FERRIER v. COMCAST CORPORATION (2020)

MEMORANDUM AND ORDER PURSUANT TO RULE 23.0

The instant case was brought under G. L. c. 93A by ten individual plaintiffs, on behalf of themselves and a putative class of persons similarly situated, on the basis of what they allege was defendant Comcast Corporation's (Comcast) failure to give prepaid customers a credit refund for television, Internet, and telephone services it failed to provide on several occasions from October 29, 2011, to the present. The trial judge granted Comcast's motion to compel arbitration, and ultimately issued a judgment of dismissal. The plaintiffs have appealed.

In evaluating a motion to compel arbitration, the judge must take the allegations in the plaintiff's complaint as true. See Dartmouth v. Greater New Bedford Regional Vocational Tech. High Sch., 461 Mass. 366, 373-374 (2012). In some respects though, the standard for allowance of such a motion is similar to the standard for summary judgment. See Miller v. Cotter, 448 Mass. 671, 676 (2007) (“The judge correctly treated the ․ defendants' motion to compel arbitration as one for summary judgment”). The judge may consider items of evidence outside the complaint, such as affidavits from the parties. See, e.g., St. Fleur v. WPI Cable Sys./Mutron, 450 Mass. 345, 356 (2008) (holding that plaintiff opposing motion to compel arbitration had raised material issue of fact by presenting affidavit asserting that she “reasonably relied” on misrepresentation and signed arbitration agreement “on account of fraud” by other party). If the judge determines that there is a dispute as to a material fact, the judge is required to hold an “expedited evidentiary hearing” in order to resolve factual issues before deciding the motion. See id. at 353.

Comcast points to several different “subscriber agreements” that it says represent contracts between itself and the named plaintiffs, each of which contain an arbitration clause. Comcast argues that the arbitration provision in the current subscriber agreement is identical in all material respects to the arbitration provision that was in effect at the earliest points of any alleged loss during the relevant period, which started in October 2011. Comcast further asserts that even if changes to the arbitration provision were material, each plaintiff is bound to modifications made to the subscriber agreement as long as the plaintiff continued to receive services from Comcast and failed to cancel services after the change. Thus, Comcast asserts that all plaintiffs, regardless of which version of the subscriber agreement they received, are bound by the current version of the subscriber agreement.

According to the allegations of the complaint, in or about 2003, Comcast sent some of its Massachusetts customers a subscriber agreement containing an arbitration provision, but some of the plaintiffs did not receive that agreement. In or about July 2007, Comcast sent some of its Massachusetts customers a notice containing the full text of an arbitration provision with their monthly bills but, again, some of the plaintiffs did not receive that. Finally, in or about March 2008, Comcast sent a written notice containing the full text of the subscriber agreement to some of its subscribers but, once again, the allegation is that some of the plaintiffs did not receive it.

Comcast attached to its motion to compel a declaration under penalty of perjury from Mary C. Kane, senior counsel for Comcast Cable Communications, LLC. In her declaration, she stated that “[i]t is a routine and regular business practice of Comcast to provide the Subscriber Agreement to subscribers in a Welcome Kit when they initiate service(s).” She stated that “[i]t is a routine and regular business practice of Comcast to provide legal notices with subscribers' monthly bills, including notices regarding the terms and conditions of receiving services in the Subscriber Agreement.” She stated that “[s]ubscribers may receive Comcast monthly bills through the United States Postal Service or electronically.” She stated that in July, 2007, Comcast sent a notice containing the full text of the arbitration provision in the subscriber agreement to subscribers in Massachusetts with their monthly bills for the period, and that in March 2008, Comcast sent a notice containing the full text of the subscriber agreement to subscribers in Massachusetts with their monthly bills for the period. Neither the Kane declaration nor any other evidence submitted by Comcast indicates the manner in which any particular subscriber received bills at the relevant time or times.⁴ Although it is a legal question, Kane also asserted that the terms of the arbitration provision that were current in 2011 are “substantively identical” to the terms of the current arbitration provision.

Comcast also put in the record work orders purportedly signed by plaintiffs Hans Doup, Russell Seelig, Lamond Lawrence, Robert Ferrier, Lynne Govoni, and Rebecca Willoughby, which stated that, if they were orders for installation, something not apparent from the face of the work orders, the person receiving service agreed to the Comcast Customer Agreement.

Comcast argued that the plaintiffs were bound to arbitrate their claims under the current version of the subscriber agreement because some of the subscriber agreements included the term that Comcast could notify the consumer of changes to the subscriber agreement merely by posting those changes online at “www.comcast.net, www.comcast.com or another website about which you have been notified,” the plaintiffs were responsible for periodically checking the website, and the plaintiffs would be bound by the modifications found online unless they cancelled their services after the changes.

The plaintiffs in turn submitted affidavits of six plaintiffs stating that they did not receive or do not recall receiving a welcome kit or subscriber agreement, that they never visited or recall visiting the Comcast website, and that the person who installed the services did not refer to any subscriber agreement or that the plaintiff cannot recall the person doing so. Those plaintiffs who were Comcast customers prior to 2007 alleged that they did not receive the July 2007 arbitration notice or the March 2008 notice of subscriber agreement. Several plaintiffs also stated that they did not receive copies of the purported work orders that were submitted by Comcast, and that those work orders did not contain their signature.

In their filings, the plaintiffs asked that the judge conduct an expedited evidentiary hearing to resolve factual disputes regarding whether there is an enforceable arbitration provision and if so, which arbitration provision applies in this dispute.

After a nonevidentiary hearing, the judge allowed the motion to compel. The judge concluded that the “current subscriber agreement,” that is the 2015 subscriber agreement that was current when the plaintiffs filed suit, is “the binding contract that governs the parties' relationship.” Although she held no evidentiary hearing, she did describe the text of the subscriber agreement, saying that use of Comcast services amounts to acceptance of this agreement and noted that all the plaintiffs used Comcast services. She also noted that the current subscriber agreement is available at Comcast's website. From this, she concluded that “[a]ll of the plaintiffs, therefore, affirmatively accepted Comcast's offer, and assented to its terms.”

Discussion. As the motion judge correctly noted, in order to find that a party is bound to arbitrate a dispute, the moving party must demonstrate that there is a valid agreement to arbitrate, and that the asserted claim comes within the clause's scope. See Ellerbee v. Gamestop, Inc., 604 F. Supp. 2d 349, 353 (D. Mass. 2009). We think, however, that further analysis is required before the motion to compel can be decided, and therefore, we vacate the order compelling arbitration and remand the case to the trial court.

To begin with, the judge must determine precisely what agreement each plaintiff has made with Comcast, if any. The affidavits of those plaintiffs who filed them raised an issue of material fact with respect to what, if any, subscriber agreement or agreements was entered into, and by which plaintiff. If, for example, an individual is never informed of the terms of an agreement, his or her mere acceptance of services cannot amount to the acceptance of those terms.

For those plaintiffs who have filed affidavits asserting that they did not receive the subscriber agreements pointed to by Comcast, the judge will have to make a factual determination as to whether they received any version of the subscriber agreement, and if so which one. Since bills are not all delivered by mail, to the extent the receipt of controlling contracts was electronic, the judge will also have to determine whether the terms of the contract were “reasonably communicated” to the consumers. See Ajemian v. Yahoo!, Inc., 83 Mass. App. Ct. 565, 573-574 (2013) (contract terms “will be enforced provided they have been reasonably communicated and accepted and if, considering all the circumstances, it is reasonable to enforce the provision at issue ․ Reasonably conspicuous notice of the existence of contract terms and unambiguous manifestation of assent to those terms by consumers are essential if electronic bargaining is to have integrity and credibility” [quotation and citation omitted]). If one or another plaintiff did indeed have a contract that included an arbitration provision, the judge will have to determine which contract they entered, as that is the contract under which the arbitrator will be arbitrating the dispute between the parties and, even if the arbitration provisions are identical, something we need not and do not decide, other provisions that may be relevant to the dispute may not be. If a contract has been superseded so it is not the relevant contract but some subsequent contract is, the arbitrator will of course need to know that as well. However, if some subsequent contractual language purports to be a modification of an earlier contractual agreement, rather than a new contract, any dispute about the applicability of that subsequent language is itself a matter for the arbitrator, who will have to determine whether the contract was modified according to its terms and whether any such contractual language was, if delivered electronically, reasonably communicated under Ajemian.

In determining what contract applies, the judge on remand will have to look at the claims raised by the plaintiffs, and determine whether it was a contract in effect at the time of the facts that gave rise to the claim that is applicable or a superseding agreement, and, if so, whether the terms of that later contract apply retroactively to claims that may have arisen prior to that agreement. Likewise, if the judge should conclude that language communicated by Comcast applies with respect to plaintiffs whose service terminated prior to the communication of that language -- and we note that several of the individual plaintiffs' service with Comcast ended well prior to the commencement of this action and the adoption of the 2015 subscriber agreement that the judge held applicable to this dispute -– the judge will have to explain how and why that is so.

For all these reasons, the order compelling arbitration and the judgment of dismissal entered on September 25, 2018, are vacated, and the case is remanded for further proceedings consistent with this memorandum and order.

So ordered.

Vacated and remanded

FOOTNOTES

4.   And although there is, in some circumstances, a presumption of the regular operation of the mails, see, e.g., Commonwealth v. Crosscup, 369 Mass. 228, 239 (1975), Comcast has not cited to us any authority for the existence of a similar presumption as to electronic notices.