Michno v. Dish Wireless L.L.C.

Background

Philip Michno alleges that DISH Wireless (Boost) allowed a hacker to access his cellular phone services, resulting in identity theft and the theft of approximately $180,000 in cryptocurrency. DISH Wireless removed the case from state court based on federal-question and diversity jurisdiction and moved to compel arbitration.

Dispute Over Arbitration Agreement

The parties agree that the Federal Arbitration Act governs the motion. Under that law, the court must first determine whether a valid arbitration agreement exists. The party seeking to compel arbitration bears the burden of proving that an agreement was formed. If the agreement’s formation is disputed, the court must hold a trial on that issue.

The parties disagree about which state’s law applies to contract formation. DISH Wireless relies on a choice-of-law provision in its terms and conditions and urges the use of Illinois law. Michno argues that California law applies because he never agreed to the terms or the choice-of-law provision.

The parties also dispute what happened when Michno’s Virgin Mobile USA account was transferred to Boost in February 2020. Michno says the transfer was automatic and required no affirmative action beyond changing his security PIN. He does not remember enrolling in AutoPay or receiving terms or agreements. DISH Wireless says Michno accepted the terms and enrolled in AutoPay, among other actions.

Order

The court found these to be material factual disputes requiring a bench trial on arbitration-agreement formation. It set a half-day trial for December 19, 2022, at 1:00 p.m., anticipated no more than three witnesses per side, and directed the parties to develop a discovery plan for the trial issues. The court stayed all other discovery pending further order and stated that it would decide the motion to compel arbitration after the bench trial. The order did not decide whether a valid arbitration agreement exists or whether arbitration will be compelled.