On October 11, an Illinois federal court denied Hertz's attempt to extend an arbitration agreement beyond the scope of the underlying contract.
In Tillman v. The Hertz Corporation, d/b/a Hertz Rent-A-Car, Case No. 16 C 4242 (N.D. Ill. Oct. 11, 2016), the plaintiff, on behalf of a putative class of consumers who received automated calls on their cell phones without their consent, sued Hertz for violations of the Telephone Consumer Protection Act. In early January, the plaintiff's mother had rented a car from Hertz and provided Hertz with plaintiff's telephone number as an "emergency contact." The contract between plaintiff's mother and Hertz contained an arbitration agreement. Later that month, the plaintiff rented cars from Hertz, and Hertz alleged that those rental agreements also contained arbitration agreements. In February, the plaintiff received automated calls from Hertz relating to his mother's rental car, and used those calls as the basis for this lawsuit.
Although the plaintiff was not a party to his mother's rental contract, Hertz moved to compel arbitration on the grounds that the plaintiff's own car rental agreements with Hertz contained arbitration provisions. Hertz argued that those arbitration agreements applied to all disputes arising from communications with Hertz. The court disagreed, holding that the plaintiff's rental agreements were irrelevant to a dispute that does not arise under those contracts: "[a]n arbitration agreement is logically and necessarily tied to the underlying contract that specifies arbitration as the agreed upon method of dispute resolution."
The decision is a strong reminder that arbitration provisions only apply to parties that have agreed to arbitrate their claims, and then only to disputes that fall within the scope of those agreements.