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.
In Rice, the plaintiff alleged that Credit One violated the TCPA by placing calls to her cell phone in an attempt to collect the past-due balance on her credit card. Id. at * 1. Plaintiff had opened a credit card account with Credit One that was governed by the “Visa/Mastercard Cardholder Agreement, Disclosure Statement and Arbitration Agreement” (the “Agreement”). Id. Shortly after plaintiff filed this individual action, Credit One moved to compel arbitration, attaching a copy of the “VISA/MASTERCARD Cardholder Agreement, Disclosure Statement and Arbitration Agreement” that governed the relationship between Credit One and the Plaintiff, along with affidavit from the Vice President of Portfolio Services at Credit One authenticating it and providing facts to support its applicability (e.g., plaintiff activated and used her credit card). See Affidavit of Gary Harwood in Support of Defendant’s Motion to Dismiss and Compel Arbitration at 1-2, Rice v. Credit One Fin., No. 5:15cv130 (E.D.N.C. May 5, 2015), ECF No. 10-1.
Interestingly, a little over a week after Credit One filed its motion, it filed a proposed order with the consent of plaintiff’s counsel stating that “[d]efendant’s Motion is GRANTED” and “[t]he Complaint is dismissed without prejudice and the parties consent to and are hereby ordered to participate in arbitration.” Consent Order on Defendant’s Motion to Dismiss and Compel Arbitration at 1, Rice v. Credit One Fin., No. 5:15cv130 (E.D.N.C. May 15, 2015), ECF No. 12.
Despite the uncontested nature of the motion, the court nevertheless issued a memorandum opinion providing its reasoning for granting the motion (which, not surprisingly, drew heavily on the arguments proffered by Credit One).
First, the Court found that the parties had “clearly and unmistakably” entered into a contract containing an arbitration agreement. The Court explained that “[b]y ‘requesting and receiving, signing and using’ her Credit One credit card, plaintiff agreed to the terms of the Agreement, including arbitration, and formed a legally binding contract with Credit One.” Rice, 2015 WL 4528933 at * 1.
The Court then turned its attention to whether plaintiff’s TCPA claim fell within the scope of the arbitration agreement between the parties. The Court began its analysis by observing that the Agreement provided “either party may ‘without the other’s consent, require that any controversy or dispute between [the parties] be resolved by mandatory, binding arbitration.’” Id. at * 2. The Court also noted that, pursuant to the Agreement, either party could compel arbitration “for any dispute relating to, inter alia, the ‘payments or credits, or collections matters relating to [the] account,’” and that “‘[a]ny questions about what Claims are subject to arbitration shall be resolved by interpreting this arbitration provision in the broadest way the law will allow it to be enforced.’” Id. The Court then explained that because plaintiff was challenging Credit One’s right to make telephone calls to the contact number she had provided to Credit One, her claims concerned the “‘operation and handling of the account and any communication of collection matters relating to the account,’” and therefore clearly fell within the broad scope of the arbitration clause. Id. (quoting the Agreement).
This decision highlights the importance of ensuring that arbitration agreements are broad enough to encompass potential TCPA claims and are set forth in sufficient detail to explain the consumer’s rights—if done correctly, opposing counsel may not even bother to contest its applicability.