18th Annual Workplace Class Action Report - 2022 Edition

632 Annual Workplace Class Action Litigation Report: 2022 Edition Calderon, et al. v. Sixt Rent-A-Car, 2021 U.S. App. LEXIS 20854 (11th Cir. July 14, 2021). Plaintiff, a rental car consumer, filed a class action alleging breach of contract and violation of consumer laws following receipt of a bill for damage to Defendant’s rental car. Defendant filed a motion to compel arbitration of Plaintiff’s claims pursuant to an agreement included in the Terms of Use for the third-party reservation system, Orbitz.com. The District Court denied the motion, and on appeal, the Eleventh Circuit affirmed. The District Court held that Plaintiff’s lawsuit fell outside of the scope of the arbitration provision because it concerned Defendant’s practices, and not Orbitz’s practices. The District Court further ruled that Defendant had no authority to enforce the arbitration provision because it was not a third-party beneficiary of Orbitz’s Terms of Use and did not meet the conditions for equitable estoppel. Id . at *5. A person making a rental reservation on Orbitz.com must agree to a contract that includes an arbitration provision, which required the customer to arbitrate disputes related to "any services or products provided." Id . at *1-2. Therefore, the Eleventh Circuit looked to whether that phase meant to services and products provided: (i) by Orbitz; or (ii) by anyone. The Eleventh Circuit concluded that reading the "any services or products provided" clause in the light of other surrounding provisions and the larger contractual context, that the phrase referred solely to Orbitz’s services and products. The Eleventh Circuit determined that the best, most ordinary, and most sensible interpretation of the contract would led a reasonable person to conclude that the arbitration agreement did not extend to the claims against Defendant. The Eleventh Circuit therefore affirmed the District Court’s ruling that denied Defendant’s motion to compel arbitration. Ciccio, et al. v. SmileDirectClub, LLC, 2021 U.S. App. LEXIS 19007 (6th Cir. June 25, 2021). Plaintiff, a consumer, filed a class action alleging false advertising and fraud in connection with Defendant’s claim that its tooth alignment system was as effective as traditional orthodontics. Plaintiff later voluntarily dismissed his claim and submitted it for arbitration to the American Arbitration Association (“AAA”). Prior to submitting the dispute to the arbitrator, an AAA administrator determined that the claim implicated various AAA policies that precluded arbitration unless the parties signed a post-dispute arbitration agreement or the District Court otherwise ordered arbitration. Id . at *3. Plaintiff declined to sign a new agreement and the matter went back to the District Court, which found that Plaintiff satisfied his obligations under the arbitration agreement by submitting the claim to arbitration. The District Court determined that the AAA administration effectively determined that the arbitration agreement did not cover the dispute. On Defendant’s appeal, the Sixth Circuit reversed and remanded that District Court’s ruling. The Sixth Circuit opined that whether an arbitration agreement covers a dispute was a gateway question of arbitrability, and the parties delegated such questions to an arbitrator. The Sixth Circuit ruled that the agreement incorporated the AAA rules, and therefore it was improper for an administrator to answer that gateway question or to overlook it altogether by binding the parties to AAA’s views of sound policy. Accordingly, the Sixth Circuit reversed and remanded the District Court’s ruling. Cottrell, et al. v. AT&T, 2021 U.S. App. LEXIS 32093 (9th Cir. Oct. 26, 2021). Plaintiff filed a putative class action asserting claims that Defendant improperly charged its customers for DIRECTV Now accounts without authorization. The District Court denied Defendant’s motion to compel arbitration of Plaintiff’s claims. The District Court determined that, under California law, Defendant’s arbitration provision’s waiver of the right for public injunctive relief rendered it unenforceable. On appeal, the Ninth Circuit reversed and remanded. In so doing, the Ninth Circuit relied on its decision in Hodges v. Comcast Cable Communications, LLC , 12 F.4th 1108 (9th Cir. 2021). In Hodges , Plaintiff argued that Comcast violated the statutory privacy rights of its residential cable subscribers and that the injunction he requested constituted public injunctive relief. Id . The Ninth Circuit rejected that argument, and held that to qualify as public injunctive relief, an injunction must be "for the benefit of the general public as a whole, as opposed to a particular class of persons," and that Plaintiff’s requested injunction was private relief because it would "benefit only Comcast ‘cable subscribers.’" Id . at *3. As applied here, the Ninth Circuit determined that Defendant’s contract required the parties "to arbitrate all disputes and claims" and then limited the award of any injunctive relief to "the individual party seeking relief and only to the extent necessary to provide relief warranted by that party’s individual claim." Id . Plaintiff sought an injunction requiring Defendant "to provide an accounting of all monies obtained" through unauthorized accounts and services; to give customers "individualized notice" of the violations committed and of their legal rights; and to refrain from committing future violations of the California law by signing customers up for products or services without authorization. Id . The Ninth Circuit ruled that the requested relief would apply only to Defendant’s current and future customers, and thus it was private injunctive relief. For these reasons, the Ninth Circuit reversed and remanded the District Court’s ruling denying Defendant’s motion to dismiss.