Georgia Federal Court Says Totality of the Circumstances Leads to Binding Arbitration Agreement

A Georgia federal court granted a motion to compel arbitration, holding that the totality of the circumstances showed that a valid arbitration agreement existed that governed the parties’ dispute.

In Dale v. Comcast Corp., No. 1:05-CV-3315-WCO, 2006 WL 2720624 (N.D. Ga. Sept. 18, 2006), Dale, purporting to represent a class of subscribers to Comcast’s cable service, brought an action alleging that Comcast violated the Cable Communications Policy Act, 47 U.S.C. § 522 et seq.

Comcast brought a motion to compel arbitration, pursuant to a Subscriber Agreement (Agreement). The Agreement contained an arbitration clause, Comcast’s policies and procedures, and a notice that the subscriber accepted the Agreement by either signing a work order at the time the cable was installed or continuing to use the cable service.

Dale first argued that no agreement to arbitrate existed. The Court disagreed, holding that the totality of the circumstances showed that Comcast mailed the Agreement to Dale and the other plaintiffs at their billing addresses and that all plaintiffs received the agreement, as evidenced by the fact that they all paid their cable bill.

Next, Dale attempted to demand a jury trial to determine whether there was a valid agreement to arbitrate, which the Court also denied. A jury trial on the issue of the existence of a valid agreement to arbitrate is only available when a party “unequivocally den[ies] that an agreement to arbitrate was reached and . . . offer[s] ‘some evidence’ to substantiate the denial.” Wheat, First Sec., Inc. v. Green, 993 F.2d 814, 818 (11th Cir. 1993).

Although Dale denied that an arbitration agreement existed, he presented no evidence to support this denial; rather, the totality of the circumstances showed that an agreement to arbitrate did in fact exist.

Next, Dale argued that his claim, a class action claim for theft, was not covered by the arbitration agreement. The arbitration agreement stated that no claims would “be arbitrated or litigated on a class action basis” and that claims for “unauthorized use, theft or piracy of service” were not covered by the arbitration clause.

Again, the Court disagreed, noting that because the language of the agreement was disjunctive it did not require that both parties agree to submit their claims to arbitration. Additionally, the agreement was labeled “Mandatory and Binding Arbitration,” and plaintiff’s claim was for theft of money, not theft of service.

Finally, the Court pointed out that the 11th Circuit has upheld arbitration agreements preventing class relief. Additionally, although Dale asked the Court to apply the California court’s holding in Discover Bank v. Superior Court, 113 P.3d 1100, 1110 (Cal. 2003), which held that class action waivers in arbitration agreements are unconscionable, this Court refused to do so because Discover was decided under California law and not applicable to this case.

Therefore, the Court granted Comcast’s motion to compel arbitration.