524 F. App'x 322
9th Cir.2013Background
- Plaintiff Alexandra Severance appeals an order compelling arbitration and dismissing her case against AT&T Mobility, LLC.
- ATTM had a contractual right to invoke arbitration because it is the parent of New Cingular Wireless PCS, which was Severance's contract successor.
- DC Newco LLC did not hold the wireless contracts; it owned a complete membership interest in the holding company Rural Newco LLC that owned the contracts.
- Severance disputes that the arbitration clause covers ATTM as a party beyond Unicel, arguing it applies only to Unicel.
- The district court concluded Severance did not prove she would incur prohibitively expensive arbitration costs, and that ATTM would bear costs.
- The Ninth Circuit affirmed, holding the clause broadly includes successors and that Severance failed to show the costs burden required to compel arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of arbitration clause to include ATTM | Severance argues clause covers only Unicel; excludes ATTM. | ATTM contends clause encompasses successors and affiliates, including ATTM. | Clause includes ATTM and successors; arbitration compelled. |
| Interpretation of 'we' and 'us' to include successors | Terms refer only to Unicel, making arbitration unavailable against successors. | We/us extend to successors, such as assignees, parent companies, and affiliates. | Text supports including successors; ambiguity resolved in favor of arbitration. |
| Prohibition of costs exception to arbitrate | Severance would face prohibitive arbitral costs. | Costs would be borne by ATTM under the arbitration terms; burden not shown. | Severance failed to show likely prohibitive costs; burden not met. |
Key Cases Cited
- Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52 (1995) (ambiguities in arbitration scope resolved in favor of arbitration)
- Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468 (1989) (arbitration scope interpretation governs in ambiguous clauses)
- Coneff v. AT&T Corp., 673 F.3d 1155 (9th Cir. 2012) (district court findings reviewed for clear error; burden shifting re arbitral costs)
- Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79 (2000) (burden to show likelihood of prohibitive costs)
- Suchoski v. Redshaw, 660 A.2d 290 (Vt. 1995) (contract interpretation considering terms and intent)
- In re Am. Express Merchants’ Litig. (Italian Colors Rest.), 634 F.3d 187 (2d Cir. 2011) (detailed costs affidavits required to prove prohibitive costs)