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Avoiding forced arbitration in TCPA lawsuits Part 2

  • Writer: Peter Schneider
    Peter Schneider
  • Aug 25
  • 3 min read
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First, some background. The plaintiff came to court alleging that USHealth Advisors LLC has plagued her telephone number with prerecorded messages without written consent. USHealth Advisors came back with a motion to compel arbitration with a somewhat complicated story.


A NextGen Leads LLC (lead generator) claims that Ms. Sessoms visited a website operated by NextGen Leads, and voluntarily provided her telephone number before clicking a button labeled "GET QUOTE".

Immediately above this button was language stating that by clicking it, the user was giving "express written consent [] to be contacted by third parties," including by message sent by automatic telephoner dialer using a prerecorded voice, as well as agreeing to the hyperlinked "Terms of Use. The hyperlink opens a webpage containing an arbitration agreement ("the Agreement") stating, in relevant part, that "You and we agree that all claims . . . arising out of or relating to . . . any acts or omissions for which you may contend NextGen . . . is liable relating thereto or to the information, products or services of third parties, shall be finally, and exclusively, settled by binding arbitration." . . . We" is defined by the Terms and Conditions of Use as NextGen. NextGen, whose website plaintiff visited, is not a party to this action . . . USHealth Advisors contends it is one of the third parties referenced in the Agreement and is attempting, through its motion, to compel arbitration of plaintiff's claim.

According to USHealth Advisors, there is an agreement between Ms. Sessoms and NextGen Leads, and USHealth Advisors as a non-party wants to enforce the arbitration agreement against Ms. Sessoms. The Sessoms court did find that USHealth Advisors was an intended beneficiary of the Agreement:

While USHA is not mentioned by name, the Terms and Conditions, which the Court considers as a whole, expressly refer to third parties and marketing partners, and the Site is clear that when a user submits her information, that user is agreeing to be contacted by third parties in response to the Site user's request.

But being an intended beneficiary of the Agreement wasn't enough:

While USHealth Advisors does benefit from the Agreement in this case, it is equally clear that NextGen would have contracted with Sessoms even if it could not include the benefit to USHealth Advisors. Thus, the benefit was not material to the purpose of their contract, and USHealth Advisors is not a third-party beneficiary under Delaware law . . . Because USHealth Advisors is not a third-party beneficiary, and the benefits it receives are incidental, it may not enforce the arbitration provision in the Agreement.

This outcome turned on the language in the website's terms and conditions, and Delaware law, so won't be widely helpful but the logic is sound - understand the website's terms and conditions, what state's laws apply, and how is arbitration enforced by third parties.


Of course all of this pre-supposed it was Ms. Sessoms who entered into the agreement in the first place. The presumption in favor of arbitration does not apply "when there remains a question as to whether an agreement [to arbitrate] even exists between the parties in the first place." Raymond James Fin. Servs., Inc. v. Cary, 709 F.3d 382, 386 (4th Cir. 2013). The Fourth Circuit has made clear that "a court, not an arbitrator, must determine whether a non-signatory to an agreement that contains an arbitration provision can enforce that provision against a signatory to the agreement." Isernia v. Danville Reg'l Med. Ctr., No. 22-2224, 2024 U.S. App. LEXIS 11806, (4th Cir. 2024); see also Rogers v. Tug Hill Operating, LLC, 76 F.4th 279, 286 (4th Cir. 2023) (stating "that it is a court, not an arbitrator, that must initially decide whether a nonparty to an arbitration agreement is entitled to enforce it.").



Got a Case Like This?

If you’ve had similar problems with telemarketers, debt collectors, or bankruptcy-related harassment, we might feature your story in a future blog post. Email your situation or legal filing to peter@nwdebtresolution.com or nathen@nwdebtresolution.com.


Are telemarketers bothering you in Washington, Oregon, or Montana?

I handle TCPA lawsuits in Washington State and Oregon, and may be able to help.

📞 Call: 206-800-6000 / 971-800-6000


Note: The opinions in this blog are mine (Peter Schneider) and do not count as legal advice. If you're thinking of suing over illegal robocalls or Do Not Call list violations, contact me for a legal consultation.




 
 
 

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