United States District Court, D. Arizona
the Court is Defendant Verizon Wireless (VAW), LLC's
(“Verizon”) Motion to Stay and Compel
Arbitration. (Doc. 13.) The motion is fully briefed. (Docs.
15, 18.) For the following reasons, Verizon's motion is
Joseph Nasca has been a customer of Verizon, a nationwide
telephone service provider, since 2001. (Doc. 13-1 ¶ 4.)
When Nasca upgraded his cellular devices in January 2016 and
June 2017, he agreed to the Verizon Wireless Customer
Agreement (“Agreement”). (Id.) The
Agreement included an arbitration provision, which in
relevant part stated: “I AM AGREEING TO . . .
SETTLEMENT OF DISPUTES BY ARBITRATION AND OTHER MEANS INSTEAD
OF JURY TRIALS. . . .” (Id. at 6.) The
arbitration provision is highlighted in the Customer
Agreement receipt above the signature line, and is set out in
bold and capital letters in the Agreement itself.
2017, Nasca contacted Verizon's customer service
department to get technical support for his cell phone. (Doc.
5 ¶ 10.) An unknown Verizon technical support
representative, named in the complaint as Defendant JD, was
assigned to help Nasca. (Id. ¶ 11.) JD
allegedly accessed Nasca's personal files, pictures, and
information from Nasca's phone without his authorization.
(Id. ¶ 13.) Since then, Nasca has experienced
problems with his cell phone and was the victim of an
attempted identity theft, which he seems to attribute to
JD's unauthorized actions. (Id. ¶ 15.)
August 2017, Nasca filed a two-count complaint against JD.
(Doc. 1.) He amended his complaint in October 2017 to add
Verizon as a defendant. (Doc. 5.) On December 13, 2017,
Verizon filed its answer, which asserted arbitration as an
affirmative defense. (Doc. 11 ¶ 37.) Shortly thereafter,
on December 22, 2017, Verizon filed the instant motion to
stay this action and compel arbitration. (Doc. 13.)
Federal Arbitration Act (“FAA”) provides that
written agreements to arbitrate disputes arising out of
transactions involving interstate commerce “shall be
valid, irrevocable, and enforceable except upon grounds that
exist at common law for the revocation of a contract.”
9 U.S.C. § 2. This provision reflects a “liberal
federal policy favoring arbitration.” AT&T
Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011).
The FAA “leaves no place for the exercise of discretion
by a district court, but instead mandates that district
courts shall direct the parties to proceed to
arbitration on issues as to which an arbitration agreement
has been signed.” Dean Witter Reynolds Inc. v.
Byrd, 470 U.S. 213, 218 (1985) (emphasis in original).
Arizona has an analogous arbitration statute, which has been
interpreted similarly to the FAA. A.R.S. § 12-1501;
Stevens/Leinweber/Sullens, Inc. v. Holm Dev. & Mgmt.,
Inc., 795 P.2d 1308, 1311 n.3 (Ariz.Ct.App. 1990).
both the FAA and Arizona law, the Court's role is to
answer two gateway questions: (1) does a valid agreement to
arbitrate exist, and (2) does the agreement encompass the
dispute at issue. Chiron Corp. v. Ortho Diagnostic Sys.,
Inc., 207 F.3d 1126, 1130 (9th Cir. 2000);
Stevens/Leinweber/Sullens, Inc., 795 P.2d at 1311
n.3. If both questions are answered in the affirmative, the
court must compel arbitration.
does not dispute that he signed the Agreement, that the
Agreement contains an otherwise valid arbitration clause, and
that the arbitration agreement encompasses the dispute at
issue. He nonetheless argues that the Court should deny
Verizon's motion because Verizon waived its right to
arbitration. “The right to arbitration, like other
contractual rights, can be waived.” Martin v.
Yasuda, 829 F.3d 1118, 1124 (9th Cir. 2016).
“Because waiver of the right to arbitrate is
disfavored, any party arguing waiver of arbitration bears a
heavy burden of proof.” Id. (internal
quotation and citation omitted). The party asserting that
there has been a waiver must demonstrate: “(1)
knowledge of an existing right to compel arbitration; (2)
acts inconsistent with that existing right; and (3) prejudice
to the party opposing arbitration resulting from such
inconsistent acts.” Id. Nasca does not dispute
that both parties had knowledge of an existing right to
compel arbitration. The Court therefore limits its analysis
to whether Verizon acted inconsistent with that right and, if
so, whether Verizon's actions prejudiced Nasca.
Verizon did not Act Inconsistently with its Right to
there is no bright-line test for determining whether a party
acted inconsistently with its right to arbitrate, the Ninth
Circuit has identified some relevant considerations.
Id. at 1125. For example, “a party's
extended silence and delay in moving for arbitration may
indicate a conscious decision to continue to seek judicial
judgment, ” of the claims, “which would be
inconsistent with a right to arbitrate.” Id.
(internal quotations and citation omitted). Relatedly, a
party that reserves its right to arbitration must assert that
right within a reasonable time. Id. A party that
actively litigates a claim and delays moving to compel
arbitration may be deemed to have waived the right. Van
Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 759
(9th Cir. 1988).
argues that Verizon acted inconsistently with its right to
arbitration in two ways, neither of which is persuasive.
First, Nasca contends that Verizon told him he could not
obtain a recording of the conversation between him and JD
without a subpoena. (Doc. 15 at 3.) The mere fact that
Verizon will not release records without a subpoena does not
mean that it has waived its right to arbitrate claims
asserted against it. Moreover, “[t]he issuance of
subpoenas is expressly authorized in arbitration
proceedings.” Lane v. City of Tempe, 44 P.3d
986, 989 (Ariz. 2002); see 9 U.S.C. § 7.
Nasca argues that Verizon acted inconsistently with its right
to arbitrate by filing an answer to the complaint. (Doc. 15
at 3.) Verizon, however, explicitly alleged the existence of
the arbitration provision as an affirmative defense. (Doc. 11
¶ 37). Further, Verizon moved to compel arbitration a
mere nine days after filing its answer. (Doc. 13.) Nine days
is not the type of protracted silence or delay indicative of
waiver. See On v. Stephen Vannucci, M.D.,
Inc., No. 2:14-cv-02714-TLN-CMK, 2018 WL 489157, at
*4 (E.D. Cal. Jan. 19, 2018) (asserting binding arbitration
as an affirmative defense in the answer and subsequently
filing a motion to compel within four months is consistent
with right to arbitrate); Pinto v. USAA Ins. Agency Inc.
of Texas, 275 F.Supp.3d 1165, 2017 WL 3172871, at *5 (D.
Ariz. July 26, 2017) ...