TCPA Mass Arbitration: How Businesses Answer Hundreds of Demands

A business with an arbitration clause can owe more in arbitration fees than the TCPA claims against it are worth. When the American Arbitration Association treats 25 or more similar demands from coordinated counsel as a mass filing, it bills the business $8,125 to open the matter, credited toward per-case fees starting at $325, before any merits arbitrator is appointed. A company that knows its clause and tracks every invoice has more room to respond than the first bill suggests.

How does a TCPA mass arbitration work?

It’s a coordinated filing of individual arbitration demands, often hundreds or thousands, by one law firm or a group of firms, all aimed at the same company and the same calling or texting program.

The model works because the business’s own clause requires each claim to be arbitrated on its own, and the provider’s rules put most of the cost on the business. The claimants’ lawyers don’t need to win the merits to create pressure. They need to file enough complete demands to trigger the invoices.

TCPA claims fit the model well. For autodialed and prerecorded calls, the statute lets a consumer recover actual losses “or to receive $500 in damages for each such violation, whichever is greater,” under 47 U.S.C. § 227(b)(3), and a court may increase that up to three times if the violation was willful or knowing. Do Not Call claims under § 227(c)(5) require more than one call within 12 months by or on behalf of the same entity, allow up to $500 per violation, subject to the same willful-or-knowing increase, and give the business an affirmative defense if it established and implemented, with due care, reasonable practices and procedures to prevent those calls. What the statute doesn’t have is a fee-shifting provision for a winning consumer. That’s why I think the filing fees, not the damages, drive the claimants’ strategy in these filings.

What does a mass arbitration cost the business?

AAA, one case at a time. Under the AAA’s Consumer Arbitration Rules fee schedule (costs of arbitration amended and effective January 15, 2024), the consumer’s filing fee is capped at $225. For a single arbitrator, the business pays a $375 filing fee, a $1,400 case management fee when the arbitrator is presented, a $500 fee for any hearing held, and arbitrator compensation of $300 an hour.

AAA, mass filings. The AAA’s Consumer Mass Arbitration and Mediation Fee Schedule, also effective January 15, 2024, applies when the AAA decides that 25 or more similar demands have been filed against the same party with coordinated representation. The business pays a flat $8,125 initiation fee, credited toward per-case fees of $325 for each of the first 500 cases and less after that. Arbitrator appointment adds $450 per case ($600 with list-and-rank selection), a $600 final fee per case is billed when a hearing or documents-only deadline is set, and merits arbitrators bill $300 an hour.

Run the numbers on 1,000 demands that each reach the final-fee stage, with arbitrators appointed directly. By my math, per-case fees come to $287,500 and appointment fees to $450,000, and final fees add $600,000, for $1,337,500 in AAA administrative fees before a single arbitrator hour (list-and-rank selection pushes it to $1,487,500). If each claimant has one $500 claim, the merits exposure is $500,000, well under half the fees. More messages per claimant, or a willfulness finding, raise that number.

JAMS. The JAMS Mass Arbitration Procedures and Guidelines, effective May 1, 2024, cover 75 or more similar demands (or another number the agreement sets) from the same or coordinated firms, but only “where the Parties have agreed to the application of these Procedures in a pre- or post-dispute written agreement.” Under the JAMS mass arbitration fee schedule, the filing fee is $7,500 regardless of the number of cases. When consumers start the arbitration, they pay no more than $2,500 of it in total, and the company pays the rest and all case management fees (13% of professional fees). Without those procedures, when a consumer starts the case, JAMS’s consumer minimum standards provide that “the only fee required to be paid by the consumer is $250,” and the company bears the rest of JAMS’s $2,000 two-party filing fee in each case.

Can a court make the business pay the fees?

In the Seventh Circuit, at least, not when the clause leaves fee disputes to the AAA. California’s statutes, covered in the next section, work differently.

The leading appellate example is Wallrich v. Samsung Electronics America, Inc., decided by the Seventh Circuit in July 2024. The case was a biometric-privacy mass filing under the AAA’s commercial rules and its earlier multiple-case filing rules, not a TCPA case. According to the opinion, 35,651 consumers filed AAA demands, the AAA asked the company for $4,125,000 as its share of the initial filing fees, the company declined to pay, and the AAA closed the cases after the consumers declined to advance the fees. The district court ordered the company to arbitrate and pay. The Seventh Circuit reversed. It held first that the consumers hadn’t proved their arbitration agreements, and then that, even if they had, the agreement left fee disputes to the AAA. Quoting the Supreme Court, the Seventh Circuit said procedural issues like fee disputes are “presumptively not for the judge, but for an arbitrator, to decide,” and it called the consumers’ request for an order requiring payment “outside the district court’s authority.”

The AAA’s Mass Arbitration Supplementary Rules (amended and effective April 1, 2024) let the arbitrator, or the AAA before an arbitrator is appointed, suspend or terminate proceedings if fees stay unpaid after the other side has a chance to advance them, and they add that the AAA “may also decline to administer future arbitrations with the parties involved.” Once all parties have paid the initiation fees, and before merits arbitrators are appointed, a party can give the AAA written notice of a disputed issue, and Rule MA-6 lets the AAA, in its sole discretion, appoint a process arbitrator who can decide “Disputes regarding payment of administrative fees, arbitrator compensation, and expenses,” along with filing deficiencies and conditions precedent. For a business that believes many demands are defective, the process arbitrator is the place to say so, and that’s where I’d spend the early effort.

What happens in California if the fees aren’t paid on time?

California treats late payment as a forfeiture. The statutes apply when the clause or the provider’s rules require the drafting party to pay the fees. Under Code of Civil Procedure § 1281.97, if the drafting party doesn’t pay the fees to start a consumer arbitration within 30 days after the due date, it “is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel arbitration under Section 1281.2.” Section 1281.98 applies the same rule to fees that come due while the arbitration is pending. The consumer then elects among statutory options, chiefly leaving for court or staying in arbitration at the drafting party’s expense. If the consumer sues, § 1281.99 provides that “The court shall impose a monetary sanction against a drafting party” for the consumer’s expenses, including attorney’s fees.

Courts have applied the deadline strictly. In Colon-Perez v. Security Industry Specialists, Inc., decided January 29, 2025, the Court of Appeal affirmed an order letting an employee leave arbitration after the employer, according to the opinion, “submitted the payment, 36 days from the date of the initial invoice.” In the published part of the opinion, the court noted that its earlier decision in Keeton v. Tesla, Inc. (now under review by the California Supreme Court) had rejected the argument that the Federal Arbitration Act preempts § 1281.98, “as have all but one of the Courts of Appeal that have considered the issue.”

A panel that went the other way is Hernandez v. Sohnen Enterprises, Inc. (2024). It held first that an agreement adopting the FAA’s procedures took the case outside § 1281.97, and as an alternative ground it concluded that “when an agreement falls within the scope of the FAA and does not expressly adopt California arbitration laws, the FAA preempts the provisions of section 1281.97 that mandate findings of breach and waiver.” The California Supreme Court granted review in Hernandez in August 2024 and deferred briefing until it decides Hohenshelt v. Superior Court, which it took up in June 2024 to decide whether the Federal Arbitration Act preempts “state statutes prescribing the procedures for paying arbitration fees and providing for forfeiture of the right to arbitrate” when the drafting party doesn’t pay on time. As of this post, Hohenshelt is pending. Until it’s decided, I’d treat every invoice in a California consumer arbitration as a hard deadline, whatever the clause says about the FAA. I’d calendar the 30th day after each due date the day the invoice arrives, and pay well before it.

Are batching and bellwether clauses enforceable?

The law is still thin. The Ninth Circuit has rejected one bellwether scheme, and at least one federal trial court has distinguished a concurrent-batching clause from it.

In Heckman v. Live Nation Entertainment, Inc., decided October 28, 2024, the Ninth Circuit affirmed the denial of a motion to compel arbitration, holding the agreement unconscionable under California law. The court relied on an extreme degree of procedural unconscionability and several problems with the terms, including limits on discovery and appeal. The rules it incorporated grouped cases into batches and let decisions in three bellwether cases serve as precedent for the rest of the batch. The Ninth Circuit wrote that those rules “provide to defendants many of the protections and advantages of a class action, but provide to non-bellwether plaintiffs virtually none of its protections and advantages.” The company obtained an extension of time to ask the Supreme Court for review, according to the Supreme Court’s docket.

A month later, in Kohler v. Whaleco Inc., the Southern District of California compelled arbitration of all claims except a request for public injunctive relief, under a clause that sends 25 or more similar notices, filed within 30 days with the help of the same firm or firms, to the AAA in batches of 100, administered concurrently. The court held that the batching clause didn’t make the delegation clause unconscionable, distinguishing Heckman because, as the order puts it, the clause “does not mention bellwether proceedings” and customers had 30 days to opt out. It left to the arbitrator whether the batching clause itself applies and is enforceable. I read Kohler as a modest win for drafters, not a green light.

What should the arbitration clause say before the next campaign?

These are the choices I’d review with any company that calls or texts at volume.

Name the mass procedures. JAMS applies its mass procedures only if the parties agreed to them, so a JAMS clause that’s silent leaves the company paying per-case filing fees unless the claimants agree to the procedures after the dispute arises. An AAA clause picks up the AAA’s mass rules when the AAA applies them, but saying so in the clause removes an argument.

Batch, but don’t bind. A concurrent-batching clause didn’t stop the court from sending the case to arbitration in Kohler, though the court left that clause’s own enforceability to the arbitrator. Bellwether “precedent” that would in practice bind other claimants was one of several features that sank the agreement in Heckman, and I wouldn’t put it in a clause.

Set the payment window. Section 1281.97 tells providers to issue invoices “as due upon receipt” unless the agreement states “the number of days in which the parties to the arbitration must pay any required fees or costs.” A stated window moves the due date, and the due date is when the statute’s 30 days start to run.

Keep small claims open. When a claim is within a small claims court’s jurisdiction, the AAA’s Consumer Arbitration Rules let a party, before an arbitrator is appointed, “send a written notice to the opposing party and the AAA that it wants the case decided by a small claims court.” In California, CCP § 116.530 provides that “no attorney may take part in the conduct or defense of a small claims action,” with narrow exceptions. In a mass filing, though, the AAA’s mass rules let the process arbitrator decide whether cases go to small claims court, so expect a fight over it.

When the demands arrive, before the first invoice comes due

1. Put a litigation hold on the dialer and texting-platform logs, call and message records, and consent records for every number named in the demands.
2. Pull the opt-out and internal do-not-call records for each number, with the date each request came in and when the number was suppressed.
3. Pull the National Do Not Call Registry scrub records and the registry version dates for the campaigns named in the demands.
4. Collect the vendor and lead-source contracts, message templates, and any prerecorded or AI-voice audio files used in those campaigns.
5. Talk to a lawyer before paying or disputing any invoice, contacting a claimant, or making any settlement offer.

For claims involving mass arbitration demands over marketing texts, the firm’s California TCPA defense page sets out what the defense looks at first.

Questions businesses ask about TCPA mass arbitration

Should we refuse to pay the arbitration fees?

Not in California. Under §§ 1281.97 and 1281.98, a payment more than 30 days late forfeits the right to compel arbitration, and in Colon-Perez a payment made 36 days after a due-on-receipt invoice, six days past the window, was enough. In the Seventh Circuit, Wallrich shows a court won’t order payment when the clause leaves fee disputes to the AAA, but the AAA can close the cases, the claimants can then sue in court, and the business loses the forum it chose.

Can we challenge defective demands before the merits stage?

Often, yes. After a party gives written notice of a disputed issue, the AAA’s mass rules let a process arbitrator decide whether filing requirements and conditions precedent were met and which demands belong in the mass filing. That happens after the initiation fees are paid but before merits arbitrators are appointed, if the AAA appoints one. Duplicate and incomplete demands, and Do Not Call claimants who allege only one call in 12 months, are worth raising then. Whether a claimant ever agreed to the clause at all may be a question for a court, as it was in Wallrich.

Does the AAA review our clause before it takes a case?

Yes. Under Rule R-1(d) of the AAA’s Consumer Arbitration Rules, the AAA accepts a consumer case only if it decides the agreement “substantially and materially complies with the due process standards” of its rules and its Consumer Due Process Protocol. The consumer fee schedule charges $600 to review and register a clause, plus $300 if a demand arrives under a clause that was never submitted.

If the demands are already arriving

If your company is facing a wave of arbitration demands over calls or texts, the invoice deadlines and the process arbitrator’s early rulings can matter as much as the merits. Rosenberger + Kawabata represents businesses defending TCPA lawsuits and class actions through its business litigation practice, including claims involving mass arbitration demands over marketing texts. Contact Rosenberger + Kawabata online for a free and confidential consultation, or call (310) 894-6921.

Sources

The statute is the Telephone Consumer Protection Act at 47 U.S.C. § 227. California’s fee-payment statutes are Code Civ. Proc. § 1281.97, § 1281.98, and § 1281.99, and the small claims rule is § 116.530.

The provider rules, in the versions posted as of this post, are the AAA’s Consumer Arbitration Rules (amended and effective September 1, 2014), the AAA consumer fee schedule, the AAA Consumer Mass Arbitration and Mediation Fee Schedule, the AAA Mass Arbitration Supplementary Rules, the JAMS Mass Arbitration Procedures and Guidelines with their fee schedule, the JAMS arbitration fee schedule, and the JAMS Consumer Minimum Standards.

The court decisions are Heckman v. Live Nation Entertainment, Inc., 120 F.4th 670 (9th Cir. 2024); Wallrich v. Samsung Electronics America, Inc., 106 F.4th 609 (7th Cir. 2024); Kohler v. Whaleco Inc., No. 3:24-cv-00935 (S.D. Cal. Nov. 25, 2024); Colon-Perez v. Security Industry Specialists, Inc., 108 Cal.App.5th 403 (2025); Hernandez v. Sohnen Enterprises, Inc., 102 Cal.App.5th 222 (2024), review granted, No. S285696; and the California Supreme Court’s grant of review in Hohenshelt v. Superior Court, No. S284498.

This post is general information about the Telephone Consumer Protection Act and related laws as of April 15, 2025. It is not legal advice, and reading it does not create an attorney-client relationship. Courts and the FCC change the rules in this area often, and the outcome of any claim depends on its facts. Past results do not guarantee future outcomes.