Advertising Law Blog

Commercial text messagers, take note: an Alabama-based bank avoided a federal lawsuit by putting an arbitration clause in its terms and conditions. In a case entitled Shea v. BBVA Compass Bancshares, decided on March 7, 2013 in the Southern District of Florida, the court enforced an arbitration clause that the plaintiff accepted from his cell phone when registering for online banking. The lawsuit arose when the bank sent Thomas Shea a text message to his cellular phone touting a new cell phone application that enabled bills to be paid through Android phones. Shea, who by now had closed his accounts with bank, complained that the unsolicited text violated federal law, and filed a class action lawsuit under the Telephone Consumer Protection Act. The bank responded with a motion to compel arbitration, reminding Shea about the arbitration clause to which he previously agreed. As a result, the bank argued, the court should require Shea to file his claims in arbitration, not in federal court.

The language Shea had agreed to stated, "By opening or maintaining the account, you agree that if a dispute, claim or controversy of any kind arises out of or relates to this Agreement or to your account or any transaction involving your account, either you or we can choose to have that dispute resolved by binding arbitration. This arbitration provision limits your ability to litigate claims in court and your right to a jury trial... You will not have the right to participate as a class representative or member of any class of claimants for any claim subject to arbitration..."

Shea argued that since he was a former customer, the arbitration clause should no longer apply. But the bank countered that the arbitration clause also provided that "this arbitration provision shall survive termination of this Agreement and the closing of your Account." The court agreed with the bank and dismissed the lawsuit, ordering it to arbitration. The court ruled that the text advertising the bill-paying app was sufficiently related to Shea's account so that the arbitration clause covered the dispute. The court left it up to the arbitrator to decide whether Shea could represent other text message recipients in arbitration or if the language of the arbitration clause limits Shea to asserting only his own claim.