Plaintiffs Doyle and Carri Wheeler v. Defendants NoteWorld LLC, Freedom Debt Center (“Freedom“), and others
United States Court of Appeals, Ninth Circuit
544
The district court concluded, and the parties do not dispute, that three provisions of the arbitration section of the Debt Settlement Agreement were substantively unconscionable: the 30-day limitation period for claims; the loser-pays-all provision; and the provision requiring the Wheelers to arbitrate their Washington claim in Orange County California.
Under Washington law, severance of unconscionable provisions from a section of an agreement is not possible where the unconscionable provisions permeate that section. McKee v. AT & T Corp., 164 Wash.2d 872, 191 P.3d 845, 860 (2008). This contract‘s arbitration section has only four sentences and three of these contain an unconscionable provision. The section is materially similar to the one in McKee where four provisions of a consumer services contract were held to be substantively unconscionable and to permeate the dispute resolution section. The Supreme Court of Washington treated the McKee arbitration section differently from the arbitration provisions contained in the employment contracts at issue in Adler v. Fred Lind Manor, 153 Wash.2d 331, 103 P.3d 773 (2004) and Zuver v. Airtouch Communications, Inc., 153 Wash.2d 293, 103 P.3d 753 (2004). In those cases, severance of the unconscionable provisions was ordered because there were only two, and the rest of the provisions in the lengthy arbitration agreements could stand on their own. Here, as in McKee, the remaining provisions cannot. The unconscionable provisions “taint the entire [] section, such that severance would essentially require us to rewrite the [] agreement.” McKee, 191 P.3d at 860-61. Regardless of whether the severance issue is one of law to be decided de novo or a discretionary determination, we must affirm the district court in this case. There was no error of law or abuse of discretion.
AFFIRMED.
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. Rene Leonard REBOLLO, Jr., a.k.a., Rene Leonard Rebollo, Defendant-Appellant.
No. 11-50445.
United States Court of Appeals, Ninth Circuit.
Argued and Submitted Jan. 9, 2013. Filed Jan. 23, 2013.
Christine Michelle Adams, Assistant U.S., Angela Joy Davis, Assistant U.S., Curtis A. Kin, Esquire, Assistant U.S., Office of the U.S. Attorney, Los Angeles, CA, for Plaintiff-Appellee. James Scott Thomson, Counsel, James Scott Thomson, Counsel, Attorney and Counselor at Law, Berkeley, CA, for Defendant-Appellant.
MEMORANDUM *
- Defendant Rene Rebollo claims there wasn‘t a sufficient evidentiary basis for the district court‘s restitution order. But the Presentence Investigation Report (PSR) provided that basis. It found that defendant‘s actions resulted in a loss of “$1.2 million for the cost of mailing notices to potentially affected customers.” Prior to the sentencing hearing, defendant objected in writing to the use of the $1.2-million figure in calculating the Guidelines sentence, but he did so on the grounds that it wasn‘t “reasonably foreseeable” that such costs would be incurred as a result of the crime, not on the ground that there was insufficient evidence documenting the cost expended on notifying customers. When he objected to the PSR‘s findings about restitution, as opposed to sentencing, it was on the grounds that the conviction didn‘t fall within the restitution statute and that neither Countrywide nor Bank of America qualified as a victim. Indeed, in his written objection to parts of the PSR, defendant twice acknowledged $1.2 million as the amount spent notifying customers. Because defendant failed to properly object to the PSR‘s finding that $1.2 million was expended on notifying customers, the PSR provided a sufficient basis for the district court‘s restitution order. United States v. Ameline, 409 F.3d 1073, 1085 (9th Cir. 2005) (en banc) (“Of course, the district court may rely on undisputed statements in the PSR at sentencing.“).
- Defendant claims Bank of America can‘t qualify as a victim under the Mandatory Victims Restitution Act because he stole the data from Countrywide, not Bank of America. This claim fails because Bank of America purchased Countrywide prior to the expenditure of $1.2 million on notifying customers. Defendant also claims that Bank of America knew of the theft prior to its purchase of Countrywide and, as a result, the purchase “severed the harm suffered by Countrywide.” But defendant admits that Countrywide became a wholly-owned subsidiary of Bank of America before he confessed to the crime and before he was charged, so this claim fails. Even if Bank of America had learned of the theft prior to the purchase, it was entitled to expect to recover restitution from defendant, so the claim that the theft was factored into the purchase price also fails.
- Finally, defendant asks us to overrule our precedents holding that Apprendi v. New Jersey, 530 U.S. 466, 120 S.Ct. 2348, 147 L.Ed.2d 435 (2000), and its progeny don‘t apply to restitution. We decline that invitation, even in light of the Supreme Court‘s recent decision in Southern Union Co. v. United States, — U.S. —, 132 S.Ct. 2344, 183 L.Ed.2d 318 (2012). Southern Union addressed Apprendi‘s application to criminal fines and isn‘t sufficiently on point to overrule our restitution caselaw without going en banc.
AFFIRMED.