Mandatory Arbitration Provision does not Block Avis TCPA Class Action (for now)

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June 1, 2017

tcpaLast week, the United States District Court for the District of New Jersey denied Avis Rent A Car System, L.L.C.’s (“Avis”) motion to compel arbitration in a putative Telephone Consumer Protection Act (“TCPA”) class action.  In that action, the named plaintiff claims that when renting a car via Avis’s website, each consumer is “presented with a checkbox asking whether the consumer consents to receiving alerts via text message.”  However, according to the named plaintiff, even if the customer does not consent to receive text messages, Avis automatically sends text messages anyway, in violation of the TCPA.  In response to the complaint, Avis filed a motion seeking to compel the named plaintiff to arbitrate his claim.  After considering Avis’s motion, the Court denied the requested relief, but allowed Avis to conduct limited discovery and refile the motion as one for summary judgment.

Why Was Avis’s Motion to Compel Arbitration to Defeat the TCPA Class Action Denied?

In its motion papers, Avis argued that the named plaintiff is an Avis Preferred Member and as such, therefore, agreed to Avis’s “Preferred Rental Transaction Terms and Conditions” in signing up to become a member. The Avis preferred membership program terms and conditions contain a mandatory arbitration provision with “a conspicuous, broad, and unambiguous” class action waiver provision.  However, the named plaintiff opposed the motion and asserted that he did not enter his Avid Preferred Member information when making the reservation at issue.  Avis replied, adamantly stating that the named plaintiff did, in fact, use his Avis Preferred Membership when making the instant reservation, and suggested that the Court allow for limited discovery on this discreet issue.  After conducting a review of the legal standard in considering Avis’s motion, the Court held that it “cannot decide the present motion without first ordering limited discovery as to the question of arbitrability.”  Once the facts are clarified during discovery, the Court stated, it will revisit Avis’s motion to compel arbitration.

Protect Yourself: Consult with a TCPA Attorney Today

We have previously blogged about the Consumer Financial Protection Bureau’s plan to limit or prohibit class action waivers in consumer arbitration agreements.  Although courts throughout the country have found class action waivers in consumer arbitration agreements enforceable, the Avis action underscores the need to consult with experienced attorneys to ensure that your class action waiver holds up.

If you are interested in learning more about this topic, please visit the Telemarketing Law practice area of our website.  If you have been served with process concerning your telemarketing practices, please e-mail us at info@kleinmoynihan.com or call us at (212) 246-0900.

The material contained herein is provided for informational purposes only and is not legal advice, nor is it a substitute for obtaining legal advice from an attorney.  Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice of an experienced attorney.

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Similar blog posts:

Waivers of Class-Action Arbitration Enforceable

TCPA Action against Sallie Mae Dismissed Due to Binding Arbitration Agreement

Sprint Compels Arbitration in TCPA Class Action

David O. Klein

David O. Klein

David Klein is one of the most recognized attorneys in the telemarketing, technology, Internet marketing, sweepstakes and telecommunications fields. Skilled at counseling clients on a broad range of technology-related matters, David Klein has substantial experience in negotiating and drafting complex licensing, marketing and Internet agreements.

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