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Minnesota Court Grants Non-signatory Defendant’s Motion to Compel Arbitration of TCPA Claim Based on “Sufficient Nexus”

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The United States District Court in Zean v. Comcast Broadband Security, LLC, et al., 2018 WL 3642614 (D. Minn. August 1, 2018), granted defendants Comcast Broadband Security, LLC’s (“Comcast”) and Southwest Credit Systems, L.P.’s (“Southwest”) motion to compel arbitration. Of particular interest for TCPAland is the fact that the court did so despite defendant Southwest not being a party to the contract.

By way of background, consumer Samuel Zean (“Consumer”) sued Comcast and Southwest alleging that the defendants violated the TCPA, the FCRA, the FDCPA, and other laws, when they allegedly used an automated telephone dialing system to collect a debt from him. In response, Comcast and Southwest filed their respective motions to compel arbitration of the claims.

With regard to Comcast’s motion, Consumer argued that he was not bound by the terms of the written subscriber agreement that contained the arbitration clause because he entered into a different contract with Comcast (that did not include such arbitration provision) on an earlier date during a phone call with Comcast. The district court disagreed, and found that Consumer and Comcast entered into a valid contract in March 2016 for residential Internet service, and that the relationship was governed by the subscriber agreement that contained the arbitration clause. The district court reasoned that the complaint itself alleged that the contract began in March 2016, that the subscriber agreement contained a merger clause, which stated that it replaced any and all prior verbal agreements, and that Consumer’s own behavior supported acceptance of the contractual terms.

Although Southwest was not a party to the subscriber agreement, the district court also granted Southwest’s motion to compel arbitration. The district court found that there was “sufficient nexus between the [s]ubscriber [a]greement and the alleged concerted misconduct of Southwest and Comcast [so that] Southwest – a nonsignatory- may also enforce the arbitration provision” of the subscriber agreement. Zean, 2018 WL 3642614 at *4. This is because the complaint alleged that Consumer disputed a debt owed to Comcast, alleged that Comcast sold the debt to Southwest, and alleged that the collection efforts of both Comcast and Southwest violated certain consumer-protection statutes. As a result, “a nonsignatory may compel arbitration when a party subject to an arbitration agreement alleges ‘substantially interdependent and concerted misconduct’ between the nonsignatory and a signatory defendant.” Id.

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