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The Fine Print: Sprint's Arbitration Clause

Ascertaining All of the Terms and Conditions of Your Cell Phone Service

(I'm using Sprint as an example only because the question posed to me related to Sprint -- I'm assuming most cell phone service agreements are the same, or at least substantially similar)

Because a reader asked, I learned today that the Sprint Cell Phone Service Agreement contains an arbitration provision. 

How did I gain this valuable knowledge?  Read on.  

A Trip to the Grocery Store   

On my way to the grocery store this morning , I drove by a Sprint outlet.  So I stopped, ran in, and had the following conversation with the Sprint representative.

"Can I get a copy of Sprint's service contract?"

"Huhhhhhhhhhh?????????"

"You know, the terms and conditions of the Sprint cell phone service plan."

"Uhhhhhhhhhhhhhh -- you mean the, uh, Plan Brochure?"

"Does it have all of the plans' terms in it?"

"Terms?"

"You know, the FINE PRINT?  the contract?  the parties' agreement if I sign up for service."

Smiling, "sure," she replies, handing me the brochure and graciously validating my parking ticket (the one with the waiver of the car park's legal responsibilities to me or my car printed on the back in 3-point type).    

Now that I've Read ALL the fine print in the Sprint brochure, I can tell ou that there is nary a mention, hint, suggestion or covert reference to "dispute resolution" or court or jury trials or arbitration. 

Nothing, Nada, Nichts.

I Should Have Gone On-line in the First Place to Find the Sprint "Terms and Conditions" of Service

At the very bottom (left hand corner) of Sprint's Plan Page you will find a link titled "Terms and Conditions." 

That's where you'll find your Sprint Cell Phone Service Agreement -- that adhesion contract I was talking about in my last post.  It is here where you will find that by signing up with Sprint (and likely all other cell phone providers) you agree to waive your Constitutional right to a jury trial [except in  California where the Supreme Court has refused to enforce pre-dispute jury trial waivers such as that required by Sprint here] and your Constitutional right of access to the courts. 

You also consent to submit any dispute you have with Sprint to binding arbitration under the authority of the Federal Arbitration Act and the rules of the National Arbitration Forum.  

The Arbitration Agreement Verbatim 

Your Agreement with Sprint Solutions, Inc. . . . includes terms of your service plan . . . and the most recent Sprint Nextel Terms and Conditions of Service . . . carefully read these all terms which include, among other things, a MANDATORY ARBITRATION of disputes provision.

The dispute resolution clauses are at the end of the Terms and Conditions (T&C's).  They provide as follows:

DISPUTE RESOLUTION

Instead Of Suing In Court, We Each Agree To Arbitrate Disputes.

 We each agree to finally settle all disputes (as defined and subject to any specific exceptions below) only by arbitration. In arbitration, there's no judge or jury and review is limited. However, just as a court would, the arbitrator must honor the terms and limitations in the Agreement and can award the same damages and relief, including any attorney's fees authorized by law.

[note, however, that under Rule 37 of the governing arbitration rules, you are not necessarily entitled to be given reasons for the award unless you follow the procedures outlined in Rule 37, as follows

An Award is a summary Award unless a prior Written agreement of the Parties requires reasons, findings of fact or conclusions of law or a Written notice is filed by a Party seeking reasons, findings of fact or conclusions of law. This Written agreement or notice must be filed with the Forum within ten (10) days of the date of the Notice of Selection of an Arbitrator and must be accompanied by a fee, if any, as provided in the Fee Schedule.]

The arbitrator's decision and award is final and binding, with some exceptions under the Federal Arbitration Act (“FAA”), and judgment on the award may be entered in any court with jurisdiction. We each also agree as follows:

“Disputes” are any claims or controversies against each other related in any way to our Services or the Agreement, including, but not limited to, coverage, Devices, privacy, or advertising, even if it arises after Services have terminated - this includes claims you bring against our employees, agents, affiliates or other representatives, or that we bring against you.

If either of us wants to arbitrate a dispute, we agree to send written notice to the other providing a description of the dispute, previous efforts to resolve the dispute, all supporting documents/information, and the proposed resolution.

Notice to you will be sent to your billing address and notice to us will be sent to: General Counsel; Arbitration Office; 2001 Edmund Halley Drive VARESP0513-502; Reston, Virginia 20191.

We agree to make attempts to resolve the dispute. If we cannot resolve the dispute within forty-five (45) days of receipt of the notice to arbitrate, then we may submit the dispute to formal arbitration.

The FAA applies to this Agreement and arbitration provision. We each agree the FAA's provisions, not state law, govern all questions of whether a dispute is subject to arbitration.

The arbitration will be administered by the National Arbitration Forum ("NAF")under its arbitration rules. If any of the NAF rule conflicts with the terms of the Agreement, the terms of the Agreement apply. You can obtain procedures, rules, and fee information from the NAF at 1-800-474-2371 or www.adrforum.com.

Unless we each agree otherwise, the Arbitration will be conducted by a single neutral arbitrator and will take place in the county of your last billing address. The federal or state law that applies to the Agreement will also apply during the arbitration.

We each agree not to pursue arbitration on a classwide basis. We each agree that any arbitration will be solely between you and us (not brought on behalf of or together with another individual's claim). If for any reason any court or arbitrator holds that this restriction is unconscionable or unenforceable, then our agreement to arbitrate doesn't apply and the dispute must be brought in court.

We each are responsible for our respective costs relating to counsel, experts, and witnesses, as well as any other costs relating to the arbitration. However, we will cover any arbitration administrative or filing fees above: (a) $25 if you are seeking less than $1,000 from us; or (b) the equivalent court filing fees for a court action in the appropriate jurisdiction if you are seeking $1,000 or more from us.

Exceptions To Our Agreement To Arbitrate Disputes Either of us may bring qualifying claims in small claims court. In addition, this arbitration provision does not prevent you from filing your dispute with any federal, state or local government agency that can, if the law allows, seek relief against us on your behalf.

No Class Actions

To the extent allowed by law, we each waive any right to pursue disputes on a classwide basis; that is, to either join a claim with the claim of any other person or entity, or assert a claim in a representative capacity on behalf of anyone else in any lawsuit, arbitration or other proceeding.

No Trial By Jury

To the extent allowed by law, we each waive any right to trial by jury in any lawsuit, arbitration or other proceeding.

More on class action waivers in consumer contract arbitration provisions later.  Off to the gym on a spectacularly beautiful sunny Southern California day.

Comments (1)

Read through and enter the discussion by using the form at the end
Kia - August 6, 2007 4:56 PM

Thank you--this is so helpful. I tried to obtain the terms of my service contracts---cell phone (Sprint, actually), utilities/telecom, credit cards, etc. to see how many arb clauses I was signed up for for research purposes. It is so difficult. My credit card co. sent me something totally unrelated to the terms of the agreement. It is ironic that consumers who make an effort to make responsible decisions are unable to do this, yet we are blamed for not reading the fine print. Catch 22.

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