Prison Phone Justice

Human Rights Defense Center
DEDICATED TO PROTECTING HUMAN RIGHTS

August 26, 2016

Submitted via Email and Postal Mail

Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G Street NW
Washington, D.C. 20552
Re:

Supplemental Comment for Docket No. CFPB-2016-0020
Arbitration Agreements; Proposed Rule

Dear Ms. Jackson:
The Human Rights Defense Center (HRDC) respectfully submits this supplemental
comment on Docket No. CFPB-2016-0020 regarding arbitration agreements as they relate to
inmate calling services (ICS) and prepaid phone accounts established by prisoners’ families so
they can speak with their incarcerated loved ones, as well as release debit cards.
Arbitration clauses appear in the terms and conditions that consumers must accept to
establish prepaid ICS phone accounts to remain in contact with incarcerated loved ones. This
condition significantly limits the legal rights of prisoners’ families by denying them the benefit
of class-action representation. All correctional facilities grant monopoly contracts to prison
phone providers, so if families want to talk with their imprisoned loved ones on the phone, they
have no choice but to agree to the arbitration clause, which is in the terms and conditions that
few people actually read.
ICS provider Global Tel*Link (GTL) recently used the arbitration clause in its Terms
and Conditions in an attempt to compel arbitration for named plaintiffs in a consumer classaction suit. 1 The company petitioned the court on August 7, 2015 “for an order compelling
arbitration pursuant to the Federal Arbitration Act and staying this matter pending conclusion of
the individual arbitrations.” Attachment 1 at 1. According to the pleadings filed in this case,
GTL revised its Terms and Conditions on July 3, 2013 to include an arbitration clause. Id. at 5.
1

See James, et al. v. Global Tel*Link Corporation, et al., U.S.D.C. (D. NJ), Case No. 2:13-cv-04989-WJM-MF.

P.O. Box 1151
Lake Worth, FL 33460
Phone: 561-360-2523 Fax: 866-735-7136
pwright@prisonlegalnews.org

Page |2

On February 16, 2016, the court denied the motion to compel arbitration with respect to
four of the five plaintiffs named in GTL’s motion and granted the motion with respect to the fifth
plaintiff. Attachment 2. In an Opinion issued the same day (Attachment 3), the Honorable
William J. Martini found that plaintiffs James, King, and Barbara and Milan Skladany created
their accounts through GTL’s interactive voice response (IVR) system, and while they were
notified of the existence of the terms and conditions that could be found on GTL’s website, they
“were not required to engage in any affirmative conduct to demonstrate acceptance.” Id. at 6-7.
Judge Martini further found that while IVR users were given notice that GTL’s service was
“governed by the terms of use,” such “notification did not inform them that use of the service
alone constituted acceptance of these terms.” Id. at 11.
The court did grant GTL’s motion to compel arbitration with respect to plaintiff Gibson,
who had created an account through the website, noting that she would have been presented with
the terms and conditions on the screen and “was required to click on an ‘Accept’ button in order
to move forward in the account creation process.” Id. at 12.
EZ Card & Kiosk LLC is another predatory company that price gouges prisoners and
then eliminates their ability to pursue legal action through arbitration agreements. John Pope was
arrested by the Fort Lauderdale police in November 2014 and held in the Broward County Jail
for 17 hours. Attachment 4 at 1. Upon his release less than one day after being arrested, Mr.
Pope was given a release debit card issued by EZ Card & Kiosk LLC (EZ Card) and the Central
Bank of Kansas City in lieu of the $178 cash he had in his possession at the time of his arrest. Id.
at 2. There were at least five fees applicable to the debit card which Mr. Pope was subject to in
order to access his own money. Id. Mr. Pope later filed a lawsuit challenging these egregious
practices. 2 As with the case cited above, EZ Card moved to compel arbitration on the basis of
Mr. Pope’s acceptance and use of the release debit card, and the company’s motion was granted
by the court on September 11, 2015. Attachment 4. Thus, Mr. Pope was denied the ability to
have his claims adjudicated by the courts – and the thousands of detainees who are released from
the Broward County Jail each year are likewise denied justice, as they must arbitrate their claims
one-by-one and cannot seek recourse through either individual or class-action lawsuits.
As stated in our initial Comment filed on August 22, there is no meaningful consent to
arbitration agreements in the prison or jail context. Such “agreements” serve only to immunize
corporate predators from the legal consequences of their unlawful actions, shield them from
judicial review and preclude victimized consumers from obtaining counsel and effective relief
from our nation’s judicial system.
We again urge the CFPB to hold that mandatory arbitration agreements should be void or
inapplicable in the criminal justice context for the simple reason that affected consumers have no
real choice in the matter. Absent free choice there can be no meeting of the minds or agreement.
Our free market system is predicated upon the notion that consumers have choice and companies
must earn their customers’ business. In the prison and jail context, however, hedge fund-owned
corporations 3 have learned that they only need to give kickbacks to the detention agencies that

2

See Pope v. EZ Card & Kiosk LLC, et al., USDC (S.D. FL), Case No. 0:15-cv-61046-KAM. HRDC attorneys and
the law firm of Giskan, Solotaroff, Anderson & Stewart LLP represented Mr. Pope in this action.
3
GTL is owned by the hedge fund American Securities, while ICS provider Securus is owned by another hedge
fund, ABRY Partners.

Page |3

hold prisoners captive to obtain exclusive, monopoly contracts and then force prisoners and
their families to pay whatever outrageous amounts they can charge for phone or money transfer
services, or to give people their own funds on debit cards. All because the affected consumers,
whose money is being taken and who are actually paying the bills, have no choice. The CFPB
should protect these captive consumers from mandatory arbitration agreements.
Thank you for your continued time and attention in this regard.
Sincerely,

Paul Wright
Executive Director, HRDC
Attachments

Attachment 1

Case 2:13-cv-04989-WJM-MF Document 95 Filed 08/07/15 Page 1 of 2 PageID: 767

GREENBERG TRAURIG, LLP
200 Park Avenue
Florham Park, New Jersey 07932
Philip R. Sellinger
Aaron Van Nostrand
Ph: (973) 360-7900
Attorneys for Defendants
Global Tel*Link Corporation
and DSI-ITI LLC
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BOBBIE JAMES, et al.,

13 Civ. 4989 (WJM) (MF)
Plaintiffs,

vs.

NOTICE OF MOTION TO
COMPEL ARBITRATION

GLOBAL TEL*LINK CORPORATION,
INMATE TELEPHONE SERVICE and
DSI-ITI LLC,

ORAL ARGUMENT REQUESTED

Defendants.
PLEASE TAKE NOTICE that, on a date and time to be set by the Court,
defendants Global Tel*Link Corporation and DSI-ITI LLC (“Defendants”) shall
move before the Honorable William J. Martini at the United States District Court
for the District of New Jersey, Martin Luther King, Jr. Federal Building and
Courthouse, 50 Walnut Street, Courtroom 4B, Newark, New Jersey 07101, for an
order compelling arbitration pursuant to the Federal Arbitration Act and staying
this matter pending conclusion of the individual arbitrations.

Case 2:13-cv-04989-WJM-MF Document 95 Filed 08/07/15 Page 2 of 2 PageID: 768

PLEASE TAKE FURTHER NOTICE that in support of this motion,
Defendants will rely upon the brief and the Declaration of John W. Baker, II
submitted herewith.
PLEASE TAKE FURTHER NOTICE that a proposed form of Order is
submitted herewith.
PLEASE TAKE FURTHER NOTICE that, pursuant to L. Civ. R. 78.1(b),
Defendants request oral argument on this motion.

GREENBERG TRAURIG LLP
/s/ Philip R. Sellinger
Philip R. Sellinger
Aaron Van Nostrand
200 Park Avenue
Florham Park, New Jersey 07932
Telephone: (973) 360-7900
Facsimile: (973) 301-8410
Attorneys for Defendants
Global Tel*Link Corporation and
DSI-ITI LLC
Dated: August 7, 2015

2

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 1 of 23 PageID: 769

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

BOBBIE JAMES, et al.,

13 Civ. 4989 (WJM) (MF)
Plaintiffs,

vs.
GLOBAL TEL*LINK CORPORATION,
INMATE TELEPHONE SERVICE and
DSI-ITI LLC,

ORAL ARGUMENT REQUESTED

Defendants.

DEFENDANTS GLOBAL TEL*LINK CORPORATION AND DSI-ITI
LLC’S BRIEF IN SUPPORT OF MOTION TO COMPEL ARBITRATION
PURSUANT TO THE FEDERAL ARBITRATION ACT AND TO STAY
THIS MATTER PENDING CONCLUSION OF THE INDIVIDUAL
ARBITRATIONS

Philip R. Sellinger, Esq.
Aaron Van Nostrand, Esq.
GREENBERG TRAURIG, LLP
200 Park Avenue
Florham Park, New Jersey 07932
Ph: (973) 360-7900
Attorneys for Defendants
Global Tel*Link Corporation and
DSI-ITI LLC

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 2 of 23 PageID: 770

TABLE OF CONTENTS
Page(s)
PRELIMINARY STATEMENT ............................................................................... 1
FACTUAL BACKGROUND ....................................................................................2
A.

Plaintiffs’ Allegations ................................................................. 2

B.

Plaintiffs’ GTL Accounts ............................................................ 2

C.

The Arbitration Agreement ......................................................... 4

PROCEDURAL HISTORY.......................................................................................6
ARGUMENT .............................................................................................................8
I.

Legal Standards .....................................................................................8

II.

Five of the Seven Plaintiffs Agreed to Arbitrate the Claims
Asserted in the Complaint ...................................................................10

III.

A.

Plaintiff Crystal Gibson Must Arbitrate Her Claims
Because She Agreed To Arbitration When Opening Her
GTL Account ............................................................................10

B.

Plaintiffs Bobbie James, Barbara Skladany and Milan
Skladany Must Arbitrate Their Claims Because They
Continued Using GTL’s Services After the Terms of Use
Were Amended To Provide For Arbitration .............................11

C.

Plaintiff Betty King Must Arbitrate Her Claims Because
She Agreed to the Amended Terms of Use By Opening a
New Account After July 2, 2013 ..............................................15

D.

Plaintiffs’ Claims Fall Within the Scope of the Arbitration
Clause ........................................................................................15

This Case Should be Stayed Pending Completion of the
Individual Arbitrations ........................................................................16

CONCLUSION ........................................................................................................19
i

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 3 of 23 PageID: 771

TABLE OF AUTHORITIES
Page(s)
Cases
Allied-Bruce Terminix Cos. v. Dobson,
513 U.S. 265 (1995) ..............................................................................................9
Arakelian v. N.C. Country Club Estates Ltd. P’ship,
No. 08-5286 (JAG), 2009 WL 4981479 (D.N.J. Dec. 18, 2009) .......................16
AT & T Mobility LLC v. Concepcion,
131 S. Ct. 1740 ( 2011) .....................................................................................8, 9
Citizens Bank v. Alafabco, Inc.,
539 U.S. 52 (2003) ................................................................................................9
Coiro v. Wachovia Bank, N.A.,
2012 WL 628514 (D.N.J. Feb. 27, 2012) ...............................................12, 13, 14
Davis v. Dell, Inc.,
No. 07-630 (AMD), 2007 WL 4623030 (D.N.J. Dec. 28, 2007) aff’d,
No. 07-630 (RBK), 2008 WL 3843837 (D.N.J. Aug. 15, 2008) ........................11
Gras v. Assocs. First Capital Corp.,
346 N.J. Super. 42 (App. Div. 2001) ..................................................................10
Green Tree Fin. Corp.-Ala. v. Randolph,
531 U.S. 79 (2000) ..........................................................................................9, 10
Katchen v. Smith Barney, Inc.,
2005 WL 1863669 (D.N.J. Aug. 3, 2005) ..........................................................17
Lankford v. Irby,
2006 WL 2828552 (D.N.J. Sept. 29, 2006) ........................................................13
Litman v. Cellco P’ship,
655 F.3d 225 (3d Cir. 2011) ................................................................................. 9
Lloyd v. HOVENSA, LLC.,
369 F.3d 263 (3d Cir. 2004) ...............................................................................17
Morales v. Sun Constructors, Inc.,
541 F.3d 218 (3d Cir. 2008) ...............................................................................10
ii

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 4 of 23 PageID: 772

Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp.,
460 U.S. 1 (1983) ................................................................................................10
Neal v. Asta Funding, Inc.,
2014 WL 131770 (D.N.J. Jan. 6, 2014) ..............................................................18
Quilloin v. Tenet HealthSystem Philadelphia, Inc.,
673 F.3d 221 (3d Cir. 2012) ...............................................................................17
Trippe Mfg. Co. v. Niles Audio Corp,
401 F.3d 529 (3d Cir. 2005) ................................................................................. 9
Weichert Co. Realtors v. Ryan,
128 N.J. 427 (1992) ............................................................................................13
Wolf v. Nissan Motor Acceptance Corp.,
2011 WL 2490939 (D.N.J. June 22, 2011) ........................................................... 9
Wolf v. Nissan Motor Acceptance Corp.,
2012 WL 1079340 (D.N.J. Mar. 29, 2012) .......................................................... 9
Statutes
9 U.S.C. § 2 ................................................................................................................9
9 U.S.C. § 3 ........................................................................................................16, 17

iii

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 5 of 23 PageID: 773

Defendants Global Tel*Link Corporation and DSI-ITI, LLC (together,
“GTL”) respectfully submit this brief in support of their motion to compel
arbitration pursuant to the Federal Arbitration Act and to stay this matter pending
conclusion of the individual arbitrations.
PRELIMINARY STATEMENT
GTL provides telecommunication services to jails, prisons and other
correctional institutions based on agreements it enters into with the governmental
entities that run those institutions. Plaintiffs are inmates or friends and family
members of inmates who claim they signed up for an account so they could use
GTL’s calling services. Although Plaintiffs opened accounts with GTL, they fail
to acknowledge the Terms of Use of those accounts.
Plaintiffs likely ignore those Terms of Use because they require arbitration:
“All claims arising out of or relating to these Terms of Use (including its
formation, performance and breach) and the Service shall be finally settled by
binding arbitration, excluding any rules or procedures governing or permitting
class actions.” Plaintiffs’ agreements to arbitrate are binding and enforceable
under the Federal Arbitration Act, as well as U.S. Supreme Court, Third Circuit
and New Jersey precedent. Plaintiffs’ claims are covered by the broad language of
this provision, requiring arbitration of “[a]ll claims arising out of or relating to
these Terms of Use… and the Service….” GTL respectfully requests that the Court

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 6 of 23 PageID: 774

grant their motion and compel Plaintiffs Bobbie James, Crystal Gibson, Barbara
Skladany, Milan Skladany and Bettie King to arbitrate their claims on an
individual basis, as they agreed to do under their agreement with GTL.
FACTUAL BACKGROUND
A.

Plaintiffs’ Allegations

GTL “provide[s] managed telecommunications services at state and local
correctional facilities in New Jersey and elsewhere in the United States so inmates
can communicate with family members, friends, attorneys and other approved
persons outside the correctional facilities.” Compl. ¶ 12. One way for prisoners to
call friends or family outside a correctional facility is by placing collect calls using
GTL’s services. Id. ¶ 25. Other ways includes debit calls or calls paid for by the
inmate’s commissary account. As alleged in the Complaint, GTL provides those
services pursuant to contracts between GTL and state and county facilities. Id. ¶
20.
B.

Plaintiffs’ GTL Accounts

Plaintiffs consist of six individuals (Bobbie James, Crystal Gibson, Betty
King, Barbara Skladany and Milan Skladany) who have or had accounts with GTL.
Four of the Plaintiffs are from New Jersey and two are from New York. Compl., ¶
6-9, 11-12. One plaintiff (Mark Skladany) was incarcerated in Somerset County

2

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 7 of 23 PageID: 775

Jail from September 2010 to September 2012 and currently is incarcerated in the
New Jersey State Prison in Yardville. Compl., ¶ 10.
Plaintiff Crystal Gibson opened an Advance Pay Account through GTL’s
website on July 29, 2014. Declaration of John W. Baker, II (“Baker Decl.”) ¶ 8.
Gibson also opened an account on June 13, 2014, through GTL’s IVR system and
closed the account the same day. Id. Gibson alleges in the Complaint that she
“became a customer of GTL in approximately September of 2010.” Comp., ¶ 42.
GTL, however, has no record of any such account dating back to 2010.
Plaintiff Bobbie James opened an Advance Pay Account on February 29,
2012. Plaintiff James continued using her account through 2014 and, specifically,
deposited funds in her account using GTL’s IVR system 38 times after July 2,
2013 – the date GTL amended its Terms of Use to include an arbitration provision.
See infra at 4. Plaintiff James also opened up a new account on August 1, 2013 for
a different phone number. Baker Decl. ¶ 9.
Plaintiff Barbara Skladany opened an Advance Pay Account on March 2,
2013. She continued using her account through 2014 and, specifically, deposited
funds in her account using GTL’s IVR system 15 times after July 2, 2013. Plaintiff
Barbara Skladany also opened an account on November 16, 2006, and closed the
account on August 19, 2013 – after GTL amended its Terms of Use to include an
arbitration provision. Id.

3

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 8 of 23 PageID: 776

Plaintiff Milan Skladany opened an Advance Pay Account on July 29, 2011.
He continued using his account through 2014 and, specifically, deposited funds in
this account using GTL’s IVR system 9 times after July 2, 2013. Id.
Plaintiff Betty King had two accounts with GTL. The first account was
opened on October 18, 2006, and was closed on July 9, 2013. The second account
was opened on November 15, 2014, using GTL’s IVR system, and Plaintiff King
deposited money into that account three times using GTL’s IVR system. Baker
Decl. ¶ 10.
C.

The Arbitration Agreement

By setting up and using their GTL accounts, Plaintiffs Bobbie James, Crystal
Gibson, Barbara Skladany, Milan Skladany and Bettie King agreed to GTL’s
Terms of Use (“TOU”), which – as of July 2, 2013 – require arbitration of any
claim arising out of or relating to GTL’s services:
Arbitration. The parties shall use their best efforts to settle any
dispute, claim, question, or disagreement directly through consultation
and good faith negotiations which shall be a precondition to either
party initiating a lawsuit or arbitration. All claims arising out of or
relating to these Terms of Use (including its formation, performance
and breach) and the Service shall be finally settled by binding
arbitration, excluding any rules or procedures governing or permitting
class actions. The arbitrator, and not any federal, state or local court or
agency, shall have exclusive authority to resolve all disputes arising
out of or relating to the interpretation, applicability, enforceability or
formation of these Terms of Use, including, but not limited to any
claim that all or any part of these Terms of Use is void or voidable.
The arbitrator shall be empowered to grant whatever relief would be
available in a court under law or in equity. The arbitrator’s award
4

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 9 of 23 PageID: 777

shall be binding on the parties and may be entered as a judgment in
any court of competent jurisdiction. To the extent the filing fee for the
arbitration exceeds the cost of filing a lawsuit, we will pay the
additional cost.
The parties understand that, absent this mandatory provision,
they would have the right to sue in court and have a jury trial.
They further understand that, in some instances, the costs of
arbitration could exceed the costs of litigation and the right to
discovery may be more limited in arbitration than in court.
TOU, § R(1) (attached as Ex. A, Baker Decl.) (emphasis in original). The Terms
of Use also offer customers two non-arbitration choices: they can opt of arbitration
or file an action in small claims court. TOU, § R(3), § R(4). None of the Plaintiffs
opted out of arbitration. Baker Decl. ¶ 11. Regardless of the dispute resolution
method selected, however, putative class actions are waived. TOU, § R(2).
Customers who opened or refilled their accounts through GTL’s website are
required to accept the Terms of Use before completing their transaction. Baker
Decl. ¶ 2.

Customers who opened or refilled their accounts through GTL’s

automated phone service received the following notice before entering their
payment information:
Please note that your account, and any transactions you complete,
with GTL, PCS, DSI-ITI, or VAC 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.
Baker Decl. ¶ 2.

5

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 10 of 23 PageID: 778

PROCEDURAL HISTORY
On August 20, 2013, Plaintiffs filed a Complaint against GTL asserting
seven causes of action:

(1) violation of the NJCFA; (2) violation of certain

provisions of N.J.S.A. § 56:8-176 of the NJCFA and N.J.A.C. § 45A-803; (3)
violation of the New Jersey public utilities statutes (N.J.S.A. § 48-3.1 and 3.2); (4)
unjust enrichment; (5) violation of the Federal Communications Act (47 U.S.C. §
201); (6) violation of the Takings Clause of the Fifth Amendment of the United
States Constitution; and (7) declaratory judgment.1 Plaintiffs also seek to certify a
nationwide class of all persons since 2002 who either (i) were incarcerated in New
Jersey and used GTL’s services or (ii) who established an advanced pay account
with GTL in order to receive telephone calls from prisoners in New Jersey.
Compl, ¶ 61.
In the Complaint, Plaintiffs provide very little information regarding their
accounts with GTL. For example, no Plaintiff states how he or she opened an
account with GTL – whether online through GTL’s website, by using GTL’s
automated system or by speaking with a customer service representative. Nor does
any Plaintiff provide his or her account number with GTL. Accordingly, at the
time the Complaint was filed, GTL did not have sufficient information to
determine which Plaintiffs were subject to the arbitration clause in the Terms of
1

Plaintiffs have since voluntarily dismissed their claims under the Federal
Communications Act and the New Jersey public utilities statutes. D.E. 41.
6

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 11 of 23 PageID: 779

Use.
After the case was stayed on primary jurisdiction grounds pursuant to GTL’s
motion (D.E. 36) and the stay was lifted on October 20, 2014 (D.E. 41), GTL filed
an Answer to the Complaint on November 26, 2014 (D.E. 46) and filed an
Amended Answer on March 9, 2015 (D.E. 67). In the Amended Answer, GTL
asserted that “[t]he claims of at least some Plaintiffs and at least some members of
the putative class are barred, in whole or in part, by an agreement to resolve all
claims through binding arbitration.” D.E. 67 at 16.
GTL did not immediately seek permission to file a motion to compel
arbitration because it still did not have complete account information for all
Plaintiffs. GTL does not require all customers to provide personal identifying
information, such as names and addresses, when opening accounts. For example,
customers who open their accounts using GTL’s automated telephone (IVR)
system are not required to provide any personal identifying information. Rather,
those customers need only enter their telephone number. Baker Decl. ¶ 3.
For that reason, GTL served interrogatories on Plaintiffs on February 20,
2015, asking for the dates and methods Plaintiffs used to open their accounts, as
well as the phone numbers they used. Responses to these interrogatories (albeit
incomplete and uncertified) finally were provided by 4 of the 7 Plaintiffs on
April 24, 2015, and 2 additional Plaintiffs have provided responses since then.

7

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 12 of 23 PageID: 780

Although GTL still does not have complete information regarding the accounts of
each Plaintiff, it now has sufficient information to confirm that at least 5 of the 7
Plaintiffs are bound by arbitration provision in the Terms of Use.
Pursuant to the Scheduling Order in this matter (D.E. 61), on May 8, 2015,
GTL submitted a request for leave to file a motion to compel arbitration (as well as
a motion for judgment on the pleadings). After the parties exchanged letters
regarding this request (D.E. 75, 76, 78), Judge Falk held a conference call on May
26, 2015, during which he reserved decision on GTL’s request for leave to file a
motion to compel arbitration. During a status conference on July 14, 2015, Judge
Falk granted GTL’s request to file a motion to compel arbitration. At Judge Falk’s
direction during the May 26, 2015 conference call and during the July 14, 2015
conference, GTL has participated in discovery since it requested leave to file a
motion to compel arbitration.

8

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 13 of 23 PageID: 781

ARGUMENT
I.

Legal Standards
The Federal Arbitration Act (“FAA”) 2 “was enacted in 1925 in response to

widespread judicial hostility to arbitration agreements.” AT & T Mobility LLC v.
Concepcion, 131 S. Ct. 1740, 1745 ( 2011). Under Section 2 of the FAA, an
agreement to arbitrate “shall be valid, irrevocable, and enforceable, save upon such
grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. §
2. 3 The FAA thus reflects “a liberal federal policy favoring arbitration and the
2

The FAA by its terms, applies to arbitration provisions contained in all contracts
that, like those at issue here, “evidenc[e] a transaction involving commerce.” 9
U.S.C. § 2; see also Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003) (“term
‘involving commerce’ in the FAA . . . ordinarily signal[s] the broadest permissible
exercise of Congress’ Commerce Clause power”); Allied-Bruce Terminix Cos. v.
Dobson, 513 U.S. 265, 276-77 (1995) (directing that FAA be construed broadly to
apply to all transactions affecting interstate commerce).
3

Federal courts in New Jersey have broadly applied Concepcion to hold that
arbitration provisions and class action waivers cannot be voided on
unconscionability or public policy grounds. See Wolf v. Nissan Motor Acceptance
Corp., 2011 WL 2490939, *6-7 (D.N.J. June 22, 2011) (“Based on the United
States Supreme Court’s holding and reasoning in [Concepcion], the Court cannot
find that any public interest articulated in this case . . . overrides the clear,
unambiguous, and binding class action waiver included in the parties’ arbitration
agreement”); see also Wolf v. Nissan Motor Acceptance Corp., 2012 WL 1079340,
*6 (D.N.J. Mar. 29, 2012) (finding plaintiff’s arguments regarding
unconscionability of arbitration provisions “completely foreclosed … by
controlling precedent from the Supreme Court and now from the Third Circuit
Court of Appeals”); Litman v. Cellco P’ship, 655 F.3d 225, 230 (3d Cir. 2011)
(finding leading New Jersey and Third Circuit case on unconscionability of
arbitration provisions preempted by FAA and abrogated by Concepcion).
9

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 14 of 23 PageID: 782

fundamental principle that arbitration is a matter of contract.” Concepcion, 131 S.
Ct. at 1745.
A court should compel arbitration where (a) a valid agreement to arbitrate
exists, and (b) the agreement encompasses the claims at issue. See Trippe Mfg. Co.
v. Niles Audio Corp, 401 F.3d 529, 532 (3d Cir. 2005); see also Green Tree Fin.
Corp.-Ala. v. Randolph, 531 U.S. 79, 91-92 (2000) (party seeking to invalidate
arbitration agreement bears the burden of showing why agreement is invalid).
Enforcing arbitration agreements is strongly favored, and any ambiguity as to the
arbitrability of a claim should be resolved in favor of arbitration. See id. (noting
“presumption in favor of arbitrability”); accord Morales v. Sun Constructors, Inc.,
541 F.3d 218, 221 (3d Cir. 2008); Gras v. Assocs. First Capital Corp., 346 N.J.
Super. 42, 54 (App. Div. 2001).

“[A]s a matter of federal law, any doubts

concerning the scope of arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the contract language itself or
an allegation of waiver, delay, or a like defense to arbitrability.” Moses H. Cone
Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24–25 (1983).

10

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 15 of 23 PageID: 783

II.

At Least Five of the Seven Plaintiffs Agreed to Arbitrate the Claims
Asserted in the Complaint.
A.

Plaintiff Crystal Gibson Must Arbitrate Her Claims Because She
Agreed To Arbitration When Opening Her GTL Account.

Plaintiff Crystal Gibson opened an Advance Pay Account through GTL’s
website on July 6, 2014. Baker Decl. ¶ 8. 4 As part of the account-opening
process, Gibson was presented with the Terms of Use and clicked a button to
“accept” the Terms of Use. Baker Decl. ¶ 2. Gibson’s registration response
constitutes a valid acceptance of the Terms of Use. See Davis v. Dell, Inc., No. 07630 (AMD), 2007 WL 4623030, *4-5 (D.N.J. Dec. 28, 2007) aff’d, No. 07-630
(RBK), 2008 WL 3843837 (D.N.J. Aug. 15, 2008) (enforcing arbitration provision
contained in online terms and conditions that plaintiff needed to “click through” in
order to purchase product).
B.

Plaintiffs Bobbie James, Barbara Skladany and Milan Skladany Must
Arbitrate Their Claims Because They Continued Using GTL’s
Services After the Terms of Use Were Amended To Provide For
Arbitration.

Plaintiffs Bobbie James, Barbara Skladany and Milan Skladany opened their
accounts before there was an arbitration provision in the Terms of Use (July 2,
4

Gibson also opened an account on June 13, 2014, through GTL’s IVR system and
closed the account the same day. Baker Decl. ¶ 8. Gibson agreed to the Terms of
Use when she opened this account as well for the reasons set forth in Section II.B.
Gibson alleges in the Complaint that she “became a customer of GTL in
approximately September of 2010.” Comp., ¶ 42. GTL, however, has no record of
any such account dating back to 2010.
11

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 16 of 23 PageID: 784

2013), but continued to use their accounts thereafter. Baker Decl. ¶ 9. That
continued use means those Plaintiffs agreed to the revised Terms of Use, including
arbitration.
The prior version of the Terms of Use contained the following language
providing for modifications:
These Terms of Use may be amended by the Company from time to
time. We will post any material changes to these Terms of Use on
the Site with a notice advising of the changes. You may cancel your
account within fifteen (15) days following the date the amended
Terms of Use are posted by contacting us using the contact
information in Section Y below. If you choose to cancel your account
within this fifteen (15) day period, you will not be bound by the terms
of the revised Terms of Use but will remain bound by terms of these
Terms of Use, and, we will provide you with a refund of any fees that
you have paid and that have not been used in connection with the
Service.
Ex. B, Baker Decl.
GTL posted a notice on the front page of its website regarding the
amendment of its Terms of Use on July 2, 2013:
ATTENTION Existing ConnectNetwork ACCOUNT HOLDERS.
As of July 2, 2013 the Terms of Use and Privacy Statement (now
entitled Your Privacy Rights) that apply to this site and associated
products and services were updated. Please review both documents
carefully and let us know of any questions using the contact
information listed in the documents. By using this site or the
associated products or services, you acknowledge and agree to the
terms contained in both documents. You may access the documents
through links appearing at the top of this site.

12

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 17 of 23 PageID: 785

Ex. C, Baker Decl. GTL also included the following notice on its automated
telephone (IVR) system advising customers regarding the amended Terms of Use:
Please note that your account, and any transactions you complete,
with GTL, PCS, DSI-ITI, or VAC 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.
Baker Decl. ¶ 2. Any customer calling the IVR system received this notice and
could not proceed to the remainder of the options, including depositing funds into
an account, without hearing this notice. Baker Decl. ¶ 2.
Courts regularly conclude that a customer’s continued use or acceptance of
services constitutes assent to modified terms of service. In Coiro v. Wachovia
Bank, N.A., 2012 WL 628514, *1 (D.N.J. Feb. 27, 2012), for example, the original
customer agreement stated that, “[i]f Plaintiff did not agree to the[] new terms, she
had the option to close her account within [a] thirty-day period.” Id. at *3. The
plaintiff was mailed two amendments to the customer agreement, the second of
which included a class-action waiver provision. Id. at *3. The court found this
provision reasonable, noting that “[u]nder New Jersey state law, silence may be
deemed acceptance ‘where the particular circumstances reasonably impose on the
offeree a duty to speak if the offer is rejected.’” Id. (quoting Johnson & Johnson v.
Charmley Drug Co., 11 N.J. 526, 539 (1953)); see also Weichert Co. Realtors v.
Ryan, 128 N.J. 427, 436-37 (1992) (“[W]hen an offeree accepts the offeror’s

13

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 18 of 23 PageID: 786

services without expressing any objection to the offer’s essential terms, the offeree
has manifested assent to those terms.”) (internal citations omitted); Lankford v.
Irby, 2006 WL 2828552, *5 (D.N.J. Sept. 29, 2006).
Based on GTL’s account records, plaintiffs Bobbie James (February 29,
2012), Barbara Skladany (March 2, 2013) and Milan Skladany (July 29, 2011)
opened their accounts before July 2, 2013. Baker Decl. ¶ 9. 5 They all continued
using their accounts after July 2, 2013. Specifically, Plaintiff Milan Skladany
deposited funds in his account using GTL’s IVR system nine times after July 2,
2013. Baker Decl. ¶ 9. Plaintiff Barbara Skladany deposited funds in her account
using GTL’s IVR system fifteen times after July 2, 2013. Baker Decl. ¶ 9.6
Plaintiff James deposited funds in her account using GTL’s IVR system 38 times
after July 2, 2013. Baker Decl. ¶ 9. Plaintiff James also opened up a new account
using GTL’s IVR system on August 1, 2013 for a different phone number, and,
during that process, affirmatively accepted GTL’s Terms of Use. Baker Decl. ¶ 9.
As in Coiro, Plaintiffs demonstrated their assent by continuing to use the
services. If anything, this case is stronger than Coiro because these Plaintiffs
5

According to GTL’s records, plaintiff John Crow opened his account prior to July
2, 2013 but never deposited money in or otherwise used his account. GTL has no
record of Mark Skladany (an inmate) opening an account with GTL.
6
Plaintiff Barbara Skladany also opened an account on November 16, 2006, and
closed the account on August 19, 2013 – after GTL amended its TOU. Baker
Decl. ¶ 9. Because the arbitration agreement applies to all claims arising out of or
relating to GTL’s “Services,” all of Barbara Skladany’s claims, including those
related to her prior account, fall within the arbitration agreement.
14

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 19 of 23 PageID: 787

repeatedly were informed of the new Terms of Use each time they used the IVR
system. Thus, Plaintiffs James, Barbara Skladany and Milan Skladany are bound
by the arbitration provisions and class action waiver in the Terms of Use.
C.

Plaintiff Betty King Must Arbitrate Her Claims Because She Agreed
to the Amended Terms of Use By Opening a New Account After July
2, 2013.

Based on GTL’s records, Plaintiff Betty King had two accounts. The first
was opened on October 18, 2006 and was closed on July 9, 2013 – after GTL
amended its TOU. The second account was opened through GTL’s IVR system on
November 15, 2014, and Plaintiff King deposited money into that account three
times using GTL’s IVR system. Baker Decl. ¶ 10. During this sign-up process,
King affirmatively accepted GTL’s Terms of Use, including the arbitration
provision. Baker Decl. ¶ 2. Because the arbitration agreement applies to all claims
arising out of or relating to GTL’s “Services,” all of King’s claims, including those
related to her prior account, fall within the arbitration agreement. Thus, King is
bound by the arbitration provision and class action waiver contained in the Terms
of Use.
D.

Plaintiffs’ Claims Fall Within the Scope of the Arbitration Clause.

All of Plaintiffs’ claims fall within the broad scope of the arbitration
provision in the Terms of Use. Those provisions require arbitration of “[a]ll claims
arising out of or relating to these Terms of Use (including its formation,

15

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 20 of 23 PageID: 788

performance and breach) and the Service.” “Service” is defined as “any of the
products or services that [GTL] . . . provide, including My Phone Account,
Offender Trust Fund, Send An Email and Offender Phone Account.” This broad
language covers “any disputes arising out of” parties’ transaction, even if not
directly related to contract containing arbitration clause. See Arakelian v. N.C.
Country Club Estates Ltd. P’ship, No. 08-5286 (JAG), 2009 WL 4981479, *12
(D.N.J. Dec. 18, 2009) (where arbitration provision applied to claims arising out of
“this Agreement . . . [or] any other agreements, communications or dealings
involving Buyer,” court construes such broad language as intending “to cover any
disputes arising out of” parties’ transaction, even if not directly related to contract
containing arbitration clause).
Here, Plaintiffs’ claims relate to their accounts with GTL for the provision of
ICS. Plaintiffs allege that the fees and rates charged by GTL in conjunction with
their ICS accounts were excessive, insufficiently disclosed, and prohibited by the
CFA. Compl., ¶ 79-80. These claims unquestionably relate to the “Services”
provided by GTL, as defined in the Terms of Use. Accordingly, Plaintiffs’ claims
are subject to binding arbitration.
III.

This Case Should be Stayed Pending Completion of the Individual
Arbitrations.
This Court should stay this litigation, including the claims asserted by Mark

Skladany and John F. Crow, pending individual arbitration. Section 3 of the FAA
16

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 21 of 23 PageID: 789

empowers this Court to grant such a stay. 9 U.S.C. § 3 (when a court determines a
suit should be referred to arbitration, it “shall on application of one of the parties
stay the trial of the action until such arbitration has been had”). “If the issues in
the case are within the contemplation of the arbitration agreement, the FAA's stayof-litigation provision is mandatory, and there is no discretion vested in the district
court to deny the stay.” Katchen v. Smith Barney, Inc., 2005 WL 1863669 at *7
(D.N.J. Aug. 3, 2005) (quoting U.S. v. Bankers Ins. Co., 245 F.3d 315, 319 (4th
Cir.2001)); see also Lloyd v. HOVENSA, LLC., 369 F.3d 263, 269 (3d Cir. 2004)
(“[T]he statute clearly states, without exception, that whenever suit is brought on
an arbitrable claim, the Court ‘shall’ upon application stay the litigation until
arbitration has been concluded. In this case, Wyatt requested a stay of the
proceeding as part of his motion to compel arbitration. Accordingly, we hold that
the District Court was obligated under 9 U.S.C. § 3 to grant the stay once it
decided to order arbitration.”). “[A] stay, rather than a dismissal, is the required
course of action when compelling arbitration.” Quilloin v. Tenet HealthSystem
Philadelphia, Inc., 673 F.3d 221, 227 n. 2 (3d Cir. 2012). GTL has requested a
stay here, rather than a dismissal, and that request should be granted.
The entire case, including the claims asserted by Mark Skladany and Dr.
John F. Crow, should be stayed pending the arbitration of the claims of the other
Plaintiffs. 9 U.S.C. § 3 (“If any suit or proceeding be brought in any of the courts

17

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 22 of 23 PageID: 790

of the United States upon any issue referable to arbitration under an agreement in
writing for such arbitration, the court in which such suit is pending, upon being
satisfied that the issue involved in such suit or proceeding is referable to arbitration
under such an agreement, shall on application of one of the parties stay the trial
of the action until such arbitration has been had in accordance with the terms of
the agreement, providing the applicant for the stay is not in default in proceeding
with such arbitration.”) (emphasis added); Neal v. Asta Funding, Inc., 2014 WL
131770, at *3 (D.N.J. Jan. 6, 2014) (“When the parties and issues significantly
overlap between a court proceeding and an arbitration, a court may stay the entire
court action. That is true even where the overlap is not complete, for example,
even if some of the parties or issues are not subject to arbitration.”). Here, there is
a complete overlap between the issues that remain in Court and the issues that
would be arbitrated by the other Plaintiffs. Accordingly, a stay pending the results
of the individual arbitrations is appropriate.

18

Case 2:13-cv-04989-WJM-MF Document 95-1 Filed 08/07/15 Page 23 of 23 PageID: 791

CONCLUSION
For the reasons set forth herein, above, GTL respectfully requests this court
grant this motion to compel arbitration and stay this matter pending the completion
of the individual arbitrations.
Respectfully submitted,
/s/ Philip R. Sellinger
Philip R. Sellinger
Aaron Van Nostrand
GREENBERG TRAURIG, LLP
200 Park Avenue
Florham Park, New Jersey 07932
Telephone: (973) 360-7900
Facsimile: (973) 301-8410
Attorneys for Defendants
Global Tel*Link Corporation and
DSI-ITI LLC
Dated: August 7, 2015

19

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 1 of 18 PageID: 792

GREENBERG TRAURIG, LLP
200 Park Avenue
Florham Park, New Jersey 07932
Philip R. Sellinger
Aaron Van Nostrand
Ph: (973) 360-7900
Attorneys for Defendants
Global Tel*Link Corporation
and DSI-ITI LLC
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
13 Civ. 4989 (WJM) (MF)

BOBBIE JAMES, et al.,
Plaintiffs,
vs.
GLOBAL TEL*LINK CORPORATION,
INMATE TELEPHONE SERVICE and DSI-ITI
LLC,
Defendants.

DECLARATION OF JOHN W. BAKER, II
I, John W. Baker, II, pursuant to 28 U.S.C. § 1746, make the following declaration:
1.

I am Global Tel*Link Corporation’s ("GTL") Senior Vice President-Payment

Services and Consumer Channels. In that capacity, I have become familiar with GTL’s
automated telephonic systems and the general process and procedure for setting up an account to
access GTL’s Inmate Calling Services ("ICS"). I am also familiar with GTL's records relating to
the Plaintiffs in this matter, which were provided to me by another GTL employee.
2.

In the process of setting up an account, whether online or telephonically through

our interactive voice response ("IVR") system, all users are informed of, and required to agree to,
GTL's Terms of Use ("TOU"). If a customer signs up for account access on GTL' s website, they

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 2 of 18 PageID: 793

indicate their assent to the TOU by clicking a button that says "Accept." Since approximately
July 2, 2013, a customer who signed up through GTL’s IVR system was notified, before
completing the transaction, that:
Please note that your account, and any transactions you complete, with GTL,
PCS, DSI-ITI, or VAC 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.
3.

Customers who open their accounts using GTL’s IVR system are not required to

provide any personal identifying information. Rather, those customers need only enter their
telephone number and payment information.
4.

As of July 2, 2013, GTL’s Terms of Use included the following provisions:

Acceptance of these Terms of Use by Users of the Site. By using the Service,
or clicking the “accept” button when you register to use the Service through the
Site or when you are otherwise prompted to do so, you agree to be bound by the
terms of these Terms of Use.
Acceptance of these Terms of Use by Other Users of the Service. If you create
an account to use the Service other than through the Site, and if you do not agree
with or consent to the terms of these Terms of Use, you will have thirty (30) days
from the date you create the account with us to cancel the account. If you decide
that you want to cancel the account within this thirty (30) day period, please
contact us using the information provided in Section Z below. If you cancel the
account we will provide you with a refund of any fees you have paid and not used
in connection with the Service
Arbitration. The parties shall use their best efforts to settle any dispute, claim,
question, or disagreement directly through consultation and good faith
negotiations which shall be a precondition to either party initiating a lawsuit or
arbitration. All claims arising out of or relating to these Terms of Use (including
its formation, performance and breach) and the Service shall be finally settled by
binding arbitration, excluding any rules or procedures governing or permitting
class actions. The arbitrator, and not any federal, state or local court or agency,
shall have exclusive authority to resolve all disputes arising out of or relating to
the interpretation, applicability, enforceability or formation of these Terms of
Use, including, but not limited to any claim that all or any part of these Terms of
Use is void or voidable. The arbitrator shall be empowered to grant whatever
relief would be available in a court under law or in equity. The arbitrator’s award
shall be binding on the parties and may be entered as a judgment in any court of

-2-

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 3 of 18 PageID: 794

competent jurisdiction. To the extent the filing fee for the arbitration exceeds the
cost of filing a lawsuit, we will pay the additional cost.
The parties understand that, absent this mandatory provision, they would
have the right to sue in court and have a jury trial. They further understand
that, in some instances, the costs of arbitration could exceed the costs of
litigation and the right to discovery may be more limited in arbitration than
in court.
Class Action Waiver. The parties further agree that any arbitration shall be
conducted in their individual capacities only and not as a class action or other
representative action, and the parties expressly waive their right to file a class
action or seek relief on a class basis. If any court or arbitrator determines that the
class action waiver set forth in this paragraph is void or unenforceable for any
reason or that an arbitration can proceed on a class basis, then the arbitration
provision set forth above shall be deemed null and void in its entirety and the
parties shall be deemed to have not agreed to arbitrate disputes.
Exception - Litigation of Small Claims Court Claims. Notwithstanding the
parties' decision to resolve all disputes through arbitration, either party may also
seek relief in a small claims court for disputes or claims within the scope of that
court’s jurisdiction.
Thirty Day Right to Opt Out. You have the right to opt-out and not be bound
by the arbitration and class action waiver provisions set forth this Section by
sending written notice of your decision to opt-out to the following address: c/o
Global Tel*Link Corporation, 12021 Sunset Hills Road, Reston, Virginia 20190,
Attn: Legal Department. The notice must be sent within thirty (30) days of the
date you have agreed to Terms of Use; otherwise you shall be bound to arbitrate
disputes in accordance with the terms set forth above. If you elect to opt-out of
these arbitration provisions, we also will not be bound by them. In addition, if you
elect to opt-out of these arbitration provisions, we may terminate your use of the
Service. If we terminate your use of the Service, we will provide you with a
refund of any fees you have paid and have not been used in connection with the
Service.
A complete copy of the version of the TOU in effect as of July 2, 2013, is attached as Exhibit A.
The TOU was available on GTL's website and accessible to all Users as of July 2, 2013.
5.

The version of the TOU in effect immediately prior to July 2, 2013, stated as

follows with respect to amendments to the TOU:
Amendments. These Terms of Use may be amended by the Company from time
to time. We will post any material changes to these Terms of Use on the Site
with a notice advising of the changes. You may cancel your account within

-3-

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 4 of 18 PageID: 795

fifteen (15) days following the date the amended Terms of Use are posted by
contacting us using the contact information in Section Y below. If you choose to
cancel your account within this fifteen (15) day period, you will not be bound by
the terms of the revised Terms of Use but will remain bound by terms of these
Terms of Use, and, we will provide you with a refund of any fees that you have
paid and that have not been used in connection with the Service.
A complete copy of the version of the TOU in effect immediately prior to July 2, 2013, is
attached as Exhibit B.
6.

GTL posted a notice on the front page of its website regarding the amendment of

its TOU on or about July 2, 2013:
ATTENTION Existing ConnectNetwork ACCOUNT HOLDERS. As of July
2, 2013 the Terms of Use and Privacy Statement (now entitled Your Privacy
Rights) that apply to this site and associated products and services were updated.
Please review both documents carefully and let us know of any questions using
the contact information listed in the documents. By using this site or the
associated products or services, you acknowledge and agree to the terms
contained in both documents. You may access the documents through links
appearing at the top of this site.
A copy of the front page of GTL’s website is attached as Exhibit C.
7.

The mobile version of GTL's website first became available in December 2014.

Before that time, if a person visited the website from a mobile device, she or he would see the
desktop version of the site. Once the mobile version became available, the TOU could be
accessed from a mobile device in at least two ways. If a customer accesses the mobile site at
https://m.connectnetwork.com/ and does not yet have an online account, the customer must click
"Create an Account." The user is then directed to a page to enter certain contact information, and
is then presented with a page with a link to the TOU and a box that must be checked to agree to
the TOU. In addition, the menu bar for the mobile site has an option to "View Full Web Site,"
where the TOU is available.

-4-

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 5 of 18 PageID: 796

8.

Plaintiff Crystal Gibson opened an Advance Pay Account through GTL’s website

on July 6, 2014. Gibson also opened an account on June 13, 2014, through GTL’s IVR system
and closed the account the same day.
9.

Plaintiffs Bobbie James (February 29, 2012), Barbara Skladany (March 2, 2013)

and Milan Skladany (July 29, 2011) opened their accounts prior to July 2, 2013. They all
continued using their accounts after July 2, 2013.

Specifically, Plaintiff Milan Skladany

deposited funds in his account using GTL’s IVR system nine times since July 2, 2013. Plaintiff
Barbara Skladany deposited funds in her account using GTL’s IVR system fifteen times since
July 2, 2013. Plaintiff James deposited funds in her account using GTL’s IVR system 38 times
since July 2, 2013. Each time these Plaintiffs deposited funds in their respective accounts, they
would have heard the notice referenced in Paragraph 2. Plaintiff James also opened up a new
account on August 1, 2013, for a different phone number, and, during that process, affirmatively
accepted GTL’s Terms of Use. Plaintiff Barbara Skladany also opened an account on November
16, 2006, and closed the account on August 19, 2013.
10.

Plaintiff Betty King had two accounts with GTL. The first account was opened

on October 18, 2006 and was closed on July 9, 2013. The second account was opened on
November 15, 2014, via GTL’s IVR system, and Plaintiff King deposited money into that
account three times using GTL’s IVR system. During this sign-up process, King affirmatively
accepted GTL’s Terms of Use, including the arbitration provision.
11.

Plaintiffs Crystal Gibson, Bobbie James, Barbara Skladany, Milan Skladany and

Bettie King did not opt-out of the arbitration or class waiver provisions of the TOU.

-5-

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 6 of 18 PageID: 797

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 7 of 18 PageID: 798

EXHIBIT A

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 8 of 18 PageID: 799

Terms of Use

Effective Date: July 2, 2013

DSI-ITI, LLC, a wholly-owned subsidiary of Global Tel*Link Corporation, is the provider of the Offender Connect
service and the operator of the website located at the url www.offenderconnect.com (the "Site"). These Terms of Use
apply when you access, visit or use the Site or use any of the products or services that DSI-ITI, LLC, or its affiliates,
Global Tel*Link Corporation, Public Communications Services, Inc., and Value-Added Communications, Inc.
(individually “Affiliate” and collectively “Affiliates”) provide, including My Phone Account, Offender Trust Fund, Send
An Email and Offender Phone Account (the Site and these products and services will be referred to in these Terms of
Use as the “Service”). For purposes of these Terms of Use, “Company”, “we”, “us”, or “our”, means DSI-ITI, LLC, and
any Affiliate where the Affiliate or its products or services are implicated.
A.
Acceptance of these Terms of Use by Users of the Site. By using the Service, or clicking the “accept”
button when you register to use the Service through the Site or when you are otherwise prompted to do so, you agree
to be bound by the terms of these Terms of Use.
B.
Acceptance of these Terms of Use by Other Users of the Service. If you create an account to use the
Service other than through the Site, and if you do not agree with or consent to the terms of these Terms of Use, you
will have thirty (30) days from the date you create the account with us to cancel the account. If you decide that you
want to cancel the account within this thirty (30) day period, please contact us using the information provided in
Section Z below. If you cancel the account we will provide you with a refund of any fees you have paid and not used
in connection with the Service.
C.
Eligibility. The Service is intended for individuals who are at least eighteen (18) years old. If you are not at
least eighteen (18) years old, please do not access, visit or use the Service.
D.
Your Privacy Rights. In connection with your use of the Service, please review the Your Privacy Rights
statement (“Privacy Statement”) in order to understand how we use information we collect from you when you
access, visit or use the Service. The Privacy Statement is part of and is governed by these Terms of Use and by
accepting the Terms of Use, you agree to be bound by the terms of the Privacy Statement, and agree that we may
use information collected from you in accordance with the Privacy Statement.
E.
Registration. As a condition of using certain features of the Service, you may be required to register
through the Site and select a password and user I.D. You may not: (1) select or use as a user I.D. a name of another
person with the intent to impersonate that person; (2) use as a user I.D. a name subject to any rights of a person
other than you without appropriate authorization; or (3) use as a user I.D. a name that is otherwise offensive, vulgar
or obscene. We reserve the right to refuse registration of, or to cancel a user I.D., in our sole discretion. You shall be
responsible for maintaining the confidentiality of your user I.D. and password.
F.
Prohibited Activities. You may not access or use the Service for any purpose other than the purpose for
which we make it available to you. We may prohibit certain activities in connection with the Service in our discretion.
These prohibited activities include, without limitation, the following:
x
x
x
x
x
x
x

Criminal or tortious activity, including child pornography, fraud, trafficking in obscene material, drug dealing,
gambling, harassment, stalking, spamming, copyright infringement, patent infringement, or theft of trade
secrets.
Advertising to, or solicitation of, any user to buy or sell any products or services.
Transmitting chain letters or junk email to other users.
Using any information obtained from the Service in order to contact, advertise to, solicit or sell any products
or services to any user without their prior explicit consent.
Engaging in any automated use of the Service, such as using scripts to send comments or messages.
Interfering with, disrupting or creating an undue burden on the Service or the networks or services
connected to the Service.
Attempting to impersonate another user or person.

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 9 of 18 PageID: 800

x
x
x
x

Using the user I.D. or account of another user.
Using any information obtained from the Service in order to harass, abuse or harm another person.
Accepting payment of anything of value from a third person in exchange for your performance of any
commercial activity on or through the Service on behalf of that person.
Using the Service in a manner inconsistent with any and all applicable laws and regulations.

G.
Management of the Service. You acknowledge that we reserve the right, but have no obligation, to (1)
take appropriate legal action against anyone who, in our sole determination, violates these Terms of Use, including,
without limitation, reporting you to law enforcement authorities, (2) in our sole discretion and without limitation, refuse,
restrict access to or availability of, or disable all or a portion of the Service, and (3) otherwise manage the Service in a
manner designed to protect the rights and property of the Company and users of the Service and to facilitate the
proper functioning of the Service.
H.
Monitoring of Calls Made and Email Sent through the Service. You acknowledge and agree that we
may, and the correctional facility where an offender is incarcerated may, monitor or record calls made using the
Service, and read emails sent using the Service, for law enforcement purposes in accordance with the policies in
place at the correctional facility where an offender is incarcerated. By accepting these Terms of Use you authorize
us, and the applicable correctional facility, to monitor and record calls you make through the Service and to read
emails you send through the Service in accordance with the policies in place at the applicable correctional facility.
I.
Use of the Service. The Service and its contents and the trademarks, service marks and logos contained
on the Service, are the intellectual property of the Company or its licensors and constitute copyrights and other
intellectual property rights of the Company or its licensors under U.S. and foreign laws and international conventions.
The Service and its contents are provided for your informational, personal, non-commercial use only and may not be
used, copied, reproduced, distributed, transmitted, broadcast, displayed, sold, licensed, or otherwise exploited for any
other purpose whatsoever without the express written consent of the Company. You agree not to engage in the use,
copying or distribution of the Service or of any of its contents for any commercial purpose. You agree not to
circumvent, disable or otherwise interfere with security related features of the Service. We may, but are not obligated
to, periodically provide updates to the Service to resolve bugs or add features and functionality. You do not acquire
any ownership rights to the Service or to any contents contained on the Service. All rights not expressly granted in
these Terms of Use are reserved by the Company. You are solely responsible for your interactions with other users of
the Service.
J.
Termination of Your Use of the Service. We may suspend or terminate your use of the Service if you
violate these Terms of Use or in our discretion. We may also impose limits on or restrict your access to parts or all of
the Service without notice or liability.
K.
Charges for the Service. Fees will apply to your use of certain features of the Service, including any calls
that are made through the Service. The fees and charges may vary based on, among other things, the correctional
facility where an offender is incarcerated. We reserve the right to change the fees charged periodically, in our
discretion.
L.
Submissions. If you submit opinions, suggestions, feedback, images, documents, and/or proposals to us
through the Service, or through any other communication with us, you acknowledge and agree that: (1) the
submissions you provide will not contain confidential or proprietary information; (2) we are not under any obligation of
confidentiality, express or implied, with respect to the submissions you provide; (3) we shall be entitled to use or
disclose (or choose not to use or disclose) the submissions you provide for any purpose, in any way, in any media
worldwide; (4) the submissions you provide will automatically become the property of the Company without any
obligation of the Company to you; and (5) you are not entitled to any compensation or reimbursement of any kind
from the Company in connection with your submissions under any circumstances.
M.
Links to Other Websites. The Service may contain links to third-party websites, resources or data. You
acknowledge and agree that the Company is not responsible or liable for: (1) the availability or accuracy of these
third-party websites, resources or data; or (2) the content, products, or services on or available from these websites,
resources or data. You also acknowledge that you are solely responsible for, and assume all risk arising from, the
use of any these websites, resources and data. Links to third party websites on the Service are not intended as
endorsements or referrals by the Company of any products, services or information contained on the applicable
websites. These Terms of Use do not apply to third party websites, including the content of and your activity on those
websites. You should review third-party websites’ terms of service, privacy policies and all other website documents,
and inform yourself of the regulations, policies and practices of third-party websites.

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 10 of 18 PageID: 801

N.
Disclaimer of Warranties. THE INFORMATION CONTAINED IN AND PROVIDED THROUGH THE
SERVICE, INCLUDING TEXT, GRAPHICS, LINKS, OR OTHER ITEMS, IS PROVIDED "AS IS". NEITHER THE
COMPANY NOR ITS SUPPLIERS WARRANT THE ACCURACY, ADEQUACY, COMPLETENESS OR TIMELINESS
OF THE INFORMATION, MATERIALS, PRODUCTS, AND SERVICES ACCESSED ON OR THROUGH THE
SERVICE AND THE COMPANY EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE
INFORMATION OR MATERIALS ACCESSED ON OR THROUGH THE SERVICE. NO WARRANTY OF ANY KIND,
WHETHER IMPLIED OR EXPRESSED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF NONINFRINGEMENT, TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND FREEDOM FROM
COMPUTER VIRUS, IS GIVEN IN CONJUNCTION WITH ANY INFORMATION, MATERIALS, OR SERVICES
PROVIDED THROUGH THE SERVICE.
O.
Limitation of Liability. IN NO EVENT SHALL THE COMPANY OR ITS THIRD PARTY SUPPLIERS BE
LIABLE FOR ANY DAMAGES, LOSSES OR LIABILITIES INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES, LOSSES OR
EXPENSES, INCLUDING ANY LOST PROFITS, LOST DATA, OR LOST SAVINGS, WHETHER BASED ON
BREACH OF CONTRACT, BREACH OF WARRANTY, TORT OR ANY OTHER LEGAL THEORY, ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THE USE OF THE SERVICE OR RELIANCE ON OR USE OR INABILITY TO
USE THE INFORMATION, MATERIALS OR SERVICES PROVIDED THROUGH THE SERVICE, OR IN
CONNECTION WITH ANY FAILURE OF PERFORMANCE, ERROR, OMISSION, INTERRUPTION, DEFECT,
DELAY IN OPERATION OR TRANSMISSION, COMPUTER VIRUS OR LINE OR SYSTEM FAILURE, EVEN IF THE
COMPANY OR ITS THIRD PARTY SUPPLIERS ARE ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
LOSSES OR EXPENSES.
P.
Unauthorized Transactions. In the event that you use a credit card to pay for any products or services
offered through the Site, you are representing to the Company that you are authorized to use that credit card.
Q.
Indemnification. You agree to defend, indemnify and hold the Company harmless from and against any
and all claims, damages, and costs including attorneys’ fees, arising from or related to your use of the Service.
R.

Dispute Resolution.
1.
Arbitration. The parties shall use their best efforts to settle any dispute, claim, question, or
disagreement directly through consultation and good faith negotiations which shall be a precondition to
either party initiating a lawsuit or arbitration. All claims arising out of or relating to these Terms of Use
(including its formation, performance and breach) and the Service shall be finally settled by binding
arbitration, excluding any rules or procedures governing or permitting class actions. The arbitrator, and not
any federal, state or local court or agency, shall have exclusive authority to resolve all disputes arising out of
or relating to the interpretation, applicability, enforceability or formation of these Terms of Use, including, but
not limited to any claim that all or any part of these Terms of Use is void or voidable. The arbitrator shall be
empowered to grant whatever relief would be available in a court under law or in equity. The arbitrator’s
award shall be binding on the parties and may be entered as a judgment in any court of competent
jurisdiction. To the extent the filing fee for the arbitration exceeds the cost of filing a lawsuit, we will pay the
additional cost.
The parties understand that, absent this mandatory provision, they would have the right to sue in
court and have a jury trial. They further understand that, in some instances, the costs of arbitration
could exceed the costs of litigation and the right to discovery may be more limited in arbitration than
in court.
2.
Class Action Waiver. The parties further agree that any arbitration shall be conducted in their
individual capacities only and not as a class action or other representative action, and the parties expressly
waive their right to file a class action or seek relief on a class basis. If any court or arbitrator determines that
the class action waiver set forth in this paragraph is void or unenforceable for any reason or that an
arbitration can proceed on a class basis, then the arbitration provision set forth above shall be deemed null
and void in its entirety and the parties shall be deemed to have not agreed to arbitrate disputes.

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 11 of 18 PageID: 802

3.
Exception - Litigation of Small Claims Court Claims. Notwithstanding the parties' decision to
resolve all disputes through arbitration, either party may also seek relief in a small claims court for disputes
or claims within the scope of that court’s jurisdiction.
4.
Thirty Day Right to Opt Out. You have the right to opt-out and not be bound by the arbitration
and class action waiver provisions set forth this Section by sending written notice of your decision to opt-out
to the following address: c/o Global Tel*Link Corporation, 12021 Sunset Hills Road, Reston, Virginia 20190,
Attn: Legal Department. The notice must be sent within thirty (30) days of the date you have agreed to
Terms of Use; otherwise you shall be bound to arbitrate disputes in accordance with the terms set forth
above. If you elect to opt-out of these arbitration provisions, we also will not be bound by them. In addition,
if you elect to opt-out of these arbitration provisions, we may terminate your use of the Service. If we
terminate your use of the Service, we will provide you with a refund of any fees you have paid and have not
been used in connection with the Service.
S.
Amendments. These Terms of Use may be amended by the Company from time to time. We will post any
material changes to these Terms of Use on the Site with a notice advising of the changes. You may cancel your
account within thirty (30) days following the date the amended Terms of Use are posted by contacting us using the
contact information in Section Z below. If you choose to cancel your account within this thirty (30) day period, you will
not be bound by the terms of the revised Terms of Use but will remain bound by terms of these Terms of Use, and,
we will provide you with a refund of any fees that you have paid and that have not been used in connection with the
Service.
T.
No Oral Modifications. Employees of the Company are not authorized to modify these Terms of Use,
either verbally or in writing. If any employee of the Company offers to modify these Terms of Use, he or she is not
acting as an agent for the Company or speaking on our behalf. You may not rely, and should not act in reliance on,
any statement or communication from an employee of the Company or anyone else purporting to act on our behalf.
U.
No Third Party Beneficiaries. These Terms of Use are between you and the Company. There are no third
party beneficiaries.
V.
Independent Contractors. No agency, partnership, joint venture, or employment is created as a result of
these Terms of Use and you do not have any authority of any kind to bind the Company in any respect whatsoever.
W.
Non-Waiver. The failure of either party to exercise in any respect any right provided for herein shall not be
deemed a waiver of any further rights hereunder.
X.
Force Majeure. The Company shall not be liable for any failure to perform its obligations hereunder where
the failure results from any cause beyond the Company’s reasonable control, including, without limitation, any
mechanical, electronic or communications failure or degradation.
Y.
Severability. If any provision of these Terms of Use is found to be unenforceable or invalid, that provision
shall be limited or eliminated to the minimum extent necessary so that these Terms of Use shall otherwise remain in
full force and effect and enforceable.
Z.
Contact Us. If you have any questions about these Terms of Use, you may contact us by email at
termsofuse@offenderconnect.com or by postal mail at c/o Global Tel*Link Corporation, 12021 Sunset Hills Road,
Suite 100, Reston, Virginia 20190, Attn: Legal Department.
AA.
Assignment. These Terms of Use are not assignable, transferable or sublicensable by you except with our
prior written consent. We may transfer, assign or delegate these Terms of Use and our related rights and obligations
without obtaining your consent.

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 12 of 18 PageID: 803

EXHIBIT B

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 13 of 18 PageID: 804

Terms of Use

DSI-ITI, LLC, a wholly-owned subsidiary of Global Tel*Link Corporation, is the provider of the Offender Connect
service and the operator of the website located at the url www.offenderconnect.com (the "Site"). These Terms of Use
apply when you access, visit or use the Site or use any of the products or services that DSI-ITI, LLC, or its affiliates,
Global Tel*Link Corporation, Public Communications Services, Inc., and Value-Added Communications, Inc.
(individually “Affiliate” and collectively “Affiliates”) provide, including My Phone Account, Offender Trust Fund, Send
An Email and Offender Phone Account (the Site and these products and services will be referred to in these Terms of
Use as the “Service”). For purposes of these Terms of Use, “Company”, “we”, “us”, or “our”, means DSI-ITI, LLC, and
any Affiliate where the Affiliate or its products or services are implicated.
A.
Acceptance of these Terms of Use by Users of the Site. By using the Service, or clicking the “accept”
button when you register to use the Service through the Site or when you are otherwise prompted to do so, you agree
to be bound by the terms of these Terms of Use.
B.
Eligibility. The Service is intended for individuals who are at least eighteen (18) years old. If you are not at
least eighteen (18) years old, please do not access, visit or use the Service.
C.
Your Privacy Rights. In connection with your use of the Service, please review the Your Privacy Rights
statement (“Privacy Statement”)[INTERNAL NOTE -- PLEASE HYPERLINK THE WORDS YOUR PRIVACY
RIGHTS SO IT DIRECTS THE USER TO THE PRIVACY POLICY – ALSO PLEASE DELETE THIS INTERNAL
NOTE] in order to understand how we use information we collect from you when you access, visit or use the Service.
The Privacy Statement is part of and is governed by these Terms of Use and by accepting the Terms of Use, you
agree to be bound by the terms of the Privacy Statement, and agree that we may use information collected from you
in accordance with the Privacy Statement.
D.
Registration. As a condition of using certain features of the Service, you may be required to register
through the Site and select a password and user I.D. You may not: (1) select or use as a user I.D. a name of another
person with the intent to impersonate that person; (2) use as a user I.D. a name subject to any rights of a person
other than you without appropriate authorization; or (3) use as a user I.D. a name that is otherwise offensive, vulgar
or obscene. We reserve the right to refuse registration of, or to cancel a user I.D., in our sole discretion. You shall be
responsible for maintaining the confidentiality of your user I.D. and password.
E.
Prohibited Activities. You may not access or use the Service for any purpose other than the purpose for
which we make it available to you. We may prohibit certain activities in connection with the Service in our discretion.
These prohibited activities include, without limitation, the following:












Criminal or tortious activity, including child pornography, fraud, trafficking in obscene material, drug dealing,
gambling, harassment, stalking, spamming, copyright infringement, patent infringement, or theft of trade
secrets.
Advertising to, or solicitation of, any user to buy or sell any products or services.
Transmitting chain letters or junk email to other users.
Using any information obtained from the Service in order to contact, advertise to, solicit or sell any products
or services to any user without their prior explicit consent.
Engaging in any automated use of the Service, such as using scripts to send comments or messages.
Interfering with, disrupting or creating an undue burden on the Service or the networks or services
connected to the Service.
Attempting to impersonate another user or person.
Using the user I.D. or account of another user.
Using any information obtained from the Service in order to harass, abuse or harm another person.
Accepting payment of anything of value from a third person in exchange for your performance of any
commercial activity on or through the Service on behalf of that person.
Using the Service in a manner inconsistent with any and all applicable laws and regulations.

F.
Management of the Service. You acknowledge that we reserve the right, but have no obligation, to (1)
take appropriate legal action against anyone who, in our sole determination, violates these Terms of Use, including,
without limitation, reporting you to law enforcement authorities, (2) in our sole discretion and without limitation, refuse,
restrict access to or availability of, or disable all or a portion of the Service, and (3) otherwise manage the Service in a

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 14 of 18 PageID: 805

manner designed to protect the rights and property of the Company and users of the Service and to facilitate the
proper functioning of the Service.
G.
Monitoring of Calls Made and Email Sent through the Service. You acknowledge and agree that we
may, and the correctional facility where an offender is incarcerated may, monitor or record calls made using the
Service, and read emails sent using the Service, for law enforcement purposes in accordance with the policies in
place at the correctional facility where an offender is incarcerated. By accepting these Terms of Use you authorize
us, and the applicable correctional facility, to monitor and record calls you make through the Service and to read
emails you send through the Service in accordance with the policies in place at the applicable correctional facility.
H.
Use of the Service. The Service and its contents and the trademarks, service marks and logos contained
on the Service, are the intellectual property of the Company or its licensors and constitute copyrights and other
intellectual property rights of the Company or its licensors under U.S. and foreign laws and international conventions.
The Service and its contents are provided for your informational, personal, non-commercial use only and may not be
used, copied, reproduced, distributed, transmitted, broadcast, displayed, sold, licensed, or otherwise exploited for any
other purpose whatsoever without the express written consent of the Company. You agree not to engage in the use,
copying or distribution of the Service or of any of its contents for any commercial purpose. You agree not to
circumvent, disable or otherwise interfere with security related features of the Service. We may, but are not obligated
to, periodically provide updates to the Service to resolve bugs or add features and functionality. You do not acquire
any ownership rights to the Service or to any contents contained on the Service. All rights not expressly granted in
these Terms of Use are reserved by the Company. You are solely responsible for your interactions with other users of
the Service.
I.
Termination of Your Use of the Service. We may suspend or terminate your use of the Service if you
violate these Terms of Use or in our discretion. We may also impose limits on or restrict your access to parts or all of
the Service without notice or liability.
J.
Charges for the Service. Fees will apply to your use of certain features of the Service, including any calls
that are made through the Service. The fees and charges may vary based on, among other things, the correctional
facility where an offender is incarcerated. We reserve the right to change the fees charged periodically, in our
discretion.
K.
Submissions. If you submit opinions, suggestions, feedback, images, documents, and/or proposals to us
through the Service, or through any other communication with us, you acknowledge and agree that: (1) the
submissions you provide will not contain confidential or proprietary information; (2) we are not under any obligation of
confidentiality, express or implied, with respect to the submissions you provide; (3) we shall be entitled to use or
disclose (or choose not to use or disclose) the submissions you provide for any purpose, in any way, in any media
worldwide; (4) the submissions you provide will automatically become the property of the Company without any
obligation of the Company to you; and (5) you are not entitled to any compensation or reimbursement of any kind
from the Company in connection with your submissions under any circumstances.
L.
Links to Other Websites. The Service may contain links to third-party websites, resources or data. You
acknowledge and agree that the Company is not responsible or liable for: (1) the availability or accuracy of these
third-party websites, resources or data; or (2) the content, products, or services on or available from these websites,
resources or data. You also acknowledge that you are solely responsible for, and assume all risk arising from, the
use of any these websites, resources and data. Links to third party websites on the Service are not intended as
endorsements or referrals by the Company of any products, services or information contained on the applicable
websites. These Terms of Use do not apply to third party websites, including the content of and your activity on those
websites. You should review third-party websites’ terms of service, privacy policies and all other website documents,
and inform yourself of the regulations, policies and practices of third-party websites.
M.
Disclaimer of Warranties. THE INFORMATION CONTAINED IN AND PROVIDED THROUGH THE
SERVICE, INCLUDING TEXT, GRAPHICS, LINKS, OR OTHER ITEMS, IS PROVIDED "AS IS". NEITHER THE
COMPANY NOR ITS SUPPLIERS WARRANT THE ACCURACY, ADEQUACY, COMPLETENESS OR TIMELINESS
OF THE INFORMATION, MATERIALS, PRODUCTS, AND SERVICES ACCESSED ON OR THROUGH THE
SERVICE AND THE COMPANY EXPRESSLY DISCLAIMS LIABILITY FOR ERRORS OR OMISSIONS IN THE
INFORMATION OR MATERIALS ACCESSED ON OR THROUGH THE SERVICE. NO WARRANTY OF ANY KIND,
WHETHER IMPLIED OR EXPRESSED, INCLUDING BUT NOT LIMITED TO THE WARRANTIES OF NONINFRINGEMENT, TITLE, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND FREEDOM FROM
COMPUTER VIRUS, IS GIVEN IN CONJUNCTION WITH ANY INFORMATION, MATERIALS, OR SERVICES

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 15 of 18 PageID: 806

PROVIDED THROUGH THE SERVICE.
N.
Limitation of Liability. IN NO EVENT SHALL THE COMPANY OR ITS THIRD PARTY SUPPLIERS BE
LIABLE FOR ANY DAMAGES, LOSSES OR LIABILITIES INCLUDING, WITHOUT LIMITATION, DIRECT OR
INDIRECT, PUNITIVE, INCIDENTAL, SPECIAL, CONSEQUENTIAL OR OTHER DAMAGES, LOSSES OR
EXPENSES, INCLUDING ANY LOST PROFITS, LOST DATA, OR LOST SAVINGS, WHETHER BASED ON
BREACH OF CONTRACT, BREACH OF WARRANTY, TORT OR ANY OTHER LEGAL THEORY, ARISING OUT OF
OR IN ANY WAY CONNECTED WITH THE USE OF THE SERVICE OR RELIANCE ON OR USE OR INABILITY TO
USE THE INFORMATION, MATERIALS OR SERVICES PROVIDED THROUGH THE SERVICE, OR IN
CONNECTION WITH ANY FAILURE OF PERFORMANCE, ERROR, OMISSION, INTERRUPTION, DEFECT,
DELAY IN OPERATION OR TRANSMISSION, COMPUTER VIRUS OR LINE OR SYSTEM FAILURE, EVEN IF THE
COMPANY OR ITS THIRD PARTY SUPPLIERS ARE ADVISED OF THE POSSIBILITY OF SUCH DAMAGES,
LOSSES OR EXPENSES.
O.
Unauthorized Transactions. In the event that you use a credit card to pay for any products or services
offered through the Site, you are representing to the Company that you are authorized to use that credit card.
P.
Indemnification. You agree to defend, indemnify and hold the Company harmless from and against any
and all claims, damages, and costs including attorneys’ fees, arising from or related to your use of the Service.
Q.

Dispute Resolution.
1.
Arbitration. The parties shall use their best efforts to settle any dispute, claim, question, or
disagreement directly through consultation and good faith negotiations which shall be a precondition to
either party initiating a lawsuit or arbitration. All claims arising out of or relating to these Terms of Use
(including its formation, performance and breach) and the Service shall be finally settled by binding
arbitration, excluding any rules or procedures governing or permitting class actions. The arbitrator, and not
any federal, state or local court or agency, shall have exclusive authority to resolve all disputes arising out of
or relating to the interpretation, applicability, enforceability or formation of these Terms of Use, including, but
not limited to any claim that all or any part of these Terms of Use is void or voidable. The arbitrator shall be
empowered to grant whatever relief would be available in a court under law or in equity. The arbitrator’s
award shall be binding on the parties and may be entered as a judgment in any court of competent
jurisdiction. To the extent the filing fee for the arbitration exceeds the cost of filing a lawsuit, we will pay the
additional cost.
The parties understand that, absent this mandatory provision, they would have the right to sue in
court and have a jury trial. They further understand that, in some instances, the costs of arbitration
could exceed the costs of litigation and the right to discovery may be more limited in arbitration than
in court.
2.
Class Action Waiver. The parties further agree that any arbitration shall be conducted in their
individual capacities only and not as a class action or other representative action, and the parties expressly
waive their right to file a class action or seek relief on a class basis. If any court or arbitrator determines that
the class action waiver set forth in this paragraph is void or unenforceable for any reason or that an
arbitration can proceed on a class basis, then the arbitration provision set forth above shall be deemed null
and void in its entirety and the parties shall be deemed to have not agreed to arbitrate disputes.
3.
Exception - Litigation of Small Claims Court Claims. Notwithstanding the parties' decision to
resolve all disputes through arbitration, either party may also seek relief in a small claims court for disputes
or claims within the scope of that court’s jurisdiction.
4.
Thirty Day Right to Opt Out. You have the right to opt-out and not be bound by the arbitration
and class action waiver provisions set forth this Section by sending written notice of your decision to opt-out
to the following address: c/o Global Tel*Link Corporation, 12021 Sunset Hills Road, Reston, Virginia 20190,
Attn: Legal Department. The notice must be sent within thirty (30) days of the date you have agreed to
Terms of Use; otherwise you shall be bound to arbitrate disputes in accordance with the terms set forth

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 16 of 18 PageID: 807

above. If you elect to opt-out of these arbitration provisions, we also will not be bound by them. In addition,
if you elect to opt-out of these arbitration provisions, we may terminate your use of the Service. If we
terminate your use of the Service, we will provide you with a refund of any fees you have paid and have not
been used in connection with the Service.
R.
Amendments. These Terms of Use may be amended by the Company from time to time. We will post any
material changes to these Terms of Use on the Site with a notice advising of the changes. You may cancel your
account within fifteen (15) days following the date the amended Terms of Use are posted by contacting us using the
contact information in Section Y below. If you choose to cancel your account within this fifteen (15) day period, you
will not be bound by the terms of the revised Terms of Use but will remain bound by terms of these Terms of Use,
and, we will provide you with a refund of any fees that you have paid and that have not been used in connection with
the Service.
S.
No Oral Modifications. Employees of the Company are not authorized to modify these Terms of Use,
either verbally or in writing. If any employee of the Company offers to modify these Terms of Use, he or she is not
acting as an agent for the Company or speaking on our behalf. You may not rely, and should not act in reliance on,
any statement or communication from an employee of the Company or anyone else purporting to act on our behalf.
T.
No Third Party Beneficiaries. These Terms of Use are between you and the Company. There are no third
party beneficiaries.
U.
Independent Contractors. No agency, partnership, joint venture, or employment is created as a result of
these Terms of Use and you do not have any authority of any kind to bind the Company in any respect whatsoever.
V.
Non-Waiver. The failure of either party to exercise in any respect any right provided for herein shall not be
deemed a waiver of any further rights hereunder.
W.
Force Majeure. The Company shall not be liable for any failure to perform its obligations hereunder where
the failure results from any cause beyond the Company’s reasonable control, including, without limitation, any
mechanical, electronic or communications failure or degradation.
X.
Severability. If any provision of these Terms of Use is found to be unenforceable or invalid, that provision
shall be limited or eliminated to the minimum extent necessary so that these Terms of Use shall otherwise remain in
full force and effect and enforceable.
Y.
Contact Us. If you have any questions about these Terms of Use or your account, you may contact us by
email at termsofuse@offenderconnect.com or by postal mail at c/o Global Tel*Link Corporation, 12021 Sunset Hills
Road, Suite 100, Reston, Virginia 20190, Attn: Legal Department.
Z.
Assignment. These Terms of Use are not assignable, transferable or sublicensable by you except with our
prior written consent. We may transfer, assign or delegate these Terms of Use and our related rights and obligations
without obtaining your consent.

Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 17 of 18 PageID: 808

EXHIBIT C

ConnectNetwork Portal
Page 1 of 1
Case 2:13-cv-04989-WJM-MF Document 95-2 Filed 08/07/15 Page 18 of 18 PageID: 809
Terms Of Use

Español

Your Privacy Rights

Contact Us

Help

User ID and Password are case-sensitive.
User ID:

Password:

Forgot your User ID?
Forgot your Password?

• ATTENTION

Existing ConnectNetwork ACCOUNT
HOLDERS AND USERS. The Terms of Use and Your
Privacy Rights that apply to this site and associated products and
services were updated on MARCH 30, 2015. Please review both

• AdvancePay Low Balance
91613 to sign up. Click here for details

Text Alerts Text ADVANCE to

documents carefully and let us know of any questions. By using this site or the
associated products or services, you acknowledge and agree to the terms
contained in both documents. You may access the documents through links
appearing at the top of this site.

• ATTENTION Existing ConnectNetwork ACCOUNT HOLDERS. As of July
2, 2013 the Terms of Use and Privacy Statement (now entitled Your Privacy
Rights) that apply to this site and associated products and services were
updated. Please review both documents carefully and let us know of any
questions using the contact information listed in the documents. By using this
site or the associated products or services, you acknowledge and agree to the
terms contained in both documents. You may access the documents through
links appearing at the top of this site.

• Attention TDOC (Tennessee Department of Corrections) customers. PIN
Debit (Offender Phone Account) deposits can now be made on
ConnectNetwork.com. To make a deposit for a TDOC offender, start by
creating an ConnectNetwork account. Please note, phone account deposits
are available on ConnectNetwork.com.

Deposits to an inmate's trust account, as well as probation, community corrections, and background check payments are provided by TouchPay Holdings, LLC d/b/a GTL
Financial Services, which is also the owner and manager of this website. TouchPay Holdings, LLC d/b/a GTL Financial Services is wholly owned by GTL Corp.

https://www.connectnetwork.com/portal

8/7/2015

Case 2:13-cv-04989-WJM-MF Document 95-3 Filed 08/07/15 Page 1 of 1 PageID: 810

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
BOBBIE JAMES, et al.,

13 Civ. 4989 (WJM) (MF)
Plaintiffs,

vs.

CERTIFICATE OF SERVICE

GLOBAL TEL*LINK CORPORATION,
INMATE TELEPHONE SERVICE and
DSI-ITI LLC,
Defendants.

I hereby certify that on August 7, 2015, the foregoing documents were filed
with the Clerk of the Court and served in accordance with the Federal Rules of
Civil Procedure, and/or the New Jersey District Court’s Local Rules, and/or the
New Jersey District’s Rules on Electronic Service upon the following parties and
participants:
Lindsey H. Taylor , Esq.
Carella, Byrne, Cecchi, Olstein,
Brody & Agnello
5 Becker Farm Road
Roseland, NJ 07068

Dated: August 7, 2015

James A. Plaisted, Esq.
Walder Hayden & Brogan
5 Becker Farm Road
Roseland, NJ 07068

/s/ Philip R. Sellinger
Philip R. Sellinger
Aaron Van Nostrand
GREENBERG TRAURIG, LLP
200 Park Avenue
Florham Park, New Jersey 07932
Attorneys for Defendants
Global Tel*Link Corporation and DSI-ITI
LLC

Attachment 2

Case 2:13-cv-04989-WJM-MF Document 117 Filed 02/11/16 Page 1 of 1 PageID: 1123

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
BOBBIE JAMES, et al.,
Plaintiffs,
Civ. No. 13-4989 (WJM)

v.
GLOBAL TEL*LINK CORPORATION,
INMATE TELEPHONE SERVICE and
DSI-ITI LLC,

ORDER

Defendants.

THIS MATTER comes before the Court on the Defendants’ motion to
compel arbitration and stay this proceeding; for the reasons set forth in the
accompanying opinion; and for good cause shown;
IT IS on this 11th day of February 2016, hereby,
ORDERED that Defendants’ motion to compel arbitration is GRANTED as
to Plaintiff Crystal Gibson and that the action as to Ms. Gibson is stayed pending
conclusion of the arbitration; and it is further
ORDERED that Defendants’ motion to compel arbitration and stay this
proceeding is DENIED as to the remaining Plaintiffs.

/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.

Attachment 3

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
BOBBIE JAMES, et al.,
Plaintiffs,
v.
GLOBAL TEL*LINK CORPORATION,
INMATE TELEPHONE SERVICE and
DSI-ITI LLC,

Civ. No. 13-4989 (WJM)

OPINION

Defendants.

This matter comes before the Court on Defendants’ motion to compel
arbitration and stay this proceeding in the interim. The Plaintiffs bring this
putative class action over fees charged by the Defendants for phone calls made by
inmates from pay phones in New Jersey correctional institutions. The Court
decides this motion without oral argument. Fed. R. Civ. P. 78(b). For the reasons
set forth below, the Court GRANTS IN PART and DENIES IN PART the
Defendants’ motion.
I.

BACKGROUND

A.

Factual Background

Global Tel*Link Corporation, Inmate Telephone Service, and DSI-ITI LLC
(collectively, “the Defendants” or “GTL”) manage telecommunications services at
state and local correctional facilities in New Jersey and other states. (Complaint ¶
12, ECF No. 1.) The Defendants are all Delaware corporations, and Plaintiffs
allege that they operate as a single economic unit. (Id. ¶¶ 14-16.) The State of
New Jersey gave GTL the exclusive right to provide telecommunications services
for inmates so that they may communicate with family, friends, and other approved
persons outside the prisons. (Id.) GTL’s service can be accessed by users
telephonically through an interactive voice response (“IVR”) system—using
standardized scripts and prompts—or via GTL’s website. (Declaration of John W.
Baker (“Baker Dec’l”) ¶ 2, ECF No. 95-2.) Through either of these methods, users
can sign up for an account and deposit funds. (Id.)

Those who create an account through GTL’s website are shown a copy of
GTL’s Terms of Use (“TOU”) within their browser, and the user must click a
button labeled “Accept” in order to complete the account creation process. (Id.) In
contrast, users of the IVR system receive the following notice over the phone:
Please note that your account, and any transactions you
complete, with GTL, PCS, DSI-ITI, or VAC 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.
(Id.) GTL states that every user of the IVR service receives this notice before he or
she can proceed to the remainder of the options. (Defendants’ Brief in Support of
Motion to Compel Arbitration (“Def. Brief”) at 13.) However, unlike the website,
users of the IVR system do not have to affirmatively register assent to the TOU.
(See Baker Dec’l ¶ 2.)
The TOU contains an arbitration agreement and a corresponding class-action
waiver. (Id. ¶ 4.) Users have thirty days in which to opt-out of both of these
provisions. (Baker Dec’l, Ex. A (“TOU”) § R(4), ECF No. 95-2.) The TOU also
notes that use of the service (or clicking “Accept” when registering online)
constitutes acceptance of the terms. (Id. §§ A-B.) Similar to the opt-out
provisions, users have thirty-days in which to cancel their account if they do not
agree to the TOU’s terms. (Id.) Prior to July 2013, the TOU stated that GTL may
amend the terms and that it would “post any material changes to [the TOU] on [its]
Site with a notice advising of the changes.” (Baker Dec’l, Ex. B § R, ECF No. 952.) Should a user not agree with the updated terms, they have fifteen days within
which to cancel their account without being bound by the new TOU. (Id.) GTL
alleges that a message was posted on its website’s frontpage on or about July 2,
2013, informing users of the updated TOU. (Baker Dec’l ¶ 6.) The version of the
TOU prior to July 2013 also stated that use of the service constituted acceptance of
the terms. (Baker Dec’l, Ex. B § A.)
The plaintiffs in this action (Bobbie James, Crystal Gibson, Betty King, John
Crow, and Barbara, Mark, and Milan Skladany, collectively, the “Plaintiffs”) are
inmates or friends or family of inmates, and used GTL’s calling services in order to
communicate with their loved ones. (Complaint ¶ 39.) GTL alleges that Crystal
Gibson opened an account through GTL’s website on July 29, 2014. (Baker Dec’l
2

¶ 8.) Prior to this, Gibson also opened an account through the IVR system on June
13, 2014, but closed it the same day. (Id.) However, Gibson states that she
became a customer of GTL in approximately April 2011, but does not provide
records for such an account. (Declaration of Crystal Gibson ¶ 2, ECF No. 99-4.)
Bobbie James and Barbara and Milan Skladany opened accounts prior to July 2,
2013, but continued using their accounts after this date. (Baker Dec’l ¶ 9.) Betty
King opened her first account on October 18, 2006, and closed it on July 9, 2013.
She then opened a second account on November 15, 2014, through the IVR
system. (Id. ¶ 10.) Lastly, GTL has not provided details for accounts opened by
Dr. John Crow or Mark Skladany. Though Mr. Skladany’s declaration does not
state when he began using the service, the Complaint notes that Dr. Crow opened
an account with GTL in April 2013. (Complaint ¶ 59.)
B.

Procedural Background

The Plaintiffs filed this putative class action in August 2013 alleging
violations of the New Jersey Consumer Fraud Act (“NJCFA”), the Federal
Communications Act (“FCA”), the Takings Clause of the Fifth Amendment, and
various New Jersey public utilities statutes, as well as alleging unjust enrichment
and seeking declaratory judgment. GTL moved to dismiss or stay this case,
arguing that the Federal Communications Commission (“FCC”) has primary
jurisdiction. (Docket No. 20.) In an opinion dated September 8, 2014, the Court
stayed this proceeding until either: (a) the FCC made a determination as to whether
the challenged charges and practices violated the FCA, (b) the Plaintiffs
voluntarily dismissed the FCA cause of action, (c) the Plaintiffs failed to file an
administrative complaint with the FCC within 90 days from the filing of the D.C.
Circuit’s opinion, or (d) the parties made a showing of good cause to lift the stay.
(Docket Nos. 35, 36.) Following the Court’s opinion and order, Plaintiffs moved
to withdraw the relevant counts from their complaint that had prompted this Court
to stay the action. (Docket No. 38.) On November 26, 2014, GTL filed its answer
and then filed an amended answer on March 9, 2015. (Docket Nos. 46, 67.) In the
amended answer, GTL raised the possibility of arbitration, noting that some of the
Plaintiffs (and the putative class members) may be subject to binding arbitration.
(Defendants’ Amended Answer at 16, ECF No. 67.) On May 6, 2015, GTL sought
leave to file a motion to compel arbitration, which was granted on July 14, 2015.
(Docket No. 75.) Subsequently, GTL filed the instant motion. In the interim, after
GTL’s first answer and prior to the filing of the instant motion, the parties engaged
3

in discovery pursuant to a scheduling order entered on February 17, 2015. (Docket
No. 61.)
II.

LEGAL STANDARD

Federal law presumptively favors the enforcement of arbitration agreements.
Harris v. Green Tree Fin. Corp., 183 F.3d 173, 178 (3d Cir. 1999). “The question
of arbitrability—whether a[n] . . . agreement creates a duty for the parties to
arbitrate the particular grievance—is undeniably an issue for judicial
determination.” AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643,
649 (1986). In considering the propriety of arbitration, a court must make “a twostep inquiry into (1) whether a valid agreement to arbitrate exists and (2) whether
the particular dispute falls within the scope of that agreement.” Trippe Mfg. Co. v.
Niles Audio Corp., 401 F.3d 529, 532 (3d Cir. 2005). “When determining both the
existence and the scope of an arbitration agreement, there is a presumption in favor
of arbitrability.” Id.
The Third Circuit has held that when arbitrability is apparent on the face of
the complaint (and/or documents relied upon in the complaint) a motion to compel
arbitration should be analyzed under the Rule 12(b)(6) standard. Guidotti v. Legal
Helpers Debt Resolution, L.L.C., 716 F.3d 764, 773–74 (3d Cir. 2013). However,
if either the complaint does not facially establish arbitrability or if the non-movant
submits enough evidence to put the question of arbitrability in issue, then the
motion to compel arbitration “should be judged under the Rule 56 standard.” Id.
Under the summary judgment standard, the moving party must demonstrate that no
genuine issue of material fact exists “concerning the formation of the [arbitration
agreement].” Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51, 54 (3d
Cir. 1980). Moreover, the court must give the non-moving party the “benefit of all
reasonable doubts and inferences.” Id.
While the moving party has the burden of showing that the parties executed
an agreement to arbitrate, see Schwartz v. Comcast Corp., 256 F. App’x 515, 519
(3d Cir. 2007), if the moving party fulfills this showing, the agreement to arbitrate
is found presumptively valid and enforceable, 9 U.S.C. § 2. Then, it is the nonmoving party that bears the burden of proving that the agreement is invalid. See
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011); Quilloin v. Tenet
HealthSystem Philadelphia, Inc., 673 F.3d 221, 228-29 (3d Cir. 2012).
III.

DISCUSSION
4

A.

Agreement to Arbitrate

“Before a party to a lawsuit can be ordered to arbitrate and thus be deprived
of a day in court, there should be an express, unequivocal agreement to that effect.”
Par–Knit Mills, 636 F.2d at 54. Plaintiffs contest this fundamental requirement for
the instant motion, arguing that they never assented to the arbitration agreement
contained within GTL’s TOU.
“To determine whether the parties have agreed to arbitrate, [courts] apply
‘ordinary state-law principles that govern the formation of contracts.’” Century
Indem. Co. v. Certain Underwriters at Lloyd’s, London, subscribing to
Retrocessional Agreement Nos. 950548, 950549, 950646, 584 F.3d 513, 524 (3d
Cir. 2009). The parties have not briefed the issue of choice-of-law. A number of
the Plaintiffs in this matter are New Jersey residents and, though the Defendants
are incorporated in Delaware with principal places of business in Alabama, they
provided their telecommunications services in the State of New Jersey.
(Complaint ¶¶ 6-17.) In turn, the parties both cite to and apply New Jersey law in
their papers. Consequently, the Court concludes that New Jersey law applies to the
issue of contract formation underlying the instant motion.
i.

Motion to Strike

Before delving into the merits of GTL’s motion, the Court first tackles the
motion to strike raised by Plaintiffs in their opposition brief. Plaintiffs ask this
Court to strike legal conclusions made by John F. Baker in his declaration. GTL,
in turn, asks the Court to strike similar statements in the Plaintiffs’ declarations.
The Court denies both motions to strike. The Court will sua sponte disregard any
legal arguments and conclusions in these declarations if and as necessary to its
analysis.
Second, Plaintiffs argue that GTL’s failure to produce the Post-2013 IVR
script in a timely fashion necessitates that the Court exclude it pursuant to Rule
37(c)(1) of the Federal Rules of Civil Procedure. There are five factors to consider
when determining whether to exclude evidence for non-disclosure: “(1) the
‘prejudice or surprise’ of the party against whom the evidence is brought, (2) the
ability of that party to cure the prejudice, (3) the extent to which including the
evidence would disrupt the orderly and efficient trial of the case, (4) bad faith or
willfulness in failing to comply with the court's order, and (5) the importance of the
evidence.” Warner Chilcott Labs. Ireland Ltd. v. Impax Labs., Inc., No. 8-CV5

6304, 2012 WL 161804, at *2 (D.N.J. Jan. 19, 2012) (citing Meyers v. Pennypack
Woods Home Ownership Ass'n, 559 F.2d 894, 904–05 (3d Cir. 1977)). But, should
the evidence be considered critical, its exclusion is deemed an extreme sanction,
which should not be normally imposed “absent a showing of willful deception or
flagrant disregard of a court order by the proponent of the evidence.” Pennypack,
559 F.2d at 905.
As a preface, the Third Circuit has directed that cases should be “disposed of
on merits whenever practicable.” Hill v. Williamsport Police Dep’t., 69 F. App’x
49, 51 (3d Cir. 2003). There is certainly warrant to Plaintiffs’ argument that GTL
should have produced the entirety of the IVR script in its original motion.
However, as to Plaintiffs’ assertion that the script should have been produced
before the motion, fact discovery was still open when the instant motion was filed,
(See Docket No. 102), and the Plaintiffs have not cited to—nor has the Court been
able to find—an instance where evidence was stricken prior to the closing of
discovery. In addition, the script is critical evidence, as it is the basis on which the
Court must decide whether GTL and its users agreed to arbitrate their disputes.
See infra at 8. Excluding the scripts would, thus, hamper an orderly adjudication
of GTL’s motion by the Court. Lastly, while the record demonstrates that
discovery between the parties has been contentious to some degree, the Court fails
to find evidence that GTL acted with “bad faith or willfulness in failing to comply”
with this Court’s discovery orders. Therefore, the Court denies Plaintiffs’ motion
to strike the Post-2013 IVR scripts.
ii. Accounts Created via the Phone
Because users of GTL’s system can create and use their accounts by way of
either the IVR service or the website, there are two distinct methods through which
Plaintiffs could provide their assent to the arbitration clause within the TOU. The
Court will, thus, tackle each medium separately in order to determine whether
Plaintiffs made an “express, unequivocal agreement” to arbitrate their claims.
Plaintiffs James, King, and Barbara and Milan Skladany created their
accounts through the IVR system. 1 As a threshold matter, the parties have not

1

It appears that Gibson created a short-lived account through the IVR system. However,
Plaintiffs have not made clear whether Gibson has any claims arising from this account. Should
such claims exist, the reasoning here would apply equally to any obligation Gibson has to
arbitrate such claims.

6

pointed to and the Court is unaware of any decisions that have addressed the issue
of contract formation through an automated phone service—where users are
notified of the existence of a service’s terms and conditions over the phone and are,
subsequently, bound by them. In this case, GTL informed users—on every call—
that the service they were providing was governed by a TOU and where users
could obtain these terms—on its website. (See Baker Dec’l ¶ 2.) However, users
were not required to engage in any affirmative conduct to demonstrate acceptance
of the TOU. Based on this, Plaintiffs argue that they cannot be ordered to arbitrate,
as they did not have “full knowledge of [their] legal rights” and did not assent “to
surrender those rights.” Atalese v. U.S. Legal Servs. Grp., L.P., 219 N.J. 430, 442
(2014) cert. denied, 135 S. Ct. 2804 (2015).
As with any other contract, for an agreement to arbitrate to be “legally
enforceable” the parties must (i) “agree on essential terms and [(ii)] manifest an
intention to be bound by those terms,” i.e. the contract must be the product of
mutual assent and requires a “meeting of the minds.” Weichert Co. Realtors v.
Ryan, 128 N.J. 427, 435 (1992) (cited with approval in Elliott & Frantz, Inc. v.
Ingersoll-Rand Co., 457 F.3d 312, 323 (3d Cir. 2006)); see also Atalese, 219 N.J.
at 442. Agreement is predicated on the parties being “fairly informed of the
contract’s terms before entering into the agreement.” Hoffman v. Supplements
Togo Mgmt., LLC, 419 N.J. Super. 596, 606 (N.J. Super. Ct. App. Div. 2011)
(quoted with approval in Weisman v. New Jersey Dep't of Human Servs., 982 F.
Supp. 2d 386, 394 (D.N.J. 2013) aff'd 593 F. App'x 147 (3d Cir. 2014)). This is
the “reasonable notice” standard and it “is a question of law for the court to
determine.” Caspi v. Microsoft Network, L.L.C., 323 N.J. Super. 118, 126 (N.J.
Super. Ct. App. Div. 1999) (quoted with approval in Liberty Syndicates at Lloyd's
v. Walnut Advisory Corp., No. 09-CV-1343, 2011 WL 5825777, at *3 (D.N.J. Nov.
16, 2011)). Consequently, the manifestation of assent requires an “unqualified
acceptance” on the part of the offeree. Weichert, 128 N.J. at 435. Such
“[a]cceptance can be express, creating an express contract, or implied by conduct,
creating a contract implied-in-fact.” Liberty Syndicates, 2011 WL 5825777, at *3.
The Court finds that these prerequisites of contract formation are equally
applicable to users of telecommunication services, such as the ones in the instant
action. See, e.g., Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 403 (2d Cir.
2004) (“While new commerce on the Internet has exposed courts to many new
situations, it has not fundamentally changed the principles of contract.”) With the
proliferation of contracts over the Internet between companies and their end users,
7

New Jersey courts—state and federal—have applied these fundamental precepts to
determine the enforceability of such contracts. See, e.g., Liberty Syndicates, 2011
WL 5825777, at *6; Hoffman, 419 N.J. Super. at 612; Holdbrook Pediatric Dental,
LLC v. Pro Computer Serv., LLC, No. 14-CV-6115, 2015 WL 4476017, at *7
(D.N.J. July 21, 2015). In particular, the Court finds similarity between the
method of notice and assent employed by GTL in this case and those used in
“browsewrap” agreements, where “by merely using the services of . . . the website
[] the user is agreeing to and is bound by the site’s terms of service.” Fteja v.
Facebook, Inc., 841 F. Supp. 2d 829, 837 (S.D.N.Y. 2012). In determining the
validity of “browsewrap” agreements, courts look to whether users were provided
with a “reasonably conspicuous notice of the existence of contract terms” and
whether the user registered an “unambiguous manifestation of assent to these
terms.” Specht v. Netscape Commc'ns Corp., 306 F.3d 17, 35 (2d Cir. 2002); see
also Hoffman, 419 N.J. Super. at 609 (noting that Specht’s application of
reasonable notice under California law was similar to New Jersey law).
Accordingly, the Court will analyze whether “the specifics surrounding agreement
revealed either that the user knew or should have known about the existence of the
[terms of use] that contained the forum selection clause,” Liberty Syndicates, 2011
WL 5825777, at *4, and whether Plaintiffs’ use of the service is sufficient to
manifest assent to the arbitration agreement within.
a) Reasonable Notice of Terms
Plaintiffs were put on constructive notice as to the existence of the TOU and
the fact that GTL’s service was governed by the terms therein. Since neither party
has put forth evidence that any of the Plaintiffs had actual knowledge of the
agreement, the Court will instead determine “reasonable notice” based on whether
a reasonably prudent user “would have known of the existence” of the arbitration
agreement. Specht, 306 F.3d at 31. The IVR system provided an audio notice
regarding the presence of terms of use at the outset—before customers could
proceed to the remainder of the options—and users were informed how they could
access the TOU, which was freely available on GTL’s website. (See Baker Dec’l ¶
2.) This prominent placement was sufficient to put users on inquiry notice as to
the existence of the TOU. See, e.g., Ticketmaster L.L.C. v. RMG Technologies,
Inc., 507 F. Supp. 2d 1096, 1107 (C.D. Cal. 2007) (finding notice where the
homepage displayed a warning regarding the presence of terms of use and the
hyperlink to the terms were available on every page). Cf. Specht, 306 F.3d at 31
(finding reasonable notice lacking where the terms were placed on a “submerged
8

screen” and “did not carry an immediately visible notice of [their] existence”); In
re Zappos.com, Inc. Customer Data Sec. Breach Litig., 893 F. Supp. 2d 1058, 1064
(D.Nev. 2012) (finding lack of notice regarding the Terms and Conditions, which
were buried in the middle to bottom of every page and amongst other links); Hines
v. Overstock.com, Inc., 668 F. Supp. 2d 362, 367 (E.D.N.Y. 2009) aff'd 380 F.
App’x 22 (2d Cir. 2010) (same). Moreover, the message was repeated each time a
user called into the service. See, e.g., Verio, 356 F.3d at 401 (imputing knowledge
of the terms of use based on the users’ repeated use of the site and exposure to the
accompanying notice); Cairo, Inc. v. Crossmedia Servs., Inc., No. C 04–04825,
2005 WL 766610, at *5 (N.D. Cal. Apr. 1, 2005) (finding reasonable notice where
every page had a notice stating the existence of the “Terms of Use.”) The medium
employed by the parties to transact their business necessitates a consideration of
what qualifies as reasonable and, as Plaintiffs acknowledge, it would be “virtually
impossible for the terms and conditions including the arbitration clause to be
available to a customer on the phone.” 2 (Plaintiffs’ Opposition to Motion to
Compel Arbitration (“Pl. Opp.”) at 12, ECF No. 99.) Thus, the Court finds that
GTL’s notice was sufficient to draw a reasonably prudent user’s attention to the
existence of the TOU and the arbitration clause within, presenting it in a
conspicuous manner in light of the medium of communication used by GTL’s
service.
b) Unqualified Assent
Moving to the second prerequisite—acceptance—the Court is faced with
two separate issues: (i) whether New Jersey law allows for assent through use and
(ii) whether the notice needed to inform users that they were providing acceptance
in this fashion. 3 Under New Jersey law, “[s]ilence does not ordinarily manifest
2

Similarly, Plaintiffs’ assertion that the IVR notice should have informed users as to the
presence of the arbitration clause within the TOU is unavailing. “Arbitration clauses are not
singled out for more burdensome treatment than other waiver-of-rights clauses under [New
Jersey] state law.” Atalese, 219 N.J. at 444. Plaintiffs provide no reason why the arbitration
provision should have been distinguished for inclusion on the IVR notice and to find that
Plaintiffs “are not bound by [the arbitration] clause would be equivalent to holding that they
were bound by no other clause either.” Caspi, 323 N.J. Super. at 126.
3
Plaintiffs argue that GTL should have required users to provide their assent through the
IVR system—for example, by pressing a number on their keypad to register acceptance of the
TOU. Plaintiffs’ argument is unpersuasive. For one, New Jersey law does not require that
assent be provided in this way. Second, any assent procured by asking users to agree to terms
they have not had the opportunity to review would be plainly void.

9

assent, but the relationships between the parties or other circumstances may justify
the offeror’s expecting a reply and, therefore, assuming that silence indicates
assent to the proposal.” Weichert, 128 N.J. at 436-37 (1992) (citing Johnson &
Johnson v. Charmley Drug Co., 11 N.J. 526, 539 (1953)). Courts in New Jersey
(both state and federal) have extended the principle of assent through silence to
“use,” finding assent where the offeree was given notice of terms and proceeded to
use the services of the offeror. See, e.g., Novack v. Cities Service Oil Co., 149 N.J.
Super. 542, 548 (N.J. Super. Ct. Ch. Div. 1977) aff’d sub nom. Novak v. Cities
Serv. Oil Co., 159 N.J. Super. 400 (N.J. Super. Ct. App. Div. 1978) (finding that
“acceptance or use of the card by the [cardholder] makes a contract between the
parties according to” the terms of the cardholder agreement); CACH of NJ, LLC v.
Bode, No. A-1137-13T3, 2014 WL 7192550, at *2 (N.J. Super. Ct. App. Div. Dec.
19, 2014) (“Use of a credit card creates a contract between the parties according to
its terms”); Ellin v. Credit One Bank, No. 15-CV-2694, 2015 WL 7069660, at *3
(D.N.J. Nov. 13, 2015) (same). 4
However, in order for silence or use to establish assent, the offeror must
“give[] the offeree reason to understand that assent may be manifested” in such a
way. Restatement (Second) of Contracts § 69 (1981). Surveying the landscape of
“browsewrap” cases, the Ninth Circuit noted that “courts have been more
amenable to enforcing browsewrap agreements” “where the website contains an
explicit textual notice that continued use will act as a manifestation of the user’s
intent to be bound” by the terms of use. Nguyen v. Barnes & Noble Inc., 763 F.3d
1171, 1177 (9th Cir. 2014); see also Cairo, 2005 WL 756610, at *2, *4–5
(enforcing forum selection clause in website's terms of use notice stated: “By
continuing past this page and/or using this site, you agree to abide by the Terms of
Use for this site, which prohibit commercial use of any information on this site.”)
Courts base enforceability on such a notice because “conduct of a party is not

4

Plaintiffs contend that any assent obtained through use would be limited only to the
offer’s essential terms, which would not include an arbitration clause. See Weichert, 128 N.J. at
437. The Court does not find this argument compelling, as New Jersey courts have included and
enforced mandatory arbitration provisions that are part of agreements procured in such a manner.
See, e.g., Ellin, 2015 WL 7069660, at *3 (affirming validity of agreement that put plaintiff on
notice regarding the agreement’s arbitration clause and denoted acceptance by using the credit
card’s services); MBNA Am. Bank, N.A. v. Bibb, No. A-4087-07T2, 2009 WL 1750220, at *4
(N.J. Super. Ct. App. Div. June 23, 2009) (stating that defendant was required to arbitrate with
the plaintiff bank since the credit card agreement specified that “when defendant ‘use[]d [the]
account, [she] agree[d] to’ its terms.”)

10

effective as a manifestation of his assent unless he . . . knows or has reason to
know that the other party may infer from his conduct that he assents.” Restatement
(Second) of Contracts § 19 (1981). Since a contract is formed and a user is bound
by the terms and conditions immediately upon using the service, such explicit
notice at the outset forms the necessary predicate to establishing an “unambiguous
manifestation of assent” to those terms.
Here, users were given notice that GTL’s service was “governed by the
terms of use.” But, the IVR notification did not inform them that use of the service
alone constituted an acceptance of these terms. (See Baker Dec’l ¶ 2.)
“Unqualified acceptance” is incumbent on each party understanding at the moment
of contract formation—from when they will be bound by the terms—the manner in
which they are providing assent. Without being put on notice that their use would
be interpreted as agreement, a reasonably prudent user of the IVR service had
neither the knowledge nor intent necessary to provide “unqualified acceptance.”5
See Be In, Inc. v. Google Inc., No. 12-CV-03373-LHK, 2013 WL 5568706, at *9
(N.D. Cal. Oct. 9, 2013) (stating that because only a link was provided to the terms
of use there was no grounds to find that defendants were put on notice that mere
use constituted assent); Holdbrook, 2015 WL 4476017, at *6 (finding no
enforceable contract where “there [was] no statement that signing the agreement
indicated acceptance of the “Terms and Conditions,” nor [was] there an instruction
to sign the contract only if [offeree] agreed to the additional terms.”)
Consequently, without an understanding that they were accepting to be bound by
the TOU, which included an agreement to arbitrate, there was no “legally
enforceable contract” created between GTL and the Plaintiffs.

5

Though the first clause of the TOU informed users that their use of the service would
constitute acceptance of the terms, such notification was in essence too late—occurring after
GTL intended to bind its users to the agreement. See Hines, 668 F. Supp. 2d at 367. Similarly,
unlike in Verio—where the Second Circuit found that repeatedly receiving a notice of terms after
the defendant made its query (i.e. called into the service) was sufficient to ascribe notice, and
thus ameliorating the ex post facto nature of the notice—the IVR notification’s essential failure
to inform callers that their assent would be garnered through use cannot be remedied by relying
on the fact that users heard the notice on multiple occasions. See Verio, 356 F.3d at 401-02
(finding that defendant was bound by terms where notice informed accessors of the data that
submission of their query constituted assent to the plaintiff’s terms and that defendant repeatedly
saw this message in its daily access of data).

11

iii. Assent to Updated Terms of Service
Since Plaintiffs who used GTL’s IVR service did not manifest assent to the
TOU, it is axiomatic that they did not agree to the clause allowing the company to
modify the terms on a one-party basis and delineating the manner by which users
would be notified of such amendments. Thus, even though GTL alerted IVR users
as to when the TOU was last updated, such notification—based on a nonenforceable contract and without telling users that use constituted assent to the
amended terms—was insufficient to bind users to the arbitration clause contained
within the modified TOU. Cf. Coiro v. Wachovia Bank, N.A., No. 11-CV-3587,
2012 WL 628514, at *3 (D.N.J. Feb. 27, 2012) (finding that plaintiff was bound by
arbitration clause in modified agreement where the initial agreement stated that
defendants could modify the terms of the agreement so long as plaintiff had thirtyday notice within which to close her account if she disagreed); Mayer v. Verizon
New Jersey, Inc., No. 13-CV-3980 (D.N.J. May 6, 2014), ECF No. 31 (finding
acceptance of amendments through continued use of services).
iv. Accounts Opened Through the Internet
According to GTL’s records, Gibson was the only plaintiff that created an
account through its website. (See Baker Dec’l ¶ 8.) As part of this process, GTL
asserts that, on a desktop computer, Gibson would have been presented with all of
the terms of the TOU on the screen and she was required to click an “Accept”
button in order to move forward in the account creation process. 6 (See id. ¶ 2.)
Gibson confirms this in her declaration, stating that she “check[ed] off the box for
the terms of service” when she setup her account over the Internet. (Gibson Dec’l
¶ 7.) This form of electronic contract is referred to as a “clickwrap” agreement,
where users are required to take affirmative action to manifest assent and are
informed that such action will comprise their assent to the displayed terms. See
Liberty Syndicates, 2011 WL 5825777, at *4. Numerous courts, including in this
District, have enforced such agreements. See, e.g., Davis v. Dell, Inc., No. 07-CV630, 2007 WL 4623030, *4-5 (D.N.J. Dec. 28, 2007) aff’d, No. 07-630 (RBK),
2008 WL 3843837 (D.N.J. Aug. 15, 2008); Feldman v. Google, Inc., 513 F. Supp.
2d 229, 237 (E.D. Pa. 2007); TradeComet.com LLC v. Google, Inc., 693 F. Supp.
2d 370, 377–78 (S.D.N.Y. 2010). Therefore, since Gibson was presented with all
6

Since Gibson would have been presented with only this version of the site (and not the
mobile version that went live in December 2014), the Court will restrict its analysis accordingly.

12

of the terms of the TOU—giving reasonable notice of the arbitration agreement—
and because Gibson provided her assent to the TOU, she is required to arbitrate her
claims against GTL, which fall under the broad scope of the arbitration clause.
See, e.g., Caspi, 323 N.J. Super. at 122 (affirming lower court’s decision to enforce
arbitration clause where agreement “appear[d] on the computer screen in a
scrollable window next to blocks providing the choices ‘I Agree’ and ‘I Don’t
Agree’” and proceeding with registration required assent, which plaintiff
provided.)
B.

Duress

Because the Court has determined that Gibson assented to arbitrate her
claims against the Defendants, the Court will now analyze whether such assent was
garnered by GTL under duress and whether GTL waived its right to arbitrate the
claims. 7 Section 2 of the Federal Arbitration Act (“FAA”) “permits arbitration
agreements to be declared unenforceable ‘upon such grounds as exist at law or in
equity for the revocation of any contract.’” Concepcion, 563 U.S. at 339. These
grounds include ‘generally applicable contract defenses, such as fraud, duress, or
unconscionability.’” Id. “The FAA ‘instructs courts to refer to principles of
applicable state law’ in order to determine the standards for such contract
defenses.” Trippe, 401 F.3d at 532.
In its reply, GTL argues that because the arbitration clause contains a
“delegation provision” any affirmative defense as to the invalidity of the arbitration
clause must be referred to the arbitrator, basing the argument on the Supreme
Court’s holding in Rent-A-Center, West, Inc. v. Jackson. 561 U.S. 63, 130 S. Ct.
2772, 177 L. Ed. 2d 403 (2010). However, the Third Circuit distinguished the
Supreme Court’s holding in Rent-A-Center, leaving it inapplicable to the instant
action. Quilloin, 673 F.3d 221.
In Rent-A-Center the plaintiff, signed a contract to arbitrate disputes arising
out of his employment, which contained within it an agreement to arbitrate
arbitrability—a delegation clause similar to the one in the instant action. Id. at 65.
As the Third Circuit opined, due to “the confusion caused by an agreement to

7

Though the duress and waiver defenses are only applicable to Gibson (as described by
the Court supra), since these defenses were raised by all of the Plaintiffs and Plaintiffs bring this
suit on behalf of a putative class, the Court will continue referring to Plaintiffs collectively with
respect to these defenses.

13

arbitrate nested within another agreement to arbitrate, the Rent-A-Center Court
found it necessary to distinguish between the overall arbitration agreement [(the
contract to arbitrate)], and the agreement to arbitrate arbitrability [(the delegation
clause)].” Quilloin, 673 F.3d at 229. The Supreme Court’s decision, thus, turned
on the fact that “the plaintiff ‘challenged only the validity of the contract as a
whole’ rather than the validity of the delegation clause,” and under prior
jurisprudence the question of arbitrability of the contract itself “must go to an
arbitrator.” Id.
Here, Plaintiffs have taken care to raise their duress argument specifically
towards the arbitration clause and not the TOU as a whole. When “a party
challenges the validity under § 2 of the precise agreement to arbitrate at issue, the
federal court must consider the challenge before ordering compliance with that
agreement under” the FAA. Rent-A-Center, 561 U.S. at 71.
Having determined that the duress argument is a threshold matter for the
Court to resolve, the Court finds Plaintiffs’ argument unpersuasive. Under New
Jersey law, the determination of duress is a two-part test: (1) a demonstration that
the victim of the duress was subject to a wrongful or unlawful act or threat, and (2)
that such act or threat must be one which deprives the victim of his unfettered will.
See Cont'l Bank of Pa. v. Barclay Riding Academy, 93 N.J. 153, 176 (1983). “The
key factor in determining whether duress exists is ‘the wrongfulness of the
pressure exerted.’” Recchia v. Kellogg Co., 951 F. Supp. 2d 676, 683 (D.N.J.
2013). However, the wrongful act must entail more than “merely taking advantage
of another’s financial difficulty.” Cont’l Bank, 93 N.J. at 177. Instead, the party
accused of coercion must have “contributed to or caused” the financial difficulty
claimed. Id. at 177.
The Court finds that Plaintiffs have failed to demonstrate the first prong of
this test. GTL’s service was not the only method by which it was possible to
contact inmates. Putting aside in-person visits and mail, inmates could have
communicated through collect calls or by the use of funds deposited in their
commissary accounts, both of which would allow the inmate to call directly.
Focusing on the arbitration clause, Plaintiffs were provided thirty days in which
they could opt-out of both the arbitration and the class-action waiver provisions.
Where parties have a choice, but fail to act upon it, it cannot be said that they were
deprived of their “unfettered will.”
C.

Waiver
14

Plaintiffs also argue that GTL’s decision to wait two years before filing the
instant motion amounts to a waiver of the right to arbitrate. The Third Circuit has
held that if “a party has acted inconsistently with the right to arbitrate,” a court
may find that the party has waived its right to enforce an arbitration agreement.
Nino v. Jewelry Exch., Inc., 609 F.3d 191, 208 (3d Cir. 2010) (internal quotation
mark omitted). However, the Third Circuit has gone on to state that “[g]iven [the]
strong preference to enforce private arbitration agreements, [courts] will not infer
lightly that a party has waived its right to arbitrate” and waiver “will normally be
found only where the demand for arbitration came long after the suit commenced
and when both parties had engaged in extensive discovery.” Gray Holdco, Inc. v.
Cassady, 654 F.3d 444, 451 (3d Cir. 2011) (internal quotation mark omitted). A
determination of waiver rests on a finding that the party seeking arbitration has,
through their litigation conduct, subjected the non-moving party to sufficient
prejudice by failing to promptly arbitrate the dispute.
In Hoxworth v. Blinder, Robinson & Co., the Third Circuit set forth six
“nonexclusive” factors that a court may use to guide its prejudice inquiry:
(1) timeliness or lack thereof of the motion to arbitrate; (2)
extent to which the party seeking arbitration has contested
the merits of the opposing party’s claims; (3) whether the
party seeking arbitration informed its adversary of its
intent to pursue arbitration prior to seeking to enjoin the
court proceedings; (4) the extent to which a party seeking
arbitration engaged in non-merits motion practice; (5) the
party’s acquiescence to the court's pretrial orders; and (6)
the extent to which the parties have engaged in discovery.
980 F.2d 912, 926-27 (3d Cir. 1992). All these factors need not be present in order
for a court to justify finding waiver, and the court’s determination “must be based
on the circumstances and context of the particular case.” Nino, 609 F.3d at 208.
After conducting a review of the Hoxworth factors, the Court finds that Plaintiffs
have failed to demonstrate sufficient prejudice to deem GTL’s right to arbitrate as
waived.
i.

Timeliness and Notice

Plaintiffs’ contention is primarily grounded on the length of time between
their initiation of this action and GTL seeking leave to file its motion to compel
15

arbitration—around two years. While Plaintiffs cite to a number of Third Circuit
decisions that have found waiver for substantially shorter delays, many of these
hinged on the fact that the moving party “offered no explanation . . . for its delay.”
See Gray Holdco, 654 F.3d at 455; Nino, 609 F.3d at 210; see also In re Pharmacy
Ben. Managers Antitrust Litig., 700 F.3d 109, 118 (3d Cir. 2012); JPMorgan
Chase Bank, N.A. v. Republic Mortgage Ins. Co., No. 10-CV-6141, 2012 WL
6005384, at *4 (D.N.J. Nov. 30, 2012). The Third Circuit has stated that “the
length of the time between when a party initiates or first participates in litigation
and when it seeks to enforce an arbitration clause is not dispositive in a waiver
inquiry.” Gray Holdco, 645 F.3d at 455. Instead, the Third Circuit has asked
courts to look to the party’s “explanations for its delay.” Id. GTL offers a
satisfactory explanation for waiting approximately two years before bringing the
instant motion. See Thyssen, Inc. v. Calypso Shipping Corp., 310 F.3d 102 (2d Cir.
2002) (finding no waiver where defendant did not seek arbitration until more than
eighteen months after suit was filed) cited with approval in Palcko v. Airborne
Express, Inc., 372 F.3d 588, 598 (3d Cir. 2004).
The first thirteen months of this case were spent on GTL’s motion regarding
jurisdiction. For nine of those months, the motion was under advisement with the
Court, and the Court subsequently agreed with GTL and granted a stay. In light of
this, the Court does not feel it is appropriate to count these nine months against
GTL. Shortly after the case moved forward, as the Plaintiffs withdrew some of
their claims in order to avoid the stay, GTL provided notice in an affirmative
defense of its intent to seek arbitration—the third Hoxworth factor—and thereafter
sought leave to file a motion to compel arbitration. See Nino, 609 F.3d at 211
(noting that disclosure of intent to seek arbitration in an answer “is an important
consideration . . . for the waiver analysis.”); Healthcare Servs. Grp., Inc. v. Fay,
No. 13-CV-66, 2015 WL 5996940, at *2 (E.D. Pa. Oct. 14, 2015) (finding no
waiver where the motion to compel arbitration was not brought until two and a half
years after the action was initiated). Cf. Gray Holdco, 654 F.3d at 457 (finding
prejudice where moving party notified non-movant of intent to arbitrate on the
same day that it filed its demand for arbitration with the AAA). While the twoyear period would—in the abstract—likely demonstrate a waiver of the right to
arbitrate, analyzing the unique procedural history in this action evidences that this
time was not spent extending the litigation to prejudice the Plaintiffs.

16

ii. Contestation of the Merits
The second, fourth, fifth, and sixth Hoxworth factors aim to highlight any
prejudice suffered by the non-movant as a result of the movant’s active
engagement in litigation in lieu of seeking arbitration. The second Hoxworth
factor looks to the “extent to which the party seeking arbitration has contested the
merits of the opposing party's claims.” 980 F.2d at 927. Though a motion to
dismiss can address the merits of the underlying claims, the Court does not find
that to be the case here, as GTL’s motion was aimed at the threshold issue of
jurisdiction. Cf. Just B Method, LLC v. BSCPR, LP, No. CIV.A. 14-1516, 2014
WL 5285634, at *10 (E.D. Pa. Oct. 14, 2014); Republic Mortgage, 2012 WL
6005384, at *4 (finding waiver after two motions to dismiss and a cross-motion for
summary judgment); Hoxworth, 980 F.2d at 925-26 (finding waiver after motion to
dismiss and opposition to class certification were filed). Additionally, “[t]he Third
Circuit has found in the past that a single merits-based motion to dismiss did not
waive a right to arbitration.” Serine v. Marshall, Dennehey, Warner, Coleman &
Goggin, No. 14-CV-4868, 2015 WL 4644129, at *3 (E.D. Pa. Aug. 5, 2015) citing
Wood v. Prudential Insurance Company of America, 207 F.3d 674, 680 (3d Cir.
2000). Consequently, the Court does not find that this factor weighs in favor of
waiver.
iii. Non-Merits Motion Practice and Discovery
As to the fourth Hoxworth factor—engagement in “non-merits motion
practice”—there has been little motion practice with regards to non-merits issues.
980 F.2d at 927. The parties have, however, engaged in a number of discoveryrelated disputes, which implicates the sixth Hoxworth factor—“the extent to which
the parties have engaged in discovery.” Id. In analyzing this factor, the Third
Circuit has looked to not only the extent of discovery by the parties, but also
whether the movant has engaged in discovery that would have been unavailable in
an arbitration, thus prejudicing the non-movant. Id. at 926. Third Circuit opinions
finding waiver have had significant discovery exchanges, including multiple
depositions, interrogatories, documents requests and productions, as well as
discovery-related motion practice. See, e.g., Nino, 609 F.3d at 213; Ehleiter v.
Grapetree Shores, Inc., 482 F.3d 207, 224 (3d Cir. 2007); Hoxworth, 980 F.2d at
925-26; Gray Holdco, 654 F.3d at 460.
Here, the discovery, while not de minimus, does not rise to a level sufficient
to constitute prejudice to the Plaintiffs. For one, a number of the discovery
17

disputes seem to have been either (i) initiated by the Plaintiffs or (ii) took place
after the instant motion was filed. See Maxum Found., Inc. v. Salus Corp., 779
F.2d 974, 983 (4th Cir. 1985) (finding that defendant’s participation in discovery
and pretrial conferences after it had filed its motion to compel arbitration did not
constitute waiver) discussed with approval in Nino, 609 F.3d at 212-13. Moreover,
the discovery requested by GTL in this case—interrogatories and requests for
production—seem to have been pertinent to the issue of arbitration. Lastly, there is
no evidence that GTL engaged in any discovery that would not have been available
in an arbitration. See, e.g., Smith v. Lindemann, No. 10-CV-3319, 2014 WL
835254, at *12 (D.N.J. Mar. 4, 2014); NN&R, Inc. v. OneBeacon Ins. Grp., No. 03CV-5011, 2006 WL 231596, at *5 (D.N.J. Jan. 30, 2006). Cf. Smith v. IMG
Worldwide, Inc., 360 F. Supp. 2d 681, 688 (E.D. Pa. 2005). Consequently, the
fourth and sixth factors weigh against finding waiver.
iv. Acquiescence to Pre-Trial Orders
The last factor for the Court to consider is GTL’s “acquiescence to the
court’s pretrial orders,” the fifth Hoxworth factor. 980 F.2d at 927. GTL has
participated without objection in a number of case management conferences,
drafted and submitted a Joint Discovery Plan, negotiated a Discovery
Confidentiality Order, and even negotiated and agreed to a revised scheduling
order approximately a month before the instant motion was filed. See Nino, 609
F.3d at 213. Consequently, this is the sole factor that the Court finds weighs for
waiver.
However, taken as a whole, the Court does not find that the fifth factor alone
pushes the needle far enough to establish that GTL has waived its right to arbitrate.
GTL puts forth plausible reasons for its delay in bringing the instant motion and,
since the determination of the jurisdiction issue, GTL has acted in a manner
consistent with the intent to arbitrate, including providing adequate notice and
limiting motion practice and discovery. If “prejudice is the touchstone for
determining whether the right to arbitrate has been waived by litigation conduct,”
Ehleiter, 482 F.3d at 222, the Court does not find that the Plaintiffs have been
prejudiced to such an extent that a finding of waiver is appropriate here.
D.

Stay as to the Remaining Plaintiffs

Lastly, the Court denies GTL’s request to stay this proceeding in regards to
Plaintiffs Mark Skladany and John F. Crow. Section 3 of the FAA states that if a
18

Court finds that a matter is “referable to arbitration,” “on application of one of the
parties [the Court must] stay the [] action until such arbitration has been had in
accordance with the terms of the agreement.” 9 U.S.C.A. § 3. However, the Third
Circuit has stated that “Section 3 was not intended to mandate curtailment of the
litigation rights of anyone who has not agreed to arbitrate any of the issues before
the court.” Mendez v. Puerto Rican Int'l Cos., 553 F.3d 709, 712 (3d Cir. 2009).
As such, the determination of a stay as to parties who have not agreed to arbitrate
is in the discretion of the court. Id. GTL’s stay argument centers on the fact that
all of the other named Plaintiffs must arbitrate their claims. GTL argues that
staying the proceeding pending the outcome of those arbitrations will save judicial
resources. However, as discussed above, the Court finds that only Gibson is
required to arbitrate her claims. Since, GTL will be required to continue litigating
against the majority of the Plaintiffs, GTL’s economy and efficiency arguments are
moot. Cf. Villano v. TD Bank, No. 11-CV-6714, 2012 WL 3776360, at *9 (D.N.J.
Aug. 29, 2012) (granting stay where there was only one non-arbitrating party
involved in the litigation). Furthermore, the Court finds that a stay would only
serve to materially prejudice the non-arbitrating Plaintiffs. Accordingly, the Court
will stay Gibson’s claims pending completion of arbitration—as mandated by the
FAA—but will decline to stay the claims of the remaining Plaintiffs, who are not
bound by the arbitration agreement.
IV.

CONCLUSION

For the above reasons, this Court GRANTS the Defendants’ motion to
compel arbitration and stay this proceeding as to Ms. Gibson, but DENIES the
motion as to the remaining Plaintiffs.

/s/ William J. Martini
WILLIAM J. MARTINI, U.S.D.J.
Date: February 11, 2016

19

Attachment 4

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 1 of 8

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
CASE NO. 15-61046-CIV-MARRA
JOHN EDWARD POPE, individually and on
behalf of all others similarly situated,
Plaintiff,
vs.
EZ CARD & KIOSK LLC (a division of
GENERAL PAYMENT SYSTEMS, INC.); and
THE CENTRAL BANK OF KANSAS CITY,
Defendants.
_____________________________________/
OPINION AND ORDER
This cause is before the Court upon Defendant Central Bank of Kansas City’s Motion to
Compel Arbitration and Stay or Dismiss Proceedings (DE 21).1 The Motion is fully briefed and
ripe for review. The Court has carefully considered the Motion and is otherwise fully advised in
the premises.
I. Background
John Edward Pope (“Plaintiff” “Pope”) filed a class action Complaint against Defendants
EZ Card & Kiosk, LLC (“EZ Card”) and Central Bank of Kansas City (“Central Bank”)
(collectively, “Defendants”) for a violation of the Electronic Funds Transfer Act, 15 U.S.C. §
1693 et seq. (count one), a violation of the Florida Deceptive and Unfair Trade Practices Act,
Florida Statute § 501.201 et seq. (count two), conversion (count three) and unjust enrichment
(count four). The Complaint alleges the following:
Plaintiff was arrested by the Fort Lauderdale police in November of 2014 and was jailed
1

Defendant EZ Card & Kiosk, LLC filed a Notice of Joinder of the motion. (DE 31.)

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 2 of 8

overnight. When booked, the Broward County Jail (the “Jail”) confiscated $178 in cash from
Plaintiff. Plaintiff was released 17 hours later. When released, the Jail did not return Plaintiff’s
cash, but gave him a prepaid debit card issued by EZ Card and the Bank of Kansas City. (Compl.
¶ 1.) The Jail did not give Plaintiff the option of receiving his cash back and the prepaid card
required Plaintiff to pay EZ Card and the Bank of Kansas City to access his own money. (Compl.
¶ 2.) Defendants required Plaintiff to “pay various exorbitant, unreasonable fees to retrieve the
money” taken from him. (Compl. ¶ 4.) Plaintiff used the card to purchase food and other items.
(Compl. ¶ 39.)
When Plaintiff was released from custody, the debit card he received had a balance of
approximately $128, which was based upon the $178 cash that the Jail confiscated from him the
day he was arrested, minus the cost of the bond, the booking fee, the uniform fee and the daily
subsistence fee that the Jail charged him. (Compl. ¶ 34.) Released individuals have no choice but
to accept the EZ Card debit card in lieu of cash or check. These individuals do not voluntarily
engage with the company, enroll in the program or take any affirmative steps to form a
contractual relationship with either Defendant. (Compl. ¶ 22.) Plaintiff did not assent to
receiving the card over cash and never assented to any terms of contract with Defendants.
(Compl. ¶ 35.) The fees applicable to Plaintiff’s debit card included: (1) a monthly maintenance
charge of $4.95; (2) an ATM balance inquiry fee of $1.99; (3) an ATM withdrawal fee of $2.99;
(4) a point of sale fee of $0.99; (5) a card replacement fee of $5.95 and (6) a fee of $4.00 to
receive a paper statement. (Compl. ¶ 37.)
Defendant Central Bank has submitted a declaration by Trent Sorbe, the president of the
Central Payment Division of Central Bank of Kansas City. (Sorbe Decl. ¶ 1, DE 22.) The
2

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 3 of 8

cardholder agreement states that “[b]y retaining and using the Card, you agree to be bound by the
terms and conditions contained in this Agreement. (Cardholder Agreement, Ex. A, Sorbe Decl.,
DE 22.) A similar provision appears on the back of the debit card issued by Central Bank. (Ex.
B, Sorbe Decl. DE 22.)
At the top of the cardholder agreement is a statement reading “THIS AGREEMENT
CONTAINS AN ARBITRATION PROVISION,” which directs the cardholder to the arbitration
provision. (Cardholder Agreement.) The arbitration provision defines an arbitrable claim as:
any claim, dispute or controversy between you and use arising from or relating to the
Card or Agreement . . . including the validity, enforceability or scope of this Arbitration
Provision or the Agreements. “Claim” includes claims of every kind and nature,
including but not limited to initial claims, counterclaim, cross-claims and third-party
claims and clams based upon contract, tort, fraud and other intentional torts, statutes,
regulations, common law and equity. The term “Claim” is to be given the broadest
possible meaning that will be enforced and includes, without limitation, any claim,
dispute or controversy that arises from or relates to (i) your Card; (ii) the amount of
available funds in your Card account; (iii) advertisements, promotions or oral or written
statements related to your Card, goods or services purchased with your Card; (iv) the
benefits and services related to your Card; and (v) your enrollment for any Card.
(Cardholder Agreement § E.4(c)).
The Cardholder Agreement provides that any claims “shall be referred to either the
Judicial Administration and Mediation Services (“JAMS”) or the American Arbitration
Association (“AAA”), as selected by the party electing to use arbitraiton.” (Id. at § E.4(c).) The
Agreement gives the cardholder the opportunity to opt-out of arbitration as well as the ability to
avoid arbitration by filing in small claims court. (Id. at § § E.4(b) and (c).)
The Agreement gives the cardholder the option to cancel the debit card and receive a
check refund for the balance. The Cardholder Agreement provides:

3

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 4 of 8

Amendment, Cancellation and Expiration
. . . . You may cancel this Agreement by returning the Card to us. Your termination of
this Agreement will not affect any of our rights or your obligations arising under this
Agreement prior to termination.
In the event that your Card Account is cancelled, closed, or terminated for any reason,
you may request the unused balance to be returned to you via a check to the mailing
address we have in our records. There may be a fee for this service. See Section A(3)
(Fee Schedule) of this Agreement for more information regarding fees. . . .
(Cardholder Agreement § E.2.)
The fee schedule in the Cardholder Agreement reflects no charge to the customer if the
account is closed and a check is issued at the customer’s request. (Id. at § A.3.)
Plaintiff states he was not given an opportunity to reject the debit card or receive his
money back in the form of cash or check. (Pl. Decl. ¶ 8, DE 35.) He does not recall receiving a
Cardholder Agreement or terms or conditions with the debit card. (Id. at ¶ 9.) No one talked to
him about the Cardholder Agreement or the terms and conditions of the debit card and he never
agreed to arbitrate claims against Defendants. (Id. at ¶ 12.)
Defendants have submitted records from the Jail which indicate that Plaintiff signed a
Withdrawal Receipt and Inmate Bank Account Refund Options form and elected to received
funds remaining on his Jail account via debit card. (Emanauel McCray Decl. ¶ 6, DE 39.) The
refund options form provided to Plaintiff provided two options: Option one provided for
repayment by debit card and identified specific fees associated with that card. Option two
provided a refund in the form of a check. (Refund option form, DE 39.) Plaintiff selected the
“debit card” option. (Id.) It is the Jail’s policy and procedure to provide all inmates who elect a
debit card in lieu of a check with copies of the Withdrawal Receipt, Inmate Bank Account
Refund Options form and the EZ Exit Release Card Cardholder Agreement. (McCray Decl. ¶ 5.)
4

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 5 of 8

In reply, Plaintiff submitted another declaration. (Pl. Sec. Decl., DE 45-1.) At the time of
Plaintiff’s arrest, he did not have a bank account, debit card or credit card. (Id. at ¶ ¶ 5-7.) Other
than the $178.00 in cash that the Jail confiscated, he had no other money. (Id. at ¶ 8.) Had he left
the Jail without the debit card, Plaintiff would have had no access to money until he received a
check. (Id. at ¶ 9.) While he does not recall signing the Withdrawal Receipt or the Inmate Bank
Account Refund Options form, he does not challenge the authenticity of his signature. (Id. at ¶
11.)
Defendants move to compel arbitration on the basis of Plaintiff’s acceptance and use of
the debit card. Plaintiff responds that there was no mutual assent or consideration between him
and Defendants. Plaintiff also claims issues of fact preclude any finding that Plaintiff agreed to
arbitrate as a matter of law. In reply, Defendants point out that Plaintiff agreed to the terms and
conditions of the Cardholder Agreement when he voluntarily elected to receive repayment
through the issuance and use of the debit card and therefore the agreement was supported by
consideration. In his sur-reply, Plaintiff argues that he was not offered a genuine alternative to
the debit card and his receipt of the Cardholder Agreement does not settle issues of fact.
II. Discussion
The Supreme Court has articulated a strong federal policy favoring arbitration
agreements. See Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).
One of the purposes of the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., is to “ensure
judicial enforcement of privately made agreements to arbitrate.” Dean Witter Reynolds, Inc. v.
Byrd, 470 U.S. 213, 219 (1985). As such, arbitration agreements must be “rigorously enforce[d]”
5

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 6 of 8

by the courts. Id. at 221. Because arbitration is a matter of contract, however, the FAA's strong
pro-arbitration policy only applies to disputes that the parties have agreed to arbitrate.
Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57 (1995). “[A] party plainly cannot
be bound by an arbitration clause to which it does not consent.” BG Grp., PLC v. Republic of
Argentina, — U.S. —, 134 S. Ct. 1198, 1213 (2014) (Sotomayor, J. concurring).
For the purposes of a motion to compel arbitration, the Court may consider affidavits.
See Samadi v. MBNA America Bank, N.A., 178 Fed. App'x 863, 866 (11th Cir. 2006). In fact,
the party opposing a motion to compel arbitration has an affirmative duty of coming forward
with affidavits or deposition transcripts to show that the court should not compel arbitration. See
Sims v. Clarendon Ins. Co., 336 F. Supp. 2d 1311, 1314 (S.D. Fla. 2004). Federal substantive
law of arbitrability determines which disputes are within the scope of the arbitration clause.
Lawson v. Life of the South Ins. Co., 648 F.3d 1166, 1170 (11th Cir. 2011).
Here, the Court finds that Plaintiff consented to arbitration. The Jail gave him an option
to receive a check, but Plaintiff elected to take the debit card instead. Plaintiff signed a form
which provided him with a choice of his refund options. That form noted the fees associated
with the debit card and the option to receive instead a check, minus postage, from the Jail. Upon
choosing the debit card, the Jail’s procedure is to give individuals, such as Plaintiff, the
Cardholder Agreement which provided him with the option to receive his money via check as
well. Plaintiff used the card to purchase food and other items. Based on these facts, Plaintiff is
bound by the Cardholder Agreement and any claims he wishes to pursue are subject to
arbitration. See Krutchik v. Chase Bank USA, N.A., 531 F. Supp. 2d 1359, 1364-65 (S.D. Fla.
2008) (the “[p]laintiff failed to follow the specified procedure for rejecting the [ ] terms and
6

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 7 of 8

continued using the credit card, his actions constitute a legal acceptance of the terms contained
within the cardmember agreement, including the arbitration provision, and the agreement is
binding”).
In arguing that he did not agree to arbitration, Plaintiff relies upon Regan v. Stored Value
Cards, Inc., No. 1:14-CV-01187-AT, 2015 WL 570524 (N.D. Ga. Jan. 13, 2015). The facts of
that case differ significantly. When the plaintiff in Regan was released the day after his arrest, he
was given a prepaid card and was not given an opportunity to reject the card. Id. at * 4. He was
not given a cardholder agreement before being given the card, was not told the cardholder
agreement was in his discharge paperwork and he did not sign the cardholder agreement. Id.
Given that Plaintiff chose the debit card over a check, Regan is inapposite.2
Plaintiff also contends that the Jail did not offer him a “genuine alternative” to the debit
card. Plaintiff states that the confiscated money represented all the money he had in the world
and waiting for a check to arrive in the mail was not an option. The Court finds, however, that
Plaintiff made a choice based upon his particular circumstances. These individual circumstances
do not render Plaintiff’s decision to accept the debit card, with its terms and conditions, including
arbitration, coerced or unconscionable.
III. Conclusion
Accordingly, it is hereby ORDERED AND ADJUDGED that Defendants’ Motion to

2

Likewise, Plaintiff’s contention that the agreement was not supported by consideration
is equally unpersuasive. Plaintiff received the benefit of a debit card over a check, which gave
Plaintiff immediate access to the funds. See Real Estate World Florida Commercial, Inc. v.
Piemat, Inc., 920 So. 2d 704, 706 (Fla. Dist. Ct. App. 2006) (“the consideration required to
support a contract need not be money or anything having monetary value, but may consist of
either a benefit to the promisor or a detriment to the promisee.”)
7

Case 0:15-cv-61046-KAM Document 46 Entered on FLSD Docket 09/11/2015 Page 8 of 8

Compel Arbitration and Stay or Dismiss Proceedings (DE 21) is GRANTED. The case shall be
stayed pending completion of the arbitration and the clerk shall administratively close the case.
All pending motions are denied as moot.
DONE AND ORDERED in Chambers at West Palm Beach, Palm Beach County,
Florida, this 11th day of September, 2015.
______________________________________
KENNETH A. MARRA
United States District Judge

8