Your Arbitration Agreement May Not Be Enough to Stop a TCPA Lawsuit
Businesses often assume that once a customer agrees to an arbitration provision, TCPA claims will be headed to arbitration rather than court. A recent decision from the Northern District of California shows that the analysis doesn’t end there.
In Johnson v. Tomocredit, Inc., No. 26-cv-01172-HSG, 2026 Lexis 373530 (N.D. Cal. July 7, 2026), the court denied a motion to compel arbitration because, although the parties had entered into a valid arbitration agreement, the defendant could not show that the TCPA claims were sufficiently connected to that agreement.
The plaintiff alleged that Tomocredit sent unsolicited marketing text messages to class members whose phone numbers were listed on the National Do Not Call Registry. Tomocredit moved to compel arbitration, arguing that the plaintiff agreed to arbitrate any disputes when he registered for the company’s services and accepted its Terms of Use.
According to the record, the plaintiff completed an online application, provided personal information, and affirmatively agreed to the Terms of Use by checking a box before clicking “Submit.” The court therefore had little difficulty concluding that the parties formed a valid and enforceable arbitration agreement.
The issue was not whether the plaintiff agreed to arbitrate—it was whether the TCPA claims were sufficiently connected to that agreement. The challenged text messages were sent to a different phone number than the one the plaintiff provided during the application process, and Tomocredit offered no evidence connecting the two numbers or otherwise tying the messages to the customer relationship governed by the Terms of Use.
When deciding whether to compel arbitration, courts generally ask two questions:
Does a valid arbitration agreement exist?
Does the agreement encompass the dispute at issue?
The court answered the first question “yes,” but the second “no.” Because the undisputed evidence showed that the challenged text messages were sent to a phone number the plaintiff never provided when entering into the agreement, the court concluded that the TCPA claim did not “arise from or relate to” the Terms of Use. Accordingly, it denied Tomocredit’s motion to compel arbitration without prejudice.
Importantly, the court also noted that the motion could potentially be renewed if discovery later established that the plaintiff had, in fact, provided the disputed phone number during the application process.
In short, Johnson demonstrates that obtaining an enforceable arbitration agreement is only part of the analysis. A business must also be able to demonstrate that the claims at issue fall within the scope of that agreement. Here, Tomocredit could not do so because the challenged text messages were sent to a phone number that was not tied to the plaintiff’s application or customer account.
Businesses should continue to draft arbitration provisions broadly and maintain records demonstrating that the communications at issue are tied to the customer relationship governed by the applicable agreement. As Johnson illustrates, that factual connection can be just as important as the arbitration provision itself. Had Tomocredit been able to establish that the disputed phone number was later provided or updated by the plaintiff, or was otherwise connected to his account, the court indicated the arbitration analysis may have come out differently.
Contributor: Legal Intern Haydyn Hoggatt contributed to the research and preparation of this post.