Dale v. Comcast Corp.

• Decision Date: 18 September 2006
• Docket Number: Civil Action No. 1:05-CV-3315-WCO.
• Citation: 453 F.Supp.2d 1367
• Parties: Gene DALE, Marrell Waring, Rebecca Shrager, Valerie Janssens, Richard Richmond, Eva Lautemann, Carlyce Burns, and all others similarly situated, Plaintiffs, v. COMCAST CORPORATION, Defendant.
• Court: U.S. District Court — Northern District of Georgia

453 F.Supp.2d 1367

Gene DALE, Marrell Waring, Rebecca Shrager, Valerie Janssens, Richard Richmond, Eva Lautemann, Carlyce Burns, and all others similarly situated, Plaintiffs, v. COMCAST CORPORATION, Defendant.

Civil Action No. 1:05-CV-3315-WCO.

United States District Court, N.D. Georgia, Atlanta Division.

September 18, 2006.

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Anne Ware Lewis, Frank B. Strickland, Mary M. Brockington, Strickland Brockington Lewis, Kevin Trent Moore, Office of Kevin T. Moore, William A. Pannell, William A. Pannell PC, Atlanta, GA, for Plaintiffs.

David A. Konuch, White & Case, Jaime A. Bianchi, White & Case, Miami, FL, Nolan C. Leake, Ranse M. Partin, King & Spalding, Llp, Atlanta, GA, for Defendant.

ORDER

O'KELLEY, Senior District Judge.

The captioned case is before the court for consideration of defendant's motion to compel arbitration and motion to dismiss and plaintiffs' motion for trial and motion for oral argument [22-1].

I. Factual Background and Procedural History

On October 20, 2005, plaintiffs filed suit against defendant in Fulton County Superior Court. Defendant removed the action to this court on December 29, 2005[1-1].¹ Plaintiffs are subscribers to defendant's cable television services who claim that defendant overcharged them for these services in violation of the Cable Communications Policy Act, 47 U.S.C. § 522 et seq. (the "Cable Act"). Plaintiffs purport to represent a class of "[a]ll Comcast cable subscribers, other than officers, directors, major shareholders and employees of Comcast and its subsidiaries, who have been charged franchise fees in excess of the base amount required by their local franchise authority." (Compl.¶ 10). Defendant now requests that the court dismiss the action pursuant to Federal Rule of Civil Procedure 12(b)(6) and compel arbitration. Defendant claims that plaintiffs' suit is barred by the arbitration clause contained in its subscriber agreement.

Plaintiffs Dale, Shrager, Lautemann, and Janssens began subscribing to cable television service from defendant's predecessor, AT & T Broadband, prior to November 2002. (Macke Decl. ¶ 6.) Plaintiff Richmond began subscribing to defendant's cable television service in June 2003. (Id.) Plaintiff Waring began subscribing to defendant's cable television service in July 2004.(Id.) Plaintiff Burns began subscribing to cable television service from defendant in approximately July 2005. (Id. ¶ 7.)

Defendant's written Subscriber Agreement sets forth the terms of the subscriber relationship between defendant and its subscribers. As a matter of standard operating procedure, defendant provides its subscribers a copy of the Subscriber Agreement at the time of installation of service. (Macke Decl. ¶ 7.) Thereafter, on an annual basis, defendant disseminates notices of its policies and practices to its subscribers by including them in the subscribers' monthly bills. (Id. ¶ 3.) Pursuant to this practice, defendant included the policies and practices containing the arbitration provisions that were in effect at the filing of this lawsuit with each Atlanta area subscriber's invoice as a billing stuffer entitled "Important Notices to Our Customers: Your Local Cable Company's Policies & Practices" during the December 2004 billing cycle. (Id. ¶ 4.) This same version of the Subscriber Agreement was given to new subscribers at the time of installation throughout 2005. (Id. ¶ 7.)

At the time of installation, along with the Subscriber Agreement, defendant provides its customers with other information concerning service in a document called a "Welcome Kit." (Further Macke Decl. ¶ 8.) It is defendant's practice to obtain the signature of the owner or resident of the subscriber's property on a document known as a "Work Order" at the time of installation of service or of service and repair visits. (Id. ¶ 4.) Above the customer signature line on the Work Order is the following language: "I acknowledge receipt of Comcast's Welcome Kit which contains the Comcast Subscriber Agreement. . . I agree to be bound by the current Comcast Subscriber Agreement." (See Further Macke Decl., Exs. A-E.)

Defendant moves to compel arbitration based on the arbitration provisions in the 2004 version of the Subscriber Agreement. This version of the Subscriber Agreement, which was included in the December 2004 invoices and given to new subscribers during 2005, contains a provision that allows either party to require binding arbitration of "any dispute, claim or controversy between [plaintiff] and Comcast . . . whether based in contract, statute, regulation, ordinance, tort . . . or any other legal or equitable theory." (Macke Decl., Ex. A, at § 13(B).) Thus, defendant requests that the court order plaintiffs to submit their claims to binding arbitration and dismiss this action. Plaintiffs have filed a response in opposition to defendant's motion. Plaintiffs have also filed a motion for a jury trial on the issue of whether a valid agreement to arbitrate exists. Plaintiffs also requested oral argument on defendant's motion to compel and motion to dismiss. The parties were given the opportunity to present their arguments on these matters to the court during a May 18, 2006 status conference.

II. Motion to Compel Arbitration

Defendant contends that this court must enforce the arbitration provisions contained in the Subscriber Agreement and require plaintiffs to submit their claims to arbitration on an individual basis. Plaintiffs argue (1) that defendant has failed to establish the existence of an arbitration agreement; (2) that plaintiffs' claims are not covered by the arbitration provisions; (3) that the arbitration provisions are unenforceable due to their unconscionability; and (4) that defendant has waived its right to arbitrate. The court will address each of these arguments in turn.

A. Agreement to Arbitrate

Although the validity of an arbitration agreement is generally governed by the Federal Arbitration Act ("FAA"), 9 U.S.C. § 1 et seq., state law generally governs whether an enforceable contract or agreement to arbitrate exists. Caley v. Gulfstream Aerospace Corp., 428 F.3d 1359, 1367-68 (11th Cir.2005). In determining whether a binding agreement to arbitrate arose between the parties, the court must apply the state law governing the formation of a contract. Id. at 1368. However, as the FAA is "preemptive of state laws hostile to arbitration," the court should take into consideration the federal policy favoring arbitration. Id. at 1367-68 (quoting Circuit City v. Adams, 532 U.S. 105, 112, 121 S.Ct. 1302, 149 L.Ed.2d 234 (2001)).

Plaintiffs first argue that defendant has failed to demonstrate the existence of an agreement to arbitrate. All plaintiffs deny that they ever entered into a written arbitration agreement with defendant. (Dale Decl. ¶ 6; Waring Decl. ¶ 4; Shrager Decl. ¶ 4; Lautemann Decl. ¶¶ 5-6; Janssens Decl. ¶ 4; Richmond Decl. ¶ 3; Burns Decl. ¶ 4.) Plaintiffs either deny or do not recall having received any documents containing the arbitration provisions prior to filing this lawsuit. (Dale Decl. ¶¶ 7-8; Waring Decl. ¶ 7; Shrager Decl. ¶ 7; Lautemann Decl. ¶ 8; Janssens Decl. ¶ 7; Richmond Decl. ¶ 7; Burns Decl. ¶ 7.)

The court, however, is persuaded that the totality of the evidence establishes that defendant mailed the Subscriber Agreements containing the arbitration provisions and that plaintiffs received them.

The declaration of James Macke, director of government and community affairs for defendant's Atlanta region, states that, as a matter of routine practices, the documents were mailed to six of the seven plaintiffs at their billing addresses of record during the December 2004 billing cycle. (Macke Decl. ¶¶3-4.) Furthermore, defendant has also shown that all plaintiffs paid their bills in the month following the receipt of the documents, indicating that the mail reached the intended recipients. The law recognizes "a rebuttable presumption that an item properly mailed was received by the addressee."² Konst v. Fla. E. Coast Ry., 71 F.3d 850, 851 (11th Cir. 1996). Defendant has also presented evidence that, at the installation of her service in July 2005, plaintiff Burns received a Welcome Kit containing the Subscriber Agreement and signed a Work Order acknowledging such receipt. (Macke Decl. ¶ 7; Further Macke Decl., Ex. E.) Based on defendant's evidence, the court finds that plaintiffs' denials and/or conclusory declarations that they do not recall receiving copies of the arbitration provisions are insufficient to defeat defendant's motion to compel.

Plaintiffs next argue that defendant cannot compel arbitration based on the arbitration provisions in the 2004 version of the Subscriber Agreement as they merely amend underlying agreements that defendant has failed to produce. Plaintiffs argue that, because defendant has failed to show the existence of a valid contract defendant cannot show a meeting of the minds as to the terms of the 2004 document. For this proposition, plaintiffs cite to Georgia law requiring a "meeting of the minds as to all essential terms" to constitute a valid and enforceable contract. TranSouth Fin. Corp. v. Rooks, 269 Ga. App. 321, 604 S.E.2d 562, 564 (2004). Plaintiffs argue that they did not assent to be bound by the terms of the 2004 version of the Subscriber Agreement.

The 2004 notice containing defendant's policies and procedures states as follows:

This notice provides important information regarding your cable television service.

We may change this information in the future. We will send you a written, electronic or other appropriate notice informing you of any changes and the effective date. If you find the change unacceptable, you have the right to cancel your service. However, if you continue to receive our service after the effective date of the change, we will consider this your acceptance of the change. . . .

THE CUSTOMER NAMED ON THE WORK ORDER ("CUSTO...