NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW JERSEY

IN RE: SPRINT PREMIUM DATA PLAN 

MARKETING AND SALES PRACTICES 

LITIGATION

 Civil Action No. 10-cv-6334

 (SDW)(MCA)

 OPINION

 September 4, 2013

WIGENTON, District Judge.

Before this Court is Defendant Sprint Spectrum L.P.’s motion to compel bilateral arbitration 

and dismiss or stay all actions pursuant the Federal Arbitration Act, Federal Rule of Civil Procedure 

12(b)(1), and 12(b)(6). This Court, having considered the parties’ supplemental submissions, decides 

this matter without oral argument pursuant to Federal Rule of Civil Procedure 78. For the reasons 

stated below, this Court GRANTS Defendants’ motion to compel arbitration.

I. FACTUAL and PROCEDURAL BACKGROUND

Given the extensive procedural history of this case, only a brief recitation of the facts and 

procedural posture is provided. This case involves Plaintiffs Cameron Comstock, Arlene Baisa 

Lockhart, Shalimar Guerra, Gene Lockhart, Matt Tillman, Scott Tallal, and Craig Morris, 

(collectively “Plaintiffs”) and their grievances against Defendant Sprint Spectrum L.P. (“Sprint”). 

On July 15, 2011, Sprint moved to compel arbitration with Plaintiffs. (See Dkt. No. 37.) On March 

12, 2012, this Court entered an opinion and order finding that Plaintiffs’ claims were subject to 

arbitration and that the arbitration agreement (“Arbitration Agreement”) was valid in almost every 

respect save for the issue of unconscionability. (See Dkt. No. 47-48.) The parties were ordered to 

engage in limited discovery to permit this Court to determine whether the Arbitration Agreement,

was substantively unconscionable due to prohibitive costs. (See id.) 

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Having completed their limited discovery in compliance with this Court’s March 12, 2012 

order, the parties now return for this Court’s determination of the validity of the Arbitration 

Agreement.

II. LEGAL STANDARD

“The final phrase of § 2 [of the Federal Arbitration Act (“FAA”)] . . . permits arbitration 

agreements to be declared unenforceable ‘upon such grounds as exist at law or in equity for the 

revocation of any contract.’” AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1746 (2011) 

(“Concepcion”). “This saving clause permits agreements to arbitrate to be invalidated by ‘generally 

applicable contract defenses, such as fraud, duress, or unconscionability.’” Id. For an agreement to 

be unconscionable, it must be found to be both procedurally and substantively unconscionable. See

Antkowiak v. Tax Masters, 455 Fed. App’x. 156, 159 (3d Cir. 2011). “In addressing a claim that an 

arbitration clause is unconscionable, we apply the ordinary state law principles . . . of the involved 

state or territory.” 1 Nino v. Jewelry Exchange, Inc., 609 F.3d 191, 200 (3d Cir. 2010). 

This Court previously found that it was not clear under California law whether the Arbitration 

Agreement was procedurally unconscionable. Consequently, this Court turned to the issue of

substantive unconscionability to determine the validity of the Arbitration Agreement. Despite the 

rule enunciated in Nino, the issue of substantive unconscionability in this case is governed by federal 

law given the language in the Arbitration Agreement.

2

 See Parada v. Superior Court, 176 Cal. App. 

4th 1554, 1577 (Cal. Ct. App. 2009) (stating that, in that case, determination of substantive 

unconscionability was governed by California pursuant to the language of the arbitration agreement). 

 1 This Court will focus on California law since only California Plaintiffs remain in this case. (See Dkt. Nos. 76, 87.) 2 The Arbitration Agreement states that the FAA governs the arbitration provision and “all questions of whether a dispute 

is subject to arbitration.” (Dkt. No. 37-6, Decl. of Stephanie Miller (“Miller Decl.”) Ex. A, p. 12.)

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i. Substantive Unconscionability

Concerning substantive unconscionability, there are two cases that provide controlling law. 

The first case that is instructive on substantive unconscionability is Green Tree Fin. Corp. v. 

Randolph, 531 U.S. 79 (2000). In Green Tree the Court held that an arbitration agreement that did 

not have a specific provision regarding costs would be unenforceable under the FAA if it made 

arbitration “prohibitively expensive.” Green Tree Fin. Corp., 531 U.S. at 92. The Court further 

stated that the party opposing arbitration was responsible for showing the likelihood of costs being 

“prohibitive.” Id.

Unlike the agreement in Green Tree, here the Arbitration Agreement is not silent as to 

arbitration costs. Instead, the Arbitration Agreement contains a clear fee-splitting provision. (Miller 

Decl. Ex. A, p. 12.) The Arbitration Agreement states that the parties are jointly responsible for 

arbitration costs; however, Sprint agrees to cover arbitration administrative and filing fees in excess 

of $25 if the customer is seeking to recover less than $1000, or the cost of court filing fees in the 

applicable jurisdiction if the claim is for more than $1000. (See id.) 

The second instructive case on the issue of substantive unconscionability is Blair v. Scott, 283 

F.3d 595 (3d Cir. 2002). In Blair, the Third Circuit addressed fee-splitting provisions in light of 

Green Tree. The Blair court stated that the presence of fee-splitting alone is not enough to make an 

arbitration agreement unconscionable. See Blair v. Scott Specialty Gases, 283 F.3d 595, 610 (3d Cir. 

2002). The Third Circuit further stated that for it to hold the mere existence of a fee-splitting 

provision to be per se unconscionable “would run counter to the strong federal preference for 

arbitration and the liberal policy regarding arbitration.” Id.

Blair established a test to determine whether a fee-splitting provision is prohibitive under 

Green Tree. The test consisted of two separate parts. First, a court must look at the projected costs 

that would apply according to the arbitration rules set forth in the agreement. See Blair, 283 F.3d at 

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607-08. Second, a court must look at the individual plaintiff’s ability to pay the projected costs. See 

id.; Antkowiak, 455 Fed. App’x at 160 (applying the same test). It is Plaintiffs’ responsibility to make 

a showing as to both factors. See Parilla v. IAP Worldwide Servs., VI, Inc., 368 F.3d 269, 285 (3d 

Cir. 2004). The Blair test is based on the original Green Tree standard. See Green Tree Fin. Corp., 

531 U.S. 607-08. 

III. DISCUSSION

a. Projected Costs

Regarding projected costs, Plaintiffs argue that the costs of individual arbitration would 

be prohibitive because: (1) “Sprint’s failure to specify arbitral rules or a method for the selection of 

[an] arbitrator causes increased costs,” (2) “data on the administrative costs of arbitration under 

Sprint’s agreement shows that those costs always exceed the amount in controversy,” (3) “the use of 

experts in similar individual arbitrations shows that Plaintiffs would likely incur substantial expert 

costs that [can] not be recovered,” and (4) Plaintiffs would incur substantial and prohibitive expenses 

for attorneys’ fees and costs in arbitration. (See Dkt. No. 110, Pls.’ Br. 1.) 

Regarding Plaintiffs’ first point, Plaintiffs state that “Sprint’s failure to specify arbitral rules 

in advance imposes additional layers of cost and delay on the arbitration process, requiring court 

action – and the attendant [expenses] . . . [to secure an arbitrator].” (See id. 2.) To support their 

argument, Plaintiffs refer to evidence demonstrating that since 2010, twelve Sprint subscribers have 

attempted to initiate individual arbitration with Sprint, but seven out of the twelve withdrew their 

arbitration demands. (See id.) (citing Dkt. No. 109-1, Revised Supplemental Decl. of Scott A. Bursor

(“Revised Bursor Decl.”) ¶ 22.) Of the five remaining arbitration demands, court action was required 

for the appointment of an arbitrator in at least three. (See id.) Plaintiffs highlight that the filing fee in 

federal court is $350.3

 (See Revised Bursor Decl. ¶ 30.) 

 3 This Court notes that the filing fee is currently $400.

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This Court finds Plaintiffs’ argument unpersuasive. Plaintiffs’ argument is misleading 

because it presumes that court action will be required to choose an arbitrator if they proceeded with 

individual arbitration against Sprint. The pertinent portion of the Arbitration Agreement states:

Unless we each agree otherwise, the Arbitration will be conducted by a single neutral 

arbitrator and will take place in the county of the last billing address of the Device. 

We will agree on the arbitrator, and if we cannot agree, then the arbitrator will be 

appointed by the court as provided by the FAA.

(Miller Decl. Ex. A, at 12.) Plaintiffs’ reference to the three instances in which court action was 

required to choose an arbitrator does not establish the filing fee in federal court as a projected cost. 

Instead, it shows that there is a possibility that court action and thereby a filing fee may be required 

in selecting an arbitrator. Notably, Sprint has provided documents showing that it has the practice 

and policy of paying for arbitral costs when customers seek individual arbitration. (See Dkt. No. 95 

Decl. of Pamela E. Benton (“Benton Decl.”) ¶ 3.) Therefore, Plaintiffs’ first assertion of projected 

costs pertaining to the logistics of the arbitral process is insufficient.

Regarding Plaintiffs’ second point, that costs of arbitration would exceed the amount in 

controversy, this argument is misplaced as it does not set forth any projected costs. Plaintiffs repeat 

this argument for the second part of the Blair test. Therefore, this Court addresses the merits of 

Plaintiffs’ argument infra section III (b).

Regarding Plaintiffs’ third point, Plaintiffs argue that they will incur substantial expert fees

that they will not be able to recover. Plaintiffs are unable to provide any evidence pertaining to

arbitrations between Sprint and its customers. As a result, Plaintiffs refer to seven arbitrations 

between AT&T and its subscribers, but primarily rely on one particular arbitration (“AT&T 

Arbitration”). Plaintiffs contend that the AT&T Arbitration is similar to theirs in that the Plaintiff in 

the AT&T Arbitration was also challenging data charges. (See Revised Bursor Decl. ¶4.) Plaintiffs 

opine that since expert testimony was required in the AT&T Arbitration, the same would be required 

for arbitration against Sprint. (See id.) Plaintiffs state that the expert fees in the AT&T Arbitration, 

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which totaled $100,040.61, would be similar if Plaintiffs were to seek individual arbitration against 

Sprint. (See id. ¶ 6.) Sprint counters Plaintiffs’ argument with a more detailed comparison of the 

AT&T Arbitration and this case. (See Dkt. No. 94 Ex. A.) Sprint clarifies that the claims in the 

AT&T Arbitration involved overstatement of the amount of actual data used by the AT&T 

subscriber, charges for data transactions not linked to usage by the subscriber, and the accuracy of 

AT&T’s billing system in reflecting the details of data usage. (See id. 1-4.) Sprint argues that given 

the differences in the nature of the claims in the AT&T Arbitration and those at issue here, the 

existence of and amount of expert fees in the AT&T arbitration are not comparable to this case.

Plaintiffs also rely on the AT&T Arbitration to argue that their attorneys’ fees and expenses 

would exceed those in the AT&T Arbitration. (See id. ¶¶ 9, 18-20.) Plaintiffs’ explanation, however, 

is conclusory. (See Revised Bursor Decl. ¶ 20)(stating that based on Scott Bursor’s experience 

individual arbitration by Plaintiffs against Sprint would exceed the attorneys’ fees and expenses in 

the AT&T Arbitration.) Without more, Plaintiffs have failed to sufficiently demonstrate that the 

attorneys’ fees and expenses in the AT&T arbitration are a fair representation of projected attorneys’

fees and expenses for arbitration against Sprint. 

b. Ability to Pay

Despite complying with this Court’s March 12, 2012 order requiring Plaintiffs to submit 

an affidavit detailing their financial information, Plaintiffs argue that their finances should not be the 

focus of this Court’s analysis. (See Pls.’ Br. 7) (citing Green Tree). Instead, Plaintiffs argue that this 

Court should focus on their ability to effectively vindicate their claims through individual arbitration. 

(See id.) Plaintiffs argue that the high costs associated with pursuing individual arbitration with 

Sprint preclude them from effectively vindicating their claims. (See Dkt. No. 113, Letter Br. 2.) 

Additionally, Plaintiffs argue that they cannot effectively vindicate their claims against Sprint 

because the arbitral costs will be greater than the best possible recovery. (See Pls.’ Br. 8.) In

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making these arguments, Plaintiffs have invoked the effective vindication exception to enforcing 

arbitration agreements. The effective vindication exception reflects the Supreme Court’s 

“willingness to invalidate, on ‘public policy’ grounds, arbitration agreements that ‘operat[e] . . . as a 

prospective waiver of a party’s right to pursue statutory remedies.’” American Express Co. v. Italian 

Colors Restaurant, 133 S.Ct. 2304, 2310 (2013) (quoting Mitsubishi Motors Corp. v. Soler ChryslerPlymouth, Inc., 473 U.S. 614, 637, n. 19 (1985). “The exception finds its origin in the desire to 

prevent ‘prospective waiver of a party’s right to pursue statutory remedies[.]’” Id. (quoting 

Mitsubishi Motors Corp., 473 U.S. at 637, n.19) (emphasis added). 

 Here, Plaintiffs’ arguments fail for two reasons. First, regarding Plaintiff’s argument 

concerning access to the arbitral forum, as previously mentioned, Sprint has proffered evidence 

demonstrating that it has the practice and policy of paying for arbitral costs when customers seek 

individual arbitration. (See Benton Decl. ¶ 3.) Therefore, Plaintiffs’ ability to pursue their statutory 

remedies through arbitration would not be hindered. Next, Plaintiffs’ second argument has already 

been addressed by our highest court. The Supreme Court clarified in Italian Colors that “the fact that 

it is not worth the expense involved in proving a statutory remedy does not constitute the elimination 

of the right to pursue that remedy.” American Express Co., 133 S.Ct. at 2311 (emphasis added). 

Accordingly, Plaintiffs’ effective vindication arguments are unavailing.

Given Plaintiffs’ inability to prove substantive unconscionability, this Court finds that 

Sprint’s Arbitration Agreement is enforceable.

IV. CONCLUSION

For the foregoing reasons, this Court GRANTS Defendants’ motion to compel arbitration.

s/Susan D. Wigenton, U.S.D.J.

Orig: Clerk

Cc: Madeline Cox Arleo, U.S.M.J.

Parties 

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