Edvard Eshagh v. the Terminix Int'l Co.
588 F. App'x 703
9th Cir.2014Background
- Eshagh sued Terminix entities in district court; Terminix moved to compel arbitration and then to strike class allegations.
- District court struck class claims and ordered arbitration per the arbitration agreement.
- Issues included whether Terminix waived arbitration, whether the agreement was unconscionable or illusory, and the propriety of striking class claims.
- The court analyzed prior circuit doctrine on arbitration-waiver timing and pre-conception of waiver following actions before Concepcion.
- Court affirmed, holding no waiver, no unconscionability or illusory nature, and proper striking of class allegations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Arbitration waiver timing | Eshagh argues Terminix waived right to compel arbitration by its procedural path. | Terminix contends actions did not waive arbitration rights under controlling precedent. | No waiver. |
| Arbitration agreement validity | Arb clause is unconscionable or illusory. | Arb clause is neither unconscionable nor illusory under California law. | Not unconscionable; not illusory. |
| Class claims | Class claims should proceed in court, not arbitration. | Gateway questions of arbitrability justify court resolution of class issues. | District court proper to strike class claims; class-arbitration not presumed. |
Key Cases Cited
- Lake Communications, Inc. v. ICC Corp., 738 F.2d 1473 (9th Cir. 1984) (waiver not shown by certain pre-answer actions)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (U.S. 1985) (broader arbitration scheme considerations)
- Britton v. Co-op Banking Grp., 916 F.2d 1405 (9th Cir. 1990) (arbitration-right actions not inconsistent with waiver)
- Ting v. AT&T, 319 F.3d 1126 (9th Cir. 2003) (arbitration enforceability requires both procedural and substantive unconscionability)
- Asmus v. Pac. Bell, 999 P.2d 71 (Cal. 2000) (illusory contract analysis for unilateral modification)
- Casas v. Carmax Auto Superstores California LLC, 224 Cal. App. 4th 1233 (Cal. Ct. App. 2014) (unilateral modification with notice not illusory)
- Momot v. Mastro, 652 F.3d 982 (9th Cir. 2011) (gateway questions of arbitrability reserved for courts)
- Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662 (U.S. 2010) (class-action arbitration fundamentally different from bilateral arbitration)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (S. Ct. 2011) (fundamental changes with class-action arbitration)
- Concepcion, 131 S. Ct. 1740 (S. Ct. 2011) (emphasizes changes from bilateral to class-action arbitration)