about whether Verizon’s arbitration agreement is enforceable “is a question for the court, not the arbitrator,” said Public Justice. Verizon’s agreement contains “no clause expressly delegating arbitrability to the arbitrator -- which it could have easily included if its intent truly was to do so,” it said.

Verizon’s mass arbitration provision can’t be enforced under the FAA because it’s not an agreement to settle disputes by arbitration under the statute, said Public Justice. The provision’s system of having only 10 bellwether proceedings go forward at a time “means that it would take more than 150 years for the potential claimants to be able to even file their claims in arbitration,” it said.