Dekker v. Vivint Solar, Inc.

CourtDistrict Court, N.D. California
DecidedMarch 24, 2020
Docket3:19-cv-07918
StatusUnknown

This text of Dekker v. Vivint Solar, Inc. (Dekker v. Vivint Solar, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Dekker v. Vivint Solar, Inc., (N.D. Cal. 2020).

Opinion

1 2 3 4 5 6 UNITED STATES DISTRICT COURT 7 NORTHERN DISTRICT OF CALIFORNIA 8

10 GERRIE DEKKER, et al., 11 Plaintiffs, No. C 19-07918 WHA

12 v.

13 VIVINT SOLAR, INC., et al., ORDER RE ARBITRATION AND MOTION TO DISMISS 14 Defendants.

15 16 INTRODUCTION 17 In this unfair business practices suit, defendant solar panel installer moves to compel 18 arbitration, or in the alternative, dismiss the complaint. Because the arbitration agreement 19 clearly delegates the question of arbitrability to the arbitrator, for plaintiffs who agreed to, 20 ARBITRATION IS COMPELLED. The motion to dismiss against the remaining two named 21 plaintiffs is GRANTED IN PART AND DENIED IN PART. 22 STATEMENT 23 Defendants Vivint Solar, Inc., Vivint Solar Holdings, Inc., Vivint Solar Developer, LLC, 24 and Vivint Solar Provider, LLC (all “Vivint”) install solar panels on customers’ roofs and, at 25 least as advertised, sell them the low cost, clean energy produced (Compl., Dkt. No. 1, at ¶ 3). 26 Vivint’s unit of sale is the residential “power purchase agreement,” under which Vivint agrees 27 to install and maintain the solar system on a customer’s roof (id. at ¶ 4). 1 Plaintiffs’ complaint, though, alleges a host of systematic misconduct. Instead of 2 agreeing to purchase only power used, customers apparently agreed to purchase all power 3 generated by the system — leading to higher bills. And, customers must still pay the average 4 expected energy generation rate even while the system is offline or broken (id. at ¶ 5). 5 Moreover, the agreement imposes a 20-year term which limits customers’ ability to sell 6 their homes. The new buyer must either agree to assume the remainder of the power-purchase 7 agreement term, or the customer must purchase the entire solar system. Plaintiffs contend 8 these buy-out provisions, along with Vivint’s other prepayment prices and default payments, 9 constitute unlawful liquidated damages provisions (id. at ¶¶ 4, 6–9). 10 To attract and bind customers to these power-purchase agreements, Vivint employs 11 aggressive door-to-door salespeople to proclaim the convenience and low cost of the solar 12 installation, and ease of transfer if a customer sells their home. But, Vivint’s salesforce 13 deliberately targets vulnerable consumers, the elderly, active-duty military personnel, low- 14 income and at risk-borrowers, and non-native English speakers. Thus, Vivint allegedly 15 peddles its deceptively dangerous power-purchase agreement to those who don’t really 16 understand and cannot actually afford its consequences (id. at ¶¶ 2–3). 17 Plaintiffs are California residents ensnared by Vivint. Gerrie Dekker signed a power- 18 purchase agreement in 2012 but discovered in 2017 that Vivint had been charging her for a 19 system offline for nearly two years (id. at ¶ 15). Karen Barajas’s terminally ill father, 20 Thompson Bryson, signed up for Vivint’s solar system. Following his death, Vivint threatened 21 to put a lien on her father’s home unless she bought out the system (id. at ¶ 16). Marlene 22 Rogers has been unable to sell her home because of Vivint’s restrictions (id. at ¶ 17). Vivint 23 demanded exorbitant early termination fees from Daniel Thompson, Jae Chong, Marci Hulsey, 24 Cindy Piini, and Genie Hilliard, each who had become dissatisfied with Vivint’s solar service 25 (id. at ¶ 18–21, 23). Phyllis Runyon discovered Vivint had deliberately installed more solar 26 panels than she needed on her roof so they could make her buy more power (id. at ¶ 22). And, 27 Juan Bautista, a native Spanish speaker with virtually no English proficiency, was sold a 1 gave him a translated copy. In 2018, Vivint sent Mr. Bautista a $2,000 bill that ballooned to 2 $18,000 thirty days later (id. at ¶ 24). 3 Plaintiffs filed this putative class action in December 2019, seeking relief from Vivint’s 4 (alleged) unlawful liquidated damages provision and accompanying violations of California’s 5 Consumer Legal Remedies Act and Unfair Competition Law. Mr. Bautista also seeks relief 6 under the California Translation Act. But Vivint’s power-purchase agreement, for most 7 plaintiffs, included an arbitration agreement which governs:

8 [A]ll disputes, claims and controversies arising out of or relating to (i) any aspect of this relationship between You and Us, whether based in contract, tort, statute or 9 any other legal theory; (ii) this Agreement or any other agreement concerning the subject matter hereof; (iii) any breach, default, or termination of this Agreement; 10 and (iv) the interpretation, validity, or enforceability of this Agreement, including the determination of the scope or applicability of this [arbitration agreement]. 11 12 (Dkt. Nos. 22-1 at ¶ 4; 22-5 at ¶ 6(e) (similar)). Additionally, the agreement prohibits class or 13 representative relief in one of two manners:

14 The arbitrator shall not have any authority to (i) entertain a claim, or to award any relief, on behalf of or against anyone other than a named party to the arbitration; 15 or (ii) join any other party to the arbitration.

16 (Dkt. No. 22-5 at ¶ 6(e)), 17 You may bring claims against us only in your individual capacity, and not as 18 plaintiff or class member in any purported class or representative proceeding.

19 (Dkt. No. 22-1 at ¶ 4). Vivint now moves to compel plaintiffs Hilliard (Dkt. No. 22, Exh. A), 20 Hulsey (Exh. B), Bautista (Exh. C), Thompson (Exh. D), Barajas (Bryson) (Exh. E), Chong 21 (Exh. F), Piini (Exh. G), Rogers (Exh. H), and Runyon (Exh. I) to arbitrate, or in the 22 alternative, to dismiss their claims. Vivint also moves separately to dismiss Ms. Dekker’s 23 claims as untimely. This order follows full briefing and oral argument. 24 ANALYSIS 25 1. VIVINT’S MOTION TO COMPEL ARBITRATION. 26 Under the Federal Arbitration Act, a district court determines “whether a valid arbitration 27 agreement exists and, if so, whether the agreement encompasses the dispute at issue.” 1 Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). Here, 2 plaintiffs do not dispute the arbitration agreement covers the consumer protection claims in suit 3 (Dkt. Nos. 22-5 at ¶ 6(e); 22-1 at ¶ 4). Thus, the only issue is whether the arbitration 4 agreement is valid and enforceable. 5 In California, “a law established for a public reason cannot be contravened by a private 6 agreement.” This is no less true where the underlying agreement compels arbitration. “[A] 7 provision in any contract . . . that purports to waive, in all fora, the statutory right to seek 8 public injunctive relief . . . is invalid and unenforceable under California law.” McGill v. 9 Citibank, N.A., 393 P.3d 85, 93–94 (Cal. 2017). 10 Plaintiffs contend that Vivint’s arbitration agreements prevent public injunctive relief and 11 are unenforceable under McGill. For this to be true: (1) plaintiffs’ claims must offer the public 12 injunctive relief contemplated in McGill; and (2) plaintiffs must actually seek such relief. 13 They do. 14 First, in McGill, the California Supreme Court held that “the public injunctive relief 15 available under the UCL [and] the CLRA . . . is primarily for the benefit of the general public.” 16 Id. at 94 (quotation omitted). So, the question here is whether plaintiffs’ claims for unlawful 17 liquidated damages under California Civil Code § 1671(d) and for violation of the California 18 Translation Act are also directed to the public benefit. They are. 19 Public injunctive relief “has the primary purpose and effect of prohibiting unlawful acts 20 that threaten future injury to the general public.” Blair v. Rent-A-Center, Inc., 928 F.3d 819

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Dekker v. Vivint Solar, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/dekker-v-vivint-solar-inc-cand-2020.