Hubbert v. Dell Corp.
| Decision Date | 12 August 2005 |
| Docket Number | No. 5-03-0643.,5-03-0643. |
| Citation | 835 N.E.2d 113 |
| Parties | Dewayne HUBBERT, Elden L. Craft, Chris Grout, and Rhonda Byington, Individually and on Behalf of Others Similarly Situated, Plaintiffs-Appellees, v. DELL CORPORATION, Defendant-Appellant. |
| Court | Illinois Supreme Court |
Jerold S. Solovy, Benjamin K. Miller, Matthew M. Neumeier, Scott T. Schutte, Jenner & Block, LLP, Chicago, Robert J. Bassett, Donovan, Rose, Nester & Joley, Belleville, for Appellant.
Stephen M. Tillery, Aaron M. Zigler, Korein Tillery, St. Louis, MO, Stephen A. Swedlow, Robert L. King, Swedlow & King, LLC, Chicago, Robert S. Forbes, Robert S. Forbes, PC, Alton, for Appellees.
The defendant, Dell Corp., appeals the trial court's order denying its motion to compel arbitration and the court's related orders denying its motion to strike certain exhibits and an affidavit submitted by the plaintiffs, Dewayne Hubbert, Elden Craft, Chris Grout, and Rhonda Byington, in opposition to the defendant's motion to compel arbitration. Because a ruling on a motion to compel arbitration is in the nature of injunctive relief, the trial court's orders are reviewable under Supreme Court Rule 307(a)(1) (188 Ill.2d R. 307(a)(1)). LAS, Inc. v. Mini-Tankers, USA, Inc., 342 Ill.App.3d 997, 1000, 277 Ill.Dec. 547, 796 N.E.2d 633 (2003). On appeal, the defendant argues that the trial court erred in finding that its arbitration clause was not a part of the contract between the defendant and the plaintiffs and that the court erred in finding that if the arbitration clause was a part of the contract between the parties, then the arbitration clause was unenforceable because it was procedurally and substantively unconscionable.
In 2000 and 2001, the plaintiffs purchased computers online through the defendant's Web site. Before purchasing their computers, each of the plaintiffs configured the model and type of computer he or she wished to purchase from the defendant's Web pages. To make their purchases, each of the plaintiffs completed online forms on five of the defendant's Web pages. On each of the five Web pages, the defendant's "Terms and Conditions of Sale" were accessible by clicking on a blue hyperlink. The terms and conditions were also printed on the back of the plaintiffs' invoices, which were sent, along with separate documents containing the "Terms and Conditions of Sale," in the shipping boxes with the plaintiffs' computers, and the terms and conditions could be obtained by calling the defendant's toll-free number and requesting a copy. On the last three forms the plaintiffs completed online, the following statement appeared: "All sales are subject to Dell's Term[s] and Conditions of Sale." The defendant included in the boxes in which the computers were shipped its "total satisfaction" return policy, which provided that purchasers would receive a full refund or credit if the computers were returned within 30 days. None of the plaintiffs returned his or her computers within 30 days.
On June 3, 2002, the plaintiffs filed their complaint, both as individuals and on behalf of others similarly situated, i.e., a putative class action lawsuit, against the defendant. In their complaint, the plaintiffs—three Illinois residents and one Missouri resident—alleged that they had purchased computers online from the defendant, whose principal place of business was in Texas; that the computers contained Pentium 4 microprocessors, which the defendant had asserted were the fastest, most powerful Intel Pentium processor available; that the Pentium 4 microprocessor was slower and less powerful and provided less performance than either a Pentium III or an AMD Athlon, but at a greater cost; and that the defendant's marketing of its Pentium 4 computers was false, misleading, and deceptive. The plaintiffs' complaint includes three counts alleging that the defendant violated the Texas Deceptive Trade Practices—Consumer Protection Act (Tex. Bus. & Com.Code Ann. § 17.41 et seq. (Vernon 1994)) and one count alleging that the defendant violated the Illinois Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1 et seq. (West 2002)). The plaintiffs allege that their damages are less than $75,000 per person.
After the plaintiffs filed their complaint, the defendant made a demand for arbitration, but the plaintiffs did not respond. On September 13, 2002, the defendant filed a motion to dismiss the plaintiffs' complaint pursuant to section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2002)) or, alternatively, to stay the proceedings and to compel arbitration. In the defendant's motion, it alleged that as a part of the online contract, the plaintiffs agreed to a binding arbitration clause, which was contained in the defendant's "Terms and Conditions of Sale."
The beginning of the "Terms and Conditions of Sale" stated:
The "Terms and Conditions of Sale" also contained a choice-of-law provision, which stated that Texas law governed the sale of the computers and the agreement.
The arbitration clause contained in the defendant's "Terms and Conditions of Sale" stated:
(Emphasis in original.)
At a hearing, the plaintiffs agreed that a contract had been formed by their online purchase of the defendant's computers, but they denied that the binding arbitration clause in the "Terms and Conditions of Sale" was a part of the contract. The defendant moved to strike certain exhibits and an affidavit filed by the plaintiffs in opposition to the defendant's motion to compel arbitration. The court denied the defendant's motion to dismiss or, alternatively, to compel arbitration and the defendant's motions to strike. The defendant filed this interlocutory appeal.
The standard of review for a decision on a motion to compel arbitration is whether there was a showing sufficient to sustain the trial court's order. Travis v. American Manufacturers Mutual Insurance Co., 335 Ill.App.3d 1171, 1174, 270 Ill.Dec. 128, 782 N.E.2d 322 (2002). If a trial court renders its decision without an evidentiary hearing and without findings on any factual issue, de novo review is appropriate. Travis, 335 Ill.App.3d at 1174, 270 Ill.Dec. 128, 782 N.E.2d 322. Additionally, where a court rules on a motion to strike an affidavit or exhibits, evidentiary matters usually within a court's discretion, in conjunction with a ruling that is subject to de novo review on appeal, a court's ruling on the motion to strike is also subject to de novo review. Jackson v. Graham, 323 Ill.App.3d 766, 773, 257 Ill.Dec. 330, 753 N.E.2d 525 (2001). In this case, the trial court did not hold an evidentiary hearing but decided the matter on the basis of the pleadings before it and the parties' arguments, so we review this case de novo.
Before proceeding, we consider what law applies. The parties agree that Texas law applies, but for different reasons: The plaintiffs argue that Texas law is applicable under a conflicts-of-law analysis, while the defendant argues that the choice-of-law provision in the "Terms and Conditions of Sale" controls.
The court addressed a similar issue in Falbe v. Dell, Inc., No. 04-C-1425, 2004 WL 1588243 (N.D.Ill.2004) (memorandum opinion). In Falbe, the defendant, whose principal place of business was in Texas, argued that the choice-of-law provision of the "Terms and Conditions of Sale" controlled, while the plaintiff, an Illinois resident who had purchased a computer from the defendant via telephone, argued...
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...of the subject area or to the issue of whether or not the subject area was included within the national forest. Hubbert v. Dell Corp. , 835 N.E.2d 113, 296 Ill.Dec. 258 (Ill.App., 2005). A newspaper article suggesting that an arbitration firm selected by a computer manufacturer had a bias i......
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...of the subject area or to the issue of whether or not the subject area was included within the national forest. Hubbert v. Dell Corp. , 835 N.E.2d 113, 296 Ill.Dec. 258 (Ill.App., 2005). A newspaper article suggesting that an arbitration irm selected by a computer manufacturer had a bias in......
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Published writings
...of the subject area or to the issue of whether or not the subject area was included within the national forest. Hubbert v. Dell Corp. , 835 N.E.2d 113, 296 Ill.Dec. 258 (Ill.App., 2005). A newspaper article suggesting that an arbitration irm selected by a computer manufacturer had a bias in......
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Published Writings
...of the subject area or to the issue of whether or not the subject area was included within the national forest. Hubbert v. Dell Corp. , 835 N.E.2d 113, 296 Ill.Dec. 258 (Ill.App., 2005). A newspaper article suggesting that an arbitration irm selected by a computer manufacturer had a bias in......