On August 27, an Illinois appellate court affirmed a trial court’s denial of a motion to compel arbitration in an FDCPA class action. The case involved a 2022 collection email about a charged-off account originally opened with a wireless provider in 2007 and later sold to a debt buyer. The plaintiff alleged that the defendants violated the FDCPA by failing to provide clear instructions for opting out of future email communications.
The defendants argued that the arbitration clause in the original service agreement — which required arbitration of “any dispute that results from this agreement or from Services” — should apply. The court disagreed, finding that FDCPA claims are “akin to torts” and do not arise from the original contract.
The appellate court explained that a mere connection to the original contract was insufficient, emphasizing that the “real source of the dispute” was the 2022 collection email, and that the case did not concern a right that accrued or vested under the agreement.
The appellate court further noted that arbitration clauses are intended to “implement a contract, not to transcend it,” and concluded that compelling arbitration in this instance would have extended the agreement beyond its intended reach. As a result, the FDCPA class action litigation was permitted to proceed.
[View source.]
