You have a cell phone, and most likely a contract for the service plan that goes with that cell phone. So when you run into problems with your wireless provider, are you tempted to use your legal know-how to challenge the arbitration clause in your cell phone contract? If you are, keep in mind that the Seventh Circuit Court of Appeals, like the Supreme Court, favors arbitration clauses.

This Seventh Circuit arbitration case hits close to home because we can remember a time where we faced a similar battle.

Gore brought a class action against Alltel Communications, LLC for failing to honor the terms of an agreement he previously made with a company Alltel acquired. Alltel moved to compel arbitration in light of a broad arbitration clause included in its service agreement with Gore.

A district court denied Alltel’s motion, concluding that a genuine dispute existed regarding the scope of the arbitration clause. The Seventh Circuit Court of Appeals disagreed, finding that Gore’s claims were based, in part, on the products and services he received under the Alltel Agreement, so the arbitration clause applied.

While Gore never specifically agreed to Alltel’s arbitration clause, his monthly invoice included the following statement: These services are subject to Alltel’s terms and conditions, which are found on the back of your customer service agreement and at www.alltel.com. By paying this bill, you acknowledge that you are bound by these terms and conditions.

The terms and conditions, of course, included an arbitration clause.

If you have a client who wants to fight the good fight against a cell phone provider in Illinois, warn your client that jurisprudence in the Seventh Circuit Court of Appeals favors the provider’s arbitration clause.

Related Resources:

  • Gore v. Alltel Communications (FindLaw’s CaseLaw)
  • A Supreme Court Arbitration Case Poses a Difficult Question of Federalism (FindLaw)
  • Arbitration Clause Held Unconscionable (FindLaw’s Second Circuit blog)
  • Designing an Arbitration Clause (FindLaw)

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