Is there a “deadline” for triggering an arbitration clause in TCPA litigation? Is it necessary to call for arbitration right out of the box? What steps can preserve an arbitration right as litigation inches forward?

In Nancy Wade v. Citibank, N.A., 2020 U.S. Dist. LEXIS 188123, Case No. 20-60712-CIV-SMITH, United States District Court for the Southern District of Florida, October 7, 2020, Ms. Wade claimed that the defendant had violated the Telephone Consumer Protection Act (TCPA) by attempting to communicate with her concerning her unpaid credit card balances. However, her credit card agreement allowed either party to “arbitrate any claim, dispute or controversy between you and us arising out of or related to your account, a previous related account or our relationship….”

Not surprisingly, Citibank moved to arbitrate.  In responding to the motion, Ms. Wade did not “challenge the validity, enforceability, or applicability of the arbitration agreement.” As a result, Judge Rodney Smith ruled that she had conceded that issue. Further, the Court concluded that the broadly worded arbitration clause “clearly encompasses Plaintiff’s claims.”

So what is left to potentially prevent the claims being sent to arbitration?  Well Ms. Wade argued that the defendant had “waived its right to arbitrate this matter by waiting more than two months after filing its Answer to file the instant motion and by filing its Corporate Disclosure Statement and a Joint Scheduling Report.”

Judge Smith noted that to establish waiver Ms. Wade had demonstrate, among other things, that “under the totality of the circumstances, [Citibank had] acted inconsistently with the arbitration right.” A key factor in making that determination is “‘whether a party has ‘substantially invoke[d] the litigation machinery prior to demanding arbitration.’”

Not so said the Court. First, in its answer, affirmative defenses and joint scheduling report the defendant reiterated its right and intent to seek arbitration. Indeed, the scheduling report stated that Citibank objected to “any proceedings going forward until such [a] motion is decided.” Second, Judge Rodney concluded, “little, if any, ‘litigation’ had occurred at the time Defendant filed its motion” to compel arbitration.  Ms. Wade had not shown that “Defendant filed any motions, other than the instant motion, that Defendant sought discovery from Plaintiff, or that Defendant otherwise partook in the litigation process, other than complying with deadlines and Court orders.”

Bottom line – Citibank “did not invoke the litigation machinery prior to demanding arbitration.” Thus, Ms. Wade “has not met her burden of establishing that Defendant acted inconsistently with its arbitration right.”

Motion to compel arbitration granted.


Leave a Reply