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Erik Knutson, Individually and On Behalf v. Sirius Xm Radio Inc

May 30, 2012

ERIK KNUTSON, INDIVIDUALLY AND ON BEHALF OF ALL OTHERS SIMILARLY SITUATED INDIVIDUALLY AND ON BEHALF
OF OTHER SIMILARLY SITUATED,
PLAINTIFFS,
v.
SIRIUS XM RADIO INC.,
DEFENDANT.



The opinion of the court was delivered by: Hon. Anthony J. Battaglia U.S. District Judge

ORDER GRANTING MOTION TO COMPEL ARBITRATION AND DISMISSING CASE [Doc. No. 6]

Presently before the Court is Defendant Sirius XM Radio Inc.'s motion to compel arbitration pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq. and dismiss the Plaintiff's putative class action in its entirety. [Doc. No. 6.] For the reasons set forth below, the Court GRANTS defendant's motion to compel arbitration and DISMISSES plaintiff's claims.

Background

Factual Background

In November 2011, Plaintiff Erik Knutson purchased a truck that included a 90-day trial subscription to Defendant's satellite radio service. Compl. ¶ 9. Plaintiff's account with Defendant was activated on November 7, 2011. Ruhland Decl. ¶ 7. During the 90-day trial subscription, Plaintiff claims that he received three unauthorized calls from Defendant on his cellular telephone. Compl. ¶¶ 14--15, 19. Plaintiff alleges that at no time had he provided his cellular telephone number to Defendant or express consent to receive such calls from Defendant. Id. at ¶ 10.

On November 29, 2011, Defendant mailed its Welcome Kit, including the Customer Agreement, to Plaintiff. Ruhland Decl. ¶¶ 10--11. The Customer Agreement, which governed the parties' relationship during the 90-day trial subscription, provided Plaintiff the opportunity to cancel his trial subscription if he did not agree to the terms of the Agreement. Ruhland Decl. Ex. A, at 6. However, the Agreement stated that if Plaintiff did not cancel his subscription within three business days of activation of his receiver, the Agreement would be legally binding on him. Id. Defendant asserts that Plaintiff never contacted Defendant to indicate that he did not accept the Agreement's terms or to cancel his trial subscription. Ruhland Decl. ¶ 14.

The Customer Agreement contains an arbitration provision, stating in all-capital letters that "ANY DISPUTE MAY BE RESOLVED BY BINDING ARBITRATION" and that by agreeing to arbitration, "YOU ARE HEREBY WAIVING THE RIGHT TO GO TO COURT, INCLUDING THE RIGHT TO A JURY ... ." Ruhland Decl. Ex. A, Section I. The arbitration provision requires that either party wishing to bring a claim against the other must wait 60 days after initiating an informal resolution before turning to formal resolution. See id., Section I(1). If a claim has not been informally resolved, the party wishing to bring a claim must initiate arbitration with the American Arbitration Association ("AAA"). See id., Section I(2). The arbitration provision specifically provides that "any claim ... whether related to this Agreement or otherwise ... shall be resolved, upon election by either party, exclusively and finally by binding arbitration." Id. Furthermore, the Agreement requires individual arbitration of claims. Specifically, the Agreement provides:

If either party elects to resolve a claim by arbitration, that Claim shall be arbitrated on an individual basis. There shall be no right or authority for any claims to be arbitrated on a class action basis or on bases involving claims brought in a purported representative capacity on behalf of the general public, other subscribers or other persons similarly situated ... You do not have the right to act as a class representative or participate as a member of a class of claimants with respect to any claims submitted to arbitration ("Class Action Waiver") ... , Section I(6).

Procedural Background

On February 15, 2012, Plaintiff filed a class action under the Telephone Consumer Protection Act, 47 U.S.C. § 227 ("TCPA") against Defendant for initiating unsolicited telephone calls via an Automatic Telephone Dialing System ("ATDS") to cellular telephones, including Plaintiff's cellular telephone. On April 23, 2012, Defendant filed the instant motion to compel arbitration of Plaintiff's claims pursuant to the FAA. Plaintiff filed an Opposition on May 9, 2012, and Defendant filed a Reply on May 18, 2012.

Legal Standard

The FAA governs the enforcement of arbitration agreements involving interstate commerce.

E.E.O.C. v. Waffle House, Inc., 534 U.S. 279, 289 (2002). The FAA permits "a party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration [to] petition any United States District Court ... for an order directing that arbitration to proceed in the manner provided for in [the arbitration] agreement." 9 U.S.C. § 4. An arbitration agreement "shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." Id. at § 2.

The FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed." Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985). In a motion to compel arbitration, the court may not review the merits of the action but must limit its inquiry to "(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue." Kilgore v. KeyBank Nat. Ass'n, 673 F.3d 947, 955--56 (9th Cir. 2012) (citing Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). If these factors are met, the court must enforce the arbitration ...


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