925 F. Supp. 2d 1185
D. Colo.2013Background
- Plaintiffs are former Qwest Price for Life customers under a two-year minimum contract with a guaranteed promotional rate and a $200 early cancellation fee if terminated early.
- The Price for Life program is governed by a Subscriber Agreement that includes an arbitration clause and a class-action waiver.
- Enrollment occurred by phone or Internet; various steps directed customers to the Subscriber Agreement and noted arbitration; a welcome letter advised review of terms and stated updates to the agreement.
- Several plaintiffs terminated within two years and were charged the $200 fee; plaintiffs filed a multi-state class action alleging an invalid fee.
- The district court, after transfers and multiple motions, granted renewed motion to compel arbitration; plaintiffs objected, and the magistrate’s order was challenged.
- The court reviews whether plaintiffs assented to the arbitration clause and whether the clause is illusory or unconscionable under Colorado law, in light of AT&T Mobility v. Concepcion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did plaintiffs assent to arbitration? | Assent was not knowingly given; terms were hidden and not read. | Access via enrollment and repeated notices constituted assent to the Subscriber Agreement and its arbitration clause. | Assent found; terms reasonably conspicuous and consent unambiguous. |
| Is the arbitration agreement enforceable (illusory or unconscionable)? | Agreement illusory due to unilateral modification right; potentially unconscionable. | Modification rights are limited by notice and context; not illusory; unconscionability not established. | Arbitration clause not illusory; not substantively unconscionable under Colorado law. |
Key Cases Cited
- Grosvenor v. Qwest Corp., 854 F.Supp.2d 1021 (D. Colo. 2012) (assent and conspicuity issues; arbitration contract upheld in similar context)
- Dumais v. American Golf Corp., 299 F.3d 1216 (10th Cir. 2002) (illusory arbitration clause where unilateral modification prospect renders unenforceable)
- Hardin v. First Cash Financial Services, Inc., 465 F.3d 470 (10th Cir. 2006) (limits on unilateral modification can avoid illusory arbitration)
- AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011) (FAA preempts state rule that would render arbitration clause unconscionable; deference to arbitration agreements)
- PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401 (2003) (arbitration costs and damages addressed by FAA framework)
- Rains v. Foundation Health Systems Life & Health, 23 P.3d 1249 (Colo. App. 2001) (consideration supports arbitration provision even without mutuality)
- Ansari v. Qwest Communications Corp., 414 F.3d 1214 (10th Cir. 2005) (FAA appeal provisions and interlocutory review considerations)