Untitled Document

In Rivera v. AT & T Corp., 420 F.Supp.2d 1312 (S.D. Fla., Feb. 23, 2006), the District of Florida compelled arbitration of a dispute between AT & T and Rivera, an AT & T telephone customer. Rivera, along with others similarly situated, claimed that AT & T had erroneously charged its customers for “uncompleted” telephone calls to Cuba. Due to the relatively small size of the individual claims, the aggrieved customers filed a lawsuit against AT & T as a putative class.

The Court first addressed Rivera’s argument that the customer service agreement (“CSA”) between him and AT & T was invalid because it did not contain his signature. However, the Court cited a number of other decisions that had already addressed AT & T’s CSA, and found the agreement to be binding on its customers. SeeBoomer v. AT & T Corp. , 309 F.3d 404, 424 (7th Cir. 2002); Kisala v. AT & T Corp., No. 02-CV-10752-MEL (D.Mass. Jan. 15, 2003). However, the Court did acknowledge Ting v. AT & T Corp. , 319 F.3d 1126, 1152 (9th Cir. 2003), which held the CSA’s arbitration provision to be “unenforceable as unconscionable under California law.”

Ultimately, the Court ruled that the CSA was binding on Rivera and the other AT & T customers. Even though Rivera had not signed the agreement and claimed never to have received it, the common law has long recognized a “rebuttable presumption that an item properly mailed was received by the addressee.” The CSA was provided not only by mail, but also referred to in monthly billing statements distributed through other carriers. Since the agreement clearly stated in boldfaced letters that the customer accepted the terms of the agreement merely by continuing to use the services provided, Rivera could not argue that the agreement was not binding.

Rivera also sought to attack the validity of the arbitration clause itself, arguing that it was both procedurally and substantively unconscionable. Rivera argued that the CSA was an adhesion contract, and thus, procedurally unconscionable. However, the Court distinguished this agreement from previous agreements invalidated by the Court, such as the one in Powertel, Inc. v. Bexley , 743 So.2d 570, 574 (Fla. 1st DCA 1991), because Rivera was not required to invest in AT & T equipment, nor was he deprived of alternatives for telephone service.

Finally, the class waiver provisions of the CSA were not substantively unconscionable because AT & T customers were left with alternative remedies for small claims and the courts had previously upheld similar agreements. For example, the arbitration clause provided for relief in small claims court, as well as the third option of filing an individual complaint with the Federal Communications Commission. Under these facts, the Court could not find that the class waiver was substantively unconscionable, since Rivera was left with other means by which to pursue his claims.