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Connecticut Federal Court Denies Motion to Compel Arbitration in TCPA Class Action Brought by Subway Customers
Posted in Arbitration

A federal court in Connecticut has ruled that Subway customers can pursue class action claims against the company for unwanted text messages in violation of the Telephone Consumer Protection Act (TCPA). Soliman v. Subway Franchisee Advertising Fund Trust Ltd., 2020 WL 161328 (D. Conn. Mar. 5, 2020). Named-plaintiff Marina Soliman, along with other Subway customers, alleges that, upon entering a Subway restaurant, a Subway employee informed her of a promotion whereby customers could sign up for text messages to receive discounts and other promotional information from Subway. Although Soliman did want an initial discount, she continued to receive text messages even after attempting to opt out of the text message program. After Soliman brought suit, Subway argued that she had agreed to certain terms and conditions in order to enter the program, including an agreement to arbitrate any claim arising out of the promotional texting program.

The court denied Subway’s motion to compel arbitration. The standard governing the enforceability of the arbitration provision required both that Soliman received reasonable, conspicuous notice of the terms and unambiguously manifested assent to those terms. The court found neither in this case, focusing on a series of obstacles Soliman would have had to overcome to receive notice of and agree to the provision. First, according to the court, the small font of the arbitration terms was dwarfed in comparison to the other colorful text and images surrounding them. Second, the court held that the immediately preceding language, indicating that consent was not required to buy goods and services, undercut Subway’s position that the plaintiffs had given their consent to arbitrate claims. Third, in order to see all the terms of the arbitration provision, Soliman would have had to type a long, tiny URL into a browser. If Soliman managed to go to that website, she would have had to understand that the language at the top of the web page, which said “FOR THIS WEBSITE,” applied not only to the website, but also to the promotional text message program. Lastly, Soliman would have needed to scroll down two to three pages to find the arbitration provision. The court held that in light of these facts, the plaintiffs neither received fair notice, nor assented to the arbitration provision. Thus, the arbitration provision was unenforceable.

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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