Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-01474/USCOURTS-azd-2_09-cv-01474-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:1692 Fair Debt Collection Act

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Lasonia Breham, 

Plaintiff, 

vs.

Asset Acceptance, LLC, 

Defendant. 

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No. CV-09-1474-PHX-GMS

ORDER

Pending before the Court is the Motion to Strike Jury Demand (Dkt. # 25) filed by

Defendant Asset Acceptance, LLC (“Defendant”). For the reasons set forth below, the Court

denies the Motion.

BACKGROUND

In October 2008, Plaintiff Lasonia Breham (“Plaintiff”) began working for Defendant

in its Arizona office. Shortly after Plaintiff was hired, Defendant distributed a new

“Associate Manual” to employees, including Plaintiff. The Manual contained a Statement

of Agreement for employees to sign. Within this statement was a “Jury Trial Waiver”

provision. (Dkt. # 12, Ex. 3.) The provision states:

I WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY

CLAIM, DEMAND OR DISPUTE RELATING TO OR

ARISING OUT OF OR IN THE COURSE OF EMPLOYMENT

OR TERMINATION THEREOF. I AGREE AND CONSENT

THAT ANY SUCH CLAIM, DEMAND OR DISPUTE SHALL

BE DECIDED BY THE COURT WITHOUT A JURY.

Case 2:09-cv-01474-GMS Document 31 Filed 04/28/10 Page 1 of 5
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(Id.) Plaintiff signed the Waiver and dated it November 24, 2008.

Because Defendant is a purchaser and collector of consumer debt, Plaintiff also signed

paperwork agreeing to “clear up” any outstanding accounts she may have with Defendant

when she was hired. Defendant, however, discovered three debts allegedly owed by Plaintiff.

Plaintiff contends she attempted to “clear up” these debts, but that Defendant’s ensuing

efforts to collect on those debts violated the Fair Debt Collection Practices Act. 15 U.S.C.

§ 1692 et seq. (Dkt. # 1 at 4–10.) These alleged violations eventually led to Plaintiff’s

termination, and they provide the basis of her claims. In raising these claims, Plaintiff also

demands a jury trial. (See id. at 1.)

On February 19, 2010, Defendant filed this Motion to Strike Plaintiff’s Jury Demand.

Specifically, Defendant contends that Plaintiff’s claims fall within the scope of the Jury Trial

Waiver provision discussed above. (Dkt. # 25 at 4.) Plaintiff, in turn, maintains that the Jury

Trial Wavier does not apply. She asserts that the Waiver is invalid when evaluated under the

Ninth Circuit reasonable expectation and unconscionability standards for analyzing

arbitration agreements. (Dkt. # 26 at 5.)

LEGAL STANDARD

The Ninth Circuit has not addressed the issue of the contractual waiver of a jury trial.

In their respective briefs, both parties base their arguments instead upon analysis relating to

the validity of arbitration agreements. Those circuits and district courts that have examined

the issue, however, consistently apply a different standard for determining the validity of a

contractual waiver of the right to jury trial than they apply for determining the validity of an

arbitration agreement. Thus, rather than apply the approach asserted by the parties, the Court

opts for the legal standard adopted by other circuit courts and the district courts within the

Ninth Circuit. 

The Seventh Amendment right to a jury trial in federal court is governed by federal

law. Simler v. Conner, 372 U.S. 221, 221–22 (1963); see also Leasing Serv. Corp. v. Crane,

804 F.2d 828, 832 (4th Cir. 1986). Under federal law, there is a strong presumption against

the waiver of this fundamental right. United States v. Cal. Mobile Home Park Mgmt. Co., 107

Case 2:09-cv-01474-GMS Document 31 Filed 04/28/10 Page 2 of 5
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F.3d 1374, 1378 (9th Cir.1997) (holding that courts “must indulge every reasonable

presumption against the waiver of the jury trial”). A waiver, however, is enforceable when

it is made knowingly, voluntarily, and intelligently. Phoenix Leasing. v. Sure Broad., 843 F.

Supp.1379, 1384 (D. Nev. 1994) (citing Standard Wire & Cable Co. v. AmeriTrust Corp.,

697 F. Supp. 368, 375 (C.D. Cal.1988)); see also Merrill Lynch & Co. v. Allegheny Energy,

Inc., 500 F.3d 171, 188 (2d Cir. 2007); K.M.C. Co. v. Irving Trust Co., 757 F.2d 752, 756

(6th Cir. 1985); Leasing Serv., 804 F.2d at 832; Okura & Co. v. Careau Group, 783 F. Supp.

482, 488 (C.D. Cal. 1991). The factors consistently used by courts to determine whether a

waiver was knowing, voluntary, and intelligent include:

(1) whether there was a gross disparity in bargaining power

between the parties; (2) the business or professional experience

of the party opposing the waiver; (3) whether the opposing party

had an opportunity to negotiate contract terms; and (4) whether

the clause containing the waiver was inconspicuous.

Phoenix Leasing, 843 F. Supp. at 1384 (quoting Hydramar, Inc. v. Gen. Dynamics Corp.,

1989 WL 159267, at *3 (E.D. Pa. Dec. 29, 1989)); see also Leasing Serv., 804 F.2d at 833

(applying these same factors).

There is a split among the circuits regarding which party has the burden of proving

these factors. See Irving Trust, 757 F.2d at 758 (placing the burden on the party opposing the

waiver). But see Leasing Serv., 804 F.2d at 832–33 (placing the burden on the party seeking

to enforce the waiver). Since placing the burden of proof on the party seeking to enforce the

waiver is most in keeping with the strong presumption against the waiver of this Seventh

Amendment right, the Court will follow the approach set forth in Leasing Serv. See id.;

Phoenix Leasing, 843 F. Supp. at 1384 (applying this approach in the District of Nevada).

 DISCUSSION

This suit is predicated upon the jury trial waiver contained in an “Associate Manual”

signed by the Plaintiff during the course of her employment. Examining this document in

light of the factors articulated above, the Court finds that the waiver fails to meet the

knowing, voluntary, and intelligent standard. The waiver, therefore, appears to be

unenforceable.

Case 2:09-cv-01474-GMS Document 31 Filed 04/28/10 Page 3 of 5
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Defendant offers no evidence to suggest that Plaintiff had any equal ability to bargain

with her employer. This weighs in favor of denying Defendant’s Motion. See MZ Ventures

LLC v. Mitsubishi Motor Sales of Am., Inc., 1999 WL 33597219, at *16 (C.D. Cal. Aug. 31,

1999) (observing that defendant’s failure to present evidence that plaintiff had equal

bargaining power weighed in favor of denying the motion to strike jury demand). Defendant

also fails to offer evidence of Plaintiff’s business acumen. See Sullivan v. Ajax Navigation

Corp., 881 F. Supp. 906, 911 (S.D. N.Y. 1995) (noting that a lack of business acumen weighs

against waiver). Defendant further does not present evidence that waiver was negotiable. See

Ginsberg v. Silversea Cruises Ltd, 2004 WL 3656827, at *2 (S.D. Fla. Mar. 18, 2004)

(holding that waiver was invalid where the form included standardized language, was drafted

by the defendant, and was nonnegotiable).

Defendant does present evidence that the clause containing the wavier provision was

conspicuous. The waiver is in all capital letters, bolded, and clearly labeled “Jury Trial

Waiver.” This factor alone, however, is not enough to render the waiver knowing, voluntary,

and intelligent. See Sullivan, 881 F. Supp. at 911 (holding that a “defendant cannot overcome

the presumption against a waiver” simply “by referring to the placement and font size of the

waiver clause”); see also MZ Ventures, 1999 WL 33597219, at *17 (denying motion to strike

jury demand even though there was evidence that the waiver was conspicuous).

In light of the lack of evidence of parity in bargaining power, of professional

experience on the part of Plaintiff, and of her ability to negotiate the terms of the waiver

agreement, the Court finds that the factors set forth in Phoenix Leasing weigh against

granting the Motion to Strike. See 843 F. Supp. at 1384. Nonetheless, to the extent that

discovery reveals additional facts suggesting that Plaintiff’s waiver was both knowing and

voluntary, the Court denies the Motion without prejudice. See MZ Ventures, 1999 WL

33597219, at *17 (denying a motion to strike jury demand, but permitting the parties to raise

the issue again on summary judgment). Here, additional facts related to and leading up to

Plaintiff’s signing of the waiver form may prove to be relevant to this issue.

Case 2:09-cv-01474-GMS Document 31 Filed 04/28/10 Page 4 of 5
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IT IS THEREFORE ORDERED that Defendant’s Motion to Strike Jury Demand

(Dkt. # 25) is DENIED without prejudice. 

DATED this 27th day of April, 2010.

Case 2:09-cv-01474-GMS Document 31 Filed 04/28/10 Page 5 of 5