Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 1 of 26
`
`UNITED STATES DISTRICT COURT
`SOUTHERN DISTRICT OF NEW YORK
`---------------------------------------------------------------------- X
`
`
` :
`NEVILLE MCFARLANE et al., individually and on
` :
`behalf of all others similarly situated,
` :
`
` :
` Plaintiffs,
` :
`
` :
`
` :
`
` :
`ALTICE USA, INC.,
` :
`
`
`
`
`
` :
` Defendant.
` :
`
` :
`
`---------------------------------------------------------------------- X
`
`-v-
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`20-CV-1297 (JMF)
`
`OPINION AND ORDER
`
`JESSE M. FURMAN, United States District Judge:
`
`
`
`This putative class action arises from a November 2019 data breach at Altice USA, Inc.
`
`(“Altice”), one of the largest television and communications providers in the United States. The
`
`nine named Plaintiffs are current or former employees of Altice whose personal identifying
`
`information, including Social Security numbers, was stolen in the breach. They bring various
`
`claims — for negligence, negligence per se, breach of implied contract, violation of the New
`
`York Labor Law, and violation of the Cable Communications Act of 1984 — against Altice for
`
`allegedly failing to take adequate measures to protect their data. Now pending are three motions
`
`filed by Altice. First, Altice moves, pursuant to Rule 12(b)(1) of the Federal Rules of Civil
`
`Procedure, to dismiss for lack of subject-matter jurisdiction, on the ground that Plaintiffs fail to
`
`allege injury sufficient to give them Article III standing. Second, Altice moves, pursuant to the
`
`Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., to compel seven of the nine named
`
`Plaintiffs to arbitrate their claims based on a clause in the General Terms and Conditions to
`
`which they allegedly agreed as subscribers of Altice’s cable services. And third, Altice moves,
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 2 of 26
`
`pursuant to Rule 12(b)(6), to dismiss Plaintiffs’ claims under the New York Labor Law (and
`
`related claims for negligence per se) as well as their claims for breach of an implied contract.
`
`
`
`Altice’s motions to dismiss are relatively easily resolved. For the reasons discussed
`
`below, the Court concludes that Plaintiffs — three of whom have already experienced identity
`
`theft since the data breach — plainly allege the kind of injury sufficient to give them Article III
`
`standing; that their New York Labor Law claims (and related negligence per se claims) fail as a
`
`matter of law; and that they state plausible claims for breach of an implied contract. Altice’s
`
`motion to compel arbitration requires more extensive discussion as it is based on a relatively new
`
`species of arbitration clause that one scholar has dubbed an “infinite arbitration clause” for its
`
`striking breadth: It effectively requires arbitration of any dispute between a subscriber and
`
`Altice, as well Altice’s parents, subsidiaries, affiliates, successors, employees, agents, and the
`
`like, whether arising now or in the future, and without regard for whether it arises from or relates
`
`to the cable services agreement of which it is part. For the reasons discussed below, the Court
`
`concludes that, as a matter of either contract formation or unconscionability, the arbitration
`
`clause at issue does not require arbitration of claims that lack a nexus to the cable services
`
`agreement. Because the record is unclear with respect to whether or to what extent Plaintiffs’
`
`claims arise from or relate to their status as cable service subscribers, the Court ultimately defers
`
`decision on the motion to compel arbitration pending supplemental submissions from the parties.
`
`BACKGROUND
`
`The Court is technically permitted to consider materials beyond the four corners of the
`
`Amended Complaint in deciding Altice’s motions to dismiss for lack of subject-matter
`
`jurisdiction and to compel arbitration. See, e.g., Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229
`
`(2d Cir. 2016) (arbitration); Cortlandt St. Recovery Corp. v. Hellas Telecomms., S.À.R.L., 790
`
`
`
`2
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 3 of 26
`
`F.3d 411, 417 (2d Cir. 2015) (jurisdiction). Nevertheless, the following facts are drawn from the
`
`Amended Complaint and documents that it incorporates by reference. See DiFolco v. MSNBC
`
`Cable L.L.C., 622 F.3d 104, 110-11 (2d Cir. 2010).
`
`Altice is one of the largest cable television and communications providers in the United
`
`States. See ECF No. 42 (“Am. Compl.”), ¶ 1. In November 2019, cyber criminals targeted
`
`Altice with a phishing attack, and an “undisclosed number” of the company’s employees
`
`inadvertently divulged the log-in credentials for their corporate email accounts. See id. ¶¶ 5, 99.
`
`The cyber criminals then “used the stolen credentials to remotely access and, in some instances,
`
`download the employees’ mailbox contents.” Id. ¶ 96; see ECF Nos. 42-1 (“Breach Notice”),
`
`42-2, 42-3.1 A forensic investigation revealed that one of the downloaded email inboxes
`
`contained a password-protected, but unencrypted, document with the names, employment
`
`information, dates of birth, social security numbers, and, in some instances, driver’s license
`
`numbers of 52,846 current and former Altice employees. See Am. Compl. ¶¶ 6-7, 101-02, 154,
`
`161. In February 2020, Altice sent notices to those whose data was affected stating that, “[a]s a
`
`former [or current] employee, your personal information was included in this report.” See id.
`
`¶¶ 96-97; Breach Notice. “[I]n an abundance of caution,” the notices offered recipients free
`
`identity and credit monitoring services for one year and recommended resources for monitoring
`
`and fraud protection. Breach Notice (emphasis omitted).
`
`
`
`The named Plaintiffs in this putative class action are nine former employees of Altice or
`
`its subsidiaries or predecessor companies who received the Breach Notice. See Am. Compl.
`
`¶¶ 14, 17, 22, 24, 30, 32, 38, 40, 46, 48, 54, 56, 62, 64, 70, 72, 81, 83. All but one — namely,
`
`DeAnna Cottrell — are also current or former cable subscribers through Altice or one of its
`
`
`ECF Nos. 42-1, 42-2, and 42-3 are substantively identical in all material respects.
`
`3
`
`1
`
`
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 4 of 26
`
`subsidiaries. See id. ¶¶ 15, 31, 39, 47, 55, 63, 71, 82. Plaintiffs were required to provide the
`
`personal identifying data that was compromised in the breach as “a condition of their
`
`employment.” Id. ¶ 104. All Plaintiffs have already spent time responding to the breach, such as
`
`by regularly monitoring their accounts and credit reports, changing passwords, and implementing
`
`credit freezes. See id. ¶¶ 18, 26, 34, 43, 50, 59, 66, 75, 85. Because their Social Security
`
`numbers were compromised, Plaintiffs anticipate needing to monitor their identity and credit and
`
`needing to pay for identity theft protection and credit monitoring services “for the rest of [their]
`
`li[ves].” Id. ¶¶ 18, 26, 34-35, 43, 50-51, 59, 66-67, 76, 86.
`
`Additionally, three of the named Plaintiffs — Neville McFarlane, Shariq Mehfooz, and
`
`Steven Paniccia — were the victims of identity theft in the months following the breach. All
`
`three allege that between December 2019 and March 2020, they discovered that identity thieves
`
`had used their personal identifying information to fraudulently open credit cards in their names.
`
`See id. ¶¶ 16, 73-74, 84. In March 2020, an identity thief also “attempted to change
`
`[McFarlane’s] home address.” Id. ¶ 16. Mehfooz discovered the fraudulent credit card
`
`application when he was applying to refinance his home mortgage. See id. ¶ 73. The fraudulent
`
`application harmed his credit score and interrupted the refinancing process, which may have
`
`prevented him from taking advantage of “historically low interest rates.” Id. ¶¶ 73-74. All three
`
`allege that, to their knowledge, they had not been the victim of any data breach other than the
`
`breach of Altice. Id. ¶¶ 20, 79, 88. The other six allege that they are “at imminent and
`
`substantial risk of identity theft that is continuous and ongoing.” Id. ¶¶ 25, 33, 42, 49, 58, 65.
`
`The named Plaintiffs bring claims on behalf of a nationwide class of “[a]ll persons whose
`
`personally identifiable information was compromised as a result of the Data Breach at Altice
`
`USA, Inc. in November 2019.” Id. ¶ 170. They bring claims for negligence, see id. ¶¶ 181-95;
`
`
`
`4
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 5 of 26
`
`negligence per se for violation of the New York Labor Law, § 203-d, see Am. Compl. ¶¶ 196-
`
`204; negligence per se for violation of the Cable Communications Act of 1984, 47 U.S.C. § 551,
`
`see Am. Compl. ¶¶ 205-14; direct violation of the New York Labor Law, § 203-d, see Am.
`
`Compl. ¶¶ 215-22; direct violation of the Cable Communications Act of 1984, 47 U.S.C. § 551,
`
`see Am. Compl. ¶¶ 223-33; and breach of implied contract, see id. ¶¶ 234-39.2 In addition, they
`
`seek a declaration that Altice’s existing cybersecurity measures are inadequate and an injunction
`
`requiring certain improvements. See Am. Compl. ¶¶ 240-46. Now pending before the Court are
`
`Altice’s motion to dismiss the Amended Complaint pursuant to Rules 12(b)(1) and 12(b)(6) of
`
`the Federal Rules of Civil Procedure, ECF No. 45, and Altice’s motion to compel seven of the
`
`named Plaintiffs — McFarlane, Edward Hellyer, Carrie Mason-Draffen, Haseeb Raja, John
`
`Frontera, Mehfooz, and Paniccia — to submit their claims to arbitration, ECF No. 47.
`
`SUBJECT-MATTER JURISDICTION
`
`The Court begins, as it must, with Altice’s motion to dismiss for lack of subject-matter
`
`jurisdiction. See, e.g., Steel Co. v. Citizens for a Better Env’t, 523 U.S. 83, 94 (1998). In
`
`particular, Altice moves to dismiss on the ground that Plaintiffs lack standing, see ECF No. 46
`
`(“Def.’s Mem.”), at 5-13, which is an “essential aspect” of Article III’s limitation on the “judicial
`
`Power” of the federal courts to “Cases” and “Controversies,” Hollingsworth v. Perry, 570 U.S.
`
`693, 704 (2013); see U.S. Const. art. III, § 2. It is well established that “the irreducible
`
`constitutional minimum of standing contains three elements”: (1) injury in fact, (2) causation,
`
`and (3) redressability. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560-61 (1992). An injury in fact
`
`is “an invasion of a legally protected interest which is (a) concrete and particularized, and (b)
`
`
`2
`Plaintiff Cottrell, who never subscribed to cable service through Altice or any of its
`subsidiaries, see ECF No. 48 (“Def.’s Mot. to Compel Mem.”), at 1 n.1, does not join in the two
`claims pursuant to the Cable Communications Act of 1984, see Am. Compl. ¶¶ 205-13, 223-33.
`
`
`
`5
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 6 of 26
`
`actual or imminent, not conjectural or hypothetical.” Id. at 560 (cleaned up). The element of
`
`causation requires that the injury be “fairly traceable to the challenged action of the defendant,
`
`and not the result of the independent action of some third party not before the court.” Id.
`
`(cleaned up). Finally, to establish redressability, “it must be likely, as opposed to merely
`
`speculative, that the injury will be redressed by a favorable decision.” Id. at 561 (internal
`
`quotation marks omitted).
`
`
`
`Here, the standing inquiry turns primarily (if not entirely) on whether the threat of future
`
`identity theft that Plaintiffs allegedly face and the costs of monitoring that they have incurred in
`
`light of that threat constitute injuries in fact. Significantly, an injury “need not be actualized” to
`
`satisfy Article III. Davis v. Fed. Election Comm’n, 554 U.S. 724, 734 (2008). Instead, a “future
`
`injury” can suffice, so long as it is “certainly impending, or there is a substantial risk that the
`
`harm will occur.” Susan B. Anthony List v. Driehaus, 573 U.S. 149, 158 (2014) (emphasis
`
`added) (internal quotation marks omitted); see also Clapper v. Amnesty Int’l USA, 568 U.S. 398,
`
`414 n.5 (2013) (noting that plaintiffs need not “demonstrate that it is literally certain that the
`
`harms they identify will come about”). Additionally, a substantial risk of harm “may prompt
`
`plaintiffs to reasonably incur costs to mitigate or avoid that harm,” which costs can themselves
`
`constitute an injury in fact. Clapper, 568 U.S. at 414 n.5. Ultimately, the injury-in-fact
`
`requirement is meant to “ensure that the plaintiff has a personal stake in the outcome of the
`
`controversy.” Susan B. Anthony List, 573 U.S. at 158 (internal quotation marks omitted).
`
`
`
`Applying these principles, many courts have held that plaintiffs alleging the theft of
`
`personal identifying information in a “data breach,” as Plaintiffs do here, have standing to bring
`
`claims against the entity that had held their data based on an increased risk of future identity
`
`theft. See, e.g., Am. Fed’n of Gov’t Emps. v. Office of Pers. Mgmt (In re U.S. Office of Pers.
`
`
`
`6
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 7 of 26
`
`Mgmt. Data Sec. Breach Litig.), 928 F.3d 42, 55-61 (D.C. Cir. 2019) (per curiam); Attias v.
`
`Carefirst, Inc., 865 F.3d 620, 628-29 (D.C. Cir. 2017); Galaria v. Nationwide Mut. Ins. Co., 663
`
`F. App’x 384, 387-89 (6th Cir. 2016) (unpublished); Lewert v. P.F. Chang’s China Bistro, Inc.,
`
`819 F.3d 963, 967-68 (7th Cir. 2016); Remijas v. Neiman Marcus Grp., LLC, 794 F.3d 688, 692-
`
`94 (7th Cir. 2015); Fero v. Excellus Health Plan, Inc., 304 F. Supp. 3d 333, 338-41 (W.D.N.Y.
`
`2018); Sackin v. TransPerfect Glob., Inc., 278 F. Supp. 3d 739, 746 (S.D.N.Y. 2017). The
`
`Second Circuit has not yet ruled on the issue, but it did cite some of these cases, arguably with
`
`approval, in a summary order. See Whalen v. Michaels Stores, Inc., 689 F. App’x 89, 91 & n.1
`
`(2d Cir. 2017) (summary order). On that basis, some courts within the Circuit have predicted
`
`that the Second Circuit would adopt the same approach. See, e.g., Fero, 304 F. Supp. 3d at 339
`
`(“Whalen’s favorable citations to Galaria, Remijas, and Lewert suggest that the Second Circuit
`
`would follow the approach to the standing issue adopted by the Sixth and Seventh Circuits,
`
`which have both found standing based on increased risk of identity theft.”); accord Sackin, 278
`
`F. Supp. 3d at 746.
`
`
`
`In light of these cases, the Court has little difficulty concluding that all nine Plaintiffs
`
`plausibly allege injury in fact. Three — McFarlane, Mehfooz, and Paniccia — have already
`
`suffered concrete injury in the form of identity theft. And as for the other six, “experience and
`
`common sense” teach that they “face a substantial risk of identity theft” given that “their social
`
`security and credit card numbers were accessed by a network intruder.” Attias, 865 F.3d at 628
`
`(internal quotation marks omitted). Indeed, for at least two reasons, the risk of future identity
`
`theft is particularly substantial here. First, the fact that fraudulent credit cards have already been
`
`opened in the names of three Plaintiffs strongly suggests that the cyber criminals responsible for
`
`the breach will use the others’ data for criminal purposes or sell it to others for such use. See
`
`
`
`7
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 8 of 26
`
`Am. Compl. ¶¶ 16, 73, 84, 110. Thus, this case is easily distinguished from, for example, Beck
`
`v. McDonald, 848 F.3d 262 (4th Cir. 2017), in which the Fourth Circuit held that the risk of
`
`future harm was too speculative to support Article III standing where a laptop containing the
`
`plaintiffs’ personal identifying information was stolen from a hospital and, after extensive
`
`discovery, there was “no evidence . . . that the thief stole the laptop with the intent to steal their
`
`private information.” Id. at 267, 274; see also Reilly v. Ceridian Corp., 664 F.3d 38, 44 (3d Cir.
`
`2011) (finding no standing where “all that [wa]s known [wa]s that a firewall was penetrated,”
`
`and there was no reason to believe “that the intrusion was intentional or malicious”); Steven v.
`
`Carlos Lopez & Assocs., 422 F. Supp. 3d 801, 803 (S.D.N.Y. 2019) (finding no standing where
`
`an email containing employees’ personal information was inadvertently distributed within the
`
`company, but “there [wa]s no evidence” that the information “was shared with anyone outside of
`
`[the company], let alone misused”).
`
`
`
`Second, the stolen report contained Plaintiffs’ Social Security numbers, which is arguably
`
`“the most dangerous type of personal information in the hands of identity thieves” because it is
`
`immutable and can be used to “impersonat[e] [the victim] to get medical services, government
`
`benefits, . . . tax refunds, [and] employment.” Am. Compl. ¶ 108 (emphasis omitted). Unlike a
`
`credit card number, which can be changed to eliminate the risk of harm following a data breach,
`
`“[a] social security number derives its value in that it is immutable,” and when it is stolen it can
`
`“forever be wielded to identify [the victim] and target him in fraudulent schemes and identity
`
`theft attacks.” Bass v. Facebook, Inc., 394 F. Supp. 3d 1024, 1034 (N.D. Cal. 2019); see also
`
`Portier v. NEO Tech. Sols., No. 3:17-CV-30111 (TSH), 2019 WL 7946103, at *12 (D. Mass.
`
`Dec. 31, 2019) (“Because Social Security numbers are the gold standard for identity theft, their
`
`theft is significant. . . . Access to Social Security numbers causes long-lasting jeopardy because
`
`
`
`8
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 9 of 26
`
`the Social Security Administration does not normally replace Social Security numbers.”), report
`
`and recommendation adopted, No. 3:17-CV-30111 (TSH), 2020 WL 877035 (D. Mass. Jan. 30,
`
`2020); cf. Alleruzzo v. SuperValu, Inc. (In re SuperValu, Inc.), 870 F.3d 763, 770 (8th Cir. 2017)
`
`(holding that the risk of future harm resulting from the theft of credit card data — as opposed to
`
`more sensitive “personally identifying information, such as social security numbers” — is
`
`insufficient to confer standing); Whalen, 689 F. App’x at 90 (holding that a plaintiff whose credit
`
`card information was stolen, but promptly canceled, and who did not allege that “other
`
`personally identifying information — such as her birth date or Social Security number” was
`
`stolen, lacked standing (emphasis added)).
`
`In sum, based on the great weight of authority, all nine Plaintiffs easily establish that they
`
`have suffered an injury in fact within the meaning of Article III. They also adequately allege that
`
`their injuries are fairly traceable to Altice because the company “failed to take the necessary
`
`precautions required to safeguard and protect” their data. Am. Compl. ¶ 103; see Stevens v.
`
`Zappos.com, Inc. (In re Zappos.com, Inc.), 888 F.3d 1020, 1029-1030 (9th Cir. 2018); Attias,
`
`865 F.3d at 629; Remijas, 794 F.3d at 696. And finally, if Plaintiffs succeed on the merits of
`
`their claims, the Court can redress their injuries by awarding damages for the “reasonabl[e]”
`
`costs of “mitigat[ing] or avoid[ing]” future identity theft, among other things. Clapper, 568 U.S.
`
`at 414 n.5. Thus, Plaintiffs meet their burden to establish Article III standing.
`
`MOTION TO COMPEL ARBITRATION
`
`Next, Altice moves to compel seven of the nine named Plaintiffs — namely, McFarlane,
`
`Hellyer, Mason-Draffen, Raja, Frontera, Mehfooz, and Paniccia — to arbitrate their claims.
`
`Significantly, Altice does so not based on an arbitration provision contained in any employment
`
`agreements with these Plaintiffs, but based on arbitration provisions contained in the General
`
`
`
`9
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 10 of 26
`
`Terms and Conditions of Service (the “Terms and Conditions”) pertaining to the company’s
`
`cable service. See Mot. to Compel Mem. 3-8. A representative version of these provisions
`
`(referred to, together, as the “Arbitration Provision”) states:
`
`Any and all disputes arising between You and Altice, including its respective
`parents, subsidiaries, affiliates, officers, directors, employees, agents,
`predecessors, and successors, shall be resolved by binding arbitration on an
`individual basis . . . . This agreement to arbitrate is intended to be broadly
`interpreted. It includes, but is 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;
`
`• Claims that arose before this or any prior Agreement; and
`
`• Claims that may arise after the termination of this Agreement.
`
`ECF No. 49-6, § 24.3 Six of the seven Plaintiffs at issue signed work orders (when cable
`
`technicians were visiting their homes for installation or maintenance of cable service) indicating
`
`that they agreed to the Terms and Conditions containing such a provision. See ECF Nos. 49-22,
`
`49-23, 49-24, 49-25, 49-26, 49-27, 49-28, 49-29, 49-30, 49-31, 49-32, 49-33, 49-34, 49-35, 49-
`
`36, 49-37. The seventh (Frontera) has not signed any such document, but “continued to use
`
`Altice’s services despite repeated notices regarding the General Terms applicable to such
`
`services” and thus, according to Altice, “unambiguously manifested his assent to the Arbitration
`
`Provision.” Def.’s Mot. to Compel Mem. 7 n.6. Notably, Altice does not move to compel
`
`Cottrell and Gill to arbitrate as there is no plausible claim that they agreed to the Arbitration
`
`
`3
`The language of the Arbitration Provision has changed a few times since it was
`introduced in 2011, but the changes are minor and immaterial for present purposes. See ECF No.
`49-1, § 18; ECF No. 49-2, § 18; ECF No. 49-3, § 18; ECF No. 49-4, § 20; ECF No. 49-5, § 22;
`see also ECF No. 49, ¶¶ 5-19.
`
`
`
`10
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 11 of 26
`
`Provision; Cottrell was never an Altice subscriber and Gill terminated her Altice cable service
`
`before the arbitration provision was added to the Terms and Conditions. See id. at 1 n.1.
`
`Section 2 of the FAA provides, in relevant part, as follows:
`
`A written provision in . . . a contract evidencing a transaction involving commerce
`to settle by arbitration a controversy thereafter arising out of such contract or
`transaction, or the refusal to perform the whole or any part thereof, or an
`agreement in writing to submit to arbitration an existing controversy arising out of
`such a contract, transaction, or refusal, shall be valid, irrevocable, and
`enforceable, save upon such grounds as exist at law or in equity for the revocation
`of any contract.
`
`9 U.S.C. § 2. Under Section 4 of the Act, a party to “a written agreement for arbitration” may
`
`petition a district court “for an order directing that such arbitration proceed in the manner
`
`provided for in such agreement.” Id. § 4. To decide “whether the parties agreed to arbitrate,” a
`
`court must then apply “ordinary state-law principles that govern the formation of contracts.”
`
`First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Significantly, the FAA was
`
`intended “to make arbitration agreements as enforceable as other contracts, but not more so.”
`
`Volt Info. Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989)
`
`(emphasis added) (internal quotation marks omitted). Thus, “the FAA does not require parties to
`
`arbitrate when they have not agreed to do so.” Id. Nor does it require arbitration when, under
`
`generally applicable principles of state law, the agreement would be unenforceable. See, e.g.,
`
`Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987); Mitsubishi Motors Corp. v. Soler Chrylser-
`
`Plymouth, Inc., 473 U.S. 614, 627 (1985); see also Doctor’s Assocs. Inc. v. Cassarotto, 517 U.S.
`
`681, 687 (1996).
`
`
`
`More specifically, the Second Circuit instructs that, when confronted with a motion to
`
`compel arbitration, “a court should undertake a three-part inquiry.” Louis Dreyfus Negoce S.A.
`
`v. Blystad Shipping & Trading Inc., 252 F.3d 218, 224 (2d Cir. 2001). (As will be seen, the
`
`inquiry, in reality, has only two parts, with the second part taking two possible forms and
`
`
`
`11
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 12 of 26
`
`depending on the outcome of the first part.) “First, recognizing there is some range in the
`
`breadth of arbitration clauses, a court should classify the particular clause as either broad or
`
`narrow.” Id. The Second Circuit has described a “clause submitting to arbitration ‘any claim or
`
`controversy arising out of or relating to the agreement’” as the “paradigm of a broad [arbitration]
`
`clause.” Hatemi v. M & T Bank, 633 F. App’x 47, 49 (2d Cir. 2016) (summary order) (quoting
`
`Collins & Aikman Prods. Co. v. Bldg. Sys., Inc., 58 F.3d 16, 20 (2d Cir. 1995)). “Next, if
`
`reviewing a narrow clause, the court must determine whether the dispute is over an issue that is
`
`on its face within the purview of the clause, or over a collateral issue that is somehow connected
`
`to the main agreement that contains the arbitration clause.” Louis Dreyfus Negoce S.A., 252 F.3d
`
`at 224 (internal quotation marks omitted). In general, “[w]here the arbitration clause is narrow, a
`
`collateral matter will . . . be ruled beyond its purview.” Id. By contrast, “[w]here the arbitration
`
`clause is broad, there arises a presumption of arbitrability and arbitration of even a collateral
`
`matter will be ordered if the claim alleged implicates issues of contract construction or the
`
`parties’ rights and obligations under it.” Id. (internal quotation marks omitted). “When parties
`
`use expansive language in drafting an arbitration clause,” the Circuit has explained, “presumably
`
`they intend all issues that ‘touch matters’ within the main agreement to be arbitrated.” Id. at 225
`
`(internal quotation marks omitted).
`
`
`
`Altice describes the Arbitration Provision as “extremely broad,” Def.’s Mot. to Compel
`
`Mem. 4, but, by any reasonable measure, “that term is inadequate to capture the true breadth of
`
`its substantive and temporal scope,” Hearn v. Comcast Cable Commc’ns, LLC, 415 F. Supp. 3d
`
`1155, 1161 (N.D. Ga. 2019). Indeed, the Arbitration Provision is significantly broader even than
`
`the paradigmatic broad arbitration clause identified by the Second Circuit. It is not limited to
`
`claims “arising out of” or “relating to” the cable service agreement. Instead, it purports to cover
`
`
`
`12
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 13 of 26
`
`“[a]ny and all disputes arising between” the customer and Altice — not to mention, Altice’s
`
`parents, subsidiaries, affiliates, agents, successors, and so on — without meaningful exception
`
`and for all eternity. That is, it is “limited” only by the requirement that the dispute involve Altice
`
`(or an associated entity or person), which, “is, of course, no limit at all.” Id. at 1162. The
`
`Arbitration Provision is thus an example of a “relatively new and untested” species of arbitration
`
`clause, Mey v. DIRECTTV, LLC, 971 F.3d 284, 302 (4th Cir. 2020) (Harris, J., dissenting), which
`
`one scholar has aptly dubbed an “infinite arbitration clause,” David Horton, Infinite Arbitration
`
`Clauses, 168 U. Pa. L. Rev. 633, 639-40 (2020). If enforced according to its terms, such a clause
`
`would seem to mandate arbitration of any claim between the parties, including those without any
`
`nexus whatsoever to the agreement containing the clause.
`
`
`
`Underscoring the relative novelty of “infinite arbitration clauses,” there is relatively little
`
`case law addressing them. Most of what there is, however, has taken a jaundiced view of the
`
`argument that they should be enforced according to their terms. See id. at 641-42; see also
`
`Hearn, 415 F. Supp. 3d at 1162. That view is traceable to Smith v. Steinkamp, 318 F.3d 775 (7th
`
`Cir. 2003), in which Judge Posner described the “absurd results” that would “ensue” if a payday
`
`lender’s arbitration agreement purporting to cover “all claims asserted by you . . . against us”
`
`were “read as standing free from any loan agreement.” Id. at 776-77 (internal quotation marks
`
`omitted). For example,
`
`if Instant Cash murdered Smith in order to discourage defaults and her survivors
`brought a wrongful death suit against Instant Cash . . . , 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.
`
`Id. at 777. Judge Posner mused that such an agreement “might be thought unconscionable,”
`
`noting that “[t]he applicability of the doctrine of unconscionability to arbitration clauses
`
`
`
`13
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 14 of 26
`
`governed by the Federal Arbitration Act was confirmed” by the Supreme Court in Doctor’s
`
`Associates, 517 U.S. at 687. Smith, 318 F.3d at 778.
`
`
`
`Following Smith, the Ninth Circuit and a handful of district courts around the country
`
`have declined to compel arbitration of claims based on “infinite arbitration clauses” where the
`
`claims at issue lack any nexus whatsoever to the agreement containing the clause. See Revitch v.
`
`DIRECTV, LLC, 977 F.3d 713, 717-21 (9th Cir. 2020); Hearn, 415 F. Supp. 3d at 1161-65;
`
`Wexler v. AT & T Corp., 211 F. Supp. 3d 500, 503-05 (E.D.N.Y. 2016); In re Jiffy Lube Int’l,
`
`Inc., Text Spam Litig., 847 F. Supp. 2d 1253, 1262-63 (S.D. Cal. 2012). But these courts have
`
`taken different paths to reach that result. Jiffy Lube, which involved facts much like those here,
`
`is representative of one path. It involved a putative class action against a Jiffy Lube franchisee,
`
`Heartland Automotive Services, Inc. (“Heartland”), alleging that the franchisee had sent
`
`unauthorized text messages offering discounts on Jiffy Lube services in violation of the
`
`Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227. 847 F. Supp. 3d at 1255.
`
`Heartland moved to compel arbitration of one named plaintiff’s claims because he had signed an
`
`agreement when he visited a Heartland location providing that “any and all disputes,
`
`controversies or claims between Jiffy Lube® and you (including breach of warranty, contract,
`
`tort or any other claim) will be resolved by mandatory arbitration.” Id. at 1262. The district
`
`court held that the agreement could not “truly encompass ‘any and all disputes’ between the
`
`parties” because such a “clause would clearly be unconscionable” if applied, for example, to “a
`
`tort action arising from a completely separate incident.” Id. at 1262-63.
`
`
`
`Hearn illustrates the second path. The plaintiff in that case alleged that Comcast Cable
`
`Communications had violated the Fair Credit Reporting Act when it checked his credit during a
`
`call on March 5, 2019. See 415 F. Supp. 3d at 1157. He was not a Comcast customer at the time
`
`
`
`14
`
`

`

`Case 1:20-cv-01297-JMF Document 58 Filed 03/08/21 Page 15 of 26
`
`of the call, but he had contracted for cable services from December 2016 to August 2017 and, in
`
`that window, had signed a work order acknowledging receipt of a “Comcast Welcome Kit”
`
`containing a service agreement with an arbitration clause much like the one at issue here. See id.
`
`at 1157-58. Comcast moved to compel arbitration, and the district court denied the motion,
`
`decrying the “absurd results” that “would inevitably ensue if federal courts began compelling
`
`arbitration of claims that are substantively and temporally unmoored from the agreements
`
`containing the arbitration provisions.” Id. at 1164. In the Hearn Court’s view, however, the
`
`problem was not one of unconscionability, but rather “one of contract formation.” Id. Under
`
`Georgia law, the court explained, “[a] contract must be given a reasonable construction which
`
`will uphold and enforce the instrument, if possible, rather than a construction which would . . .
`
`lead to an absurd result.” Id. at 1165 (quoting Tudor v. Am. Emp’rs Ins. Co., 173 S.E.2d 403,
`
`405-06 (Ga. Ct. App. 1970)). And “no reasonable customer would have understood himself to
`
`be signing over his right