Dispute Over Financial Institution’s Phone Calls Not Arbitrable, Calif. Federal Judge Rules

SACRAMENTO, Calif. — A California federal judge has refused to compel arbitration of claims accusing a financial institution of making improper phone calls to a borrower, finding the dispute does not arise from the parties’ loan agreement, which contains the arbitration provision.

On Sept. 2, Judge William B. Shubb of the U.S. District Court for the Eastern District of California held that because the plaintiff alleges she received calls that were not related to the contract containing the arbitration provision, the arbitration agreement does not "encompass the dispute at issue."

In December 2011, Josette Porter signed a Deferred Deposit Loan …