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Buren v. Pro Se Planning, Inc.

United States District Court, E.D. Louisiana

November 18, 2014



IVAN L.R. LEMELLE, District Judge.

Before the Court is Defendant's, Pro Se Planning, Inc. ("Defendant"), Motion to Compel Arbitration, or Alternatively, Motion to Dismiss Pursuant to Fed.R.Civ.P. 12(b)(3), or Alternatively, to Transfer Pursuant to 28 U.S.C. §1404(a) (Rec. Doc. 7); Plaintiff's, Latoisha Van Buren ("Plaintiff") opposition thereto (Rec. Doc. 11); and Defendant's Reply (Rec. Doc. 15). Defendant seeks recognition of the enforceability of an alleged arbitration agreement contained in a contract executed with Plaintiff as well as order of this Court dismissing or staying the instant proceedings pending arbitration of this dispute. Alternatively, in the event the Court finds the alleged arbitration agreement unenforceable, Defendant seeks dismissal or transfer of this dispute, pursuant to the terms of a forum selection clause contained in the subject contract designating the state or federal courts of Washington as the venue for disputes arising out of the contract.

Facts and Cause of Action:

Defendant is a Washington corporation that produces a website through which various services are offered to assist individuals in completing the documentation necessary to achieve their own divorces. (See Rec. Doc. 7-1 at 1).[1] In August of 2014, Plaintiff, a Louisiana resident, sought to obtain a petition for divorce and visited Defendant's website, located at ", " to that end. (Rec. Doc. 1-1 at 4). On Defendant's website, Plaintiff filled out an online questionnaire relating to her marital status and contracted for the preparation of various legal documents, ostensibly based on her responses to these questions, for which she paid the sum of approximately $149.00. (Rec. Doc. 1-1 at 4). Although the record does not reflect Plaintiff's success in the pursuit of her divorce, her subsequent initiation of the instant putative class action suggests unsuitable results. Plaintiff filed the instant suit in state court in Louisiana on August 13, 2014, seeking recovery of the fees paid by her and all those similarly situated to Defendant. (Rec. Doc. 1-1 at 3). Plaintiff alleges in her putative class action that Defendant is engaged in the unauthorized practice of law in Louisiana, pursuant to La. Rev. Stat. ann. 37:212(A), thereby rendering the contract contrary to public policy and absolutely null. (Rec. Doc. 1-1 at 5-7). Defendants removed the action to this Court on the basis of diversity jurisdiction and subsequently filed the present motion seeking enforcement of an arbitration provision contained in the Terms of Use to which Plaintiff allegedly agreed to be bound in executing her contract with Defendant.

Contentions of Movant:

Defendant argues, first, that the Terms of Use ("TOU") incorporated into its contract with Plaintiff include a binding arbitration agreement which requires the parties to resolve the instant dispute through arbitration. Thus, Defendant moves this Court to dismiss the instant proceedings, or, at the very least, to stay them pending resolution by arbitration.

Alternatively, Defendant contends the forum selection clause included in the TOU designates the exclusive venue for any dispute arising out of or pertaining to the subject matter of the TOU to be state or federal court in Washington. Accordingly, to the extent the Court might find the arbitration agreement (or portions thereof) unenforceable, Defendant argues this Court must dismiss the instant action for improper venue, or alternatively, transfer the matter to the appropriate federal district court in the state of Washington for further consideration.

Contentions of Opponent:

Plaintiff opposes arbitration on four grounds. First, Plaintiff argues the arbitration agreement at issue here violates the "effective vindication" doctrine sanctioned by the United States Supreme Court in cases such as Mitsubishi Motors Corp. v. Soler Chrylser-Plymouth, Inc., 473 U.S. 614, 636-37, 105 S.Ct. 3346, 3360, 87 L.Ed.2d 444 (1985) and Green Tree Fin. Corp.-Alabama v. Randolph., 531 U.S. 79, 91-92, 121 S.Ct. 513, 522-23, 148 L.Ed.2d 373 (2000). This, Plaintiff argues, is because the cost of arbitration is likely to far exceed the amount of any potential recovery, thereby operating as an impermissible liability shield for Defendant. Second, Plaintiff argues the arbitration clause is unenforceable as illusory because Defendant has retained the right to unilaterally alter the terms of the agreement at any time without notice to Plaintiff. Third, Plaintiff argues there is no applicable arbitration agreement at all, because the alleged agreement to arbitrate is part of a broader contract that is contrary to public policy and void ab initio. Finally, Plaintiff argues the alleged arbitration agreement is unenforceable on grounds of unconscionability, based primarily on its physical appearance (i.e., that it was concealed) and also on the lack of mutuality in terms of its enforcement.

With respect to the forum selection clause ("FSC") discussed supra, Plaintiff makes the following arguments. First, Plaintiff contends the clause is inapplicable in light of its inclusion in a broader contract that is void ab initio. Second, Plaintiff argues the FSC violates the terms of 28 U.S.C. §1404(a) (the federal venue transfer statute) by failing to indicate to which specific court's jurisdiction the parties allegedly consented for purposes of venue ( i.e., that the clause fails by designating the state or federal courts of Washington). Finally, similarly as with the arbitration clause, Plaintiff argues the FSC is unenforceable due to Defendant's alleged unilateral right to alter the terms of the agreement as well as the concealment and lack of mutuality relating to the TOU generally.

Law and Analysis:

Section 2 of the Federal Arbitration Act ("FAA") provides:

A written provision in... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. §2.[2] It is trite law at this point that §2 reflects a "liberal federal policy favoring arbitration" and "the fundamental principle that arbitration is a matter of contract." AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740, 1745, 179 L.Ed.2d 742 (2011)(internal citations omitted). Accordingly, courts must enforce arbitration agreements according to their terms, except "upon such grounds as exist at law or in equity for the revocation of any contract." Concepcion, 131 S.Ct. at 1746. Arbitration agreements may be invalidated only by "generally applicable contract defenses, such as fraud, duress, or unconscionability, " which are, in turn, determined according to applicable state contract law. Id.; accord Washington Mut. Fin. Co. v. Bailey, 364 F.3d 260, 264 (5th Cir. 2004)(because the ...

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