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Needless Gamble: Eleventh Circuit Uses Exceedingly Broad Language to Address Narrow Issue of Arbitration in TCPA Text Suit

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In Gamble v. New Eng. Auto Fin., Inc., No. 17-15343, 2018 U.S. App. LEXIS 14608 (11th Cir. May 31, 2018) the Eleventh Circuit upheld denial of arbitration of a TCPA claim involving text messages offering a consumer a new auto finance contract. While the Eleventh Circuit used unnecessarily broad language–discussed below– the holding is actually quite narrow; calls made to offer a consumer a second finance agreement do not arise out of a first finance agreement for arbitration purposes. The panel’s decision to reach this narrow conclusion through the vehicle of broadly-worded analysis might mean trouble for defendants seeking to compel future TCPA cases to arbitration in the Eleventh Circuit, however.

The arbitration clause at issue  in Gamble required arbitration of any “claim, dispute or controversy whether preexisting, present or future, that in any way arises from or relates to this Agreement or the Motor Vehicle securing this Agreement.”  The contract also contained a separate provision with a separate signature line appearing below the signature line for the auto loan agreement relating to consent to receive texts.  This separate provision was not signed by Plaintiff.

Defendant apparently emphasized the unsigned text message consent provision as the crux of its legal position. By offering Plaintiff the right to opt-in to text messages in the contract–the argument goes–the resulting text messages must have arose out of that contract. That’s a terrible argument, of course, and the Eleventh Circuit made short work of it concluding roughly that “no agreement regarding text messages exists between the parties.”

Unfortunately the Court did not stop there–although it could have–and used unnecessarily broad language in passing on the dispute before it. For instance, the Court made the express finding that the Plaintiff’s claim “does not arise from any right implicated by the Loan Agreement nor from the parties contractual relationship.”  While that is undoubtedly true, the reason that is the case is because the texts at issue were unrelated to this contract and pitched a wholly different contract. Yet the Court’s failure to emphasize this critical fact makes it seem as if TCPA cases–which almost never arise from a right implicated in a loan agreement–are per se non-arbitrable.

Complicating matters further, the Court also emphasized, in seemingly gratuitous fashion, that TCPA claims arise “from post-agreement conduct that allegedly violates a separate, distinct federal law.”  Again, this is undoubtedly true, but that is not a predicate basis for denying arbitration–claims related to purported statutory violations are commonly compelled to arbitration, including by the Eleventh Circuit. See generally Walthour v. Chipio Windshield Repair, LLC, 745 F. 3d 1326 (11th Cir. 2014). And texts often arise out of contracts–such as where a consumer goes into default under the terms of a loan agreement resulting in text messages from a servicer seeking to collect. The loose language in Gamble needlessly implies, therefore, that claims related to such text messages are not subject to arbitration merely because the underlying right being enforced is a federal statutory right, rather than a contractual right. That’s an unnecessary–if not dangerous–implication, and surely not one that comports with the Congressionally-mandated policy favoring arbitration.

It remains to be seen exactly what district courts in the Eleventh Circuit do with Gamble, but one thing is for sure– Gamble just made defense efforts to compel arbitration of TCPA cases there a whole lot less certain. Care to roll the dice?

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