United States District Court, D. Maryland
PAUL BARON, on behalf of himself and others similarly situated, Plaintiff,
SPRINT CORPORATION, Defendant. TYLER MORRISON, on behalf of himself and others similarly situated, Plaintiff,
AT&T MOBILITY LLC, Defendant. MICHELLE MORRISON, on her own behalf and on behalf of all others similarly situated, Plaintiff,
VERIZON COMMUNICATIONS INC. and CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS, Defendants. SHAWNAY RAY AND KANTICE JOYNER, on their own behalf and on behalf of all others similarly situated, Plaintiffs,
T-MOBILE US, INC., Defendant.
K. Bredar Chief Judge.
April and May of 2019, four putative class actions were filed
against each of the major mobile carriers in the United
States: AT&T (Morrison v. AT&T Mobility,
LLC, Civ. No. JKB-19-1257), Sprint (Baron v. Sprint
Corporation, Civ. No. JKB-19-1255), T-Mobile (Ray,
et al. v. T-Mobile US, Inc., Civ. No. JKB-19-1299), and
Verizon (Morrison v. Verizon Communications Inc. et
al., Civ. No. JKB-19-1298). Each complaint alleges that
the mobile carriers illegally sold users' geolocation
data to third parties in violation of the Federal
Communications Act. (AT&T Compl., ECF No. 1; Sprint
Compl., ECF No. 1; T-Mobile Compl., ECF No. 1; Verizon
Compl., ECF No. 1.)
four cases, the mobile carriers ("Defendants") have
filed Motions to Compel Arbitration, citing the arbitration
provisions contained in each plaintiffs contract with their
respective mobile carrier. (AT&T Mot. Compel, ECF No. 7;
Sprint Mot. Compel, ECF No. 11; T-Mobile Mot. Compel, ECF No.
12; Verizon Mot. Compel, ECF No. 11.) The plaintiffs in each
case ("Plaintiffs") contend that the arbitration
clauses are unenforceable because they are unconscionable
under Maryland state law. (AT&T Opp'n Mem. 4-10, ECF
No. 11; Sprint Opp'n Mem. 4-11, ECF No. 16; T-Mobile
Opp'n Mem. 3-7, ECF No. 20; Verizon Opp'n Mem. 4-10,
ECF No. 12.)
the arbitrability of each dispute involves the same legal
analysis, the Court addresses these motions in one
memorandum. The motions have been fully briefed. No. hearing
is required. See Local Rule 105.6 (D. Md. 2018). For
the reasons set forth below, the Court will grant each
Defendant's Motion to Compel Arbitration.
Federal Arbitration Act ("FAA") stipulates that, in
any contract involving interstate commerce, a provision
through which the parties agree to arbitrate their disputes
shall be "valid, irrevocable, and enforceable, save upon
such grounds as exist at law or in equity for the revocation
of any contract." 9 U.S.C. § 2. The Act
"reflects an 'emphatic federal policy in favor of
arbitral dispute resolution.'" KPMG LLP v.
Cocchi, 565 U.S. 18, 21 (2011) (per curiam) (quoting
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 631 (1985)). The "party
resisting arbitration bears the burden of proving that the
claims at issue are unsuitable for arbitration."
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79,
a party agreed to arbitrate a particular dispute is a
question of state law governing contract formation."
Adkins v. Labor Ready, Inc., 303 F.3d 496, 501 (4th
Cir. 2002). "[G]enerally applicable state contract
defenses, such as fraud, duress, or unconscionability, may be
applied to invalidate arbitration agreements without
contravening [the FAA]." Doctor's Assocs., Inc.
v. Casarotto, 517 U.S. 681, 687 (1996). However, state
law defenses must not be applied "in a fashion that
disfavors arbitration," T&T Mobility LLC v.
Concepcion, 563 U.S. 333, 341 (2011), and they must not
"rely on the uniqueness of an agreement to
arbitrate" to invalidate it, id. (quoting
Perry v. Thomas, 482 U.S. 483, 493 (1987)).
establish that a provision is unconscionable under Maryland
law, a plaintiff must show the provision at issue is both
procedurally and substantively unconscionable. Holloman
v. Circuit City Stores, Inc., 894 A.2d 547, 560 (Md.
2006). Procedural unconscionability is "characterized by
extreme unfairness, which is made evident by (1) one
party's lack of meaningful choice, and (2) contractual
terms that unreasonably favor the other party."
Walther v. Sovereign Bank, 872 A.2d 735, 743 (Md.
2005) (internal quotations and citations omitted).
Substantive unconscionability involves terms that are
'"unreasonably favorable to the more powerful
party,' 'impair the integrity of the bargaining
process or otherwise contravene the public interest or public
policy,' 'attempt to alter in an impermissible manner
fundamental duties otherwise imposed by the law,' or are
otherwise 'unreasonably and unexpectedly
harsh.'" Freedman v. Comcast Corp., 988
A.2d 68, 85-86 (Md. Ct. Spec. App. 2010) (quoting
Walther, 872 A.2d at 744).
The Enforceability of the Arbitration Clauses
contend that each of the arbitration clauses in dispute is
not enforceable because they are procedurally and
substantively unconscionable under Maryland law. (AT&T
Opp'n Mem. at 4-10; Sprint Opp'n Mem. at 4-11;
T-Mobile Opp'n Mem. at 3-7; Verizon Opp'n Mem. at
4-10.) The arbitration provisions are procedurally
unconscionable, Plaintiffs argue, because they are contained
in contracts that are excessively long and customers do not
have a meaningful choice as to whether to accept them.
(AT&T Opp'n Mem. at 5-8; Sprint Opp'n Mem. at
5-8; T-Mobile Opp'n Mem. at 3-5; Verizon Opp'n Mem.
at 4-8.) The arbitration clauses are substantively
unconscionable, according to Plaintiffs, because arbitration
in these circumstances would make it impossible for all of
the potential plaintiffs to recover, and arbitration would
allow Defendants to get away with egregious misconduct
without public scrutiny. (AT&T Opp'n Mem. at 8-10;
Sprint Opp'n Mem. at 8-11; T-Mobile Opp'n Mem. at
5-7; Verizon Opp'n Mem. at 8-10.)
Court need not address whether the arbitration provisions are
procedurally unconscionable, as Plaintiffs' substantive
unconscionability arguments fail as a matter of law. Both the
United States Supreme Court and the United States Court of
Appeals for the Fourth Circuit have held that courts cannot
invalidate arbitration clauses on a theory that features
inherent to arbitration are unconscionable. See Kindred
Nursing Centers Ltd. P'ship v. Clark, 137 S.Ct.
1421, 1426-27 (2017) (courts may not "adopt a legal rule
hinging on the primary characteristic[s] of an arbitration
agreement" to invalidate an arbitration clause); see
also Muriithi v. Shuttle Exp., Inc., 712 F.3d 173, 180
(4th Cir. 2013) ("[T]he generally applicable contract
defense of unconscionability may not be applied in a manner
that targets the existence of an agreement to arbitrate as
the basis for invalidating that agreement.") But this is
precisely what Plaintiffs attempt to do here. In emphasizing
the private nature of arbitration (and the accompanying lack
of public scrutiny over arbitral disputes), as well as the
individual approach typically used in arbitration (and the
accompanying challenges this creates for large numbers of
plaintiffs to recover), Plaintiffs seek to use two of
arbitration's "primary characteristic[s]" as a
basis for invalidating the arbitration clauses. See
Kindred, 137 S.Ct. at 1427. This approach runs headlong
into the binding precedent that expressly rejects such an
emphasis on the troubling nature of Defendants' alleged
misconduct also fails to provide a legally cognizable basis
for invaliding the arbitration clauses. Even if Defendants
did engage in egregious conduct, courts must avoid
considering the merits of a claim in deciding whether a
dispute is arbitrable. See Noohi v. Toll Bros., 708
F.3d 599, 607 (4th Cir. 2013) ("[W]here it is asserted
that a dispute is bound to arbitration, the role of courts is
limited to determining the enforceability of an arbitration
provision; straying into [the merits of a dispute] ... is an
impermissible encroachment on the arbitrator's
authority.' (internal quotation omitted)).
allegations about Defendants' conduct, if true, are
indeed troubling. And the concerns Plaintiffs raise about the
ability of consumers to recover in an era of widespread
arbitration are well documented. See e.g., L Maria
Glover, Disappearing Claims and the Erosion of
Substantive Law, 124 Yale L J. 3052 (2015). But courts
are prohibited from treating arbitration "as an inferior
or less reliable means of vindicating important substantive
rights." Adkins, ...