Opinion ID: 794138
Heading Depth: 3
Heading Rank: 1

Heading: Plaintiffs' federal antitrust claims

Text: 84
85 With respect to Plaintiffs' federal antitrust claims, Comcast's reliance on Pacificare is misplaced. As explained earlier, the Court in Pacificare reasoned that: 86 since we do not know how the arbitrator will construe the remedial limitations, the questions whether they render the parties' agreements unenforceable and whether it is for courts or arbitrators to decide enforceability in the first instance are unusually abstract.... [T]he proper course is to compel arbitration. 87 PacifiCare, 538 U.S. at 407, 123 S.Ct. 1531. The Court decided that the uncertainty of whether the remedies limitation in the arbitration agreement actually conflicted with the RICO statute meant that the arbitrator should construe the remedies limitation in the first instance, and then decide in light of that construction whether the arbitration agreement is enforceable. In other words, when there is ambiguity about the scope of a remedies limitation of an arbitration agreement, the arbitrator will decide the question of enforceability in the first instance. See id. 88 Unlike the situation in PacifiCare, there is no doubt that the language of the 2002/2003 arbitration agreements and the language of 15 U.S.C. § 15(a) directly conflict. The plain language of the 2002/2003 arbitration agreements excludes any type of damages remedy that is not simple, compensatory damages. PacifiCare — which holds that courts should not presume that an arbitrator will construe an ambiguous arbitration agreement in a manner that renders the agreement unenforceable, Schwartz, supra at 77-78 — does not apply here. There is nothing ambiguous about the remedies-stripping provision at issue. 89 Comcast also finds support for its position in some dicta from MCI Telecomm. Corp. v. Matrix Communications Corp., 135 F.3d 27 (1st Cir.1998), a case in which the appellee asserted that the arbitration clause at issue was invalid because the arbitration rules it referred to foreclosed remedies such as multiple damages. In response, we stated that this argument must be brought to the arbitrator because it does not go to the arbitrability of the claims but only to the nature of available relief. Id. at 33 n. 12. 90 PacifiCare casts considerable doubt on the accuracy of our dicta 14 in MCI that a limitation on remedies cited as a basis for a vindication of statutory rights claim cannot pose a question of arbitrability for a court to decide. Implicit in the PacifiCare analysis is the proposition that if the remedies limitation in the arbitration agreement posed a clear conflict with the remedies available in the RICO statute, that clear conflict would pose a question of arbitrability. In other words, in the face of a vindication of statutory rights claim based on such a clear conflict, the court would decide the question of the enforceability of the arbitration clause in the first instance. As one commentator has observed: 91 [t]he Court apparently assumed, arguendo, that a remedy limitation barring treble damages would render the RICO claims non-arbitrable. But the Court asserted that it would not presume that an arbitrator will construe an ambiguous arbitration agreement in a manner that renders the agreement unenforceable. Instead, the proper course is to compel arbitration and, presumably, see how the arbitrator actually construes the agreement. 92 Schwartz, supra at 77-78 (quoting PacifiCare, 538 U.S. at 407, 123 S.Ct. 1531). 93 Here, however, unlike PacifiCare, there is no initial ambiguity for an arbitrator to construe with respect to the federal antitrust claim. There is a clear conflict between the language of the arbitration agreements and the federal antitrust statutes. Moreover, as we shall explain in the next section of this opinion, the consequences of this conflict are equally clear. That is, under federal law, the remedies provided by the antitrust statute cannot be contractually waived. 15 In light of the clarity of this conflict and the clarity of the legal consequences, Plaintiffs' challenge to the remedies limitation in the arbitration provisions of the 2002/2003 Policies & Practices raises a question of arbitrability. We will resolve in the first instance the claim that the damages limitation prevents arbitration of Plaintiffs' federal antitrust claims because it precludes the vindication of Plaintiffs' statutory rights in the arbitral forum. 94

95 Comcast asserts that because the damages limitation appears in a separate section of the Policies & Practices from the arbitration agreement, the damages limitation does not apply to disputes resolved in arbitration. The language of the damages limitation itself effectively nullifies this assertion. The damages limitation states that: SUCH LIMITATION OF LIABILITY APPLIES IN ALL CIRCUMSTANCES. This remedies limitation applies any time Comcast incurs liability, including in arbitration. 96 Moreover, in the 2001 Policies & Practices, the damages limitation is located within the arbitration section; therefore, under the 2001 agreement, the limitation on liability clearly applied to arbitration proceedings. At the very least, the 2002/2003 arbitration agreements' damages limitation does the same. In fact, given the new location of the damages limitation outside the arbitration provision, it is a fair conclusion that Comcast intends it to apply in court as well as in arbitration proceedings, i.e., Comcast expanded the scope of the damages limitation in the 2002/2003 Policies & Practices. Additionally, it would be nonsensical for Comcast to create a mandatory alternate resolution system to resolve disputes with its subscribers, and then include a damages limitation that — under the theory Comcast offers here — would never apply because all cases would go to arbitration. In dealing with the retroactivity question, we found that the 2002/2003 arbitration agreements reflected a change in language but not a significant change in the substance of the contractual relationship between Comcast and its subscribers. Comcast's separate section argument is unpersuasive.
97 15 U.S.C. § 15(a) states in relevant part that a private antitrust plaintiff  shall recover threefold the damages by him sustained (emphasis added). Congress's use of the word shall makes the treble damages remedy a mandatory result if a plaintiff successfully sues an antitrust violator. This language directly conflicts with the language of the first paragraph of the damages provision quoted above. 98 There is no Supreme Court precedent that speaks directly to the question of whether treble damages under federal antitrust law may be waived by contract. However, in Mitsubishi, the Court noted in dicta that if provisions in the arbitration agreement at issue had operated as a prospective waiver of a party's right to pursue statutory remedies for antitrust violations, we would have little hesitation in condemning the agreement as against public policy. 473 U.S. at 637, 105 S.Ct. 3346 n. 19. As the Mitsubishi court noted, other circuits have similarly disapproved of waivers of statutory remedies for antitrust violations. See, e.g., Gaines v. Carrollton Tobacco Bd. of Trade, Inc., 386 F.2d 757, 759 (6th Cir.1967) ([I]t seems clear as a matter of law that such an agreement, if executed in a fashion calculated to waive damages arising from future violations of the antitrust laws, would be invalid on public policy grounds.). On the basis of these precedents, we conclude that the award of treble damages under the federal antitrust statutes cannot be waived. 99 At first blush, the conflict on the award of treble damages between the arbitration agreements and the federal antitrust statutes, and the non-waivability of treble damages in the federal antitrust context, indicate that Plaintiffs should prevail on their vindication of statutory rights claim. However, the Limitation on Liability section of the Policies & Practices also contains a savings clause located immediately after the operative language, quoted earlier, that limits a plaintiff's remedies. This savings clause 16 states: 100 YOUR SOLE AND EXCLUSIVE REMEDIES UNDER THIS AGREEMENT ARE AS EXPRESSLY SET FORTH IN THIS AGREEMENT, UNLESS APPLICABLE LAW PROVIDES THAT CERTAIN REMEDIES, DAMAGES AND/OR WARRANTIES CANNOT BE WAIVED, LIMITED OR OTHERWISE MODIFIED. 101 The meaning of this language is straightforward. If the law does not permit waiver of a remedy, a plaintiff will still have that remedy, the Policies & Practices liability limitation notwithstanding. The savings clause, in other words, removes the conflict between the language of the arbitration agreements and the federal antitrust statutes on the issue of treble damages. Therefore, by the terms of the arbitration agreements' savings clause, the arbitrator must award treble damages for a federal antitrust violation. 102 As to the Kristian complaint (which raises the federal antitrust claims), the presence of a damages limitation in the 2002/2003 agreements — even though it poses a question of arbitrability — does not preclude enforcement of the arbitration agreements. Because the damages limitation does not apply to Plaintiffs' claims under federal antitrust law, the damages limitation does not prevent the Plaintiffs in Kristian from vindicating their statutory rights in arbitration. The governing law mandates that Plaintiffs can recover treble damages in arbitration for federal antitrust violations. 103