Taylor v. Verizon Communications Inc.
1:25-cv-01081
| S.D.N.Y. | Jul 15, 2025Background
- Susan Taylor, a Verizon Wireless customer, filed a putative class action against Verizon alleging improper disclosure of customer information without consent.
- Taylor signed the Verizon Customer Agreement and Device Payment Agreement, both of which included mandatory arbitration clauses, most recently in June 2023.
- The relevant agreements required arbitration (or use of small claims court) for disputes arising out of or related to the agreement.
- Plaintiff alleged Verizon violated several laws, including the Telecommunications Act, Computer Fraud and Abuse Act, and the Federal Wiretap Act, by disclosing proprietary customer information.
- Taylor did not dispute signing the agreements or their arbitration provisions, but argued the arbitration clause was unconscionable and procedurally unfair.
- Verizon moved to compel arbitration and stay the action, asserting all disputes must go to arbitration per the agreement and delegation clause.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of Arbitration Clause | Clause is unconscionable/adhesion contract | Contracts are validly agreed to upon notice | Arbitration clause enforceable |
| Procedural Unconscionability | Plaintiff lacked meaningful choice; not informed of practices | No evidence of fraud or lack of notice | No procedural unconscionability found |
| Substantive Unconscionability | Clause prevents customers from vindicating rights in court | Arbitration provides a forum to vindicate rights | No substantive unconscionability; Supreme Court precedent supports enforceability |
| Delegation Clause Validity | Delegation clause is oppressive and lacks meaningful choice | Clause clearly delegates arbitrability to arbitrator | Delegation clause valid; arbitrator decides scope |
Key Cases Cited
- Mitsubishi Motors Corp. v. Soler-Chrysler-Plymouth, 473 U.S. 614 (arbitration agreements covering federal statutory claims are enforceable)
- Guyden v. Aetna, Inc., 544 F.3d 376 (federal statutory claims can be subject to arbitration)
- Caley v. Gulfstream Aero Corp., 428 F.3d 1359 (public policy favors enforcing valid arbitration agreements)
- Katz v. Cellco P'ship, 794 F.3d 341 (Second Circuit prefers staying rather than dismissing cases pending arbitration)