785 F.3d 1157
7th Cir.2015Background
- Andermanns contracted with U.S. Cellular for mobile service in 2000; contract included a binding arbitration clause that survived termination.
- In 2013 U.S. Cellular assigned the contract to Sprint without notice to the Andermanns; Sprint later informed them of service termination and potential substitutes.
- Sprint made six calls to the Andermanns offering substitutes after the assignment; Andermanns sued under the TCPA for unsolicited calls.
- Sprint moved to compel arbitration under 9 U.S.C. § 4, arguing the dispute arose from the contract despite naming Sprint as assignee.
- District court denied arbitration; court held the dispute did not arise from the contract due to termination prior to the calls.
- Court of Appeals reversed, holding that Sprint could compel arbitration and remanded for arbitration action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does FAA arbitration clause cover the TCPA dispute? | Andermanns contend clause governs disputes arising from or relating to the contract. | Sprint argues the dispute relates to the contract because it arises from the assignment and ongoing service relationship. | Yes; arbitration clause covers the dispute. |
| Can Sprint compel arbitration where assignment to Sprint occurred without notice? | Assignment without notice cannot bind Andermanns to arbitration. | Sprint Solutions acted as agent for Sprint Spectrum; assignment valid and binding. | Yes; assignment valid and binds Andermanns to arbitration. |
| Is the TCPA claim subject to arbitration given the business-relationship exception? | Calls were unsolicited under TCPA; no established Business Relationship exception. | There is an established business relationship via Sprint as assignee triggering exception. | Yes; the communication fell within the established business relationship exception. |
Key Cases Cited
- Sweet Dreams Unlimited, Inc. v. Dial-A-Mattress Int'l, Ltd., 1 F.3d 639 (7th Cir. 1993) (supports enforcing arbitration where related contract provisions apply)
- Smith v. Steinkamp, 318 F.3d 775 (7th Cir. 2003) (absurd results not applicable when arising-out/relating-to provisions are in same contract)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (arbitration clauses should be construed generously)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (presumption in favor of arbitration; policy considerations)
- CE Design Ltd. v. King Architectural Metals, Inc., 637 F.3d 721 (7th Cir. 2011) (established business relationship notion in TCPA context)