Antitrust Law Daily Wrap Up, CONSUMER PROTECTION—9^th Cir.: Consumers may not immediately appeal order staying judicial proceedings and compelling arbitration in claims against credit monitoring service, (Mar 21, 2014)

By Linda O’Brien, J.D., LL.M.

In a series of class action suits against a credit monitoring service for allegedly engaging in deceptive trade practices, a group of consumers was barred from appealing the district court order staying judicial proceedings and compelling arbitration of their individual claims, the U.S. Court of Appeals in San Francisco has ruled. Accordingly, the consumers’ appeals were dismissed (Johnson v. ConsumerInfo.com, Inc., March 20, 2014, Per Curiam.).

In Internet transactions, four consumers purchased a credit reporting subscription from ConsumerInfo.com, a credit monitoring service. Terms and conditions of the subscription included a clause required arbitration of all claims and disputes. The consumers each filed a putative class action suit against ConsumerInfo.com, alleging that the company engaged in deceptive trade practices in violation of California consumer protection laws. ConsumerInfo.com moved to compel arbitration. The district court stayed the actions, compelled individual arbitration of each consumer’s claims, and denied the motion for class certification. The court determined that the consumers assented to the arbitration agreements, ConsumerInfo.com did not commit fraud in the execution, and fraud in the inducement defense must be resolved in arbitration. The consumers appealed.

The court found that the sole route for an immediate appeal of an order staying judicial proceedings and compelling arbitration was 28 U.S.C. §1292(b). Under 9 U.S.C. §16, an appeal may not be taken from an interlocutory order requiring arbitration or staying judicial proceedings. However, appellate jurisdiction is preserved over orders certified under §1292(b). In rejecting the consumers’ contention that the district court order could be deemed “final” under the collateral order doctrine, the court looked to the design of the statute as a whole and determined that Congress intended to remove appellate jurisdiction from all orders, regardless of whether the orders could be deemed collateral.

The case is No. 11-56520.

Attorneys: Vincent J. Esades (Steiner, Heins, Mills & Olson, P.L.C) and Gretchen M. Nelson (Kreindler & Kreindler, LLP) for James Johnson, Steven Grosz, Deon Bird and David Waring. Meir Feder (Jones Day) for ConsumerInfo.com, Inc.

Companies: ConsumerInfo.com, Inc.

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