Gamble Strikes Again: Arbitration Denied in TCPA Class Action Involving Post-Cancellation Texts

Luckily, TCPAWorld developments have been proceeding at a snail’s pace this year relative to their usual brisk clip. We do have some unfortunate news to bring you, however, out of the M.D. Florida—where unfortunate news seems to breed—as a court just denied arbitration in a TCPA class action following the Eleventh Circuit’s disastrous Gamble ruling.

In Ramos v. PH Homestead, LLC, Case No. 18-23431-CIV-MARTINEZ/AOR, 2019 U.S. Dist. LEXIS 12491 (M.D. Fl. Jan. 25, 2019), the Court addressed a motion to compel arbitration in a TCPA class action involving text messages arising out a gym membership. (Hmmm…where have I seen that fact pattern before?) The gym membership agreement contained a consent clause with an opt-out box that was not checked. The membership agreement also contained an arbitration provision. So far, so good.

The Plaintiff canceled his membership and after the cancellation took place the gym sent him a text message asking Plaintiff to rejoin the gym. Not a good idea friends.

Within two weeks of receiving the, “please come back to me,” text the Plaintiff had filed a class action lawsuit on behalf of everyone that received a similar post-cancellation text message.

Defendant moved to compel arbitration citing to the arbitration clause in the canceled membership agreement. The Court had little problem denying the motion. In the first place, the arbitration provision was very limited, applying to “this contract.”  The text messages at issue, however, were sent after the contract was canceled. The Ramos Court found that Gamble was right on point—it kind of is—and rejected the Defendant’s position that the consent clause baked into the same membership agreement created a dispute “under the contract.” See Ramos at *10 (“Here, neither the Agreement nor the Arbitration Provision contemplates future TCPA claims; thus, as in Gamble, the Text Consent Provision constitutes a ‘separate stand-alone provision.’”) The Court concludes: “Because the Text Consent Provision was not part of the Agreement, and the Text Message constituted postagreement conduct, Plaintiff’s TCPA claim is not arbitrable pursuant to the Arbitration Provision.” Ibid.

Ramos is notable for two additional reasons as well. First, the Court rejected a Spokeo challenge to the telemarketing text messages—that was quite the Hail Mary anyway, so no big loss there. Second, the Court issued a short and sneaky ATDS ruling right at the end of the decision. Rather than addressing ATDS functionalities, the Court concludes that the complaint alleges the text messages were “automated” based “on the presence of marketing promo codes and a website in the Text Message, and the ‘impersonal and generic nature’ of the wording, all suggesting that the Text Message was sent to a mass audience by an autodial function.” Ramos at * 15.

Also– there is already a Ramos case in TCPAworld addressing automated text messages and reaching the exact opposite conclusion. In Good Ramos—here we go again—the court deemed similar impersonal and generic messages to be outside of TCPA coverage because of the human intervention used to send the message. In this new (Bad) Ramos case, however, the Court assumed that the impersonal nature of the message was enough to survive the pleadings stage, but did reserve to the Defendant the right to re-raise its challenge to the ATDS component of the case at the MSJ stage. See Bad Ramos at *14 (“Defendant may renew the argument of whether the equipment used in this case is an ATDS at the summary judgment stage after the Parties have conducted discovery on this issue.”)

Never a dull moment. Except for all the dull moments.

Categories: