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Trent Alvarez, On Behalf of Himself and All v. T-Mobile Usa

December 20, 2011

TRENT ALVAREZ, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
T-MOBILE USA, INC., AND DOES 1-10, DEFENDANT,



MEMORANDUM AND ORDER RE: MOTION TO COMPEL ARBITRATION AND STAY CLAIMS

----oo0oo----Plaintiff Trent Alvarez brought this putative class action against defendant T-Mobile USA, Inc. ("T-Mobile") arising out of plaintiff's mobile phone contract with T-Mobile. The Complaint alleges violation of the California Consumer Legal Remedies Act ("CLRA"), the California Unfair Competition Law ("UCL"), and the California False Advertising Law ("FAL"). Presently before the court is T-Mobile's motion to compel binding arbitration pursuant to the Federal Arbitration Act ("FAA").

I. Factual and Procedural Background

In August of 2009, Alvarez visited a T-Mobile store where he activated a cell phone plan with two phone lines. (Compl. ¶ 38.) The plan that he signed up for was a T-Mobile myFave FamilyTime plan that was advertised as offering unlimited web access and text messaging and required him to agree to a twenty-four month contract. (Id. ¶¶ 38, 59.) At the same time, Alvarez purchased two cell phones for use on the plan. (Id.)

When the T-Mobile sales representative was finished obtaining the information necessary to activate Alvarez's account, he calculated the total amount due and asked Alvarez to sign an electronic signature pad. (Id. ¶ 60; Alvarez Decl. ¶¶ 8, 9 (Docket No. 54).) According to Alvarez, when he signed the pad, the screen displayed little to no words and he believed that in signing the pad he was merely authorizing the store to charge his credit card. (Alvarez Dep. at 23:17-24:20.)

T-Mobile claims that the electronic pad was programmed in such a way that before the signature pad displayed the signature screen, it displayed several screens that required the customer to accept or agree to a "bulleted version of the contract" that included the arbitration provision and the opt-out provision. (Brown Decl. ¶¶ 1-5, Tab 1 (Docket No. 60-3).) Without indicating agreement or acceptance, a customer could not access the signature screen and complete their transaction. (Id.; Smith Decl. ¶ 6 (Docket No. 60).) T-Mobile additionally claims that the signature screen displayed the following words above the signature line: "I have had the opportunity to review my Agreement and I agree to the current version of T-Mobile's Terms and Conditions." (Brown Decl. ¶ 6, Tab 1.)*fn1

The sales representative did not provide Alvarez with a copy of the Terms and Conditions. (Id.) According to Alvarez, the Terms and Conditions were not included in the packaging of his phones. (Alvarez Decl. ¶ 22; Alvarez Dep. at 21:16-22 (Docket No. 57).) T-Mobile, on the other hand, maintains that it is its regular business practice to insert copies of the Terms and Conditions into the packaging of cell phones sold to customers. (Smith Decl. ¶ 19, Tab 2.)

According to the Complaint, after Alvarez signed this pad, the sales representative "printed out a contract with Plaintiff's electronic signature applied to the contract. This service agreement describes the plans' prices, 24-month commitments, and other terms." (Compl. ¶ 60.) The contract "refers to T-Mobile's Terms and Conditions and provides that the Terms and Conditions are available in T-Mobile stores." (Id.)

T-Mobile has submitted a copy of the signed contract referred to by Alvarez along with its motion to compel arbitration. (Baca Decl. Tab 1 (Docket No. 7-2).) Alvarez claims that he was not provided with the contract in the T-Mobile store at the time he activated his phones. (Alvarez Dep. at 52:3-53:8.) T-Mobile claims that at the store at which Alvarez purchased his phone and activated his phone plan, it was the regular practice to provide customers with a copy of their Service Agreements. (Smith Decl. ¶ 7 (Docket No. 60-1).)

In addition to summarizing the price and length terms of the cellular service plan, the one-page Service Agreement lists six terms to which the customer agrees "by signing [the] form or activating or using T-Mobile service." (Baca Decl. Tab

1.) The second of these terms incorporates the Terms and Conditions and the third states that the customer agrees that "T-Mobile requires ARBITRATION of disputes UNLESS I OPT-OUT WITHIN

30 DAYS OF ACTIVATION. See T-Mobile's Terms and Conditions for details . . . ." (Id. (emphasis in original).) The agreement additionally states that the signer can "obtain copies of TMobile's Terms and Conditions . . . plan at T-Mobile retail stores, at www.T-Mobile.com . . ., or by calling Customer Care at (800) 937-8997 or 611 from any T-Mobile phone. I have received and read my Agreement." (Id.)

The Terms and Conditions, in turn, contain an arbitration clause in the second numbered paragraph that states that

WE EACH AGREE THAT EXCEPT AS PROVIDED BELOW (AND EXCEPT DISPUTES BETWEEN YOU AND US IN ANY WAY RELATED TO OR AS TO PUERTO RICO CUSTOMERS), ANY AND ALL CLAIMS OR CONCERNING THE AGREEMENT, OUR SERVICES, DEVICES OR PRODUCTS, INCLUDING ANY BILLING DISPUTES, WILL BE RESOLVED BY BINDING ARBITRATION, RATHER THAN IN COURT. (Id. Tab 3, at 32 (emphasis in original).) They also contain a class action waiver, (id. at 33), and an opt-out provision providing that

Notwithstanding the above, YOU MAY CHOOSE TO PURSUE YOUR CLAIM IN COURT AND NOT BY ARBITRATION if: (a) your claim qualifies, you may initiate proceedings in ...


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