Jason BLANKS et al.
TDS TELECOMMUNICATIONS LLC, Peoples Telephone Company, Inc., and Butler Telephone Company, Inc.
from Cherokee Circuit Court (CV-18-900097)
Frank Davis, John E. Norris, Wesley W. Barnett, Dargan M.
Ware, and Kristan B. Rivers of Davis & Norris, LLP,
Birmingham, for appellants.
J. Butler and Taryn E. Hodinka of Maynard, Cooper & Gale LLP,
Birmingham; and Eric S. Mattson and Angelo J. Suozzi of
Sidley Austin LLP, Chicago, Illinois, for appellees.
Blanks, Peggy Manley, Kimberly Lee, Nancy Watkins, Randall
Smith, Trenton Norton, Earl Kelly, Jennifer Scott, and
Alyshia Kilgore (hereinafter referred to collectively as
"the customers") appeal from the denial of a motion
to compel arbitration and a declaratory judgment entered in
an action brought by TDS Telecommunications LLC, and its two
affiliates, Peoples Telephone Company, Inc., and Butler
Telephone Company, Inc. (hereinafter referred to collectively
as "the Internet providers"). In the
declaratory-judgment action, the trial court ruled that the
Internet providers are not required to arbitrate disputes
with the customers. We reverse and remand.
customers subscribe to Internet service furnished by the
Internet providers; their relationship is governed by a
written "Terms of Service."
customers allege that the Internet service they have received
is slower than the Internet providers promised them. At the
time the customers learned that their Internet service was
allegedly deficient, the Terms of Service contained an
arbitration clause providing that "any controversy or
claim arising out of or relating to [the Terms of Service]
shall be resolved by binding arbitration at the request of
either party." The arbitration clause also incorporated
the commercial arbitration rules of the American Arbitration
Association ("the AAA"). The customers'
attorney notified the Internet providers that he intended to
initiate AAA arbitration proceedings with respect to the
dispute regarding Internet speed.
after the Internet providers learned of the customers'
plan to arbitrate, the Internet providers updated the Terms
of Service. As part of the update, the arbitration clause was
modified. Among other things, the clause now states that all
disputes arising out of or relating to the Terms of Service
must be submitted to "JAMS" for
arbitration. Also included in the updated Terms of
Service, however, is a provision expressly stating that the
arbitration clause "does not apply to customers who
receive services in Alabama or Georgia, and [the Internet
providers] expressly [do] not consent to arbitration of any
dispute, claim or controversy— regardless of when the
dispute, claim, or controversy arose— for customers
who receive services in Alabama or
prior Terms of Service stated that the Internet providers
could modify the terms at any time and in any manner, that
such a modification becomes effective upon notice of the
modification to the Internet providers' customers, and
that the continued use of the Internet service constitutes
acceptance of the modification. The customers do not dispute
that, on the day the Terms of Service was updated, the
Internet providers gave them notice of the update. They also
do not dispute that they continued to use their Internet
service after they received that notice.
the updated Terms of Service and its provision excluding the
customers from arbitration, the customers indicated that they
would continue to press for arbitration. Indeed, after the
Terms of Service ...