Tyler Kaspers v. Comcast Corporation , 631 F. App'x 779 ( 2015 )

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[DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT
________________________
No. 15-12066
Non-Argument Calendar
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D.C. Docket No. 1:12-cv-01397-SCJ
TYLER KASPERS,
individually and on behalf of all others similarly situated,
Plaintiff-Appellant,
versus
COMCAST CORPORATION,
Defendant-Appellee.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
________________________
(November 16, 2015)
Before MARTIN, ROSENBAUM, and ANDERSON, Circuit Judges.
PER CURIAM:
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Tyler Kaspers, a Georgia attorney proceeding pro se1, appeals the district
court’s order compelling arbitration of his individual claims against Comcast
Corporation and its dismissal of his claims brought on behalf of a proposed class.
On appeal, Kaspers argues that the district court erred in holding that the
arbitration provision in his subscriber agreement, “as applied,” was neither
unconscionable nor violative of public policy. He further asserts that the court
erroneously dismissed his class claims on the basis of a class-action waiver. After
careful review, we affirm.
I.
This six-year saga began when Kaspers obtained cable and Internet service
from Comcast for his residence in Sandy Springs, Georgia. Over a seven-month
period beginning in January 2009, Kaspers did not receive full cable service except
for a two-week period in August 2009. Comcast technicians visited the property
over ten times to attempt to resolve the issues, but to no avail. Eventually, a
technician informed Kaspers that he would receive full service only if a new wire
were run from Kaspers’s house to the street. To do that, Comcast needed to dig a
180-foot-long trench through Kaspers’s front yard. Kaspers agreed but, despite the
trench, full service still was not restored.
1
Because Kaspers is a licensed attorney, we do not give him the benefit of the liberal
construction we normally accord pro se litigants. See Olivares v. Martin, 555 F.2d 1192, 1194
n.1 (5th Cir. 1977).
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These service issues led to billing disputes. Because he was not receiving
full service, Kaspers on numerous occasions attempted to obtain from Comcast a
refund of or credit for its monthly service charges. Kaspers also objected to
Comcast’s charging him a $250 service fee to dig up his front yard. Eventually,
Kaspers canceled his Comcast subscription and refused to pay the outstanding debt
Comcast claimed he owed. At some point, Comcast referred Kaspers’s purported
debt to a collection agency.
Comcast’s subscriber agreement, which Kaspers signed when he initially
obtained service, contains a binding arbitration provision. After attempting to
resolve his dispute with Comcast informally, Kaspers submitted a claim to the
American Arbitration Association (“AAA”) in November 2010, in accordance with
the arbitration provision. But the AAA refused to arbitrate the claim because
Comcast’s arbitration provision had a “material or substantial deviation” from
AAA rules and protocol with respect to a clause limiting Comcast’s liability for
certain damages, and because Comcast did not remedy the deviation upon request.
AAA also requested that Comcast remove AAA’s name from the list of arbitrators
in the arbitration clause, but Comcast did not do so. Indeed, it does not appear that
Comcast responded in any way to AAA or Kaspers regarding Kaspers’s attempt to
arbitrate his dispute.
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II.
Following the unsuccessful attempt to arbitrate, Kaspers filed suit against
Comcast in Georgia state court. In an amended complaint, Kaspers alleged
numerous claims under Georgia state law on behalf of himself and “all other
customers of Comcast similarly situated.” In broad terms, Kaspers sought to
recover for property damage and for payments he made for service he did not
receive, and he also sought declaratory and injunctive relief either invalidating the
arbitration provision in Comcast’s subscriber agreement or requiring Comcast to
change it in certain ways (such as removing AAA from the list of arbitrators).
Comcast removed the action to the United States District Court for the
Northern District of Georgia under the Class Action Fairness Act, see 28 U.S.C.
§ 1332(d), and then moved to compel arbitration of Kaspers’s individual claims
and stay the action pending arbitration. Kaspers opposed arbitration for several
reasons, including that Comcast previously had refused to engage in arbitration and
that the arbitration provision was invalid and unenforceable.
The district court granted Comcast’s motion and compelled arbitration. The
court concluded that the arbitration provision was valid and enforceable and that it
applied to his individual claims against Comcast. The court also found that
Kaspers’s claims brought on behalf of a proposed class could not proceed to
arbitration due to the following class-action waiver in the subscriber agreement:
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ALL PARTIES TO THE ARBITRATION MUST BE
INDIVIDUALLY NAMED. THERE SHALL BE NO
RIGHT OR AUTHORITY FOR ANY CLAIMS TO BE
ARBITRATED OR LITIGATED ON A CLASS
ACTION OR CONSOLIDATED ACTION BASIS OR
ON BASES INVOLVING CLAIMS BROUGHT IN A
PURPORTED REPRESENTATIVE CAPACITY ON
BEHALF OF THE GENERAL PUBLIC (SUCH AS A
PRIVATE ATTORNEY GENERAL), OTHER
SUBSCRIBERS, OR OTHER PERSONS[.]
Doc. 14–1 at 53-54. Consequently, the court ordered Kaspers’s individual claims
to arbitration and stayed the action.
In July 2014, the arbitrator issued an award finding in Kaspers’s favor on his
claims for breach of contract and property damage. The arbitrator awarded
Kaspers $983.52 for amounts paid to Comcast for incomplete or inadequate
services, $250.00 for property damage, and $200.00 for the administrative fee
Kaspers previously paid for the arbitration. After the award, which Comcast paid
in full, Kaspers sought to reopen the district court proceedings—administratively
closed in the interim—to proceed on his class claims. The district court denied the
motion, concluding that the class-action waiver barred him from litigating those
claims. Because Kaspers’s individual claims had been resolved in arbitration, the
court dismissed the action with prejudice. Kaspers now appeals.
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III.
We review de novo a district court’s order compelling arbitration and
dismissing the action. Cruz v. Cingular Wireless, LLC, 648 F.3d 1205, 1210 (11th
Cir. 2011).
IV.
“The principal purpose of the [Federal Arbitration Act (FAA)] is to ensure
private arbitration agreements are enforced according to their terms.” AT&T
Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 1748 (2011) (internal
quotation marks omitted). Through arbitration agreements, “parties may agree to
limit the issues subject to arbitration, to arbitrate according to specific rules, and to
limit with whom a party will arbitrate its dispute.” Id. at 1748-49 (citations
omitted). Thus, parties may agree to class-action waivers. See id.
Written agreements to arbitrate are “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; Cruz, 648 F.3d at 1210. Therefore, generally applicable contract
defenses, such as fraud, duress, or unconscionability, may be applied to invalidate
arbitration agreements. Cruz, 648 F.3d at 1210. However, an agreement to
arbitrate cannot be invalidated “by defenses that apply only to arbitration or that
derive their meaning from the fact that an agreement to arbitrate is at issue.”
Concepcion, 131 S. Ct. at 1746.
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Kaspers admits that the binding arbitration provision in the subscriber
agreement appears to be valid on its face. Through it, Kaspers and Comcast agreed
to resolve various disputes in arbitration. Kaspers does not dispute that the
arbitration provision covers his individual claims against Comcast, nor does he
directly challenge the arbitrator’s award. Kaspers likewise does not dispute that, in
the arbitration provision, he waived his rights to proceed against Comcast on a
class basis. In other words, Kaspers does not contend that the district court failed
to enforce the arbitration agreement according to its terms.
Instead, Kaspers contends, the arbitration provision “as applied” by Comcast
is unconscionable and violates public policy because it is “ineffective and poses
unreasonable hurdles” to resolving disputes through arbitration. In support of that
argument, Kaspers points to evidence of the following: AAA’s refusal to
administer any disputes brought by Comcast customers, because Comcast’s
arbitration provision does not comply with its due-process protocol; Kaspers’s own
arduous experience in interacting with and attempting to arbitrate a dispute with
Comcast; and the class-action waiver. In light of these and other factors, Kaspers
asserts, the arbitration provision is substantively unconscionable.
Under Georgia law, unconscionability is determined “under the
circumstances existing at the time of the making of the contract.” Dale v. Comcast
Corp., 498 F.3d 1216, 1219 (11th Cir. 2007) (internal quotation marks omitted).
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Unconscionability can be either procedural or substantive. Id. Procedural
unconscionability concerns the process of making a contract (largely focusing on
the parties and their relative bargaining power), whereas the inquiry into
substantive unconscionability focuses on the contractual terms themselves. Id.Matters relevant to substantive unconscionability include “the commercial
reasonableness of the contract terms, the purpose and effect of the terms, the
allocation of the risks between the parties, and similar public policy concerns.” Id.(quotation marks omitted).
Here, the district court did not err in compelling arbitration and dismissing
Kaspers’s class claims in accordance with the terms of the arbitration provision in
the subscriber agreement. Cruz, 648 F.3d at 1210. Kaspers admits that the terms
of the arbitration provision, including the class-action waiver, are facially valid.
And he provides no legal authority indicating that his theory of unconscionability
“as applied” is a generally applicable contract defense, nor is this novel theory
equivalent to the doctrine of substantive unconscionability, as he claims in his
reply brief. Consequently, he has not shown a basis for invalidating the arbitration
provision. See id.While the inquiry into substantive unconscionability looks to the purpose
and effect of the contractual terms, and in that sense looks at how the contractual
terms would be applied, the analysis is still tied to the “contractual terms
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themselves” under the circumstances existing when the contract was made. See
Dale, 498 F.3d at 1219.
Kaspers points to numerous instances of Comcast’s allegedly unreasonable
and fraudulent actions in making it extraordinarily difficult for parties to resolve or
arbitrate their disputes with Comcast. 2 But however unreasonable these actions
may be, Kaspers does not contend that they arise from the contractual terms
themselves. In fact, they appear to be in opposition to the terms. Moreover, a
party’s resistance to arbitration alone cannot be the basis for invalidating an
arbitration agreement. Both the FAA and Georgia law provide that a party
aggrieved by the failure of another to arbitrate under an agreement may apply for
an order compelling arbitration in a court of competent jurisdiction. O.C.G.A. § 9–
9–6(a); 9 U.S.C. § 4. Kaspers did not avail himself of this remedy. In sum, the
practical difficulties Kaspers faced in attempting to arbitrate his dispute with
Comcast do not show that there was any defect in the formation of the arbitration
provision or that the contract terms themselves were substantively unconscionable.
We are likewise unpersuaded that AAA’s refusal to arbitrate claims from
Comcast because of a non-compliant damages provision renders the arbitration
2
Although Kaspers makes several references to “fraud” in his briefing on appeal, we take
these statements as mere colorful language and do not understand him to be alleging that the
subscriber agreement was invalid due to the contract defense of fraud. In any case, we would
find such a contention to be abandoned because he makes no legal argument in that respect. See
Sapuppo v. Allstate Floridian Ins. Co., 739 F.3d 678, 681-82 (11th Cir. 2014).
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provision invalid or unenforceable.3 Kaspers agrees with Comcast that AAA’s
administrative determination is not binding on this Court, and he does not
complain that application of the damages provision affected his recovery in this
case. Moreover, AAA’s refusal to arbitrate claims from Comcast does not render
the arbitration provision invalid, because the choice of AAA as a forum was not
integral to the agreement. See Brown v. ITT Consumer Fin. Corp., 211 F.3d 1217,
1222 (11th Cir. 2000); see also 9 U.S.C. § 5 (establishing procedures for the
appointment of a substitute arbitrator). In the arbitration provision, Kaspers agreed
to certain procedures for the appointment of a substitute arbitrator, including
where, as here, the named arbitrator would not enforce the arbitration provision as
written.
Kaspers also has not shown that the class-action waiver is invalid. His
arguments in this regard are not clear, but he appears to contend that the class-
action waiver, combined with other Comcast practices already mentioned,
effectively precludes subscribers from obtaining relief from Comcast. However,
the Supreme Court has specifically “rejected the argument that class arbitration
was necessary to prosecute claims that might otherwise slip through the legal
system.” Am. Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304, 2312
(2012). So to the extent Kaspers argues “that the arbitration agreement [is]
3
Ultimately, the AAA agreed to arbitrate this dispute because it had been presented with
a court order to do so.
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unconscionable and unlawfully exculpatory under [state] law because it disallow[s]
classwide procedures,” that argument is foreclosed. Pendergast v. Sprint Nextel
Corp., 691 F.3d 1224, 1235-36 (11th Cir. 2012) (quoting Concepcion, 131 S. Ct. at
1745); see also Cruz, 648 F.3d at 1215. To the extent that Kaspers’s challenge to
the class-action waiver simply relates to the practical difficulty of pursuing
arbitration with Comcast, we reject it for the same reasons stated above.
Finally, we reject Kaspers’s remaining arguments. Kaspers’s contention that
the district court erroneously found that he lacked “standing” to pursue his class
claims misunderstands the court’s order. The court made no ruling about
Kaspers’s standing but instead found that these claims were barred by the class-
action waiver.
And, because we have concluded that the class-action waiver was valid, the
district court did not need to consider the requirements for class certification under
Rule 23, Fed. R. Civ. P. Kaspers also claims that Comcast engaged in “legal
gamesmanship” by removing the action under the Class Action Fairness Act while
at the same time contesting whether Kaspers could pursue his class claims.
However, he does not contend that the action did not meet the formal requirements
of the Class Action Fairness Act at the time of removal or that the court lacked
subject-matter jurisdiction to address and dismiss his claims. Cf. Vega v. T-Mobile
USA, Inc., 564 F.3d 1256, 1268 n.12 (11th Cir. 2009) (concluding that the post-
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removal failure of a proposed class does not deprive the district court of subject-
matter jurisdiction so long as the requirements of the Class Action Fairness Act
were satisfied at the time of removal). Consequently, he has not shown a basis for
reversing the district court’s decision on the basis of Comcast’s “gamesmanship.”
V.
In sum, Kaspers has not shown that the arbitration provision is invalid and
unenforceable, and the district court did not err in enforcing the arbitration
provision according to its terms by compelling arbitration and dismissing
Kaspers’s class claims. See Concepcion, 131 S. Ct. at 1748; Pendergast, 691 F.3d
at 1236. Therefore, we affirm.
AFFIRMED.
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