E-Signature Results in Enforceable Agreement to Arbitrate

The 3rd Circuit affirmed a district court ruling granting Kaplan University's motion to compel the student to arbitrate. The 3rd Circuit concluded that the e-signature was a valid method of assent and the student was bound regardless of whether or not she read the enrollment packet.

Buckley LLP discusses the case further.

The Politics of Arbitration Law and Centrist Proposals for Reform

The Politics of Arbitration Law and Centrist Proposals for Reform is a new paper of mine, just posted. I welcome comments and suggestions to ware@ku.edu

The abstract:

Arbitration law in the United States is far more controversial when applied to individuals than to businesses. While enforcement of arbitration agreements between businesses sometimes raises legal issues that divide courts, those issues tend to interest only scholars, lawyers, and other specialists in the field of arbitration. In contrast, enforcement of arbitration agreements between a business and an individual (such as a consumer or employee) raises legal issues that interest many members of Congress and various interest groups — all of whom have taken positions on significant proposals for law reform. The Consumer Financial Protection Bureau has extensively researched and reported on consumer arbitration agreements and is expected to issue a rule regulating, or even prohibiting, such agreements.

This Article both explains how issues surrounding consumer and other adhesive arbitration agreements became divisive along predictable political lines and introduces a framework to understand and compare various positions on them. This new framework arrays on a continuum five positions on the level of consent the law should require before enforcing an arbitration agreement against an individual. Progressives generally would require higher levels of consent than arbitration law currently requires, while conservatives generally defend current arbitration law’s low standards of consent.

This Article proposes an intermediate (or centrist) position. It joins progressives in rejecting conservative-supported anomalies that enforce adhesive arbitration agreements more broadly than other adhesion contracts on the three important topics: contract-law defenses, correcting legally-erroneous decisions, and class actions. Once these anomalies are fixed though, adhesive arbitration agreements should — contrary to progressives — be as generally enforceable as other adhesion contracts. In other words, this Article joins conservatives in defending general enforcement of adhesive arbitration agreements under contract law’s standards of consent. The Article briefly concludes with the language of a rule the CFPB could adopt to enact into law the reforms advocated in this Article

Arbitration Clauses and Other Online Contract Terms

Interesting and well written article, Notice, Assent, and Form in a 140 Character World, by Widener University Law Professor Juliet M. Moringiello. 

She writes

From the earliest days of internet contracting disputes, courts and scholars used the terms “clickwrap” and “browsewrap” to describe the different types of electronically presented terms, with clickwrap referring to terms to which party could accept only by clicking a web site button and browsewrap denoting terms for which no click was required and which often provided that a web site user accepted them merely by browsing the web site....
The recent opinion in Tompkins v. 23andMe, Inc., Case No. 5:13-CV-05682-LHK, N.D. Cal., June 25, 2014. illustrates both the doctrinal confusion that can result from adherence to a electronic contracting lexicon that is limited to the terms “clickwrap” and “browsewrap” and the tendency of courts to hold that so long as there is notice of the notice of contract terms, a contract will be formed when the web site user takes the requested acceptance action. The dispute involved a personal genetics company that provided individuals with a genome profile developed from a DNA sample. Numerous customers of 23andMe filed class action complaints against the company alleging various false advertising and consumer protection claims, and the company moved to compel arbitration, citing the plaintiffs’ agreement to arbitrate.

Court Declines to Enforce Website's Arbitration Clause

The 9th Circuit yesterday declined to enforce an arbitration agreement contained in Barnes & Noble’s website’s Terms of Use.

The appellate court said “We agree with the district court that Barnes & Noble did not provide reasonable notice of its Terms of Use, and that Nguyen therefore did not unambiguously manifest assent to the arbitration provision contained therein.”

Good commentary by Technology & Marketing Law Blog.

 

10th Circuit Holds Unsigned Arbitration Agreement Unenforceable

Bellman v. i3Carbon, LLC, 2014 WL 2210739 (10th Cir. May 29, 2014), discussed by Liz Kramer

The court writes "Defendants argue that Plaintiffs manifested their acceptance of the
Operating Agreement, and specifically the arbitration provision, when they
invested in i3Carbon following receipt of the approximately 200-page
Investment Binder. However, the Operating Agreement included in the
Investment Binder did not have Plaintiffs’ names on it and did not indicate that
Plaintiffs were expected to sign it. Moreover, Plaintiffs have submitted
uncontroverted evidence that (1) i3Carbon never requested that they sign the
Operating Agreement or agree to its provisions, and (2) Plaintiffs, in fact, did
not sign the Operating Agreement."

Agreeing to Arbitrate When you Download a Coupon

General Mills pushes arbitration in striking ways

Today's New York Times says “the maker of cereals like Cheerios and Chex … has quietly added language to its website to alert consumers that they give up their right to sue the company if they download coupons, ‘join’ it in online communities like Facebook, enter a company-sponsored sweepstakes or contest or interact with it in a variety of other ways.”  A fascinating case about assent to contract terms will arise when someone challenges a this website language: “Please note we also have new Legal Terms which require all disputes related to the purchase or use of any General Mills product or service to be resolved through binding arbitration.”

11th Circuit Holds New No-Arbitration Agreement Supersedes Earlier Arbitration Agreement

 

Dasher v. RBC Bank (USA), __ F.3d __, 2014 WL 504704 (11th Cir. Feb. 10, 2014), is a class action part of the larger Checking Account Overdraft Multidistrict Litigation.  As the 11th Circuit explains, the original account agreement "contained an arbitration clause with terms broad enough to cover this overdraft fee dispute.” When the bank was acquired by another bank, it sent out to new account agreements with no arbitration clause.  In the 11^th Circuit, the bank cited a labor arbitration case stating there is “a presumption of arbitrability in the sense that an order to arbitrate . . . should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 650, 106 S. Ct. 1415, 1419 (1986) (internal quotation marks omitted).  The 11^th Circuit rejected this argument by citing a labor arbitration case holding that this presumption of arbitrability applies when an “arbitration agreement is ambiguous about whether it covers the dispute at hand.” Granite Rock Co. v. Int’l Bhd. of Teamsters, 561 U.S. 287, __, 130 S. Ct. 2847, 2858 (2010). The FAA’s presumption is inapplicable in this situation, as courts are to apply “the presumption of arbitrability only where a validly formed and enforceable arbitration agreement is ambiguous about whether it covers the dispute at hand.” Granite Rock, 561 U.S. at __, 130 S. Ct. at 2858 (emphasis added).

More at Practical Law and Arbitration Nation

 

 

Money, Politics and Judicial Decisions: A Case Study of Arbitration Law in Alabama

This article presents the results of a study of 106 decisions by the Supreme Court of Alabama from January 18, 1995 through July 9, 1999. The decisions are in the area of arbitration law and reveal the remarkably close correlation between a justice's votes on arbitration cases and his or her primary source or campaign funds. Justices whose election campaigns are funded by plaintiffs' lawyers oppose arbitration, whereas justices whose campaigns are funded by business favor arbitration. The correlation holds not just with regard to ideologically-charged doctrines, like unconscionability, but also with seemingly bland questions of contract formation, interpretation and waiver.

Journal of Law & Politics, Vol. 15, No. 645,