in the united states district court for the ......preston v. ferrer, 552 u.s. 346, 353 (2008). the...

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 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.


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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


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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


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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)).


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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.


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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.


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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,


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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


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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


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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


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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


Kristi Ramsay


Alston & Bird LLP

1201 West Peachtree Street

Atlanta, GA 30309-3424

Telephone: 404-881-7000

Facsimile: 404-253-8169

[email protected]

[email protected]

[email protected]

Attorneys for Defendants Grand

Canyon University, Inc. and Grand

Canyon Education, Inc.


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.


Derin B. Dickerson


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.


Derin B. Dickerson


in the united states district court for the ......preston v. ferrer, 552 u.s. 346, 353 (2008). the...

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