Taylor v. Verizon Communications Inc.

Background

Susan Taylor, a Verizon Wireless customer, filed a proposed class action against Verizon Communications Inc. She alleged that Verizon disclosed confidential information about her usage, web browsing history, and other customer information without her consent. The complaint asserted claims under Section 222 of the Telecommunications Act of 1996, the Computer Fraud and Abuse Act, the Federal Wiretap Act, and the Georgia Unfair Deceptive Trade Practices Act. Taylor also alleged invasion of privacy, negligent dissemination of information, and unjust enrichment. She sought certification of a nationwide class, an injunction, and damages.

Taylor first used Verizon’s wireless service in 2013. When she upgraded her device and service plan in June 2023, she accepted a Customer Agreement and a Device Payment Agreement. Both agreements contained arbitration provisions. The Customer Agreement stated that disputes relating to or arising from the agreement, Verizon’s products and services, or related advertising would be resolved through arbitration or in small-claims court. Taylor electronically signed an acknowledgment stating that she had read and agreed to the agreement, including arbitration. She did not dispute that the signature was hers.

Motion to Compel Arbitration

Verizon moved to compel arbitration. The court found that Taylor had agreed to arbitrate disputes arising out of or relating to the Customer Agreement and disputes under the Device Payment Agreement. The court also found that the agreements contained delegation provisions—contract terms assigning the arbitrability question to the arbitrator. The agreements incorporated the American Arbitration Association’s Consumer Arbitration Rules, which also contain a delegation provision.

The court rejected Taylor’s arguments that the arbitration agreement was an unfair contract of adhesion. Applying Georgia law, the court said that unequal bargaining power and the absence of negotiation did not make the agreement unconscionable when the arbitration term was disclosed and Taylor chose to sign and continue doing business with Verizon. The court also found no evidence that Taylor had been defrauded into signing the agreement.

The court rejected Taylor’s argument that arbitration was substantively unfair because it prevented her from litigating statutory privacy claims in court. It concluded that arbitration does not violate public policy when a party has a forum available to pursue her rights, and that federal statutory claims may be arbitrated. The court likewise rejected Taylor’s challenge to the delegation provision, assuming that she had separately challenged that provision.

The opinion states that the record contained no evidence Taylor had signed an arbitration agreement before June 7, 2023. The court did not decide whether claims arising before that date were covered. Instead, because the delegation provision assigned scope questions to the arbitrator, the court said the arbitrator must decide whether any claims fall outside the arbitration agreement.

Ruling and Effect

Judge Colleen McMahon granted Verizon’s motion to compel arbitration. The court directed that the arbitrator determine whether any portion of Taylor’s claims was not arbitrable because it fell outside the agreement’s scope.

The court stayed the underlying action and directed the Clerk to place it on the court’s inactive calendar. It did not dismiss the action. A party may move to reopen the case after arbitration to confirm or challenge an arbitration award. The Clerk was also directed to remove Verizon’s motion from the list of open motions.