Costa v. Roman Health Ventures Inc.

Background

Sergio Costa filed a proposed class action against Roman Health Ventures, Inc., asserting one claim under the Telephone Consumer Protection Act and its implementing regulations. The claim was based on allegedly unsolicited marketing text messages that Roman sent to Costa.

Costa had signed up for an account through a subdomain of Roman’s website on or about July 30, 2020. The account-registration process required him to indicate his agreement to Roman’s Terms and Conditions of Use. Those terms included an arbitration agreement requiring the parties to resolve disputes relating to the terms through binding individual arbitration in New York under American Arbitration Association rules. The agreement also allowed either party to seek temporary and preliminary specific performance and injunctive relief in a court with jurisdiction.

Arbitration analysis

Roman moved under the Federal Arbitration Act (FAA) to compel Costa to arbitrate his claim on an individual basis. The FAA generally requires courts to enforce written arbitration agreements according to their terms.

Costa did not dispute that the terms contained an arbitration agreement or that he had entered into a valid agreement to arbitrate. Instead, he argued that the agreement did not cover the claims in this action. The court explained that the question of arbitrability—whether the parties agreed to arbitrate a particular dispute—is ordinarily decided by a court unless the parties clearly and unmistakably assign that question to an arbitrator.

The court held that the parties had clearly and unmistakably assigned arbitrability questions to the arbitrator. The arbitration agreement incorporated the American Arbitration Association rules, which authorize an arbitrator to decide objections concerning the arbitrability of claims. Costa also agreed in his briefing that an arbitrator should decide arbitrability and acknowledged the court’s precedent concerning delegation of that issue when an agreement incorporates those rules.

Roman also argued that Costa had agreed to individual arbitration and waived class arbitration. Costa did not respond to that argument in opposition. Although the court stated that this failure could be treated as a concession, it held that the issue was better left for the arbitrator to decide.

Injunctive relief

The court rejected Costa’s argument that claims seeking injunctive relief could proceed in court. It interpreted the agreement’s provision allowing temporary and preliminary specific performance and injunctive relief as preserving an independent right to seek such relief in aid of arbitration. The provision did not make otherwise arbitrable claims nonarbitrable merely because the complaint requested a particular form of relief. The court also noted that Costa had not applied for temporary or preliminary injunctive relief in court.

Disposition

Judge Halpern granted Roman’s motion to compel arbitration. Because the court determined that all disputes raised in the case by Costa and the purported class members were subject to arbitration, and because it found that a stay would serve no purpose, it dismissed the complaint without prejudice. The court denied Roman’s request for oral argument as unnecessary, directed the Clerk of Court to terminate the motion and enter judgment, and closed the case.