Noonan v. Comcast Corp.

• Decision Date: 23 October 2017
• Docket Number: Civil Action No. 3:16-cv-00458 (PGS)
• Parties: JUDITH NOONAN, at al. Plaintiffs, v. COMCAST CORP. Defendant.
• Court: U.S. District Court — District of New Jersey

JUDITH NOONAN, at al. Plaintiffs, v. COMCAST CORP. Defendant.

Civil Action No. 3:16-cv-00458 (PGS)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY

October 23, 2017

NOT FOR PUBLICATION

MEMORANDUM AND ORDER

SHERIDAN, U.S.D.J.

This matter comes before the Court on Defendant's Renewed Motion to Compel Arbitration and Stay Litigation. (ECF No. 31).

Factual & Procedural Background

On December 8, 2015, Plaintiffs initiated this class action in Superior Court, Ocean County. On January 27, 2016, Defendant removed the matter to this Court pursuant to the Class Action Fairness Act of 2005 ("CAFA"), 28 U.S.C. § 1332 et seq. (ECF No. 1, Notice of Removal). Plaintiffs allege: (1) declaratory relief; (2) violations of the Plain Language Act, N.J.S.A. §56:12-1 et seq.; (3) violations of the Consumer Fraud Act, N.J.S.A. § 56:8-1 et seq.; (4) breach of contract; (5) bad faith; and (6) prima facie tort, arising out of Comcast's allegedly arbitrary pricing, deficient telephone, television, and computer services, deficient equipment, and abandoned equipment and advertising material. (ECF No. 1, Compl.).

Plaintiffs allege that Defendant arbitrarily priced its equipment and services, provided deficient services and equipment, left promotional literature on door knobs, abandoned equipment, used confusing contractual and promotional language, and provided deficient customer service. (Id. ¶¶ 17-24).

Defendant seeks to compel arbitration and stay litigation. Defendant contends that Plaintiffs are bound by an arbitration agreement in their Comcast Agreement for Residential Services (the "Subscriber Agreement"). Comcast provided copies of the Subscriber Agreement to Plaintiffs as an insert in a monthly billing statement and as part of a welcome kit when services were installed. (See Def.'s Br. 4; ECF No. 18).

For the purposes of this motion, the parties have submitted a Stipulation as to which versions of the Subscriber Agreements were in place at the time the Plaintiff received services.¹ (See Stip. 1-2; ECF No. 23-1). The stipulation is significant because the language of the current Subscriber Agreement available on Defendant's website differs from those in dispute. (See Pl.'s Br. 4-5; ECF No. 36). In particular, the Defendant revised Section 13 which contains the arbitration provision. (See Def.'s Br. at Exhibit "A"; ECF No. 18-2).

All three Subscriber Agreements in dispute have nearly identical arbitration provisions made up of 11 paragraphs a-k, are approximately thirty pages, over 3,000 words, and single spaced with no table of contents. (ECF No. 23-1) (See Def.'s Br. 6; Opp. Br. 10). The sections in thearbitration provision are as follows: a. Purpose; b. Definitions; c. Right to Opt Out; d. Initiation of Arbitration Proceeding/Selection of Arbitrator; e. Arbitration Procedures; f. Restrictions; g. Location of Arbitration; h. Payment of Arbitration Fees and Costs; i. Severability; j. Exclusions from Arbitration; k. Continuation. (See Exhibit "B"; ECF No. 23-1 at 44-47.) The 2008 agreement has no page numbers while the 2011 and 2012 agreements have page numbers and a separate notice on customer privacy. The following memorandum refers to all three agreements, starting with Ex. B, the 2008 Agreement, and citing to the corresponding page numbers for Exhibits C and D when the language used is identical.² Any minor language differences present in relevant sections of the disputed versions of the agreements are quoted accordingly.

On the first page of the 2008 Subscriber Agreement located three-quarters of the way down, in bold type (surrounded by other bold type) is the following language:

Note: This Agreement contains a binding arbitration provision in Section 13 that affects your rights under this Agreement with respect to all Services.

(ECF 23-1 Ex. B at 28; Ex. C at 69; Ex. D at 102). Section 13 is roughly three-and-a-half pages, the first section listed is the "Purpose":

13. BINDING ARBITRATION

a. Purpose. If you have a Dispute (as defined below) with Comcast that cannot be resolved through the informal dispute resolution process described in this Agreement, you or Comcast may elect to arbitrate that Dispute in accordance with the terms of this Arbitration Provision rather than litigate the Dispute in court. Arbitration means you will have a fair hearing before a neutral arbitrator instead of in a court by a judge or jury.

(ECF 23-1 Ex. B 43-44). The language of this section in the 2011 agreement states as follows:

13. BINDING ARBITRATION

a. Purpose. If you have a Dispute (as defined below) with Comcast that cannot be resolved through the informal dispute resolution with Comcast, you or Comcast may elect to arbitrate that Dispute in accordance with the terms of this Arbitration Provision rather than litigate the Dispute in court. Arbitration means you will have a fair hearing before a neutral arbitrator instead of in a court by a judge or jury.

(ECF 23-1 Ex. C at 80). The language of this section in the 2012 agreements states:

13. BINDING ARBITRATION

a. Purpose. If you have a Dispute (as defined below) with Comcast that cannot be resolved through the informal dispute resolution with Comcast, you or Comcast may elect to arbitrate that Dispute in accordance with the terms of this Arbitration Provision rather than litigate the Dispute in court. Arbitration means you will have a fair hearing before a neutral arbitrator instead of in a court by a judge or jury. Proceeding in arbitration may result in limited discovery and may be subject to limited review by courts.

(ECF 23-1 Ex. D at 115.) Plaintiff points to the permissive language in the above section and contends that a customer unacquainted with the law would not deduce that the provision is a waiver of the right to access the court system (See Pl.'s Br. 2).

Plaintiff compares the 2008 agreement to the current version on Defendant's website with a strengthened introductory note, underlined and capitalized, in addition to bold:

Note: THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION IN SECTION 13 THAT AFFECTS YOUR RIGHTS UNDER THIS AGREEMENT WITH RESPECT TO ALL SERVICE(S). These terms and conditions are subject to applicable tariffs and service guides.

(See Def.'s Br. at Exhibit "A"; ECF No. 18-2). Section 13 has also been changed in Defendant's current version with more succinct and forceful language:

13. BINDING ARBITRATION

a. Purpose. Any Dispute involving you and Comcast shall be resolved through individual arbitration. In arbitration, there is nojudge or jury and there is less discovery and appellate review than in court.

(See Def.'s Br. at Exhibit "A"; ECF No. 18-2).

The disputed agreements continue with the "b. Definitions" and "c. Right to Opt Out" paragraphs. Of note is what the Supreme Court has called a delegation clause, Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68-69 (2010), which arguably exists in the "b. Definitions" paragraph, stating that any dispute will go to an arbitrator and that "includes the validity, enforceability or scope of this Arbitration Provision." The Defendant notes that the "c. Right to Opt Out" paragraph is a clear signal that arbitration is binding. (See Def.'s Br. 4).

b. Definitions. As used in this Arbitration Provision, the term "Dispute" means any dispute, claim or controversy between you and Comcast regarding any aspect of your relationship with Comcast that has accrued or may hereafter accrue, whether based in contract, statute, regulation, ordinance, tort (including, but not limited to, fraud, misrepresentation, fraudulent inducement, negligence or any other intentional tort), or any other legal or equitable theory, and includes the validity, enforceability or scope of this Arbitration Provision (with the exception of the enforceability of the class action waiver clause provided in paragraph F(2)). "Dispute is to be given the broadest possible meaning that will be enforced. As used in this Provision, "Comcast" means Comcast Cable Communications, LLC., its officers, directors, employees and agents, and all entities using the brand name "Comcast", including your local cable company, its employees, authorized agents, and its parents, subsidiaries and affiliated companies. As used in this Provision, the term "Arbitration Provision" means all the terms of this Section 13.

c. Right to Opt Out. IF YOU DO NOT WISH TO BE BOUND BY THIS ARBITRATION PROVISION, YOU MUST NOTIFY COMCAST IN WRITING WITHIN 30 DAYS OF THE DATE THAT YOU FIRST RECEIVE THIS AGREEMENT BY VISITING WWW.COMCAST.COM/ARBITRATIONOPTOUT, OR BY MAIL TO DEPARTMENT/ARBITRATION. YOUR WRITTEN NOTIFICATION TO COMCAST MUST INCLUDE YOUR NAME, ADDRESS AND COMCAST ACCOUNT NUMBER AS WELL AS A CLEAR

STATEMENT THAT YOU DO NOT WISH TO RESOLVE DISPUTES WITH COMCAST THROUGH ARBITRATION. YOUR DECISION TO OPT OUT OF THIS ARBITRATION PROVISION WILL HAVE NO ADVERSE EFFECT ON YOUR RELATIONSHIP WITH COMCAST OR DELIVERY OF SERVICES TO YOU BY COMCAST. IF YOU HAVE PREVIOUSLY NOTIFIED COMCAST OF YOUR DECISION TO OPT OUT OF ARBITRATION, YOU DO NOT NEED TO DO SO AGAIN.

(See Exhibit "B"; ECF No. 23-1 at 43-44). The 2011 and 2012 versions of the agreement mentions the same with slight variation in wording:

b. Definitions. The term "Dispute" means any dispute, claim, or controversy between you and Comcast regarding any aspect of your relationship with Comcast, whether based in contract, statute, regulation, ordinance, tort (including, but not limited to, fraud, misrepresentation, fraudulent inducement, negligence, or any other intentional tort), or Arbitration Provision (with the exception of the enforceability of the class action waiver clause provided in paragraph 13(f)(2)). "Dispute" is to be given the broadest possible meaning that will be enforced. As used in this Arbitration Provision, "Comcast" means Comcast and its parents, subsidiaries and affiliated companies and each of their respective officers, directors, employees and agents.

c. Right to Opt Out. IF YOU DO NOT WISH TO BE BOUND BY THIS ARBITRATION

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