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James v. Global TelLink Corp.

United States Court of Appeals, Third Circuit

March 29, 2017

BOBBIE JAMES, on behalf of themselves and all others similarly situated; CRYSTAL GIBSON, on behalf of themselves and all others similarly situated; BETTY KING, on behalf of themselves and all others similarly situated; BARBARA SKLADANY, on behalf of themselves and all others similarly situated; MARK SKLADANY, on behalf of themselves and all others similarly situated; MILAN SKLADANY, on behalf of themselves and all others similarly situated; DR. JOHN F. CROW, on behalf of themselves and all others similarly situated
v.
GLOBAL TELLINK CORP; INMATE TELEPHONE SERVICE; DSI ITI LLC Global TelLink Corporation and DSI-ITI LLC, Appellants

          Submitted Under Third Circuit L.A.R. 34.1(a) November 3, 2016

         On Appeal from the United States District Court for the District of New Jersey (D.C. No. 2-13-cv-04989) District Judge: Honorable William J. Martini

          James E. Cecchi, Esq. Lindsey H. Taylor, Esq. Carella, Byrne, Cecchi, Olstein, Brody & Agnello James A. Plaisted, Esq. Lin C. Solomon, Esq. Pashman Stein Walder Hayden Counsel for Plaintiffs-Appellees.

          Robert J. Herrington, Esq. Greenberg Traurig 1840 Century Park East Suite Philip R. Sellinger, Esq. Aaron Van Nostrand, Esq. Greenberg Traurig Counsel for Defendants-Appellants.

          Before: CHAGARES, HARDIMAN, and SCIRICA, Circuit Judges

          OPINION

          HARDIMAN, CIRCUIT JUDGE

         Global Tel*Link Corporation, Inmate Telephone Service, and DSI-ITI LLC (collectively, GTL), appeal the District Court's order denying their motion to compel arbitration against Bobbie James and other putative class action plaintiffs who used GTL's prison phone services. The question presented is whether Appellees agreed to be bound by the terms of use contained on GTL's website, even though they never visited it. Because the District Court properly held that Appellees did not agree to arbitrate, we will affirm.

         I

         GTL provides telecommunications services that enable inmates at state and local correctional facilities to call family, friends, attorneys, and other approved persons outside the prisons. GTL is the sole provider of these services in New Jersey. Users can sign up for an account and deposit funds either through GTL's website or through an automated telephone service that uses an interactive voice-response system with standardized scripts and prompts.

         People who create an account through the website are shown a copy of GTL's terms of use and must click a button that says "Accept" to complete the process. Those who create an account by telephone receive the following audio notice:

Please note that your account, and any transactions you complete . . . are governed by the terms of use and the privacy statement posted at www.offenderconnect.com. The terms of use and the privacy statement were most recently revised on July 3, 2013.

App. 125. Unlike web users, those who set up accounts by telephone are not required to indicate their assent to the terms of use.

         GTL's terms of use contain an arbitration agreement and a class-action waiver, and users have 30 days to opt out of both of these provisions. They also state that using the telephone service or clicking the "Accept" button on the website constitutes acceptance of the terms, and users have 30 days to cancel their accounts if they do not agree to the terms.

         Plaintiffs in this case are inmates and their relatives or friends who used GTL's services. Four of them opened accounts by telephone, and one opened an account through GTL's website.[1] In August 2013, Plaintiffs filed a putative class action alleging that GTL's charges were unconscionable. They alleged violations of the New Jersey Consumer Fraud Act, the Federal Communications Act (FCA), the Takings Clause of the Fifth Amendment, and various New Jersey state laws. GTL moved to dismiss or stay the matter, arguing that the Federal Communications Commission (FCC) had primary jurisdiction. In September 2014, the District ...


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