[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________ FILED
U.S. COURT OF APPEALS
No. 09-15936 ELEVENTH CIRCUIT
JUNE 3, 2010
Non-Argument Calendar
JOHN LEY
________________________
CLERK
D. C. Docket No. 09-01036-CV-CAP-1
ANDREA JONES,
Plaintiff-Appellee,
versus
DIRECTV, INC.,
THE DIRECTV GROUP, INC.,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(June 3, 2010)
Before MARCUS, PRYOR and ANDERSON, Circuit Judges.
PER CURIAM:
DirecTV and the DirecTV Group (collectively “DirecTV”) appeal the denial
of their motion to compel Andrea Jones to arbitrate her consumer complaint. The
district court ruled that an arbitration clause in Jones’s contract with DirecTV was
unenforceable because its waiver of the right to maintain a class action was
unconscionable. We affirm.
In 2002, Jones subscribed for satellite television service from DirecTV.
Jones’s customer agreement stated that she could “cancel [her] service” if she
disagreed with any term of the agreement and continued use of the service
constituted acceptance of the agreement. In May 2007, Jones leased two DirecTV
receivers from a Best Buy store in Georgia and signed an equipment lease
addendum. The addendum incorporated a revised customer agreement.
The revised agreement provided that any dispute between DirecTV and a
customer would be “resolved only by binding arbitration.” The arbitration clause
stated that the customer had to “pay an arbitration initiation fee . . . not to exceed
$125” and DirecTV would “pay any additional fee or deposit required by JAMS to
initiate . . . arbitration.” The clause also stated that DirecTV “agree[d] to pay the
costs of the arbitration proceeding,” but “[o]ther fees, such as attorney’s fees and
expenses of travel” would “be paid in accordance with JAMS Rules.” Those rules
vest an arbitrator with discretion to “allocate” attorney’s fees and expenses “if
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provided by the Parties’ agreement or allowed by applicable law.” JAMS
Comprehensive Arb. R. 24(g) (available at http://www.jamsadr.com/files/Uploads/
Documents/JAMS-Rules /JAMS_comprehensive_arbitration_rules-2009.pdf (all
Internet materials as visited June 2, 2010, and available in Clerk of Court’s case
file). The agreement prohibited a customer from “arbitrat[ing] any claim as a
representative member of a class,” but the agreement stated that, if that provision
were unenforceable, the “entire” arbitration clause would be “unenforceable.”
In November 2008, Jones sent DirecTV a letter complaining that she had
been overcharged by $5.39 each month since she had leased the two receivers.
Jones warned that unless DirecTV “submit[ted] a reasonable tender of settlement”
within 30 days, she would sue DirecTV for making “misrepresentations and
breaches of contract . . . in violation of the Georgia Fair Business Practices Act of
1975, O.C.G.A. §§ 10-1-390, et. seq. and the Uniform Deceptive Trade Practices
Act, O.C.G.A. §§ 10-1-370 et. seq.” DirecTV did not settle the dispute.
In January 2009, Jones filed a complaint in a Georgia court “on behalf of
herself and all others similarly situated” against DirecTV. Jones alleged that
DirecTV had “collected unduly high fees for leasing and lease-related sales tax
charges.” Jones complained that DirecTV had breached its contract and been
unjustly enriched, and Jones requested an accounting of funds and injunctive and
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declaratory relief.
DirecTV removed the case to the district court, under the Class Action
Fairness Act, 28 U.S.C. § 1332(d)(2), and moved to compel Jones to arbitrate her
complaint. DirecTV argued that Jones was bound by the arbitration clause in the
customer agreement. DirecTV also argued that the clause was enforceable because
Jones could, but did not, assert a claim under the Georgia Fair Business Practices
Act, which guaranteed to a prevailing party payment of attorney’s fees.
The district court denied the motion to arbitrate filed by DirecTV. The
district court ruled that the waiver of the right to represent a class in Jones’s
agreement was unconscionable based on our decision in Dale v. Comcast Corp.,
498 F.3d 1216 (11th Cir. 2007). The district court reasoned that Jones and the
class she sought to represent would have little incentive to pursue arbitration based
on “the limited potential recovery” available. We held in Dale that a waiver of a
class action in an arbitration agreement is unconscionable under Georgia law when
the “cost of vindicating an individual subscriber’s claim . . . is too great.” Id. at
1224. We explained that several factors are relevant in determining the
enforceability of a waiver of a class action, including the “fairness of the
provisions,” the cost of individual arbitration in comparison to the potential
recovery, the likelihood that attorney’s fees and expenses could be recovered, the
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power the waiver gave the company “to engage in unchecked market behavior,”
and “related public policy concerns.” Id. We ruled that the waiver of a class
action in the Comcast contract was unconscionable because it undermined a public
policy favoring the pursuit of small-value claims to deter companies from
misconduct and discouraged arbitration by consumers who sought small
judgments, but bore significant costs and would otherwise experience difficulty
obtaining representation. Id.
This appeal is materially indistinguishable from Dale. Jones and other
subscribers each seek to recover about $200, but they have to weigh whether that
small recovery would offset their costs of up to $125 for initiating the arbitration,
the price of expert witnesses, and other expenses. See Dale, 498 F.3d at 1224.
Jones and other subscribers would face difficulty obtaining individual
representation because their complaints about violations of state law do not entitle
them to recovery of attorney’s fees and costs unless they can prove that DirecTV
acted in bad faith. See Ga. Code § 13-6-11. The waiver of a class action in the
arbitration agreement with DirecTV is unconscionable because the costs of
arbitration would significantly deter Jones from pursuing her complaint against
DirecTV. See Dale, 498 F.3d at 1224.
DirecTV argues that, in its cost-benefit analysis, the district court must
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consider all potential claims available to a plaintiff, but we disagree. The plaintiff
is master of her complaint and “selects the claims that will be alleged in the
complaint.” United States v. Jones, 125 F.3d 1418, 1428 (11th Cir. 1997).
DirecTV cites no authority to support its argument that we must ascribe to Jones a
potential claim for relief that has not been pleaded in her complaint. See
Pendergast v. Sprint Nextel Corp.,592 F.3d 1119, 1141 (11th Cir. 2010)
(evaluating substantive unconscionability based on grounds alleged in complaint);
Dale, 498 F.3d at 1222–23 (stating that “subscribers cannot recover attorneys’ fees
. . . for the specific violations alleged” in the complaint); Jenkins v. First Am. Cash
Advance of Ga., LLC, 400 F.3d 868, 878 (11th Cir. 2005) (rejecting argument that
class members would be unable to obtain representation because plaintiff could
recover attorney’s fees under “her Georgia RICO claim”); Snowden v. CheckPoint
Check Cashing, 290 F.3d 631, 638 (4th Cir. 2002) (plaintiffs could recover
attorney’s fees for alleged violations of the Truth in Lending Act and Racketeer
Influenced and Corrupt Organizations Act); Honig v. Comcast of Ga. I, LLC, 537
F. Supp. 2d 1277, 1287 (N.D. Ga. 2008) (distinguishing Dale on the ground that
the plaintiff’s “first and primary claim . . . is brought pursuant to the Georgia Fair
Business Practices Act”).
The decision to deny the motion to arbitrate is AFFIRMED.
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