Federal Court Sends Data Privacy Dispute to Arbitration
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The Northern District of Illinois has ordered a proposed class action data privacy lawsuit that was filed against a telecommunications company to arbitration. In O’Neil v. Comcast Corp., No. 18-04249 (N.D. Ill., February 27, 2019), a customer, O’Neil, subscribed to Comcast’s Xfinity wireless internet service for her home. Prior to securing the service, O’Neil signed a subscriber agreement that contained a binding arbitration clause as well as a prohibition on collective action. Interestingly, the arbitration provision also allowed customers to opt-out within 30 days of service activation. O’Neil did not opt-out.
Later, Comcast apparently created several unauthorized wireless telephone accounts in O’Neil’s name. After receiving a bill for the fraudulent accounts, O’Neil reported the matter to both Comcast and the local police. O’Neil then filed a putative class action lawsuit against the telecommunications company in the Northern District of Illinois.
According to O’Neil’s complaint, Comcast failed to reasonably protect the personal information of its customers, violated the Illinois Consumer Fraud and Deceptive Business Practices Act, and enjoyed unjust enrichment as a result. Comcast responded to O’Neil’s data privacy lawsuit by filing a motion to compel the case to arbitration based on the terms of the signed subscriber agreement. O’Neil opposed the company’s motion by arguing the mandatory arbitration provision applied only to the home internet service she had actually subscribed to. The customer also claimed the arbitration agreement was unconscionable.
The federal district court first determined that a valid agreement to arbitrate existed between the parties. After that, the court examined whether the parties’ dispute fell within the scope of the mandatory arbitration agreement. The Northern District of Illinois found that the arbitration provision was “quite broad in scope,” and O’Neil’s claims were “inherently” related to her relationship with Comcast. Because of this, the court ruled the arbitration provision applied to the case before it.
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