Mey v. DIRECTV: Fourth Circuit Compels Arbitration of Telephone Consumer Protection Act Claims Through an Affiliate's Wireless Contract

Background

In 2012, Diana Mey opened a line of service at an AT&T retail store and electronically acknowledged the Wireless Customer Agreement, "including limitation of liability and arbitration provisions." The arbitration clause covered "all disputes and claims between us" and defined the parties to include their "subsidiaries, affiliates, agents, employees, predecessors in interest, successors, and assigns." It was "intended to be broadly interpreted" and expressly reached statutory claims and "claims relating to advertising."

AT&T, Inc. acquired DIRECTV in 2015. In 2017, Mey filed a putative class action alleging that DIRECTV's agents placed automated and prerecorded telemarketing calls to her number while it was on the National Do Not Call Registry. The Northern District of West Virginia denied DIRECTV's motion to compel arbitration, finding the dispute outside the clause's scope.

The Majority

Judge Rushing, joined by Judge Floyd, vacated and remanded.

Formation. Mey's signed acknowledgment established assent, and the clause covered authorized users, so it did not matter that the account was in her husband's name. Applying the ordinary meaning of "affiliate," a company under common ownership or control, the court held that DIRECTV qualified. The agreement's forward-looking terms, including "successors" and "assigns," showed the parties did not intend to freeze the list of covered entities on the signing date. Because the contract was not ambiguous, the rule construing ambiguity against the drafter did not apply.

Scope. The district court had asked whether the clause could be read to exclude the dispute. The correct question is whether it is susceptible of an interpretation that covers it. Given the "all disputes" language, the express inclusion of advertising and statutory claims, and a provision allowing contact about "other matters we believe may be of interest to you," the TCPA claims fell within the clause. The court declined to define the agreement's outer limits.

Unconscionability was left for remand, along with DIRECTV's waiver argument. The court took no position on DIRECTV's consent defense.

The Dissent

Judge Harris would have affirmed on formation. A reasonable wireless customer would read "affiliates" as entities acting in the carrier's place regarding the service, not any company later acquired by the parent. She described hypotheticals, including a defamation claim against a later-acquired news network, that she said followed from DIRECTV's position, and noted that DIRECTV embraced them at oral argument.

Practical Considerations

1. Companies within a corporate family may be able to invoke a sibling's broad consumer arbitration clause, at least in the Fourth Circuit.
2. Plaintiffs should develop formation and unconscionability arguments in the district court rather than raising them on appeal.
3. Drafting matters. An "all disputes" clause with a broad party definition will be read according to their terms.

The article is intended to give general information and is not legal advice.

The Fourth Circuit's opinion in Mey v. DIRECTV is attached.