Court Declines to Compel Arbitration in Wireless Litigation—At Least For Now

Judge William Alsup of the Northern District of California issued in order last week declining to compel arbitration since a trial would be “necessary to determine whether plaintiffs agreed to the terms and conditions of defendants’ service, which included [the applicable] arbitration clauses.” Barraza v. Cricket Wireless LLC, No. C 15-02471, 2015 WL 6689396 (Nov. 3, 2015).

The court began by noting a split in opinions regarding whether documents enclosed in a wireless phone package give rise to inquiry notice of the arbitration clause.  Compare Dang v. Samsung Electronics Co., Ltd., No. 14-00430, 2015 WL 4735520 (N.D. Cal. Aug. 10, 2015) (granting motion to compel arbitration where the arbitration clause was on the fifth page of an “Important Information” booklet enclosed in the phone packaging); with Norcia v. Samsung Telecoms. Am., LLC, No. 14-00582, 2014 WL 4652332 (N.D. Cal. Sept. 18, 2014) (denying the motion to compel arbitration because the arbitration provision was inconspicuously located in a 101-page booklet called “Product Safety & Warranty Information”).

Rather than weighing in on one side or the other of the split, the court distinguished the earlier cases on their facts, noting that in this case, the arbitration clause appeared in a “Quick Start Guide” that “lacked any indication of its contractual nature.”  Barraza, 2015 WL 6689396, at *5.  Nevertheless, given the various opportunities Plaintiffs had to review the materials that would have put them on notice of the arbitration clause, the Court held that a summary trial would be necessary to “resolve the credibility issues regarding whether plaintiffs actually read [the] materials.”  Id.

The court set the jury trial for December 14th and ordered cooperation on expedited discovery needed to resolve the motion.