Michael Hearn v. Comcast Cable Communications, LLC

992 F.3d 1209

• Court: Court of Appeals for the Eleventh Circuit
• Decided: April 5, 2021
• Docket: 19-14455
• Status: Published

Opinion

USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 1 of 13

[PUBLISH]

IN THE UNITED STATES COURT OF APPEALS

FOR THE ELEVENTH CIRCUIT ________________________

No. 19-14455 ________________________

D.C. Docket No. 1:19-cv-01198-TWT

MICHAEL HEARN, individually and on behalf of all other similarly situated consumers,

Plaintiff - Appellee,

versus

COMCAST CABLE COMMUNICATIONS, LLC,

Defendant - Appellant.

________________________

Appeal from the United States District Court for the Northern District of Georgia ________________________

(April 5, 2021)

Before WILSON, GRANT, and TJOFLAT, Circuit Judges.

WILSON, Circuit Judge: USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 2 of 13

On March 19, 2019, plaintiff-appellee Michael Hearn filed a putative class

action against Comcast Cable Communications LLC (Comcast), alleging that it

had violated the Fair Credit Reporting Act (FCRA). Hearn claimed that when he

called Comcast to inquire about pricing and services, a Comcast representative

conducted a credit check and pulled his credit information without his permission.

After Hearn brought this suit, Comcast moved to compel arbitration, citing the

Federal Arbitration Act (FAA) and a prior Subscriber Agreement between Hearn

and Comcast. The Subscriber Agreement contained an Arbitration Provision that

broadly applied to “any claim or controversy related to Comcast” and specified

that it survived the termination of the Agreement. The district court denied

Comcast’s motion to compel arbitration. Because we find that Hearn’s FCRA

claim relates to the Subscriber Agreement, we reverse the district court and remand

for further proceedings.

I.

In December 2016, Hearn obtained services from Comcast for his residence

in Mableton, Georgia (the Mableton address). While securing these services,

Hearn signed a work order acknowledging that he received a “Comcast Welcome

Kit” that contained a Subscriber Agreement. This Subscriber Agreement included

an Arbitration Provision that stated: “Any dispute involving [the customer] and

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Comcast shall be resolved through individual arbitration.” The Agreement defined

dispute as:

[A]ny claim or controversy related to Comcast, including but not limited to any and all: (1) claims for relief and theories of liability, whether based in contract, tort, fraud, negligence, statute, regulation, ordinance, or otherwise; (2) claims that arose before this or any prior Agreement; (3) claims that arise after the expiration or termination of this Agreement; and (4) claims that are currently the subject of purported class action litigation in which you are not a member of a certified class.

The provision is a default part of the contract. Although customers can

affirmatively opt out, it is undisputed that Hearn did not do so. Hearn later

terminated Comcast’s services in August of 2017.

In March 2019, Hearn called Comcast to inquire about pricing and obtaining

services at the Mableton address again. While it is undisputed that Hearn called

about obtaining services again, the parties characterize this conversation slightly

differently. Comcast claims that Hearn called and inquired about pricing for

reconnecting services. Hearn says he called to open a new account and not to

reconnect services, as he had already terminated services under the Subscriber

Agreement. Hearn claims that a Comcast representative pulled his credit

information during the call without his knowledge or permission. This credit

check lowered Hearn’s credit score.

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Hearn then brought a putative class action in the Northern District of

Georgia alleging that Comcast violated the FCRA when it pulled his credit

information without his permission. 15 U.S.C. § 1681 et seq. Comcast moved to

compel arbitration. Hearn opposed this motion, claiming that (1) there was no

valid arbitration agreement between the parties, (2) his FCRA claim does not relate

to the Subscriber Agreement and therefore is not arbitrable, and (3) the Arbitration

Provision is overly broad and unconscionable.

The district court denied Comcast’s motion. It acknowledged that the

parties intended for the Arbitration Provision to survive termination of the

Subscriber Agreement but still found that Hearn’s claim fell outside the scope of

the Agreement. Relying primarily on Georgia contract law and out-of-circuit

decisions, the district court concluded that no reasonable person would believe that

the Arbitration Provision was so all-encompassing as to apply to all claims

regardless of when they occurred or whether they related to the agreement.1

1 The district court also relied on Cordoba v. DIRECTV, LLC, 347 F. Supp. 3d 1311 (N.D. Ga. 2018), in holding that the Arbitration Provision is too broad and therefore unenforceable as written. In Cordoba a plaintiff alleged that DIRECTV disclosed her personal information in violation of a federal statute. Id. at 1314. The district court denied DIRECTV’s motion to compel arbitration despite the fact that the relevant arbitration clause purportedly applied broadly to “all disputes and claims between” the parties. Id. at 1320. The district court held that the plaintiff’s claim was not subject to arbitration because the underlying claim did not “have some relationship to the contract containing the arbitration provision.” Id. at 1321. While Hearn’s case was pending on appeal, however, we reversed the district court’s decision in Cordoba. See Cordoba v. DIRECTV, LLC, 801 F. App’x 723 (11th Cir. 2020) (per curiam). On appeal, we did not “address[] the more general question of whether the relevant arbitration provision [was] enforceable as to ‘all claims and disputes’” but instead found the plaintiff’s claim was arbitrable because it related to the underlying agreement. Id. at 725–26. 4 USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 5 of 13

Next, the district court found that the FAA could only compel Hearn to

arbitrate his FCRA claim if it “arose out of” or “relate[d] to” the earlier Subscriber

Agreement. Ultimately, it held that Hearn’s claim did not arise out of the

Agreement. It recognized that there was a dispute of fact whether Hearn called

Comcast to reconnect services or enter into a new agreement. Comcast claimed

that Hearn called to reconnect services, and because the Subscriber Agreement

contained a provision that addressed reconnecting a customer’s services, Hearn’s

underlying claim related to the Agreement. Hearn argued that he did not call to

reconnect services. The district court asserted that it had to resolve this factual

dispute in favor of Hearn. It then found that the underlying FCRA claim did not

relate to the Agreement, and Comcast could not compel arbitration.2 This appeal

followed.

On appeal, Comcast raises two arguments. First, Eleventh Circuit precedent

demonstrates that the FAA requires courts to enforce valid arbitration agreements,

including agreements as broad as the one at issue here. Second, even under the

district court’s limited construction of the FAA, this case must be arbitrated

because Hearn’s claim relates to the Subscriber Agreement.

II.

2 Because the district court found that Hearn’s claim did not relate to the Subscriber Agreement, it did not address whether enforcement of the arbitration provision would be unconscionable. 5 USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 6 of 13

We review de novo a denial of a motion to compel arbitration as well as a

district court’s interpretation of an arbitration agreement. Jones v. Waffle House,

Inc., 866 F.3d 1257, 1263 (11th Cir. 2017).

III.

“The FAA [] places arbitration agreements on an equal footing with other

contracts and requires courts to enforce them according to their terms.” Rent-A-

Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010) (internal citation omitted).

Section 2 of the FAA states:

A written provision in any . . . contract evidencing a transaction . . . to settle by arbitration a controversy thereafter arising out of such contract . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

9 U.S.C. § 2.

“This provision establishes a liberal federal policy favoring arbitration

agreements.” CompuCredit Corp. v. Greenwood, 565 U.S. 95, 98 (2012) (internal

quotation mark omitted). Courts should construe “any doubts concerning the

scope of arbitrable issues . . . in favor of arbitration.” Mitsubishi Motors Corp. v.

Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 626 (1985).

We have stated:

There [] is nothing unusual about an arbitration clause . . . that requires arbitration of all disputes between the parties to the agreement. [And] [w]e have enforced such a clause

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before because it evidenced a clear intent to cover more than just those matters set forth in the contract.

Bd. of Trs. of Delray Beach Police & Firefighters Ret. Sys. v. Citigroup

Glob. Mkts. Inc., 622 F.3d 1335, 1343 (11th Cir. 2010) (alteration adopted and

internal quotation marks omitted). We have reiterated this position—that an

arbitration agreement can reach beyond the matters addressed in the underlying

contract—in other cases. Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217, 1222

(11th Cir. 2000) (finding that an arbitration provision that required the parties to

arbitrate any and all claims was not overly broad or vague); cf. Doe v. Princess

Cruise Lines, Ltd., 657 F.3d 1204, 1218 (11th Cir. 2011) (“If the [defendant] had

wanted a broader arbitration provision, it should have left the scope of it at ‘any

and all disputes, claims, or controversies whatsoever’ instead of including [a]

limitation that narrowed the scope [of the clause] . . . .”).

A “standard arbitration clause,” however, generally includes language that

limits the scope of the arbitrable issues to “any controversy or claim arising out of,

or relating to [the] agreement, or the breach thereof.” Telecom Italia, SpA v.

Wholesale Telecom Corp., 248 F.3d 1109, 1114 (11th Cir. 2001). When

determining if a dispute “arises out of” or “relate[s] to” an underlying contract, we

generally consider whether the dispute in question “was an immediate, foreseeable

result of the performance of contractual duties.” Id. at 1116; see also Hemispherx

Biopharma, Inc. v. Johannesburg Consol. Invs., 553 F.3d 1351, 1366–67 (11th Cir. 7 USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 8 of 13

2008) (recognizing that the Eleventh Circuit has employed “various verbal

formulae to describe the relationship between disputes and arbitration clauses,” but

ultimately focusing on foreseeability). In other words, there must be “some direct

relationship between the dispute and the performance of duties specified by the

contract” in order to find that the dispute arises out of, relates to, or is connected to

the underlying agreement. See Doe, 657 F.3d at 1218–19.

IV.

While we have previously enforced arbitration provisions that “evidenced a

clear intent to cover more than just those matters set forth in the contract,”

Citigroup, 622 F.3d at 1343 (alteration adopted), we have not enforced a provision

exactly like the one in this case. Here, the Arbitration Provision is different in that

it applies broadly to all disputes between the parties and applies even if the dispute

arises after the Subscriber Agreement is terminated. While the language in some

of our previous decisions may indicate that the full scope of the Arbitration

Provision is enforceable, this is a close question that we leave for another day. We

need not address that question because we find that Hearn’s FCRA claim relates to

the Subscriber Agreement.

Hearn’s FCRA claim relates to the Subscriber Agreement and therefore falls

within the Arbitration Provision. To start, Comcast was able to conduct a credit

check only because of its previous relationship with Hearn. It used Hearn’s

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personal information, including his social security number, that it had on file from

the Subscriber Agreement to conduct the credit check. Cf. Doe, 657 F.3d at 1219

(focusing on the fact that the defendant could have “engaged in [the alleged]

tortious conduct even in the absence of any contractual . . . relationship with [the

plaintiff]” as important in finding a claim did not arise out of or relate to the

plaintiff’s employment contract).

Also, more importantly, the Subscriber Agreement contains provisions that

specify duties relating to Comcast’s alleged unlawful credit inquiry. See id. at

1218–19 (explaining that there must be “some direct relationship between the

dispute and the performance of duties specified by the contract” to find a claim

arose out of an underlying agreement). In relevant part, it includes provisions

entitled “Reconnection Fees and Related Charges” (the Reconnection Provision),

“Our Right to Make Credit Inquiries” (the Credit Inquiries Provision), and

“Termination of this Agreement” (the Termination Provision).

Hearn claims he was not calling to reconnect services, and in turn tries to

dispute the relevance of the Reconnection Provision. The Reconnection Provision

states:

If you resume Service(s) after any suspension, we may require you to pay a reconnection fee. If you reinstate any or all Service(s) after disconnection, we may require you to pay an installation fee and/or service activation fee . . . . Reconnection of the Service(s) is subject to our credit policies, this Agreement and applicable law. 9 USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 10 of 13

Hearn claims that the Reconnection Provision applies only if Comcast’s services

were suspended or disconnected. And, according to Hearn, services are suspended

or disconnected only when the customer fails to pay or pays late. He cites to a

provision of the Agreement entitled “Suspension/Disconnect” to support this

argument. In relevant part, that provision states: “If you fail to pay the full amount

due for any or all of the Service(s) then Comcast . . . may suspend or disconnect

any or all the Service(s) you receive.” So, Hearn says that because he terminated

services, rather than having them suspended or disconnected, he could not have

been attempting to reconnect services, and therefore the Reconnection Provision

does not relate to his claim.

Reading the Subscriber Agreement as a whole, Hearn’s position regarding

the Reconnection Provision is incorrect. The Agreement uses the terms “suspend”

or “disconnect” to refer broadly to discontinuing services—not only to situations

where a customer has failed to pay or paid late. For instance, under the

Termination Provision, Comcast “reserve[d] the right” to “terminate or suspend”

services in other circumstances, like if there were public health or safety concerns.

And the Termination Provision also repeatedly states that Comcast will disconnect

its services upon termination, regardless of who terminates. Thus, contrary to

Hearn’s position, the Reconnection Provision does not only apply when a customer

did not pay or paid late. Also, the terms terminate, suspend, and disconnect are not 10 USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 11 of 13

necessarily mutually exclusive. In fact, under the Agreement, Comcast’s services

are always disconnected after termination.

The district court also misinterpreted the Subscriber Agreement. It accepted

Hearn’s position that he was calling Comcast to create a new account, not to

reconnect his old account and subsequently stated that the claim therefore did not

relate to the Agreement.3 In doing so, the district court did not consider the

Reconnection Provision as a whole.

A comprehensive reading of the Reconnection Provision demonstrates that

even if we accept Hearn’s statement that he was not calling to reconnect services,

Hearn’s claim still relates to the agreement.4 It is undisputed that Hearn was

calling to inquire about obtaining Comcast’s services at the Mableton address

again. Because he previously used Comcast services, Comcast would be

“reinstating” services that were previously disconnected. Thus, Hearn’s claim

3 We treat motions to compel arbitration similarly to motions for summary judgment. See Bazemore v. Jefferson Cap. Sys., LLC, 827 F.3d 1325, 1333 (11th Cir. 2016) (“We agree with our sister circuits that a summary judgment-like standard is appropriate and hold that a district court may conclude as a matter of law that parties did or did not enter into an arbitration agreement only if ‘there is no genuine dispute as to any material fact’ concerning the formation of such an agreement.”). Therefore, at this stage, the district court had to view the facts in the light most favorable to Hearn, the nonmovant. Allen v. Tyson Foods, Inc., 121 F.3d 642, 646 (11th Cir. 1997). 4 Also, the debate over the meaning of the term “reconnect” is seemingly semantic. The Subscriber Agreement does not clearly define “reconnection” or the other related terms used in the Reconnection Provision. 11 USCA11 Case: 19-14455 Date Filed: 04/05/2021 Page: 12 of 13

relates to the Reconnection Provision: that Provision explicitly addresses situations

where customers seek to resume and reinstate Comcast services.

Moreover, it is foreseeable that Comcast would use Hearn’s information that

it already had on file to reinstate services. See Doe, 657 F.3d at 1219–20 (looking

to an underlying employment agreement to discern if a claim is related). This

situation is anticipated by the Agreement. Therefore, even resolving this potential

factual dispute in Hearn’s favor, the Reconnection Provision relates to the

underlying claim.

Similarly, the Credit Inquiries Provision directly relates to Hearn’s FCRA

claim. The Credit Inquiries Provision authorizes Comcast “to make inquiries and

to receive information about [the customer’s] credit experience.” And, relatedly,

the Reconnection Provision explicitly sets out that it is subject to the Credit

Inquiries Provision. The Credit Inquiries Provision thus directly relates to Hearn’s

claim—Comcast used the private information from Hearn’s file to conduct a credit

check after Hearn called to inquire about reinstating the company’s services. And,

just like with the Reconnection Provision, the Agreement contemplates this type of

situation.

Our holding is narrow—we do not answer if the broad scope of the

Arbitration Provision is enforceable under the FAA. We simply find that Hearn’s

FCRA claim relates to the Subscriber Agreement because of: the FAA’s liberal

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federal policy favoring arbitration agreements, the relevant provisions in the

Subscriber Agreement applicable to Hearn, and the fact that Comcast would not

have access to Hearn’s personal information—and therefore could not have

engaged in the allegedly tortious conduct—but for the pre-existing Agreement.

Because Hearn’s claim relates to the Subscriber Agreement, we reverse the district

court and remand so it can determine the merits of the parties’ remaining

arguments related to Comcast’s motion to compel arbitration.

REVERSED AND REMANDED.