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Alltel Corporation and Alltel Communications, Inc. v. Rosenow

Supreme Court of Arkansas

September 18, 2014



Quattlebaum, Grooms, Tull & Burrow PLLC, by: Steven W. Quattlebaum, E. B. Chiles IV, and Chad W. Pekron, for appellants.

Emerson Poynter LLP, by: Scott E. Poynter; and Arnold, Batson, Turner & Turner, P.A., by: Todd Turner, for appellees.

Friday, Eldredge & Clark, LLP, by: Kevin A. Crass and R. Christopher Lawson, for amicus curiae Arkansas State Chamber of Commerce.



Appellants Alltel Corporation and Alltel Communications, Inc. (collectively, "Alltel"), appeal from the circuit court's second amended order denying Alltel's motion that sought to compel arbitration of a class-action complaint brought by Appellee Peter Rosenow, individually and on behalf of similarly situated persons. Alltel asserts two points on appeal: that the circuit court erred: (1) in finding that Alltel's arbitration agreement lacked mutuality and was thus invalid; and (2) in failing to enforce its valid arbitration agreement. Rosenow cross-appeals, asserting that Alltel waived any right it had to arbitration. We affirm the circuit court's order on direct appeal, which renders the cross-appeal moot.

The litigation began when Rosenow filed a class-action complaint against Alltel, alleging violations of the Arkansas Deceptive Trade Practices Act and unjust enrichment stemming from Alltel's imposition of an early termination fee on its cellular-phone customers. The circuit court denied a motion by Rosenow for class certification, and this court reversed and remanded. See Rosenow v. Alltel Corp., 2010 Ark. 26, 358 S.W.3d 879. On remand, the circuit court granted class certification by its order of December 9, 2010.

On June 15, 2011, Alltel filed a motion to redefine the class to exclude any customers that had been subject to, and bound by, an arbitration provision in their contracts with Alltel. Rosenow countered Alltel's motion, asserting that Alltel, having failed to previously raise or rely on the existence of an arbitration agreement, had waived any consideration of its arbitration clause and its validity. A hearing was held on the motion on September 26, 2011, and the circuit court, by its order of October 10, 2011, denied Alltel's motion without prejudice.

Some two months later, Alltel filed a motion to compel arbitration of those claims by any class member who had received service from Alltel on or after May 1, 2004. In its motion, Alltel claimed that its "Terms and Conditions" had included an arbitration clause stating that all disputes resulting from Alltel's service shall be arbitrated. Alltel further stated that its policies and procedures in place had been designed to ensure that all Alltel customers were on notice that its provision of service was subject to those terms and conditions, including the arbitration clause. In support of its motion, Alltel presented affidavits from its employees, as well as exhibits, which included the apposite versions of the terms and conditions for its wireless contracts. Rosenow claimed that, even assuming that Alltel had a valid basis for its motion to compel arbitration, Alltel had waived arbitration in the instant class-action litigation. Rosenow further asserted that (1) Alltel's motion to compel lacked specific evidence from which notice to and assent by Alltel's customers could be inferred; (2) the agreement lacked mutuality and was invalid; and (3) Alltel's terms and conditions and the arbitration clause were unconscionable and unenforceable. To counter Rosenow's assertion that Alltel had waived its right to arbitration by waiting too long to assert it, Alltel claimed that the recent decision by the United States Supreme Court in AT&T Mobility, LLC v. Concepcion, 563 U.S.___, 131 S.Ct. 1740 (2011), had changed the law in this area and that any "wait . . . resulted from the fact that Concepcion was pending . . . at the time of class certification." After several hearings on Alltel's motion to compel, the circuit court entered an order denying that motion. The order denied the motion on several bases, including that (1) Alltel had waived any alleged right to compel arbitration, (2) Alltel's arbitration provision lacked mutuality, (3) its arbitration provision was unconscionable, and (4) Alltel's motion failed on policy grounds.

The circuit court later amended its order, and on October 7, 2013, it entered a second amended order denying Alltel's motion to compel in which it found as follows:

While I do agree with Alltel's position that it did not waive enforcement of its arbitration in this case, its motion to compel arbitration is denied because Alltel never used arbitration as a sword. Thus, it never respected the arbitration provision it sought to enforce here. The Arkansas Supreme Court held that "there is no mutuality of obligation where one party uses an arbitration agreement to shield itself from litigation, while reserving to itself the ability to pursue relief through the court system." Independence County v. City of Clarksville, 2012 Ark. 17, *7. "Thus, under Arkansas law, mutuality requires that the terms of the agreement impose real liability upon both parties." Id. Here, the arbitration provision imposed no real liability upon Alltel. For this reason, Alltel's motion to compel arbitration is denied.
The parties have requested rulings on issues raised by them in their written materials and as presented by them in hearings before the Court. The Court has considered all of the issues raised by both sides, and has denied the Motion to Compel Arbitration for the reasons cited above. To the extent that a ruling on all such issues not specifically addressed above is required for appellate review, the Court hereby denies each issue and argument raised by the parties and not specifically addressed by this Order as moot.
The previous orders regarding Alltel's motion to compel arbitration and entered on July 15 and 26, 2013, are withdrawn and this ...

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