701 F.3d 1248 (10th Cir. 2012), 11-6233, Hancock v. American Tel. and Tel. Co., Inc.

Docket Nº:11-6233.
Citation:701 F.3d 1248
Opinion Judge:MATHESON, Circuit Judge.
Party Name:Gayen HANCOCK; David Cross; Montez Mutzig; James Bollinger, Plaintiffs-Appellants, v. AMERICAN TELEPHONE AND TELEGRAPH COMPANY, INC.; AT & T Operations, Inc.; Southwestern Bell Telephone Company, LP; Pacific Bell Telephone Company; Illinois Bell Telephone Company; Indiana Bell Telephone Company Incorporated; Michigan Bell Telephone Company; Nevada
Attorney:Richard A. Westfall (Peter J. Krumholz and Matthew W. Spengler, with him on the briefs), Hale Westfall, LLP, Denver, CO, appearing for Appellants. Archis A. Parasharami, Mayer Brown, LLP, Washington, DC (Evan M. Tager and Theodore J. Weiman, Mayer Brown, LLP, Washington, DC; Curtis Long, Fellers,...
Judge Panel:Before MURPHY, EBEL, and MATHESON, Circuit Judges.
Case Date:December 11, 2012
Court:United States Courts of Appeals, Court of Appeals for the Tenth Circuit
 
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Page 1248

701 F.3d 1248 (10th Cir. 2012)

Gayen HANCOCK; David Cross; Montez Mutzig; James Bollinger, Plaintiffs-Appellants,

v.

AMERICAN TELEPHONE AND TELEGRAPH COMPANY, INC.; AT & T Operations, Inc.; Southwestern Bell Telephone Company, LP; Pacific Bell Telephone Company; Illinois Bell Telephone Company; Indiana Bell Telephone Company Incorporated; Michigan Bell Telephone Company; Nevada Bell Telephone Company; The Ohio Bell Telephone Company; Wisconsin Bell, Inc.; The Southern New England Telephone Company; BellSouth Telecommunications, Inc.; AT & T Southeast, Inc., Defendants-Appellees.

No. 11-6233.

United States Court of Appeals, Tenth Circuit.

December 11, 2012

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Richard A. Westfall (Peter J. Krumholz and Matthew W. Spengler, with him on the briefs), Hale Westfall, LLP, Denver, CO, appearing for Appellants.

Archis A. Parasharami, Mayer Brown, LLP, Washington, DC (Evan M. Tager and Theodore J. Weiman, Mayer Brown, LLP, Washington, DC; Curtis Long, Fellers, Snider, Blankenship, Bailey & Tippens, Tulsa, OK; J. Henry Walker, IV, Cindy D. Hanson, and John P. Jett, Kilpatrick Stockton, LLP, Atlanta, GA, with him on the brief), appearing for Appellees.

Before MURPHY, EBEL, and MATHESON, Circuit Judges.

MATHESON, Circuit Judge.

Gayen Hancock, David Cross, Montez Mutzig, and James Bollinger (collectively " Plaintiffs" ) seek to represent a class of customers dissatisfied with " U-verse," a digital telecommunications service. The United States District Court for the Western District of Oklahoma dismissed their claims based on forum selection and arbitration clauses in the U-verse terms of service. Plaintiffs appeal the dismissal of their claims.

Exercising jurisdiction pursuant to 28 U.S.C. § 1291, we affirm.

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I. BACKGROUND

A. Factual History

1. U-verse and Terms of Service

U-verse is the brand name for a telecommunications service that includes digital television (" TV" ), voice-over Internet protocol (" Voice" ), and high-speed Internet (" Internet" ). At the time Plaintiffs purchased U-verse, customers could receive TV alone or bundle it with Voice and/or Internet for a discounted rate.

One set of terms of service governs U-verse TV and Voice services (" TV/Voice terms" ). The TV/Voice terms have a forum selection provision stating that, in the event of litigation, AT & T and U-verse customers " agree to submit to the ... jurisdiction of the courts located within the county of Bexar County, Texas" (" Forum Selection Clause" ). Aplt. Appx. at 1007.

Different terms of service govern U-verse Internet service (" Internet terms" ). The Internet terms include an arbitration provision stating that AT & T and the customer " agree to arbitrate all disputes and claims ... based in whole or in part upon the [Internet service]" (" Arbitration Clause" ). Id. at 778.

2. Parties

Plaintiffs are individuals who purchased U-verse in either Florida or Oklahoma. Their complaint names 13 defendants and alleges that U-verse is " plagued by defects and deficiencies." Id. at 26. Plaintiffs seek to represent a class of U-verse customers who experienced similar problems with U-verse.

This appeal principally involves three defendants: AT & T Operations, Inc. (" AT & T" ); 1 Southwestern Bell Telephone Company (" Southwestern Bell" ); and BellSouth Telecommunications, Inc. (" BellSouth" ) (collectively " Defendants" ). AT & T " is the entity ultimately responsible for ... U-verse in the areas provisioned by Southwestern Bell ... and BellSouth." Id. at 1051. Southwestern Bell and BellSouth are AT & T regional affiliates who install and provide U-verse services for customers in Oklahoma and Florida, respectively.2

B. Procedural History

1. Complaint and Motions to Dismiss

Plaintiffs filed their class action complaint on July 30, 2010, in the U.S. District Court for the Western District of Oklahoma. They asserted claims under the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. §§ 1961 et seq., as well as various claims under state law.

In October 2010, AT & T and Southwestern Bell filed two motions to dismiss Plaintiffs' claims. The first motion cited the Forum Selection Clause and moved under Fed.R.Civ.P. 12(b)(3) to dismiss Plaintiffs' TV/Voice-related claims for improper venue or, alternatively, to transfer venue to the U.S. District Court for the Western District of Texas under 28 U.S.C. § 1404(a). The second motion cited the Arbitration Clause and moved to dismiss Plaintiffs' Internet-related claims and to compel arbitration. BellSouth and the

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other 10 named defendants joined AT & T and Southwestern Bell's two motions.3

To show that Plaintiffs accepted the TV/Voice terms and Internet terms— including the corresponding Forum Selection Clause and Arbitration Clause— Defendants proffered declarations from AT & T employees. The declarations recount the standard practice for customer acceptance of U-verse TV/Voice and Internet terms (the " standard practice" ).

a. Standard Practice for Acceptance of TV/Voice Terms

According to the declarations, the following standard practice applies to customer acceptance of the TV/Voice terms.

When a customer orders U-verse TV/Voice service, the order is sent to AT & T's Global Craft Access System (" GCAS" ). A technician reviews the order and responds to install the TV/Voice service. The technician provides the customer with a Welcome Kit, which contains a printed copy of the TV/Voice terms. The technician gives the customer an opportunity to review the TV/Voice terms before installation.

The technician then displays an acceptance form on the technician's laptop through the GCAS web application. The acceptance form has a check box next to " Terms Of Service." Below the check box, the form states in all capital letters: " Before acknowledging below, please review the appropriate documents pertaining to your new AT & T service(s). By selecting ‘ I Acknowledge’ below, you are acknowledging that you have read, understand, and agree to the content of the documents checked above." Id. at 883. The customer must click an " I Acknowledge" button below this statement to accept the TV/Voice terms.

The acceptance form is then populated with the customer's name, order number, account number, and date of acceptance and stored on an AT & T server. For customers who prefer a written acceptance form, technicians provide paper copies. Technicians do not install U-verse TV/Voice service until customers accept the terms of service.

According to AT & T's records, Plaintiffs Mutzig, Bollinger, and Hancock " completed the installation of ... U-verse services and acceptance of the TV/Voice [terms] on the GCAS web application." Id. at 879-80.

AT & T was unable to find records confirming that Plaintiff Cross was a U-verse customer. But one of the declarations explains that because Plaintiff Cross is an Oklahoma resident, he would have received U-verse from Southwestern Bell, the sole provider in that state. And because Southwestern Bell's " U-verse activation and acceptance procedures are uniform and mandatory," Plaintiff Cross would have accepted the TV/Voice terms in the same manner as other U-verse customers. Id. at 997.

b. Standard Practice for Acceptance of Internet Terms

An AT & T senior product manager for U-verse Internet customer registration and activation described the following standard practice for customer acceptance of U-verse Internet terms.

A new U-verse Internet customer is required to complete an online registration process to activate the service. During the registration process, the customer is

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presented with a screen that displays AT & T's Internet terms in a scrolling text box. Below the text box are three buttons labeled " Exit Registration," " I Reject," and " I Agree." The customer must click the " I Agree" button to continue with the registration. " Until this process is completed, the new customer will automatically be directed to the U-verse registration page every time he or she attempts to connect to the Internet using a web browser over his or her U-verse High Speed Internet connection." Id. at 339.

AT & T's records indicate that Plaintiffs Mutzig, Bollinger, and Hancock completed the U-verse Internet registration process.4 Plaintiffs Bollinger and Hancock received U-verse Internet when its terms of service included the Arbitration Clause. Plaintiff Mutzig's U-verse Internet registration date was September 29, 2008, before the Internet terms incorporated the Arbitration Clause. In October 2008, AT & T sent an e-mail to customers notifying them of changes to the Internet terms, including the addition of the Arbitration Clause. The e-mail states that " [b]y continuing to use the Service, [customers] signify [their] continued agreement to the terms and conditions set forth in the Terms of Service document." Id. at 427. It is undisputed that Plaintiff Mutzig received this e-mail.

2. Hancock Affidavit

In response to the motions to dismiss, Plaintiffs provided an affidavit from Plaintiff Hancock. He averred that he " did not ‘ click on’ ANY acceptance of U-verse ‘ Terms of Service’ when [he] bought U-verse, and the salesman never told [him] about any ‘ Terms of Service.’ " Id. at 1802. Plaintiff Hancock further stated that he " was never aware of the fact that there were actually multiple terms of service for TV, [Voice,] and Internet services." Id.

3. District Court's Orders

In separate orders tailored to each Plaintiff, the district court granted Defendants' motion to dismiss/transfer venue on the TV/Voice-related claims and their motion to dismiss/compel arbitration on the Internet-related claims. Concluding that the Forum Selection Clause was mandatory and unambiguous, the court dismissed Plaintiffs' TV/Voice-related claims without prejudice. The court...

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