LOWDEN v. T-MOBILE USA INC.
The Ninth Circuit Court of Appeals today released an opinion in LOWDEN v. T-MOBILE USA INC., No. 06-35395, a diversity appeal. The panel consisted of William C. Canby, Jr., Susan P. Graber, and Ronald M. Gould, Circuit Judges.
GOULD, Circuit Judge:
I The issues on appeal are whether the arbitration provisions in Defendant T-Mobile’s service agreements with two of its customers are enforceable under Washington state law and, if not, whether the state law is preempted by the Federal Arbitration Act (”FAA”), 9 U.S.C. §§ 1-16. After two consumers of T-Mobile’s cellular phone service brought a class action against T-Mobile in state court for breach of contract and violation of the Washington Consumer Protection Act (the “CPA”), Wash. Rev. Code § 19.86.010-19.86.920, T-Mobile removed the case to federal district court and moved to compel arbitration per its service agreements. The district court denied T-Mobile’s motion to compel arbitration, holding that the arbitration agreements were tainted by substantive unconscionability and thus were unenforceable. We conclude that the Washington State Supreme Court’s decision in Scott v. Cingular Wireless, 161 P.3d 1000 (Wash. 2007), establishes that T-Mobile’s arbitration provision is substantively unconscionable and unenforceable under Washington state law, and that there is no federal preemption in light of our decision in Shroyer v. New Cingular Wireless Servs., Inc., 498 F.3d 976 (9th Cir. 2007). We therefore affirm. II The two named Plaintiffs, Kathleen Lowden and John Mahowald, are or were T-Mobile customers whose service agreements contained mandatory arbitration provisions with slightly varying terms. Plaintiffs sued T-Mobile, alleging that the service provider had improperly charged them for certain fees beyond the advertised price of service, charged them for calls during a billing period other than that in which the calls were made, and charged them for roaming and other services . . .