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.