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Robert Hodsdon, On Behalf of Himself and All Others Similarly Situated v. Bright House Networks

March 14, 2013

ROBERT HODSDON, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
BRIGHT HOUSE NETWORKS, LLC,
DEFENDANT.



The opinion of the court was delivered by: Jennifer L. Thurston United States Magistrate Judge

FINDINGS AND RECOMMENDATIONS GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION (Doc. 7)

Bright House Networks, LLC ("Defendant" or "Bright House") seeks to compel arbitration and stay this action initiated by Plaintiff Robert Hodsdon ("Plaintiff" or "Hodsdon"). (Doc. 7). Plaintiff filed his opposition to the motion on February 5, 2013 (Doc. 16), to which Defendant filed a reply on February 19, 2013. (Doc. 19). On February 21, 2013, the matter was referred to the Magistrate Judge pursuant to 28 U.S.C. § 636(b)(1). (Doc. 25).

The Court heard oral arguments of counsel on March 14, 2013. For the following reasons, the Court recommends Defendant's motion to compel arbitration be GRANTED.

I. Relevant Factual and Procedural History

Plaintiff alleges he signed up for cable service from Bright House on June 1, 2005, and cancelled his service on February 4, 2011. (Doc. 1 at 9). Plaintiff asserts Bright House still retains his information, "including his address, telephone number, and social security number," which were given to obtain the cable service. Id. According to Plaintiff, "Bright House uses its position to collect 2 personal information -- such as names, addresses, social security numbers, and credit card numbers -- 3 from tens of millions of consumers across the country." Id. at 2. Plaintiff asserts Bright House "maintain[s] personally identifiable information on all of its previous customers indefinitely." Id. at 2, 6. In addition, Plaintiff contends Bright House fails to send annual privacy notices to consumers, 6 informing them of the retainer of personally identifiable information. Id.

For these actions, Plaintiff initiated this class action by filing a complaint on September 26, 2012, alleging Defendant is liable for violations of the Cable Communications Policy Act as set forth 9 in 47 U.S.C. § 551, et seq. (Doc. 1 at 13-15). In addition, Plaintiff alleges violations of the California Customer Records Act (Cal. Civ. Code § 1798.80), breach of implied contract, and Cal. Penal Code § 637.5. Id. at 16-22.

On December 12, 2012, Defendant filed a motion to compel arbitration, asserting "the arbitration agreement between the parties is (1) valid and enforceable under the FAA; (2) encompasses Hodsdon's claims; and, (3) must be enforced according to its terms, which, among other terms, requires that Hodsdon's claims be arbitrated on an individual, non-class basis." (Doc. 7 at 2).

II. Legal Standard

The Federal Arbitration Act ("FAA") provides that written arbitration agreements "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. A party seeking to enforce arbitration agreement may petition the Court for "an order directing the parties to proceed to arbitration in accordance with the terms of the agreement." 9 U.S.C. § 4.

The Court's role in applying the FAA is "limited to determining whether a valid agreement to arbitrate exists and, if so, whether the agreement encompasses the dispute as issue." Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). To determine whether an arbitration agreement encompasses particular claims, the Court looks to the plain language of the agreement, and "[i]n the absence of any express provision excluding a particular grievance from arbitration . . . only the most forceful evidence of a purpose to exclude the claim from arbitration can prevail." United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 584-86 (1960).

Because the FAA "is phrased in mandatory terms," "the standard for demonstrating arbitrability is not 2 a high one [and] a district court has little discretion to deny an arbitration motion." Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469, 475 (9th Cir. 1991).

"[A]ny doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration." Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). As a 6 result, arbitration should only be denied when "it may be said with positive assurance that the 7 arbitration clause is not susceptible of an interpretation that covers the asserted dispute." AT&T Tech., Inc. v. Communs. Workers of Am., 475 U.S. 643, 650 (1986). It is well-established that "arbitration 9 provides a forum for resolving disputes more expeditiously and with greater flexibility than litigation." Lifescan, 363 F.3d at 1011.

III. Terms of the Arbitration Agreement

Bright House created an "Agreement for Residential Services," ("the Agreement") which sets forth the terms and conditions of services from Bright House for its customers. (Doc. 7-4). In addition, the Agreement includes an arbitration provision, which states:

(a) If you have a Dispute (as defined below) with BHN that cannot be resolved, you or BHN may elect to arbitrate that Dispute in accordance with the terms of this Arbitration Provision rather than litigate the Dispute in court. Arbitration means that you will have a fair hearing before a neutral arbitrator instead of in a court by a judge or jury.

(b) As used in this Provision, the term "Dispute" means any dispute, claim or controversy between you and BHN regarding any aspect of your relationship with BHN or the BHN Parties that has accrued or may hereafter accrue, whether based in contract, statute, regulation, ordinance, tort (including, but not limited to, fraud, misrepresentation, fraudulent inducement, negligence or any other intentional tort), or any other legal or equitable theory. (Doc. 7-4 at 11). In addition, the provision includes a "Right to Opt Out," which provides a customer may opt-out of the arbitration provision by providing written notice to Bright House within thirty days from the date of receiving the Agreement. Id. The Agreement includes a "special note regarding arbitration to California customers," which states: "If you are a BHN customer in California, BHN will not seek to enforce the arbitration provision above unless we have notified you otherwise." (Doc. 7-4 at 12).

IV. Discussion and Analysis

When determining whether a valid and enforceable agreement to arbitrate has been established for the purposes of the FAA, the Court should apply "ordinary state-law principles that govern the 4 formation of contracts to decide whether the parties agreed to arbitrate a certain matter." First Options 5 of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995); Circuit City Stores v. Adams, 279 F.3d 889, 892

(2002). Here, the Agreement provided that it was "subject to all applicable federal, state, or local laws 7 and regulations, including any applicable franchise agreement, in effect in the relevant jurisdiction(s) 8 in which [the customer] receive[s] . . . Services." (Doc. 7-4 at 14). Because Plaintiff received services 9 in Florida, the parties agree the law of the state of Florida governs the determination of whether the agreement is valid. (See Doc. 7-1 at 17-18; Doc. 16 at 16).

A. Validity and enforceability of the arbitration agreement

Pursuant to Florida contract law, "the basic requirements of [a] contract" include "offer, acceptance, consideration and sufficient specification of essential terms." St. Joe ...


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