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Comcast Wins Assertion of Primacy of “Involuntary” Binding Arbitration

Tuesday, December, 3, 2013


 

While binding arbitration clauses are generally considered to be reasonable provisions that limit excessive litigation and provide reasonable relief outside of the courtroom for most people, the question of whether these arbitration agreements can be entered into when one party has no independent choice in the matter has been an open question until earlier in 2013 when the Supreme Court upheld such clauses.  This has had an impact on the current class-action lawsuit being waged by consumers against cable television provider Comcast.  The suit alleges that Comcast and other entities colluded to deny consumers the ability to watch certain sporting events in an effort to drive subscribers to sports-related pay services.  Comcast has asserted that the issue must be resolved in arbitration due to the binding arbitration agreement in its standard consumer agreements.

 

The litigants argued that they could not be held to the arbitration clause because they had no choice in agreeing to it – the clause is required for even the most basic Comcast services, and cable companies can operate as near-monopolies in their localities.  The Supreme Court decision, however, upheld this precise use of the binding arbitration clause.

 

The end result is that if Comcast can demonstrate that each consumer involved in the class action agreed to the binding arbitration clause, the litigants will be forced out of the courtroom and into arbitration.  This is perceived generally as a more positive outcome for Comcast, who can expect to overwhelm the litigants in an arbitration process and who can expect a more positive outcome no matter the result – and can avoid dangerous legal precedents as well.  Avoiding legal precedent is widely believed to be on motivator for the corporate preference for arbitration as opposed to litigation, in addition to cost.