HOUSTON - The First Court of Appeals has reversed an order granting Microsoft an anti-arbitration injunction in litigation brought by a law firm asserting the company locked its cloud storage account.
The legal dispute was brought by Turnbull Legal Group, a Houston firm that primarily practices criminal defense law. As part of its practice, the firm uses Microsoft’s Office 365 and also subscribes to Microsoft’s OneDrive, a cloud-based service that provides remote storage of files and data.
According to the First Court’s Oct. 27 opinion, the firm accepted the terms set out in a Microsoft Services Agreement by creating an account. The “Code of Conduct” section of the MSA prohibited certain types of conduct. The MSA also included a detailed arbitration clause.
Court records state the firm’s OneDrive account had been suspended due to a suspected violation of the Code of Conduct, and attorneys could not access work relating to their pending criminal cases. The alleged violation was for material related to a case being handled by the firm.
According to the opinion, on Oct. 25, 2019, the firm and Edward Turnbull IV filed an ex parte petition for a temporary restraining order and temporary injunction “pending arbitration” seeking to require Microsoft to restore access to the OneDrive account and immediately return “all data belonging to [the firm] in its possession.”
On Oct. 29, 2019, a Harris County ancillary judge granted the Firm’s request. In June 2020, the firm and Turnbull filed a demand with the AAA, alleging that the MSA required arbitration of their claims against Microsoft. Microsoft filed a motion for an anti-arbitration injunction, which the trial court granted.
The First Court concluded that Microsoft did not meet its burden to establish that the firm substantially invoked the judicial process and waived its arbitration rights established in the MSA.
“We therefore hold that the trial court erred by granting Microsoft’s motion for an anti-arbitration injunction and enjoining the parties from submitting this case to arbitration,” the opinion states. “We remand the case to the trial court for entry of an order compelling the parties to arbitrate and staying the underlying proceedings pending completion of the arbitration.”
Case No. 01-20-00851-CV