FCRA Class Action Foiled by Comcast Arbitration Agreement

A Comcast arbitration agreement by which a former subscriber to the cable service agreed to arbitrate “any claim or controversy related to Comcast” was enforced by the court in Hearn v. Comcast Cable Communications, LLC, 992 F.3d 1209 (11th Cir. 2021), overturning a contrary decision by the Northern District of Georgia. The arbitration agreement was included in Comcast’s subscriber agreement with the plaintiff, but the plaintiff terminated his service. A year and a half later, however, the plaintiff approached Comcast about renewing service. In connection with that inquiry, Comcast made use of his credit report, which he claimed, in a subsequent putative class action, violated the Fair Credit Reporting Act. 15 U.S.C. § 1681 et seq.

Judge Chuck Wilson’s opinion for the court began by noting that the court had previously held that an arbitration agreement governed by the Federal Arbitration Act can reach beyond matters addressed in the underlying contract. But the court noted that the standard arbitration agreement typically covers disputes relating to the underlying contract. The court deemed a “close question” to be presented by Comcast’s broad arbitration provision, but decided to leave it for another day. Instead, the court reasoned that the plaintiff’s FCRA claim related to his subscriber agreement, for several reasons. First, Comcast was able to conduct a credit check only because of the plaintiff’s previous relationship with Comcast. Second, the subscriber agreement included provisions dealing specifically with credit inquiries and reconnection. The plaintiff argued that he was not calling to reconnect services, because he had previously terminated them. But the court concluded that the contract’s reconnection provision was broad enough to cover that eventuality and not just suspensions of service for delinquencies or failures in payment. The court also noted that Comcast’s use of the information that it had on file concerning the plaintiff was foreseeable, and that the agreement’s credit inquiries provision directly related to his FCRA claim.

The plaintiff’s would be class-action is not officially over, because the court remanded for a determination of other anti-arbitration arguments, including unconscionability, but these arguments ordinarily have a low success rate. Interestingly, the scope of the arbitration agreement could have been committed by the agreement to the arbitrators, with an express delegation, but apparently was not, leaving the courts to decide scope questions.

Posted by Tom Byrne.

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