Consumer Finance Litigation

In Brown v. DIRECTV, LLC, No. CV 12-08382, 2013 WL 3273811 (C.D. Cal. June 26, 2013), the U.S. District Court for the Central District of California held that Telephone Consumer Protection Act ("TCPA") claims based on collection calls were arbitrable since they related to the customer agreement. Plaintiff Joshua Brown filed suit against DIRECTV and others alleging violations of the TCPA based on automated collection calls on his account. DIRECTV moved to compel Brown's claims to arbitration. Brown ordered DIRECTV satellite service online and was presented with "DIRECTV Terms and Conditions" on the "Checkout: Payment" webpage. The "Terms and Conditions" appeared in a text box and included an arbitration clause. The checkout page also included a hyperlink to the Customer Agreement. Brown checked the box affirming that he read and accepted the Terms and Conditions prior to checking out. When the DIRECTV equipment was installed, Brown was presented with an Equipment Lease, which he executed. The Equipment Lease contained an arbitration clause above the signature line. Brown's account was subsequently transferred to collections. In response to DIRECTV's motion to compel arbitration, Brown argued that he did not agree to the arbitration clause because he did not see it when he ordered DIRECTV service online or when he signed the Equipment Lease. The court, however, found that the website contained language sufficient to alert him to the arbitration clause. The court further noted that the arbitration clause was immediately above the signature line on the Equipment Lease. Accordingly, the court said that Brown was bound by the terms of the arbitration clause. The court also found that Brown's TCPA claims fell within the scope of the arbitration clause. In the Customer Agreement, Brown agreed to arbitrate "any legal or equitable claim relating to this Agreement, any addendum, or [a customer's] Service." Relying on Ninth Circuit precedent, the court said that the "relating to" language was to be construed as relatively broad. The court also looked to other cases in which courts found that TCPA claims based on collection (rather than marketing) calls were arbitrable. Specifically, the court determined that the Customer Agreement contemplated collection and "the ability to collect on an unpaid contract is 'related to' that contract." 2013 WL 3273811, at 6. Because Brown's TCPA claims were based on collection calls, the court held that the TCPA claims were related to the Agreement and were arbitrable. Finally, the court held that the arbitration clause was enforceable because it was neither procedurally nor substantively unconscionable. The court, therefore, granted DIRECTV's motion to compel arbitration. For more information on consumer finance litigation topics, please contact one of the Burr & Forman team members for assistance. We are happy to answer any questions or concerns you may have.