Christopher L. Gore v. Alltel Commu
2012 U.S. App. LEXIS 1047
| 7th Cir. | 2012Background
- Gore entered into a two-year wireless service agreement with First Cellular (acquired by Alltel) in Oct 2005; the First Cellular Agreement did not contain an arbitration clause.
- Alltel acquired First Cellular in May 2006 and began transitioning Gore’s lines to the Alltel network, with GSM service ultimately becoming inoperable.
- Gore received a single consolidated invoice in Nov 2006 containing an arbitration clause and an acceptance provision tied to payments, terms, and service acceptance.
- Gore then transitioned to an Alltel plan after being told to purchase Alltel-compatible equipment or pay a $250 early-termination fee, prompting a class-action suit in Illinois state court.
- Alltel removed the case to federal court and moved to compel arbitration; the district court denied the motion pending discovery on whether an arbitration agreement existed and its scope.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of arbitration clause governing dispute | Gore argues Alltel Agreement arbitration applies to claims arising from First Cellular | Alltel contends clause broad enough to cover dispute | Arbitration clause applies to Gore’s claims arising from Alltel services and equipment |
| Whether the arbitration clause is unconscionable as to the dispute | Gore challenges entire Alltel Agreement as unconscionable | Arbitrator should decide contract unconscionability; court should not decide generally | Arbitrability issue resolved in favor of arbitration; case remanded for arbitration proceedings |
Key Cases Cited
- AGCO Corp. v. Anglin, 216 F.3d 589 (7th Cir. 2000) (arbitration scope depends on incorporation and signatories")
- Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657 (7th Cir. 2002) (two contracts with related subject matter; arbitration clause cannot be read to include undisclosed related agreement)
- In re Oil Spill by the Amoco Cadiz, 659 F.2d 789 (5th Cir. 1981) (claims must be scrutinized for arbitrability when tied to contract terms)
- Kiefer Specialty Flooring, Inc. v. Tarkett, Inc., 174 F.3d 907 (7th Cir. 1999) (arising out of or relating to language is broadly construed to favor arbitrability)
- Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int'l, Ltd., 1 F.3d 639 (7th Cir. 1993) (broad arbitration clauses interpreted to favor arbitrability; relate-to language not substantially broadening scope)
- Mercury Constr. Corp. v. Moses H. Cone Mem'l Hosp., 460 U.S. 1 (U.S. 1983) (presumption of arbitrability when clause is broad; interpret all doubts in favor of arbitration)
- Welborn Clinic v. MedQuist, Inc., 301 F.3d 634 (7th Cir. 2002) (read broadly to include fraud and related claims tied to the contract)