All 39 Plaintiffs in T-Mobile MDL Are Required to Arbitrate: Motion to Compel

T-Mobile moved Wednesday to compel arbitration in an 18-case multidistrict data breach litigation because all the more than three dozen plaintiffs in those actions agreed “on numerous occasions” to arbitrate any claims they may have against T-Mobile, said its motion (docket 4:23-md-03073) in U.S. District Court for Western Missouri in Kansas City. The plaintiffs can’t avoid “their contractual obligations,” it said.

Due to the large number of plaintiffs in the MDL, T-Mobile requests the opportunity to present oral argument on its motion to compel, said the motion, filed Wednesday. T-Mobile asks that the court enter an order compelling arbitration and staying the MDL pending the outcome of that arbitration, or alternatively dismissing the action, it said.

Petitioners Wendy Smith, Michelle Martinez and Kenneth Turner are asking the U.S. Supreme Court to reverse the 9th U.S. Circuit Appeals Court’s affirmation of the district court’s dismissal of their case after compelling their claims to arbitration, saying the case “presents an important question of statutory construction” under the Federal Arbitration Act (see 2403010007). Their case (docket 22-1218) is being watched closely to determine whether the FAA's Section 3 requires district courts to stay a lawsuit pending arbitration, or whether they have discretion to dismiss when all claims are subject to arbitration.

All the plaintiffs in the MDL agreed to arbitrate their claims against T-Mobile “and for many, multiple times over,” said carrier’s suggestions memorandum in support of the motion to compel. Thirty-six of the 39 plaintiffs signed arbitration agreements -- and often multiple arbitration agreements -- with T-Mobile “where they agreed to individual arbitration rather than litigation in court and waived any ability to participate in a class action,” it said.

The plaintiffs collectively signed nearly 300 arbitration agreements with T-Mobile, said the memorandum. The “handful” of plaintiffs who didn’t sign agreements “are nevertheless required to arbitrate,” it said. Those plaintiffs accepted arbitration agreements “by conduct or are users of T-Mobile customers’ accounts and thus bound by those customers’ arbitration agreements under blackletter agency and equitable estoppel grounds,” it said.

Because the plaintiffs’ arbitration agreements delegate questions of arbitrability to the arbitrator, the district court’s “only role” is to determine whether the parties “formed an agreement to arbitrate in the first instance,” said the memorandum. Once it does, the Supreme Court has instructed that the district court must move the parties into arbitration as quickly and easily as possible, it said.

But even if the court were to address arbitrability, “the result is the same,” said the memorandum. The plaintiffs’ arbitration agreements are “broad,” and encompass, among other things, all disputes with T-Mobile in any way related to or concerning plaintiffs’ agreements with T-Mobile, devices or services provided by T-Mobile or T-Mobile’s privacy policy, it said.

The plaintiffs’ claims “fall squarely within the scope of the arbitration agreements,” said the memorandum. Their claims hinge on the defendant’s alleged failure to implement reasonable measures to protect the data they allege they entrusted to T-Mobile in connection with their agreements and the services and devices provided, it said.

The plaintiffs’ claims also relate to T-Mobile’s privacy policy, said the memorandum. They allege they were injured because the theft of their information resulted in a loss of their privacy rights, it said. Their complaint references the carrier’s privacy policy “repeatedly,” and asserts claims for invasion of privacy and breach of express contract based on T-Mobile’s alleged breach of the privacy policy, it said.

The plaintiffs’ arbitration agreements “are fully enforceable under applicable state laws and under the FAA,” said the memorandum. Courts across the country “have repeatedly enforced T-Mobile’s arbitration agreements and consistently granted motions to compel claims” like those the plaintiffs assert here, it said. In any event, the plaintiffs, not T-Mobile, “would bear the burden of establishing that their agreements are not enforceable,” it said. That’s a burden the plaintiffs can’t carry “because T-Mobile’s arbitration agreements provide an efficient and consumer-friendly process for resolving their claims,” it said.