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AT&T Corp. v. Clark County ex rel. Tucker

Court of Appeals of Arkansas, Division IV

March 14, 2018

AT&T CORPORATION APPELLANT
v.
CLARK COUNTY, ARKANSAS EX REL HONORABLE TROY TUCKER, IN HIS OFFICIAL CAPACITY AS COUNTY JUDGE OF CLARK COUNTY, ARKANSAS, INDIVIDUALLY AND O/B/O A CLASS OF SIMILARLY SITUATED PARTIES APPELLEE

         APPEAL FROM THE CLARK COUNTY CIRCUIT COURT [NO. 10CV-17-28] HONORABLE GREGORY L. VARDAMAN, JUDGE

          Smith Williams & Meeks L.L.P., by: Richard Smith; and Mayer Brown LLP, by: Kevin S. Ranlett, pro hac vice, and Madeleine L. Hogue, pro hac vice, for appellant.

          Arnold, Batson, Turner & Turner, PA, by: Dan Turner and Todd Turner, for appellee.

          KENNETH S. HIXSON, JUDGE.

         Appellant AT&T Corporation (AT&T) appeals from the trial court's order denying AT&T's motion to compel arbitration of a class-action complaint brought by appellee Clark County, individually and on behalf of similarly situated parties. On appeal, AT&T argues that the trial court's finding that a contract to arbitrate was never formed contravenes the Federal Arbitration Act and Arkansas law. AT&T also argues that the trial court erred in invalidating the arbitration provision on the ground that it deprived Clark County of a right under state law to sue in court or pursue state statutory remedies. We affirm.

         Clark County received telephone service from AT&T dating back to at least 2009. On March 17, 2017, Clark County filed a complaint against AT&T on behalf of Clark County and all similarly situated counties in Arkansas that received AT&T telephone service. In the complaint, Clark County alleged that AT&T had collected improper and unlawful fees from Clark County and the putative class members. These allegedly improper fees included 911 fees, "Arkansas Universal Service charges, " and "Special municipal charges." According to the complaint, over the course of the past six years Clark County had asked AT&T to provide authority for its imposition of these fees, but AT&T never provided any satisfactory explanation for the fees. Clark County sought a declaratory judgment that Clark County and the putative class members were not subject to imposition of the fees described in the complaint, and requested an injunction to enjoin AT&T from continuing to collect these fees. Clark County also asked for a judgment for all improper fees that AT&T had collected.

         AT&T filed a motion to stay the proceedings and compel arbitration. In its motion, AT&T relied on two documents. The first document is labeled "AT&T ILEC Plexar ('Service'), " hereinafter referred to as the "Service Agreement." The second document is labeled "AT&T ILEC Business Term and Volume Discount Plan ('Plan'), " hereinafter referred to as the "Volume Plan." The top of the Service Agreement and the Volume Plan each contain the following verbiage:

[] Pricing schedule to AT&T Agreement Reference No. ____
[] Confirmation of Service Order
If neither box above is checked then this document is a standalone confirmation of service order.

         Neither of the above boxes were checked on either document. The Service Agreement and the Volume Plan each contain, inter alia, the following verbiage:

If this document serves as a confirmation of service order (as indicated above), the confirmation of service order is subject to: (a) the terms of the applicable Tariff, if the service is offered pursuant to Tariff; or (b) the AT&T Business Service Agreement (BSA), if the Service is not offered pursuant to Tariff. Tariffs, Guidebooks, and the BSA can be found at www.att.com/servicepublications.

         The Service Agreement was for a term of 60 months, and the Volume Plan was for a term of 48 months. However, each document provides:

At the end of the Term, the Service will automatically be provided to Customer under the terms and conditions of the applicable Tariff or Guidebook on a month-to-month basis at the then-current month-to-month Tariff or Guidebook rates unless and until execution of a then available term plan for the Service or until AT&T or Customer cancels the Service on 30-day prior written notice.

         In its motion, AT&T asserted that when Clark County signed up for service, the services were provided subject to publicly filed tariffs. However, those services were de-tariffed on October 1, 2013, after which AT&T claimed that the services became subject to the AT&T Business Service Agreement (BSA) pursuant to the terms of the Service Agreement and the Volume Plan. Although AT&T updates the terms of the BSA from time to time, all versions of the BSA contained arbitration clauses. The BSA in effect when the services were de-tariffed provided:

AT&T and You ("We") agree to resolve all disputes between us through binding arbitration administered by the American Arbitration Association ("AAA") under its Commercial Arbitration Rules, as modified by this provision.
This agreement to arbitrate is broad, and includes disputes of any type between AT&T (including its subsidiaries, affiliates, agents, predecessors, successors, and assigns) and You (including authorized or unauthorized users/beneficiaries of services or devices) under this or prior agreements. WE AGREE THAT WE ARE WAIVING THE RIGHT TO A TRIAL BY JURY, TO PARTICIPATE IN A CLASS ACTION, OR TO SEEK REMEDIES BEYOND THE EXTENT NECESSARY TO PROVIDE INDIVIDUALIZED RELIEF TO, AND AFFECTING ONLY, AT&T OR YOU ALONE. WE AGREE NOT TO ACT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED OR DE FACTO CLASS OR REPRESENTATIVE PROCEEDING, OR AS A PRIVATE ATTORNEY GENERAL OR ON BEHALF OF THE GENERAL PUBLIC.

         AT&T alleged that it notified Clark County that its services were no longer subject to the tariff. AT&T asserted that after Clark County was notified that its service was being de-tariffed effective October 1, 2013, continued use of AT&T services constituted acceptance of the BSA. Because Clark County chose to continue to receive AT&T services, AT&T thus maintained that, pursuant to the terms of the BSA (as allegedly incorporated into the parties' agreements), Clark County was required to resolve its claims against AT&T in binding arbitration.[1]

         AT&T attached affidavits of employees in support of its motion to compel arbitration. Cleveland Beverage stated in his affidavit that when the customer is provided with one or more Service Agreements and Volume Plans to sign, the AT&T sales representative will provide copies of the tariffs or BSA to the customer on request. He also stated that those documents are available on AT&T's website. Michele Ruetty stated in her affidavit that the services provided to Clark County became de-tariffed on October 1, 2013, at which point the services became subject to the BSA in effect at the time. She also stated that customers were notified in writing of the de-tariffing and application of the BSA. A copy of this notice was attached to her affidavit, and it states in pertinent part:

         Dear Valued AT&T Business Customer:

As a result of recent changes in Arkansas law governing telecommunications services, Intrastate telecommunications services offered by AT&T Arkansas and all of your long distance services offered by AT&T Long Distance (collectively referred to herein as "business telecommunications services") will no longer be provided pursuant to tariffs filed with the Arkansas Public Service Commission.
Instead, effective October 1, 2013, if you are a retail customer, AT&T business telecommunications services to which you subscribe (unless you have an applicable written agreement) will be offered under the terms and conditions of the enclosed Business Services ...

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