Adams v. Lashify, Inc.
| Docket Number | 6:23-cv-243-PGB-DCI |
| Decision Date | 29 August 2023 |
| Parties | COURTNEY ADAMS, Plaintiff, v. LASHIFY, INC., Defendant. |
| Court | U.S. District Court — Middle District of Florida |
This cause comes before the Court on Defendant's Motion to Compel Arbitration and Stay the Case (Doc. 25 (the “Motion”)) and Plaintiff's response in opposition (Doc. 30). Upon due consideration, the Motion is granted.
This dispute stems from allegedly unwanted telephone solicitations. (Doc. 11). Defendant is an online retailer of eyelash extension products. (Doc. 25-1, p. 2). Plaintiff purchased products from Defendants on six separate occasions. (Id. at p. 4). As part of this purchase process Plaintiff encountered a screen substantially similar to the following:
(Image Omitted) (Id. at p. 3). A purchase cannot be made without clicking the “CHECKOUT” button. (Id. at p. 4). If the “Terms of Use” link is clicked on, a written offer of terms (the “Internet Agreement” or “Terms of Use”) governing the interaction appears in a potential purchaser's browser. (Id. at pp. 27-45). Contained therein is the following arbitration clause:
Notwithstanding any contrary provision of these Terms, all disputes, claims, controversies and matters relating to or in connection with these Terms (or the breach thereof) or any transactions hereunder shall be settled by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules ("AAA Rules"), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof. The arbitration shall take place in New York, New York before a single neutral arbitrator appointed in accordance with the AAA Rules and shall be conducted in the English language. All arbitrations shall be conducted and resolved on an individual basis and not a class-wide, multiple plaintiff or similar basis. No arbitration shall be consolidated with any other arbitration proceeding involving any other person or entity.
(Id. at p. 39).
After allegedly receiving unwanted telephonic sales calls, Plaintiff brought this action in Florida state court alleging violations of the Florida Telephone Solicitation Act on behalf of herself and all others similarly situated. (Doc. 1-1). Defendant promptly removed the case to this Court. (Doc. 1). Within a month, Defendant moved to compel arbitration and stay the case. (Doc. 19). Plaintiff filed an amended complaint which mooted this initial motion to compel. (Doc. 21, 24). Defendant again requested an order to compel arbitration and stay the case.[1] (Doc. 25). Plaintiff later timely responded in opposition to the Motion. (Doc. 30). As such, this matter is now ripe for review.
The Federal Arbitration Act (the “FAA”) provides that a written arbitration agreement in any contract involving commerce “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. The existence of a valid arbitration agreement is a threshold issue for determining the propriety of a motion to compel arbitration. Klay v. All Defendants, 389 F.3d 1191, 1200 (11th Cir. 2004). If the Court finds that no arbitration agreement exists, the Court “cannot compel the parties to settle their dispute in an arbitral forum.” Id.
When a party moves to compel arbitration, the FAA states that “[t]he court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue . . . shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4 (emphasis added). The determination of whether parties have agreed to submit a dispute to arbitration is an issue of law subject to judicial resolution. See Granite Rock Co. v. Int'l Bhd. of Teamsters, 561 U.S. 287, 296 (2010). Generally, this determination requires the district court to apply standard principles of state contract law. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 939 (1995); see also P&S Bus. Machs., Inc. v. Canon USA, Inc., 331 F.3d 804, 807 (11th Cir. 2003); Basulto v. Hialeah Auto., 141 So.3d 1145, 1152-56 (Fla. 2014).
A motion to compel arbitration is generally treated as a motion to dismiss for subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). McElmurray v. Consol. Gov't of Augusta-Richmond Cnty., 501 F.3d 1244, 1251 (11th Cir. 2007); Owings v. T-Mobile USA, Inc., 978 F.Supp.2d 1215, 1222 (M.D. Fla. 2013). Motions to dismiss based on subject matter jurisdiction come in two forms: facial attacks and factual attacks. Lawrence v. Dunbar, 919 F.2d 1525, 1528-29 (11th Cir. 1990). A facial attack looks to the four corners of the complaint and those related exhibits properly under consideration before the Court to consider whether subject matter jurisdiction is sufficiently alleged. Id. at 1529. The allegations of the Complaint are accepted as true for purposes of such a motion. Id. In contrast, a factual attack relies on matters outside the pleadings, such as testimony or affidavits. Id.
When a factual attack is employed, “no presumptive truthfulness attaches to plaintiff's allegations, and the existence of disputed material facts will not preclude the trial court for evaluating for itself the merits of jurisdictional claims.” Id. (quoting Williamson v. Tucker, 645 F.2d 404, 412-13 (5th Cir.), cert. denied, 454 U.S. 897 (1981)); Bryant v. Rich, 530 F.3d 1368, 1373-74 (11th Cir. 2008) (). As here, motions to compel arbitration are generally treated as a factual attack because they require reliance on an extrinsic document which might deprive a court of its power to adjudicate a plaintiff's claim. Mason v. Coastal Credit, LLC, No. 3:18-cv-835, 2018 WL 6620684, at *5 (M.D. Fla. Nov. 16, 2018).
In moving to compel arbitration, Defendant points the Court to several affidavits and extrinsic documents the factual veracity of which Plaintiff does not reasonably challenge. (Docs. 25-1, 25-2). Based on these documents, the Court finds the parties must arbitrate Plaintiff's claims pursuant to the Internet Agreement.
The FAA provides a federal “policy favoring arbitration.” Morgan v. Sundance, Inc., 142 S.Ct. 1708, 1713 (2022). But “[t]he federal policy is about treating arbitration contracts like all others, not about fostering arbitration.” Id. (citation omitted). Under both federal and Florida law, a party has a right to arbitrate where: (1) a valid, written agreement exists between the parties containing an arbitration clause; (2) an arbitrable issue exists; and (3) the right to arbitration has not been waived. Sims v. Clarendon Nat. Ins. Co., 336 F.Supp.2d 1311, 1326 (S.D. Fla. 2004); Marine Envt'l. Partners, Inc. v. Johnson, 863 So.2d 423, 426 (Fla. 4th DCA 2003); Seifert v. U.S. Home Corp., 750 So.2d 633 (Fla. 1999).
Plaintiff incorrectly argues Defendant has no right to arbitrate this dispute by challenging all three of these prongs. (Doc. 30, pp. 6-16).[2]
Federal courts “apply ordinary state-law principles that govern the formation of contracts” to determine whether there is a valid agreement to arbitrate under the FAA.[3],[4] First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). In Florida, an enforceable contract requires offer, acceptance, consideration, and sufficient specification of essential terms. St. Joe Corp. v. McIver, 875 So.2d 375, 381 (Fla. 2004). Consequently, courts must first decide whether there were formation challenges “to the contract containing the arbitration clause.” Solymar Invs., Ltd. v. Banco Santander S.A., 672 F.3d 981, 990 (11th Cir. 2012). After all, a party plainly cannot be bound by an arbitration clause of a proffered contract to which it does not assent. BG Grp., PLC v. Republic of Argentina, 572 U.S. 25, 46 (2014) (citations omitted). Formation requires Matter of T&B Gen. Contracting, Inc., 833 F.2d 1455, 1459 (11th Cir. 1987) (citations omitted).
In the online context, Florida courts have recognized two main types of internet contracts:
(1) clickwrap agreements: when a website directs a purchaser to the terms and conditions of the sale and requires the purchaser to click a box to acknowledge that they have read those terms and conditions; and (2) browserwrap agreements: when a website merely provides a link to the terms and conditions and does not require the purchaser to click an acknowledgement during the checkout process. The purchaser can complete the transaction without visiting the page containing the terms and conditions.
Fridman v. 1-800 Contacts, Inc., 554 F.Supp.3d 1252, 1259 (S.D. Fla. 2021) (citations and quotations omitted). “The defining feature of browserwrap agreements is that the user can continue to use the website or its services without visiting the page hosting the terms of the browserwrap agreement or even knowing that such a webpage exists.” Id. (cleaned up). Because the boundary between the two types of internet contracts is not always clearcut, the Court will assume without deciding that the Internet Agreement was a browserwrap agreement; nowhere is Plaintiff required to click to confirm their agreement with the terms although users must press the “CHCKOUT” button.[5] (Doc. 25-1, p. 3; Doc. 30, p. 8).
Under Florida law, a browserwrap agreement is enforceable “when the...
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