Deny AT&T’s Motion to Compel Arbitration, Data Breach Plaintiff Urges N.C. Court
The U.S. District Court for Western North Carolina in Statesville should reject AT&T’s motion to compel plaintiff Timothy Trimble’s fraud claims to arbitration, said Trimble’s reply brief in opposition Friday (docket 5:23-cv-00038). His class action alleges AT&T “completely and utterly failed” to protect sensitive consumer data when it suffered a “massive data breach” in January, compromising the personal information of about 9 million U.S. customers (see 2305150052).
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
Contrary to AT&T’s assertions, Trimble’s consumer service agreement with AT&T doesn’t contain an arbitration provision that encompasses all of his data breach claims because the dispute doesn’t arise out of standard business operations between him and AT&T, said the brief. The court shouldn’t compel arbitration of Trimble’s claims in accordance with Section 4 of the Federal Arbitration Act (FAA), “and allow this case to continue forward,” it said. AT&T seeks to stay the case pending the outcome of the arbitration.
AT&T “understood it had an enormous responsibility” to protect the consumer data it collected, said the brief. “AT&T now attempts to hide their wrong doing behind an overly broad arbitration agreement in an effort to avoid real repercussions for this egregious behavior and handling of sensitive customer information,” it said. AT&T moved to compel Trimble’s claims to arbitration after he and the company were unable to resolve their impasse following good-faith discussions toward a voluntary settlement (see 2305110029).
AT&T’s failure to satisfy all four parts of the FAA requirements to compel arbitration means its motion “must fail,” said the brief. Trimble’s claims “are outside the scope of AT&T’s arbitration contracts,” it said. “Nonsignatory” plaintiffs also aren’t bound by the arbitration contracts by AT&T’s customer agreements “under equitable estoppel,” it said. AT&T “acknowledges that none of the plaintiffs it seeks to compel to arbitration ever actually signed contracts containing arbitration clauses with AT&T,” it said.
The court should say AT&T’s arbitration contracts “are unenforceable because the FAA doesn’t apply here at all,” said the brief. Even if the FAA did apply, the court “should refuse to enforce the arbitration contracts because they are unconscionable,” it said. Courts in the 4th Circuit already concluded that AT&T’s arbitration contract is unconscionable, it said.