By Joyce Hanson
Law360 (April 6, 2018, 6:08 PM EDT) — The Ninth Circuit has shot down a lower court decision that sent toarbitration a proposed Telephone Consumer Protection Act class action saying a joint promotion between TMobileand Subway for chicken sandwiches included the delivery of mass unwanted text messages to thetelecommunications company’s customers, ruling the case’s claims rely on the TCPA and not a wirelessagreement.
A three-judge panel also said Thursday that the Washington district court erred in concluding that SubwaySandwich Shops Inc., a non-signatory to a wireless agreement between consumers David and YehudaRahmany and T-Mobile USA Inc., could equitably estop the Rahmanys from avoiding the agreement’sarbitration clauses.
“Although Subway’s affirmative defense of express consent may require the district court to analyze thewireless agreement, Rahmany’s claims do not rely on the terms of the wireless agreement, nor does Rahmanyallege substantially interdependent and concerted misconduct between Subway and T-Mobile that is foundedin or intimately connected with the obligations of the wireless agreement,” the panel said.
The appellate ruling stems from U.S. District Judge John C. Coughenour’s January 2017 ruling thatdismissed the TCPA suit and told the Rahmanys to take their claims outside of court.
Judge Coughenour concluded that the suit’s claims, relating to T-Mobile’s services and devices, fall withinthe scope of the telecom company’s arbitration agreement and don’t belong in court. Consumers can’t opt outof the arbitration deal unless they can show it to be excessive, the judge said.
The Rahmanys, who are California residents, moved quickly in September 2016 to file their proposed TCPAclass action in Washington federal court, only days after allegedly receiving an unwanted text on Sept. 1 ofthat year. T-Mobile is headquartered in Bellevue, Washington, and Subway is based and incorporated in Milford, Connecticut, according to the suit.
The text purportedly said: “This T-Mobile Tuesday, Score a free 6” Oven Roasted Chicken sub at SUBWAY,just for being w/ T-Mobile,” and included a link to an app that would provide more details.
The Rahmanys said the message, allegedly sent by an autodialer without obtaining express written consentfrom the recipients, was spam sent by T-Mobile with the consent and encouragement of Subway.
“The free sandwich offer was a pretext to sell other items at Subway restaurants, such as chips, drinks andcookies,” the Rahmanys said.
The proposed class comprises anyone in the United States who received a similar text within the last fouryears. The claims include negligent violation of the TCPA and knowing or willful violation of the TCPA.
Lawyers for the Rahmanys and Subway did not respond immediately to requests for comment Friday.
U.S. Circuit Judges Richard A. Paez and Sandra S. Ikuta and U.S. District Judge Lynn S. Adelman, sitting bydesignation, sat on the panel for the Ninth Circuit.
The Rahmanys are represented by Abbas Kazerounian of Kazerouni Law Group APC and Joshua Swigart of Hyde & Swigart.
Subway Sandwich Shops is represented by Jeff Bone and Michael A. Moore of Corr Cronin MichelsonBaumgardner Fogg & Moore LLP, and Kristine M. Brown and Derin B Dickerson of Alston & Bird LLP.
Counsel information for T-Mobile was not available.
The case is David Moshe Rahmany and Yehuda Rahmany v. T-Mobile USA Inc. and Subway SandwichShops Inc., case number 2:16-cv-01416, in the U.S. District Court for the Western District of Washington.
–Additional reporting by Cara Salvatore. Editing by Kelly Duncan.