California Court Denies Motion To Compel Arbitration

TCPA Connect

Denying a motion to compel arbitration in a Telephone Consumer Protection Act (TCPA) class action, a California federal court rejected the defendants’ argument that the plaintiff agreed to arbitrate when he shared his information on a lead-generation website.

Bill Hansen, the plaintiff, claimed that he received texts from (LMB) and Digital Marketing Solutions advertising mortgage financing services and filed a TCPA class action.

The defendants moved to compel arbitration. They argued that Hansen agreed to the terms of use for LMB’s website, which include a provision requiring arbitration of “all claims, disputes or controversies.” According to the defendants, Hansen agreed to the terms when he entered his information on and clicked the submit button.

To back up their argument, the defendants provided the court with LMB records documenting that information was entered on the site for Willena Hansen, including an email address, phone number, and information about a property in Roseville, California. It was undisputed that Willena was Hansen’s recently deceased mother and that the phone number provided belonged to Hansen.

The plaintiff declared under penalty of perjury that he never visited the LMB website, never entered any of the information and never clicked the submit button. Therefore, he told the court, he could not be bound by the arbitration clause.

Holding that the defendants failed to meet their burden of showing there were no genuine disputes of material fact as to the arbitration agreement’s existence, U.S. District Judge Kimberly J. Mueller denied the motion to compel.

The defendants offered two theories to explain how Hansen was bound by the arbitration agreement: first, that he entered his mother’s information on the site, thereby agreeing to the terms of use; and second, that his mother entered the information, including Hansen’s phone number, binding them both.

But the court rejected both theories, relying on Hansen’s declaration that he never visited the site as well as three sworn depositions he provided from third parties who visited, entered personal information, did not press the submit button and still received text messages from LMB affiliates.

As for the second theory, even if his mother had agreed to the terms, the defendants failed to show that the plaintiff would be bound by them, Judge Mueller said, declining to adopt the defendants’ arguments based on equitable estoppel, agency or third-party beneficiary.

To read the order in Hansen v. Rock Holding, Inc., click here.

Why it matters: For a lawsuit to be ordered to arbitration, a party must demonstrate “express, unequivocal agreement” to arbitrate, the court said, holding that the defendants failed to demonstrate such agreement based on the plaintiff’s testimony and third-party declarations.  



pursuant to New York DR 2-101(f)

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