631 F. App'x 779
11th Cir.2015Background
- Kaspers, a Georgia attorney, obtained Comcast cable/Internet service; over seven months in 2009 he experienced inadequate service and property damage after Comcast dug a trench and service was not restored.
- He disputed charges (including a $250 service fee), cancelled service, refused to pay alleged balance, and Comcast referred the debt to collections.
- His subscriber agreement with Comcast included a binding arbitration clause that named AAA and contained a class-action waiver. Kaspers submitted a claim to AAA in Nov. 2010.
- AAA initially refused to administer Comcast customer claims because Comcast’s arbitration clause deviated from AAA rules (including a damages-limiting clause); AAA asked Comcast to remedy but Comcast did not respond.
- Kaspers sued in Georgia state court on behalf of himself and a putative class; Comcast removed under CAFA, moved to compel arbitration of individual claims and to bar class claims under the class-action waiver.
- District court compelled arbitration of Kaspers’s individual claims, stayed the case; an arbitrator later awarded Kaspers damages, Comcast paid, and the district court dismissed the remaining class claims with prejudice based on the waiver. Kaspers appealed; the Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration provision (as-applied) | Kaspers: arbitration provision is unconscionable and violates public policy as applied because AAA refuses to administer Comcast claims and Comcast obstructed arbitration | Comcast: provision is facially valid, covers individual claims, and remedies (e.g., court-appointed substitute arbitrator) exist; procedural resistance doesn’t invalidate clause | Court: arbitration provision valid and enforceable; practical difficulties and AAA’s refusal do not render it unconscionable |
| Validity of class-action waiver | Kaspers: waiver, combined with Comcast practices, effectively prevents relief and is unconscionable | Comcast: waiver is a valid contractual term; Supreme Court precedent permits class-action waivers in arbitration agreements | Court: waiver valid; challenges to waivers that hinge on inability to prosecute claims are foreclosed by precedent |
| Effect of AAA’s refusal to administer claims | Kaspers: AAA’s refusal shows the clause is ineffective and substantively unconscionable | Comcast: AAA’s administrative decision is not binding; parties agreed procedures for substitute arbitrator; U.S. courts can compel arbitration | Court: AAA’s refusal does not invalidate the arbitration clause; substitute procedures and FAA permit enforcement |
| Post-arbitration pursuit of class claims | Kaspers: after arbitration award and payment he should be allowed to proceed with class claims | Comcast: class claims barred by waiver; arbitration of individual claims resolves those claims and precludes class litigation | Court: district court correctly dismissed class claims under waiver; no ruling on standing required |
Key Cases Cited
- Cruz v. Cingular Wireless, LLC, 648 F.3d 1205 (11th Cir. 2011) (standards for compelling arbitration and applying contract defenses)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA enforces arbitration agreements and permits class-action waivers)
- Dale v. Comcast Corp., 498 F.3d 1216 (11th Cir. 2007) (Georgia unconscionability analysis tied to contract terms at formation)
- Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217 (11th Cir. 2000) (forum naming preferences do not necessarily invalidate arbitration clauses; substitute arbitrator procedures)
- Am. Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013) (class arbitration not required to vindicate statutory rights; waivers may be enforceable)
- Pendergast v. Sprint Nextel Corp., 691 F.3d 1224 (11th Cir. 2012) (rejecting state-law challenges to class-action waivers post-Concepcion)
- Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678 (11th Cir. 2014) (arguments not developed are treated as abandoned)
- Vega v. T-Mobile USA, Inc., 564 F.3d 1256 (11th Cir. 2009) (post-removal collapse of a proposed class does not destroy district court jurisdiction if CAFA requirements were met at removal)