Court Holds Arbitration Agreement Targeted To Medical Malpractice Lawsuits Is Ambiguous As Applied To TCPA Claims

As we have mentioned before at TCPAWorld, drafting clear arbitration agreements, broad enough to cover all future disputes, is critical in consumer contracts. Failure to do so can lead to a jury trial on the issue of arbitratbility or, worse, outright denial of arbitration and the prospect of a class action lawsuit. Today brings such a cautionary tale from the District of New Jersey. See Abedi v. New Age Med. Clinic, No. 18-14680, 2019 U.S. Dist. LEXIS 67903 (April 18, 2019). The court held that the arbitration agreement at issue is ambiguous as to whether it covers TCPA claims, meaning that arbitrability must be resolved on a summary judgment standard or, if necessary, at trial.

The defendant in Abedi operated a new age medical clinic but allegedly engaged in a rather old school form of marketing: telemarketing and mass texting. The plaintiff purchased a Groupon for the defendant’s services (not how I would choose a doctor, but I digress) and, at some point in the process, agreed to the following arbitration agreement:

“Article 1: Agreement to Arbitrate: It is understood that any dispute as to medical malpractice, that is, as to whether any medical services rendered under this contract were unnecessary or unauthorized or were improperly, negligently or incompetently rendered, will be determined by submission to arbitration pursuant to New York law, and not by a lawsuit or resort to court process except as New York law may provide for judicial review of arbitration proceedings. Both parties to this contract, by entering into it, are giving up their constitutional right to have any such dispute decided in a court of law before a jury, and instead are accepting the use of arbitration.

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