Extremely interesting case here.
Remember a while back we discussed the case of the lead provider who *allegedly* provided false leads? Specifically, the lead supplier argued the Plaintiff had encountered the website and filled out a webform submission but the Plaintiff denied visiting the website and provided declarations from others who also claim to have received calls as a result of fraudulent lead forms submitted by those websites.
The trial court denied arbitration in the suit finding a question of fact as to whether or not the Plaintiff had actually submitted the webform containing the arbitration provision.
That’s all well and good but here’s where things get interesting from a procedural standpoint. Rather than set the case for a prompt jury trial on the issue of arbitrability—which is the proper procedure—the court apparently just outright denied arbitration altogether.
Defendant took an interlocutory appeal and—rather than argue the trial court erred in failing to set a jury trial—argued that no question of fact on arbitration existed for some reason. (Seems like a bad argument since, you know, the Plaintiff and others swore, under oath, they never visited the website—which is pretty much the definition of a question of fact.)
On appeal the Ninth Circuit cleaned up the procedural mess and ordered the trial court to hold a prompt jury trial on the issue of arbitrability. Interestingly, it did so by reversing the trial court’s denial of the motion to compel, even though the appellate court actually agreed with Plaintiff—and not Defendant—that a question of fact did exist on the issue of arbitration. The case is Hansen., No. 20-15272, 2021 U.S. App. LEXIS 17472 (9th Cir. June 11, 2021).
So Defendant lost on the issue it appealed on but still won the appeal. You don’t see that every day. Of course they’ll still need to try the issue of contract formation to a jury if they want to get to arbitration.
At bottom Hansen reminds litigants and courts alike that the proper procedure in weighing a motion to compel arbitration is: i) first to assess whether a triable issue on the formation of a contract containing an arbitration provision exists; and ii) if so, to try the issue. Arbitration cannot simply be denied when a question of fact exists.
And this is increasingly important in TCPA cases involving webforms–Plaintiffs sometimes testify (falsely?) that they did not encounter a website despite their accurate information having been provided on a webform. Having that issue tried to a jury–rather than arbitration simply being denied–affords a critical procedural tool for defendants hoping to defang TCPA class litigation.