Court Opinion

ID: 5121295
Source: CourtListenerOpinion
Date Created: 2021-10-26 20:01:08.735704+00
Date Added: 2024-06-11T08:22:21.825594
License: Public Domain

NOT FOR PUBLICATION                           FILED
                     UNITED STATES COURT OF APPEALS                      OCT 26 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

DAVID COTTRELL,                                 No.    20-16162

                Plaintiff-Appellee,             D.C. No. 3:19-cv-07672-JCS

 v.
                                                MEMORANDUM*
AT&T INC.; et al.,

                Defendants-Appellants.

                   Appeal from the United States District Court
                      for the Northern District of California
                   Joseph C. Spero, Magistrate Judge, Presiding

                        Argued and Submitted June 8, 2021
                        Submission Vacated June 15, 2021
                           Resubmitted October 7, 2021
                               Seattle, Washington

Before: GILMAN,** GOULD, and MILLER, Circuit Judges.

      David Cottrell brought this putative class action asserting claims under

California law against AT&T Inc. and associated companies (collectively,

“AT&T”) based on his allegations that AT&T improperly charged its customers

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Ronald Lee Gilman, United States Circuit Judge for
the U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
for DIRECTV Now accounts without authorization. AT&T now appeals the

district court’s denial of its motion to compel arbitration. We have jurisdiction

under 9 U.S.C. § 16(a)(1)(C). Reviewing the district court’s order de novo, Hodges

v. Comcast Cable Communications, LLC, 12 F.4th 1108, 1113 (9th Cir. 2021), we

reverse and remand with instructions to grant the motion.

       Under California law, a contractual provision purporting to waive the right

to seek public injunctive relief in any forum is unenforceable. McGill v. Citibank,

N.A., 393 P.3d 85, 94 (Cal. 2017). AT&T’s contract requires the parties “to

arbitrate all disputes and claims” and then limits the award of any injunctive relief

to “the individual party seeking relief and only to the extent necessary to provide

relief warranted by that party’s individual claim.” By precluding injunctive relief

benefitting anyone other than the individual claimant, the contract prevents Cottrell

from seeking public injunctive relief in any forum. Therefore, if Cottrell’s

requested relief qualifies as public injunctive relief, AT&T may not compel him to

arbitrate. See id.

       The district court determined that Cottrell sought public injunctive relief, so

it declined to compel arbitration. Whatever we might think of that conclusion if we

were to make our own assessment of California law, it is foreclosed by our

intervening decision in Hodges. In that case, Hodges argued that Comcast had

violated the statutory privacy rights of its residential cable subscribers and that the

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injunction he requested—which would have prevented future violations—

constituted public injunctive relief. Hodges, 12 F.4th at 1111. We rejected that

argument, holding that to qualify as public injunctive relief, an injunction must be

“for the benefit of the general public as a whole, as opposed to a particular class of

persons.” Id. at 1114–15; see McGill, 393 P.3d at 94. We concluded that the

requested injunction was private relief because it would “benefit only Comcast

‘cable subscribers.’” Hodges, 12 F.4th at 1121. Although the injunction applied to

Comcast’s dealings with future customers and therefore could be said to benefit the

general public in the form of those “persons considering entering into” a

transaction with Comcast, that was insufficient to transform otherwise private

relief into a public injunction. Id. at 1118. Instead, the “incidental benefit to the

general public” was “not enough to classify that relief as non-waivable public

injunctive relief.” Id. (citing McGill, 393 P.3d at 89).

      Cottrell’s requested relief suffers from the same flaw. Cottrell seeks an

injunction requiring AT&T “to provide an accounting of all monies obtained”

through unauthorized accounts and services; to give customers “individualized

notice” of the violations committed and of their legal rights; and to refrain from

committing future violations of the California law by signing customers up for

products or services without authorization. Cottrell asserts that those unlawful

practices “may victimize any member of the public . . . who walks into” an AT&T

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store, so this injunction primarily benefits the general public. That characterization

elides an important distinction. As Cottrell admits, for AT&T to create an

unauthorized account and violate California law, the victimized individual must

first transact in some way with AT&T by providing payment and billing

information. That is, the individual must become a customer.

      The benefit of Cottrell’s requested relief therefore would not primarily

accrue to the general public. Rather, the beneficiaries of the injunction would be

current and future AT&T customers—“a ‘group of individuals similarly situated

to’” Cottrell. Hodges, 12 F.4th at 1121 (quoting McGill, 393 P.3d at 90). Because

“[t]here is simply no sense in which this relief could be said to primarily benefit

the general public as a more diffuse whole,” id., Cottrell seeks private injunctive

relief, the waiver of which is enforceable under McGill.

      The district court suggested that the arbitration agreement’s prohibition

against public injunctions would make the agreement categorically unenforceable

“even if Cottrell did not himself seek public injunctive relief.” That argument, too,

is foreclosed by Hodges, which rejected the proposition “that courts should stretch

to invalidate contracts based on hypothetical issues that are not actually presented

in the parties’ dispute.” 12 F.4th at 1113.

      REVERSED and REMANDED.

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