EAST ST. LOUIS - District judge Nancy Rosenstengel denied SI Wireless’s motion to dismiss a putative class action alleging it wrongfully sends automated text messages, holding that the defendant failed to prove an arbitration agreement binds the parties.
“The text sent by Si Wireless was inadequate to communicate its intent to add a mandatory arbitration clause to the original contract or to support a finding that Campbell received reasonable notice of such terms,” she wrote in her Sept. 5 order.
“Thus, SI Wireless’s attempt to modify the first contract by adding the arbitration clause fails. Further, the second contract does not mandate arbitration because the plain language of the clause carves out a specific exception for actions related to the failure to pay bills in a timely manner,” she continued.
Tennessee resident Andrea Campbell, individually and on behalf of all others similarly situated, filed the complaint on Dec. 8, 2016, in the U.S. District Court for the Southern District of Illinois against SI Wireless LLC for allegedly violating the Telephone Consumer Protection Act. The putative class is represented by Jeremy Glapion of The Glapion Law Firm LLC in Wall, NJ.
Campbell alleges she fell behind on her payments in 2016 and began receiving automated text messages demanding she make a payment or risk having her service suspended.
She alleges the messages were disruptive and attempted to revoke her consent for the automated messages but was told there was no way to stop the messages.
SI Wireless filed a motion to dismiss the complaint for improper venue or, in the alternative, to compel arbitration on Jan. 5 through attorney Lorna Geiler of Meyer Capel in Champaign, Ill.
The defendant argues that its cellular telephone service agreement requires arbitration of any dispute “arising from or relating in any way” to the services provided. It also argues that the agreement sets the venue for arbitration in McCracken County, Ky., or Madison County, Tenn.
In her order, Rosenstengel wrote that the issue before the court is whether the arbitration clause is enforceable.
“If the arbitration clause is enforceable, venue would not lie with this Court because only a district court in one of the forums selected has authority to compel arbitration,” she wrote.
Rosenstengel concluded that the text message used by the defendant to notify Campbell of the arbitration clause was inadequate to create an arbitration agreement.
She explained that the evidence presented “indicates the link in the relevant text connected to a web page that did not contain the arbitration language.”
“There is no evidence, therefore, that the terms of the arbitration clause were communicated to Campbell or that she was provided with notice that SI Wireless intended to add an arbitration clause. Thus, there is no enforceable arbitration agreement arising out of the first contract,” Rosenstengel wrote.
Campbell’s second contract includes an arbitration clause, but relates to a different phone number than the one at issue in the complaint.
“Nothing in the second contract expressly states the intent of the parties to modify or incorporate the arbitration clause into the earlier contract,” Rosenstengel wrote.
Further, SI Wireless’s arbitration clause contains an exception for “actions relating to failure to timely pay billed charges,” which are allowed to be brought in “small claims or another court with jurisdiction.”
“If the texts sent by SI Wireless arise from or relate to Campbell’s failure to pay her bill on time, the arbitration clause will be applicable, but so will the exception.
“Thus, even if the arbitration clause in the second contract can relate back to the phone line in the first contract, the explicit terms of the arbitration clause exclude Campbell’s complaints from the mandatory arbitration provision,” Rosenstengel wrote.
U.S. District Court for the Southern District of Illinois case number 3:16-cv-1320