In Mason v. Midland Funding, plaintiffs Mason and Burnett brought an action against a debt collector and its subsidiaries claiming that they violated the Fair Debt Collection Practices Act by allegedly filing lawsuits to collect on unpaid debts even though they knew the debts were “uncollectable.”

The defendants filed a motion to dismiss, which was denied by the U.S. District Court for the Northern District of Georgia. The defendants then filed a motion to compel arbitration, seeking to hold Mason and Burnett to arbitration agreements that the defendants claimed Mason and Burnett agreed to when they obtained credit accounts online, which was ultimately denied. The defendants then filed an interlocutory appeal with the Eleventh Circuit.

The crux of the interlocutory appeal turned on whether Mason and Burnett agreed to arbitrate. The defendants claimed that as part of opening the credit card account, Mason agreed to arbitrate by assenting to a clickwrap agreement that was part of his online application. The defendants also argued that Mason was mailed a welcome packet containing the agreement, along with the credit card, which he used upon receipt.

In support of these arguments, the defendants cited a declaration from the original creditor. The court found that the declaration neither showed the actual application form that Mason filled out and agreed to online nor demonstrated that the online application contained an arbitration provision. Thus, the Eleventh Circuit had no evidence that Mason saw and was required to agree to the arbitration provision when applying.

Although the defendants claimed that the agreement was also mailed to Mason, the Eleventh Circuit rejected the defendants’ application of the “mailbox rule,” finding that they failed to present any “competent evidence” proving they knew that the agreement had been mailed. The court, therefore, affirmed the lower court’s denial of the defendants’ motion to compel arbitration as to Mason.

Conversely, as to Burnett, the Eleventh Circuit found that the defendants provided a much more definitive declaration, which was sufficient to trigger the mailbox rule’s presumption that Burnett received the agreement, including the arbitration agreement contained within it. Thus, the Eleventh Circuit reversed the district court’s denial of the motion to compel arbitration as to Burnett.

Mason v. Midland Funding LLC, No. 18-14019 (11th Cir. May 13, 2020).