Court Grants Motion to Compel Arbitration of Claims of Non-Signatory to Contract

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In Shelton v. Comcast Corp., No. 20-1763, 2021 U.S. Dist. LEXIS 10790 (E.D. Pa. Jan. 21, 2021), the U.S. District Court for the Eastern District of Pennsylvania granted Comcast’s motion to compel arbitration under the terms of its Subscriber Agreement of a FCRA claim brought by the Plaintiff even though the Plaintiff was not a signatory to the Agreement.  Plaintiff claimed that Comcast checked his credit without a permissible purpose in violation of the Fair Credit Reporting Act.

Plaintiff’s father established an account with Comcast for cable and internet services to be provided to the residence where Plaintiff lived and operated his personal business. Plaintiff’s personal cell phone number was provided as a contact number for the account, but the Plaintiff was not identified as the Subscriber.  As a matter of regular business practice, Comcast sent a copy of its Subscriber Agreement to subscribers, who “accept[ed] this Agreement on behalf of all person who use” the services. 2021 U.S. Dist. LEXIS 10790 at *3. In 2017, Comcast sent an updated version of its Subscriber Agreement, which included an arbitration provision, to the Plaintiff’s address.

In determining whether Plaintiff, a non-signatory to the Subscriber Agreement, was bound by it, the Court applied the test enunciated by the Third Circuit in E.I. DuPont de Nemours and Co. v. Rhone Poulenc Fiber & Resin Intermediates, S.A.S., 269 F.3d 187, 199-200 (3d Cir. 2001), specifically, whether "the non-signatory knowingly exploit[ed] the agreement containing the arbitration clause despite having never signed the agreement." In holding that the plaintiff was subject to Comcast’s arbitration provision, the U.S. District Court found that the plaintiff: (i) listed the service address as his own home and place of employment; (ii) associated his own personal cell phone with the account; (iii) placed a service call regarding the account on January 29, 2020; and (iv) during service call, acknowledged that he used the account service, established online access to the account, and sought customer service.  Accordingly, the District Court concluded that the plaintiff’s claims fell within the scope of the arbitration provision and because he knowingly obtained benefits under the Agreement and sought to enforce the agreement, he was compelled to arbitrate his FCRA claim. 

Practice Tip:  When evaluating whether to compel arbitration, consideration should be given to whether the consumer – even if a non-signatory - may have “knowingly exploited” the agreement, i.e. received benefits from or made efforts to enforce it.  

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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