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Blair v. Rent-A-Center, Inc.

United States District Court for the Northern District of California

October 3, 2017, Decided; October 3, 2017, Filed

No. C 17-02335 WHA

Opinion

AMENDED ORDER RE MOTION TO COMPEL ARBITRATION, STRIKE CLASS ACTION CLAIMS, AND STAY PROCEEDINGS

INTRODUCTION

In this putative consumer class action, defendant corporations move to compel arbitration, stay court proceedings, and strike class action claims. Plaintiffs oppose. For the reasons herein, defendants' motion to compel arbitration is Granted in part and Denied in part.  [*2] Defendants' motion to stay is Denied.

STATEMENT

This action arises from rent-to-own agreements, which plaintiffs Paula Blair, Andrea Robinson, and Falechia Harris contend set prices in excess of the maximum installment payment rates allowable under California law.

Defendants Rent-A-Center, Inc., and Rent-A-Center West, Inc. (collectively "RAC") own and manage rent-to-own stores throughout California, which rent household merchandise (e.g., appliances, electronics, furniture) to consumers for a weekly, bi-weekly, or monthly fee. After a specified time period, if all payments have been made the consumer will own the merchandise. These agreements also set forth a cash price at which consumers can purchase the item outright before the rent-to-own period has ended (Sec. Amd. Compl. ¶¶ 11-13).

The terms of these rent-to-own agreements are set forth in written contracts between the consumer and RAC, which are signed by the consumer at the point of sale. The consumer is also given a separate arbitration agreement when she makes a purchase, which she is likewise asked to sign (id. ¶¶ 11-13, 59).

Plaintiff Blair signed an arbitration agreement in connection [*3]  with her 2015 purchase of a window-unit air conditioner, which is the document from which RAC's motion to compel arbitration arises. RAC has not been able to locate signed arbitration agreements for either of the other two named plaintiffs, and they are therefore not subject to the motion to compel. Moreover, plaintiff Blair entered into a second agreement with RAC in 2016, but in connection with that purchase opted out of arbitration, so that agreement is likewise not subject to RAC's motion to compel (id. ¶¶ 41, 47, 59-64, 68-69; Exhs. 30; Dkt. No. 54 at 1).

Blair's 2015 arbitration agreement provided that either party may elect to arbitrate "claims arising under, arising out of, or relating in any way to any Consumer Contract," or "claims that are based on any legal theory whatsoever, including . . . any statute, regulation or ordinance" (Dkt. No. 22-1 ¶ B). In a subsection entitled "Requirement of Individual Arbitration" the agreement provided that, in the event arbitration is selected, it "shall be conducted on an individual basis" and that "[t]here will be no right or authority for any dispute to be brought, heard, or arbitrated as a class, collective, mass, private attorney general, [*4]  or representative action" (id. ¶ D). The agreement delegated interpretation of the validity of the paragraph requiring individual arbitration to a court, and provided that "any such court challenge shall be governed by the law of the customer's mailing address" — here, California law (ibid.; Sec. Amd. Compl. ¶ 3). "If there is a final judicial determination that applicable law precludes enforcement of [the individual arbitration paragraph's] limitations as to a particular claim for relief, then that claim (and only that claim) must be severed from the arbitration and may be brought in court" (Dkt. No. 22-1 ¶ D).

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2017 U.S. Dist. LEXIS 163979 *; 2017 WL 4805577

PAULA BLAIR, ANDREA ROBINSON, and FALECHIA HARRIS, individually and on behalf of all others similarly situated, Plaintiffs, v. RENT-A-CENTER, INC., a Delaware corporation, RENT-A-CENTER WEST, INC., a Delaware corporation, and DOES 1-50, inclusive, Defendants.

Subsequent History: As Amended October 25, 2017.

Decision reached on appeal by, Appeal dismissed by, in part Blair v. Rent-A-Center, Inc., 928 F.3d 819, 2019 U.S. App. LEXIS 19476 (9th Cir. Cal., June 28, 2019)

Prior History: Blair v. Rent-A-Center, Inc., 2017 U.S. Dist. LEXIS 144389 (N.D. Cal., Sept. 6, 2017)

CORE TERMS

arbitration, injunctive relief, injunction, arbitration agreement, consumer, Karnette Rental-Purchase Act, contracts, invalid, motion to compel arbitration, unenforceable, preempted, argues, parties, waived, public purpose, class action