DirecTV late-fee case returned for arb decision

Brandon Copple Sep. 7, 2004, 10:34am

The Fifth District Court of Appeals has remanded a St. Clair County class action against DirecTV to the district court for reconsideration of its decision not to compel arbitration.

The case found its way to the Appellate Court after St. Clair Circuit Court Judge Jan Fiss denied DirecTV's motion to compel arbitration, finding a clause in the company's customer agreement "unconscionable and unenforceable."

The plaintiff, Charlotte Bess, brought the suit in 1999, claiming DirecTV, a satellite television provider, overcharged her and other customers for failing to pay their bills on time. DirecTV charged a $5 administrative fee for late payments. Bess, represented by Bradley Sylwester of David Danis Law Firm, St. Louis, claimed this exceeded the company's actual costs and therefore constituted unjust enrichment in violation of the Illinois Consumer Fraud and Deceptive Business Practices Act.

When Bess signed up for DirecTV in November 1999 she received a copy of the company's Customer Agreement, which notified her of the late fee and contained a dispute-resolution clause.

That clause stated that "any Claim either of us asserts will be resolved only by binding arbitration."

The agreement also stated that it would take effect unless the customer canceled service. Bess never canceled her service. As of late August she was still a DirecTV customer.

Bess sued DirecTV in fall 2000 in St. Clair County. In December, the company notified her that it intended to enforce the dispute-resolution clause. DirecTV, represented by Joseph McDonnell of Greensfelder, Hemker & Gale, Belleville, moved the court to compel arbitration. Judge Fiss denied the motion, declaring the arbitration provision "unconscionable and uneforceable," citing a California case which held that an arbitration provision prohibiting class actions violated public policy.

Justice Donovan, writing for the appellate majority, first held that the Customer Agreement's failure to provide for class arbitration did not render it unconscionable or unenforceable.

The court also held that the trial court had not given substantive consideration to the question of whether the arbitration provision was valid, or to Bess's other objections to the provision.

Justice Donovan wrote: "Although the trial court thoughtfully addressed the first issue raised by Bess in opposition to DirecTV's motion to compel arbitration, it failed to consider the remaining issues raised by Bess."

The case was remanded to St. Clair County. The next scheduled hearing is set for March 23, 2005.

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