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IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
EILEEN CARR, CLAYTON KOLB,
SAMUEL STANTON, JANE DOE I,
JANE DOE II, and JANE DOE III, on
behalf of themselves and all others
similarly situated,
Plaintiffs,
v.
GRAND CANYON UNIVERSITY,
INC., and GRAND CANYON
EDUCATION, INC. d/b/a GRAND
CANYON UNIVERSITY,
Defendants.
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CIVIL ACTION FILE
NO. 1:19-cv-01707
GRAND CANYON UNIVERSITY, INC. AND GRAND CANYON
EDUCATION, INC.’S MEMORANDUM IN SUPPORT OF THEIR
MOTION TO COMPEL ARBITRATION
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 1 of 24
Pursuant to the Federal Arbitration Act (“FAA”) 9 U.S.C. §§ 2-4, Defendants
Grand Canyon University, Inc.1 and Grand Canyon Education, Inc. (collectively,
“Defendants”) move for an Order: (i) compelling Plaintiffs Eileen Carr and Samuel
Stanton2 to individually arbitrate their claims as required by their arbitration
agreement with GCU; and (ii) dismissing Plaintiff Carr’s and Plaintiff Stanton’s
claims or, in the alternative, staying this litigation until arbitration is complete.
Defendants’ Motion to Compel Arbitration should be granted because Plaintiffs Carr
and Stanton are contractually required to individually arbitrate, rather than litigate
in court, their claims against Defendants.
1 The Complaint improperly names Grand Canyon University, Inc. as a
Defendant. Grand Canyon Education, Inc. d/b/a Grand Canyon University was
the legal entity that provided educational services to Plaintiffs. During the
timeframe of the events alleged in the Complaint, Grand Canyon Education, Inc.
d/b/a Grand Canyon University operated as a comprehensive, regionally
accredited university. On July 1, 2018, Grand Canyon Education, Inc. sold the
educational assets of Grand Canyon University, along with its name, to a
standalone, nonprofit organization that simultaneously changed its name to
Grand Canyon University. As such, beginning July 1, 2018, Grand Canyon
University operates as a standalone, nonprofit comprehensive, regionally
accredited university that is separate and distinct from Grand Canyon Education,
Inc.
2 The anonymous Plaintiffs are also likely required to arbitrate their claims against
Defendants as well. The Court cannot, however, make that determination because
those Plaintiffs have kept their identity a secret. In addition to the reasons set
forth in GCU’s Motion to Dismiss, this is another reason it is improper for the
unnamed Plaintiffs to pursue their claims anonymously.
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INTRODUCTION
In their Class Action Complaint, Carr and Stanton (“Plaintiffs”) assert claims
for breach of contract, fraud, intentional misrepresentation, unjust enrichment, and
declaratory judgment based on their enrollment in Grand Canyon University’s
(“GCU”) College of Doctoral Studies. Plaintiffs contend that GCU has designed its
dissertation program so that doctoral studies students cannot complete the program
and earn their degrees in 60 credit hours, despite purported representations and
contractual obligations to the contrary. (Complaint, Dkt. No. 1-1) (“Compl.”). Both
Plaintiffs, however entered into written arbitration agreements with GCU that
require them to individually arbitrate the claims they attempt to assert in this
litigation.
Defendants’ Motion to Compel Arbitration should be granted because:
Plaintiffs agreed to arbitrate their disputes with GCU. Plaintiffs’ claims
fall squarely within the scope of the arbitration clause in their
agreements, which encompasses “any dispute between” GCU and
Plaintiffs, including “any dispute arising from” Plaintiffs’ enrollment at
GCU, “no matter how [that dispute] is described, pleaded, or styled.”
(See Declaration of Kathleen Hall, attached as Exhibit A, ¶¶ 19, 22 )
(“Hall Decl.”)
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The arbitration agreements expressly incorporate the American
Arbitration Association’s (“AAA”) Consumer Rules, and thus,
Plaintiffs agreed that any issue of arbitrability would be delegated to
and decided by the arbitrator. Therefore, not only Plaintiffs’ claims,
but any issues of the validity or scope of the arbitration agreement, must
be submitted to the arbitrator.
Even if this Court were to address issues of arbitrability, Defendants’
Motion should still be granted because Plaintiffs’ claims in this
litigation fall within the scope of their arbitration agreements.
Specifically, all of Plaintiffs’ claims relate to their enrollment at GCU
in the College of Doctoral Studies. Thus, these claims fall squarely
within the scope of their agreements to arbitrate.
Furthermore, Plaintiffs’ arbitration agreements are enforceable and not
unconscionable under Arizona law. The arbitration agreements
between GCU and Plaintiffs are fair and even-handed, and Plaintiffs
can show neither procedural nor substantive unconscionability.
Grand Canyon Education, Inc., like GCU, is equally entitled to enforce
the arbitration agreements under the doctrine of equitable estoppel.
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 4 of 24
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For these reasons, and as set forth more fully below, the Federal Arbitration
Act (“FAA”) requires this Court to grant Defendants’ Motion and compel Plaintiffs
to arbitrate their claims. The Court should further dismiss this case as to Plaintiffs
Carr and Stanton in favor of arbitration or, in the alternative, stay the case pending
arbitration of their claims.
BACKGROUND
On August 7, 2012, Eileen Carr completed an Application for Admission to
GCU. (Hall Decl. ¶ 4). On August 7, 2012, Carr completed an Enrollment
Agreement to enroll in GCU’s Doctor of Education program. (Hall Decl. ¶ 7; see
also Compl. ¶ 49). On May 29, 2014, Samuel Stanton completed an Application for
Admission to GCU. (Hall Decl. ¶ 6). On May 29, 2014, Stanton also completed an
Enrollment Agreement to enroll in GCU’s Doctor of Education program. (Hall Decl.
¶ 9; see also Compl. ¶ 59). Just two sentences above each Plaintiff’s signature line
on his or her respective Enrollment Agreement, Plaintiffs acknowledge that they are
bound by GCU’s terms and policies: “I further understand and agree that all
Programs of Study are subject to the terms and policies outlined in the
University’s enrollment application and the University’s Policy Handbook.” (Hall
Decl. ¶ 11; Hall Decl. at Tab 1, p. 8; Tab 3, p. 8) (emphasis added).
In connection with their Applications for Admission, Plaintiffs also entered
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 5 of 24
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into identical arbitration agreements with GCU (the “Agreement”). (Hall Decl ¶¶
17, 18). Plaintiffs each signed the Agreement electronically on August 7, 2012
(Carr) and May 29, 2014 (Stanton). (Id.).
The Agreement is straightforward, plainly notifying Plaintiffs that both they
and GCU agree to submit “any and all claims to the decision of an arbitrator rather
than a court.” (Hall Decl. ¶ 20; Hall Decl. at Tab 1, p. 7; Tab 3, p. 7). Just above
the signature line, the Agreement states:
ACKNOWLEDGEMENT OF WAIVER OF JURY TRIAL AND
AVAILABILITY OF AAA RULES:
By my signature, I acknowledge that I understand that both I and the
School are irrevocably waiving rights to trial by jury, and are selecting
instead to submit any and all claims to the decision of an arbitrator
instead of a court. I understand that the award of the arbitrator will be
binding and not merely advisory.
(Hall Decl. ¶ 20; Hall Decl. at Tab 1, p. 7; Tab 3, p. 7) (emphasis in original).
The Agreement requires arbitration of “any dispute arising from my
enrollment.” More specifically, the Agreement states, in pertinent part:
AGREEMENT TO BINDING ARBITRATION AND WAIVER
OF JURY TRIAL:
I agree that any dispute arising from my enrollment, no matter how
described, pleaded, or styled, shall be resolved by binding arbitration
under the Federal Arbitration act Conducted by the American
Arbitration Association under its consumer rules.
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Terms of Arbitration:
1. Both I and the School irrevocably agree that any dispute between us
shall be submitted to arbitration.
2. Neither I nor the School shall file or maintain any lawsuit in any court
against the other, and agree that any suit filed in violation of this
Agreement shall be dismissed by the court in favor of an arbitration
conducted pursuant to this agreement.
(Hall Decl. ¶¶ 19, 22; Hall Decl. at Tab 1, p. 6; Tab 3, p. 6) (emphasis in original).
The Agreement also provides that students have the ability to obtain in arbitration
any remedy from their individual claims that would be available in court. (Hall Decl.
¶ 27); (Hall Decl. at Tab 1, p. 6; Tab 3, p. 6). Additionally, the Agreement provides
that the student will not consolidate his or her claims with the claims of any other
student, whether in a class action or otherwise, and gives an option to opt-out of the
no-consolidation provision:
I agree not to combine or consolidate any Claims with those of other
students, such as in a class or mass action. I may opt out of this no-
consolidation provision by delivering a written statement to that effect
received by the school within 30 days of my first execution of an
Enrollment Agreement with the School.
(Hall Decl. ¶ 24; Hall Decl. at Tab 1, p. 6; Tab 3, p. 6) (emphasis in original).
Plaintiffs never opted out of the no-consolidation provision. (Hall Decl. ¶ 26). As
discussed more fully below, under these facts, Plaintiffs are bound by the Agreement
and are required to arbitrate the claims they attempt to assert here.
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ARGUMENT AND AUTHORITY
A. The FAA Applies and Requires Enforcement of Plaintiffs’
Arbitration Agreement.
The FAA expressly provides that agreements to arbitrate “shall be valid,
irrevocable, and enforceable.” 9 U.S.C. § 2. The FAA applies to any written
arbitration agreement contained in a contract “evidencing a transaction involving
commerce.” Id. The Supreme Court has expansively construed the phrase
“involving commerce” as extending the FAA’s reach to the full limit of Congress’
Commerce Clause power. See Allied-Bruce Terminix Cos. v. Dobson, 513 U.S. 265,
268 (1995). Because the provision of online education services is a matter of
commerce, the FAA applies to Plaintiff’s Agreement.3 See generally United States
v. Sherlin, 67 F.3d 1208, 1213 (6th Cir. 1995) (holding that the educational business
of a college, which advertises to out-of-state students and purchases supplies from
out-of-state, is an activity that affects interstate commerce); Cyberspace,
Communc’ns, Inc. v. Engler, 55 F. Supp. 2d 737, 744 (E.D. Mich. 1999) (“[T]he
Internet is by nature an instrument of interstate commerce.”).
3 Plaintiffs also expressly agreed that the Federal Arbitration Act would apply to
any dispute arising from their enrollment. (Hall Decl. ¶ 19; Hall Decl. at Tab 1,
p. 6; Tab 3, p. 6).
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“The principal purpose of the FAA is to ensur[e] that private arbitration
agreements are enforced according to their terms.” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 344 (2011) (internal quotation marks omitted). The FAA
both “embod[ies]” and “declare[s] a national policy favoring arbitration.” Id. at 346;
Preston v. Ferrer, 552 U.S. 346, 353 (2008). The Supreme Court has interpreted the
FAA as reflecting both “a liberal federal policy favoring arbitration, and the
fundamental principle that arbitration is a matter of contract.” Concepcion, 563 U.S.
at 333 (citations and internal quotation marks omitted). “In line with these
principles, courts must place arbitration agreements on an equal footing with other
contracts, and enforce them according to their terms.” Id. at 339 (citations omitted).
Time after time, the Supreme Court has recognized this strong public policy
in favor of arbitration. See Am. Express Co. v. Italian Colors Rest., 570 U.S. 228,
232-33 (2013) (courts must “rigorously enforce arbitration agreements according to
their terms”) (internal quotation marks omitted); Concepcion, 563 U.S. at 339
(discussing the “liberal federal policy favoring arbitration”) (internal quotation
marks omitted); Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 115 (2001)
(recognizing the pro-arbitration purposes of the FAA); Green Tree Fin. Corp.-Ala.
v. Randolph, 531 U.S. 79, 89 (2000) (quoting Gilmer v. Interstate/Johnson Lane
Corp., 500 U.S. 20, 24 (1991)) (enforcing agreement to arbitrate and holding that
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 9 of 24
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Congress intended the FAA “to reverse the longstanding judicial hostility to
arbitration agreements . . . and to place arbitration agreements upon the same footing
as other contracts”). Arizona law is in accord.4 See N. Valley Emergency Specialists,
L.L.C. v. Santana, 93 P.3d 501, 504 (Ariz. 2004) (“Arizona has a strong public policy
favoring arbitration”).
To further the FAA’s purposes, the Supreme Court has emphasized that courts
should interpret arbitration clauses liberally in favor of arbitration. See Moses H.
Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983) (“any doubts
concerning the scope of arbitrable issues should be resolved in favor of arbitration”).
The Supreme Court has instructed that courts should “move the parties to an
arbitrable dispute out of court and into arbitration as quickly and easily as possible.”
Preston, 552 U.S. at 357. “A prime objective of an agreement to arbitrate is to
achieve streamlined proceedings and expeditious results.” Concepcion, 563 U.S. at
346.
4 The Agreements each provide that “THIS AGREEMENT SHALL BE
GOVERNED IN ALL RESPECTS, WHETHER AS TO VALIDITY,
CONSTRUCTION, CAPACITY, PERFORMANCE, OR OTHERWISE, BY
THE LAWS OF THE STATE OF ARIZONA.” ((Hall Decl. ¶ 10; Hall Decl. at
Tab 1, p. 6; Tab 3, p. 6)).
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 10 of 24
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Accordingly, this Court should grant Defendants’ Motion because, as set forth
below: Plaintiffs entered into valid written agreements to arbitrate, and Plaintiffs
claims fall within the scope of their agreements to arbitrate. See 9 U.S.C. §§ 3, 4.
B. Plaintiffs Agreed to Arbitrate Their Claims with GCU.
Plaintiffs agreed to arbitrate, instead of litigate in court, the claims asserted in
this lawsuit. When Plaintiffs enrolled at GCU in 2012 (Carr) and 2014 (Stanton),
they expressly agreed that “any dispute arising from [their] enrollment” would be
subject to arbitration. (Hall Decl. at Tab 1, p. 6; Tab 3, p. 6). Indeed, the Agreement
provides:
AGREEMENT TO BINDING ARBITRATION AND WAIVER
OF JURY TRIAL:
I agree that any dispute arising from my enrollment, no matter how
described, pleaded or styled, shall be resolved by binding arbitration
under the Federal Arbitration Act conducted by the American
Arbitration Association under its Consumer Rules.
(Hall Decl. ¶ 19; Hall Decl., Tab 1, p. 6; Tab 3, p. 6) (emphasis in original).
The Agreement further provides:
1. Both I and the School irrevocably agree that any dispute between us
shall be submitted to arbitration.
2. Neither I nor the School shall file or maintain any lawsuit in any court
against the other, and agree that any suit filed in violation of this
Agreement shall be dismissed by the court in favor of an arbitration
conducted pursuant to this Agreement.
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 11 of 24
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(Hall Decl., Tab 1, p. 6; Tab 3, p. 6). Carr electronically signed her Agreement on
August 7, 2012, and Stanton signed his Agreement on May 29, 2014. In doing so,
both Plaintiffs acknowledged that their enrollment would be subject to the “terms
and policies” of their applications, including the arbitration agreement.
C. Plaintiffs Agreed to Arbitrate Any Questions of Arbitrability.
It is well established that “parties can agree to arbitrate ‘gateway’ questions
of ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their
agreement covers a particular controversy.” Rent-A-Center, W., Inc. v. Jackson, 561
U.S. 63, 68-69 (2010); see also Parnell v. CashCall, Inc., 804 F.3d 1142, 1146-48
(11th Cir. 2015). A court must enforce an agreement to arbitrate arbitrability
(sometimes called a “delegation” provision) “as long as there is ‘clear and
unmistakable’ evidence that the parties manifested their intent to arbitrate a gateway
question.” In re Checking Account Overdraft Litig.¸ 674 F.3d 1252, 1255 (11th Cir.
2012) (quoting Rent-A-Center, 561 U.S. at 69).
By agreeing that any dispute shall be conducted under the AAA Consumer
Rules, Plaintiff and GCU agreed to arbitrate any questions of arbitrability. Indeed,
the Agreement provides:
I agree that any dispute . . . shall be resolved by binding arbitration . . .
conducted by the American Arbitration Association under its consumer
rules.
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 12 of 24
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(Hall Decl. ¶ 19; Hall Decl., Tab 1, p. 6; Tab 3, p. 6). Rule R-14(a) of the
AAA Consumer Arbitration Rules provides that “[t]he arbitrator shall have the
power to rule on his or her own jurisdiction, including any objections with respect
to the existence, scope, or validity of the arbitration agreement or to the arbitration
of any claim or counterclaim.” The AAA Rules likewise state that the arbitrator
shall have the power to determine the existence or validity of a contract “of which
an arbitration clause forms a part.” AAA Consumer Arbitration Rule R-14(b).
By agreeing to arbitrate under the AAA Rules, Plaintiff and GCU have
“clearly and unmistakably” delegated the issue of arbitrability to the arbitrator. See
U.S. Nutraceuticals, LLC v. Cyanotech Corp., 769 F.3d 1308, 1311 (11th Cir. 2014)
(“[W]hen parties incorporate the rules of the [American Arbitration] Association
into their contract, they clearly and unmistakably agree that the arbitrator should
decide whether the arbitration clause applies.”) (internal quotations omitted); Cohen
v. Career Educ. Corp., No. 8:13-cv-00125-EAK, 2013 U.S. Dist. LEXIS 91237, at
*6 (M.D. Fla. June 28, 2013) (“The 2005 and 2009 Agreements provide that
arbitration shall proceed in accordance with AAA rules. AAA Rule 7(a) gives the
arbitrator the power to rule on his or her own jurisdiction . . . . Under Terminix, this
clearly and unmistakably delegates the issue of validity to the arbitrator.”) (internal
quotations omitted).
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Accordingly, an arbitrator, rather than the Court, must decide any issues
relating to the scope or validity of the arbitration agreement.
D. Plaintiff’s Claims are Arbitrable.
Because Plaintiffs and GCU agreed that any questions of arbitrability would
be decided by the arbitrator, the Court need not address the scope or validity of the
arbitration agreement. See Terminix Int'l Co. Ltd. P'ship v. Palmer Ranch Ltd.
P'ship, 432 F.3d 1327, 1332 (11th Cir. 2005). However, even if this Court were to
decide those issues here, Defendants’ Motion to Compel should be granted because
(1) Plaintiffs’ claims fall within the scope of the arbitration agreement; and (2) the
arbitration agreement is valid and enforceable under Arizona law.
1) Plaintiffs’ Claims Fall Within the Scope of the Arbitration
Agreement.
Plaintiffs’ arbitration agreements require individual arbitration of “any
dispute arising from my enrollment, no matter how described, pleaded, or styled.”
(Hall Decl. ¶ 19; Hall Decl. at Tab 1, p. 6; Tab 3, p. 6). The phrase “arising from”
has been construed broadly, including in agreements containing language nearly
identical to that at issue here. See Ferguson v. Corinthian Colls., Inc., 733 F.3d 928,
938 (9th Cir. 2013) (granting defendant college’s motion to compel arbitration based
on an agreement with language identical to Plaintiff’s Agreement, requiring
arbitration of “any dispute arising from my enrollment, no matter how described,
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 14 of 24
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pleaded or styled”); Sanders v. Concorde Career Colls., Inc., No. 3:16-cv-01974-
HZ, 2017 U.S. Dist. LEXIS 37858, at *1-2 (D. Or. Mar. 16, 2017) (compelling
arbitration based on an agreement providing that “[a]ny dispute arising from
enrollment at Concorde Career College, no matter how described, pleaded or styled”
must be arbitrated).
Plaintiffs’ claims are premised on an allegation that GCU “forc[ed] doctoral
students into taking unnecessary ‘continuation courses.’” (Compl. ¶ 1).
Specifically, Plaintiffs allege that they had to “enroll in additional courses to
complete their dissertation” because “GCU designed its dissertation program and
requirements so that it is highly unlikely that the dissertation students can complete
the program within 60 credit hours.” (Compl. ¶ 17). Carr alleged that she enrolled
in twelve continuation courses, while Stanton alleges he enrolled in five continuation
courses. (Compl. ¶¶ 50, 60). Plaintiffs further allege that their enrollment in these
courses was costly and that GCU “failed to provide the “necessary guidance and
resources” to students such that they could complete their dissertation on a timely
basis. (Compl. ¶¶ 52, 61). According to Plaintiffs, GCU breached its contracts with
doctoral students by designing a program that is “impossible for the student to
complete…in 60 credit hours.” (Compl. ¶¶ 91). Plaintiffs’ claims thus
unquestionably relate to their enrollment at GCU.
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Because Plaintiffs’ claims fall squarely within the scope of the arbitration
agreement, the claims must be arbitrated. See Concepcion, 563 U.S. at 343-44; see
also Moses H. Cone Mem’l Hosp., 460 U.S. at 24-25 (“any doubts concerning the
scope of arbitrable issues should be resolved in favor of arbitration”); Wiand v.
Schneiderman, 778 F.3d 917, 922 (11th Cir. 2015) (quoting Moses H. Cone Mem’l
Hosp., 460 U.S. at 24–25).
2) Plaintiff’s Arbitration Agreement is Valid and Enforceable Under
Arizona Law.
Although the FAA and the strong federal policy in favor of arbitration apply
to the Agreement, state law determines an arbitration agreement’s enforceability.
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (federal courts
“should apply ordinary state-law principles that govern the formation of contracts”
in determining enforceability of an arbitration agreement). Even when applying
state law, however, the court must consider the federal policy favoring arbitration.
See Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1368 (11th Cir. 2005).
Arizona law, which is the law designated by both Plaintiffs’ enrollment
agreements, applies to determine whether the arbitration clause is enforceable. See
Cappuccitti v. DirecTV, Inc., 623 F.3d 1118, 1123-24 (11th Cir. 2010). Arizona
courts will enforce arbitration agreements unless they are procedurally or
substantively unconscionable. Maxwell v. Fid. Fin. Servs., Inc., 907 P.2d 51, 59
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 16 of 24
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(Ariz. 1995). Plaintiffs bear the burden of proving unconscionability. See Perry v.
NorthCentral Univ., Inc., No. 10-cv-8229, 2011 U.S. Dist. LEXIS 106051, at *11
(D. Ariz. Sept. 19, 2011). Plaintiffs cannot carry that burden.
Procedural unconscionability deals with “unfair surprise, fine print clauses,
mistakes or ignorance of important facts or other things that mean bargaining did not
proceed as it should.” Jones v. Gen. Motors Corp., 640 F. Supp. 2d 1124, 1130 (D.
Ariz. 2009). Plaintiffs cannot prove that the Agreement or its arbitration terms were
procedurally unconscionable. The arbitration provisions are clearly stated in plain,
conspicuous terms. Immediately above Plaintiff’s signature, the Agreement states:
ACKNOWLEDGEMENT OF WAIVER OF JURY TRIAL AND
AVAILABILITY OF AAA RULES:
By my signature, I acknowledge that I understand that both I and the
School are irrevocably waiving rights to trial by jury, and are selecting
instead to submit any and all claims to the decision of an arbitrator
instead of a court. I understand that the award of the arbitrator will be
binding and not merely advisory.
(Hall Decl. ¶ 20; Hall Decl. at Tab 1, p. 7; Tab 3, p. 7). Accordingly, Plaintiff
cannot establish the “unfair surprise, fine print clauses, mistakes or ignorance of
important facts or other things necessary to yield procedural unconscionability.”
Jones, 640 F. Supp. 2d at 1131 (arbitration provisions in six-page document, where
terms were legible, bolded, and appeared immediately adjacent to plaintiff’s initials,
were not procedurally unconscionable).
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Nor can Plaintiffs prove that the Agreements were substantively
unconscionable. Substantive unconscionability relates to the fairness of the contract
terms. “Indicative of substantive unconscionability are contract terms so one-sided
as to oppress or unfairly surprise an innocent party, an overall imbalance in the
obligations and rights imposed by the bargain, and significant cost-price disparity.”
Maxwell, 907 P.2d at 58.
None of those issues is present here. The arbitration provisions apply
mutually to GCU and to Plaintiffs, and the Agreements provide that “any remedy
available from a court under the law shall be available in arbitration.” (Hall Decl. ¶
27; Hall Decl. at Tab 1, p. 6; Tab 3, p. 6). Furthermore, the Agreements clearly
provide a method and procedure for the arbitration, referencing the Consumer Rules
of the American Arbitration Association, and clearly stating that GCU would
provide a copy of the AAA Consumer Rules upon request. (Hall Decl. ¶¶ 19, 29;
Hall Decl. at Tab 1, p. 7; Tab 3, p. 7).
Finally, under the “Terms of Arbitration” provided in the Agreements, GCU
agreed to pay for the “costs of the arbitration filing fee, arbitrator’s compensation
and facilities fees . . . to the extent that the fees are greater than the applicable court
filing fees.” (Hall Decl. ¶ 23; Hall Decl. at Tab 1, p. 6; Tab 3, p. 6). Accordingly,
Plaintiffs cannot claim that arbitration would be prohibitively expensive. In light of
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 18 of 24
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these facts, Plaintiffs cannot show that the arbitration provisions in the Agreements
are substantively unconscionable. See, e.g., Coup v. Scottsdale Plaza Resort, LLC,
823 F. Supp. 2d 931, 953 (D. Ariz. 2011) (rejecting plaintiff’s arguments regarding
substantive unconscionability of an arbitration provision).
E. GCE is Entitled to Enforce the Agreements.
Plaintiffs have sued both Grand Canyon University, Inc. and Grand Canyon
Education, Inc. Grand Canyon Education, Inc. (“GCE”) is the legal entity that
operated Grand Canyon University until, just last year, it sold the university to a new
entity, Grand Canyon University, Inc. Though Plaintiffs’ technically entered into
their Enrollment Agreements with GCU, both parties are entitled to enforce the
Agreements because the claims arise from alleged conduct that occurred when the
entities were one and the same.
Even if GCE is not a party to the Enrollment Agreements, it can enforce the
terms of those Agreements under the well-established doctrine of equitable estoppel.
Georgia law recognizes equitable estoppel “as an exception to the general rule that
only the parties who agree to be bound by a contract's terms can enforce them.”
Lawson v. Life of the S. Ins. Co., 648 F.3d 1166, 1172 (11th Cir. 2011). “Equitable
estoppel allows a nonsignatory to an arbitration agreement to compel...a signatory
to arbitrate under certain circumstances in which fairness requires doing so.” Id.
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Georgia law provides for two scenarios when equitable estoppel can apply.
One of those two scenarios includes instances “when the signatory to a written
agreement containing an arbitration clause must rely on the terms of the written
agreement in asserting its claims against the nonsignatory.” Parm v. Nat’l Bank of
Cal., N.A., No. 4:14-CV-0320-HLM, 2015 U.S. Dist. LEXIS 189260 (N.D. Ga. May
20, 2015) (citing Order Homes, LLC v. Iverson, 300 Ga. App. 332, 338-39 (2009)).
A party relies on the written agreement when the “party's claims [against the
nonsignatory] arise out of or relate directly to the written agreement because the
claims ‘make reference to or presume the existence of the written agreement. Under
Georgia law, a plaintiff's claims must directly, not just indirectly, be based on the
contract containing the arbitration clause in order for equitable estoppel to compel
arbitration of those claims.” Id. (internal citation omitted).
Here, Plaintiffs Carr and Stanton clearly rely on the terms of their Enrollment
Agreements in asserting claims against both GCE and GCU. Plaintiffs’ claims
indisputably arise out of their enrollment in GCU’s College of Doctoral Studies,
which enrollment is effectuated only through the relevant Enrollment Agreements.
(See generally Compl.). More specifically, Plaintiffs incorporate by reference the
Enrollment Agreements and other related agreements in their Complaint. For
example, Plaintiffs appear to base their breach of contract claim on the Dissertation
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Milestone Table attached to the University Policy Handbook, which is expressly
incorporated into the Plaintiffs’ Enrollment Agreements. (Compl. ¶ 90; Hall Decl. ¶
11; Hall Decl. at Tab 1, p. 8; Tab 3, p. 8). There is no doubt that Plaintiffs’ claims
“arise out of or relate directly to” the agreements containing the subject arbitration
provisions. Consequently, GCU is entitled to enforce the arbitration provisions
therein.
The second equitable estoppel scenario applies as well—“when the signatory
to the contract containing the arbitration clause raises allegations of substantially
interdependent and concerted misconduct by both the nonsignatory and one or more
of the signatories to the contract.” Order Homes, LLC v. Iverson, 300 Ga. App. 332,
338-39, 685 S.E.2d 304, 310 (2009). Here, Plaintiffs allegations against GCU and
GCE are virtually indistinguishable as Plaintiffs attempt to hold both Defendants
liable for the same alleged conduct. Accordingly, GCE is also entitled to enforce
the arbitration agreement under the second equitable estoppel scenario.
CONCLUSION
For all the reasons stated herein, Plaintiffs Carr and Stanton are contractually
required to individually arbitrate, rather than litigate their claims. Accordingly,
Defendants respectfully request that this Court grant the Motion to Compel
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 21 of 24
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Arbitration and dismiss, or alternatively, stay Plaintiffs’ claims in this case in favor
of arbitration.
Respectfully submitted this 7th day of May, 2019.
/s/ Derin B. Dickerson
Derin B. Dickerson
Georgia Bar No. 220620
Caroline Rawls Strumph
Georgia Bar No. 250168
Kristi Ramsay
Georgia Bar No. 964749
Alston & Bird LLP
1201 West Peachtree Street
Atlanta, GA 30309-3424
Telephone: 404-881-7000
Facsimile: 404-253-8169
Attorneys for Defendants Grand
Canyon University, Inc. and Grand
Canyon Education, Inc.
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 22 of 24
CERTIFICATE OF COMPLIANCE WITH
LOCAL RULE 5.1
I hereby certify that the foregoing was prepared in Times New Roman 14 point
font, double-spaced, with a top margin of not less of 1.5 inches and a left margin of not
less than 1 inch.
This 7th day of May, 2019.
/s/ Derin B. Dickerson
Derin B. Dickerson
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 23 of 24
CERTIFICATE OF SERVICE
I hereby certify that on this day I filed a true and correct copy of the within
and foregoing with the Clerk of Court using the Court’s CM/ECF system. I further
certify that I have this day served a true and correct copy of the same via United
States First Class Mail, postage prepaid, and properly addressed as follows:
E. Adam Webb
G. Franklin Lemond, Jr.
D. Grant Coyle
Webb, Klase & Lemond, LLC
1900 The Exchange, S.E.
Suite 480
Atlanta, GA 30339
Attorneys for Plaintiffs
On this 7th day of May, 2019.
/s/ Derin B. Dickerson
Derin B. Dickerson
Case 1:19-cv-01707-TCB Document 7-1 Filed 05/07/19 Page 24 of 24