Arbitration Agreements See TCPA Class Action Against DirectTV Cut Short

After cancelling his TV service and receiving multiple collection calls, Joshua Brown launched a class action lawsuit against DirectTV in 2012, alleging that the repeated automated calls broke TCPA rules. The calls, placed by Credit Management LP, working for collection agency CMI Group, were part of the company’s efforts to collect unpaid bills left outstanding by Brown at the time of his contract termination. In the proposed lawsuit, Brown alleged that the calls were illegal, and sought class action status.

It’s a good reminder that any contract consumers enter into should be read thoroughly and the implications of agreeing to the document should be understood.

Unfortunately for Brown, he has twice agreed to DirectTV’s Terms and Conditions, which included arbitration clauses – and now a California judge has ruled that he must pursue arbitration instead of the court case.

While purchasing his service, and again when he leased equipment, Brown expressly agreed to the terms of the company, the judge ruled – terms that included a provision that disputes be handled in arbitration. In one case, the arbitration was mentioned specifically in a line just above the signature, making it impossible for Brown to argue that the stipulation wasn’t reasonably noticeable.

Brown had argued that the arbitration clause should not apply in this instance because his lawsuit was in relation to the collocation calls and TCPA rules, rather than the agreement he had with DirectTV itself. However, the judge found that the contract’s wording – that any dispute “arising under or relating to” the agreement would be compelled to arbitration – covered this case because the calls were related to bills for DirectTV service.

Although doubts have been raised before about the value of arbitration clauses for consumers, the judge in this case found that Brown had agreed more than once to the terms and therefore had no justifiable reason for getting out. It’s a good reminder that any contract consumers enter into should be read thoroughly and the implications of agreeing to the document should be understood. Should problems arise and lawsuits be pursued, a mandatory arbitration agreement may potentially benefit the companies, rather than consumers; however, as consumers often agree across the board to terms of service without actually reading the document, there are few options available even if a class action lawsuit is sought.

Brown’s dispute with DirectTV and related companies has now been compelled to arbitration, and the outcome may never become public knowledge.