Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 1 of 22
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF GEORGIA
`ATLANTA DIVISION
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`
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`MICHAEL HEARN
`individually and on behalf of all
`other similarly situated consumers,
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` Plaintiff,
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` v.
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` CIVIL ACTION FILE
` NO. 1:19-CV-1198-TWT
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`OPINION AND ORDER
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`This is a class action under the Fair Credit Reporting Act. It is before
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`COMCAST CABLE
`COMMUNICATIONS, LLC,
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` Defendant.
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`
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`the Court on Defendant Comcast Cable’s Motion to Compel Individual
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`Arbitration and Stay Litigation [Doc. 6]. For the reasons set forth below,
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`Defendant Comcast Cable’s Motion to Compel Individual Arbitration and Stay
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`Litigation [Doc. 6] is DENIED.
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`I.
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`Background
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`A. The Plaintiff’s Claim
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`The Plaintiff Michael Hearn alleges that he called Defendant Comcast
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`Cable Communications to inquire about its services on or about March 5, 2019.
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`Class Action Compl. ¶ 8. During the call, a representative for the Defendant
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`made a “hard pull” of the Plaintiff’s consumer report, damaging his credit
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 2 of 22
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`score. Id. ¶¶ 12-14. The Plaintiff alleges that he did not consent to a credit
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`check, was not a customer of the Defendant at the time, and did not request
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`any services before or after the Defendant pulled his consumer report. Id. ¶¶
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`9-10. The Plaintiff alleges that the Defendant obtained the Plaintiff’s consumer
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`report for an “impermissible purpose” in violation of various provisions of the
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`Fair Credit Reporting Act, 15 U.S.C. §§ 1681 et seq. Id. ¶¶ 37-46. The Plaintiff
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`sues on behalf of two putative classes of Georgia residents whose consumer
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`reports were either (1) impermissibly accessed or (2) impermissibly used by the
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`Defendant. Id. ¶ 22.
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`B. The Arbitration Provision
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`The Defendant argues that the Plaintiff’s FCRA claim is covered by an
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`arbitration agreement previously entered into by the parties. The Plaintiff
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`contracted with the Defendant for services at his current address from
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`December of 2016 through August of 2017.1 The Plaintiff signed a work order
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`1
`The Defendant has submitted two declarations from its Director
`of Regulatory Compliance, Nicole Patel, in which she testifies that the Plaintiff
`previously contracted for services with the Defendant and that the purpose of
`the Plaintiff’s March 2019 call was to inquire about reconnecting services. See
`Patel Decl., Ex. A to Def.’s Mot. to Compel Arbitration [Doc. 6-1]; Patel Suppl.
`Decl., Ex. A to Def.’s Reply in Supp. of Mot. to Compel Arbitration [Doc. 18-1].
`Attached to Ms. Patel’s first declaration is an “Agreement for Residential
`Services” (the “2016 Service Agreement”) and a signed work order from 2016
`(the “2016 Work Order”). See Ex. 1 to Patel Decl. [Doc. 6-2]; Ex. 2 to Patel Decl.
`[Doc. 6-3]. The Plaintiff has submitted his own declaration in which he admits
`to previously receiving services but denies that the purpose of the March 2019
`call was to inquire about reconnecting services. Hearn Decl., Ex. A to Pl.’s Resp.
`to Mot. to Compel Arbitration [Doc. 16-1].
`2
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 3 of 22
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`on December 20, 2016, acknowledging receipt of a “Comcast Welcome Kit” that
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`contained, inter alia, the 2016 Service Agreement. See 2016 Work Order, at 3.
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`The first page of the 2016 Service Agreement notifies the customer that “THIS
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`AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION IN
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`SECTION 13 THAT AFFECTS YOUR RIGHTS UNDER THIS AGREEMENT
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`WITH RESPECT TO ALL SERVICE(S).” See 2016 Service Agreement, at 1
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`(emphasis in original). The arbitration provision in Section 13 of the
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`Agreement states that it is governed by the Federal Arbitration Act and covers
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`“[a]ny Dispute involving [the customer] and Comcast.” Id. § 13(a). The
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`provision defines the term “Dispute” as:
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`any claim or controversy related to Comcast, including but not
`limited to any and all: (1) claims for relief and theories of liability,
`whether based in contract, tort, fraud, negligence, statute,
`regulation, ordinance, or otherwise; (2) claims that arose before
`this or any prior Agreement; (3) claims that arise after the
`expiration or termination of this Agreement, and (4) claims that
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`In adjudicating the Defendant’s motion to compel arbitration, the Court is not
`limited to the four corners of the Plaintiff’s complaint. See Liles v. Ginn-La
`West End, Ltd., 631 F.3d 1242, 1244 n.5, 1249 n.13 (11th Cir. 2011) (noting
`that a court can consider extrinsic evidence in a motion to change venue and
`that a motion to compel arbitration is essentially a specialized motion to
`change venue). The Court will therefore consider the parties’ testimonial and
`documentary evidence in adjudicating the Defendant’s motion. But, because
`the Court must apply a “summary-judgment-like” standard to factual disputes
`on a motion to compel arbitration, it will view the evidence in the light most
`favorable to the Plaintiff. In re Checking Account Overdraft Litig., 754 F.3d
`1290, 1294 (11th Cir. 2014) (holding that an order compelling arbitration is “in
`effect a summary disposition of the issue of whether or not there has been a
`meeting of the minds on the agreement to arbitrate”) (quoting Magnolia
`Capital Advisors, Inc. v. Bear Stearns & Co., 272 Fed. Appx. 782, 785 (11th
`Cir. 2008)).
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 4 of 22
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`are currently the subject of purported class action litigation in
`which you are not a member of a certified class.
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`Id. § 13(b). The provision states that the customer has the right to opt out of
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`arbitration by notifying the Defendant’s legal department in writing within
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`thirty days of receipt of the Agreement. Id. § 13(d). 2 The provision further
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`states that the customer waives his or her right to arbitrate or litigate claims
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`against the Defendant in a collective action. Id. § 13(h). Finally, the provision
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`contains a survival clause stating that the parties’ agreement to arbitrate
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`survives termination of the Agreement. Id. § 13(k).
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`The Defendant contends that the Federal Arbitration Act, 9 U.S.C. § 1
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`et seq., governs the arbitration provision contained within the 2016 Service
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`Agreement and that the Plaintiff’s FCRA claim falls within its broad scope.
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`The Defendant argues that the Court should therefore stay these proceedings
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`pending arbitration of the Plaintiff’s FCRA claim. See 9 U.S.C. §§ 3-4. The
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`Federal Arbitration Act covers any arbitration provision that is (1) in writing
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`and (2) is part of a contract “evidencing a transaction involving [interstate]
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`commerce.” 9 U.S.C. § 2; see also Klay v. All Defendants, 389 F.3d 1191, 1200
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`n.9 (11th Cir. 2004). The Plaintiff does not dispute that the arbitration
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`2
`The customer has the option of notifying the legal department by
`mail or through an online portal accessible through the Defendant’s website.
`Id. Ms. Patel testifies, and the Plaintiff does not contest, that the Plaintiff
`never notified that the Defendant that he was opting out of the arbitration
`provision contained within the 2016 Service Agreement. Patel Decl. ¶¶ 10-12.
`4
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`provision is in writing and that, by contracting for telecommunications
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`services, the parties engaged in a transaction involving interstate commerce.
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`Therefore, the Court will consider and apply precedent construing the Federal
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`Arbitration Act in adjudicating the Defendant’s motion.
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`II.
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`Legal Standard
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`The Federal Arbitration Act “embodies a liberal federal policy favoring
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`arbitration agreements.” Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359,
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`1367 (11th Cir. 2005) (citation and punctuation omitted). Section 2 of the
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`Federal Arbitration Act provides in relevant part that “[a] written provision in
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`any maritime transaction or a contract evidencing a transaction involving
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`commerce to settle by arbitration a controversy thereafter arising out of such
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`contract or transaction . . . shall be valid, irrevocable, and enforceable, save
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`upon such grounds as exist at law or in equity for the revocation of any
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`contract.” 9 U.S.C. § 2. When considering a motion to compel arbitration
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`pursuant to the Federal Arbitration Act, the Court must first “determine
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`whether the parties agreed to arbitrate that dispute.” Mitsubishi Motors Corp.
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`v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 (1985). If they have, the
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`Court must then determine whether the arbitration clause is valid. It may be
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`unenforceable on grounds that would permit the revocation of any contract,
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`such as fraud or unconscionability. See id., at 627 (“[C]ourts should remain
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`attuned to well-supported claims that the agreement to arbitrate resulted from
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`the sort of fraud or overwhelming economic power that would provide grounds
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 6 of 22
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`‘for the revocation of any contract.’”). There may also be legal constraints
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`precluding arbitration, such as a clear congressional intention that a certain
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`claim be heard in a judicial forum. See id., at 628 (“Having made the bargain
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`to arbitrate, the party should be held to it unless Congress itself has evinced
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`an intention to preclude a waiver of judicial remedies for the statutory rights
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`at issue.”).
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`The Court must apply state laws of contract to resolve questions
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`regarding the “validity, revocability, and enforceability” of arbitration
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`agreements. Caley, 428 F.3d at 1368 (citing Perry v. Thomas, 482 U.S. 483,
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`492 n.9 (1987)). The Court does so, however, in light of the strong federal policy
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`favoring arbitration. Id. (citing Cooper v. MRM Inv. Co., 367 F.3d 493, 498 (6th
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`Cir. 2004)). “[A]s a matter of federal law, any doubts concerning the scope of
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`arbitrable issues should be resolved in favor of arbitration, whether the
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`problem at hand is the construction of the contract language itself or an
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`allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone
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`Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983). If the moving
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`party establishes the necessary elements, “the FAA requires a court to either
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`stay or dismiss a lawsuit and to compel arbitration.” Lambert v. Austin Ind.,
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`544 F.3d 1192, 1195 (11th Cir. 2008).
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`III. Discussion
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`The Defendant argues that the arbitration provision is valid and
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`compels arbitration of the Plaintiff’s FCRA claim. The Plaintiff makes three
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`arguments in response. First, the Plaintiff argues that he ceased to be bound
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`by the arbitration provision of the 2016 Service Agreement when he
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`terminated the Defendant’s services in August of 2017. Second, the Plaintiff
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`argues that his FCRA claim is beyond the scope of the arbitration provision
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`because they do not relate to the 2016 Service Agreement. Third, the Plaintiff
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`argues that if the arbitration provision requires arbitration of claims unrelated
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`to the 2016 Service Agreement, then the provision is unenforceable because it
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`is unconscionable.
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`A. Whether the Arbitration Provision Continues to Bind the Parties
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`The Plaintiff does not dispute that he entered into the 2016 Service
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`Agreement when he purchased services from the Defendant in December of
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`2016. 3 The Plaintiff argues, however, that he is no longer bound by the
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`arbitration provision because he terminated the 2016 Service Agreement two
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`years before the events giving rise to this lawsuit. Section 9(b) of the
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`Agreement permits customers to terminate the Agreement “for any reason at
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`any time” by, among other options, calling the Defendant’s customer service
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`line during normal business hours. 2016 Service Agreement § 9(b). The
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`In other cases involving this Defendant, courts in this district
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`have routinely held that customers accept the terms of their service
`agreements when they sign work orders acknowledging receipt of the
`agreements and accept the benefits of continued service without objection. Cf.
`Honig v. Comcast of Georgia I, LLC, 537 F. Supp. 2d 1277, 1283-84 (N.D. Ga.
`2008); Losapio v. Comcast Corp., No. 1:10-CV-3438-RWS, 2011 WL 1497652,
`at *3 (N.D. Ga. Apr. 19, 2011) (citing Honig, 537 F. Supp. 2d at 1283-84).
`7
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`Plaintiff called the Defendant and cancelled his services in August of 2017.
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`Hearn Decl. ¶ 3. At that time, he also confirmed that no outstanding balance
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`remained due on his account. Id. ¶ 4. The Plaintiff argues that any agreement
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`to arbitrate was necessarily extinguished when he cancelled the 2016 Service
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`Agreement.
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`The Court is not persuaded. The Plaintiff’s argument contravenes the
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`express language of the arbitration provision’s survival clause, which states
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`that “[t]his Arbitration Provision shall survive the termination of your
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`Service(s) with Comcast.” 2016 Service Agreement § 13(k). The survival clause
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`unambiguously reflects the parties’ intent that their agreement to arbitrate
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`would survive termination of the 2016 Service Agreement. The Plaintiff argues
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`that the survival clause somehow renders the termination provision
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`“ambiguous,” and that this ambiguity must be resolved against the Defendant
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`as the drafter of the Agreement. But the termination provision and the
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`arbitration provision are not in conflict. The termination provision explains
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`how the parties can terminate the 2016 Service Agreement, and the arbitration
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`provision’s survival clause explains that the parties’ agreement to arbitrate
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`survives termination of the 2016 Service Agreement. Because the plain
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`language of the contract makes the parties’ intentions clear, the Court need
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`not apply rules of contract construction to manufacture ambiguity where none
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`exists.
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`Based on the plain language of the contract, the Court concludes that
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`the parties intended for the arbitration provision to survive termination of the
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`2016 Service Agreement. The Court will therefore compel arbitration of the
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`Plaintiff’s FCRA claim unless, as the Plaintiff argues in the alternative, they
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`fall outside the scope of the arbitration provision or the arbitration provision
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`is unenforceable on unconscionability grounds.
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`B. Whether the Plaintiff’s FCRA Claim is Within the Scope of the
`Arbitration Provision
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`The Plaintiff argues that his FCRA claim is wholly unrelated to the 2016
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`Service Agreement and that it is therefore beyond the scope of the Agreement’s
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`arbitration provision. The Defendant responds that the plain language of the
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`arbitration provision states that it reaches any claim “related to Comcast,”
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`such that claims unrelated to the 2016 Service Agreement fall under the
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`provision’s broad scope. Id. § 13(b). The Defendant argues in the alternative
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`that the Plaintiff’s FCRA claim is, in fact, related to the 2016 Service
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`Agreement and that the arbitration provision therefore covers the Plaintiff’s
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`FCRA claim even if the Court subjects it to a limiting construction.
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`1. Whether the Arbitration Provision Covers Unrelated, Post-
`Expiration Claims
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`The Defendant describes the arbitration provision in the 2016 Service
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`Agreement as “broad,” but that term is inadequate to capture the true breadth
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`of its substantive and temporal scope. Typically, courts define arbitration
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`provisions as “broad” when they purport to cover all claims “arising out of” or
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`“relating to” the underlying agreement. See Telecom Italia, SpA v. Wholesale
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 10 of 22
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`Telecom Corp., 248 F.3d 1109, 1114 (11th Cir. 2001) (noting that “standard
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`arbitration clause[s]” in commercial contracts “broadly state[] that ‘any
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`controversy or claim arising out of, or relating to this agreement, or the breach
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`thereof[,]’ shall be settled by arbitration”) (quoting Joseph T. McLaughlin,
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`Arbitrability: Current Trends in the United States, 59 Alb. L.Rev. 905, 932
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`(1996)); see also Red Brick Partners-Brokerage, LLC v. Staubach Co., No.
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`4:08CV82-SPM-WCS, 2008 WL 2743689, at *3 (N.D. Fla. July 9, 2008) (“The
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`arbitration clause in the Sublicense Agreement includes the ‘arising out of or
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`relating to’ language and is thus a broad clause.”) (citing Prima Paint Corp. v.
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`Floor & Conklin Mfg. Co., 388 U.S. 395, 398 (1967)); Johnson Law Grp. v.
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`Elimadebt USA, LLC, No. 09-81331-CIV, 2010 WL 11558229, at *2 (S.D. Fla.
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`Mar. 11, 2010) (finding that an arbitration clause providing for arbitration of
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`“any controversy or claim arising out of or relating to this Agreement” was
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`“broad” rather than “narrow” because it “evidence[d] the parties’ intent to have
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`arbitration serve as the primary recourse for disputes connected to the
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`agreement containing the clause”) (quoting Louis Dreyfus Negoce S.A. v.
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`Blystad Shipping & Trading Inc., 252 F.3d 218 (2d Cir. 2001)); Collins v. Susan
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`Schein Chrysler Dodge, Inc., No. 06-CV-00841-RRA, 2006 WL 8436810, at *1
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`(N.D. Ala. June 22, 2006) (“In construing arbitration clauses, courts have, at
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`times, distinguished between broad clauses that purport to arbitrate all
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`disputes arising out of a contract, from narrow clauses that limit arbitration to
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`specific disputes.”), report and recommendation adopted, No. 06-CV-00841-
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`RRA, 2006 WL 8436806 (N.D. Ala. July 11, 2006). This language of “arising
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`out of” or “related to” is included in standard arbitration clauses in commercial
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`contracts because it tracks the language of the FAA. See U.S.C. § 2.
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`In determining whether a dispute “relates to” an agreement, courts ask
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`whether the dispute “was an immediate, foreseeable result of the performance
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`of contractual duties.” Telecom Italia, SpA, 248 F.3d at 1116. Otherwise, the
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`term “related to” would “stretch to the horizon and beyond.” Doe v. Princess
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`Cruise Lines, Ltd., 657 F.3d 1204, 1218 (11th Cir. 2011). Unlike the standard
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`arbitration clauses typically found in commercial contracts, the arbitration
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`provision at issue in this case lacks language limiting the scope of arbitrable
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`claims to those “arising out of” or “relating to” the 2016 Service Agreement.
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`The arbitration provision is limited only by the requirement that the claim be
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`“related to Comcast.”4 2016 Service Agreement § 13(b). This is, of course, no
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`limit at all, as any claim brought against Comcast necessarily “relates” to it in
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`some way. The arbitration provision also specifies that it covers claims arising
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`before, during, or after the contract period. Id. § 13(b). If, as the Defendant
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`contends, the contractual language reflects the parties’ mutual understanding
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`of their agreement to arbitrate, then any claim that the Plaintiff has or might
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`ever have against the Defendant falls within its unbounded scope. For
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`4
`Although not relevant in this case, the arbitration provision also
`permits either party to bring claims in small claims court. Id. § 13(f).
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`example, if the Plaintiff was run over by a Comcast truck, he would be required
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`to submit his personal injury claim to arbitration.
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`The Defendant has not identified a single case in which a court has
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`compelled arbitration of a claim that was (1) unrelated to the agreement
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`containing the arbitration provision and (2) arose after the arbitration
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`provision had expired. Indeed, the case law interpreting arbitration provisions
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`like the one at issue in this case is sparse and largely unfriendly to the
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`Defendant’s position. In the Seventh Circuit case Smith v. Steinkamp, 318 F.3d
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`775 (7th Cir. 2003), the court highlighted the problems that could arise if courts
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`began enforcing arbitration agreements untethered to an underlying
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`commercial contract or transaction. In Steinkamp, the plaintiffs brought
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`federal Racketeer Influenced and Corrupt Organizations Act claims against a
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`payday loan company for making usurious loans. Id., at 775-76. The loan
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`company moved to compel arbitration based on an arbitration agreement that
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`the plaintiffs signed when taking out prior loans from the payday lending
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`company. Id., at 777. Crucially, however, the plaintiffs had not signed any
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`arbitration agreements when taking out the loans that gave rise to their RICO
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`claims. Id.
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`The Seventh Circuit ultimately concluded that the arbitration provision
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`did not on its face extend to future claims, and upheld the lower court’s denial
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`of the motion to compel arbitration on that basis. Id., at 778. But the court
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`aptly described the “absurd results” that could ensue if the court were to
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`construe the arbitration provision to cover future, unrelated claims:
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`If [the arbitration provisions] are read as standing free from any
`loan agreement, absurd results ensue, for example that if Instant
`Cash murdered Smith in order to discourage defaults and her
`survivors brought a wrongful death suit against Instant Cash (a
`“common law” suit, thus encompassed by [the arbitration
`provisions]), Instant Cash could insist that the wrongful death
`claim be submitted to arbitration. For that matter, if an employee
`of Instant Cash picked Smith's pocket when she came in to pay
`back the loan, and Smith sued the employee for conversion, he
`would be entitled to arbitration of her claim. It would make no
`difference that the conversion had occurred in Smith's home 20
`years after her last transaction with Instant Cash.
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`Id., at 777. Although not necessary to the holding, the court reasoned that an
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`arbitration provision that stretched to reach such claims “might be thought
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`unconscionable.” Id., at 777-78. Using Steinkamp as a jumping off point,
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`district courts in the Northern District of California, the Eastern District of
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`New York, the Southern District of California, and—most recently—the
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`Northern District of Georgia have declined to compel arbitration of claims
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`unrelated to the parties’ contractual relationship, even though the arbitration
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`provisions at issue lacked language tethering them to the underlying
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`agreements. See In re Jiffy Lube Int'l, Inc., Text Spam Litig., 847 F. Supp. 2d
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`1253 (S.D. Cal. 2012); Wexler v. AT & T Corp., 211 F. Supp. 3d 500 (E.D.N.Y.
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`2016); Revitch v. DirecTV, LLC, No. 18-CV-01127-JCS, 2018 WL 4030550
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`(N.D. Cal. Aug. 23, 2018); Cordoba v. DIRECTV, LLC, 347 F. Supp. 3d 1311
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`(N.D. Ga. 2018).
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`In In re Jiffy Lube, 847 F. Supp. 2d at 1258, the defendant sought to
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`compel arbitration of the plaintiffs’ Telephone Consumer Protection Act claims
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`pursuant to an arbitration provision found on invoices that the plaintiffs
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`signed for oil change services. The arbitration provision was “incredibly broad”
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`and purported to cover “any and all disputes” between the parties. Id., at 1262.
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`The district court for the Northern District of California reasoned that the
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`plaintiffs’ TCPA claims were wholly unrelated to the oil change services
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`previously rendered to the plaintiffs and that enforcement of the arbitration
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`provision to cover unrelated claims “would clearly be unconscionable.” Id., at
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`1262-63.
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`In Wexler v. AT & T Corp., 211 F. Supp. 3d at 504, the district court for
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`the Eastern District of New York declined to enforce a similarly broad
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`arbitration provision in a cell phone services contract to compel arbitration of
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`the plaintiff’s TCPA claim. 5 Rather than rely on the doctrine of
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`unconscionability, however, the court framed the problem as one of contract
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`formation. Id., at 504.6 The court reasoned that under New York contract law
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`5
`The arbitration provision at issue stated in relevant part that “AT
`& T and you agree to arbitrate all disputes and claims between us,” including
`but not limited to “claims arising out of or relating to any aspect of the
`relationship between us, whether based in contract, tort, statute, fraud,
`misrepresentation or any other legal theory[,]” that may arise before, during,
`or after the contract period. Id., at 501.
`6
`The Wexler court was concerned that the In re Jiffy Lube court’s
`reliance on the doctrine of unconscionability was in tension with the Supreme
`Court’s decision in AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 352
`(2011). In Concepcion, the Supreme Court held that the Federal Arbitration
`Act preempted a California judicial rule of law that class action waivers in
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`“the words expressed must be judged according to ‘what an objective,
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`reasonable person would have understood them to convey.’” Id. Therefore,
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`“notwithstanding the literal meaning of the clause’s language, no reasonable
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`person would think that checking a box accepting the ‘terms and conditions’
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`necessary to obtain cell phone service would obligate them to arbitrate literally
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`every possible dispute he or she might have with the service provider[.]” Id.
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`
`
`In Revitch v. DirecTV, LLC, No. 18-CV-01127-JCS, 2018 WL 4030550,
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`at *2-*3, the defendant telecommunications company sought to compel
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`arbitration of the plaintiff’s TCPA claim based on a broad arbitration provision
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`in the plaintiff’s wireless services agreement. The arbitration provision
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`purported to reach “all disputes and claims” between the parties, regardless of
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`whether they were related to the underlying services agreement. Id. The
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`district court for the Southern District of California “agree[d] with the Court
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`in Wexler that the broad interpretation of the arbitration provision advanced
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`by [the defendant] leads to absurd results[.]” Id., at *15. Relying on the common
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`law rule “requiring that contracts be construed to avoid absurd results,” the
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`court concluded that “no reasonable consumer” would enter into a wireless
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`services contract that would “subject to arbitration not only disputes that
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`might arise with the service provider relating to that service but virtually any
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`sort of dispute the customer might have against any entity that might in the
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`contracts of adhesion are unconscionable.
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 16 of 22
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`future be acquired by the holding company that owns the service provider.” Id.
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`In Cordoba v. DIRECTV, LLC, 347 F. Supp. 3d at 1320-21, the defendant
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`broadcast satellite services provider sought to compel arbitration of the
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`plaintiff’s Satellite Television Extension and Localism Act claim pursuant to
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`an arbitration provision found in the plaintiff’s customer services agreement.
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`The arbitration provision purportedly reached “all disputes and claims
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`between [the parties],” including but not limited to “claims arising out of or
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`relating to any aspect of the relationship between us, whether based in
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`contract, tort, statute, fraud, misrepresentation or any other legal theory[.]”7
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`Id., at 1320.
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`The district court for the Northern District of Georgia declined to adopt
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`the broad interpretation of the provision urged by the defendant, reasoning
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`that the Federal Arbitration Act “requires that the controversy ‘aris[e] out of’
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`the contract between the parties” and that the Eleventh Circuit and other
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`circuit courts therefore “require that the claim have some relationship to the
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`contract containing the arbitration provision.” Id., at 1321-22 (citing 9 U.S.C.
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`§ 2; Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985); Telecom
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`Italia, SpA, 248 F.3d at 1116 (“Disputes that are not related—with at least
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`some directness—to performance of duties specified by the contract do not
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`count as disputes ‘arising out of’ the contract, and are not covered by the
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`7 Id., at 1320.
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 17 of 22
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`standard arbitration clause.”); Jones v. Halliburton Co., 583 F.3d 228, 238 (5th
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`Cir. 2009); 3M Co. v. Amtex Sec., Inc., 542 F.3d 1193, 1199 (8th Cir. 2008);
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`Cummings v. FedEx Ground Package Sys., Inc., 404 F.3d 1258, 1261 (10th Cir.
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`2005); Brayman Constr. Corp. v. Home Ins. Co., 319 F.3d 622, 626 (3d Cir.
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`2003); Fazio v. Lehman Bros., 340 F.3d 386, 395 (6th Cir. 2003); Louis Dreyfus
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`Negoce S.A. v. Blystad Shipping & Trading Inc., 252 F.3d 218, 224 (2d Cir.
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`2001); Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999); Sweet
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`Dreams Unlimited, Inc. v. Dial-A-Mattress Int'l, Ltd., 1 F.3d 639, 642 (7th Cir.
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`1993); J.J. Ryan & Sons v. Rhone Poulenc Textile, S.A., 863 F.2d 315, 321 (4th
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`Cir. 1988)). The court found that no such relationship existed between the
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`plaintiff’s STELA claim and the customer services agreement and declined to
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`compel arbitration. Id., at 1322-24.
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`The Court agrees with its district court colleagues that absurd results
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`would inevitably ensue if federal courts began compelling arbitration of claims
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`that are substantively and temporally unmoored from the agreements
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`containing the arbitration provisions. The Court is persuaded by the decisions
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`in Wexler and Revitch that the problem is fundamentally one of contract
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`formation. Although the Wexler and Revitch courts applied, respectively, New
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`York and California state law of contract formation, the fundamental contract
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`principles on which those decisions rest apply with equal force under Georgia
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`law. “In determining if parties had the mutual assent or meeting of the minds
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`necessary to reach agreement, [Georgia] courts apply an objective theory of
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`Case 1:19-cv-01198-TWT Document 19 Filed 10/21/19 Page 18 of 22
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`intent whereby one party's intention is deemed to be that meaning a
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`reasonable man in the position of the other contracting party would ascribe to
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`the first party's manifestations of assent.” Cox Broad. Corp. v. Nat'l Collegiate
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`Athletic Ass'n, 250 Ga. 391, 395 (1982) (citations omitted). Furthermore, under
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`Georgia law “[a] contract must be given a reasonable construction which will
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`uphold and enforce the instrument, if possible, rather than a construction
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`which would… lead to an absurd result.” Tudor v. Am. Emp. Ins. Co., 121 Ga.
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`App. 240, 242 (1970) (quoting Brown v. Chrysler Corporation, 112 Ga. App. 22,
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`23 (1965)) (cited with approval in Kwok v. Delta Air Lines Inc., 578 F. App'x
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`898, 902 (11th Cir. 2014)).
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`Applying these state law rules of contract formation to this case, the
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`Court concludes that no reasonable customer would have understood himself
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`to be signing over his right to pursue any claim against the Defendant in
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`perpetuity simply by signing a work order acknowledging receipt of the 2016
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`Service Agreement. Nor does the Court believe that a reasonable company in
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`the Defendant’s position could understand the customer’s “manifestation[] of
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`assent” to affect an absolute waiver of the customer’s right to sue the
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`Defendant in state or federal court with respect to claims unrelated to the 2016
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`Service Agreement. The Court is further persuaded by the fact that the
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`arbitration provision in the 2016 Service Agreement deviates from the
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`statutory language of the Federal Arbitration Act, which by its terms covers
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`written provisions “to settle by arbitration a controversy thereafter arisin