On July 19, 2010, we issued an opinion in this case. Cappuccitti v. DirecTV, Inc., 611 F.3d 1252 (11th Cir.2010). We based our decision on our interpretation of the jurisdictional requirements of the Class Action Fairness Act of 2005 ("CAFA"), Pub.L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.), which we have elsewhere called a "statutory labyrinth." Lowery v. Ala. Power Co., 483 F.3d 1184, 1199 (11th Cir.2007). Subsequent reflection has led us to conclude that our interpretation was incorrect. Specifically, CAFA's text does not require at least one plaintiff in a class action to meet the amount in controversy requirement of 28 U.S.C. § 1332(a). Accordingly, we construe both parties' petitions for rehearing en banc to include petitions for panel rehearing,
DirecTV, Inc. ("DirecTV"), a California corporation, is the largest direct-to-home satellite television provider in the United States, beaming a wide variety of programs
On March 6, 2009, Cappuccitti, on behalf of himself and a putative class of DirecTV subscribers in Georgia, brought this action against DirecTV in the United States District Court for the Northern District of Georgia. Although Cappuccitti had not paid the cancellation fee, his complaint sought recovery of the fee in Count I, a claim for "Money Had and Received," and in Count II, a claim for "Unjust Enrichment." In Count III, Cappuccitti sought a declaratory judgment invalidating the cancellation fee on the ground that it is unlawful and therefore unenforceable under Georgia law.
In subpart A., we address the question of whether CAFA afforded the district court subject matter jurisdiction to entertain this class action. Concluding that the court did possess jurisdiction, we address, in subpart B., the question of whether the district court erred in denying DirecTV's motion to compel arbitration.
Under 28 U.S.C. § 1332(d)(2)(A):
A "class action" includes "any civil action filed under rule 23 of the Federal Rules of Civil Procedure or similar State statute or rule of judicial procedure authorizing an action to be brought by 1 or more representative persons as a class action." Id. § 1332(d)(1)(B).
Additionally, the putative class must contain at least 100 members for a district court to exercise subject matter jurisdiction under CAFA. Id. § 1332(d)(5). To determine whether the amount in controversy requirement is met "[i]n any class action, the claims of the individual class members shall be aggregated to determine whether the matter in controversy exceeds the sum or value of $5,000,000, exclusive of interest and costs." Id. § 1332(d)(6).
There is no requirement in a class action brought originally or on removal under CAFA that any individual plaintiff's claim must exceed $75,000. See, e.g., 14AA Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice and Procedure § 3704 (Supp.2010) ("CAFA ... extends federal subject matter jurisdiction to class actions when there is minimal diversity and the total amount in controversy exceeds $5,000,000, exclusive of interest and costs, and provides for aggregation even if no individual class member asserts a claim that exceeds $75,000.").
Applying these requirements to the controversy at hand, it becomes clear that the district court had subject matter jurisdiction as an original matter. Cappuccitti brought the action on behalf of himself and all persons similarly situated pursuant to Rule 23. The putative class exceeded 100 persons,
In sum, Cappuccitti properly requested that the district court certify his proposed class pursuant to Rule 23(c) in order to obtain declaratory and injunctive relief under Rule 23(b)(2) and damages under Rule 23(b)(3).
Contractual disputes between Cappuccitti and DirecTV are subject to binding arbitration
The JAMS Rules in effect at the time the contract was made and when Cappuccitti cancelled his service provide that the arbitrator can award attorney's fees and expenses if allowed by applicable state law, here Georgia law. JAMS Streamlined Arbitration Rules & Procedures 18-19 (2007), available at http://www.jamsadr. com/files/Uploads/Documents/JAMS- streamlined_arbitration_rules-2007.pdf.
Section 9 also states: "Neither you nor we shall be entitled to join or consolidate claims in arbitration by or against other individuals or entities, or arbitrate any claim as a representative member of a class or in a private attorney general capacity."
Under the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., arbitration agreements generally are considered valid and enforceable.
The Georgia law of contracts deems an arbitration clause unenforceable if, "in the light of the general commercial background and the commercial needs of the particular trade or case, the clause[ ] involved [is] so one-sided as to be unconscionable under the circumstances existing at the time of the making of the contract." NEC Techs., Inc. v. Nelson, 267 Ga. 390, 478 S.E.2d 769, 771 (1996) (internal citations omitted) (emphasis added).
Georgia's unconscionability doctrine contemplates both procedural unconscionability, which "addresses the process of making the contract," and substantive unconscionability, which "looks to the contractual terms themselves." Id. (internal citations omitted). When considering procedural unconscionability, the Georgia courts examine "the age, education, intelligence, business acumen and experience of the parties, their relative bargaining power, the conspicuousness and comprehensibility of the contract language, the oppressiveness of the terms, and the presence or absence of a meaningful choice." Id. at 772 (internal citations omitted). As for the substantive element, "courts have focused on matters such as the commercial reasonableness of the contract terms, the purpose and effect of the terms, the allocation of the risks between the parties, and similar public policy concerns." Id. (internal citations omitted). It is obvious from these quotations that resolving the issue of unconscionability under Georgia law is a fact-intensive exercise.
A finding that enforcing a contract provision would be unconscionable is a finding of an ultimate fact; it is inferred from a variety of circumstances depending on the nature of the case.
In the district court, Cappuccitti argued that it would be unconscionable to require him individually to submit his claim that the early cancellation fee is invalid to arbitration for two interrelated reasons. First, he claimed that the amount he could recover in arbitration, $420, would be far less than the expenses he would incur in obtaining the recovery. This was so because his claim was labeled as one for money had and received or for unjust enrichment, and Georgia law did not afford a claimant prevailing on either claim the right to reimbursement for attorney's fees and costs. Second, Cappuccitti argued that his inability to recover attorney's fees and costs in combination with Section 9's bar against consolidating claims for arbitration or pursuing them as a member of a class worked effectively to preclude him from obtaining legal representation. As a result, DirecTV was charging and being paid an invalid cancellation fee with impunity.
The sine qua non of Cappuccitti's argument was, and remains, the unavailability of attorney's fees and costs. DirecTV met the argument head on by drawing the district court's attention to Georgia's Fair Business Practices Act ("FBPA"), O.C.G.A. § 10-1-390 et seq. The FBPA, in O.C.G.A. § 10-1-399(d), provides that
The FBPA, in O.C.G.A. § 10-1-393(a), states that "[u]nfair or deceptive acts or practices in the conduct of consumer transactions and consumer acts or practices in trade or commerce are declared unlawful." DirecTV contended that its practice of charging its subscribers an early cancellation fee clearly involved "consumer transactions" and "practices in ... commerce." And, reduced to its essentials, Cappuccitti's claim was that the early cancellation fee was "[u]nfair or deceptive."
In determining whether requiring Cappuccitti to submit his claim to arbitration would be unconscionable, the district court faced the same question we face here: would it have been be unconscionable "under the circumstances existing at the time of the making of the contract"? NEC Techs., 478 S.E.2d at 771. To answer that question the district court needed to consider all of the remedies available to Cappuccitti under Georgia law at the moment he contracted with DirecTV. The FBPA provided the basis for one of those remedies in O.C.G.A. § 10-1-393(a)—namely, a declaration that the cancellation fee was unfair or deceptive and thus unlawful. The FBPA also authorized, in O.C.G.A. § 10-1-399(d), the recovery of "reasonable attorneys' fees and expenses of litigation." Cappuccitti acknowledged all of this in his memorandum in opposition to DirecTV's motion to compel arbitration. The memorandum stated that he could have "theoretically pleaded" an FBPA claim in his complaint, and "d[id] not deny" that he "purposely did not plead [the FBPA] claim in order to be able to proceed as a class."
According to Cappuccitti, he was "entitled to have DIRECTV's motion evaluated on the basis of his complaint as filed, not based on additional causes of action he could have pleaded." Id. at 18. The district court bought this argument. In doing so, the court disregarded the circumstances prevailing at the time of the contract, and, instead, substituted for those circumstances the circumstances Cappuccitti's attorneys created in limiting their client's remedies to money had and received
The court erred. As Cappuccitti readily conceded in opposing DirecTV's motion to compel arbitration, attorney's fees and litigation expenses would be available to him if he prevailed on the theory that the early cancellation fee is invalid as "[u]nfair or deceptive" under O.C.G.A. § 10-1-393(a). The JAMS Rules provide for the award of attorney's fees and litigation expenses if allowed by state law, and O.C.G.A. § 10-1-399(d) authorizes them.
In light of this, it is apparent that the district court's order denying arbitration must be vacated and the case remanded for further proceedings consistent with this opinion. We therefore VACATE the order and REMAND the case for further proceedings.
9 U.S.C. § 2 (emphasis added).
Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 686, 116 S.Ct. 1652, 1655, 134 L.Ed.2d 902 (1996) (quoting Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265, 281, 115 S.Ct. 834, 843, 130 L.Ed.2d 753 (1995)). In Doctor's Associates, the Court mentioned "unconscionability" as a typical contract law basis for declining to enforce an arbitration agreement. 517 U.S. at 687, 116 S.Ct. at 1656.
Presumably, Cappuccitti could have brought suit under this provision if he had cause to believe that DirecTV intended to act unfairly or deceptively in inserting the early cancellation fee into the Customer Agreement. A showing of intent, however, is not required to prevail on all FBPA claims. See O.C.G.A. § 10-1-399(a).
Although we need not decide the issue, it appears that a cause of action for money had and received is not available in this case because the dispute at issue arises out of an express contract, the Customer Agreement.
Morris v. Britt, 275 Ga.App. 293, 620 S.E.2d 422, 424 (2005) (internal quotations and citations omitted); see also Tuvim v. United Jewish Cmtys., Inc., 285 Ga. 632, 680 S.E.2d 827, 829-30 (2009) (quoting Engram v. Engram, 265 Ga. 804, 463 S.E.2d 12, 15 (1995)) ("Unjust enrichment applies when as a matter of fact there is no legal contract, but when the party sought to be charged has been conferred a benefit by the party contending an unjust enrichment which the benefitted party equitably ought to return or compensate for."). As we observed in note 20, supra, the dispute here arises out of an express contract, not a quasi contractual obligation.