The opinion of the court was delivered by: DAVID HERNDON, District Judge
I. Introduction and Procedural Background
Now before the Court is Defendant Talk America, Inc.'s motion
to compel arbitration and stay action pursuant to the Federal
Arbitration Act, or, alternatively, to stay the action in favor
of the Primary Jurisdiction of the Federal Communications
Commission (Doc. 22). Specifically, Talk America, Inc. moves the
Court to compel arbitration of all claims in this matter.
Crawford opposes the motion (Doc. 49). Based on the following,
the Court grants Talk America, Inc.'s motion and stays this
matter pending arbitration.
On March 11, 2005, Annie Crawford, on behalf of herself and all
others similarly situated, filed suit against Talk America, Inc.
("Talk America"), a telecommunications carrier offering local, long distance and dial
up internet services to residential and small business customers
in twenty-five states nationwide, for unjust and unreasonable
rate overcharges in violation of the Communications Act § 201(b),
47 U.S.C. § 201(b) (Doc. 1).*fn1 Crawford challenges the
lawfulness of Talk America's "TSR Administrative Fee," a line
item that appears on its customers' monthly bills. Crawford
alleges that Talk America "confuses . . . consumers as to the
true nature of the TSR Administrative Fee by, among other things,
listing the TSR Administrative Fee as a line item amongst
government fees, surcharges and taxes. . . ." (Doc. 1, ¶ 15).
On May 16, 2005, Talk America filed a motion to compel
arbitration and stay action pursuant to the Federal Arbitration
Act, or alternatively, to stay the action in favor of the primary
jurisdiction of the Federal Communications Commission (Doc. 22).
On June 6, 2005, the Court exercised its discretion pursuant to
LOCAL RULE 7.1(g) and granted Talk America's motion to stay the
case and compelled arbitration (Doc. 30).*fn2 The next day,
Crawford moved to vacate the Court's Order (Doc. 31). On June 8,
2005, the Court vacated its June 6, 2005 Order and allowed
Crawford up to and including June 13, 2005 to respond to the
motion to stay and compel arbitration (Doc. 35). Instead of
filing a response to the motion to stay and compel arbitration, Crawford filed a motion for leave to serve
discovery and extend time to respond to Defendant's motion (Doc.
37). Talk America filed its opposition to the motion on June 30,
2005 (Doc. 43). On July 11, 2005, Crawford moved for an extension
of time to file a reply (Doc. 44) which the Court granted and
allowed Crawford up to an including July 15, 2005 to reply (Doc.
45). Crawford filed her reply on July 15, 2005 (Doc. 46). On
August 30, 2005, the Court denied's Crawford's request.
Thereafter, the parties filed briefs on the pending motion to
compel (Docs. 49, 50 & 51).
Talk America argues that this Court should compel arbitration
and stay this case as Crawford agreed to arbitrate all disputes
arising out of the telecommunications services she enrolled in or
used provided by Talk America and further agreed under the
agreement ("CSA") not to arbitrate any claims as a class action.
Crawford opposes the motion contending that since she never
received or has been able to access the CSA, she did not assent
to the CSA's arbitration provision and cannot be compelled to
arbitrate her claim.
The Federal Arbitration Act ("FAA") was originally enacted
". . . to reverse the longstanding judicial hostility to
arbitration agreements that had existed at English common law
and had been adopted by American courts, and to place arbitration
agreements upon the same footing as other contracts." Gilmer v.
Interstate/Johnson Lane Corp., 500 U.S. 20, 24 (1991). "Its
primary substantive provision states that `[a] written provision in any maritime
transaction or contract evidencing a transaction involving
commerce to settle by arbitration a controversy thereafter
arising out of such contract or transaction . . . shall be valid,
irrevocable, and enforceable, save upon such grounds as exist at
law or equity for the revocation of any contract.'" Id. at
24-25 (quoting 9 U.S.C. § 2). Section 3 of the FAA provides for
stays of proceedings where the issue therein is referable to
arbitration, and § 4 provides for the court's entering an order
compelling arbitration where a party has failed to arbitrate
under the agreement. 9 U.S.C. §§ 3, 4.
"The Arbitration Act establishes that, as a matter of federal
law, any doubts concerning the scope of arbitrable issues should
be resolved in favor of arbitration, whether the problem at hand
is the construction of the contract language itself or an
allegation of waiver, delay, or a like defense to arbitrability."
Moses H Cone Memorial Hosp. v. Mecury Const. Corp.,
460 U.S. 1, 24-25 (1983). While it is established that FAA policy favors
the enforcement of valid arbitration agreements, Crawford cannot
be compelled to arbitrate unless she has entered into a valid
contract waiving her right to a judicial forum. The Court turns
now to address this issue.
On February 25, 2004, Crawford signed up for telephone service
with Talk America. The following is a conversation regarding
verification of Crawford's order for service with Talk America
between Crawford and an ACS Verifier:
ACS Verifier: That 9979-4995 Talk America Operator: That's right. Ms. Crawford.
Ms. Crawford, I would like to thank you for using
Talk America, you yourself have a great day okay
Talk America Operator: Hold on for the verifier.
ACS Verifier: Hello.
Crawford: I'm here.
ACS Verifier: My name is Wayne and I'm with ACS a
independent verification company. The purpose of this
call is to confirm your order with Talk America, and
this call is being recorded. Today's date is February
25th of 2004 and you have requested to have the
following phone number switched to Talk America,
618-3323-417. Is that correct?
ACS Verifier: You are over 18 years of age and the
person of record with authority to make decision on
you phone services, correct?
ACS Verifier: You are giving your approval to
change your local services to Talk America, correct?
ACS Verifier: And that was a yes?
ACS Verifier: And you are giving your approval to
change your regional toll sometimes called your
intra-lata services to Talk America? Correct? Crawford: Yes.
ACS Verifier: And you are giving approval to change
your interstate, intrastate, inter-lata and
international telephone services to Talk America,
ACS Verifier: Is that a yes?
Crawford: Yes. Yes I believe so.
ACS Verifier: Okay for identification purposes may
I please have your date of birth?
ACS Verifier: Okay and your first name is ANNIE.
ACS Verifier: And your last name is CRAWFORD,
is that correct?
ACS Verifier: Your service will be switched within
4 to 7 days from your current provider to Talk
America, Incorporated and based on your current
information the price of your monthly services will
be $18.95 and including taxes and surcharges your
bill will be approximately $31.14. For complete
information about your services you may visit
Talk.com or call 1-800-291-9699. This completes the
verifications process and confirms your order with
Talk America. Thank you for your time. You have a
Crawford: Okay. ACS Verifier: Bye Bye.
Thereafter, Talk America sent Crawford a notice dated February
27, 2004 (the "Welcome Letter") informing her that she could view
her bill on line and review the service terms and conditions of
her Talk America service at www.talk.com. (Doc. 24, Exhibit
The Notice also informed Crawford that she could
call, email or write a letter to Talk America if she had any
questions. (Doc. 24, Exhibit B).
The relevant clauses in the CSA are prefaced or set forth in
bold and capitalized text. Under the "Terms and Conditions," the
CSA provides as follows:
BY ENROLLING IN, USING OR PAYING FOR THE SERVICES,
YOU AGREE TO THE PRICES, CHARGES, TERMS AND
CONDITIONS IN THIS AGREEMENT. IF YOU DO NOT AGREE TO
THESE PRICES, CHARGES, TERMS AND CONDITIONS, DO NOT
USE THE SERVICES, AND CANCEL THE SERVICES IMMEDIATELY
BY CALLING TALK AT 1-800-291-9699 FOR FURTHER
(Doc. 24, Exhibit A, Heading).
* * * IT IS IMPORTANT THAT YOU READ THIS ENTIRE SECTION
CAREFULLY. THIS SECTION PROVIDES FOR RESOLUTION OF
DISPUTES THROUGH FINAL AND BINDING ARBITRATION BEFORE
A NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE
OR JURY OR THROUGH A CLASS ACTION.
(Doc. 24, Exhibit A, § 6).
Specifically, the CSA provides that "[a]ll . . . disputes
[excepting those qualifying for small claims court] arising out
of or related to this Agreement (whether based on contract, tort,
statute, fraud, misrepresentation or any other legal or equitable
theory) must be resolved by final and binding arbitration" (Doc.
24, Exhibit A, § 6(a)). The CSA also states: "No dispute may be
joined with another lawsuit, or in an arbitration with a dispute
or any other person, or resolved on a class-wide basis." (Doc.
24, Exhibit A, § 6(a)). The CSA further reads: "Before you take a
dispute to arbitration . . ., you must first contact our customer
account representatives at the customer service number on your
Talk bill for the Services, or write to us at . . ., and give us
an opportunity to resolve the dispute." (Doc. 24, Exhibit A, §
6(b)). Here, Talk America contends that the CSA requires
arbitration. Crawford maintains that since she never received or
accessed the CSA from Talk America, she did not assent to the
CSA's arbitration provisions and cannot be compelled to arbitrate
her claims. The Court does not agree with Crawford.
The Court finds that Boomer v. AT&T Corp., 309 F.3d 404
Cir. 2002), instructive, if not controlling. In Boomer, the
Seventh Circuit examined the terms of a virtually identical CSA. The CSA in Boomer provided
"BY ENROLLING IN, USING, OR PAYING FOR THE SERVICES, YOU AGREE
TO THE PRICES, CHARGES, TERMS AND CONDITIONS IN THIS AGREEMENT."
Id. at 414. Furthermore, the CSA in Boomer stated that
"[a]ll . . . disputes arising out of or related to this Agreement
(whether based in contract, tort statute, fraud,
misrepresentation or any other legal or equitable theory) must be
resolved by final and binding arbitration" and stated that "NO
DISPUTE MAY BE . . . RESOLVED ON A CLASS-WIDE BASIS." Id. at
410. The Seventh Circuit held:
In sum, the CSA Mailing constituted an offer and
Boomer's continued use of AT&T's services constituted
an acceptance. Consideration supported each party's
promises and Boomer failed to present any evidence of
fraud. Accordingly, the CSA constituted a contract
and as such established the terms and conditions
governing AT&T's ...