Massachusetts Federal Court Compels Arbitration in TCPA Case Against Toyota Dealership

Case Snapshot

• Court: U.S. District Court for the District of Massachusetts
• Case: Katzeff v. Toyota of Dartmouth, Inc., No. 1:25-cv-12022-JEK
• Core Issue: Whether a car dealership could enforce an arbitration agreement contained in a third-party vehicle shopping website’s terms of service.
• Key Allegation: Plaintiff alleged unsolicited telemarketing calls violated TCPA do-not-call regulations.
• Court Holding: Toyota qualified as a third-party beneficiary of TrueCar’s arbitration agreement and could enforce the arbitration provision.
• Outcome: Motion to compel arbitration granted; case stayed pending arbitration.
• Notable Detail: The court found TrueCar’s clickwrap agreement enforceable but declined to enforce AutoWeb’s arbitration provision due to insufficient evidence regarding notice and consent.

A federal judge in Massachusetts has ordered a Telephone Consumer Protection Act (TCPA) class action against Toyota of Dartmouth, Inc., into arbitration, finding that the dealership could enforce an arbitration agreement contained in TrueCar’s terms of service as a third-party beneficiary. The ruling highlights how online vehicle-shopping platforms may provide dealerships with a pathway to compel arbitration in telemarketing disputes.

The case stems from allegations that Toyota of Dartmouth placed unsolicited telemarketing calls to Massachusetts consumer Jodi Katzeff after she had registered her phone number on the National Do Not Call Registry and later requested that the dealership stop contacting her.

Court Finds TrueCar Agreement Enforceable

U.S. District Judge Julia E. Kobick of the District of Massachusetts concluded that Katzeff was bound by TrueCar’s terms of service because she was required to affirmatively check a box accepting the agreement before submitting her information through a TrueCar-affiliated vehicle shopping service.

The court distinguished between two lead-generation platforms involved in the case.

Toyota argued that Katzeff agreed to arbitration provisions through both AutoWeb and TrueCar when shopping for vehicles online. However, the court found that Toyota failed to prove that AutoWeb provided adequate notice of its terms because it did not provide evidence showing exactly what Katzeff saw when using the site.

By contrast, the court found TrueCar’s enrollment process provided reasonable notice and required affirmative acceptance through a clickwrap agreement. The terms were presented through hyperlinks, and consumers could not proceed without checking a box acknowledging acceptance of the terms of service.

Third-Party Beneficiary Language Proved Critical

The key issue was whether Toyota, which was not a direct signatory to the agreement between Katzeff and TrueCar, could nevertheless enforce the arbitration provision.

Judge Kobick pointed to language in the TrueCar arbitration agreement stating that “Participating Dealers” are intended third-party beneficiaries and may enforce the arbitration agreement in disputes with consumers. The agreement defined participating dealers as automobile dealers within the TrueCar network.

Toyota presented evidence that it participates in the TrueCar dealer network and received Katzeff’s lead information through the platform. Based on that evidence, the court concluded Toyota qualified as a participating dealer and could enforce the arbitration provision.

The court rejected the plaintiff’s argument that a dealership must be specifically named in the agreement to obtain third-party beneficiary rights. Instead, the court held that identifying a clearly defined category of beneficiaries was sufficient under Massachusetts law.

TCPA Claims Moved to Arbitration

Katzeff’s complaint alleged that Toyota violated TCPA do-not-call regulations by:

• Calling a number listed on the National Do Not Call Registry.
• Continuing to place calls after she requested no further communications.

According to the complaint, Toyota allegedly made at least 11 telemarketing calls between April and July 2024 after Katzeff had texted “Stop” and received confirmation that she had been removed from dealership text messages.

The court did not reach the merits of those allegations. Instead, it held that the dispute falls within the scope of the arbitration agreement and granted Toyota’s motion to compel arbitration. The lawsuit has been stayed pending completion of the arbitration process.

Implications for TCPA and Lead Generation Litigation

The decision may be significant for businesses that obtain consumer leads through third-party platforms.

The ruling demonstrates that companies may be able to enforce arbitration agreements entered into between consumers and lead-generation platforms when the agreements expressly designate participating businesses as third-party beneficiaries. The case also underscores the importance of website design and consent mechanisms. 

While TrueCar’s clickwrap process survived scrutiny, AutoWeb’s arbitration provision was not enforceable because the evidentiary record did not sufficiently establish how the terms were presented to consumers.