Ramsey v. Comcast Cable Commc'n

317 Cal.Rptr.3d 561

Charles RAMSEY, Plaintiff and Respondent,

v.COMCAST CABLE COMMUNICATIONS, LLC, Defendant and Appellant.

H049949

Court of Appeal, Sixth District.

Filed December 29, 2023

Trial Court: Santa Clara County Superior Court, Superior Court No.: 21CV384867, Trial Judge: The Honorable Patricia M. Lucas, (Santa Clara County Super. Ct. No. 21CV384867)

Daniel S. Jonathan, Freeman, Freeman & Smiley, 1888 Century Park E, Ste 1500, Los Angeles, CA 90067-1719, Bevin Elaine Pike, Trisha Kathleen Monesi, Ryan Hung-Hsi Wu, Liana Carol Carter, Capstone Law APC, 1875 Century Park E Ste 1000, Los Angeles, CA 90067-2533, for Plaintiff and Respondent.

Aileen Marie McGrath, Michael Weisbuch, Marshall Lee Baker, Akin Gump Strauss Hauer & Feld LLP, 100 Pine Street, Suite 3200, San Francisco, CA 94111, for Defendant and Appellant.

Greenwood, P. J.

Charles Ramsey subscribes to Comcast Cable Communications, LLC’s (Comcast) Xfinity services. Ramsey sued Comcast for violations of California’s consumer protection statutes, alleging that Comcast en- gaged in unfair, unlawful, and deceptive business practices under the Consumers Legal Remedies Act (CLRA) and the unfair competition law (UCL). Ramsey’s complaint sought injunctive relief. Comcast filed a petition to compel arbitration pursuant to the arbitration provision in the parties’ subscriber agreement. The trial court denied the petition based on the Supreme Court’s decision in McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 216 Cal. Rptr.3d 627, 393 P.3d 85 (McGill), which held that a predispute arbitration provision that waives a plaintiff’s right to seek public injunctive relief in any forum is "contrary to California public policy and is thus unenforceable under California law." (Id. at p. 951, 216 Cal.Rptr.3d 627, 393 P.3d 85.) Because the arbitration provision in Comcast’s subscriber agreement required the parties to arbitrate all disputes and permitted the arbitrator to grant only individual relief, the trial court held that the provision waived Ramsey’s right to seek public injunctive relief in any forum. Further concluding that Ramsey’s complaint sought public injunctive relief, the court held the arbitration provision to be unenforceable.

On appeal, Comcast argues that the trial court erred in concluding that Ramsey was seeking public injunctive relief. Comcast contends that the requested injunction was private because it would benefit only a subset of Comcast subscribers. Comcast further argues that the Federal Arbitration Act (FAA) preempts McGill. Concluding that Ramsey’s complaint seeks public injunctive relief, and that McGill is not preempted, we affirm the trial court’s order.

I. Factual and Procedural Background¹

Comcast designs, operates, markets, and sells its Xfinity cable television, internet, home telephone, and related subscription services to millions of consumers in California and nationwide. Ramsey has been a subscriber to Comcast’s services since 2009. When Ramsey initially signed up for services, Comcast offered him a "limited time promotional rate" and represented that it would last for approximately one year from the date the subscription began, after which, the price of the subscription would increase.

When Ramsey’s promotional rate for Comcast’s services was nearing its initial expiration, he determined that he was not willing to pay the additional price increase to maintain his subscription, and contacted Comcast to discuss cancelling his service. Upon speaking to a customer service representative regarding the cancellation, Ramsey was "instead offered additional channels, faster internet speed, and additional services at a premium cost." Ramsey expressed his lack of interest in the upgraded packages and indicated he was only willing to continue purchasing Comcast’s most basic subscription package. After some discussion, the customer service representative eventually offered Ramsey a "new" limited-time promotion, consisting of "similar, if not identical services to what [Ramsey] had been receiving, at a cost comparable to the current promotional rate he was being charged." The customer service representative again informed Ramsey that this promotional rate would expire in approximately one year.

Each year since then, Ramsey has contacted Comcast near the conclusion of his promotional period to discuss pricing options. Each year, Comcast’s customer service representative has "miraculously come up with a ‘new’ comparable promotional package" to offer Ramsey. Comcast does not contact Ramsey to inform him that his promotional period is about to expire, nor offer him any new and comparable promotions "unless and until he contacts [Comcast]." Each time, the new promotional rate Ramsey is offered has "arbitrarily varied," but is always less than the non-promotional rate he would otherwise pay if he did not reach out to Comcast.

A. Ramsey’s Complaint for Violations of the CLRA and UCL

In 2021, Ramsey filed a complaint against Comcast in superior court, alleging violations of the CLRA and UCL. Ramsey’s complaint sets forth four causes of action. The first cause of action alleges a violation of the CLRA, which prohibits "unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer." (Civ. Code, § 1770, subd. (a).) In connection with this cause of action, Ramsey alleges that by "failing to disclose to [Ramsey] and concealing the existence of, and true and actual reasons for, Xfinity subscription service pricing, Defendants violated [the CLRA], as they misrepresented the reasons for, existence of, or amounts of, price reductions with respect to their services." For this cause of action, Ramsey seeks "public injunctive relief enjoining Defendants’ unfair or deceptive acts or practices and correcting all false and misleading statements and material omissions concerning pricing models, reasons for changes in pricing, and the availability of discounts, to prevent future injury to the general public."

Ramsey’s second cause of action alleges a violation of the UCL’s prohibition against unfair business practices. According to the complaint, "[Ramsey] purchased Defendants’ services at costs he reasonably believed to be the accurate, true, and the actual price of those services, when in fact, Defendants have and continue to offer secret and unearned discounts on their services to select consumers, and concealing the existence and amount of these discounts to the general public." This practice of "issuing secret rebates constitutes an unfair business practice in violation of California Business and Professions Code section 17200, et seq."² For this cause of action, Ramsey seeks a "permanent injunction requiring Defendants to halt their practice of issuing secret discounts."

Ramsey’s third cause of action alleges a violation of section 17045, which falls under the UCL’s prohibition against unlawful business practices. Section 17045 provides that the "secret payment or allowances of rebates, refunds, commissions, or unearned discounts … to the injury of a competitor and where such payment or allowance tends to destroy competition, is unlawful." (§ 17045.) In this cause of action, Ramsey seeks "public injunctive relief and declaratory relief enjoining Defendants’ unfair or deceptive acts or practices to prevent injury to the general public."

Ramsey’s fourth cause of action seeks declaratory and injunctive relief for the aforementioned law violations. In connection with this cause of action, Ramsey requests that the court adjudicate and declare that, (1) Ramsey has a right to view and rely upon truthful advertising, (2) that Comcast has an obligation to "ensure all of their advertisements and related statements and representations are truthful, complete, and not misleading," (3) that Comcast not issue "secret and earned [sic] discounts to select consumers," and (4) that Comcast has an obligation to "train their personnel not to misrepresent Defendants’ services and pricing and to present consumers with truthful, complete and accurate information." Ramsey also seeks "related injunctive relief that requires Defendants to comply with their legal obligations and utilize only truthful and complete advertisements, statements, and representations, and ensure consumers are aware of any and all price reductions and rebates Defendants seek to grant to consumers."

In his prayer for relief, Ramsey seeks a "declaration requiring Defendants to comply with the various provisions of the CLRA and UCL alleged herein," and an order "enjoining Defendants from continuing their unlawful and unfair business practices." Though Ramsey alleges that he had suffered "an ascertainable loss of money, including … out of pocket costs incurred in paying nonpromotional rates when he did not immediately contact [Comcast] to obtain new promotional pricing," he does not seek monetary damages but only declaratory and injunctive relief, and an award of costs and attorney’s fees.

B. Comcast’s Petition to Compel Arbitration

Comcast sought to compel arbitration. In the petition, Comcast argued that Ramsey has continuously accepted the terms of Comcast’s subscriber agreements, which has contained an arbitration provision since 2011. Comcast asserted that the trial court should compel arbitration based on the subscriber agreement included in Ramsey’s May 2021 bill (the 2021 subscriber agreement), which provided that any "Dispute" between the parties "shall be resolved through individual arbitration." The 2021 subscriber agreement also included a waiver of all class, collective, and representative claims, providing that "[t]he arbitrator may award injunctive relief only in favor of the individual party seeking relief and only to the extent necessary to provide relief warranted by that individual party’s claim, and the arbitrator may not award relief for or against or on behalf of anyone who is not...