Business Law 11th Edition by Kenneth Clarkson,Roger LeRoy Miller,Gaylord Jentz,Frank Cross

تمرين 5

Thibodeau v. Comcast Corp.
Superior Court of Pennsylvania, 2006. 2006 PA Super 346, 912 A.2d 874.
• Company Profile Comcast Corporation ( www.comcast.com ) was founded in 1963 as a single-system cable television operation. Today, Comcast is the largest provider of cable services in the United States and one of the leading providers of entertainment and communications products and services in the world. Comcast offers interactive digital services, including Internet service, Web entertainment and information sites, and IP-enabled phone service. Comcast also provides digital cable services, high-definition television, and video on demand. Comcast is involved in the development, management, and operation of broadband cable networks and in the delivery of programming content, such as E! Entertainment Television and Comcast SportsNet.
• Background and Facts Comcast Corporation provides cable-television services. Its corporate headquarters are in Philadelphia, Pennsylvania. Philip Thibodeau was a Comcast subscriber in Massachusetts. As part of his subscription for extended basic cable service, Thibodeau rented two converter boxes and two remote controls, which he thought were needed to receive the broadcasts. At the time, Comcast did not tell its customers that nonpremium programming could be viewed without the boxes and that the remotes were wholly unnecessary. In 2002, Comcast mailed Thibodeau and others a new "customer agreement" that mandated the individual arbitration of all disputes and precluded class action. On behalf of Comcast's basic-service customers, Thibodeau filed a suit in a Pennsylvania state court against Comcast and others, asserting that the customers were being improperly billed for unnecessary converter boxes and remote controls. The defendants sought to dismiss the complaint and compel arbitration under the "customer agreement." The court denied this request. Comcast appealed to a state intermediate appellate court.
Opinion by MUSMANNO, J. [Judge]
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In this case, the trial court applied general principles of Pennsylvania contract law, applicable to all contracts, when it concluded that the arbitration provision at issue was unconscionable and unenforceable.* * *
Pennsylvania law concerning the enforceability of arbitration agreements is in accordance with Federal law, requiring that arbitration agreements be enforced as written * * *. However, where the arbitration clause is contained in an adhesion contract and unfairly favors the drafting party, such clauses are unconscionable and must be deemed unenforceable. [Emphasis added.]
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Contracts of adhesion are standardized form contracts presented to consumers without negotiation or any option for modification. * * * [A] contract of adhesion is one prepared by one party, to be signed by the party in a weaker position, usually a consumer, who has little choice about the terms. The Comcast customer agreement received by the plaintiff and all other class members are clearly contracts of adhesion. They were sent without any opportunity for customers to negotiate and even without any requirement of assent * * *.
There is nothing per se wrong with a contract of adhesion. Not every contract of adhesion contains unconscionable provisions. A contract of adhesion is only unconscionable if it unreasonably favors the drafter. * * * In determining whether a clause is unconscionable, the court should consider whether, in light of the general commercial background and the commercial needs of a particular trade, the clause is so one-sided that it is unconscionable under the circumstances. [Emphasis added.]
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Class actions are * * * of great public importance. Class action lawsuits are * * * the essential vehicle by which consumers may vindicate their lawful rights. The average consumer, having limited financial resources and time, cannot individually present minor claims in court * * *.
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It is only the class action vehicle which makes small consumer litigation possible. Consumers joining together as a class pool their resources, share the costs and efforts of litigation and make redress possible. Should the law require consumers to litigate or arbitrate individually, defendant corporations are effectively immunized from redress of grievances.
The Comcast customer agreement attempts to preclude all class action * * * and attempts to mandate that all customers arbitrate all claims as individuals. The Comcast customer agreement is a contract of adhesion unilaterally imposed on all consumers. Consumers including Mr. Thibodeau are subject to every term without choice.* * * Mr. Thibodeau was forced to accept every word of all 10 pages of the mass-delivered Comcast customer agreement or have no cable television service * * *.
Mr. Thibodeau and his class members are claiming minimal damages. * * * Mr. Thibodeau and each of his class members allege they were unlawfully overcharged $9.60 per month.* * * No individual will expend the time, fees, costs and/or other expenses necessary for individual litigation or individual arbitration for this small potential recovery. If the mandatory individual arbitration and preclusion of class action provisions are valid, Comcast is immunized from * * * any minor consumer claims. It is clearly contrary to public policy to immunize large corporations from liability by allowing them to preclude all class action.
• Decision and Remedy The court upheld the lower court's denial of the defendant's request to compel individual arbitration. The state intermediate appellate court held that the preclusion of all class action in the "customer agreement" was "unconscionable and unenforceable." The court reasoned that the relatively high cost for an individual to obtain a minor recovery would otherwise effectively "immunize [the] corporations from liability."
• What If the Facts Were Different If the "customer agreement" had precluded only class litigation and mandated class arbitration, would the court have considered the provision unconscionable Why or why not
• The E-Commerce Dimension Forums for arbitration and other methods of alternative dispute resolution (ADR) are available online. Should the reduced cost and other factors favoring online ADR be considered in determining the unconscionability of provisions such as the clause at issue in this case