In a somewhat shocking recent ruling, the Eleventh Circuit Court of Appeals refused to compel arbitration of TCPA marketing suits pursuant to consumer agreements reasoning that such messages do not “arise out of” the underlying contract. See Gamble v. New Eng. Auto Fin., Inc., No. 17-15343, 2018 U.S. App. LEXIS 14608 (11th Cir. May 31, 2018).
While courts within the Eleventh Circuit have dutifully followed Gamble, the decision has obtained very little traction outside of the Eleventh and most courts are willing to interpret a broad “disputes” provision in a consumer arbitration agreement to include marketing texts. But now it looks like Gamble may be catching on in far off Arizona, which is bad news for TCPA defendants.
In Briggs v. Pfvt Motors Llc, No. CV-20-00478-PHX-GMS, 2020 U.S. Dist. LEXIS 163949 (D. Az. September 8, 2020) the defendant allegedly sent illegal marketing text messages to its customer who had recently purchased a vehicle. The vehicle purchase contract contained an arbitration provision applying to all disputes “which arise out of or relate to this Agreement or any resulting transaction or relationship.” The defendant moved to compel arbitration arguing that the texts were sent in furtherance of the relationship arising out of the agreement; i.e. the business/customer relationship. But the Court was not having it.
The Briggs court reasoned that the messages sent to Plaintiff did not arise out of the existing purchase agreement but were a wholly separate effort to generate new business. This was precisely the reasoning adopted by Gamble and Briggs specifically cited to Gamble in reaching its conclusion.
The take away here is that an arbitration agreement in a purchase contract may not be read to broadly as to require arbitration of disputes arising out of subsequent marketing efforts. And it should be noted, although rather obvious, that TCPA claims can and often do arise out of existing business relationships with consumers— just because you’ve done business with someone does not mean you can fire off automated marketing messages folks.
Always happy to discuss these issues.
Eric Troutman is one of the country’s prominent class action defense lawyers and is nationally recognized in Telephone Consumer Protection Act (TCPA) litigation and compliance. He has served as lead defense counsel in more than 70 national TCPA class actions and has litigated nearly a thousand individual TCPA cases in his role as national strategic litigation counsel for major banks and finance companies. He also helps industry participants build TCPA-compliant processes, policies, and systems.
Eric has built a national litigation practice based upon deep experience, rigorous analysis and extraordinary responsiveness. Eric and his team feel equally at home litigating multibillion dollar telecommunications class actions in federal court as they do developing and executing national litigation strategies for institutions facing an onslaught of individual TCPA matters. They thrive in each of these roles – delivering consistently excellent results – while never losing sight of the client experience.
While many firms now tout TCPA expertise, Eric has been there from the beginning. He built one of the country’s first TCPA-only defense teams and began serving as national TCPA counsel for his clients nearly a decade ago. This perspective allows him to swiftly develop the right litigation strategies for dealing with recurring problems, without wasting time on tactics that are bound to fail.
Eric’s rich historical perspective and encyclopedic knowledge of the TCPA landscape also make him an invaluable resource to institutional compliance teams struggling to comply with the shifting regulatory landscape. No task is too small – or too big. Indeed, Eric and his team have helped build TCPA-compliant systems and processes for some of the largest and most complex corporate entities in the country. He commonly works with in-house compliance counsel to build and implement enterprise and business-line specific TCPA solutions, performs TCPA audits and drafts and reviews proposed TCPA policies and procedures. He and his team also have the technical expertise necessary to assist call centers seeking to develop TCPA-resistant call path architecture or to modify existing telephony and software integration to better insulate from potential TCPA exposure.
Eric has built a reputation for thought leadership. An avid blogger and speaker, he has been at the forefront of the industry’s effort to push for clarity and a return to sanity for the TCPA for years. He was selected to advocate for the financial services industry on important TCPA issues before the Federal Communications Commission and co-authored the nation’s only comprehensive practice guide on TCPA defense.
In his spare time, Eric leads defense teams representing banks and other financial services companies in consumer finance litigation matters. He has experience representing clients in UCC, TILA, RESPA FCRA, CCRA, CLRA, FDCPA, RFDCPA and FCCPA claims, as well as in fraud and bank operations issues.