Marc Dambrosio v. Comcast Corporation

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NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-4330
*MARC DAMBROSIO; **KENNETH SAFFREN; STANFORD GLABERSON; ERIC
BRISLAWN; JOAN EVANCHUK-KIND; LAWRENCE RUDMAN; BARBI J.
WEINBERG; MICHAEL KELLMAN; CAROLINE CUTLER
v.
COMCAST CORPORATION; COMCAST CABLE HOLDINGS, LLC; COMCAST
CABLE COMMUNICATIONS HOLDINGS, INC.; COMCAST CABLE
COMMUNICATIONS, INC.; COMCAST HOLDINGS CORPORATION
(*Amended per order of 2/17/05)
(**Amended per order of 3/2/05)
_______
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. No. CV-03-6604)
District Judge: The Honorable John R. Padova
Argued: July 15, 2005
Before: ALITO, VAN ANTWERPEN and ALDISERT, Circuit Judges
(Filed: July 29, 2005)

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Jaime A. Bianchi (Argued)
Christopher M. Curran
George L. Paul
White & Case LLP
701 Thirteenth Street, N.W.
Washington, DC 20005
Rima Y. Mullins
White & Case LLP
200 South Biscayne Blvd.
Miami, FL 33131
Darryl J. May
Jason A. Leckerman
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599
Attorneys for Appellants
Samuel D. Heins
Stacey L. Mills
Alan I. Gilbert (Argued)
David Woodward
Jessica N. Servais
Heins Mills & Olsen, P.L.C.
3550 IDS Center
80 South Eighth Street
Minneapolis, MN 55402
Joshua H. Grabar
Anthony J. Bolognese
Michael E. Gehring
1617 JFK Boulevard, Suite 650
Philadelphia, PA 19103

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Barry Barnett
John Turner
Susman Godfrey, LLP
901 Main Street, Suite 4100
Dallas, TX 75202
Ann D. White, Esq.
Mager, White & Goldstein
165 Township Line Road
Suite 2400, One Pitcairn Place
Jenkintown, PA 19046
Attorneys for Appellees
OPINION OF THE COURT
ALDISERT, Circuit Judge.
This is an appeal by Comcast Corporation, Comcast Cable Holdings, LLC,
Comcast Cable Communications Holdings, Inc., Comcast Cable Communications, Inc.
and Comcast Holdings Corporation (collectively “Comcast”) of the United States District
Court for the Eastern District of Pennsylvania’s denial of Comcast’s motion to compel
arbitration of claims brought against it, on behalf of a putative class, by Marc Dambrosio,
Kenneth Saffren, Stanford Glaberson, Eric Brislawn, Joan Evanchuk-Kind, Lawrence
Rudman, Barbi J. Weinberg, Michael Kellman and Caroline Cutler (collectively
“Appellees”). Appellees have alleged violations of Sections 1 and 2 of the Sherman Act,
15 U.S.C. §§ 1 and 2.

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The District Court had jurisdiction over these claims pursuant to 28 U.S.C. § 1331.
We have jurisdiction over the order denying the motion to compel arbitration pursuant to
28 U.S.C. § 1291 and 9 U.S.C. § 16(a)(1)(B).
The District Court concluded that Comcast was required by federal regulations to
provide notice to its subscribers 30 days in advance of the changes in its arbitration
agreement with the Appellees, that Comcast failed to provide this advance notice as
required and that this failure to provide notice invalidated the arbitration agreement. For
the reasons set forth we do not agree with the District Court’s determination and will
reverse the judgment of the District Court and remand for further proceedings in
accordance with this opinion.
I.
Because we write only for the parties, who are familiar with the facts, procedural
history and contentions presented, we will not recite them except as necessary to the
discussion.
II.
Appellees are Comcast subscribers (or in one case a former subscriber) in the
Chicago and Philadelphia regions seeking to avoid arbitration so that they can assert
antitrust claims in court on behalf of a putative class.
For the Philadelphia region, Comcast introduced the arbitration clause it now seeks
to enforce by placing it, along with the other “Terms and Conditions,” on the back of pre-

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printed Work Order forms beginning in December of 2001. Comcast contends that
Appellees Glaberson, Weinberg, Saffren, Dambrosio and Cutler would have received
work orders with the arbitration clause printed on the back based on service they received
after December 2001. Additionally, some of the Philadelphia Subscribers received a
Welcome Kit when they signed up for service that contained the arbitration clause. The
arbitration clause provides “MANDATORY AND BINDING
ARBITRATION--EXCEPT AS PROVIDED BELOW, ANY CLAIM OR
CONTROVERSY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE SERVICES PROVIDED UNDER THIS AGREEMENT, SHALL BE SETTLED
BY ARBITRATION.”
In the Chicago region, Comcast sent out a booklet entitled “Policies &
Practices--Notice to Customers Regarding Policies, Complaint Procedures & Dispute
Resolution.” This booklet was sent with the monthly bills for November, 2002 and
November, 2003. It provides in relevant part “MANDATORY AND BINDING
ARBITRATION: IF WE ARE UNABLE TO RESOLVE INFORMALLY ANY CLAIM
OR DISPUTE RELATED TO OR ARISING OUT OF THIS AGREEMENT OR THE
SERVICES PROVIDED, WE HAVE AGREED TO BINDING ARBITRATION
EXCEPT AS PROVIDED BELOW.” This clause replaced an already existing arbitration
clause.
III.

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Section 552(c) provides:1
A cable operator may provide notice of service and rate changes to subscribers
using any reasonable written means at its sole discretion. Notwithstanding section
543(b)(6) of this title or any other provision of this chapter, a cable operator shall
not be required to provide prior notice of any rate change that is the result of a
regulatory fee, franchise fee, or any other fee, tax, assessment, or charge of any
kind imposed by any Federal agency, State, or franchising authority on the
transaction between the operator and the subscriber.
The regulations provide:
Customers will be notified of any changes in rates, programming services or
channel positions as soon as possible in writing. Notice must be given to
subscribers a minimum of thirty (30) days in advance of such changes if the
change is within the control of the cable operator. In addition, the cable operator
shall notify subscribers 30 days in advance of any significant changes in the
other information required by § 76.1602.
47 C.F.R. § 76.1603(b) (emphasis added). And, in relevant part:
the cable operator shall provide written information on each of the following areas
at the time of installation of service, at least annually to all subscribers, and at any
time upon request . . . (2) Prices and options for programming services and
conditions of subscription to programming and other services.
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We review the District Court’s conclusions of law de novo. See First Liberty Inv.
Group v. Nicholsberg, 145 F.3d 647, 649 (3d Cir. 1998) (reviewing the denial of a motion
to compel arbitration de novo).
IV.
The District Court based it decision not to compel arbitration on a severely limited
basis—the failure to provide an advance 30-day notice to subscribers as required by 47
C.F.R. §§ 76.1602 & 76.1603, which interpret and implement a portion of the Cable
Television and Consumer Protection Act, 47 U.S.C. § 552(c).1

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47 C.F.R. § 76.1602(b)(2) (emphasis added).
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Though the regulations make clear that Comcast was required to provide 30 days
notice of the change in its terms of subscription, they do not speak to the type of notice
required. The statute states that the notice may be provided “using any reasonable written
means at [the cable company’s] sole discretion.” 47 U.S.C. § 552(c) (2000).
In both Philadelphia and Chicago, Comcast provided notice of the new arbitration
clause by setting forth the full text of the subscription agreement. This is not ideal notice
because it does not draw the attention of the subscriber to changes in the agreement. We
are not, however, called upon to decide whether the form of notice used by Comcast was
ideal. Rather, we must decide whether Comcast’s provision of the full text of the
subscriber agreement, which included the new arbitration clause, was a “reasonable
written means” with which to provide notice. See 47 U.S.C. § 552(c). Moreover, because
the complaint was filed more than 30 days after the Appellees would have received a
Work Order, Welcome Kit, or billing insert containing the applicable arbitration clause,
there is no question that Comcast did not attempt to compel arbitration before the
expiration of the 30-day waiting period and, therefore, the notice also satisfied the
requirements of 47 C.F.R. §§ 76.1602 & 76.1603.
Our task in deciding whether the notice provided was legally sufficient is made
easier by the strong presumption in favor of arbitration present in the Federal Arbitration
Act, 9 U.S.C. §§ 1-16. Perry v. Thomas, 482 U.S. 483, 489 (1987) (determining that with

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To the extent that any Appellee disputes receipt of the text of the applicable2
arbitration agreement in a Welcome Kit, Work Order or billing insert, such dispute
should be resolved, if necessary to its determination of the case consistent with this
opinion, by the District Court on remand.
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the FAA “Congress declared a national policy favoring arbitration”) (citation omitted). In
view of this strong federal presumption in favor of arbitration, we have no trouble
concluding that the notice given, while not ideal, satisfied the requirements of 47 U.S.C. §
552(c) and the interpreting regulations.2
Independent of our conclusion that 47 U.S.C. § 552(c) was not violated, we
conclude that the new arbitration agreement in the Chicago area did not “significantly
change” the arbitration agreement that was previously in effect in that area for purposes
of 47 C.F.R. § 76.1603(b). The District Court describes the changes that were made by
the new arbitration clause.
The 2001 arbitration clause differs from the 2002/2003 clause in several respects.
The 2001 clause provides for arbitration under the rules of the American
Arbitration Association, while the 2002/2003 clause allows the consumer to elect
arbitration under the rules of either the American Arbitration Association, the
Judicial Arbitration & Mediation Service, or the National Arbitration Forum. In
addition, the 2001 arbitration clause provides the application of federal or
Colorado law, while the 2002/2003 clause contains no choice of law provision.
The 2001 arbitration clause explicitly deals with retroactivity and the severability
of unenforceable portions of the agreement, while the 2002/2003 clause is silent on
both matters. Finally, the 2001 clause requires that consumers pay their “share” of
the arbitration association’s fees and the arbitrator’s costs and expenses, while
Comcast agrees to bear those expenses in the 2002/2003 clause.
Dambrosio v. Comcast Corp., No. Civ. A. 03-6604, 2004 WL 2577548, *4 (E.D. Pa. Oct.
8, 2004).

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The District Court concluded that these changes were significant. Although the
changes are “significant” in the sense that they are not unimportant or insubstantial, it is
also clear that the changes either benefitted or did not in anyway adversely affect the
subscribers. The Cable Act and the regulations that interpret it are designed to protect
subscribers to cable service; surely subscribers do not need to be protected from changes
to their subscription agreements which benefit them. The most logical reading of the term
“significant changes” in the regulation, therefore, is significant from the perspective of
the subscriber; i.e. changes which adversely affect subscriber rights in a significant way.
Because none of the changes from the 2001 arbitration clause to the 2002/2003 arbitration
clause negatively affected subscriber rights at all, let alone in a significant way, 30-day
advanced notice of the 2002/2003 arbitration clause was not required.
* * * * *
The judgment of the District Court will be reversed and remanded for
consideration of whether enforcement of the arbitration clauses is barred by contract,
unconscionablity or any other contention raised below but not considered in the Court’s
initial decision.

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