Two federal district courts in the Third Circuit recently compelled arbitration in lawsuits alleging TCPA violations, including a putative class action. The decisions were Herndon v. Green Tree Servicing LLC, No. 4:15-cv-01202 (M.D. Pa. Apr. 22, 2016) and Raynor v. Verizon Wireless, No. 3:15-cv-05914 (D.N.J. Apr. 25, 2016). Both courts held that arbitration clauses covered the alleged communications because the plaintiffs’ claims related to or arose out of the agreements that created the plaintiffs’ obligations to pay for services with the defendants.
In Herndon, a class action, the plaintiff entered an agreement to finance the purchase of a manufactured home. The defendant was an assignee of the lender, and the agreement explicitly covered disputes between the contracting parties or their assignees. Accordingly, the court held that the defendant-assignee could enforce the agreement and compel arbitration of her individual claims, and stayed the class claims.
In Raynor, the plaintiff set up two cell phone numbers with the defendant on the same day but only signed one of the two customer agreements. The alleged TCPA violation involved the phone for which she did not sign the agreement. The court held that the arbitration clause applied to both phone numbers because they were under the same account. In other words, the signing of the one agreement applied its terms to both phone numbers. Alternatively, the court held that the plaintiff accepted the agreement by activating her phone service, a method of acceptance that was explicitly stated in the agreement.
These cases illustrate the continued importance of including arbitration clauses in consumer agreements that cover wide-ranging disputes, such as TCPA violations or other putative class claims, as well as federal court's continued application of AT&T Mobility v. Concepcion to compel individual arbitration. Additionally, the agreements should permit acceptance by conduct in case the consumer does not sign the agreement before using the product.