Phillips v. Sprint PCS
209 Cal. App. 4th 758
| Cal. Ct. App. | 2012Background
- Diane Tucker filed a 2003 UCL action against Sprint alleging misrepresentation of cellular rates; two later plaintiffs were substituted and a class action was sought.
- In 2006 Sprint moved to compel bilateral arbitration under an arbitration clause that barred class treatment; the court relied on Discover Bank’s unconscionability standard.
- The 2006 order denied arbitration based on Discover Bank; a class was certified in 2008.
- Concepcion (2011) held FAA preempts Discover Bank’s class-action waiver rule; Sprint renewed the motion in 2011 under CCP §1008 after Concepcion.
- The trial court granted renewal, ordered bilateral arbitration for the named plaintiff, deferred class claims, and plaintiff appealed seeking immediate review of the arbitration order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether renewal of arbitration motion was permissible after law change | Meyer argues res judicata bars renewal | Sprint contends renewal permitted by CCP §1008 after change of law | Renewal proper; court could reconsider due to intervening law |
| Whether the original denial was res judicata | Meyer contends prior order bars relitigation | Sprint argues no final judgment in separate proceeding; res judicata inapplicable | Res judicata does not apply; no final judgment in a separate proceeding |
| Whether the court could reconsider after Concepcion | Arbitrability under Discover Bank controls; change not allowed | Concepcion changed governing law; reconsideration warranted | Intervening change in law allowed reconsideration and new order compelling arbitration |
| Whether waiver occurred by failing to appeal the 2006 denial | Sprint waived by not appealing | Futile to appeal given law at time; waiver not established | Waiver not shown; not grounds to preclude renewal |
| Whether challenges to contract as a whole negate arbitration | Other contract provisions render the entire contract unconscionable | Unconscionability challenges to the contract must go to arbitrator; arbitration provision severable | Arbitration clause severable; challenges to contract as a whole do not preclude arbitration |
Key Cases Cited
- Discover Bank v. Superior Court, 36 Cal.4th 148 (Cal. 2005) (unconscionable class-action waivers under certain circumstances; FAA preemption вопросы)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA preempts Discover Bank rule; class-action waivers in consumer contracts enforceable)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006) (contractual validity of arbitration agreements vs. whole contract)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (severability and arbitrability principles; courts decide validity of arbitration clause)
- O’Brien v. City of Santa Monica, 220 Cal.App.2d 67 (Cal. App. 1963) (ordinary motion renewals; not res judicata)
- Towers, Perrin, Forster & Crosby, Inc. v. Brown, 732 F.2d 345 (3rd Cir. 1984) (preclusion in subsequent proceeding; Towers distinguished)
- Otay River Constructors v. San Diego Expressway, 158 Cal.App.4th 796 (Cal. App. 2008) (distinguishes independent arbitration petition from motion within action)
- Frog Creek Partners, LLC v. Vance Brown, Inc., 206 Cal.App.4th 515 (Cal. App. 2012) (arbitration mootness and relation to underlying action)
- Puritan Leasing Co. v. Superior Court, 76 Cal.App.3d 140 (Cal. App. 1977) (change in law analysis governing reconsideration timeline)
- Scripps Clinic v. Superior Court, 108 Cal.App.4th 917 (Cal. App. 2003) (judicial estoppel and position-taking in related proceedings)
- MBNA America Bank, N.A. v. Gorman, 147 Cal.App.4th Supp. 1 (Cal. App. 2006) (fees to prevailing party where contract claim resolved)
- In re Baycol Cases I & II, 51 Cal.4th 751 (Cal. 2011) (contextual discussion of class action issues)