Arbitration Provision Unenforceable in TCPA Class Action, Ninth Circuit Holds

By Andrew Glass and Roger Smerage

The Ninth Circuit recently held that a consumer’s TCPA class action against Sirius XM Radio Inc. (“Sirius XM”) was not subject to Sirius XM’s arbitration agreement.  The consumer brought suit alleging that the satellite radio provider violated the TCPA by placing automated calls to his cellular phone without his consent.  Sirius XM sought to compel arbitration on an individual basis.  The consumer countered that although he purchased a car that was preloaded with a trial subscription to Sirius XM radio, the purchase agreement made no mention of a contract governing the satellite radio service.  Rather, the consumer asserted that he did not receive Sirius XM’s terms and conditions until more than a month after he purchased the car, but that those terms required cancellation of service within three days of activation of the trial subscription.  Because of the manner in which Sirius XM delivered its terms and conditions to purchasers of cars with trial subscriptions, the Ninth Circuit found that the consumer could not have provided assent to be bound by the arbitration provision.  Thus, the Ninth Circuit ruled that neither the arbitration provision nor the class action waiver it contained was enforceable.  The decision was issued in a case styled Knutson v. Sirius XM Radio Inc., — F.3d —-, 2014 WL 5802284 (9th Cir. Nov. 10, 2014).