A federal appeals panel has reactivated a man’s class action lawsuit against sandwich seller Subway, saying the restaurant chain can’t invoke T-Mobile’s contract to force to arbitration the man’s claims Subway broke federal telecommunications law by sending text messages to T-Mobile users advertising “T-Mobile Tuesday” sandwich deals.
On Jan. 25, a three-judge panel of the U.S. Seventh Circuit Court of Appeals in Chicago ruled in favor of plaintiff Matthew Warciak, and overturning a federal judge’s decision which had appeared to resolve the matter in Subway’s favor.
The decision was authored by Seventh Circuit Judge Michael S. Kanne. Circuit Judge Diane S. Sykes and U.S. District Judge Sara L. Darrow, of the Central District of Illinois, concurred in the opinion.
The case landed before the federal appeals panel last year, when Warciak and his attorneys appealed the decision of U.S. District Judge Charles P. Kocoras, of the state’s Northern District court in Chicago.
In April 2017, Kocoras had ordered the case dismissed, as he believed federal law required the case to be sent to arbitration.
Kocoras had taken up the case in 2016, when attorneys with the Chicago-based firm of Edelson P.C. filed suit on behalf of Warciak.
In the complaint, Warciak alleged, on Sept. 6, 2016, he received a text message promoting “a free 6-inch Oven Roasted Chicken sub at Subway” on “T-Mobile Tuesday … just for being with T-Mobile.” The message then provided a link, purportedly inviting him to download an app on his phone.
Warciak alleged this text message violated the federal Telephone Consumer Protection Act and the Illinois Consumer Fraud Act.
Warciak’s lawsuit, however, does not allege a violation of the law against T-Mobile. Rather, Subway is named as the lone defendant.
In response, Subway argued the case did not belong in court, because Warciak, as an authorized user of his mother’s mobile carrier contract with T-Mobile, should be bound under federal law by the terms of the user agreement between his mother and T-Mobile, which dictated such disputes be taken to arbitration, rather than tried in a class action lawsuit.
Warciak’s attorneys, however, argued Illinois law should apply, which would negate such an argument, because neither Matthew Warciak nor Subway had ever signed any agreement mandating arbitration.
Kocoras, however, agreed that federal law should govern in this instance, and ordered arbitration.
Warciak then appealed, saying the decision did not abide by prior decisions from the Seventh Circuit Appeals Court.
And on appeal, the judges of the Seventh Circuit said Warciak’s lawyers had the better of the argument, and Illinois state law should apply when weighing such contract disputes.
The appeals judges said Subway’s appeals to the doctrine of estoppel, saying at no time did Warciak and Subway agree to arbitrate their dispute, and state law does not allow them to declare Matthew Warciak should be bound by the terms of his mother’s contract with T-Mobile, neither of which are parties in his lawsuit.
“Looking to Illinois law, it is clear that Subway cannot rely on estoppel to enforce T-Mobile’s arbitration agreement against Warciak,” Kanne wrote.
The judges sent the matter back to Kocoras’ courtroom for further proceedings on Warciak’s class action claims under the TCPA.
Subway is represented in the action by attorneys with the firms of Alston & Bird LLP, of Atlanta, and Schiff Hardin LLP, of Chicago.
The case, however, is just one of two cases Warciak and attorneys from the Edelson firm have pending in Chicago federal court.
In a separate matter, Warciak has also sued One Inc., the maker of the After School app, which allows users to create and join virtual communities within actual high schools. In that lawsuit, Warciak alleged the app searches a user’s contacts directory on their mobile device and sends text messages inviting other students at the high school to also download an use the After School app.
Warciak’s lawsuit alleges After School also violates the TCPA law.
That lawsuit remains pending.
Last year, a Chicago federal judge dismissed a lawsuit Warciak and the Edelson lawyers filed against Nikil Inc., a company that developed the Down To Lunch app, which Warciak also alleged violated federal law by accessing users’ contacts list to send invitational text messages.
However, in that case, a judge noted Down To Lunch specifically requires users to press a button labeled ‘Invite’ for each contact the user wishes to invite to download and use the app. Users can also skip that step, court documents noted.