Citizens Telecommunications d/b/a Frontier Communications of W. Va. v. Michael Sheridan
239 W. Va. 67
| W. Va. | 2017Background
- Respondents subscribed to Frontier residential high-speed Internet between 2007 and 2010; suits filed alleging Frontier throttled speeds and misrepresented service (putative class action).
- Their service was governed by Frontier’s printed Terms and Conditions, which originally had no arbitration clause but reserved Frontier’s right to change terms upon notice; continued service after notice constituted acceptance.
- Frontier added an arbitration provision (Sept. 2011, revised Jan. 2012) and sent billing notices; a folded paper copy of the revised Terms was included in the November 2012 bill with an opt-out phone number.
- Frontier moved to compel individual arbitration and to dismiss; the circuit court denied the motion, finding no mutual assent, lack of consideration/illusoriness, non-applicability to pre-existing claims, and an improper ban on class-wide injunctive relief.
- West Virginia Supreme Court granted immediate review, applied de novo contract/arbitrability review, reversed the circuit court, and ordered individual arbitration compelled.
Issues
| Issue | Plaintiff's Argument (Sheridan et al.) | Defendant's Argument (Frontier) | Held |
|---|---|---|---|
| Mutual assent to arbitration after modification | Billing notice and one-time insert were insufficient; browsewrap-style online terms were not bound | Reasonable written notice via billing, web posting, and paper insert; acceptance by continued service formed unilateral contract | Court: Not a browsewrap; unilateral contract principles govern; Frontier gave reasonable notice; assent via continued service upheld |
| Consideration / illusoriness of arbitration clause | Arbitration promise is illusory because Frontier reserved unilateral right to change terms; modification required new consideration | Mutual promise to arbitrate plus additional burdens/benefits in revised clause supply consideration | Court: Mutual commitment to arbitrate and added burdens/benefits provide adequate consideration; not illusory |
| Applicability to pre-existing claims | Arbitration cannot be applied retroactively to claims that arose before adoption | Clause explicitly covers disputes that arose before the agreement; parties can agree to arbitrate existing controversies | Court: Clause unambiguous and may apply to pre-existing disputes; enforceable as written |
| Ban on class-wide injunctive relief / enforceability of waiver | Waiver of class injunctive relief is unconscionable / unenforceable | FAA and Supreme Court precedent allow class-waiver provisions; Concepcion controls | Court: Under Concepcion and related precedent, waiver of class-wide relief does not render arbitration unenforceable; circuit court erred |
Key Cases Cited
- Credit Acceptance Corp. v. Front, 231 W. Va. 518, 745 S.E.2d 556 (W. Va. 2013) (order denying motion to compel arbitration is immediately appealable)
- Cook v. Heck's Inc., 176 W. Va. 368, 342 S.E.2d 453 (W. Va. 1986) (unilateral contract formed by offer accepted through performance)
- Bischoff v. Francesa, 133 W. Va. 474, 56 S.E.2d 865 (W. Va. 1949) (modification of written contract requires new consideration)
- Cotiga Dev. Co. v. United Fuel Gas Co., 147 W. Va. 484, 128 S.E.2d 626 (W. Va. 1962) (courts must enforce clear unambiguous contract language)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (states cannot require procedures, like classwide arbitration, that conflict with the FAA)
- American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013) (upholding class-arbitration waivers under the FAA)