A suburban Marengo man will not – for now - be able to press
his claim income tax return preparer Jackson Hewitt, and its partners American
Express and Restaurant.com, illegally spammed his phone with text messages,
after a Chicago federal judge ruled the agreement he signed with Jackson Hewitt
also mandated all disputes over the contract be handled through arbitration.
On Nov. 16, U.S. District Judge Philip D. Reinhard granted
the request from Jackson Hewitt to compel arbitration in the case, rejecting
the contention from plaintiff Phil Hollingsworth that the agreement’s
arbitration provision shouldn’t apply in this case.
“The Agreement was offered to him and accepted by him, as
part of the tax preparation services provided by Jackson Hewitt,” Reinhard
wrote. “As noted above, the terms of the
arbitration provision of the Agreement require ‘all claims, disputes, or
controversies asserted individually or collectively against … any of the
Jackson Hewitt System’ to be arbitrated.
“The court cannot say ‘with positive assurance’ that the
arbitration provision does not reach Hollingsworth’s claims against Jackson
Hewitt. Whether the scope of the
arbitration agreement reaches these claims is for the arbitrator to decide.”
The ruling comes as the latest step in litigation dating
back to March, when Hollingsworth filed his complaint against the tax services
provider, AmEx and discounted dining voucher provider, Restaurant.com, arguing
text messages sent by Jackson Hewitt on its behalf and to promote offers
through AmEx and Restaurant.com violated federal telecommunications law.
Hollingsworth, through his attorney Sergei Lemberg, of
Lemberg Law, of Wilton, Conn., had sought to extend the putative class action
to also cover potentially tens of thousands of others who may have received
similar alleged spam messages.
The complaint acknowledged Hollingsworth, like many across
the country, had provided his mobile phone number to Jackson Hewitt as part of
his interactions with the company.
However, Hollingsworth’s complaint alleged the text messages
exceeded the consent to contact him using that number when he provided it. The
complaint alleged Jackson Hewitt was not clear enough in explaining to Hollingsworth
and others believed to have received similar text messages about “the consequence
of providing Jackson Hewitt their phone number” and did not specify the
customer was agreeing “unambiguously to receive automated text messages from or
on behalf of” Jackson Hewitt, AmEx or Restaurant.com.
Further, Hollingsworth alleged Jackson Hewitt violated the
law by continuing to send text messages even after receiving a reply from the
recipient asking them to stop.
The complaint asked the court to issue injunctions barring Jackson
Hewitt from continuing to send the text messages, and statutory damages of
$500-$1,500 per text message, plus attorney fees.
In response, Jackson Hewitt argued the case did not belong
in court, but rather in arbitration, as mandated by the customer agreement
Hollingsworth signed, which was governed by the laws of Kentucky.
Hollingsworth argued the arbitration agreement should not
apply in this case, as the agreement was issued through Jackson Hewitt’s
financial services provider, Republic Bank & Trust, and should not apply to
his claims against the other defendants, AmEx and Restaurant.com, at all.
The judge, however, said the arbitration agreement should be
considered valid in this case, as the agreement was executed “as part of the
tax preparation services provided by Jackson Hewitt.” And the judge said the
task of determining the legal reach of the arbitration agreement is better left
to an arbitrator.
Jackson Hewitt was defended in the case by attorneys with the
firm of Locke Lord LLP, with offices in Chicago and Morristown, N.J.