Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_07-cv-00411/USCOURTS-cand-3_07-cv-00411-15/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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28 This disposition is not designated for publication and may not be cited. 1

Case Number C 07-00411 JF (PVT)

ORDER DEFERRING DETERMINATION OF PLAINTIFF'S MOTION FOR CLASS CERTIFICATION

(JFLC1)

**E-Filed 6/21/2010**

IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

JONATHAN C. KALTWASSER,

 Plaintiff,

 v.

CINGULAR WIRELESS LLC, a Delaware

Corporation,

 Defendant.

Case Number C 07-00411 JF (PVT)

ORDER DEFERRING 1

DETERMINATION OF PLAINTIFF’S

MOTION FOR CLASS

CERTIFICATION

I. BACKGROUND

Plaintiff Jonathan C. Kaltwasser (“Kaltwasser”) filed the complaint in this action on

January 22, 2007. On October 2, 2007, after settlement negotiations failed, Defendant Cingular

Wireless LLC, now known as AT& T Mobility LLC, (“Cingular”) moved to compel arbitration,

and the parties stipulated to extend Cingular’s time to answer or otherwise move with respect to 

Kaltwasser’s complaint until the Court had ruled on the motion to compel arbitration. On April

11, 2008, the Court denied the motion to compel arbitration, and on April 15, 2008 Cingular filed

a Notice of Appeal with respect to that ruling. Cingular then moved to stay the instant action

Case 3:07-cv-00411-JW Document 154 Filed 06/21/10 Page 1 of 5
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 On June 3, 2010, the Court continued the scheduled hearing on Kaltwasser’s motion for 2

class certification from June 11 to July 2 to permit orderly consideration of Cingular’s instant

motion to stay. 

2

Case Number C 07-00411 JF (PVT)

ORDER DEFERRING DETERMINATION OF PLAINTIFF’S MOTION FOR CLASS CERTIFICATION

(JFLC1)

pending appeal. The Court denied that motion on August 22, 2008. On October 1, 2009, the

Ninth Circuit affirmed this Court’s order denying the motion to compel arbitration. 

On February 26, 2010, Kaltwasser filed a motion to certify the proposed plaintiff class. 

The hearing on Kaltwasser’s motion for class certification was scheduled for June 11, 2010. On 2

May 24, 2010, the United States Supreme Court granted certiorari in AT&T Mobility LLC v.

Concepcion, No. 09-893, for the purpose of reviewing, inter alia, the Ninth Circuit’s decision in

Laster v. AT&T Mobility LLC, 584 F.3d 849 (9th Cir. 2009). AT&T Mobility LLC v.

Concepcion, --- S.Ct. ----, 2010 WL 303962, 78 USLW 3454, 78 USLW 3677, 78 USLW 3687

(U.S. May 24, 2010) (NO. 09-893). The question presented in Concepcion is whether the

Federal Arbitration Act (“FAA”) precludes California from conditioning the enforcement of an

arbitration agreement on the availability of class-wide arbitration. The arbitration provision at

issue in Concepcion was implemented by Cingular in December 2006 and is the same provision

that this Court declared unconscionable under California law when it denied Cingular’s motions

to compel arbitration and for a stay pending appeal. That provision reads, “You and Cingular

agree that YOU AND CINGULAR MAY BRING CLAIMS AGAINST THE OTHER ONLY IN

YOUR OR ITS INDIVIDUAL CAPACITY, and not as a plaintiff or class member in any

purported class or representative proceeding.” Order Denying Motion to Compel Arbitration at

2. The FAA preemption argument raised by Cingular in Concepcion is identical to that rejected

by this Court and by the Ninth Circuit. 

On May 26, 2010, in light of the Supreme Court’s decision to grant certiorari, Cingular

filed an “Emergency Administrative Motion to Stay” all pending proceedings in the instant

action. On June 8, 2010, the Court denied the motion but requested further briefing from both

parties with respect to whether the hearing on Kaltwasser’s motion for class certification should

be deferred until a ruling is issued in Concepcion. 

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Case Number C 07-00411 JF (PVT)

ORDER DEFERRING DETERMINATION OF PLAINTIFF’S MOTION FOR CLASS CERTIFICATION

(JFLC1)

II. LEGAL STANDARD

The power to grant a stay in pending litigation is incidental to the power inherent in every

court to control the disposition of the cases on its docket. Landis v. North American Co., 299

U.S. 248, 254-55, 57 S.Ct. 163, 81, L.Ed. 153 (1936). In an exercise of that discretion, the Court

must weigh “the competing interests which will be affected by the granting or refusal to grant a

stay.” Lockyer v. Mirant Corp., 398 F.3d 1098, 1110 (9th Cir.2005), citing CMAX Inc. v. Hall,

300 F.2d 265, 268 (9th Cir. 1962). “Among those competing interests are the possible damage

which may result from the granting of a stay, the hardship or inequity which a party may suffer in

being required to go forward, and the orderly course of justice measured in terms of the

simplifying or complicating of issues, proof, and questions of law which could be expected to

result from a stay.” Id. “The proponent of a stay bears the burden of establishing its need.” 

Clinton v. Jones, 520 U.S. 681, 708, 117 S.Ct. 1636, 137 L.Ed.2d 945 (1997). The moving party

“must make out a clear case of hardship or inequity in being required to go forward.” Lockyer,

398 F.3d at 1109, quoting Landis, 299 U.S. at 255. “Only in rare circumstances will a litigant in

one case be compelled to stand aside while a litigant in another settles the rule of law that will

define the rights of both. Id. at 1109-10, quoting Landis, 299 U.S. at 255. 

III. DISCUSSION

Kaltwasser proposes a class that includes all AT&T Mobility LLC (“ATTM”) customers

in California “who contracted with Cingular wireless phone services on or after March 1, 2006.”

Complaint ¶ 35. In his motion for class certification, Kaltwasser asserts that this proposed class

may include “hundreds of thousands (if not millions) of Californians.” Motion for Class

Certification at 1. In its order dated June 8, 2010, this Court concluded that even if the Supreme

Court reverses the Ninth Circuit’s holding and finds that California law is preempted by the

FAA, it is far from clear that no class could be certified in the instant action. However,

Kaltwasser acknowledges that such a decision likely would narrow significantly the scope of any

certifiable plaintiff class to: (1) customers such as Kaltwasser who rejected the December 2006

revised arbitration clause; and (2) customers who initiated or renewed their Cingular service on

or after March 1, 2006, but terminated their service before December 2006. 

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Case Number C 07-00411 JF (PVT)

ORDER DEFERRING DETERMINATION OF PLAINTIFF’S MOTION FOR CLASS CERTIFICATION

(JFLC1)

Cingular asserts that it knows of only one California customer who affirmatively rejected

the arbitration provision. In addition, it claims that because most of its service agreements

extend for two or more years, the number of customers who initiated or renewed their service

agreement on or after March 1, 2006, but terminated their service before December 2006 will be

“dramatically lower than the ‘millions’ currently alleged by Plaintiff.” Cingular Letter Brief at 3. 

Accordingly, Cingular argues that it will be prejudiced if the Court allows the pending motion for

class certification to go forward, as the difference in size of the potential plaintiff class will have

a profound impact on the extent and cost of merits and expert discovery. The Court agrees. 

With a smaller class, the class period would be cut in half, affecting the collection,

review, and production of documents, the number of witnesses, and extent of expert analysis, as

well as necessary defense discovery. It also is reasonable to assume, as argued by Cingular, that

the cost and administration of surveys of class members with respect to their experience with

dropped calls will be impacted significantly by the ultimate size of the class, as will the cost of

providing notice. 

Kaltwasser argues that proceeding with the class certification motion now will benefit not

only class members who remain after Concepcion but also those who may be excluded, as the

cost of discovery in private arbitration with respect to the latter group would be reduced. 

However, the nature and extent of discovery permissible in private arbitration is fundamentally

different from that allowed in class-action litigation. Any benefit to potential class members who

may be excluded later would be substantially outweighed by the discovery costs Cingular would

be required to incur were the Court to grant Kaltwasser’s motion for certification of the proposed

class. 

Plaintiff’s most compelling argument for maintaining the current hearing date is that

deferral of the pending motion for class certification effectively would amount to a stay of the

entire action. However, it makes little sense to certify a large class when there is at least a

reasonable likelihood that the Supreme Court may hold that certification of such a class would be

inappropriate. 

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Case Number C 07-00411 JF (PVT)

ORDER DEFERRING DETERMINATION OF PLAINTIFF’S MOTION FOR CLASS CERTIFICATION

(JFLC1)

IV. ORDER

Good cause therefor appearing, IT IS HEREBY ORDERED that determination of

Kaltwasser’s motion for class certification is DEFERRED pending the ruling of the United States

Supreme Court in AT&T Mobility LLC v. Concepcion, No. 09-893, or until further order of the

Court. The July 2, 2010 hearing date on the motion is hereby vacated. 

IT IS SO ORDERED.

DATED: June 21, 2010

 

JEREMY FOGEL

United States District Judge

Case 3:07-cv-00411-JW Document 154 Filed 06/21/10 Page 5 of 5