United States District Court, D. Maryland
Stephanie A. Gallagher United States District Judge.
Brandon Gorin (“Gorin”) filed this case against
Defendant Vivint Solar Developer LLC (“Vivint”),
alleging breach of express and implied warranties under the
Magnuson-Moss Warranty Act. ECF 2. On May 1, 2019, Vivint
filed a Motion to Stay and Compel Arbitration, ECF 5, along
with a memorandum of law, ECF 5-1 (collectively, the
“Motion”). Gorin opposed the motion
(“Opposition”), ECF 6, and Vivint replied, ECF 12
(“Reply”). I find that no hearing is necessary.
See Loc. R. 105.6 (D. Md. 2018). For the reasons
that follow, I will grant the Motion and stay the
about February 2, 2016, Gorin entered a written agreement
(“the Contract”) for Vivint to design and install
a residential solar power system (“the System”)
at his home in Maryland. ECF 5-3, Ex. B-1. The Contract
provided that Vivint “will design, install, service,
and maintain a solar photovoltaic system on Your home.”
Id. at 2. Under the Contract, Vivint would install,
service, and maintain the System for a twenty-year term, and
at the end of the term, Gorin could elect to:
(1) continue with this Agreement for a renewal term of five
(5) years at the Renewal Price (as described in Section
2(b)(ii)); (2) purchase the System (as described in Section
2(b)(iii)) and this Agreement will automatically terminate;
or (3) have the System removed at no cost to You (as
described in Section 2(b)(iv)) and this Agreement will
Id. Other provisions of the Contract clearly
indicated that Vivint retained ownership of the System during
the twenty-year term. See, e.g., id. at 3
(“This Agreement is for the sale of energy by Us to You
and not for the sale of the System . . . .”);
id. at 5 (“Any manufacturer’s warranty
is for Our benefit as owner of the System . . . .”).
Contract contained the following arbitration clause:
(e) Arbitration of Disputes. PLEASE READ THIS
PROVISION CAREFULLY. BY SIGNING BELOW, YOU ACKNOWLEDGE AND
AGREE THAT, WITH LIMITED EXCEPTIONS, ANY DISPUTE BETWEEN U.S.
SHALL BE RESOLVED BY BINDING ARBITRATION. Arbitration is more
informal than a lawsuit in court. In arbitration, disputes
are resolved by an appointed arbitrator instead of a judge or
jury. Therefore, by signing below, YOU ARE WAIVING THE RIGHT
TO A TRIAL BY JURY.
Id. at 10. The Contract also set forth the
requirements for pre-arbitration notice of the dispute and
dispute resolution proceedings, the scope of the arbitration
provision, and the procedures to be employed in arbitration.
Id. at 10-12.
instant Motion, Vivint seeks to stay this proceeding and to
compel binding arbitration pursuant to the Contract. ECF 5.
In support of its position, Vivint cites to the Federal
Arbitration Act (“FAA”), which provides, in
If any suit or proceeding be brought in any of the courts of
the United States upon any issue referable to arbitration
under an agreement in writing for such arbitration, the court
in which such suit is pending, upon being satisfied that the
issue involved in such suit or proceeding is referable to
arbitration under such an agreement, shall on application of
one of the parties stay the trial of the action until such
arbitration has been had in accordance with the terms of the
agreement . . . .
9 U.S.C. § 3 (2012). In enacting the FAA, Congress
intended to preempt various state laws that directly or
indirectly undermine enforcement of parties’ private
arbitration agreements. See, e.g., Southland
Corp. v. Keating, 465 U.S. 1, 11 (1984). Where a court
concludes that a private arbitration agreement exists and
controls a contested issue, the court may not consider the
merits of the case, and must stay the litigation and order
the parties to arbitration. See AT&T Techs., Inc. v.
Commc’ns Workers of Am., 475 U.S. 643, 649 (1986).
Specifically, a court must compel arbitration where it finds
a valid written arbitration agreement and a dispute within
the scope of the agreement. See Glass v. Kidder Peabody
& Co., 114 F.3d 446, 453 (4th Cir. 1997). Vivint
contends that those elements are present in this case.
opposition to binding arbitration of this dispute rests upon
regulations enacted by the Federal Trade Commission
(“FTC”) to implement the Magnuson-Moss Warranty
Act (“MMWA”). ECF 6-1. The MMWA provides, in
[A] consumer who is damaged by the failure of a supplier,
warrantor, or service contractor to comply with any
obligation under this chapter, or under a written warranty,
implied warranty, or service contract, may bring suit for
damages and other legal and equitable relief . . . .
15 U.S.C. § 2310(a)(1) (2012). The FTC’s
regulations interpreted the MMWA to ban
“pre-dispute” binding arbitration. 16 C.F.R.
§ 703.5(j); 40 Fed. Reg. 60, 168, 60, 210 (Dec. 31,
1975). Under the FTC’s regulations, parties must first
engage in nonbinding dispute resolution before the warrantor
can insist on binding arbitration. 40 Fed. Reg. at 60, 211.
The Fourth Circuit has opined that the FTC’s regulatory
ban on binding arbitration in MMWA cases is ...