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Annoyed Subway Customer Dodges Arbitration Over Sandwich Texts

June 8, 2021, 6:02 PM

A California sandwich shop customer can proceed on her claim that Subway violated federal law by ignoring her request to stop texting, because she wasn’t bound by an arbitration provision located on the franchise’s website, the Second Circuit said Tuesday.

There was no proof Marina Soliman actually saw the terms and conditions of a free-sandwich promotional program or that the arbitration provision was reasonably conspicuous, the U.S. Court of Appeals for the Second Circuit said.

The court affirmed a lower court order denying Subway Franchisee Advertising Fund Trust Ltd.'s motion to compel arbitration in a proposed class action alleging violations of the Telephone Consumer Practices Act.

Soliman saw an advertisement in a California Subway shop that invited customers to text a keyword and a short code to the company to receive a free sandwich. She texted the company.

Later, Soliman decided to opt out of receiving further promotional materials from the franchise. She texted Subway, telling it to stop sending her messages, but the company ignored her, according to the court.

The customer filed a proposed class action under the TCPA on behalf of all people who’d had similar experiences. Subway moved to compel arbitration based on an arbitration provision contained in the promotion’s terms and conditions, which were published on a website whose web address appeared on the advertisement.

Soliman wasn’t bound by those terms and conditions under California law, the court said.

The reference to the terms and conditions was printed in a “significantly smaller” font than the rest of the advertisement, surrounded by unrelated information, only vaguely referenced the terms, and didn’t tell the customer she would be agreeing to those terms just by texting the message to get a free sandwich, the court said.

Taken all together, these facts indicated that a reasonable person in Soliman’s position wouldn’t have realized she was required to arbitrate any disputes growing out of her texting Subway to take advantage of the free sandwich offer, the court said.

The court sent the case back to the trial court for further proceedings.

Judge Joseph F. Bianco wrote the opinion. Judges Dennis Jacobs and Rosemary S. Pooler joined.

Law Offices of Todd M. Friedman PC and Wocl & Leydon LLC represent Soliman. Greenberg Traurig LLP represent Subway.

The case is Soliman v. Subway Franchisee Advertising Fund Trust, Ltd., 2d Cir., No. 20-946, 6/8/21.

To contact the reporter on this story: Mary Anne Pazanowski in Washington at mpazanowski@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Patrick L. Gregory at pgregory@bloomberglaw.com

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