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Eleventh Circuit Court Of Appeals Holds Plaintiff’s FCRA Claim Was Subject To Provision In A Subscriber Agreement That Terminated Years Before His Claim Arose

In Michael Hearn, et. al. v. Comcast Cable Communications, LLC, the United States Court of Appeals for the Eleventh Circuit reverses a recent decision from United States District Court for the Northern District of Georgia and ruled that a putative class action brought by a consumer against Comcast Cable Communications, LLC (“Comcast”) for allegedly violating the Fair Credit Reporting Act (“FCRA”) must go to arbitration.

In 2016, lead plaintiff Michael Hearn (“Hearn”) contracted with Comcast for services at his residences.  At the start of the services, Hearn received a welcome kit from Comcast that contained, among other things, a subscriber agreement. Within that agreement there was a mandatory arbitration provision. The provision was a default part of the agreement, but customers could opt out of the provision. Both parties to the lawsuit agreed that Hearn never chose to opt out. Hearn decided to terminate the services with Comcast in 2017.

Two years later, on March 5, 2019, Hearn called Comcast seeking to contract with Comcast for services at a different residence. During that phone call, a representative of Comcast made a “hard pull” on Hearn’s consumer report which damaged his credit score. Hearn never consented to the “hard pull” nor was he a customer of Comcast when the representative performed the credit check. Hearn filed suit against Comcast on March 19, 2019, alleging that Comcast obtained his consumer report in violation of the Fair Credit Reporting Act (“FCRA”). Hearn alleged that Comcast’s “hard pull” was an impermissible use of Hearn’s consumer report under the FCRA.

Comcast then filed a motion to compel arbitration. Comcast argued that Hearn’s FCRA claim was covered by the arbitration provision contained in the subscriber agreement he received in 2016. Specifically, the provision stated that “any dispute involving [the customer] and Comcast shall be resolved through individual arbitration,” and that the parties’ agreement to arbitrate survives the termination of the subscriber agreement. Hearn argued against the motion by claiming (1) he was not under any valid agreement with Comcast in 2019, (2) his FCRA claim did not relate to the subscriber agreement, and (3) the arbitration provision was overly broad and unconscionable. The District Court did not agree with Hearn’s first or third argument; however, it did agree that the Federal Arbitration Act (FAA) could only compel Hearn to arbitrate his FCRA claim if it was related to the subscriber agreement. The District Court determined that Hearn’s claims were not related to his subscriber agreement because he was calling to enter into a new service agreement with Comcast. Comcast disagreed with the District Court and appealed.

On appeal, the 11th Circuit sided with Comcast and reversed the lower court’s decision by finding that Hearn’s FCRA claims related to the 2016 subscriber agreement. It found that Comcast was only able to conduct the credit check because of Hearn’s personal information in its files—information it obtained directly from the subscriber agreement. Further, the 11th Circuit determined that Hearn’s call in 2019 was an attempt to reconnect services rather than start new services. This related to the reconnection provision, the termination provision, and the credit inquiry provision contained in the subscriber agreement.

The court’s holding in this case is a narrow one, and it never answered if the extremely broad language contained in the arbitration provision was enforceable under the Forced Arbitration Act (FAA).

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