Court Opinion

ID: 4375949
Source: CourtListenerOpinion
Date Created: 2019-03-12 15:00:19.464628+00
Date Added: 2024-06-11T14:22:10.359921
License: Public Domain

18-1436
Katz v. Cellco Partnership

                                     UNITED STATES COURT OF APPEALS
                                        FOR THE SECOND CIRCUIT

                                            SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007 IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1.
WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY
MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY ORDER MUST SERVE A
COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New York,
on the 12th day of March, two thousand nineteen.

PRESENT:
                     ROBERT D. SACK,
                     REENA RAGGI,
                     SUSAN L. CARNEY,
                                 Circuit Judges.

_________________________________________

MICHAEL A. KATZ,
individually and on behalf of all others similarly situated,

                     Plaintiff-Appellant,

                             v.                                            No. 18-1436

CELLCO PARTNERSHIP d/b/a VERIZON WIRELESS,

           Defendant-Appellee.
_________________________________________

FOR APPELLANT:                                        WILLIAM ROBERT WEINSTEIN, ESQ.,
                                                      White Plains, N.Y.

FOR APPELLEE:                                         LEIGH R. SCHACHTER, Verizon
                                                      Communications, Basking Ridge, N.J.
                                                      (Joshua S. Turner, Jeremy J. Broggi, and
                                                    Bethany A. Corbin, Wiley Rein LLP,
                                                    Washington, D.C., on the brief)

       Appeal from a judgment of the United States District Court for the Southern District
of New York (Briccetti, J.).

       UPON DUE CONSIDERATION WHEREOF, IT IS HEREBY ORDERED,
ADJUDGED, AND DECREED that the judgment appealed from entered on April 18,
2018, is AFFIRMED.

       Plaintiff-Appellant Michael Katz brings this putative class action against Defendant-
Appellee Cellco Partnership d/b/a Verizon Wireless (“Verizon”), asserting claims under
New York state law for breach of contract and consumer fraud based on an administrative
charge that Verizon adds to the monthly bill of each of its subscribers. Katz was compelled
to arbitrate the dispute and, dissatisfied with the outcome, he sought vacatur and de novo
review of the arbitrator’s legal conclusions in the District Court, arguing that the standard of
review imposed by the Federal Arbitration Act violates his due process right to judicial
review. The District Court declined to exercise de novo review and confirmed the arbitration
decisions. Katz appeals.

        We assume the parties’ familiarity with the underlying facts, procedural history, and
arguments on appeal, to which we refer only as necessary to explain our decision to affirm
the judgment of the District Court.

       Katz entered into a customer agreement with Verizon in 2011. The agreement
contained an arbitration clause requiring the parties “to resolve disputes only by arbitration
or in small claims court” and prohibiting class arbitrations. App’x 29. In December 2012,
Katz sued Verizon in federal court, asserting class claims for breach of contract and
consumer fraud related to the monthly administrative charge under New York’s General
Business Law (“GBL”) section 349. He also sought a declaration that compelling arbitration
on these claims would violate Article III of the United States Constitution.

       On December 12, 2013, the District Court entered an order compelling arbitration
and dismissing Katz’s federal case. As relevant here, the District Court rejected Katz’s

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Article III claim because Katz could not show state action in Verizon’s inclusion of an
arbitration clause in its customer agreement or its acts to compel arbitration. This Court
affirmed the District Court’s reasoning but vacated the judgment and remanded in part with
instructions to stay (instead of dismiss) the proceedings pending arbitration. Katz v. Cellco
P’ship, 794 F.3d 341, 347 (2d Cir. 2015).

       Arbitration then ensued. Between 2016 and 2017, the arbitrator issued decisions
collectively granting Verizon judgment on the pleadings; ordering Verizon to pay Katz
$1,500 that Verizon had previously tendered to settle the dispute, as well as $500 in
attorney’s fees; and denying Katz injunctive relief for himself and a putative class.

       Katz then returned to the District Court, moving to vacate the arbitration decisions
in substantial part and to renew his claims. As relevant here, Katz argued that the standard
of review imposed by the Federal Arbitration Act violates his Fifth Amendment due process
right to judicial review. The District Court rejected Katz’s motions, ruling that its previous
holding that Katz had not shown state action in Verizon’s signing and enforcement of the
private arbitration agreement is law of the case and therefore, that Katz has no viable
constitutional claim. Accordingly, the court confirmed the arbitration decisions in full. Katz
now appeals as to his due process claim.

       Even without recourse to the law of the case, we conclude that Katz’s claim fails on
the merits. To state a due process claim under the Fifth Amendment, a plaintiff must show
that: “(1) state action (2) deprived him or her of liberty or property (3) without due process
of law.” Barrows v. Burwell, 777 F.3d 106, 113 (2d Cir. 2015). As we have held repeatedly, a
private party’s agreement to arbitration does not constitute state action, and the enforcement
of such an agreement cannot ordinarily give rise to a due process claim. See Perpetual Secs., Inc.
v. Tang, 290 F.3d 132, 138 (2d Cir. 2002) (“It is clear that [the National Association of
Securities Dealers] is not a state actor and its requirement of mandatory arbitration is not
state action.”); Desiderio v. Nat’l Ass’n of Sec. Dealers, Inc., 191 F.3d 198, 207 (2d Cir. 1999)
(“[W]e find no state action in the application or enforcement of the arbitration clause.”).
Like NASD in Perpetual and Desiderio, Verizon is a private concern, not a state actor, and its
enforcement of an arbitration agreement does not transform it into an arm of the state.

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                                        * * *

      We have considered Appellant’s remaining arguments and conclude that they are
without merit. Accordingly, we AFFIRM the District Court’s judgment.

                                                FOR THE COURT:
                                                Catherine O’Hagan Wolfe, Clerk of Court

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