Case 4:21-cv-03002 Document 13 Filed on 12/15/21 in TXSD Page 1 of 8
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF TEXAS
`HOUSTON DIVISION
`
`JAMARQUIS ETHERIDGE,
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`Plaintiff,
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`v.
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`AT&T INC. AND AT&T MOBILITY
`LLC,
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`Defendants.
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`Civil Action No. 4:21-CV-03002
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`DEFENDANTS’ REPLY BRIEF IN SUPPORT OF ITS MOTION TO COMPEL
`ARBITRATION AND STAY LITIGATION
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`I.
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`INTRODUCTION
`As stated in AT&T Inc. and AT&T Mobility LLC’s (hereinafter collectively,
`“AT&T”) motion to compel arbitration, Plaintiff Jamarquis Etheridge’s (hereinafter
`“Plaintiff” or “Mr. Etheridge”) claims are subject to the arbitration provision and should
`be compelled to arbitration. Mr. Etheridge’s argument that AT&T’s arbitration
`provision is unenforceable because it is procedurally and substantively unconscionable
`is unsupported by both the law and facts surrounding this matter. Mr. Etheridge does not
`contest signing in agreement to AT&T’s written 2009 Terms of Service (“the
`Agreement”), including the arbitration clause. Nor does Mr. Etheridge argue that his
`specific claims are not subject to the arbitration clause. Because the Agreement is a valid
`agreement to arbitrate and the claims are within the scope of the Agreement AT&T
`respectfully moves the Court to compel Mr. Etheridge’s claims to arbitration, as well as
`stay this action pending completion of the arbitration proceedings.
`II.
`ARGUMENT
`Mr. Etheridge argues that the agreement to arbitrate claims which arise out of his
`contractual relationship with AT&T for
`telecommunications services
`is both
`procedurally and substantively unconscionable under state law. “Under Texas law,
`unconscionability includes two aspects: (1) procedural unconscionability, which refers
`to the circumstances surrounding the adoption of the arbitration provision, and (2)
`substantive unconscionability, which refers to the fairness of the arbitration provision
`itself.” Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 301 (5th Cir. 2004)
`(citing In re Halliburton Co., 80 S.W.3d 566, 571 (Tex. 2002)). Courts may consider
`both procedural and substantive unconscionability of an arbitration clause in evaluating
`its validity. In re Halliburton Co., 80 S.W.3d at 572. “The party contesting the
`contractual arbitration provision has the burden to show procedural unconscionability.”
`Smith v. H.E. Butt Grocery Co., 18 S.W.3d 910, 912 (Tex. App. 2000)).
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`The Agreement is not an unconscionable contract of adhesion. In fact, the United
`States Supreme Court upheld a materially identical AT&T arbitration provision in
`AT&T Mobility LLC v. Conception. 131 S. Ct. 1740, 1748 (2011).1 Moreover, this
`district has held that AT&T’s arbitration provision, contained in the Terms of Service, is
`fully enforceable. Johnson v. AT & T Mobility, L.L.C., No. 4:09-CV-4104, 2010 WL
`5342825, at *3 (S.D. Tex. 2010) (finding AT&T Terms of Service enforceable,
`including the arbitration provision stating “AT&T and you agree to arbitrate all disputes
`and claims between us. This agreement to arbitrate is intended to be broadly
`interpreted.) The arbitration provision which Mr. Etheridge consented to contains the
`exact same language described above. (See Dkt. 11 (Fuller Decl., Exhibit B, ¶ 8)).
`A.
`The Agreement is Not Procedurally Unconscionable
`Procedural unconscionability challenges the fairness of the contract formation
`process. See Arkwright–Boston Mfrs. Mut. Ins. Co. v. Westinghouse Elec. Corp., 844 F.2d
`1174, 1184 (5th Cir. 1988). Under Texas law, arbitration agreements are not inherently
`procedurally unconscionable, even if they might be considered contracts of adhesion. See
`Carter, 362 F.3d at 301 (“In Texas, there is nothing per se unconscionable about
`arbitration agreements; indeed, parties claiming unconscionability bear the burden of
`demonstrating it.”); In re Palm Harbor Homes, Inc., 195 S.W. 3d 672, 679 (Tex. 2006);
`In re AdvancePCS Health L.P., 172 S.W. 3d 603, 608 (Tex. 2005); EZ Pawn Corp. v.
`Mancias, 934 S.W. 2d 87, 90–91 (Tex. 1996) (unequal bargaining power alone does not
`
`1 In the wake of Conception, numerous courts around the country have confirmed that the
`FAA requires enforcement of AT&T’s arbitration provision. See, e.g., Coneff v. AT&T
`Corp., 673 F.3d 1155, 1158 (9th Cir. 2012); Cruz v. Cingular Wireless, LLC, 648 F.3d
`1205, 1212-16 (11th Cir. 2011); Blau v. AT&T Mobility, 2012 WL 10546, at *5 (N.D. Cal.
`Jan. 3, 2012); In re Apple & AT&TM Antitrust Litig., 826 F. Supp. 2d 1168, 1174-75 (N.D.
`Cal. 2011); Hendricks v. AT&T Mobility, LLC, 823 F. Supp. 2d 1015, 1019-23 (N.D. Cal.
`2011); Nelson v. AT&T Mobility LLC, 2011 WL 3651153, at *2-*4 (N.D. Cal. Aug. 18,
`2011); Boyer v. AT&T Mobility Servs., LLC, 2011 WL 3047666, at *3 (S.D. Cal. July 25,
`2011); In re Apple & AT&T iPad Unlimited Data Plan Litig., 2011 WL 2886407, at *3-*4
`(N.D. Cal. July 19, 2011); see also Sherman v. AT&T Inc., 2012 WL 1021823, at *4 (N.D.
`Ill. Mar. 26, 2012).
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`defeat an agreement to arbitrate). Indeed, some form of oppression and unfairness must
`taint the negotiation process leading to the agreement’s formation. El Paso Nat. Gas Co.
`v. Minco Oil & Gas Co., 964 S.W.2d 54, 61 (Tex.App. 1998), rev’d on other grounds, 9
`S.W.3d 309 (Tex. 1999).
`Completely ignoring the multiple arbitration references contained in the Wireless
`Service Agreement, Mr. Etheridge argues
`that
`the contract was procedurally
`unconscionable because the “AT&T User Manual containing the arbitration provision
`was a pre-printed, 26-page document which Plaintiff had no power to negotiate nor did
`negotiate.” (Dkt. 12, ¶14.) Mr. Etheridge does not cite any opinions that support his
`allegation. Moreover, this district has found no procedural unconscionability where
`“Plaintiff had the choice of wireless service providers but chose to contract with [AT&T]
`despite the arbitration agreement contained in its Terms of Service.” Johnson, 2010 WL
`5342825, at *4. Additionally, the page number of the Agreement does not support an
`argument of procedural unconscionability, as the 5th Circuit has held that manuals over
`200 pages including an arbitration provision are not procedurally unconscionable.
`Crawford Professional Drugs, Inc. v. CVS Caremark Corp., 748 F.3d 249, 265 (5th Cir.
`2014).
`Citing out of Circuit opinions, Mr. Etheridge claims that the provision was also
`procedurally unconscionable because it was a surprise.2 Mr. Etheridge may not escape his
`agreements on procedural-unconscionability grounds because AT&T did not draw his
`attention to what he was signing. Crawford Professional Drugs, Inc., 748 F.3d at 265.
`
`2 Mr. Etheridge briefly counters that because he did not read the Customer Service
`Agreement and Terms of Service when he signed the Customer Service Agreement he
`did not assent. This argument fails as Texas courts have held failing to read an
`agreement, even when a party claims there was no opportunity to read or understand the
`agreement, does not excuse a party from arbitration. Sosa v. PARCO Oilfield Serv's,
`Ltd., Civ. Action No. 2:05–CV–153, 2006 WL 2821882, at *5 (E.D. Tex. 2006) (citing
`EZ Pawn Corp., 934 S.W.2d at 90)
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`Even if Mr. Etheridge did not have subjective knowledge of the arbitration clause,
`“courts do not find surprise if an arbitration clause is clearly set out, such as by “bold and
`conspicuous language[.]” Evergreen Media Holdings v. Warner Brothers Entertainment.
`No. CIV.A. H-14-0793, 2014 WL 5681852, at *8 (S.D. Tex. 2014). Mr. Etheridge’s
`surprise argument seems to be premised on the fact that he did not read the Agreement
`rather than any allegation that the terms were hidden. As demonstrated in AT&T’s
`motion, Mr. Etheridge was informed of the Agreement through the Wireless Service
`Agreement, which he assented to along with the Agreement. (Dkt. 11. (Decl. of Fuller,
`Exs. A, B, C.)) The Wireless Service Agreement stated several times that there was an
`arbitration agreement in both bold typed font and in capitals. (Dkt. 11. (Decl. of Fuller,
`Ex. A.)) Thus, Mr. Etheridge was informed of the arbitration agreement by more than one
`document and cannot now claim that he was surprised.
`Lastly, Mr. Etheridge argues that the failure to attached AAA Commercial
`Arbitration Rules, results in procedural unconscionability. Again, Mr. Etheridge cites no
`5th Circuit or Texas law on this matter, citing instead to out of context opinions that did
`not discuss AAA Commercial Arbitration Rules. Regardless, Texas courts have
`repeatedly rejected Mr. Etheridge’s argument as such terms are binding even where a
`signer did not receive a copy of the referenced document. See U.S. ex rel. Cassaday v.
`KBR, Inc., 590 F. Supp. 2d 850, 855 (S.D. Tex. 2008) (relying on Texas law: “[T]o the
`extent Cassaday argues the arbitration provision is unconscionable because KBR did not
`give him a copy of the KBR Dispute Resolution Program rules … the Court finds this
`argument is unavailing and without merit.”); In re Raymond James & Associates, Inc.
`196 S.W.3d 311, 318-19 (Tex.App. 2006) (finding that an arbitration provision in an
`incorporated document bound account holders even though they never received a copy).
`In light of the applicable Texas law, Mr. Etheridge’s allegations of procedural
`unconscionability are insufficient to invalidate the Agreement.
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`The Arbitration Provision is Not Substantively Unconscionable
`B.
`Mr. Etheridge’s only argument concerning substantive unconscionability is that
`arbitration was not within the reasonable contemplation of Mr. Etheridge. Without
`citing any support Mr. Etheridge contends his surprise alone is adequate to avoid the
`arbitration provision. However, this is neither a factor of substantive unconscionability
`nor accurate as explained above.
`To the contrary, “substantive unconscionability addresses the fairness of the
`terms of the contract itself. A contract may be substantively unconscionable when the
`terms of the contract are so one-sided as to be overly oppressive or unduly harsh to one
`of the parties.” Crawford Professional Drugs, Inc., 748 F.3d at 263 (internal citations
`and quotations omitted). Mr. Etheridge has made no argument that the terms of the
`contract are one sided, nor has he discussed the terms of the agreement at all. Given Mr.
`Etheridge’s failure to point to any factors supporting procedural or substantive
`unconscionability, this Court should find the arbitration agreement valid and
`enforceable.
`
`The Claims Are Within the Scope of the Arbitration Provision
`C.
`The relevant portion of the Agreement reads: “AT&T and you agree to arbitrate all
`disputes and claims between us. This agreement to arbitrate is intended to be broadly
`interpreted. It includes, but is not limited to, claims arising out of or relating to any
`aspect of the relationship between us, whether based in contract, tort, statute, fraud,
`misrepresentation or any other legal theory.” (Dkt. 11 (Decl. of Fuller, Ex. B.)) Because
`the arbitration provision contains phrases that suggest it encompasses all claims, such as
`“arising out of” and “relating to,” it is a “broad arbitration clause[] capable of expansive
`reach.” See Pennzoil Explor. & Prod. Co. v. Ramco Energy Ltd., 139 F.3d 1061, 1067
`(5th Cir. 1998) (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395,
`397–98 (1967)). Such “broad” arbitration clauses “embrace all disputes between the
`parties having a significant relationship to the contract regardless of the label attached to
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`the dispute.” Id. Thus, as the language encompasses “all disputes and claims” “arising out
`of” or “relating to” the agreement, the scope of the arbitration clause encompasses Mr.
`Etheridge’s allegation that AT&T failed to implement security measures that would have
`protected against unauthorized access to his phone number.
`III. CONCLUSION
`For the foregoing reasons, AT&T respectfully requests that the Court compel Mr.
`Etheridge’s claims to arbitration and stay this case pending completion of the arbitration
`proceedings.
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`DATED: December 15, 2021
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`Respectfully submitted,
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`KILPATRICK TOWNSEND & STOCKTON LLP
`
`By:
`
`/s/ Patrick J. Carew
`Patrick J. Carew
`Attorney-In-Charge
`Texas State Bar No. 24031919
`Federal Bar No. 1104841
`2001 Ross Avenue, Suite 440
`Dallas, TX 75201
`Telephone: (214) 922-7155
`Facsimile: (214) 279-5178
`
`Nancy L. Stagg (to be admitted pro hac vice)
`CA Bar No. 157034
`12255 El Camino Real, Ste. 250
`San Diego, CA 92130
`Telephone: (858) 350-6156
`Facsimile: (858) 408-3931
`
`Attorneys for DEFENDANTS
`AT&T INC. AND AT&T MOBILITY LLC
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`CERTIFICATE OF SERVICE
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`The undersigned counsel for Defendant AT&T Mobility LLC hereby certifies that
`a true and correct copy of the foregoing instrument was served on the counsel identified
`below pursuant to the Federal Rules of Civil Procedure on this 15th day of December,
`2021.
`
`Richard E. Brown
`Brownreb34@aol.com
`RICHARD E. BROWN ATTORNEY AT LAW, P.C.
`54 Sugar Creek Center Blvd., Suite 300
`Sugar Land, Texas 77478
`
`/s/ Patrick J. Carew
`Patrick J. Carew
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