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In affirming a trial court order denying a motion to compel arbitration, the Oregon Court of Appeals held that the Cable Television Consumer Protection Act of 1992 did not preempt the application of Oregon law, which required unequivocal assent to a contract modification that would have added an arbitration clause.
In Martin v. Comcast of California/Colorado/Florida/Oregon, Inc., A127818, 2006 WL 3086188 (Or. Ct. App. Nov. 1, 2006), Martin and two other cable television subscribers brought a putative class action against Comcast, alleging unlawful billing practices.
Comcast filed a motion to compel arbitration, citing a purported amendment to the subscriber agreements. Intending to amend the subscriber agreements, Comcast had sent a “bill stuffer” to its subscribers, informing them that continued use of their cable service would constitute acceptance of the terms set forth in the notice. One of the terms was an arbitration clause.
The trial court denied Comcast’s motion to compel arbitration on the ground that there was no valid arbitration agreement between the parties. Specifically, the trial court applied Oregon law in concluding that the evidence did not “manifest a meeting of the minds with respect to a modification of the subscriber agreements.”
On appeal, Comcast argued that the Cable Television Consumer Protection Act of 1992 (the Cable Act) preempted Oregon law by occupying the field of modification of subscriber agreements. As support for this argument, Comcast relied on section 552(c) of the Cable Act, which provides that “[a] cable operator may provide notice of service and rate changes to subscribers using any reasonable written means at its sole discretion.”
In rejecting Comcast’s preemption argument, the Court observed that the cited section pertains only to “service and rate changes.” Based on that limitation, the Court held that the Cable Act did not preempt Oregon law regarding “the means by which consumers can accept an operator’s proposed modification in the service agreement relating to dispute resolution procedures.”
The Court also affirmed the trial court’s ruling that there was no valid arbitration agreement between the parties. In affirming that ruling, the Court noted that it was obligated to “accept the trial court’s factual finding – there was no objectively manifested meeting of the minds – if there [wa]s any evidence in the record to support it.” Applying that standard, the Court found evidentiary support for “the inference that a subscriber could easily have continued using Comcast’s service without ever being aware of the arbitration clause.”
State contract law will govern the formation of an enforceable arbitration agreement, unless preempted by the Federal Arbitration Act or other federal law. Some states have enacted statutes allowing credit card agreements to be modified via a “bill stuffer,” allowing the credit card agreement to be modified “in any respect,” including the addition of a provision for “arbitration or other alternative dispute resolution mechanisms.” Del. Code. Ann. tit. 5, § 952(a) (2006). Many other states uphold arbitration agreements that have been sent via a “bill stuffer,” finding that continued use of a product, be it a credit card or cable service, constitutes acceptance of the agreement. See, e.g., Fahey v. U.S. Bank Nat’l Assoc., No. 4:05CV01453FRB, 2006 WL 2850529 (E.D. Mo. Sept. 29, 2006); Dale v. Comcast Corp., No. 1:05-CV-3315-WCO, 2006 WL 2720624 (N.D. Ga. Sept. 18, 2006).
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