Brown v. Charter Communications, Inc., 1:17-cv-00670

Background

Plaintiff Teri Brown sued Charter Communications (doing business as Spectrum) under the TCPA for repeated automated/pre-recorded telemarketing calls to her cell phone, asserting she never consented and that calls continued after she said she was not interested.
Brown was a Bright House Networks (BHN) subscriber from Jan 2012–Jul 2013; BHN’s residential services agreement (RSA) includes a broad arbitration provision and a 30‑day opt‑out right.
The RSA contains a special notice for California customers: “IF YOU ARE A BHN CUSTOMER IN CALIFORNIA, BHN WILL NOT SEEK TO ENFORCE THE ARBITRATION PROVISION ABOVE UNLESS WE HAVE NOTIFIED YOU OTHERWISE.”
Charter moved to compel arbitration, arguing the RSA covers Brown’s claims and delegates arbitrability to the arbitrator; Brown opposed, arguing the California carve‑out excludes her claims because she did not receive the required notice.
The magistrate judge concluded there was a genuine dispute over scope and notice: the RSA’s California special‑notice provision required notice before enforcing arbitration for California customers, Brown (a former California BHN customer) did not receive such notice, and therefore her claims are expressly excluded from arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the RSA is a valid agreement to arbitrate	Brown does not contest formation or consideration; argues enforceability fails as RSA’s California notice was not given	Charter contends the RSA is valid and remains in force	Court applied California contract law and found Brown did not challenge formation; validity not disputed
Whether the arbitration clause delegates arbitrability to the arbitrator	Brown: RSA does not clearly and unmistakably delegate gateway issues to arbitrator	Charter: Broad language covering any dispute shows delegation to arbitrator	Court: No clear and unmistakable evidence of delegation; court must decide arbitrability
Whether Charter (not BHN) can compel arbitration	Brown: Provision names BHN as party entitled to arbitrate; Charter is parent and not obviously a signatory	Charter: For purposes of motion, provision applies to Charter	Court assumed arguendo Charter may enforce but noted RSA language limits arbitration to BHN/BHN Parties; decision rested on California carve‑out notice
Whether Brown’s claims are excluded by the RSA’s California special‑notice clause	Brown: As a (former) California BHN customer, she was promised BHN would not seek to enforce arbitration unless it notified her; no such notice occurred	Charter: The present‑tense wording limits clause to current customers; Brown is a former customer so carve‑out doesn't apply	Held: The carve‑out requires notice to California customers before enforcement; Brown did not receive notice, so her claims are excluded and arbitration was denied

Key Cases Cited

Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010 (9th Cir.) (scope inquiry: whether a valid agreement exists and whether it covers the dispute)
United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574 (U.S. 1960) (claims are arbitrable absent clear evidence excluding them)
Republic of Nicaragua v. Standard Fruit Co., 937 F.2d 469 (9th Cir.) (FAA’s mandatory terms limit district court discretion to deny arbitration)
Green Tree Fin. Corp.-Alabama v. Randolph, 531 U.S. 79 (U.S. 2000) (party opposing arbitration bears burden to show unenforceability)
Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (U.S. 1983) (resolve doubts about arbitrability in favor of arbitration)
AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643 (U.S. 1986) (court decides arbitrability unless parties clearly and unmistakably delegate it)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (apply ordinary state‑law contract principles to decide if parties agreed to arbitrate)
Momot v. Mastro, 652 F.3d 982 (9th Cir.) (requires clear and unmistakable evidence to delegate arbitrability)
Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir.) (incorporation of AAA rules can constitute clear evidence of delegation)