in assessing standing, the 3 court may consider “the complaint and any other particularized allegations of fact in affidavits or 4 in amendments to the complaint”
How later courts described this case
- in assessing standing, the 3 court may consider “the complaint and any other particularized allegations of fact in affidavits or 4 in amendments to the complaint”
Written by the judges who cited it.
The opinion
1
2
3
4 UNITED STATES DISTRICT COURT
5 NORTHERN DISTRICT OF CALIFORNIA
6
7 NICK VASQUEZ, Case No. 21-cv-06400-EMC
8 Plaintiff,
ORDER DENYING DEFENDANTS’
9 v. MOTION TO COMPEL
ARBITRATION
10 CEBRIDGE TELECOM CA, LLC, et al.,
Docket No. 12
11 Defendants.
12
13
14 I. INTRODUCTION
15 Plaintiff Nick Vasquez, individually, as a private attorney general, and on behalf of a
16 putative class of other customers similarly situated, alleges that Defendants Cebridge Telecom
17 CA, LCC and Altice, USA, Inc., doing business as Suddenlink Communications (collectively,
18 “Suddenlink” or “Defendants”), engaged in false advertising by failing to disclose a “Network
19 Enhancement Fee” for internet services, and misrepresenting that the fee is a tax or government
20 regulation. Vasquez asserts claims under California law pursuant to the Consumer Legal
21 Remedies Act, False Advertising Law and Unfair Competition Law seeking public injunctive
22 relief, declaratory relief and restitution.
23 Now pending is Suddenlink’s motion to compel the entirety of the action to arbitration
24 subject to an arbitration agreement that prohibits non-individualized relief. Docket No. 12. In the
25 alternative, Suddenlink argues Plaintiff Vasquez lacks Article III standing to bring this action.
26 Docket No. 23. For the following reasons, the Court DENIES Suddenlink’s motion to compel
27 arbitration and finds that Plaintiff Vasquez has Article III standing to pursue this action.
1 II. BACKGROUND
2 A. Summary of Allegations
3 The operative complaint alleges that Suddenlink has engaged, and continues to engage, in
4 a false advertising scheme in California by publicly advertising specific flat monthly rates for its
5 internet service plans for a specified time period, but then charging “higher monthly rates during
6 that period via a disguised and fabricated extra charge on the bill (which Suddenlink calls the
7 ‘Network Enhancement Fee’).” Docket No. 22 (“Second Amended Complaint” or “SAC”) ¶¶ 1-2.
8 The SAC alleges the “Network Enhancement Fee” was concocted by Suddenlink as a means to
9 covertly increase customers’ rates, including during their advertised and promised fixed-rate
10 promotional period. SAC ¶¶ 1, 23.
11 Furthermore, the SAC alleges that Suddenlink does not disclose that it can increase
12 customers’ monthly service rates, even during a promised fixed-rate promotional period, by
13 increasing the amount of the Network Enhancement Fee. Id. ¶¶ 23, 30-38. For example, in
14 February 2019, Suddenlink allegedly added “a new $2.50 per month disguised double-charge for
15 internet service, which it buried in a section of the bill with taxes and government fees,” and later
16 increased that fee to “$3.50 per month for California subscribers.” Id. ¶ 2. In the event that a
17 customer notices that they have been charged the Network Enhance Fee and contacts Suddenlink
18 to inquire about the fee, Suddenlink agents allegedly “falsely tell the customer that the Fee is a tax
19 or government fee or is otherwise out of Suddenlink’s control” when, in “actuality, the Network
20 Enhancement is not a tax or government fee. Id. ¶¶ 5-6, 40-46. Suddenlink’s false and misleading
21 statements about pricing allegedly appear in advertisements on its website and in its California
22 retail stores where customers can sign up for Suddenlink services, as well as online video
23 advertisements via YouTube, Facebook, and Twitter. Id. ¶¶ 19, 25–33. Suddenlink’s false
24 advertising is allegedly ongoing. See SAC ¶¶ 100, 108, 116, 122, 133, 138.
25 Plaintiff brings claims individually, as a private attorney general, and on behalf of a
26 putative class consisting of “[a]ll current and former Suddenlink customers who were charged a
27 ‘Network Enhancement Fee’ on their bill for Suddenlink internet services received in California
1 Legal Remedies Act (“CLRA”), California Civil Code § 1750 et seq., False Advertising Law
2 (“FLA”), Cal. Bus. & Prof. Code § 17500 et seq., and Unfair Competition Law (“UCL”), Cal.
3 Bus. & Prof. Code § 17200 et seq. SAC ¶¶ 91-140. The SAC seeks public injunctive relief to
4 stop Suddenlink’s allegedly ongoing false and deceptive price advertising to the general public
5 under the UCL, FAL, and CLRA. SAC ¶¶ 8, 109, 123, 139, Prayer, § A. Separately but still
6 pursuant to his claim under the UCL, FAL and CLRA, Plaintiff seeks, on behalf of himself and the
7 proposed class, restitution, damages and a private injunction prohibiting Suddenlink from
8 continuing to charge the Network Enhancement Fee to him and the class of current subscribers
9 who signed up for service after being induced by Suddenlink’s allegedly misleading pricing
10 scheme. SAC ¶¶ 8, 110, 124, 140, Prayer, § C.
11 B. Procedural Background
12 Plaintiff filed this action in Humboldt County Superior Court on May 3, 2021, and
13 Defendants were served with the Summons and Complaint on July 20 and 21, 2021, respectively.
14 Docket No. 1 (“Notice of Removal”) at 2. Defendants timely filed a notice of removal under 28
15 U.S.C. § 1446(b) on August 18, 2021. Id. Defendants assert this Court has jurisdiction pursuant
16 to the Class Action Fairness Act, 28 U.S.C. § 1332, because the putative class action has 100 or
17 more class members (allegedly 20-30,000 class members, id. at 3), the aggregate amount in
18 controversy exceeds $5 million (id. at 5-6), and there is minimal diversity (Plaintiff is a citizen of
19 California, Defendants Altice and Cebridge are Delaware corporations with their principal place of
20 business in New York, id. at 3-4).
21 Now pending is Defendants’ motion to compel arbitration pursuant to the arbitration
22 agreement Plaintiff entered into and to stay these proceedings during the pendency of arbitration.
23 Docket No. 12. Defendants’ reply brief on this motion challenged, for the first time, Plaintiff
24 Vasquez’s standing to pursue public injunctive relief in this action under Article III. Docket No.
25 18. At the hearing on Defendants’ motion to compel arbitration, the Court allowed Plaintiff leave
26 to amend his complaint on the limited ground to address issues related to his Article III standing to
27 pursue public injunctive relief. Docket No. 21. Accordingly, Plaintiff filed the operative Second
1 supplemental brief in response to the SAC regarding Plaintiff’s standing to bring this action,
2 Docket No. 21, which they did, Docket No. 23.
3 In this order, the Court addresses Defendants’ arguments on Plaintiff’s standing and in
4 support of their motion to compel arbitration.
5 C. Relevant Arbitration Provisions
6 Suddenlink moves to compel arbitration based on its Residential Services Agreement
7 (“RSA”), which Plaintiff Vasquez agreed to when he signed up for Suddenlink’s services online.
8 The parties agree that they entered into the RSA. Docket No. 12 (“Motion to Compel”) at 3;
9 Docket No. 14 (“Opposition”) at 5.
10 The relevant provisions of the arbitration agreement upon which Suddenlink moves the
11 Court to compel arbitration are contained in a section titled “Binding Arbitration.” Docket No.
12 12-5 (“RSA”) § 24. The “Binding Arbitration” provision provides:
13 Any and all disputes arising between You and Suddenlink, including
its respective parents, subsidiaries, affiliates, officers, directors,
14 employees, agents, predecessors, and successors, shall be resolved
by binding arbitration on an individual basis in accordance with this
15 arbitration provision. This agreement to arbitrate is intended to be
broadly interpreted. It includes, but is not limited to:
16
- Claims arising out of or relating to any aspect of the
17 relationship between us, whether based in contract, tort,
statute, fraud, misrepresentation or any other legal theory;
18
- Claims that arose before this or any prior Agreement,
19
- Claims that may arise after the termination of this
20 Agreement. . . .
21 YOU AGREE THAT BY ENTERING INTO THIS
AGREEMENT, YOU AND SUDDENLINK EACH WAIVE
22 THE RIGHT TO A TRIAL BY JURY AND THE RIGHT TO
PARTICIPATE IN A CLASS, REPRESENTATIVE, OR
23 PRIVATE ATTORNEY GENERAL ACTION.
24 Id. (Emphasis in the original). The RSA also includes an express provision for “Waiver of Class
25 and Representative Actions,” which states:
26 YOU AGREE TO ARBITRATE YOUR DISPUTE AND TO DO
SO ON AN INDIVIDUAL BASIS; CLASS,
27 REPRESENTATIVE, AND PRIVATE ATTORNEY
bring claims against the other only in Your or its individual capacity
1 and may not participate as a class member or serve as a named
plaintiff in any purported class, representative, or private attorney
2 general proceeding. This arbitration provision does not permit and
explicitly prohibits the arbitration of consolidated, class, or
3 representative disputes of any form. In addition, although the
arbitrator may award any relief that a court could award that is
4 individualized to the claimant and would not affect other Suddenlink
account holders, neither You nor Suddenlink may seek, nor may the
5 arbitrator award, non-individualized relief that would affect other
account holders. Further, the arbitrator may not consolidate or join
6 more than one person's claims unless all parties affirmatively agree
in writing.
7
If any of the prohibitions in the preceding paragraph is held to be
8 unenforceable as to a particular claim, then that claim (and only that
claim) must be severed from the arbitration and brought in court. In
9 that instance, or any instance when a claim between You and
Suddenlink proceeds to court rather than through arbitration, You
10 and Suddenlink each waive the right to any trial by jury through this
Agreement.
11
12 Id. § 24(g) (emphasis in the original).
13 III. LEGAL STANDARDS
14 A. Subject Matter Jurisdiction and Standing (Rule 12(b)(1))
15 Under Rule 12(b)(1), a party may move to dismiss for lack of subject matter jurisdiction.
16 “[L]ack of Article III standing requires dismissal for lack of subject matter jurisdiction under
17 [Rule] 12(b)(1).” Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011). The “irreducible
18 constitutional minimum” of standing requires that a “plaintiff must have (1) suffered an injury in
19 fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) that is likely to
20 be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins (“Spokeo II”), 136 S. Ct.
21 1540, 1547 (2016). These three elements are referred to as, respectively, injury-in-fact, causation,
22 and redressability. Planned Parenthood of Greater Was. & N. Idaho v. U.S. Dep't of Health &
23 Human Servs., 946 F.3d 1100, 1108 (9th Cir. 2020). “The plaintiff, as the party invoking federal
24 jurisdiction, bears the burden of establishing these elements,” which at the pleadings stage means
25 “clearly . . . alleg[ing] facts demonstrating each element.” Spokeo II, 136 S. Ct. at 1547 (quoting
26 Warth v. Seldin, 422 U.S. 490, 518 (1975)).
27 “It is within the trial court’s power to allow or to require the plaintiff to supply, by
1 supportive of plaintiff’s standing.” Warth, 422 U.S. at 501; see also Table Bluff Reservation
2 (Wiyot Tribe) v. Philip Morris, Inc., 256 F.3d 879, 882 (9th Cir. 2001) (in assessing standing, the
3 court may consider “the complaint and any other particularized allegations of fact in affidavits or
4 in amendments to the complaint”).
5 B. Federal Arbitration Act
6 The Federal Arbitration Act (“FAA”) provides that written provisions in contracts
7 involving commerce are “valid, irrevocable, and enforceable, save upon such grounds as exist at
8 law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “[T]he FAA was designed to
9 promote arbitration” and accordingly there is “a liberal federal policy favoring arbitration
10 agreements.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 345-46 (2011). “The final clause
11 of § 2, its saving clause, permits agreements to arbitrate to be invalidated by generally applicable
12 contract defenses, such as fraud, duress, or unconscionability, but not by defenses that apply only
13 to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue.”
14 Sakkab v. Luxottica Retail N. Am., Inc., 803 F.3d 425, 432 (9th Cir. 2015) (internal quotation
15 marks omitted).
16 Accordingly, the California Supreme Court has found that “[a]greements to arbitrate
17 claims for public injunctive relief under the CLRA, the UCL, or the false advertising law are not
18 enforceable in California.” McGill v. Citibank, N.A., 2 Cal. 5th 945, 956 (2017). In particular, an
19 arbitration agreement that purports to waive the right to seek public injunctive relief violates
20 California Civil Code § 3513, which provides that ‘a law established for a public reason cannot be
21 contravened by a private agreement.’ Id. at 961. Claims for public injunctive relief include
22 “injunctive relief that has the primary purpose and effect of prohibiting unlawful acts that threaten
23 future injury to the general public.” Id. at 951. The Ninth Circuit has ruled that the FAA does not
24 preempt McGill. Blair v. Rent-A-Center, Inc., 928 F.3d 819, 822 (9th Cir. 2019).
25 IV. ANALYSIS
26 A. Plaintiff Vasquez’s Standing under Article III to Pursue Public Injunctive Relief
27 As a threshold matter, Suddenlink argues that Plaintiff Vasquez lacks Article III standing
1 Enhancement Fee,” and thus the Court lacks subject matter jurisdiction over this action. Docket
2 No. 23 (“Suppl. Br.”) at 2.
3 Under the three-part test for standing, “a plaintiff must show (i) that he suffered an injury
4 in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused
5 by the defendant; and (iii) that the injury would likely be redressed by judicial relief.”
6 TransUnion, LLC v. Ramirez, 141 S. Ct. 2190, 2203 (2021). To establish standing to seek
7 prospective injunctive relief in particular, a plaintiff must demonstrate that “he has suffered or is
8 threatened with a concrete and particularized legal harm coupled with ‘a sufficient likelihood that
9 he will again be wronged in a similar way.’” Bates v. UPS, Inc., 511 F.3d 974, 985 (9th Cir.
10 2007) (citation omitted) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 111 (1983)).
11 Under Ninth Circuit precedent, in cases alleging false advertising or labeling, the plaintiff
12 must sufficiently demonstrate the intent to purchase the product or service at issue in the future in
13 order to have standing to seek injunctive relief. See Davidson v. Kimberly-Clark Corp., 889 F.3d
14 956, 969 (9th Cir. 2018) (holding that “a previously deceived consumer may have standing to seek
15 an injunction against false advertising or labeling, even though the consumer now knows or
16 suspects that the advertising was false at the time of the original purchase, because the consumer
17 may suffer an ‘actual and imminent, not conjectural or hypothetical’ threat of future harm”). In
18 “resolv[ing a] district court split in favor of plaintiffs seeking injunctive relief” the Davidson
19 Court observed that a plaintiff could have standing to challenge false advertising in cases where
20 “the threat of future harm may be the consumer's plausible allegations that she will be unable to
21 rely on the product's advertising or labeling in the future, and so will not purchase the product
22 although she would like to,” as well as in cases where “the threat of future harm may be the
23 consumer's plausible allegations that she might purchase the product in the future, despite the fact
24 it was once marred by false advertising or labeling, as she may reasonably, but incorrectly, assume
25 the product was improved.” 889 F.3d at 969–70. The Court found that the plaintiff in Davidson
26 had standing to challenge Kimberly-Clark’s allegedly false advertising of its “flushable” wipes
27 based on the harm of her “inability to rely on the validity of the information advertised on
1 Suddenlink argues that Vasquez, unlike the plaintiff in Davidson, is not at risk of being
2 misled in the future by Suddenlink’s disclosures regarding the Network Enhancement Fee because
3 Vasquez is (1) aware of the fee and (2) currently paying it each month with full knowledge that it
4 will be charged. Suppl. Br. at 2. In addition, Suddenlink argues that Plaintiff Vasquez concedes
5 that Suddenlink does now disclose the “existence and amount” of the fee to future online
6 purchasers. Id. (citing SAC ¶ 38 n.5). Sudden link furthers argues that “[u]nlike the plaintiff in
7 Davidson or similar products cases, Vasquez need not purchase Suddenlink service again to know
8 whether that remains true” and that even if “that disclosure is inadequate for other purchasers,
9 [Vasquez] himself knows where to look, and he would be free to decline to go through with the
10 purchase if he did not wish to pay the fee.” Id. at 6.
11 Suddenlink’s argument is unavailing. The SAC demonstrates Vasquez desires to purchase
12 Suddenlink’s fixed-rate promotional price services in the future if he were confident that
13 Suddenlink had ceased its allegedly false advertising practices:
14 Mr. Vasquez has a legal right to rely now, and in the future, on the
truthfulness and accuracy of Suddenlink’s representations and
15 advertisements regarding its internet service plan prices. Mr.
Vasquez believes that he was given the services Suddenlink
16 promised him—just not at the price Suddenlink promised and
advertised to him. Mr. Vasquez’s 12-month fixed-price promotional
17 period for his internet service plan expired in September 2021. He
continues to be a Suddenlink internet subscriber. He has limited
18 options for internet where he lives in Arcata, California. Mr.
Vasquez would sign up for a different service plan package from
19 Suddenlink, such as one with a faster internet speed (Mr.
Vasquez is currently subscribed to Suddenlink’s slowest
20 internet-only plan; he is also not currently subscribed to any of
Suddenlink’s other services such as TV and phone), and he
21 would sign up for another fixed price period (e.g., where
Suddenlink promises a discounted and fixed price for service for
22 a 12-month period of time), if he were confident in Suddenlink’s
advertised and quoted service prices. In particular, Mr.
23 Vasquez wants to be confident that the advertised and quoted
price for services is the true and full price for services (i.e., that
24 it includes all applicable monthly service charges such as the
Network Enhancement Fee). See infra Prayer § A.1. Mr.
25 Vasquez also wants to be confident that Suddenlink is not going
to increase the service price during any promised fixed-price
26 period, as has been its practice, by increasing any discretionary
monthly service charges such as the Network Enhancement Fee.
27 See infra Prayer § A.2. And, if Suddenlink introduces any new or
be confident that Suddenlink will include the amount of that
1 service charge in the advertised and quoted service price. See
infra Prayer § A.4.
2
3 SAC ¶ 77 (emphasis added).
4 The SAC demonstrates that Vasquez is similarly situated to the plaintiff in Davidson who
5 had standing to pursue her claims: Vasquez is harmed by his “inability to rely on the validity of
6 the information advertised” by Suddenlink “despite [his] desire to purchase [a] truly [fixed rate
7 promotional period of internet service].” 889 F.3d at 971. Although he is a current subscriber, he
8 would like to purchase other services from Suddenlink in the future. Suddenlink argues Vasquez
9 need not actually purchase Suddenlink’s services in the future in order to ascertain whether they
10 have ceased their allegedly deceptive practices by making much of Vasquez’s “conce[ssion]” that
11 he is now aware of Suddenlink’s disclosure of the Network Enhance Fee. Suppl. Br. at 2 (citing
12 SAC ¶ 38 n.5). This argument relies on a selective and incomplete reading of the relevant
13 footnote. Vasquez concedes that, “Suddenlink slightly revised part of the online purchase process
14 to now mention the existence and amount of the Network Enhancement Fee” but explains that
15 “nowhere in the online purchase process is it disclosed that the Fee may be increased in the middle
16 of the supposedly fixed-price promotional period.” SAC ¶ 38 n.5. Thus, Suddenlink’s argument
17 that Plaintiff cannot possibly by misled in the future because he can obtain the information that he
18 alleges was misleading does not hold. While Plaintiff Vasquez may now know where to look find
19 the disclosure of the Network Enhancement Fee, that disclosure does not suffice to provide him
20 with full and accurate information about what to expect regarding Suddenlink’s pricing practices
21 during the term of his subscription, so he remains harmed by his inability to rely on Suddenlink’s
22 advertising. Moreover, Vasquez’s request for public injunction does not only seek to enjoin
23 Suddenlink for failing to disclose a “Network Enhancement Fee” but from “advertising or quoting
24 an internet service plan if that prince does not any applicable monthly service charge” regardless
25 of what it is labeled. SAC, Prayer § A.2.
26 Thus, Plaintiff Vasquez has standing to seek public injunctive relief because he has
27 adequately alleged injury-in-fact under Davidson. See Davidson, 889 F.3d 969-70; Schneider v.
1 establish standing for injunctive relief claims if she alleges that “she will be unable to rely on the
2 product's advertising or labeling in the future, and so will not purchase the product although she
3 would like to”); Eiess, 404 F. Supp. 3d at 1258 (observing that plaintiff may seek public injunctive
4 relief because she “remains a USAA customer and nothing indicates that she wants to stop being a
5 customer” and “thus [she] has standing under Davidson.”).
6 B. Suddenlink’s “Binding Arbitration” and “Waiver of Class and Representative Actions”
7 Provisions Violate McGill
8 The “Binding Arbitration” and “Waiver of Class and Representative Actions” provisions
9 of Suddenlink’s RSA are unenforceable as to any claim for public injunction under McGill (and
10 confirmed in Blair) because they eliminate Plaintiff’s right to seek a public injunction in any
11 forum, under any federal or California law. RSA §§ 24 (“This agreement to arbitrate is intended
12 to be broadly interpreted. It includes . . . [c]laims arising out of or relating to any aspect of the
13 relationship between us”), 24(g) (“YOU AGREE TO ARBITRATE YOUR DISPUTE AND TO
14 DO SO ON AN INDIVIDUAL BASIS; CLASS, REPRESENTATIVE, AND PRIVATE
15 ATTORNEY GENERAL ARBITRATIONS AND ACTIONS ARE NOT PERMITTED. . .
16 [N]either You nor Suddenlink may seek, nor may the arbitrator award, non-individualized relief
17 that would affect other account holders.” See McGill, 2 Cal. 5th at 951; Blair, 928 F.3d at 822.
18 Suddenlink concedes that the RSA provisions are unenforceable as to claims for public
19 injunction under McGill. Suddenlink does not argue otherwise in its briefs.1 Instead, Suddenlink
20 contends that Plaintiff “is seeking private relief” so “McGill does not apply.” Motion to Compel
21 at 12 (emphasis added); Docket No. 18 (“Reply”) at 1 (“The only disputed issue presented to this
22 Court is whether Vasquez seeks an injunction on behalf of the ‘general public’ within the meaning
23 of McGill”). As explained below, the Court rejects Suddenlink’s argument.
24
25
26
1 Suddenlink raises the contention that McGill is preempted by the FAA, but acknowledges that
the Ninth Circuit squarely rejected this argument in Blair, 928 F.3d at 830-31 and that this Court is
27
bound by Blair. Motion to Compel at 17. Suddenlink states that it raises this argument only “to
1 C. The SAC Seeks “Public Injunctive Relief” Within the Meaning of McGill
2 Suddenlink argues that the McGill-rule, rendering the RSA’s binding arbitration and
3 waiver of class and representative actions provision unenforceable, does not apply here because
4 Plaintiff is primarily seeking individual relief rather than injunctive relief truly directed at the
5 general public. Motion to Compel at 12-16. Thus, Suddenlink contends that the Court should
6 compel Plaintiff’s claims to arbitration. Id. Suddenlink’s argument lacks merit: the SAC clearly
7 seeks public injunctive relief within the meaning of McGill.
8 In McGill, the plaintiff opened a credit card account with Citibank and purchased a credit
9 protector plan under which Citibank agreed to defer or credit certain amounts on her credit card
10 account when certain qualifying events took place (e.g., long-term disability, unemployment). 2
11 Cal. 5th at 952. The plaintiff submitted a claim to Citibank under the plan after she lost her job,
12 but did not receive the protection she purchased. Id. She filed suit against Citibank under the
13 UCL, CLRA and FLA based on Citibank’s allegedly unlawful marketing of the plan and handling
14 of her claim. Id. at 953. For relief, the plaintiff asked, inter alia, for “an order requiring Citibank
15 ‘to immediately cease [its] acts of unfair competition and enjoining [Citibank] from continuing to
16 conduct business via the unlawful, fraudulent or unfair business acts and practices complained of
17 . . . and from failing to fully disclose the true nature of its misrepresentations.’” Id. at 957. The
18 McGill Court held that these were requests for public injunctive relief. Id. at 960-61.
19 The California Supreme Court explained that “public injunctive relief” is “relief that has
20 ‘the primary purpose and effect of’ prohibiting unlawful acts that threaten injury to the general
21 public,” whereas private injunctive relief is “[r]elief that primarily ‘resolve[s] a private dispute’
22 between the parties . . . and rectifies individual wrongs. . . and that benefits the public, if at all,
23 only incidentally.” Id. at 955; see also Blair, 928 F.3d at 831 n.3 (“[Defendant] alternatively
24 argues that the McGill rule does not apply because [Plaintiff's] requested relief does not amount to
25 a public injunction. Not so. [Plaintiff] seeks to enjoin future violations of California's consumer
26 protection statutes, relief oriented to and for the benefit of the general public.”); Hodges v.
27 Comcast Cable Commc'ns, LLC, 12 F.4th 1108, 1115 (9th Cir. 2021) (“[P]ublic injunctive relief
1 violations of law for the benefit of the general public as a whole, as opposed to a particular class of
2 persons, and that do so without the need to consider the individual claims of any non-party.”).
3 In particular, the statutory schemes set out in “the UCL, the CLRA, and the false
4 advertising law” are explicitly designed to provide for “public injunctive relief” that is “[b]y
5 definition” “primarily for the benefit of the general public.” McGill, 2 Cal. 5th at 961 (quotation
6 omitted). Indeed, in Hodges, the Ninth Circuit observed that “[t]he paradigmatic example [of
7 public injunctive relief] would be the sort of injunctive relief sought in McGill itself, where the
8 plaintiff sought an injunction against the use of false advertising to promote a credit protection
9 plan.” 12 F.4th at 1115 (citation omitted).
10 Here, Plaintiff’s SAC seeks this “paradigmatic example” of public injunctive relief: to
11 enjoin Suddenlink from falsely advertising its internet service plans to the general public via
12 public injunctions under the UCL, FAL, and CLRA – the very same statutes and type of relief at
13 issue in McGill. See, e.g., SAC ¶ 8 (“Plaintiff Nick Vasquez brings this lawsuit individually and
14 as a private attorney general seeking public injunctive relief to protect the general public by putting
15 an end to Suddenlink’s unlawful advertising scheme.”). The SAC alleges that Suddenlink violated
16 the CLRA because “Suddenlink’s misrepresentations deceive and have a tendency to deceive the
17 general public,” that “Suddenlink intentionally deceived Plaintiff and the Class, and continues to
18 deceive the general public, by [m]isrepresenting the prices of Suddenlink’s internet service plans
19 by advertising or quoting an internet service plan price that does not include applicable monthly
20 service charges such as the Network Enhancement Fee,” and thus, “Plaintiff, on behalf of himself
21 and as a private attorney general, seeks public injunctive relief under the CLRA to protect the
22 general public from Suddenlink’s false advertising and misrepresentations.” SAC ¶¶ 100(a), 130,
23 109 (emphasis added).
24 Moreover, the SAC specifically seeks four public injunctions addressing the various
25 aspects of Suddenlink’s false advertising, stemming from his CLRA, FAL and UCL claims.
26 Paragraph A of the Prayer for Relief in the SAC states:
27 In order to prevent injury to the general public, Plaintiff Nick
CLRA, FAL, and UCL as follows:
1
1. Permanently enjoin Suddenlink from advertising or quoting an
2 internet service plan price if that price does not include any
applicable monthly service charges such as the Network
3 Enhancement Fee;
4 2. Permanently enjoin Suddenlink from advertising or representing
that the prices of its internet service plans are fixed and will not
5 increase during a specified promotional period, when in fact
Suddenlink reserves the right to increase the service price during
6 that period by increasing discretionary monthly service charges such
as the Network Enhancement Fee;
7
3. Permanently enjoin Suddenlink, including Suddenlink’s sales and
8 customer service agents, from stating to members of the public that
the Network Enhancement Fee is any of the following: (a) a tax; (b)
9 a government fee; (c) a regulatory fee; or (d) a charge over which
Suddenlink has no control; and
10
4. Permanently enjoin Suddenlink from inventing a bogus internet
11 service fee (such as, but not limited to, the “Network Enhancement
Fee”) out of whole cloth and then not including that fee amount in
12 the advertised and quoted price of the internet service plan, when in
fact the fee is an arbitrary and disguised double-charge for the
13 internet service promised in the plan.
14 SAC, Prayer § A.1-4. In McGill itself, the California Supreme Court concluded that allegations of
15 false advertising less detailed than those here—for example that the defendant “‘continue[s] to
16 violate’ the UCL by selling the Plan ‘with advertising that includes false, misleading or deceptive
17 information”—along with requests to enjoin such advertising, established that the plaintiff in that
18 case sought public injunctive relief. 2 Cal. 5th at 956-57. Plaintiff’s detailed requests for relief,
19 then, certainly qualify as public injunctions under McGill.
20 Suddenlink mostly ignores Plaintiff’s detailed allegations of unlawful advertising and
21 misrepresentations aimed at the public, and instead hones in on the fact that Plaintiff also requests
22 restitution, damages and a private injunction enjoining Suddenlink from continuing to charge
23 Plaintiff and class members the Network Enhancement Fee to argue that “the primary motivation
24 behind his lawsuit is to obtain monetary relief” and private relief that is not covered by the McGill
25 rule. Motion to Compel at 14; see also id. at 15(“Vasquez cannot credibly contend that what he
26 really wants is for Suddenlink to change its advertising going forward rather than to stop charging
27 the Network Enhancement Fee.”). Suddenlink, however, cites no authority that a plaintiff seeking
1 McGill rule inapplicable to a plaintiff’s claims for public injunctive relief.
2 Indeed, Suddenlink could not do so because in McGill itself the California Supreme Court
3 established that the plaintiff’s requests to enjoin alleged false advertising constituted requests for
4 public injunctive relief that were not subject to arbitration, and acknowledged that the plaintiff’s
5 “complaint also requests compensatory, monetary and punitive damages, and ‘injunctive relief in
6 the form of restitution and/or disgorgement,’” which “do not constitute public injunctive relief.” 2
7 Cal. 5th at 957 n.1. That the McGill plaintiff brought claims for private relief in addition to claims
8 for public injunctive relief did not preclude application of the rule that the requests for public
9 injunctive relief had to be litigated in court. Indeed, courts regularly examine which claims are
10 arbitrable and which are not, and conduct a severability analysis to analyze where claims should
11 be split between court and arbitral processes. See e.g., Blair, 928 F.3d at 831; Eiess v. USAA Fed.
12 Sav. Bank, 404 F. Supp. 3d 1240, 1260 (N.D. Cal. 2019) (“These claims may be litigated in court
13 only to the extent Ms. Eiess is seeking public injunctive relief. . . Notably, Ms. Eiess is also asking
14 for monetary relief with respect to these claim. . . The claims for monetary relief are subject to
15 arbitration because the McGill rule does not apply to these claims.”). Importantly, the court in
16 McGill did not assess the primary motive of the litigation as a whole.
17 Suddenlink argues that the Ninth Circuit’s recent decision in Hodges supports its theory
18 that Plaintiff here cannot arbitrate its requests for public injunctive relief because he seeks private
19 relief as well. Motion to Compel at 13. Hodges, however, fails to provide the support Suddenlink
20 claims it does.
21 Hodges expressly reiterated the holdings in McGill and the Ninth Circuit’s confirmation
22 that McGill is not preempted by the FAA in Blair, and makes clear that any other private relief
23 sought by the plaintiff, including other forms of injunctive relief, has no bearing on a court’s
24 determination of whether the requested relief includes a public injunction within the meaning of
25 McGill. 12 F.4th at 1116 n.4 (recognizing that the McGill rule applied to certain claims in Blair,
26 but not to other claims that the Blair plaintiff raised which did not seek public injunctions).
27 Moreover, as previously explained, Hodges labeled the McGill plaintiff’s forward-looking
1 “paradigmatic examples” of public injunctive relief – the very same public relief requested and
2 causes of actions at issue in this case. No part of the analysis in Hodges casts doubt on the
3 assessment that Plaintiff here seeks public injunctive relief: the requests for public injunctive relief
4 here are expressly aimed at enjoining Suddenlink’s false advertising to the general public. The
5 Court in Hodges found that the complaint there failed to seek public injunctive relief because all
6 seven of the injunctions sought were sought on behalf of “cable subscribers of Comcast,” and
7 reasoned because “these requests on their face stand to benefit only Comcast ‘cable subscribers’—
8 i.e., by definition they will only benefit a ‘group of individuals similarly situated to the plaintiff.’”
9 12 F.4th at 1121 (citation omitted). None sought public injunctive relief. By contrast, the requests
10 for public injunctive relief in the SAC here stand to benefit the public “on their face;” the requests
11 for public injunction are not limited to serving only existing customers, which the Hodges court
12 found was insufficient to constitute public injunctive relief. Id. at 1121; SAC, Prayer § A.1-4.
13 Thus, the Court holds that the SAC seeks public injunctive relief within the meaning of
14 McGill, and, thus, the arbitration provisions are unenforceable as to those claims. This is true
15 even though Plaintiff here seeks private relief in addition to public injunctive relief.
16 D. The Arbitration Agreement’s Severability Clause Requires the Entirety of Plaintiff’s
17 Claims to Proceed in this Court
18 “Parties are welcome to agree to split decision making between a court and an arbitrator”
19 by “requiring the arbitrator to adjudicate liability first” and “carv[ing] out only the potential public
20 injunctive remedy” for a court's determination separately. Blair, 928 F.3d at 831. “To sever in
21 this way, however, the parties’ agreement must do so precisely.” Lag Shot LLC v. Facebook, Inc.,
22 No. 21-CV-01495-JST, 2021 WL 2660433, at *9 (N.D. Cal. June 25, 2021). In Blair, the court
23 found that the reference in the contract's clause to the severance of a “claim for relief” required the
24 court to sever the entire claim, not just the remedy. Id. At 830-31. “A ‘claim for relief,’ as that
25 term is ordinarily used, is synonymous with ‘claim’ or ‘cause of action.’” Id.; see also Fed. R.
26 Civ. P. 8(a) (using “claim” and “claim for relief” synonymously, but using “demand for relief
27 sought” to mean the form or type of requested remedy).
1 Blair arbitration provision. The Waiver of Class and Representative Actions provision prohibits
2 Plaintiff Vasquez from seeking public injunctive relief in arbitration because any arbitration must
3 be conducted on an “individual basis,” and the arbitrator is prohibited from awarding “non-
4 individualized relief that would affect other account holders.” RSA § 24(g). The next paragraph in
5 Section 24(g) contains a severance clause similar to the one in Blair: “If any of the prohibitions in
6 the preceding paragraph is held to be unenforceable as to a particular claim, then that claim (and
7 only that claim) must be severed from the arbitration and brought in court.” Id. (emphasis added).
8 Claims, not specific forms of relief, are severable.
9 Vasquez seeks public injunctive relief under each of the three claims in his complaint—
10 California’s false advertising law, unfair competition law and Consumer Legal Remedies Act.
11 Therefore, the class action waiver provision of the arbitration agreement is unenforceable as each
12 of those claims. See supra Analysis § C. The private remedies sought by Plaintiff flow from the
13 same claims. Thus, pursuant to the arbitration agreement’s severability clause, Vasquez must
14 litigate the entirety of each of those claims before this Court, including his requests for restitution,
15 declaratory relief and injunctive relief for himself and the putative class. See Blair, 928 F.3d at
16 831. Suddenlink does not contest this reading of the severability provision and makes no
17 argument to the contrary. Accordingly, there is no basis for the Court to compel any portion of the
18 claims in Plaintiff’s SAC to arbitration.
19 Finally, because there is no basis for the Court to compel any portion of Plaintiff’s claims
20 to arbitration, the Court need not address Suddenlink’s request to stay proceedings pending
21 arbitration.
22 ///
23 ///
24 ///
25 ///
26 ///
27 ///
1 V. CONCLUSION
2 For the foregoing reasons, the Court finds that Plaintiff Vasquez has standing to pursue this
3 action for public injunctive relief and DENIES Suddenlink’s motion to compel arbitration.
4 This order disposes of Docket No. 12.
5
6 IT IS SO ORDERED.
7
8 Dated: November 3, 2021
9
10 ______________________________________
EDWARD M. CHEN
11 United States District Judge
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