Hilton v. Fluent, LLC
Hilton v. Fluent, LLC
Opinion of the Court
*1339THIS CAUSE is before the Court on two Motions to Compel Arbitration filed by Defendants Fluent, LLC and Reward Zone USA, LLC (collectively, "Defendants"). The original complaint in this matter was filed on November 20, 2017. (DE 1). It named two Plaintiffs and alleged a putative class action for violations of the Telephone Consumer Protection Act,
BACKGROUND
Defendant Reward Zone USA, LLC ("Reward Zone") and Fluent, LLC ("Fluent") work in concert with each other to acquire and sell phone numbers to their clients, who are online advertisers seeking to target prospective consumers with personalized ads. Reward Zone is a wholly-owned subsidiary of Fluent, and both are run by the same manager. (Am. Compl. ¶¶ 3, 9; DE 22-1 at 1). Reward Zone operates websites such as www.consumerproductsusa.com and www.surveyvoicesreseach.com, which offer prizes to consumers who enter information into the sites, including their phone numbers, and who consent to receiving texts and telemarketing calls to the phone numbers provided. (Am. Compl. ¶¶ 4-7; DE 22-1 at 1-2).
Plaintiffs allege that Defendants "send unsolicited text messages to consumers to drive them to their websites" and then "dupe consumers" into providing information which Defendants sell as leads to telemarketing advertisers. (Am. Compl. ¶ 6). Plaintiffs claim they received unsolicited text messages from Defendants directing them to lead generation websites operated by Reward Zone, or directing them to call a phone number operated by Fluent. (Am. Compl. ¶¶ 42, 58, 74, 88, 102-03). Plaintiffs state that they never provided Defendants with prior express written consent to be contacted. (Am. Compl. ¶¶ 50, 66, 79, 93, 109).
Defendants move to compel arbitration, arguing that prior to receiving the alleged unsolicited texts, the Plaintiffs had each visited a Reward Zone lead generation website and opted to register and participate in Reward Zone's promotions. Participation in turn required Plaintiffs to consent and agree to various written Terms and Conditions, including a mandatory dispute resolution provision which required arbitration of "any dispute" involving Reward Zone or "any aspect" of the Terms and Conditions of the website and its promotions or incentives (the "Arbitration Agreement"). (DE 22 at 4-5; DE 44 at 4-5).
In support of their motions, Defendants submit sworn statements from a Computer System Engineer at Fluent, and the General Counsel and Chief Compliance Officer of Fluent and Reward Zone (DE nos. 22-1, 44-2, 36-1, 44-1). Defendants explain their registration process at length, and they attach documentation consisting of screenshots of each Reward Zone website where the Plaintiffs' phone numbers were purportedly entered, and where they checked a box online consenting to Terms and Conditions, including arbitration. (DE 22-1 at 5-6; DE 44 at 4-7, 9-10). Each screenshot also indicates that additional information was provided along with the Plaintiffs' phone numbers, such as birthdates, residential addresses, and email addresses.
The Plaintiffs respond with their own sworn declarations. (DE nos. 29-1, 29-2, 52-1, 52-2).
Defendants assert that no bona fide user of a Reward Zone website would have any incentive to submit inaccurate personal information with their phone number, as this would defeat the purpose of opting into the promotions. Defendants suggest that misconduct is a more likely explanation for these discrepancies. (DE 44 at 18-19). Plaintiffs respond that Defendants' position and version of the facts is not credible, given that the original, unsolicited texts which Defendants sent to Plaintiffs contained hyperlinks back to the same lead generation websites where Defendants claim that Plaintiffs had previously registered their phone numbers. (DE 52 at 2). In this sense, Plaintiffs seem to argue that the discrepancies between the phone numbers and identifying information lend support to Plaintiffs' allegations that Defendants violated the TCPA.
STANDARD
In considering the instant Motion, the Court applies the federal substantive law of arbitrability, which applies to any arbitration agreement within the coverage of the Federal Arbitration Act ("FAA"). See Lawson v. Life of the S. Ins. Co. ,
DISCUSSION
The threshold issue presented here is whether a valid written agreement to arbitrate exists. "Federal law establishes the enforceability of arbitration agreements, while state law governs the interpretation and formation of such agreements." Emp'rs Ins. of Wausau v. Bright Metal Specialties, Inc. ,
Plaintiffs deny the existence of valid arbitration agreements, and it is axiomatic that "parties cannot be forced to submit to arbitration if they have not agreed to do so." Chastain v. Robinson-Humphrey Co. ,
In reviewing a motion to compel arbitration, the Court applies "a summary judgment-like standard," and "may conclude as a matter of law that parties did or did not enter into an arbitration agreement only if there is no genuine dispute as to any material fact concerning the formation of such an agreement." Bazemore v. Jefferson Capital Sys., LLC ,
Therefore, pursuant to
Scope of the Arbitration Trial
Having determined that this matter will proceed to a bench trial, I emphasize that the scope of the trial will be limited, both with respect to the evidentiary presentations and the matters about which this Court will entertain oral argument. The Parties should tailor their presentations accordingly, and should remain mindful of the following guidance regarding the Court's position on other issues raised in the briefings.
After careful review of the applicable law and the written submissions of the Parties, I am persuaded that as to the threshold issue of arbitrability, the delegation clause in the Arbitration Agreement requires that the arbitrator interpret the scope of that agreement and whether the dispute at issue in this litigation is covered. See Jones v. Waffle House, Inc. ,
I am also persuaded that if a valid agreement to arbitrate exists, Fluent can enforce it against Plaintiffs, notwithstanding its status as a non-signatory to the agreement, due to the affiliation between Fluent and Reward Zone, and the nature of the allegations in the Amended Complaint which involve concerted misconduct by both Defendants. Recognized theories of equitable estoppel would support Fluent's right to compel arbitration under these circumstances. See JLM Indus., Inc. v. Stolt-Nielsen S.A. ,
Also, to the extent that Plaintiffs claim they should not be bound by the Arbitration Agreement because they did not see or read the Terms and Conditions on the Reward Zone websites before checking the box to provide consent, I would be inclined to reject such arguments. See Brueggemann v. NCOA Select, Inc. , No. 08-80606-Civ,
The Parties are advised that this trial will be aimed solely at resolving the issue of whether the individual Plaintiffs checked the registration and consent boxes on the Reward Zone websites, because I am convinced that whoever checked the boxes is bound by the Terms and Conditions, including the Arbitration Agreement. On the record as it presently stands, I cannot conclude Plaintiffs did so.
CONCLUSION
Based upon the foregoing, it is ORDERED and ADJUDGED that:
1. Ruling is hereby DEFERRED on Defendants' Motions to Compel Arbitration (DE 22; DE 44).
2. A bench trial will be held pursuant to9 U.S.C. § 4 to determine the existence of binding arbitration agreements. These proceedings will commence on Tuesday, April 3, 2018, at 10:00 AM, in West Palm Beach, Florida.
3. Plaintiffs' Motion for Leave to File a Sur-Reply in Opposition to Defendants' Motion to Compel Arbitration (DE 37) is DENIED, because the Court will entertain arguments of counsel at the trial.
4. Defendants' Motion to Stay (DE 24) is GRANTED, and all pretrial deadlines set forth in the Scheduling Order (DE 9) are STAYED until further order of the Court.
5. Plaintiffs' Motions for Extension of Time (DE 39, DE 61) are DENIED AS MOOT, in light of the Court's ruling on the Motion to Stay (DE 24).
DONE AND ORDERED in Chambers at West Palm Beach, Florida, this 12 day of March, 2018.
With respect to Plaintiff Orr, Defendants state they have no record of her telephone number in their database in 2017, when she alleges she received the unsolicited text. Defendants say that Plaintiff Orr did, however, opt into Reward Zone's promotions in January 2018, and agreed to the Terms and Conditions, including the Arbitration Agreement, at that time. (DE 44 at p. 3).
No affidavit was submitted from Plaintiff Trzupek and the Response does not address her position on whether she consented to the Arbitration Agreement.
Reference
- Full Case Name
- Laura HILTON, Anna Nikerina, Ebonie Orr, John Brooks, and Whitney Trzupek, individually and on Behalf of all others similarly situated v. FLUENT, LLC, and Reward Zone USA, LLC
- Cited By
- 12 cases
- Status
- Published