So I’m doing a huge webinar on Thursday of this week that everyone is talking about. I’ll be breaking down the impact of the Berman case and other developments on the ability to compel arbitration in TCPA class actions.
It is important to keep in mind, however, that some courts will not enforce arbitration provisions for conduct arising after a contract terminates.
For instance, in Robert Kelly v. the McClatchy Company, No. 2:21-cv-01960-KJM-JDP, 2022 WL 1693339 (E.D. Cal. 05/26/2022) the Court held that calls made after the plaintiffs cancelled their newspaper subscriptions were not subject to arbitration.
In Kelly, the Plaintiffs all agreed to arbitration by subscribing to the newspaper. But they did not receive the challenged phone calls until after the newspaper subscription terminated.
When the Plaintiffs sued under the TCPA the Defendant moved to compel arbitration but the Court denied the motion finding that the arbitration provision between the parties terminated when the subscription did. Since the calls at issue arose after the arbitration provision was terminated there was no basis to send the dispute to arbitration.
The Court distinguished cases in which the calls at issue arose out of a terminated contract–i.e. where debt collection calls were made to a number supplied in an agreement. There the calls arose out of the contract in the sense that contractual rights were being enforced–but that was not the case here.
Notice that the Kelly court’s interpretation of arbitration rights is different from the prevailing view on revocation of consent. Merely stopping a newspaper subscription would not be revocation of consent–consent can only be revoked by a clear revocation and not by conduct suggestive of revocation–but cancelling the subscription was sufficient to terminate arbitration rights. Something to keep in mind.
Folks that engage in win-back campaigns–i.e. calls to former customers–should keep the Kelly case in mind. Those former customers may still be covered by EBR rules–and you might even have express written consent to call them using regulated technology–but don’t expect to be able to enforce your arbitration provisions in the context of calls to customers that have terminated their agreement with you.
We’ll keep an eye on this.