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Gorin v. Vivint Solar Developer LLC

United States District Court, D. Maryland

September 27, 2019



          Stephanie A. Gallagher United States District Judge.

         Plaintiff 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 litigation.[1]

         On or 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 automatically terminate.

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 . . . .”).

         The 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.

         In the 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 relevant part,

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.

         Gorin’s 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 relevant part:

[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 ...

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