The Court of Appeals for the First Circuit has affirmed the denial of a motion to compel arbitration in a case alleging a collector violated state law in Massachusetts related to call frequency caps, upholding a state Supreme Court ruling that not only are third parties not covered by arbitration provisions, but that the manner in which the collector attempted its appeal necessitated its denial.
A copy of the ruling in the case of Powers v. Receivables Performance Management can be accessed by clicking here.
The plaintiff filed suit back in 2018 in Massachusetts state court, alleging the defendant called her more than twice in a seven-day period, which is a violation of state law. The defendant removed the case to federal court, and a District Court judge remanded it back to state court. Back in state court, the defendant filed a motion to compel arbitration, which was originally granted, and then subsequently denied when the plaintiff filed a motion for reconsideration after the state Supreme Court issued its ruling in Landry v. Transworld Systems.
Six weeks later, the defendant filed a motion for reconsideration in state court, which was denied. The defendant filed a petition for appeal before the Massachusetts Appeals Court, which was denied for being untimely filed. The defendant again removed the case to federal court and filed a motion to compel arbitration, which was denied. The defendant then appealed that denial to the First Circuit.
Because the motion to compel arbitration at the federal court level was not based on newly available evidence and there was no “manifest error of law,” the Appeals Court saw no reason to grant the appeal. It did note that it was not making any determination if the ruling in Landry
