SIM Swap Claims Don't Fall Under AT&T's Arbitration Clause: Plaintiff

AT&T’s March motion to compel arbitration (see 2303220048) and stay a case in a SIM card swap lawsuit should be denied, said plaintiff Al Weiss in a Thursday opposition response (docket 6:23-cv-001200) in U.S. District Court for Middle Florida in Orlando.

The January lawsuit alleges an unauthorized person obtained control of Weiss' cellphone number in a June SIM change he didn’t authorize and stole “hundreds of thousands of dollars” of cryptocurrency assets (see 2301250030).

AT&T argues that the statutory and common law claims alleged in the complaint relate to the cellular service AT&T provides to Weiss and fall within the customer service agreement’s (CSA) arbitration provision, said the response. Courts “routinely reject this type of ‘but-for’ analysis," even when considering broad arbitration provisions, said the plaintiff.

The complaint, asserting violation of the Federal Communications Act and Florida’s Deceptive and Unfair Trade Practices Act, doesn’t set forth any arbitrable issue because Weiss’ claims don’t bear a substantial relationship to AT&T’s customer service agreement (CSA), as required under Florida law to fall within the scope of arbitration, said the response.

Plaintiff referenced a bankruptcy court case appeal, Verizon Wireless Personal Communications v. Bateman, in which Verizon challenged a trial court’s nonfinal order denying its motion to compel arbitration over the customer agreement arbitration clause that says the customer and carrier agree to resolve disputes “only by arbitration or in small claims court.”

In that case, the appellate court affirmed the trial court’s order denying Verizon’s motion to compel arbitration, rejecting its argument that a “significant relationship” existed between the CSA and its alleged conduct, the response said. The appellate court reasoned that the plaintiff correctly asserted that his statutory claims relied on obligations arising under the Florida Consumer Collection Practices Act and could have brought the action based on Verizon’s conduct regardless of whether the CSA existed, the response said.

Weiss’ claims are not based on the CSA but on “AT&T’s systemic failure to implement and maintain adequate security measures and safeguards” as required under the FCA, said the response. FCA and CPNI (customer proprietary network information) rules require telecom carriers to “protect the confidentiality of proprietary information” relating to customers’ personal information and CPNI regardless of whether a contract exists, it said.

Carriers are required to take precautions to protect customers’ data under federal statutes, not customer agreements, said the response. They are required to notify them of data breaches to “aid” in the pursuit and apprehension of bad actors and provide valuable information that helps affected consumers be proactive in protecting themselves in the aftermath of a data breach, said the response.

Weiss’ claims don’t depend on the interpretation or existence of a CSA; thus, the claims do not bear a significant relationship to the CSA as required to compel arbitration under a broad arbitration provision, the response said.