Schnuerle v. Insight Communications Co.

Michael Schnuerle and other individuals (customers) (plaintiffs) contracted with Insight Communications Company (Insight) (defendant) for broadband internet service. To receive service, customers were required to sign a service agreement or manifest their assent to the terms online. The service agreement contained an arbitration clause. Provisions under the clause stated that customers could not bring class-action lawsuits against Insight and that neither Insight nor customers could discuss the results of any arbitration settlements. Insight attempted to upgrade its high-speed internet service, which resulted in customers experiencing frequent service outages. Overloaded customer-service lines led to long wait times for customers and misleading information about the outages. The customers filed suit in Kentucky state court, alleging breach of contract and other state-law claims. Insight moved to dismiss the suit and compel arbitration, citing the customers’ service agreements. Among other matters, the customers claimed that the ban on class-action lawsuits was unenforceable and that the confidentiality provision was unconscionable and unenforceable. The trial court granted Insight’s motion to compel and dismissed the class action. The customers appealed to the Kentucky appellate court, which affirmed the trial court’s decision. The customers appealed again to the Kentucky Supreme Court. The Kentucky Supreme Court found that the class-action ban was enforceable under federal arbitration law and addressed the confidentiality provision.