Data Breach Claims 'Belong in Arbitration,' Says T-Mobile's Motion to Compel

Plaintiff Dan Marlow’s claims “belong in arbitration,” said T-Mobile’s Friday motion to compel arbitration (docket 1:23-cv-04301) and stay a negligence case in U.S. District Court for Eastern New York in Brooklyn.

Marlow sued T-Mobile after $32,000 was removed from his Coinbase cryptocurrency account, which he alleges was related to a T-Mobile data breach. He claimed the two-factor authentication on his Coinbase account had been deactivated at about the same time his SIM card was replaced, alleging two employees unlawfully accessed his cellphone’s SIM card with his financial information and Social Security number.

In his complaint, Marlow admits he executed a contract with T-Mobile for wireless services with a clause “requiring Plaintiff to arbitrate his claims” but still seeks to avoid arbitration, said T-Mobile's motion. Marlow asks the court to declare his contract with the carrier unconscionable, void against public policy and unenforceable, saying the contract is one-sided, adhesive, doesn't allow him a “full range of statutory remedies,” includes an indemnity clause and has an "egregious" arbitration clause, said the motion.

“Inexplicably,” Marlow also claims “breach of that same contract for breach of privacy obligations,” the motion said. “Plaintiff’s dissonance is just a distraction; the dispute must be arbitrated” despite his objections, “which either fail as a matter of law or should be decided by the arbitrator," it said.

T-Mobile’s customer agreements require arbitration of “any and all claims or disputes” involving T-Mobile’s services, and Marlow doesn’t dispute that his claims are within the scope of the arbitration clause, said the motion. His complaints are that the clause is “adhesive, and its terms are unenforceable,” it said. “There is no dispute that the claims in this lawsuit are within the scope of the parties’ arbitration agreement.”

The arbitration agreement has a delegation provision, requiring an arbitrator, not the court, to decide “all threshold issues of arbitrability, including the validity and enforceability of the arbitration provision,” T-Mobile noted. That provision requires that the arbitrator decide whether “the arbitration clause violates public policy, is unconscionable, or otherwise fails for one of the reasons Plaintiff presents,” said the motion. Marlow’s challenges to the arbitration clause fail as a matter of law, and the court should grant T-Mobile’s motion to compel arbitration of his claim “and stay this action,” it said.