‘Bait-and-Switch’ Claims vs. Verizon Don’t Belong in Court: Motion to Compel

All 28 plaintiffs in the Feb. 27 class action accusing Verizon of “bait-and-switch” wrongdoing “agreed to arbitrate their claims against Verizon on a non-class basis,” said Verizon’s motion Friday (docket 3:23-cv-01138) in U.S. District Court for New Jersey in Trenton to compel their disputes to arbitration. The plaintiffs allege Verizon pads customers’ monthly bills with a $3.30-per-line “administrative charge” that isn’t disclosed either before or when they agree to buy wireless service from Verizon.

The plaintiffs “further agreed that any disputes concerning the arbitrability of their claims must be submitted to the arbitrator for resolution,” said Verizon’s motion. The contracts the plaintiffs agreed to “clearly and expressly delegate” any arbitrability disputes to the arbitrator, said a memorandum of law in support of the motion.

The 28 plaintiffs’ claims in this case mirror those in Corsi v. Cellco Partnership (docket 3:22-cv-4621). Both cases are before U.S. District Judge Zahid Quraishi for New Jersey in Trenton. Corsi and this case “are brought by the same counsel and raise the same meritless challenges” to Verizon’s “fully disclosed” administrative fee, it said. Stephen DeNittis of DeNittis Osefchen in Marlton, New Jersey, is the lead plaintiffs’ attorney in both cases.

But the contracts at issue in this case differ “in an important respect” from the contract the court has before it in Corsi, said the memorandum. That version “accomplished the delegation of threshold questions to the arbitrator, including unconscionability disputes,” by incorporating the American Arbitration Association’s rules, it said. The 3rd Circuit “found this sufficient to accomplish delegation,” it said. The contracts at issue in this case “add suspenders to that belt, making the delegation explicit in the agreement itself,” and therefore precluding the plaintiffs “from even attempting an argument against delegation,” it said.

The classes the plaintiffs seek to represent in Corsi are Verizon wireless customers who live in Florida, Hawaii, New Mexico, New York, Oregon and Washington, in connection with the same claims about Verizon’s administrative fee, said the memorandum. This case purports to cover the rest of the U.S., or alternatively, Verizon customers in 15 more states, it said.

None of the cases challenging Verizon’s administrative fee belongs in court, because all Verizon customers “agreed to arbitrate on an individual basis the claims they assert in their putative class actions,” said the memorandum. The plaintiffs’ counsel notified the AAA “of their intention to file thousands of identical claims in that forum on behalf of individual Verizon wireless customers,” including hundreds in the very states where plaintiffs’ counsel “now seek to certify classes,” it said.

With multiple rounds of litigation “already in the books,” the court and Verizon “know what to expect in response to this motion to compel arbitration,” said the memorandum. The plaintiffs likely won’t contest that they accepted Verizon’s customer agreement when they signed up for Verizon’s wireless services “and will acknowledge they are bound by it,” it said. But they will argue the court should decline to enforce the provisions of the customer agreement “that preclude class actions and require them to resolve disputes in arbitration,” it said. The plaintiffs “will be wrong,” it said.

The court has pending Verizon’s motion to compel arbitration in Corsi, and if the court grants that motion, as it should, “it can readily grant this one,” said the memorandum. The plaintiffs “will have no meaningfully different arguments in this case than their counterparts had in Corsi,” it said. As the court knows, Verizon believes the Corsi plaintiffs’ attacks on the October 2021 agreement “misinterpret that agreement in unreasonable ways,” it said. But the October 2021 agreement isn’t at issue in this case because Verizon “has amended it,” it said. “For avoidance of any doubt,” the amended agreements “remove any ability” for these newest plaintiffs “to raise the incorrect arguments their counterparts have asserted in Corsi,” it said.