Case: /09/2012 ID: DktEntry: 14 Page: 1 of 27. Docket No In the United States Court of Appeals. For the Ninth Circuit

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1 Case: /09/2012 ID: DktEntry: 14 Page: 1 of 27 Docket No In the United States Court of Appeals For the Ninth Circuit ROSITA H. SMITH, individually and on behalf of all similarly situated Washington State Residents, Plaintiff-Appellee, v. LEGAL HELPERS DEBT RESOLUTION LLC, a Nevada limited liability company, and JEM GROUP INC., a Nevada corporation, Defendants-Appellants. Appeal from a Decision of the United States District Court for the Western District of Washington, No. 11-cv RJB Honorable Robert J. Bryan BRIEF OF APPELLANT GREGORY JACKSON, ESQ. FREIMUND JACKSON TARDIF & BENEDICT GARRATT, PLLC 711 Capitol Way South, Suite 602 Olympia, Washington (360) Telephone (360) Facsimile RICHARD W. EPSTEIN, ESQ. REBECCA F. BRATTER, ESQ. GREENSPOON MARDER, P.A. 200 East Broward Boulevard, Suite 1500 Fort Lauderdale, Florida (954) Telephone (954) Facsimile Attorneys for Appellant JEM Group Inc. COUNSEL PRESS (800) 3-APPEAL PRINTED ON RECYCLED PAPER

2 Case: /09/2012 ID: DktEntry: 14 Page: 2 of 27 JEM GROUP, INC. CORPORATE DISCLOSURE STATEMENT Defendant JEM Group, Inc. ( JEM ), pursuant to Fed. R. Civ. P. 7.1, states that its parent corporation is Abbycat Holding Company, and that there is no publicly traded corporation owning 10% or more of its stock.

3 Case: /09/2012 ID: DktEntry: 14 Page: 3 of 27 TABLE OF CONTENTS Page CORPORATE DISCLOSURE STATEMENT TABLE OF CONTENTS... i TABLE OF AUTHORITIES... ii JURISDICTIONAL STATEMENT... 1 STATEMENT OF ISSUES... 2 SUMMARY OF THE CASE... 3 STATEMENT OF THE FACTS... 4 SUMMARY OF ARGUMENT... 6 ARGUMENT... 7 I. THE DISTRICT COURT IMPROPERLY REACHED THE ISSUE OF THE ENFORCEABILITY OF THE ARBITRATION CLAUSE WHEN THIS WAS NOT THE CRUX OF THE CONTRACTUAL CLAIMS IN THE PLAINTIFF S COMPLAINT II. THE DISTRICT COURT ERRED BY APPLYING RULES AND REQUIREMENTS THAT APPLY ONLY TO ARBITRATION CLAUSES CONCLUSION CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a) and LOCAL RULE STATEMENT OF RELATED CASES CERTIFICATE OF SERVICE i

4 Case: /09/2012 ID: DktEntry: 14 Page: 4 of 27 TABLE OF AUTHORITIES CASES Page(s) AT&T Mobility, LLC v. Concepcion, 131 S. Ct (2010)... 15, 16, 17 Bell Atlantic Corp. v. Twombly, 550 U.S. 554, 127 S.Ct (2007) Bridge Fund Capital Corporation v. Fastbucks Franchise Corporation, 622 F.3d 996 (9th Cir. 2010)... 11, 13 Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S. Ct (2006) Guidotti v. Legal Helpers Debt Resolution, LLC, 2011 WL (D. N.J. 2011) Hughes Masonry Co., Inc. v. Greater Clark County School Building Corp., 659 F.2d 836 (7th Cir. 1981)... 14, 15 Human Life of Washington, Inc. v. Brumsickle, 624 F.3d 990 (9th Cir. 2010) Kim v. Moffett, 234 P.3d 279 (Wash. App. 2010) Lonsdale v. Chesterfield, 573 P.2d 822 (Wash. App. 1978) Marmet Health Care Center, Inc. v. Brown, 132 S. Ct (2012) Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 103 S. Ct. 927 (1983) Nagrampa v. Mailcoups, Inc., 469 F.3d 1257 (9th Cir. 2006) ii

5 Case: /09/2012 ID: DktEntry: 14 Page: 5 of 27 Net Global Marketing, Inc. v. Dialtone, Inc., 217 Fed. Appx. 598 (9th Cir. 2007)... 9 Perry v. Thomas, 482 U.S. 483, 107 S. Ct (1987) Somerset Consulting, LLC v. United Capital Lenders, LLC, 832 F.Supp.2d 474 (E.D. Pa. 2011)... 10, 11 Susai v. Jagadeesh, 2007 WL (N.D. Cal. 2007)... 9, 10 Torgerson v. One Lincoln Tower, LLC, 166 Wash. 2d 510 (2009) Townsend v. Quadrant Corp., 153 Wash. App. 870, 224 P.3d 818 (2009) OTHER AUTHORITIES 9 U.S.C. 16(a)(1)(B) U.S.C. 1332(d)... 1 iii

6 Case: /09/2012 ID: DktEntry: 14 Page: 6 of 27 JURISDICTIONAL STATEMENT Jurisdiction in this Court is based on 9 U.S.C. 16(a)(1)(B) as the order under review denies a motion to compel arbitration. Jurisdiction in the district court is based on provisions of the Class Action Fairness Act codified at 28 U.S.C. 1332(d). This is a non-final appeal. The notice of appeal was timely filed on November 18, 2011 to review the order entered October 24,

7 Case: /09/2012 ID: DktEntry: 14 Page: 7 of 27 STATEMENT OF THE ISSUES I. WHETHER THE ISSUE OF THE ENFORCEABILITY OF AN ARBITRATION CLAUSE IN A CONTRACT IS FOR THE ARBITRATOR OR THE COURT TO DECIDE, WHEN THE ARBITRATION CLAUSE IS NOT MENTIONED OR CHALLENGED IN THE PLAINTIFF S COMPLAINT CHALLENGING THE ENFORCEABILITY OF THE CONTRACT AS A WHOLE. II. WHETHER STATE LAW RULES IMPOSING HIGHER STANDARDS ON ARBITRATION CLAUSES THAN OTHER CLAUSES IN ATTORNEY RETAINER AGREEMENTS VIOLATE THE FEDERAL ARBITRATION ACT. 2

8 Case: /09/2012 ID: DktEntry: 14 Page: 8 of 27 SUMMARY OF THE CASE Plaintiff retained Defendants to perform debt settlement services. Plaintiff, as representative of a putative class, sued Defendants seeking to have the parties contract declared void ab initio and other relief under various theories. The Defendants moved to compel arbitration pursuant to their agreement. The district court denied the motions to compel arbitration. This non-final appeal followed. Legal Helpers Debt Resolution, LLC will be referred to herein as LHDR. JEM Group, Inc. will be referred to as JEM. Rosita Smith will be referred to as Plaintiff or Smith. 3

9 Case: /09/2012 ID: DktEntry: 14 Page: 9 of 27 STATEMENT OF THE FACTS Smith filed this action in the district court on behalf of herself and a putative class consisting of all Washington state residents who entered into an attorney retainer agreement with LHDR, a law firm, for debt settlement services. Smith alleges violations of Washington s Debt Adjusting Act. RE.226. JEM is a nonlawyer service provider that performs services in connection with debt resolutions. RE.229. Smith s Attorney Retainer Agreement ( ARA ) with LHDR, RE.213, specifically names JEM as a party performing certain described services for Smith for a prescribed fee. RE.211. It is by performing the services and accepting the fees specified in the ARA that JEM is alleged to have violated the Debt Adjusting Act. The services JEM would provide, and the fees JEM would be paid for these services, are set forth in the ARA as follows: The implementation, management and maintenance of a debt resolution plan by LHDR shall be performed under the direct supervision of LHDR by JEM Group, Inc. ( JEM ) at a cost of fifteen percent (15%) of the Client s total scheduled debt (hereinafter referred to as Service Costs ). LHDR has a non-exclusive reciprocal referral agreement with JEM to provide these services under LHDR s direct supervision. Id. The performance of these services and acceptance of these fees by JEM pursuant to the ARA form the basis for Smith s claims against JEM. RE.240,

10 Case: /09/2012 ID: DktEntry: 14 Page: 10 of 27 The ARA specifically calls for arbitration. The arbitration clause appears under a bold heading at the top of the page bearing Smith s signature, and states: In the event of any claims or disputes between Client and LHDR related to the Agreement or related to any performance of any services related to the Agreement, such claim or dispute shall be submitted to binding arbitration upon the request of either party upon the service of that request. RE.213.The clause goes on to provide the claimant with the option of two nationally recognized arbitration services. Id. JEM is not a signatory to the ARA but asserted the right to enforce the arbitration clause of the ARA. Along with other defendants, JEM brought a motion to compel arbitration. RE.150. After complete briefing, see RE.28, 36, 140, the district court entered its order denying all of the defendants motions to compel, based on issues raised for the first time in the Plaintiff s response to the motion to compel arbitration. RE.1. The district court did not find that JEM lacked the right to enforce the arbitration clause. The district court found the arbitration clause to be unenforceable because state law requires arbitration clauses in attorney retainer agreements to meet certain requirements that were not met. RE.11, 12. All of the defendants timely appealed. RE.15. This brief is submitted solely on behalf of JEM. 5

11 Case: /09/2012 ID: DktEntry: 14 Page: 11 of 27 SUMMARY OF ARGUMENT The Plaintiff s Complaint challenges the attorney retainer agreement as a whole, without making any separate challenge to the arbitration clause or even mentioning the arbitration clause. Accordingly, the crux of the Plaintiff s Complaint is the agreement as a whole, and not the arbitration clause. Under these circumstances, the Supreme Court requires that the issue of the enforceability of the arbitration clause be determined by the parties chosen arbitrator and not by the court. A prior en banc decision of this Court supports this rule. A panel decision of this Court post-dating this en banc decision announces a different decisional framework that renders the binding Supreme Court precedent a nullity. This Court should decline to follow this precedent and instead apply the Supreme Court and en banc panel procedures, or refer the matter for additional en banc consideration. The district court relied upon State Court rules imposing heightened requirements on arbitration clauses. This places arbitration clauses on less than equal footing with any other contractual clause and therefore violates the Federal Arbitration Act. State law may not impose additional requirements on arbitration clauses to be enforceable that are not imposed upon other types of contractual provisions. 6

12 Case: /09/2012 ID: DktEntry: 14 Page: 12 of 27 ARGUMENT I. THE DISTRICT COURT IMPROPERLY REACHED THE ISSUE OF THE ENFORCEABILITY OF THE ARBITRATION CLAUSE WHEN THIS WAS NOT THE CRUX OF THE CONTRACTUAL CLAIMS IN THE PLAINTIFF S COMPLAINT. The Supreme Court unequivocally announced in Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 126 S.Ct (2006) that when a contract is challenged as a whole the enforceability of an arbitration clause in the contract is for the arbitrator to decide. The district court violated this principle when it ruled on the enforceability of the arbitration clause in the ARA, rather than referring that issue to the arbitrator. This Court should adhere to the strictures imposed by Buckeye and decline to permit district courts to address claims regarding the enforceability of arbitration clauses when those claims do not form the crux of the plaintiff s challenge to the contract in the complaint. See, 546 U.S. at 444. The en banc panel of this Court in Nagrampa v. Mailcoups, Inc., 469 F.3d 1257 (9th Cir. 2006) (en banc) discussed Buckeye at length. Nagrampa applied and adhered to Buckeye s requirement that the challenge to an arbitration clause must be the crux of the plaintiff s complaint challenging the contract in order for the issue of arbitrability to be one for the district court to decide. If the challenge to the arbitration clause is not the crux of the complaint challenging the contract, then the validity of the arbitration clause is for the arbitrator to determine. 7

13 Case: /09/2012 ID: DktEntry: 14 Page: 13 of 27 In Nagrampa, the plaintiff s complaint honed in on the arbitration clause in her contract, including two counts specifically and exclusively challenging the validity of the arbitration provision. 469 F.3d at Her other counts did not challenge the validity of the contract, and instead relied upon the contract being valid and binding. Id. This Court in Nagrampa contrasted Nagrampa s complaint with the complaint in Buckeye, noting that unlike Nagrampa s complaint, the complaint in Buckeye did not contain any claim that the arbitration provision standing alone was void or unenforceable. 469 F.3d at Instead, the complaint in Buckeye sought to declare the entire contract void ab initio. Id. Because the complaint in Buckeye complained that the contract as a whole was void ab initio, the Supreme Court in Buckeye found that the validity of the arbitration clause contained in the contract was for the arbitrator to decide. 469 F.3d at 1269, citing Buckeye at This Court repeatedly emphasized that the crux of Nagrampa s complaint is a challenge to the arbitration provision itself. 469 F.3d at Then the Nagrampa en banc panel surveyed sister circuits, finding substantial agreement among the circuits that where the causes of actions or claims within a complaint are, in essence, an effort to invalidate the entire contract, then the federal court will send the dispute to arbitration. Id. The Plaintiff s complaint in this case clearly attacks the entire contract, and contains no separate attack on the arbitration clause. Indeed, the arbitration clause 8

14 Case: /09/2012 ID: DktEntry: 14 Page: 14 of 27 is not mentioned at all. The relief requested in the complaint is the same relief requested in Buckeye; to declare the entire contract between the parties to be void ab initio. RE.239, 240, 244, 245. This is reinforced in the ad damnum clause, in which the plaintiff again asks that the entire contract be declared void ab initio. RE.249. It could not be clearer from the face of the Plaintiff s complaint that the crux of Plaintiff s complaint is to attack the entire contract, without any separate attack on the arbitration clause itself. This Court s en banc decision in Nagrampa has been properly interpreted as requiring the complaint itself to challenge the arbitration clause. For example, in Net Global Marketing, Inc. v. Dialtone, Inc., 217 Fed. Appx. 598 (9th Cir. 2007), this Court applied both Nagrampa and Buckeye to conclude that the issue of arbitrability was properly before the court because the complaint challenged the arbitration clause directly, and did not rely upon a general challenge to the entire contract. Id. at 600. Indeed, in Susai v. Jagadeesh, 2007 WL (N.D. Cal. 2007), the court looked only to the original complaint filed by the plaintiff. The court noted that that original complaint made no reference to arbitration. Id. at *3. It was only after the parties had conferred and the defendant indicated an intention to enforce the arbitration clause that the plaintiff amended his pleadings to add a claim to invalidate the arbitration clause. The court stated as an initial matter, it appears that Susai s seventh claim alleging the invalidity of the arbitration 9

15 Case: /09/2012 ID: DktEntry: 14 Page: 15 of 27 provision was added only once Susai became aware that defendants intended to compel arbitration. As noted above, the original complaint filed by Susai made no reference to the Agreement..... However, there is no question that the crux of Susai s complaint is that he was fraudulently induced into entering into the Agreement as a whole. Id. at *6. Therefore, applying Nagrampa, the court in Susai concluded that the issue of arbitrability was not the crux of the plaintiff s complaint. Instead, the court described the amendment as a cynical attempt to avoid this sound rule by simply adding a cause of action challenge in the validity of the arbitration.... Id. The court in Somerset Consulting, LLC v. United Capital Lenders, LLC, 832 F.Supp. 2d 474 (E.D. Pa. 2011), recently collected and cataloged the proper procedures to be followed in addressing motions to compel arbitration. The case before this Court falls into the category described in Somerset as a case in which it appears from the face of the complaint, and documents relied upon in the complaint, that certain of its claims are subject to an enforceable arbitration clause.... Id. at 482. This is because the plaintiff is seeking to invalidate a contract that contains an arbitration clause. Under these circumstances, the Rule 12(b)(6) standard is appropriate, id., and directs the court to an examination of the crux of the complaint as commanded by Buckeye. If the party opposing arbitration does not, in its complaint, allege enough fact[s] to raise a reasonable 10

16 Case: /09/2012 ID: DktEntry: 14 Page: 16 of 27 expectation that discovery will reveal the clause could be unenforceable, [Bell Atlantic Corp. v.] Twombly, 550 U.S. [554] at 556, 127 S.Ct [2007], the motion to compel arbitration should be granted. 832 F.Supp. 2d at 482 (emphasis and citation brackets added). In Bridge Fund Capital Corporation v. Fastbucks Franchise Corporation, 622 F.3d 996 (9th Cir. 2010), a three-judge panel of this Court announced a decisional framework for determining the enforceability of arbitration clauses that departed from the crux of the complaint approach utilized in Buckeye and this Court s en banc decision in Nagrampa. Under the Bridge Fund analysis, the court does not look to the complaint at all, never mind the crux of the complaint. Instead, the Bridge Fund procedure has the district court base this gateway decision on issues that are not raised until they are alleged for the first time in a response to a motion to compel arbitration. This essentially turns the procedure on its head. In a case such as this one, on the face of the plaintiff s complaint, the parties have a valid and unchallenged agreement between themselves to arbitrate the very disputes raised in the complaint. Accordingly, the defendant files a motion to compel arbitration based on what is presented in the complaint. Only in response to this motion, for the first time, is the plaintiff obligated to come forward with some legal or factual theory why the arbitration clause in the contract the plaintiff has already attacked should not be enforced. This relegates a critical 11

17 Case: /09/2012 ID: DktEntry: 14 Page: 17 of 27 threshold issue to a mere procedural after thought. While the defendant may be entitled to some limited opportunity in a reply to address these arguments that are raised for the first time in a response to a motion to compel, the result of this procedure is that the gateway issue of arbitrability is decided based on issues raised at the latest possible point in the motion procedure. This is the antithesis of requiring the challenge to arbitrability to be the crux of the complaint, and therefore violates Buckeye. Surely, there is no unfair burden on a plaintiff, like the plaintiff in this case, who is challenging the substantive enforceability of the entirety of the contract to include within that pleading some recitation of why the arbitration clause in the very same contract should not be enforced. This is an issue much like jurisdiction of which the plaintiff should be well aware in the process of crafting the initial pleading. Indeed, careful pleaders in Washington already include their challenges to arbitration clauses in their initial complaints. See, e.g., Townsend v. Quadrant Corp., 153 Wash. App. 870, 875, 224 P. 3d 818, 822 (2009) (including a separate count challenging the arbitration clause). This would meet the requirement of Buckeye and Nagrampa that the issue of arbitrability at least be raised in the complaint, and be central to the issues presented in the complaint. By doing so, a plaintiff would at least be making an effort to comply with the requirements of Buckeye. The important gateway issue of arbitrability should be the first issue 12

18 Case: /09/2012 ID: DktEntry: 14 Page: 18 of 27 addressed by a party seeking to invalidate a contract with an arbitration clause, and not be relegated to the late stages of motion practice. In practice, the Bridge Fund approach reduces Buckeye s requirement to a nullity. Instead of focusing on the crux of the complaint as commanded by Buckeye, the court is allowed to focus on the crux of the opposition to a motion to compel arbitration. Of course the crux of the opposition will be the enforceability of the arbitration clause. In this way, Bridge Fund is an impermissible attempt at a deft end run of Buckeye. Bridge Fund represents a brief but misbegotten departure from the binding precedent of the Supreme Court and this Court s en banc jurisprudence. This panel should consider itself bound by the Supreme Court and en banc decisions, not a decision of another 3-judge panel. See generally, Human Life of Washington, Inc. v. Brumsickle, 624 F.3d 990, 1013 (9th Cir. 2010). Bridge Fund should either be rejected by this panel, or referred for en banc review in light of that binding precedent. When a party brings an action challenging the validity of a contract that contains an arbitration clause, but does not separately plead in the complaint a basis for taking the issue away from the arbitrators as the parties agreed, the case should be sent to arbitration. After the fact rationalizations for undermining the parties arbitration agreement are not the crux of the complaint and should not hinder arbitration. 13

19 Case: /09/2012 ID: DktEntry: 14 Page: 19 of 27 II. THE DISTRICT COURT ERRED BY APPLYING RULES AND REQUIREMENTS THAT APPLY ONLY TO ARBITRATION CLAUSES. The arbitration clause in this case was contained within an attorney retainer agreement ( ARA ) between LHDR, a law firm, and Smith, its client. RE.210, 213. JEM is a third-party beneficiary of this contract, in accordance with the contract s terms. JEM provides its services only under the supervision and control of LHDR, and pursuant to the provisions of the ARA. RE.211. The services that JEM provides and the fees charged pursuant to the ARA are what give rise to Smith s complaint against JEM. RE.241, 242. Accordingly, JEM is a named and intended third-party beneficiary of the ARA because it is a party who, though not a party to a contract, nevertheless received direct benefits therefrom. Lonsdale v. Chesterfield, 573 P. 2d 822, 825 (Wash. App. 1978). The fee JEM receives is a benefit [as] the direct result of performance [of the ARA] and so within the contemplation of the parties. Kim v. Moffett, 234 P. 3d 279, 284 (Wash. App. 2010). Indeed, if JEM had not received the fee as a specified benefit under the ARA, Smith would not even have a claim against JEM. The Plaintiff may not on the one hand rely upon JEM s performance and receipt of a fee under the ARA to argue that JEM is liable, and at the same time deny that JEM is performing under the ARA for the purpose of avoiding the ARA s arbitration clause. Hughes 14

20 Case: /09/2012 ID: DktEntry: 14 Page: 20 of 27 Masonry Co., Inc. v. Greater Clark County School Building Corp., 659 F.2d 836 (7th Cir. 1981) (subcontractor may not argue that construction manager was not a party to contract with arbitration clause when claim against manager was for breach of duties under same contract). While the Plaintiff contested JEM s thirdparty beneficiary status before the district court, the district court properly did not credit Defendants arguments in this regard. The primary justification relied upon by the district court for refusing to enforce the arbitration clause is that it is an arbitration clause that is contained in an attorney s retainer agreement. RE The district court relied on WSBA, Advisory Op (1996) entitled Including arbitration provision in fee agreement with client, and on the American Bar Association Comm. on Ethics 1 The district court also mentioned in passing a conclusion that the arbitration clause in the ARA was hidden in a maze of fine print, RE.12, quoting Torgerson v. One Lincoln Tower, LLC, 166 Wash. 2d 510, 519 (2009). This is not an argument that was developed by the Plaintiff. In fact, the arbitration clause appears at the top of the page that bears the Plaintiff s signature, in plain language and the same legible font as the rest of the ARA, and with the bold heading Arbitration, as used throughout the four page document. RE.213. Indeed, in upholding the enforceability of the same arbitration clause in the same form ARA, the court in Guidotti v. Legal Helpers Debt Resolution, LLC, 2011 WL *12 (D. N.J. 2011) described the clause as plainly written, contained within the main body of the contract rather than hidden in fine print, bore a bolded paragraph heading, and was mere inches away from Plaintiff s signature line. It is not surprising that the Plaintiff did not pursue this argument. The Plaintiff s other arguments regarding the perceived superiority of litigation over arbitration for pursuing her claims or chosen form of relief were properly not credited by the district court because those arguments have been put to rest by Concepcion and its progeny in the district courts of this Circuit. 15

21 Case: /09/2012 ID: DktEntry: 14 Page: 21 of 27 and Professional Responsibility, Formal Opp (2002). Neither of these opinions is binding authority. Indeed, the WSBA opinion is replete with caveats limiting the opinion to certain undisclosed facts and disclaiming endorsement by the Bar Association. More to the point, these opinions reflect archaic antipathy for arbitration and impose higher standards on arbitration clauses to be enforceable than are imposed on other clauses in an attorney retainer agreement. Imposing higher standards on arbitration clauses is impermissible under AT&T Mobility, LLC v. Concepcion, 131 S.Ct (2010). While WSBA Advisory Op concedes that there is no per se prohibition in the Rules of Professional Conduct against including an arbitration provision in a fee agreement, id., it provides that including such a provision may properly must be done only with full disclosure to the client. This is a separate requirement in addition to being consistent with a lawyer s fiduciary obligations and statutory law. In other words, the opinion requires disclosure over and above what otherwise would be consistent with a lawyers fiduciary obligations. Similarly, the ABA Formal Opp specifies in detail that arbitration clauses for attorneys are permissible only provided that (1) the client has been fully apprised of the advantages and disadvantages of arbitration and has been given sufficient information to permit her to make an informed decision about whether to agree to the inclusion of the arbitration provision in the retainer 16

22 Case: /09/2012 ID: DktEntry: 14 Page: 22 of 27 agreement, and (2) the arbitration provision does not insulate the lawyer from liability or limit the liability to which she would otherwise be exposed under common and/or statutory law. Id. The district court specifically relied upon these heightened requirements for arbitration clauses, finding that [t]here is no evidence that Legal Helpers fulfilled their fiduciary obligations as lawyers or made any disclosures to Plaintiff here regarding the rights that she was relinquishing when she agreed to arbitration. RE.12. The district court s decision imposes state law rules on the enforceability of arbitration clauses that are not applied to any other kind of contract provision. This runs afoul of Concepcion. The Court in Concepcion precluded the type of analysis used by the district court in this case, stating that a court may not rely on the uniqueness of an agreement to arbitrate as a basis for a state-law holding that enforcement would be unconscionable...., 131 S.Ct. at 1747 (quoting Perry v. Thomas, 482 U.S. 483, 493 n.9, 107 S.Ct (1987). Imposing these additional requirements on agreements to arbitrate that are not placed on other contractual provisions affirmatively and improperly places arbitration agreements on an unequal footing with other contracts, and precludes enforcement of them according to their terms in violation of the Federal Arbitration Act ( FAA ). See, Concepcion, 131 S.Ct. at Indeed, the only distinction between the rule 17

23 Case: /09/2012 ID: DktEntry: 14 Page: 23 of 27 applied by the district court in attorney retainer agreements and the state law requirements recently struck down by a unanimous Supreme Court in Marmet Health Care Center, Inc. v. Brown, 132 S.Ct (2012) is that the state law in Marmet completely precluded arbitration of certain claims against nursing homes. The state law rule in this case singling out arbitration clause alone in attorney retainer agreements for additional requirements for enforceability violates the same provision of the FAA. This undermines the primary substantive provision of the FAA making arbitration clauses as enforceable as any other contract. Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927 (1983). 18

24 Case: /09/2012 ID: DktEntry: 14 Page: 24 of 27 CONCLUSION For the foregoing reasons, Appellant respectfully submits that the Order denying the Defendant JEM GROUP, INC. s motion to compel be reversed and the matter remanded for further proceedings consistent therewith. Respectfully submitted this 9th day of July By: s/richard W. Epstein Richard W. Epstein (Fla. Bar No ) Admitted Pro Hac Vice Rebecca F. Bratter (Fla. Bar No ) Admitted Pro Hac Vice GREENSPOON MARDER, P.A. 200 East Broward Boulevard, Suite 1500 Ft. Lauderdale, Florida (954) Telephone (954) Facsimile Richard.Epstein@gmlaw.com Rebecca.Bratter@gmlaw.com Gregory Jackson (WSBA No ) FREIMUND JACKSON TARDIF & BENEDICT GARRATT, PLLC 711 Capitol Way South, Suite 602 Olympia, Washington (360) Telephone (360) Facsimile gregj@fjtlaw.com 19

25 Case: /09/2012 ID: DktEntry: 14 Page: 25 of 27 CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF APPELLATE PROCEDURE 32(a) and LOCAL RULE 31.1 Pursuant to Fed. R. App. P. I certify the following: This brief complies with the type-volume limitation of Rule 32(a)(7)(B) of the Federal Rules of Appellate Procedure because this brief contains 3,866 words, excluding the parts of the brief exempted by Rule 32(a)(7)(B)(iii) of the Federal Rules of Appellate Procedure. This brief complies with the typeface requirements of Rule 32(a)(5) of the Federal Rules of Appellate Procedure and the type style requirements of Rule 32(a)(6) of the Federal Rules of Appellate Procedure because this brief has been prepared in a proportionally spaced typeface using the 2008 version Microsoft Word in 14 point Times New Roman font. This brief complies with the electronic filing requirements of Local Rule 31.1(c) because the text of this electronic brief is identical to the text of the paper copies, and the Vipre Virus Protection, version 3.1 has been run on the file containing the electronic version of this brief and no viruses have been detected. Dated: July 9, 2012 By: s/richard W. Epstein Richard W. Epstein Greenspoon Marder, P.A. 20

26 Case: /09/2012 ID: DktEntry: 14 Page: 26 of 27 STATEMENT OF RELATED CASES The same or closely related issue presented in Argument I of this brief will be presented in Heather Newton v. American Debt Services, Inc., et al, Case No

27 Case: /09/2012 ID: DktEntry: 14 Page: 27 of 27 CERTIFICATE OF SERVICE I hereby certify that on July 9, 2012, I electronically filed the foregoing with the Clerk of the Court for the United States Court of Appeals for the Ninth Circuit by using the appellate CM/ECF system. I certify that all participants in the case are registered CM/ECF users and that service will be accomplished by the appellate CM/ECF system. s/ Stephen Moore 22