Ronald Andermann v. Sprint Spectrum

785 F.3d 1157, 62 Communications Reg. (P&F) 1041, 2015 U.S. App. LEXIS 7727, 2015 WL 2167846
CourtCourt of Appeals for the Seventh Circuit
DecidedMay 11, 2015
Docket14-3478
StatusPublished
Cited by12 cases

This text of 785 F.3d 1157 (Ronald Andermann v. Sprint Spectrum) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ronald Andermann v. Sprint Spectrum, 785 F.3d 1157, 62 Communications Reg. (P&F) 1041, 2015 U.S. App. LEXIS 7727, 2015 WL 2167846 (7th Cir. 2015).

Opinion

POSNER, Circuit Judge.

Sprint, the defendant, appeals from the denial by the district court of its motion under 9 U.S.C. § 4 to order arbitration of a class action suit brought against it by the Andermanns for alleged violation of the Telephone Consumer Protection Act, 47 U.S.C. § 227. Interlocutory appeals from denials of motions to order arbitration are authorized by 9 U.S.C. § 16(a)(1)(B).

*1158 The Andermanns had obtained mobile phone service from U.S. Cellular in 2000 under a renewable two-year contract that was renewed for the last time in 2012. The contract included an arbitration clause which provided that “any controversy or claim. arising out of or relating to this agreement [i.e., the contract for mobile phone service] shall be resolved by binding arbitration” and that “this arbitration agreement survives the termination of this service agreement.”

The contract also provided that “U.S. Cellular may assign this Agreement [again, the service contract] without notice to you,” “you” being the customer. And in May of the following year (2013) U.S. Cellular did just that — it sold the Andermanns’ service contract, complete with the arbitration clause, to Sprint, without notice to the Andermanns. Several months later Sprint sent a letter to them informing them of the sale and that their mobile service would be terminated on January 31 of the following year (2014). The reason given in the letter was that some of U.S. Cellular’s cellphones — including the Andermanns’ — were not compatible with Sprint’s network, and so the Andermanns would either have to get new cellphones or obtain their mobile phone service from another company. The letter added that Sprint was offering attractive substitutes for the terminated service and gave the recipients of the letter a Sprint phone number to call if they were interested in the offers or devices.

In December Sprint phoned the Andermanns to remind them that their service was about to expire, and added that Sprint had “a great set of offers and devices available to fit [their] needs.” Sprint made six such calls (three to each of the Andermanns), all to no avail — for all were made within a month after the Andermanns had signed on with another mobile service provider.. And anyway the Andermanns answered none of the calls; instead they brought this suit, contending that the unsolicited advertisements contained in the calls violated the Telephone Consumer Protection Act. Sprint responded by asking the district court to order arbitration, on the ground that the service contract renewed in 2012 that the Andermanns had signed required that the dispute kicked off by their suit be decided by an arbitrator, because the dispute arose out of and thus related to that contract. Although the contract had been between U.S. Cellular and the Andermanns rather than between Sprint and them, by virtue of the assignment to Sprint (and remember that the Andermanns had consented in their contract with U.S. Cellular to its assigning the contract without notice to them), Sprint had stepped into U.S. Cellular’s shoes.

The Andermanns point out that the actual assignee was Sprint Solutions, Inc., rather than the defendant in this suit, Sprint Spectrum L.P., and they argue that because Sprint Spectrum, though of course an affiliate of Sprint Solutions, is not the assignee it can’t require them to arbitrate their dispute with it. The argument has no merit. For reasons that the Andermanns have not shown to have any connection to the parties’ dispute, Sprint Solutions was designated to be Sprint Spectrum’s agent to hold the contracts assigned to Sprint by U.S. Cellular, including therefore the Andermanns’ contract.

■ The district court ruled for the Andermanns but on a different ground — that since Sprint’s contract with them terminated before the phone calls that are the basis of this lawsuit, the dispute over the legality of the calls could not have arisen from or related to the contract. Actually there’s an intimate relation. The contract authorized an assignment, and because of the incompatibility of the assignor’s (U.S. *1159 Cellular’s) cellphones and the assignee’s (Sprint’s) mobile phone network, Sprint had had to terminate the U.S. Cellular customers, such as the Andermanns, whom it had acquired by virtue of the assignment; for they could not use their cellphones without switching to a different network. It was to prevent the loss of all these customers because of the incompatibility that Sprint had told them in the calls that it could offer them a substitute service. The calls gave rise to the dispute; and so the Andermanns were required to arbitrate the dispute.

Against this conclusion, which is strongly supported by this court’s decision in Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int'l Ltd., 1 F.3d 639 (7th Cir. 1993), the Andermanns offer an untenable interpretation of our decision in Smith v. Steinkamp, 318 F.3d 775, 777 (7th Cir. 2003). They say we said “that allowing the arbitration clause in the payday loan agreement to apply to statutory. and tort claims arising after the transactions regarding that loan were completed would lead to ‘absurd results.’ ” The quotation is from the Andermanns’ brief; the only term quoted from the Smith opinion is “absurd results.” What we said, which differs totally from the Andermanns’ characterization of what we said, is that “absurd results” would ensue if the arising-from and relating-to provisions contained in a payday loan agreement, defining what disputes would have to be arbitrated rather than litigated, were cut free from the loan and applied to a subsequent payday loan agreement that did not contain those provisions. See id. at 776-77. That is not this case. The Andermanns’ contract, containing the arising-out-of or relating-to provisions, is a single contract.

Sprint gilds the lily, however, in telling us that arbitration is a darling of federal policy, that there is a presumption in favor of it, that ambiguities in an arbitration clause should be resolved in favor of arbitration, and on and on in this vein. It’s true that such language (minus the “darling”) appears in numerous cases. E.g., Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1, 24-25, 103 S.Ct. 927, 74 L.Ed.2d 765 (1983); Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907, 909 (7th Cir.1999). But the purpose of that language is to make clear, as had seemed necessary because of judges’ historical hostility to arbitration, that arbitration was no longer to be disfavored — especially in labor cases, see, e.g., Granite Rock Co. v. International Brotherhood of Teamsters, 561 U.S. 287, 298-99, 130 S.Ct. 2847, 177 L.Ed.2d 567 (2010), where arbitration is now thought a superi- or method of dispute resolution to litigation.

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Bluebook (online)
785 F.3d 1157, 62 Communications Reg. (P&F) 1041, 2015 U.S. App. LEXIS 7727, 2015 WL 2167846, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ronald-andermann-v-sprint-spectrum-ca7-2015.