Postpichal v. Cricket Wireless, LLC

Background

Plaintiffs Ursula Freitas and Jamie Postpichal alleged that Cricket Wireless, LLC advertised 4G wireless service and sold 4G-capable phones in markets where Cricket did not actually provide 4G coverage. They sought relief for customers who paid for 4G phones and coverage but received only 3G coverage. The court had previously certified a class under Federal Rule of Civil Procedure 23(b)(3).

Before class notice was sent, Cricket moved to compel arbitration for groups of absent class members. The court explained that it could exclude people who were likely subject to arbitration from the class definition without binding them to arbitrate. The excluded people would remain free to sue later and litigate arbitrability individually.

Text-message agreements

Cricket argued that customers who continued paying for service after receiving a May 22, 2014 text message became subject to an arbitration clause. The message linked to terms stating that disputes would be resolved through binding individual arbitration rather than jury trials or class actions.

The court held that Cricket had not met its initial burden of producing evidence that the alleged text-message arbitration agreements existed. The declarations describing Cricket’s usual practice were not supported by enough examples to establish a routine practice. The witnesses also lacked personal knowledge that the May 22, 2014 message was sent to the relevant customers. Other evidence raised questions about whether customers actually received the message, and Cricket did not provide reliable records identifying who received it. The court also found the spreadsheet offered to prove the message campaign inadmissible under the best-evidence rule and found that Cricket had not shown it could send the message only to account owners rather than to other lines of service.

The court therefore DENIED Cricket’s motion to compel arbitration as to the text-message exclusion.

Electronic-signature agreements

Cricket identified 15,529 class members who, during or after May 2017, allegedly returned to Cricket or added a line of service at a store and accepted the terms through an electronic signature. The court found that declarations from Cricket employees showed those transactions could not be completed without accepting the Terms and Conditions. Because plaintiffs did not dispute the witnesses’ personal knowledge, the court found no genuine dispute of material fact about the existence of those agreements. It also held that Cricket’s failure to produce copies of all electronic signatures during discovery was harmless.

Applying California law and principles the court found uniform across the relevant jurisdictions, the court held that the agreements validly incorporated the arbitration terms by reference. The electronic notices identified the Terms and Conditions, explained that they included individual arbitration, and made the terms available online, in phone boxes, and in stores. The arbitration clause covered claims relating to Cricket’s advertising.

The court did not order the 15,529 absent class members to arbitrate. Instead, it excluded them from the class definition because they were likely required to arbitrate. They could later pursue individual claims and litigate arbitrability.

Online agreements

Cricket identified 438 class members who activated or reactivated service or added a line online between April 1, 2017, and December 31, 2021. The court found that those transactions could not be completed unless the customer clicked to accept the Terms and Conditions. Plaintiffs did not create a genuine factual dispute about whether those agreements existed.

The court held that the online agreements were valid. The Terms and Conditions link was conspicuous, bold, blue, and located near the acceptance box, while larger text prompted users to accept the terms before completing the purchase. The court found that the customers were at least on constructive notice of the arbitration clause and that the clause covered the claims at issue.

Again, the court did not order the 438 absent class members to arbitrate. It excluded them from the class definition because they were likely bound by arbitration, while leaving them free to bring individual suits and litigate arbitrability.

Disposition

Judge William Alsup excluded 15,529 class members who accepted the Terms and Conditions by electronic signature at Cricket stores and 438 class members who accepted them on Cricket’s website. The court denied arbitration for the group allegedly covered by the May 22, 2014 text message. The court ordered the parties to provide notice to the excluded people and to file a proposed class notice, distribution plan, and opt-out timeline within two weeks.