Tenth Circuit Enforces Electronic Agreement Entered Into on an Installation Technician’s Laptop Reply

E-Commerce News provided by BuckleySandler LLP for informational purposes only, and should not be construed as legal advice on any subject matter.

December 17, 2012

On December 11, the U.S. Court of Appeals for the Tenth Circuit affirmed dismissal of plaintiffs’ claims concerning AT&T’s U-Verse services, based on forum selection and arbitration clauses in the agreements between the parties. Hancock v. Am. Tel. & Tel. Co., Inc., 11-6233, 2012 WL 6132070 (10th Cir. Dec. 11, 2012). In support of the motion to dismiss, AT&T offered declarations from its employees concerning its standard practices for entering into agreements with customers obtaining U-Verse services. Under those practices, customers purchasing U-Verse TV and Voice services agreed to terms of service (TV Terms) that included a forum selection clause. The TV Terms were provided to customers in writing by the installation technician at the time the services were installed. The customers agreed to the TV Terms by clicking on an acknowledgement and acceptance box on the technician’s laptop after being given the printed terms – the acknowledgement and acceptance stated that the customer had received and reviewed the TV Terms. Details of each acceptance were captured and stored on AT&T’s servers at the time of acceptance. Also under AT&T’s standard practices, customers purchasing U-Verse Internet Services agreed to separate terms of service (Internet Terms) during the online registration process – to complete registration, customers had to click on an “I Agree” button underneath the Internet Terms. For two of the plaintiffs, the Internet Terms included a mandatory arbitration clause at the time of registration. For another plaintiff, the mandatory arbitration clause was added after a notice of amendment, describing the new arbitration clause, was provided to the plaintiff via email. On appeal, the court held that the declarations concerning AT&T’s standard practices were admissible in evidence, and since they were not contradicted by the plaintiffs’ affidavits, the district court did not abuse its discretion by accepting the declarations as true. The court went on to hold that under AT&T’s standard practices both the TV Terms and the Internet Terms were clearly presented, and that enforceable contracts were formed between the plaintiffs and AT&T. The court also concluded that the e-mail notification process used to add the arbitration clause to the Internet Terms was sufficient to make the amendment effective.

Bank Agrees to Settle Suit Over Cyber Security Procedures Reply

On November 19, a bank sued by a commercial account holder to recover funds lost after cyber attackers gained electronic access to its account and made a series of unauthorized withdrawals reportedly agreed to pay the customer for the unrecovered funds, in connection with the dismissal of the suit. Patco Const. Co. Inc. v. Peoples United Bank, No. 9-503, Stipulation of Dismissal (D. Me. Nov. 19, 2012). In July, the First Circuit held that the bank’s collective security failures, when compared to the security measures employed by other financial institutions and the bank’s capacity to implement more robust protections, rendered its security procedures commercially unreasonable. In doing so, the First Circuit became the first federal appellate court to address the issue of bank liability for the loss of customer funds resulting from a breach of a bank’s cyber security. It reversed a district court ruling in favor of the bank and remanded for further proceedings. On remand, the bank agreed to pay in full for the lost funds.