An unsigned agreement put an end to a Telephone Consumer Protection Act (TCPA) defendant’s attempt to compel arbitration of the suit, the U.S. Court of Appeals for the Eleventh Circuit recently decided. That case is Gamble v. New England Auto Finance, Inc.
There, plaintiff Hope Gamble entered into an auto loan agreement with defendant New England Auto Finance (NEAF) in 2014. The loan agreement she executed contained a clause requiring arbitration of any “claim, dispute or controversy … whether preexisting, present or future, that in any way arises from or relates to this Agreement or the Motor Vehicle securing this Agreement.” The Loan Agreement also contained a provision granting NEAF the right to send its customers “e-mails, text messages and other electronic communications.”
However, the Loan Agreement and the text consent provision required separate signatures. Gamble signed the Loan Agreement but did not sign the Text Consent Provision, which followed after the signature line for the Loan Agreement.
After Gamble paid off her loan the following year, she began receiving text messages from NEAF offering her a new loan. Gamble called NEAF in November 2016 requesting that the lender stop sending her texts, but she received an additional nine messages through January 2017, when she filed a putative TCPA class action.
NEAF responded to the lawsuit with a motion to compel arbitration. The plaintiff’s complaint asserted that the lender lacked her prior express consent to send text messages, but the text consent provision governed the issue of consent, the defendant told the court, tying a prima facie element of the TCPA claim to the Loan Agreement and triggering the arbitration provision.
A district court denied the motion, and the reviewing Eleventh Circuit panel affirmed.
“Contrary to what NEAF asserts in its briefs, it is not the unsigned text consent provision which gives Ms. Gamble the right not to receive unconsented-to text messages from NEAF,” the panel wrote. “Congress provided Ms. Gamble that right through the TCPA, and she had that right (and could assert it through litigation against NEAF, for example) well before she signed the Loan Agreement and refused to sign the Text Consent Provision with NEAF. The fact that NEAF requested, but was refused, Ms. Gamble’s consent to receive text messages does not somehow transform the Text Consent Provision into the source of Ms. Gamble’s rights regarding those text messages.”
Nor was the arbitration provision broad enough to pull Gamble’s TCPA claims into its orbit, the court said.
“The plain language of the arbitration provision requires that the dispute ‘arise[] from or relate[] to this Agreement or the Motor Vehicle securing this Agreement,’” the panel held. “Although this language makes the Arbitration Provision broad, it does not make it limitless. Here, Ms. Gamble signed an agreement whereby NEAF promised to provide her with the necessary funds to purchase an automobile on a particular date, in exchange for her promise to pay NEAF back—with interest—by a later date. The Arbitration Provision only applies to disputes arising out of, or related to, this agreement.”
By contrast, the plaintiff’s TCPA claim arose not from the Loan Agreement or any breach of it. Instead, it was based on “post-agreement conduct that allegedly violates a separate, distinct federal law,” the court said. “And NEAF’s sending of the text messages does not relate to or arise from its lending money to Ms. Gamble, Ms. Gamble’s repayment of that loan, or the vehicle which secured the loan. Further, the text consent provision is a separate and stand-alone provision which Ms. Gamble never signed, and thus no agreement regarding text messages exists between the parties.”
In terms of the plaintiff’s TCPA claims, the existence of the contract was “unnecessary and irrelevant,” the panel added. “Put differently, NEAF could have violated the TCPA, and Ms. Gamble could have brought a lawsuit against NEAF for those violations, without there ever having been a contract (in this case the Loan Agreement) between the two parties.”
“NEAF cannot force Ms. Gamble to arbitrate her TCPA claim just because the contract she entered into with NEAF, a contract that had nothing to do with the TCPA or with text messages, contained a separate provision, with a separate signature line, requesting Ms. Gamble’s consent. NEAF cannot avoid the strictures of the TCPA, and force arbitration of its alleged TCPA violations, by placing the request for consent to receive text messages in the same document as, but after and apart from, a separate and independent contract, and then, after it failed to get the individual’s consent, claim that the consent request was actually part of the contract. We will not accept NEAF’s invitation to bootstring independent TCPA claims to a completely distinct contract.”
To read the decision in Gamble v. New England Auto Finance, Inc., click here.
Why it matters: The Eleventh Circuit’s unpublished opinion had no difficulty in affirming denial of the defendant’s motion to compel arbitration, emphasizing that the plaintiff’s right to bring a TCPA lawsuit came from Congress, not her Loan Agreement with the defendant. The panel was also unpersuaded by the defendant’s attempt to apply the arbitration provision broadly to reach the plaintiff’s lawsuit. It also goes to show that, if a defendant hopes to compel arbitration of a TCPA dispute, the relevant consent language should appear in the same document or that the consent language in a separate document have a separate arbitration provision.