Defenses / Arbitration clauses
Arbitration clauses: moving a TCPA claim out of court, if the plaintiff agreed
An arbitration clause does not say you were right. It says the argument happens somewhere other than a courtroom, one plaintiff at a time, without a class. For a business facing TCPA exposure that is often the most valuable procedural defense there is. It only works if the person who was called actually agreed to the terms, and that is where most TCPA arbitration motions are won or lost.
The law
The Federal Arbitration Act, 9 U.S.C. §§ 1 to 16, requires courts to enforce written arbitration agreements according to their terms. A class-action waiver inside such an agreement is enforceable. A court faced with a valid agreement that covers the dispute will stay the case and compel arbitration.
Formation: did this person agree?
Everything turns here. Courts ask whether the user had reasonable notice of the terms and manifested assent. The usual categories:
- Clickwrap. The user ticked a box or pressed a button next to "I agree to the Terms", with the terms linked. Routinely enforced.
- Sign-in wrap. The user pressed "Sign up" or "Continue" under a line saying that by continuing they agree to the terms. Enforced when the notice is conspicuous and close to the button; refused when it is small, faint or far away.
- Browsewrap. A terms link in the footer with no action required. Rarely enforced.
You will have to show the screen as it looked on the date the plaintiff signed up, not as it looks now. Version history of the flow and the terms is the evidence.
Scope: does the clause cover this claim?
A clause covering "any dispute arising out of or relating to" the agreement or the relationship is usually broad enough to reach a TCPA claim about marketing to a customer. A narrow clause limited to disputes about the service itself may not be. Many agreements delegate the question of scope to the arbitrator; courts enforce those delegation clauses when they are clear.
The lead-generation gap
Most TCPA plaintiffs were not your customers. They were on a purchased list, or filled in a form on a lead site. An arbitration clause in the lead site's terms binds the consumer to arbitrate with the lead site. Whether it extends to you depends on whether the terms named you, made you a third-party beneficiary, or covered the site's "partners" in a way a court will enforce. Some courts have extended such clauses; many have not. If you rely on a lead vendor's terms, get the terms, the version, and the signup record from the vendor now, and have a lawyer read the clause for whether it reaches you. The same vendor records decide whether "our vendor made the calls" is a defense.
Do not wait
The right to arbitrate can be waived by litigating. In Morgan v. Sundance, Inc., 596 U.S. 411 (2022), the Supreme Court held that a party opposing arbitration on waiver grounds does not have to show prejudice; acting inconsistently with the right is enough. Move to compel at the outset, before answering on the merits or taking discovery, or expect the motion to be refused.
What arbitration does and does not change
It changes the forum, removes the class, and keeps the dispute private. It does not change the statute. The arbitrator applies the same $500 and $1,500 per violation, the same consent rules, the same limitations period. A weak case on the merits is still weak in arbitration. The gain is certainty and scale, not a discount. Those rules are set out under consent as a TCPA defense and the statute of limitations.
- The signup or acceptance record for the plaintiff: date, time, IP address, user agent, the action taken.
- The terms version in force on that date, with the arbitration clause and class waiver.
- The screen or flow as the plaintiff saw it, from a versioned archive or a dated screenshot.
- For purchased leads: the lead site’s terms, version and acceptance record, obtained from the vendor.
- Any later terms updates and how they were communicated to the user.
Questions this defense raises
We have an arbitration clause in our website terms. Does it cover people we cold-called?
Only if they agreed to those terms. Someone on a purchased list who never visited your site agreed to nothing.
The lead site had an arbitration clause. Can we use it?
Sometimes. It depends on whether the clause named you or made you a beneficiary and on the court. Get the terms and the signup record from the vendor and have counsel assess it.
If we win the motion to compel, is the claim gone?
No. It is heard by an arbitrator instead of a judge, individually rather than as a class. The statute and the damages are unchanged.
Can we raise arbitration later if the case goes badly?
Probably not. Litigating first is inconsistent with the right to arbitrate and courts no longer require the plaintiff to show prejudice to find waiver.