Freedom of Contract Appears Alive and Well in the Third Circuit

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Two federal courts in the Third Circuit recently compelled individual arbitration in TCPA actions. See Raynor v. Verizon Wireless, No. 15-5914, 2016 U.S. Dist. LEXIS 54678 (D.N.J. Apr. 25, 2016); Herndon v. Green Tree Serv. LLC, No. 15-1202, 2016 U.S. Dist. LEXIS 53937 (M.D. Pa. Apr. 22, 2016). Issued just a few days apart in cases against a telecommunications provider and a mortgage broker, these decisions serve as a helpful reminder to businesses to consider including arbitration clauses in their consumer contracts—and to explore their applicability when facing TCPA litigation. Continue reading

Plaintiff’s Counsel Concedes Applicability of Arbitration Provision to TCPA Suit

The Eastern District of North Carolina recently granted a motion compelling arbitration in a TCPA case involving debt-collection calls allegedly made to plaintiff’s cellular telephone. See Rice v. Credit One Fin., No. 5:15-130, 2015 WL 4528933 (E.D.N.C. July 27, 2015). As previously covered here, here, and here, district courts around the country have demonstrated a willingness to order arbitration when TCPA claims fall within the scope of an arbitration agreement.

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California District Court Compels Arbitration of TCPA Claim

The Eastern District of California recently compelled arbitration of a TCPA claim based on the broad language of the plaintiff’s arbitration agreement. See Delgado v. Progress Financial Company, No. 14-0033, 2014 WL 1756282 (E.D. Cal. May 1, 2014). In reaching its decision, the Delgado court distinguished the agreement from those at issue in two other district court decisions that held that TCPA claims fell outside the scope of arbitration agreements.

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Two California Federal Courts Send Putative TCPA Class Actions to Arbitration

Two federal district courts in California recently hit the brakes on putative TCPA class actions, granting the defendants’ motions to compel arbitration and informing the plaintiffs that, by signing contracts containing arbitration clauses, they relinquished any right to pursue TCPA claims through a class action.

In Mendoza v. Ad Astra Recovery Services, Inc., No. 2:13-cv-06922-CAS(JCGx), 2014 WL 47777 (Jan. 6, 2014 C.D. Cal.), plaintiff Miguel Mendoza sued an agent of a payday lending firm that contacted him regarding repayment of a loan. Mendoza, who had obtained a $255 payday loan from non-party Speedy Cash, alleged that he began receiving calls from defendant Ad Astra on his cell phone after he failed to repay the debt. When Mendoza did not answer these calls, Ad Astra allegedly left “voicemail messages using a pre-recorded or artificial voice.” He contended that such messages violated the TCPA. See 47 U.S.C. § 227(b)(1)(A).

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Reminder: TCPA Claims Are Arbitrable

The District of Massachusetts recently found that TCPA claims arising from debt collection calls fall within the scope of an arbitration agreement that covered disputes relating to “violations of statute” or “the impositions or collection of principle.”  Cyganiewicz v. Sallie Mae, Inc., Nos. 13-40068, 13-40067, 2013 U.S. Dist. LEXIS 153554, 153556, at *7 (D. Mass. Oct. 24, 2013).

In Cyganiewicz, plaintiffs brought suit against Sallie Mae, claiming that its collections practices violated the TCPA.  Plaintiffs were the borrower and the co-signor on three promissory notes, all of which contained arbitration agreements that could have been (but were not) rejected by sending a signed rejection notice to Sallie Mae within sixty days of the disbursement of the loan.  Id. at *2.  Plaintiffs alleged that Sallie Mae made calls from automated dialing machines to collect the outstanding balance of their loans, including approximately 147 calls after plaintiffs requested that the calls stop.  Plaintiffs argued that their arbitration agreements were not enforceable and that, even if they were, their TCPA claims were not arbitrable.   The court found otherwise and granted Sallie Mae’s motion to dismiss for lack of subject matter jurisdiction.

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