Massachusetts Federal Court Orders Privacy Lawsuit to Individual Arbitration

The United States District Court for the District of Massachusetts has granted a cable company’s motion to compel individual arbitration in a privacy case.  In Wainblat v. Comcast Cable Communications, LLC, et. al., No. 19-cv-10976 (D. Mass., November 4, 2019), a Massachusetts man, Wainblat, purchased a subscription for cable services from Comcast in 2013.  Several years later, the man filed a putative class action lawsuit against the cable company in federal court.  In his complaint, Wainblat claimed Comcast violated the Cable Communications Policy Act of 1984 as well as certain sections of Chapter 93A of the Massachusetts General Laws when it deployed a “two-way cable-network” that purportedly delivered targeted advertisements to subscribers through the company’s advertising subsidiary.

In response to the man’s complaint, Comcast filed a motion to compel the dispute to arbitration based on the terms of the company’s revised subscriber agreement.  According to the arbitration provision that was included in Wainblat’s August 2017 bill, “any claim or controversy” related to the parties’ relationship was subject to individual arbitration, governed by the Federal Arbitration Act, and required to be administered by the American Arbitration Association pursuant to its Consumer Arbitration Rules.  Additionally, the arbitral provision provided Wainblat with an opportunity to opt-out, which he failed to exercise.

When reviewing Comcast’s motion, the Massachusetts Federal Court first examined the legal standard applicable to the parties’ dispute before turning to the facts of the case before it.  According to the court:

Comcast seeks to enforce the arbitration clause. The only real dispute concerns whether a “valid agreement to arbitrate exists.” See Soto-Fonalledas, 640 F.3d at 474. Plaintiff contends that the clause is unenforceable because Comcast can modify the agreement at any time, and therefore its obligations under the agreement are “illusory.” See National Federation of the Blind v. The Container Store, Inc., 904 F.3d 70, 85 (1st Cir. 2018).

A unilateral right to modify an arbitration provision can render it unenforceable. In National Federation, the First Circuit declined to enforce an arbitration provision on the ground that the arbitration agreement was an “illusory” promise on the part of the defendant. 904 F.3d at 85. “[W]here one party to an arbitration agreement seeks to invoke arbitration to settle a dispute, if the other party has the right to change the terms of the agreement to avoid arbitration, then the agreement was illusory from the outset.” Id. at 86 (citing 3 WILLISTON ON CONTRACTS § 7:11 (4th ed. 2018)). The key question was “whether the [enforcing party] has the power to make changes to its arbitration policy that have retroactive effect, meaning changes to the policy that would strip the right of arbitration from a party who has already attempted to invoke it.” Id. (emphasis added).

The Massachusetts court next found that Comcast’s ability to modify the parties’ arbitration agreement was not unlimited, nor was the agreement illusory.

In short, because Comcast’s obligations under the Arbitration Provision were not “illusory,” the Arbitration Provision is valid and enforceable. For that reason, defendant’s motion to compel arbitration will be granted.

After that, the United States District Court for the District of Massachusetts granted Comcast’s motion to compel the privacy lawsuit to arbitration.

Photo by:  Glenn Carstens-Peters on Unsplash