IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF OREGON

EDGAR T. NUMRICH,

Plaintiff,

v.

QWEST CORPORATION, a Colorado

Corporation of itself and on

behalf of CENTURYLINK, INC.,

a Corporation of Louisiana,

Defendants.

3:14-CV-01864-BR

 

OPINION AND ORDER 

EDGAR T. NUMRICH

200 Greenridge Drive

#1108

Lake Oswego, OR 97035-1496

(503) 635-2599 

Plaintiff, Pro Se

CAREY CALDWELL

RICHARD J. KUHN

Hart Wagner, LLP

1000 S.W. Broadway

Suite 2000

Portland, OR 97205

(503) 222-4499 

Attorneys for Defendants

1 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 1 of 23
BROWN, Judge.

This matter comes before the Court on the Motion (#13) for

Dismissal and Summary Judgment of Defendants Qwest Corporation

and CenturyLink, Inc.; Plaintiff Edgar T. Numrich’s First Request

(#27) for Judicial Notice; Plaintiff’s Second Request (#29) for

Judicial Notice; Plaintiff’s Third Request (#31) for Judicial

Notice; and Defendants’ Motion (#33) to Strike Plaintiff's

Surreplies. 

For the reasons that follow, the Court GRANTS Defendants’

Motion for Dismissal on the ground of lack of personal

jurisdiction as to CenturyLink, GRANTS Defendants’ Motion for

Dismissal on the ground of lack of subject-matter jurisdiction as

to Qwest, GRANTS Defendants’ Motion to Strike Plaintiff's

Surreplies, and STRIKES Plaintiff’s Requests for Judicial Notice.

BACKGROUND

The following facts are taken from the Complaint and the

parties' materials filed in relation to Defendants’ Motion for

Dismissal.

At all relevant times Plaintiff was a resident of Oregon and

a subscriber to a residential land-line telephone and broadband

internet service. Plaintiff received land-line telephone and

broadband internet services pursuant to the Qwest High-Speed

Internet Subscriber Agreement that contained the following

2 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 2 of 23
arbitration clause:

(a) Arbitration Terms. You agree that any dispute

or claim arising out of or relating to the

Services, Equipment, Software, or this Agreement

(whether based in contract, tort, statute, fraud,

misrepresentation or any other legal theory) will

be resolved by binding arbitration. The sole

exceptions to arbitration are that either party

may pursue claims: (1) in small claims court that

are within the scope of its jurisdiction, provided

the matter remains in such court and advances only

individual (non-class, non-representative,

nonconsolidated) claims; and (2) in court if they

relate solely to the collection of any debts you 

owe to Qwest. 

* * *

(b) Waiver of Jury and Class Action. By this

Agreement, both you and Qwest are waiving rights

to litigate claims or disputes in court. . . . 

Both you and Qwest also waive the right to a jury

trial on your respective claims, and waive any

right to pursue any claims on a class or

consolidated basis or in a representative

capacity.

Decl. of Carey Caldwell, Ex. C at ¶ 17. The Agreement further

provided the arbitration “shall be conducted by the American

Arbitration Association ("AAA")” and “[t]he Federal Arbitration

Act, 9 U.S.C. Sections 1-16 . . . shall govern the arbitration of

the dispute.” Id.

CenturyLink is a Louisiana corporation with its principal

place of business in Monroe, Louisiana. CenturyLink is a holding

company that has an ownership interest in more than 200 companies

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Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 3 of 23
including Qwest Corporation.1

CenturyLink is a registered corporation in Oregon, but it

does not maintain any offices, employees, bank accounts,

financial accounts, real estate, or personal property in Oregon.

On November 21, 2014, Plaintiff filed a Complaint in this

Court against CenturyLink alleging claims for violation of

Oregon’s Unlawful Trade Practices Act, Oregon Revised Statute 

§ 646.605, et seq.; breach of the implied covenant of good faith

and fair dealing; usury; and mail and wire fraud.

On December 24, 2014, Plaintiff filed an Amended Complaint

against “Qwest Corporation . . . of itself and on behalf of

CenturyLink” alleging claims for violation of Oregon’s Unlawful

Trade Practices Act, usury, and mail and wire fraud.

On January 7, 2015, Defendants filed a Motion for Dismissal

and Summary Judgment in which they move to dismiss Plaintiff’s

claims against CenturyLink on the ground of lack of personal

jurisdiction, move to dismiss Plaintiff’s claims against Qwest on

the ground of lack of subject-matter jurisdiction, and/or move

for summary judgment on the merits of Plaintiff’s claims. On

January 29, 2015, Plaintiff filed a Response. On February 11,

2015, Defendants filed a Reply. 

On January 9, 2015, the Court issued a Summary Judgment

1

 Qwest Corporation is, in fact, a subsidiary of

CenturyLink.

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Advice Notice to Plaintiff advising him that if he did not submit

admissible evidence in opposition to Defendants’ Motion for

Summary Judgment, summary judgment could be entered against him. 

Between February 17 and 23, 2015, Plaintiff filed three

Requests for Judicial Notice. On February 24, 2015, Defendants

filed a Motion to Strike Plaintiff’s Surreplies (i.e.,

Plaintiff’s Requests for Judicial Notice). On March 4, 2015,

Plaintiff filed a Response to Defendants’ Motion to Strike. The

Court took the matters under advisement on March 4, 2015.

PLAINTIFF’S REQUESTS FOR JUDICIAL NOTICE (#27, #29, #31)

and DEFENDANTS’ MOTION (#33) TO STRIKE SURREPLIES

As noted, Plaintiff filed three Requests for Judicial Notice

after Defendants filed their Reply. Defendants move to strike

Plaintiff’s three Requests for Judicial Notice, which Defendants

characterize as Surreplies to their Motion for Dismissal.

I. Standards

Federal Rule of Evidence 201 allows a court to take judicial

notice of facts that can be “accurately and readily determined

from sources whose accuracy cannot reasonably be questioned.” 

Fed. R. Evid. 201(b)(2). The court may take judicial notice of

documents that are matters of public record. See MGIC Indem.

Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986)(court may

take “judicial notice of matters of public record outside the

5 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 5 of 23
pleadings" when determining whether a complaint fails to state a

claim).

Federal Rule of Civil Procedure 12(f) provides the Court

“may strike from a pleading an insufficient defense or any

redundant, immaterial, impertinent, or scandalous matter.” 

II. Analysis

Defendants contend Plaintiff offers in his Requests for

Judicial Notice further legal argument rather than facts that can

be accurately and readily determined from sources whose accuracy

cannot reasonably be questioned, and, therefore, Plaintiff’s

Requests are, in fact, Surreplies. The Court agrees. 

Local Rule 7-1(f)(3) provides: “Unless directed by the

Court, no further briefing is allowed other than the briefing

allowed under LR 56-1(b).” Local Rule 56-1(b), in turn, provides

only “[i]f an evidentiary objection is raised by the moving party

in its reply memorandum [may] the non-moving party . . . file a

Surreply memorandum . . . addressing only an evidentiary

objection.”

Defendants do not raise any evidentiary objections in their

Reply, and Plaintiff does not address any alleged evidentiary

objections by Defendants in his Requests for Judicial Notice. 

Plaintiff instead merely reiterates the legal arguments found in

his Response to Defendants’ Motion for Dismissal. Moreover,

“surreplies are disfavored and the party seeking to submit one

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Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 6 of 23
has to demonstrate a compelling reason for permitting the

additional filing and such requests are routinely disallowed when

that burden is not met.” Raybould v. JPMorgan Chase Bank, N.A.,

No. 6:13-CV-1966-TC, 2014 WL 7146962, at *1 n.2 (D. Or. Dec. 11,

2014)(citation omitted). See also Queensridge Towers LLC v.

Allianz Global Risks US Ins. Co., No. 2:13–CR–197 JCM (PAL), 2015

WL 1403479, at *2 (D. Nev. Mar. 26, 2015)(“Surreplies are

disfavored and only authorized to address new matters raised in a

reply.”); Huskey v. Ahlin, No. 1:12–cv–00569–AWI–SKO (PC), 2014

WL 348449, at *1 (E.D. Cal. Jan 31, 2014)(“[S]urreplies are not

permitted as a matter of course and are disfavored.”).

Accordingly, the Court grants Defendants’ Motion to Strike

and strikes Plaintiff’s Requests for Judicial Notice.

DEFENDANTS’ MOTION (#13) FOR DISMISSAL FOR LACK OF

PERSONAL JURISDICTION AS TO CENTURYLINK

Defendants move to dismiss CenturyLink from this action

pursuant to Federal Rule of Civil Procedure 12(b)(2) on the

ground that this Court lacks personal jurisdiction over

CenturyLink. Alternatively, CenturyLink moves for summary

judgment on the merits of Plaintiff’s claims. 

CenturyLink asserts this Court lacks general jurisdiction

over CenturyLink, and Plaintiff appears to concede that point. 

Plaintiff, however, contends this Court has specific personal

7 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 7 of 23
jurisdiction over CenturyLink.

I. Standards

When "the existence of personal jurisdiction is challenged

and the defendant appears specially to contest its presence in

the jurisdiction, the plaintiff has the burden to come forward

with some evidence to establish jurisdiction." Dist. Council No.

16 of Intern. Union of Painters & Allied Trades, Glaziers,

Architectural Metal & Glass Workers, Local 1621 v. B&B Glass,

Inc., 510 F.3d 851, 855 (9th Cir. 2007)(citing Schwarzenegger v.

Fred Martin Motor Co., 374 F.3d 797, 800 (9th Cir. 2004)). "The

court may consider evidence presented in affidavits to assist it

in its determination and may order discovery on the jurisdictional issues." Doe v. Unocal Corp., 248 F.3d 915, 922 (9th

Cir. 2001)(citing Data Disc, Inc. v. Sys. Tech. Assoc., Inc., 557

F.2d 1280, 1285 (9th Cir. 1977)). If the court makes a

jurisdictional decision based only on the pleadings and

affidavits submitted by the parties and does not conduct an

evidentiary hearing, the plaintiff need make only a prima facie

showing of personal jurisdiction. B&B Glass, 510 F.3d at 855

(citation omitted). When determining whether the plaintiff has

met the prima facie showing, the court must assume the truth of

uncontroverted allegations in the complaint. Ochoa v. J.B.

Martin and Sons Farms, Inc., 287 F.3d 1182, 1187 (9th Cir. 2002).

II. Specific Personal Jurisdiction

8 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 8 of 23
"Personal jurisdiction over a nonresident defendant is

tested by a two-part analysis. First, the exercise of

jurisdiction must satisfy the requirements of the applicable

state long-arm statute. Second, the exercise of jurisdiction

must comport with federal due process." Bauman v. Daimler

Chrysler Corp., 579 F.3d 1088, 1094 (9th Cir. 2009)(quotations

omitted). "Oregon's long-arm statute confers jurisdiction to the

outer limits of due process under the United States

Constitution." Pac. Reliant Indus., Inc. v. Amerika Samoa Bank,

901 F.2d 735, 737 (9th Cir. 1990)(citation omitted). See also J.

McIntyre Mach., Ltd. v. Nicastro, 131 S. Ct. 2780, 2800 n.8

(2011)("State long-arm provisions allow the exercise of

jurisdiction subject only to a due process limitation in . . .

Oregon); Or. R. Civ. P. 4L. Oregon's long-arm statute,

therefore, is co-extensive with the limits of due process. 

Gleason v. Carter, No. 3:12-CV-01265-HA, 2012 WL 4482372, at *4

n.1 (D. Or. Sept. 25, 2012).

"The due process analysis, in turn, centers on whether [a

nonresident defendant] has 'certain minimum contacts' with [the

forum state], such that the exercise of jurisdiction 'does not

offend traditional notions of fair play and substantial

justice.'" Fiore v. Walden, 688 F.3d 558, 573 (9th Cir. 2012)

(citing Int'l Shoe Co. v. Wash., 326 U.S. 310, 316 (1945)).

The Ninth Circuit applies the following three-part test to

9 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 9 of 23
determine whether a district court constitutionally may exercise

specific jurisdiction over a nonresident defendant: 

(1) The non-resident defendant must purposefully

direct his activities or consummate some

transaction with the forum or resident thereof; or

perform some act by which he purposefully avails

himself of the privilege of conducting activities

in the forum, thereby invoking the benefits and

protections of its laws;

(2) the claim must be one which arises out of or

relates to the defendant's forum-related

activities; and

(3) the exercise of jurisdiction must comport with

fair play and substantial justice, i.e. it must be

reasonable.

Yahoo! Inc. v. La Ligue Contre Le Racisme Et L'Antisemitisme,

433 F.3d 1199, 1205-06 (9th Cir. 2006)(quoting Schwarzenegger v.

Fred Martin Motor Co., 374 F.3d 797, 802 (9th Cir. 2004)). "If

the plaintiff fails to satisfy either of [the first two] prongs,

personal jurisdiction is not established in the forum state. If

the plaintiff succeeds in satisfying both of the first two

prongs, the burden then shifts to the defendant to 'present a

compelling case' that the exercise of jurisdiction would not be

reasonable." Schwarzenegger, 374 F.3d at 802 (quoting Burger

King Corp. v. Rudzewicz, 471 U.S. 462, 476-78 (1985)).

III. Analysis

Plaintiff alleges in his Complaint that the Court has

personal jurisdiction over CenturyLink because it is “a domestic

corporation regularly transacting business and engaging in

10 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 10 of 23
substantial activities within the state of Oregon.” Plaintiff

concedes his service agreements are with a Qwest entity, but he

asserts Qwest provides services in Oregon on behalf of

CenturyLink.

As noted, CenturyLink is a Louisiana corporation and the

record reflects its principal place of business is in Monroe,

Louisiana. Decl. of Joan Randazzo at ¶ 3. CenturyLink is a

holding company that has an ownership interest in more than 200

companies. Id. As a holding company, CenturyLink acquires and

invests in companies in the communications and technology

industries with the goal of earning returns for its shareholders. 

Id. at ¶ 5. Although CenturyLink is registered in Oregon, it

does not maintain an office in Oregon; it does not have any

employees, bank accounts, or other financial accounts in Oregon;

it does not own any real or personal property in Oregon; it does

not make, use, sell, or offer to sell any products or services in

Oregon; it has never advertised or posted job openings for jobs

located in Oregon; it does not have any contracts with any entity

that specifically require performance in Oregon; and it does not

hold a license in Oregon authorizing it to provide any kind of

internet service nor has it applied for such a license in Oregon

or any other state. Randazzo Decl. at ¶¶ 9-11.

In addition, although the record reflects Qwest is a

subsidiary of CenturyLink, CenturyLink does not exercise any

11 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 11 of 23
control or discretion over the day-to-day operations of Qwest. 

Randazzo Decl. at ¶ 13. CenturyLink also does not have any

involvement in billing customers for any services or products

provided by Qwest Corporation (or any of its other 200

subsidiaries), in the collection of payments from customers for

those services or products, or in the processing of customer

payments for those products or services. Id. at ¶ 15.

Plaintiff asserts CenturyLink’s Form 10-K filed with the

Securities and Exchange Commission (SEC) shows CenturyLink is in

fact a “real party in interest” in this matter. As CenturyLink

notes, however, the fact that it complied with SEC requirements

for filing a consolidated annual 10-K is not sufficient to

subject it to the jurisdiction of this Court. Moreover, the fact

that Qwest is a subsidiary of CenturyLink is also insufficient to

subject CenturyLink to this Court’s jurisdiction. See, e.g.,

Crystal Cruises, Inc. v. Moteurs Leroy-Somer S.A., 545 F. App’x

647, 647-48 (9th Cir. 2013)(“Corporations are treated as separate

and distinct entities and ‘the presence of one . . . in a forum

state may not be attributed to the other’ for determining jurisdiction.” (quoting Holland Am. Line Inc. v. Wartsila N. Am.,

Inc., 485 F.3d 450, 459 (9th Cir. 2007)). 

In any event, Plaintiff fails to identify any evidence that

suggests CenturyLink is, in fact, the alter ego of Qwest or that

indicates the Court should pierce the corporate veil of either

12 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 12 of 23
CenturyLink or Qwest to establish personal jurisdiction. In

fact, the record reflects the relationship between CenturyLink

and Qwest is like that described in Doe v. Unocal Corporation,

248 F.3d 915 (9th Cir. 2001). In Doe the Ninth Circuit noted:

[When] a holding company is nothing more than an

investment mechanism[; i.e.,] a device for

diversifying risk through corporate acquisitions

the subsidiaries conduct business not as its

agents but as its investments. The business of

the parent is the business of investment, and that

business is carried out entirely at the parent

level.

Id. at 929 (quotation omitted). CenturyLink stated in pertinent

part in its December 2013 Form 10-K:

As a holding company, substantially all of our

income and operating cash flow is dependent upon

the earnings of our subsidiaries and their

distribution of those earnings to us in the form

of dividends, loans or other payments. As a

result, we rely upon our subsidiaries to generate

the funds necessary to meet our obligations,

including the payment of amounts owed under our

long-term debt. Our subsidiaries are separate and

distinct legal entities and have no obligation to

pay any amounts owed by us or, subject to limited

exceptions for tax-sharing or cash management

purposes, to make any funds available to us to

repay our obligations, whether by dividends, loans

or other payments. State law applicable to each

of our subsidiaries restricts the amount of

dividends that they may pay.

Decl. of Carey Caldwell, Ex. H at 1. Plaintiff does not offer

any evidence that CenturyLink is anything other than a holding

company. In short, Plaintiff fails to establish that CenturyLink

has purposefully directed its activities or consummated

transactions with Oregon or Plaintiff or that it has performed

13 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 13 of 23
some act by which it has purposefully availed itself of the

privilege of conducting activities in Oregon.

Because Plaintiff “fails to satisfy [one] of [the first two]

prongs, personal jurisdiction is not established in the forum

state.” The Court, therefore, concludes Plaintiff has not

established this Court has personal jurisdiction over

CenturyLink. 

Accordingly, the Court grants CenturyLink’s Motion for

Dismissal on the ground of lack of personal jurisdiction. 

Because the Court concludes it lacks personal jurisdiction over

CenturyLink, the Court does not address CenturyLink’s other

ground for dismissal.

DEFENDANTS’ MOTION (#13) FOR DISMISSAL FOR LACK OF

SUBJECT-MATTER JURISDICTION AS TO QWEST

Defendants move for dismissal of Plaintiff’s claims against

Qwest on the ground that this Court lacks subject-matter

jurisdiction over Plaintiff’s claims against Qwest pursuant to

the arbitration clause in the Agreement. Alternatively, Qwest

moves for summary judgment on the merits of Plaintiff’s claims. 

I. Standard

Plaintiff has the burden to establish that the court has

subject-matter jurisdiction. Robinson v. Geithner, 359 F. App'x

726, 728 (9th Cir. 2009). See also Ass'n of Am. Med. Coll. v.

United States, 217 F.3d 770 (9th Cir. 2000).

14 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 14 of 23
When deciding a motion to dismiss for lack of subject-matter

jurisdiction under Rule 12(b)(1), the court may consider

affidavits and other evidence supporting or attacking the

complaint's jurisdictional allegations. Rivas v. Napolitano, 714

F.3d 1108, 1114 n.1 (9th Cir. 2013). The court may permit

discovery to determine whether it has jurisdiction. Laub v.

United States Dep't of Interior, 342 F.3d 1080, 1093 (9th Cir.

2003). When a defendant's motion to dismiss for lack of

jurisdiction "is based on written materials rather than an

evidentiary hearing, the plaintiff need only make a prima facie

showing of jurisdictional facts to withstand the motion to

dismiss." Mavrix Photo, Inc. v. Brand Tech., Inc., 647 F.3d

1218, 1223 (9th Cir. 2011)(citation omitted). 

II. Arbitration Standards

Congress enacted the Federal Arbitration Act (FAA), 

9 U.S.C. § 1, et seq., “in response to widespread judicial

hostility to arbitration.” Am. Exp. Co. v. Italian Colors

Restaurant, 133 S. Ct. 2304, 2309 (2013). The FAA provides

arbitration agreements generally "shall be valid, irrevocable,

and enforceable." Knutson v. Sirius XM Radio, Inc., 771 F.3d

559, 564 (9th Cir. 2014). See also 9 U.S.C. § 2. 

[C]ourts must rigorously enforce arbitration

agreements according to their terms, including

terms that specify with whom [the parties] choose

to arbitrate their disputes and the rules under

which that arbitration will be conducted. That

holds true for claims that allege a violation of a 

15 - OPINION AND ORDER

Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 15 of 23
federal statute, unless the FAA's mandate has been

overridden by a contrary congressional command.

Am. Exp. Co., 133 S. Ct. at 2309 (quotations omitted).

“Under the FAA, the basic role for courts is to determine

(1) whether a valid agreement to arbitrate exists and, if it

does, (2) whether the agreement encompasses the dispute at

issue.” Knutson, 771 F.3d at 564-65 (quotation omitted). 

“[A] district court may either stay the action or dismiss it

outright when . . . the court determines . . . the claims raised

in the action are subject to arbitration.” Johnmohammadi v.

Bloomingdale's, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014). See

also 9 U.S.C. §§ 3, 4.

III. Analysis

It is undisputed that Plaintiff received service from Qwest

at all relevant times pursuant to Qwest’s Subscriber Agreement

that contains the following arbitration clause:

(a) Arbitration Terms. You agree that any dispute

or claim arising out of or relating to the

Services, Equipment, Software, or this Agreement

(whether based in contract, tort, statute, fraud,

misrepresentation or any other legal theory) will

be resolved by binding arbitration. The sole

exceptions to arbitration are that either party

may pursue claims: (1) in small claims court that

are within the scope of its jurisdiction, provided

the matter remains in such court and advances only

individual (non-class, non-representative,

nonconsolidated) claims; and (2) in court if they

relate solely to the collection of any debts you 

owe to Qwest. 

* * *

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(b) Waiver of Jury and Class Action. By this

Agreement, both you and Qwest are waiving rights

to litigate claims or disputes in court. . . . 

Both you and Qwest also waive the right to a jury

trial on your respective claims, and waive any

right to pursue any claims on a class or

consolidated basis or in a representative

capacity.

Caldwell Decl., Ex. C at ¶ 17. The Agreement further provides

the arbitration “shall be conducted by the American Arbitration

Association ("AAA"),” and “[t]he Federal Arbitration Act, 9

U.S.C. Sections 1-16 . . . shall govern the arbitration of the

dispute.” Id.

Qwest contends Plaintiff’s claims against it are subject to

the arbitration clause, and, therefore, this Court lacks subjectmatter jurisdiction over those claims. In his Amended Complaint,

however, Plaintiff alleges the arbitration clause does not govern

his claims against Qwest because his claims “relate solely to the

collection of any debts [that Plaintiff] owe[s] to Qwest.” 

Although it is not entirely clear, it appears Plaintiff also

asserts in his Response to Defendants’ Motion that the

arbitration clause is unconscionable.

A. Applicability of the Arbitration Clause

As noted, Plaintiff asserts in his Amended Complaint

that the arbitration clause does not govern his claims because

his claims “relate solely to the collection of any debts [that

Plaintiff] owe[s] to Qwest.” Defendants, however, assert

Plaintiff’s claims do not relate solely to the collection of any

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Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 17 of 23
debt he may owe Defendants. As Defendants point out, Plaintiff

does not allege in his Amended Complaint that he owes money on

his account. Plaintiff instead asserts Defendants charged

usurious interest rates on their accounts, Defendants used the

mail and the internet to issue invoices for services that were

charged at usurious rates, and Defendants’ activities as

described in the Amended Complaint violate Oregon UTPA, Oregon’s

usury laws, and the Racketeer Influence Corrupt Organization Act

(RICO), 18 U.S.C. §§ 1341, 1343. Plaintiff alleges he is

entitled to statutory economic damages under the Oregon UTPA,

Oregon’s usury laws, and RICO. 

The Supreme Court has made clear that courts “must

rigorously enforce arbitration agreements according to their

terms.” Here the parties agreed to arbitrate “any dispute or

claim arising out of or relating to . . . this Agreement (whether

based in contract, tort, statute, fraud, misrepresentation or any

other legal theory).” The parties agreed to a narrow exception

to that broad agreement for claims that “relate solely to the

collection of any debts you owe to Qwest.” The Court may not

read out the word “solely” in the arbitration clause. Thus, the

Court concludes the word “solely” in the context of the entire

arbitration provision limits the arbitration exception to actions

involving only debt collection. Here Plaintiff’s claims do not

relate solely to the collection of a debt, but also include

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statutory claims beyond the collection of a debt. 

On this record the Court concludes Plaintiff’s claims

against Qwest do not fall under the exception to the arbitration

clause for actions related solely to the collection of any debt

owed by Plaintiff to Qwest.

B. Unconscionability

Although it is not entirely clear, it appears Plaintiff

is asserting in his Response to Defendants’ Motion that the

arbitration clause is unconscionable because the late-charge

provisions in the Agreement are usurious, and, therefore,

unconscionable.2

When grounds "exist at law or in equity for the

revocation of any contract," courts may decline to enforce

arbitration agreements. 9 U.S.C. § 2. Knutson, 771 F.3d at 564. 

The Supreme Court recently “reaffirmed that the savings clause

preserves generally applicable contract defenses such as

unconscionability, so long as the doctrines are not ‘applied in a

fashion that disfavors arbitration.’” Kilgore v. KeyBank, Nat.

Ass'n, 673 F.3d 947, 963 (9th Cir. 2012)(quoting AT&T Mobility

LLC v. Conception, 131 S. Ct. 1740, 1747 (2011)).

Pursuant to Oregon law, a “party asserting

unconscionability bears the burden of demonstrating that the

2 Plaintiff, however, specifically asserts in his Response

that he “is not contesting the whole cloth of Defendants’

Subscription Agreement.” Resp. at 24.

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arbitration clause in question is, in fact, unconscionable."

Livingston v. Metropolitan Pediatrics, LLC, 234 Or. App. 137, 151

(2010)(citing W.L. May Co., Inc. v. Philco-Ford Corp., 273 Or.

701, 707 (1975)). Whether a contract is unconscionable is a

"question of law to be decided based on the facts in existence at

the time the contract was made." Livingston, 234 Or. App. at

151. 

"In Oregon, the test for unconscionability has both

procedural and substantive components.” Id. (citing VasquezLopez v. Beneficial Or., Inc., 210 Or. App. 553, 556 (2007)). 

Procedural unconscionability refers to the

conditions of contract formation and involves a

focus on two factors: oppression and surprise. 

Oppression exists when there is inequality in

bargaining power between the parties, resulting in

no real opportunity to negotiate the terms of the

contract and the absence of meaningful choice. 

Surprise involves the question whether the

allegedly unconscionable terms were hidden from

the party seeking to avoid them. 

Livingston, 234 Or. App. at 151. Substantive unconscionability,

in turn, “generally refers to the terms of the contract, rather

than the circumstances of formation, and the inquiry focuses on

whether the substantive terms unfairly favor the party with

greater bargaining power.” Id.

As noted, the basis for Plaintiff’s possible assertion

of unconscionability is not entirely clear. To the extent that

Plaintiff asserts the arbitration clause is unconscionable

because the late-charge provisions in the Agreement are allegedly

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usurious, the Court finds Plaintiff’s argument unconvincing. 

Even if late-charge provisions in the Agreement are usurious

(which this Court does not decide) and usurious provisions are

unconscionable, unconscionability of one clause of a contract

does not render other clauses of the contract unconscionable,

particularly when, as here, the plaintiff “is not contesting the

whole cloth of Defendants’ Subscription Agreement.”

To the extent that Plaintiff asserts the arbitration

clause is unconscionable because Plaintiff and Qwest have unequal

bargaining power, Oregon courts have made clear that unequal

bargaining power without some evidence of deception, compulsion,

or unfair surprise is not sufficient to establish unconscionability. See, e.g., Motsinger v. Lithia Rose-FT, Inc., 211 Or.

App. 610, 615 (2007). In addition, Qwest points out that

Plaintiff has at least one other internet provider available in

his area, and, therefore, Plaintiff had the choice to select an

internet provider other than Qwest or to forego internet service

altogether. The record, however, reflects Plaintiff contacted

Qwest and solicited discounted service for his account at least

four times: August 2011, 2012, 2103, and 2014. On each occasion

Plaintiff was offered and accepted a 12-month contract subject to

the High-Speed Internet Subscriber Agreement that contained the

arbitration clause at issue. Plaintiff concedes he was aware of

the Agreement and that he was subject to the terms of the

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Agreement at all relevant times. In addition, the arbitration

clause in the Agreement is titled in bold and states: “PLEASE

READ THIS SECTION CAREFULLY. IT AFFECTS RIGHTS THAT YOU MAY

OTHERWISE HAVE. IT PROVIDES FOR DISPUTES THROUGH MANDATORY

ARBITRATION . . . INSTEAD OF IN A COURT BY A JUDGE OR JURY.” 

Caldwell Decl., Ex. C at 16. Plaintiff has not alleged

compulsion, unfair surprise, or deception with respect to the

arbitration clause.

On this record Plaintiff has not established the

arbitration clause in the Agreement is unconscionable. The

Court, therefore, concludes the arbitration clause in the

Agreement is valid. 

Accordingly, the Court grants Qwest’s Motion for

Dismissal on the ground of lack of subject-matter jurisdiction. 

Because the Court concludes it lacks subject-matter jurisdiction

over Qwest, the Court does not address Qwest’s other ground for

dismissal. 

Because Plaintiff is proceeding pro se and because, as

noted, it is not entirely clear whether Plaintiff asserts the

arbitration clause is unconscionable, and, if so, what factual

basis would support that assertion, the Court grants Plaintiff

leave to file a Second Amended Complaint to the extent that

Plaintiff wishes to and is able to allege a basis for a defense

of unconscionability related to the arbitration clause of the

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Case 3:14-cv-01864-BR Document 38 Filed 04/23/15 Page 22 of 23
Agreement.

CONCLUSION

For these reasons, the Court GRANTS Defendants’ Motion (#13)

for Dismissal on the ground of lack of personal jurisdiction as

to CenturyLink, GRANTS Defendants’ Motion (#13) for Dismissal on

the ground of lack of subject-matter jurisdiction as to Qwest,

GRANTS Defendants’ Motion (#33) to Strike Plaintiff's Surreplies,

STRIKES Plaintiff’s Requests (#27, #29, #31) for Judicial Notice,

and DISMISSES CenturyLink from this action for lack of personal

jurisdiction without prejudice.

The Court also GRANTS Plaintiff leave to file a Second

Amended Complaint no later than May 22, 2015, limited to

clarifying and providing a factual basis to support his possible

assertion of the unconscionability of the arbitration clause in

the Agreement. If Plaintiff does not file an Amended Complaint

consistent with this Opinion and Order by May 22, 2015, the Court

will dismiss this matter as to Qwest without prejudice.

IT IS SO ORDERED.

DATED this 23rd day of April, 2015.

/s/ Anna J. Brown

 

ANNA J. BROWN

United States District Judge

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