Shalomayev v. Altice USA, Inc., 1:21-cv-05540

Background

Plaintiff Artem Shalomayev owns 3715 Barber Shop, Inc.; on Feb. 5, 2020 he electronically ordered Altice internet/phone service and assented to Optimum General Terms of Service that incorporate a binding arbitration clause and an opt-out mechanism.
During the COVID-19 lockdown (Mar–June 2020) the barbershop was closed and Plaintiff did not receive or pay monthly invoices for service usage for that period.
Altice billed Plaintiff for March–June 2020, terminated service for nonpayment, and informed Plaintiff that service restoration required paying outstanding balances and a one-time "activity"/installation fee; Plaintiff paid $180 to restore service.
Plaintiff sued Altice alleging fraudulent inducement, fraudulent concealment, deceptive practices, and unjust enrichment based on termination and the restoration fee; Altice moved to compel arbitration as to Plaintiff.
The court considered whether the Feb. 2020 agreement (and its incorporated arbitration clause, which expressly survives termination) covers Plaintiff’s claims and whether the case should be stayed pending arbitration.
The court granted Altice’s motion to compel arbitration as to the named plaintiff and stayed the litigation pending completion of arbitration.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of Feb. 2020 arbitration clause	Shalomayev argues any later June 2020 agreement governs and he did not agree to arbitrate under that alleged new agreement.	Altice argues Plaintiff electronically agreed to the Feb. 2020 Terms (which incorporate arbitration) and received the Terms by email.	Court: Feb. 2020 agreement is enforceable; arbitration clause was properly incorporated by reference.
Scope of arbitration (do claims fall within it?)	Plaintiff contends his fraud/unjust enrichment claims relate to post-termination conduct and the June 2020 interactions, not the Feb. 2020 contract.	Altice contends the clause covers any dispute "arising out of or relating to" the parties’ relationship, including pre- and post-termination claims.	Court: Claims fall within the broad scope; disputes about the billed months, termination, and restoration fee are arbitrable.
Survival of arbitration clause after termination/expiration	Plaintiff argues the clause is unreasonably broad ("infinite") and should not cover disputes arising after expiration.	Altice points to the explicit survival/severability clause stating arbitration survives termination/amendment/expiration.	Court: Survival provision is valid and enforceable; arbitration survives termination.
Stay of litigation / class-action timing	Plaintiff argues it's premature to compel arbitration for unnamed class members.	Altice seeks a stay after compelling arbitration as to the named plaintiff.	Court: Motion to compel as to named plaintiff is proper; district court stayed the litigation pending arbitration (without compelling arbitration as to absent putative class members).

Key Cases Cited

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (arbitration agreements are broadly enforceable under the FAA)
Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (federal policy favors arbitration when scope is disputed)
Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (arbitration is a matter of contract and courts enforce arbitration agreements per their terms)
Nicosia v. Amazon.com, Inc., 834 F.3d 220 (state contract principles govern whether parties agreed to arbitrate)
Starke v. SquareTrade, Inc., 913 F.3d 279 (arbitration is a creature of contract; courts apply contract-law analysis)
Nolde Bros., Inc. v. Local No. 358, 430 U.S. 243 (arbitration obligations can survive contract termination absent contrary intent)
Katz v. Cellco P'ship, 794 F.3d 341 (district court should stay proceedings when claims are referred to arbitration and a stay is requested)
ACE Capital re Overseas Ltd. v. Central United Life Ins. Co., 307 F.3d 24 (arbitration clauses that contemplate post-termination disputes can survive termination)