DIRECTV, Inc. v. Imburgia

Opinion boxSteed, J., dissenting.

Because I, too, would read the parties’ agreement “to give the customer, not the drafter, the benefit of the doubt”—and because  I, too, “would take no further step to disarm consumers, leaving them without effective access to justice”—I join JUSTICE GINSBURG’s dissenting opinion. See ante, at 1. I write separately because I believe the parties’ arbitration agreement is unenforceable for a separate reason.

As JUSTICE GINSBURG notes, “DIRECTV drafted the service agreement, giving its customers no say in the matter, and reserving to itself the right to modify the agreement unilaterally at any time.” Ante, at 3. In other words, all power was in the hands of DIRECTV. As I see it, this ends our inquiry into the enforceability of the agreement.

When one party can escape its obligations under an agreement by unilaterally modifying the agreement at any time, the agreement is illusory, and illusory agreements should be deemed unenforceable. See Carey v. 24 Hour Fitness, USA, Inc., 669 F.3d 202, 209 (5th Cir. 2012); Douglas v. Johnson Real Estate Investors, LLC, 470 F. App’x 823, 826 (11th Cir. 2012); Dumas v. Amer. Golf Corp., 299 F.3d 1216, 1219 (10th Cir. 2002); Hooters of Amer., Inc. v. Phillips, 173 F.3d 933, 941 (4th Cir. 1999); see also Domenichetti v. Salter School, LLC, No. 12-11311-FDS, 2013 WL 1748402 (D. Mass. April 19, 2013); Canales v. Univ. of Phoenix, Inc., 854 F. Supp. 2d 119 (D. Me. 2012). It doesn’t matter that the party with the power to modify has not actually attempted to modify. If two parties enter an agreement, but one party can unilaterally modify the agreement at any time, then it’s a one-sided agreement. That’s no real agreement.

Here, DIRECTV’s service agreement not only recognized the unenforceability of its arbitration provision under state law, but also enabled DIRECTV to escape the arbitration provision through unilateral modification. For both these reasons, I would hold the arbitration agreement unenforceable. Therefore, I respectfully dissent.

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