Kristian v. Comcast Corporation, No. 04-2619, is, an interesting question regarding arbitration. A number of Comcast subscribers sued Comcast for violations of state and federal antitrust laws (i.e. the Clayton Antitrust Act, 15 U.S.C. §§ 15 and 26 and the Massachusetts Antitrust Act, Mass. Gen. Laws. Ch. 93) through agreements to swap or exchange cable television assets ("swapping agreements"). Comcast invoked an arbitration clause that appears to have been added to their contract after it was initially entered into, and moved to compel arbitration. The District Court found that the arbitration clause didn’t have retroactive effect. The First reverses, holding that in determining how to construe arbitration agreements, federal law, rather than state contractual construction doctrines regarding adhesive contracts are what matter. It finds that the amendment to the contract did, in fact, give the customers notice (as specified in 47 U.S.C. § 552(c) and 47 C.F.R. §§ 76.1602 & 76.1603 ) of the new arbitration provisions.
But, applying Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002), Pacificare Health Systems, Inc. v. Book, 538 U.S. 401 (2003), and Green Tree Financial Corp. v. Bazzle, 539 U.S. 444 (2003), the court concludes that the following parts of the agreement are invalid because they prevent vindication of a federal statutory right (but nevertheless should be arbitrated):
- a provision barring treble damages
- a provision barring recovery of attorneys fees
- a provision barring class arbitration
The court discusses how to parity state unconscionability doctrines with the Federal Arbitration Act. However, since it concludes that the contract was severable in the sense that the federal statutes could still be litigated in the arbitration forum, under both federal and state law, the the nothing unconscionable happened.