In Porter v. Dollar Financial Group, Inc., 2014 U.S. Dist. LEXIS 122865, a Northern District of California court denied the defendant’s motion to compel arbitration based on the plaintiff’s allegation that the debt collection calls at issue were intended for a third party, and thus were not related to the contract containing the arbitration clause.  Specifically, the plaintiff alleged that she signed a loan agreement with the defendant, which contained an arbitration provision stating that all disputes or controversies “arising from or relating to” transactions with the lender were subject to arbitration.  The plaintiff further alleged that she began receiving unauthorized debt collection calls on her cell phone from the defendant for an unrelated third party’s debt.

Although the Northern District recognized that courts routinely hold that efforts to collect on unpaid contracts are “related” to such contracts for purposes of arbitration, it determined that the plaintiff’s situation was distinct.  The court found that, because the calls referenced a loan obtained by a third party, the arbitration provision in the plaintiff’s contract did not “encompass[] the dispute at issue.”  Furthermore, the court stated that, although the defendant obtained the plaintiff’s cell phone number through the loan transaction, this fact was insufficient to establish that the claims arose out of the agreement containing the arbitration provision.  This is an important decision because it may limit the instances where a defendant can compel arbitration under the TCPA or FDCPA, even where the number at issue relates to a borrower who is subject to a valid arbitration provision.