West Waters v. Earthlink, Inc.

Not for publication in West's Federal Reporter
Citation Limited Pursuant to 1st Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 02-1385
WEST WATERS,
Plaintiff, Appellee,
v.
EARTHLINK, INC., and ONEMAIN.COM, INC.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Robert E. Keeton, U.S. District Judge]
Before
Selya, Circuit Judge,
Farris,* Senior Circuit Judge,
and Howard, Circuit Judge.
Christopher F. Robertson, with whom Brian E. Pastuszenski,
Colleen M. Geary, and Testa, Hurwitz & Thibeault, LLP were on
brief, for appellants.
Bruce A. Bierhans, with whom Law Office of Bruce A. Bierhans,
Carlin J. Phillips and Phillips & Garcia, LLP were on brief, for
appellee.
October 31, 2003
*Of the Ninth Circuit, sitting by designation.
Per Curiam. This putative class action suit arises out
of plaintiff West Waters' complaints about allegedly poor internet
service. Defendants-appellants Earthlink, Inc., and OneMain.com,
Inc., appeal the district court's refusal to dismiss or stay the
action pending arbitration.
Plaintiff is an individual who resides in Wellfleet,
Massachusetts, and was a customer of a local internet service
provider (ISP) that was acquired by OneMain in 1999. In September
2000, OneMain became a wholly owned subsidiary of Earthlink.
Plaintiff brought a state court action alleging that, following
OneMain's acquisition of the ISP with whom he had originally
contracted, OneMain (and then Earthlink) breached their assumed
agreement(s) to provide him with adequate internet services and
committed unfair or deceptive trade practices in violation of Mass.
Gen. Laws chapter 93A.
Defendants removed the case to the district court on the
basis of diversity jurisdiction and thereafter moved to dismiss or
stay it pending arbitration pursuant to the Federal Arbitration
Act, 9 U.S.C. § 3. The district court denied the order without
prejudice and permitted discovery to proceed because, in its view,
defendants had not established that plaintiff had in fact agreed to
arbitrate any disputes he might have with them. Defendants have
taken an immediate appeal from the district court's order under 9
U.S.C. § 16(a)(1)(C), see Intergen N.V. v. Grina, No. 03-1056, 344
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F.3d 134, 140 (1st Cir. 2003), arguing that the district court
erred in (1) concluding that they had not established the existence
of a binding agreement to arbitrate between themselves and
plaintiff, and (2) ordering unlimited discovery. Even assuming we
have jurisdiction to address it (an issue ignored by the parties),
defendants' second argument was not made with sufficient
specificity in the district court to preserve it for appellate
review. See United States v. Frisby, 258 F. 3d 46, 48 (1st Cir.
2001). Accordingly, we proceed directly to the merits of their
first appellate argument.
Our review of the record convinces us that the district
court's conclusion was sound. In support of their motion,
defendants submitted a copy of a OneMain license and service
agreement that contains an arbitration provision which purports to
bind its customers, and an affidavit stating that links to the
agreement were placed on the web site of both the ISP with whom
plaintiff had contracted and OneMain's own website. Conspicuously
absent, however, is any convincing explanation why we should
conclude that plaintiff should have seen these links. Nor is there
other compelling evidence that plaintiff was, or should have been,
on notice that he was bound to arbitrate any dispute he might have
with OneMain. Were OneMain customers only able to access the
internet through these websites? How prominently were the links
displayed? How were they labeled or explained? None of these
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potentially relevant issues is answered by the record. And absent
a showing that it is reasonable to assume that plaintiff would have
seen the links, we are at a loss to see how he could be found to
have agreed to arbitrate any disputes with defendants.
Even more fundamentally, we have serious doubts that this
case meets the amount-in-controversy requirement of 28 U.S.C. §
1332, the basis on which it was removed. While we recognize that
dismissal for failure to establish the amount-in-controversy
requirement (here, more than $75,000) is appropriate only if the
court is satisfied to a legal certainty that plaintiff is not
entitled to recover from defendants the jurisdictional minimum,
see, e.g., Spielman v. Genzyme Corp., 251 F.3d 1, 5 (1st Cir.
2001), we do not presently see how plaintiff's actual damages, even
if multiplied under ch. 93A, could approach such a figure.1 After
all, the amount-in-controversy must be satisfied independent of
other plaintiffs' claims or any attorneys' fees to which the class
may be statutorily entitled. See id. at 7-10.
Because the district court is better situated to resolve
any amount-in-controversy issue, we are content for present
purposes simply to raise it.2 For the reasons set forth above, we
1
We note that the furniture company that plaintiff owns, and
which allegedly was harmed by defendants' lapses, is not a named
plaintiff.
2
The district court has, of course, authorized full discovery,
and that may shed light on the amount actually in controversy.
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affirm the denial without prejudice of defendants' motion to
dismiss or stay.
Affirmed.
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