O'Neil v. Comcast Corporation et al

Filing 38

MEMORANDUM Opinion and Order. For the reasons stated herein, Defendants' Motion to Compel Individual Arbitration and Stay Litigation 21 is granted. Plaintiff shall comply with the written arbitration agreement. This action is stayed in its entirety during the pendency of any resulting individual arbitration proceeding. Signed by the Honorable Harry D. Leinenweber on 2/27/2019:Mailed notice (maf)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

ELIZABETH O’NEIL,
Plaintiff,

Case No. 18 C 4249

v.

Judge Harry D. Leinenweber

COMCAST CORPORATION, et al.,
Defendants.

MEMORANDUM OPINION AND ORDER
Plaintiff Elizabeth O’Neil brings this putative class action
on behalf of herself and other similarly situated individuals.
Plaintiff alleges that Defendants Comcast Corporation and Comcast
Cable Communications failed to protect her personal information,
resulting

in

identity

thieves

accessing

purchasing cell phones in her name.
violated

the

Illinois

Consumer

that

information

and

Plaintiff claims Defendants

Fraud

and

Deceptive

Business

Practices Act, breached an implied contract, and unjustly enriched
themselves.
action

in

arbitration

Defendants move to compel arbitration and stay this
its

entirety

proceedings.

during
For

the
the

pendency
reasons

Defendants’ Motion (Dkt. No. 21) is granted.

of

any

stated

resulting
herein,

I.

BACKGROUND

Defendant Comcast Corporation (“Comcast”) is a media and
technology

company.

(Compl.

¶ 11.)

Defendant

Comcast

Cable

Communications (“Comcast Cable”) is a wholly-owned subsidiary of
Comcast. (Compl. ¶ 12.)

Xfinity is a brand of Comcast Cable, used

to market its consumer cable television, internet, telephone, and
wireless services. (Compl. ¶ 13.) The Court will refer to Comcast,
and Comcast Cable doing business as Xfinity Mobile, collectively
as “Defendants.”
Plaintiff Elizabeth O’Neil has a Xfinity account for wireless
internet at her residence. In April 2017, Comcast created a new
wireless service named Xfinity Mobile. (Compl. ¶ 16.) Plaintiff
never added Xfinity Mobile services to her account. (Compl. ¶ 31.)
In November 2017, Plaintiff was alerted that several cell phones
she did not purchase herself had been charged to her Xfinity
account and shipped to various addresses in the United States.
(Compl. ¶ 30.) The phone purchases were processed in her name
through

Xfinity

Mobile.

(Compl.

¶ 31.)

Similar

unauthorized

purchases in her name occurred a few months later. (Compl. ¶ 33.)
Plaintiff

ultimately

expended

significant

time

and

resources

resolving these fraudulent purchases with Comcast and reporting
the incidents to local law enforcement. (Compl. ¶ 37.)

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In June 2018, Plaintiff brought this lawsuit, claiming that
Defendants used existing cable and internet subscribers’ personal
information—including payment information—to open Xfinity Mobile
accounts without their knowledge or consent. Because of the lack
of security measures, unauthorized users could easily access these
accounts and then fraudulently purchase cell phones. (Compl. ¶ 3638.) Plaintiff brings suit on behalf of herself and all other
Comcast subscribers who had cell phones fraudulently purchased in
their

name,

knowledge

through

of.

an

(Compl.

account
¶ 42.)

they

neither

Plaintiff

created

brings

three

nor

had

counts,

arguing: (1) Defendants violated the Illinois Consumer Fraud and
Deceptive Business Practices Act, 815 ILCS 505/1, et seq., by
opening Xfinity Mobile accounts without subscribers’ consent or
knowledge,

and

information

from

failing

to

protect

unauthorized

third

subscribers’
parties;

(2)

personal
Defendants

breached an implied contract to reasonably safeguard subscribers’
personal

information;

and

(3)

Defendants

unjustly

enriched

themselves at the expense of Plaintiff and the putative class.
(Compl. ¶ 6.)
Defendants

assert

that

Plaintiff

arbitration for dispute resolution.

twice

agreed

to

use

Following installation of

Comcast internet in her residence in November 2015, Plaintiff
received a copy of Defendants’ standard Subscriber Agreement.
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(Comcast

Agreement

for

Residential

Services

(“2015

Subscriber

Agreement”), Ex. 2 to Ex. A to Defs.’ Mot., Dkt. No. 21.) When
Plaintiff signed a work order confirming the installation, she
both acknowledged receipt of the 2015 Subscriber Agreement and
agreed to be bound by it. (Defs.’ Mot. at 2-3, Dkt. No. 21.) In
August

2017,

(Comcast

Comcast

Agreement

updated

for

the

2015

Residential

Subscriber

Services

(“2017

Agreement.
Subscriber

Agreement”), Ex. 3 to Ex. A to Defs.’ Mot., Dkt. No. 21.) Comcast
sent Plaintiff the 2017 Subscriber Agreement along with her August
2017

billing

Subscriber

statement.

Agreement

and

(Defs.’
its

Mot.

2017

at

4.)

replacement

Both

the

contain

2015
terms

requiring arbitration in the case of a dispute. The Court will
refer to the arbitration terms in the 2017 Subscription Agreement
collectively as “the arbitration provision.” The following are the
relevant terms of that Agreement:
1.
The 2017 Subscriber Agreement states on the first
page that it requires arbitration: “Note: THIS AGREEMENT
CONTAINS A BINDING ARBITRATION PROVISION IN SECTION 13
THAT AFFECTS YOUR RIGHTS…” (2017 Subscriber Agreement at
1 (emphasis in original).)
2.
The arbitration provision states, “[a]ny dispute
involving you and [Comcast] shall be resolved through
individual arbitration.” (Id. at § 13(a).)
3.
“Dispute” is defined as “any dispute, claim, or
controversy related to us or our relationship, including
but not limited to any and all: (1) claims for relief
and theories for liability, whether based on contract,
tort, fraud, negligence, statute, regulation, ordinance,
or otherwise; (2) claims that arose before this or any
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prior Agreement; (3) claims that arise after the
expiration or termination of this Agreement; (4) claims
that are the subject of purported class action
litigation.” (Id. at § 13(b).)
4.
The arbitration provision waives all class actions
and collective relief: “THERE SHALL BE NO RIGHT OR
AUTHORITY FOR ANY CLAIMS TO BE ARBITRATED OR LITIGATED
ON A CLASS ACTION…” (Id. at § 13(h).)
5.
Subscribers have an opportunity to opt out of the
arbitration requirement within thirty days of their
first Xfinity service activation, with “no adverse
effect” to the subscriber. (Id. at § 13(d).)
6.
The 2017 Subscriber Agreement further provides that
“[t]his
Arbitration
Provision
shall
be
broadly
interpreted.” (Id. at § 13(b).)
Defendants now move to compel Plaintiff to pursue her claims
in individual arbitration, and to stay this action during the
pendency of any resulting arbitration proceedings, pursuant to the
Federal Arbitration Act. 9 U.S.C. §§ 1-16.
II.
The

Federal

LEGAL STANDARD

Arbitration

Act

(“FAA”)

provides

that

an

arbitration clause “shall be valid, irrevocable, and enforceable,
save upon such grounds as exist at law or in equity for the
revocation of any contract.” 9 U.S.C. § 2. The FAA established a
“liberal federal policy favoring arbitration agreements.” Epic
Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (citation
omitted). Courts must “rigorously” enforce arbitration agreements
according to their terms. Id.

Whether parties have agreed to

submit a particular dispute to arbitration is typically an issue
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for judicial determination. Howsam v. Dean Witter Reynolds, Inc.,
537 U.S. 79, 83 (2002). Such determinations are guided by, state
law principles of contract formation. Zurich Am. Ins. Co. v. Watts
Indus., Inc., 466 F.3d 577, 580 (7th Cir. 2006).

Both Defendants

and Plaintiff agree that Illinois law governs; the Court will thus
analyze contract issues using Illinois law.
In Zurich American Insurance Co. v. Watts Industries, Inc.,
466 F.3d 577, 580 (7th Cir. 2006), the Seventh Circuit held that
a party moving to compel arbitration must show that: (1) a written
agreement to arbitrate exists; (2) the dispute at issue is within
the scope of that agreement; and (3) the other party has refused
to

arbitrate.

Id.

The

third

requirement

is

satisfied

since

Plaintiff currently refuses to arbitrate. And it appears to the
Court that a contract already exists between the parties: the 2017
Subscriber Agreement. The parties, however, disagree over the
validity and scope of that Agreement. Accordingly, the Court will
address

the

first

two

Zurich

elements,

and

then

consider

Plaintiff’s alternative argument that the arbitration agreement is
unenforceable because it is unconscionable.
As a preliminary matter, the Court notes that Plaintiff
appears to cite the 2015 Subscriber Agreement rather than the 2017
Subscriber Agreement, though the Court cannot be certain, as she
uses

only

the

vague

term

“Internet
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Agreement”

and

does

not

reference a specific exhibit. (See Pl.’s Resp. at 8, 9, 12, Dkt.
No. 33.) Regardless, the arbitration provision exists in both the
2015 and 2017 Subscriber Agreements, and Plaintiff does not dispute
that

she

has

agreed

to

such

provisions.

(Pl.’s

Resp.

at

1

(“Plaintiff does not dispute that she agreed to arbitrate her
claims

regarding

her

use

of

Comcast’s

internet

service.”).)

Accordingly, the Court will note for the sake of accuracy when
Plaintiff appears to cite the 2015 Subscriber Agreement, but the
Court will base the following analysis on the 2017 Subscriber
Agreement.
III.
A.

DISCUSSION

Contract Formation

As the party seeking to enforce an alleged agreement to
arbitrate, Defendants have the burden to establish a prima facie
case that the agreement exists. Liu v. T & H Mach., Inc., 191 F.3d
790, 795 (7th Cir. 1999) (applying Illinois law). Thus, Defendants
must establish the three required elements of contract formation:
offer, acceptance, and consideration. Melena v. Anheuser-Busch,
Inc., 847 N.E.2d 99, 109 (Ill. 2006). The first element is easily
satisfied here. Under Illinois law, the test for an offer is
“whether it induces a reasonable belief in the recipient that he
can, by accepting, bind the sender.” Architectural Metal Sys.,
Inc. v. Consol. Sys., Inc., 58 F.3d 1227, 1229 (7th Cir. 1995).
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The 2017 Subscriber Agreement constitutes an offer by Comcast to
provide internet services to Plaintiff.
For acceptance to be valid, it must meet and correspond to
the exact terms of the offer. Morris v. Goldthorp, 60 N.E.2d 857,
861 (Ill. 1945). Plaintiff contends that she did not accept the
terms of the Subscriber Agreement, citing the following language
in the 2015 Subscriber Agreement for support: “You will have
accepted this Agreement and be bound by its terms if you use the
Service(s) or otherwise indicate your affirmative acceptance of
such terms.” (2015 Subscriber Agreement § 1 (emphasis added).)
Plaintiff argues that she did not accept the Subscriber Agreement
because she did not use the Xfinity Mobile account from which her
claims stem—a third-party imposter did. However, both the 2015 and
2017 Subscriber Agreement define “service(s)” to include Xfinity
internet service. (See 2017 Subscriber Agreement at 1.) It is
uncontested that Plaintiff used the Xfinity internet service after
receiving the 2015 and 2017 Subscriber Agreements. Because she
used the “service” to which these agreements refer, she accepted
Defendants’

offer

according

to

its

exact

terms.

See

Int’l

Administrators, Inc. v. Life Ins. Co. of N. Am., 541 F. Supp. 1080,
1083 (N.D. Ill. 1982) (noting that an offer may be accepted by
rendering performance). Plaintiff’s argument against acceptance
fails.
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Finally,

consideration

is

the

bargained-for

exchange

of

promises or performances. McInerney v. Charter Golf, Inc., 680
N.E.2d

1347,

1350

(Ill.

1997)

(citation

omitted).

Defendants

agreed to provide internet service to Plaintiff in exchange for
Plaintiff paying all charges associated with that service. (2017
Subscriber

Agreement

at 1.)

Thus,

consideration

is

present.

Defendants have made a prima facie showing that the 2017 Subscriber
Agreement is a contract that binds Plaintiff. See Liu, 191 F.3d at
795.

Plaintiff

has

failed

to

offer

any

evidence

to

counter

Defendant’s prima facie showing. See id. Accordingly, the 2017
Subscriber Agreement constitutes a written agreement to arbitrate.
Zurich, 466 F.3d at 580.
B.

Contract Scope

Having found that a written agreement to arbitrate exists,
the Court turns to the question of whether the dispute at issue is
within the scope of that agreement. Zurich, 466 F.3d at 580. The
Seventh

Circuit

resolution

of

has

noted

disputes

that

through

although

the

arbitration,

it

FAA
is

favors
not

to

the
be

construed so broadly as to include claims that were never intended
for arbitration. Am. United Logistics, Inc. v. Catellus Dev. Corp.,
319 F.3d 921, 929 (7th Cir. 2003). Because arbitration is a matter
of contract, “a party cannot be required to submit to arbitration
any dispute which he has not agreed so to submit.” Howsam v. Dean
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Witter Reynolds, Inc., 537 U.S. 79, 83, (2002) (citation omitted).
See, e.g., Rosenblum v. Travelbyus.com Ltd., 299 F.3d 657, 663-64
(7th Cir. 2002) (finding, in a case involving one contract for
employment and another for the purchase and sale of a business,
that the arbitration clause in the former did not extend to the
latter). But where, as here, parties concede that they have agreed
to arbitrate some matters pursuant to an arbitration clause, the
“law’s permissive policies in respect to arbitration” counsel that
“any doubts concerning the scope of arbitral issues should be
resolved in favor of arbitration.” Granite Rock Co. v. Int’l Bhd.
of Teamsters, 561 U.S. 287, 298 (2010) (citation omitted). The
Court cannot deny Defendants’ request to arbitrate an issue unless
it may be said “with positive assurance that the arbitration clause
is not susceptible of an interpretation that covers the asserted
dispute.” Gore v. Alltel Commc’ns, LLC, 666 F.3d 1027, 1032 (7th
Cir. 2012) (citation omitted).
Plaintiff argues that the arbitration provision does not
apply to her claims against Defendants because it only relates to
internet services. To support this argument, Plaintiff cites to
language in the 2015 Subscriber Agreement that states, “You will
have accepted this Agreement and be bound by its terms if you use
the Service(s). . .” (2015 Subscriber Agreement § 1 (emphasis
added).)

According

to

Plaintiff,
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this

language

unambiguously

requires arbitration only for the “services at issue”—and in this
case, only Xfinity Mobile services are at issue. (Pl.’s Resp. at
9.) Plaintiff’s interpretation belies the plain meaning of the
quoted language. See O’Rourke v. Access Health, Inc., 668 N.E.2d
214,

220

interpreted

(Ill.

App.

according

Ct.
to

1996)
its

(contract

plain,

language

ordinary,

and

must

be

popular

meaning). As the Court has already explained, this provision
establishes

the

conditions

for

accepting

the

contract,

which

Plaintiff did by continuing to use Xfinity internet services. It
does not relate to the scope of the arbitration provision. This
argument fails.
Plaintiff next argues her claims are outside the scope of the
arbitration provision because her claims are “entirely unrelated”
to her relationship with Comcast. (Pl.’s Resp. at 12.) However,
the arbitration provision is quite broad in scope, including “any
dispute, claim, or controversy related to us or our relationship,
including but not limited to any and all… claims for relief and
theories for liability, whether based on contract, tort, fraud,
negligence, statute, regulation, ordinance, or otherwise. . .”
(2017 Subscriber Agreement § 13(b) (emphasis added).) Plaintiff’s
Complaint reveals that her claims are related to her relationship
with Defendants. Plaintiff essentially alleges that Defendants
took advantage of their existing relationship with her when they
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opened a mobile account in her name. All of Plaintiff’s claims
depend

on

the

factual

assertion

that

Defendants

misused

the

personal information that she provided in connection with her
Xfinity internet account. (See, e.g., Compl. ¶ 68 (alleging that
when Plaintiff provided Defendant her personal information for her
Xfinity internet account, it created an implied contract whereby
Comcast

became

obligated

to

safeguard

her

information).)

Plaintiff’s claims are inherently “related to” her “relationship”
with Defendants, and thus are within the scope of the arbitration
provision. (2017 Subscriber Agreement at § 13(b).)
Plaintiff additionally argues that the arbitration provision
does not apply to an unforeseeable tort such as the theft of
Plaintiff’s personal information. Plaintiff cites several Florida
and South Caroline state court decisions to support this claim.
However, the Seventh Circuit has routinely held that a party may
not avoid a contractual arbitration clause by casting its complaint
in tort. Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int’l,
Ltd., 1 F.3d 639, 643 (7th Cir. 1993). Furthermore, Plaintiff
specifically agreed to arbitrate all tort and fraud claims. (2017
Subscriber Agreement § 13(b).) This argument fails as well.
Plaintiff also raises a series of arguments centered on the
assertion that she never signed a separate agreement pertaining
specifically to Xfinity Mobile services. Plaintiff argues that
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because she never entered into a “mobile services agreement” with
Defendants, they cannot now require her to arbitrate claims arising
from

the

unauthorized

access

of

her

Xfinity

Mobile

account.

However, Defendants do not claim that such a contract exists.
Rather, they argue that the arbitration provision in the 2017
Subscriber

Agreement

determines

the

outcome

in

this

case.

Therefore, Plaintiff’s reliance on cases in which the plaintiff
had

no

prior

relationship

with

the

defendant

is

misplaced.

Plaintiff cites to Maranto v. Citifinancial Services, No. Civ.A.
05-0359, 2005 WL 3369948 (D. La. Nov. 18, 2005) and Boran v.
Columbia Credit Services, No. 3:06CV806, 2006 WL 3388400 (D. Conn.
Nov. 21, 2006). Both cases involved an identity thief who opened
a credit card in the plaintiff’s name—and in the process, signed
an arbitration agreement in the plaintiff’s name. This case is
distinguishable from Maranto and Boran because here there is a
contract between Plaintiff and Defendants that existed prior to
the fraud. Plaintiff apparently views her Xfinity Mobile account
as

requiring

a

different

contract

with

its

own

arbitration

agreement. However, the Court need not resolve that argument
because the Court has already found Plaintiff’s claims to be within
the scope of the arbitration provision in the 2017 Subscriber
Agreement.

Accordingly,

Defendants

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have

satisfied

the

three

requirements for a motion to compel arbitration. Zurich, 466 F.3d
at 580.
C.

Unconscionability

In a final attempt to thwart arbitration, Plaintiff argues
that the 2017 Subscriber Agreement is procedurally unconscionable
as applied to her claims. Under Illinois contract law, an agreement
may be unenforceable if it is procedurally unconscionable. Phoenix
Ins. Co. v. Rosen, 949 N.E.2d 639, 647 (Ill. 2011). Procedural
unconscionability consists of “some impropriety during the process
of forming the contract depriving a party of meaningful choice.”
Id. (citation omitted). It applies when a contract term is “so
difficult to find, read, or understand that the plaintiff cannot
fairly be said to have been aware he was agreeing to it.” Razor v.
Hyundai Motor Am., 854 N.E.2d 607, 622 (Ill. 2006). Procedural
unconscionability also takes into account a lack of bargaining
power. Id.
Plaintiff first asserts that the 2017 Subscriber Agreement is
procedurally unconscionable because it did not sufficiently alert
her

that

claims

involving

third

parties

placing

unauthorized

orders in her name would be subject to arbitration. However, the
first page of the 2017 Subscriber Agreement states in capital
letters that it requires arbitration and directs the reader to
where in the contract the arbitration provision can be found.
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AGREEMENT

(“THIS

CONTAINS

A

BINDING

ARBITRATION

PROVISION

IN

SECTION 13… THE ARBITRATION PROVISION REQUIRES THAT DISPUTES BE
RESOLVED

IN

INDIVIDUAL

PROCEEDINGS.”)

(2017

ARBITRATIONS

Subscriber

OR

SMALL

Agreement

at

CLAIMS

1

COURT

(emphasis

in

original).) The arbitration provision then states that it includes
“any

dispute,

claim,

or

controversy

relationship.” (Id. at § 13(b).)

related

to

us

or

our

The arbitration provision is not

“hidden in a maze of fine print”—it is conspicuously announced on
the first page of the contract.

See Frank’s Maint. & Eng’g, Inc.

v. C. A. Roberts Co., 408 N.E.2d 403, 410 (Ill. App. Ct. 1980).
Plaintiff

does

not

otherwise

claim

that

the

terms

of

the

arbitration provision were difficult to find, read, or understand,
nor does she claim that she lacked bargaining power. Indeed,
Plaintiff cannot claim that she was denied “meaningful choice,”
Phoenix, 949 N.E.2d at 647, because she could have opted out of
arbitration

pursuant

to

the

2015

Subscriber

Agreement.

(2015

Subscriber Agreement § 13(c).) Had Plaintiff chosen to opt out of
arbitration in 2015, the 2017 Subscriber Agreement would have
automatically

carried

forward

that

election.

(2017

Subscriber

Agreement § 13(d).) The presence of an arbitration opt-out clause
“weighs

heavily

unconscionability.

against”

a

finding

of

procedural

O’Quinn v. Comcast Corp., No. 10 C 2491, 2010

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WL 4932665, *5 (N.D. Ill. Nov. 29, 2010). Plaintiff’s argument
fails.
Plaintiff also contends that the 2017 Subscriber Agreement is
procedurally unconscionable because its arbitration provision has
“unlimited scope.” This argument, however, is more appropriately
characterized as a claim of substantive unconscionability because
it concerns the actual terms of the contract and the relative
fairness of the obligations assumed. See Phoenix, 949 N.E.2d at
647. An agreement is substantively unconscionable when its terms
are so one-sided as to oppress or unfairly surprise an innocent
party. Id. Other factors include whether there is an overall
imbalance in the obligations and rights imposed by the contract,
and the presence of a significant cost-price disparity. Kinkel v.
Cingular Wireless LLC, 857 N.E.2d 250, 267 (Ill. 2006).
First, the Court finds the arbitration provision is not
“unlimited” in scope. It is confined to disputes regarding the
parties’ relationship. See Zacher v. Comcast Cable Commc’ns LLC,
No. 17 CV 7256, 2018 WL 3046955, at *3 (N.D. Ill. June 20, 2018)
(finding same). Second, as already discussed, Plaintiff had a
meaningful opportunity to opt out of the arbitration requirement
without repercussions. Such an option “weighs strongly against”
finding substantive unconscionability. O'Quinn, 2010 WL 4932665,

- 16 -

at *5. Thus, the 2017 Subscriber Agreement is not substantively
unconscionable.
IV.

CONCLUSION

For the reasons stated herein, Defendants’ Motion to Compel
Individual Arbitration and Stay Litigation (Dkt. No. 21) is granted
pursuant to 9 U.S.C. §§ 3, 4.

Plaintiff shall comply with the

written arbitration agreement in the 2017 Subscriber Agreement.
This action is stayed in its entirety during the pendency of any
resulting individual arbitration proceeding.
IT IS SO ORDERED.

Harry D. Leinenweber, Judge
United States District Court
Dated: 2/27/2019

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