20 F.4th 400
8th Cir.2021Background
- Duncan became an IML Independent Business Owner (IBO) via IML’s website in July 2016; IML says registration required clicking to accept Terms and Conditions and Policies and Procedures that included an arbitration clause.
- IML submitted an affidavit from its COO and a sample registration screen; IML did not produce the exact screen Duncan saw and characterized the sample as substantially identical.
- Duncan filed an affidavit saying she never saw the Terms or Policies and did not recognize the registration screen produced by IML; she recalls clicking boxes but not the specific language.
- IML terminated Duncan in June 2019; Duncan sued in state court in October 2019; IML removed the case, answered, asserted counterclaims, and later moved to compel arbitration.
- The district court denied the motion to compel, finding a genuine dispute of material fact about whether the parties agreed to arbitrate and viewing facts in Duncan’s favor.
- The Eighth Circuit reversed only to the extent of directing a trial under 9 U.S.C. §4 to resolve the factual dispute about the formation of any arbitration agreement and remanded for that trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of a valid arbitration agreement | Duncan: she never saw or agreed to the Terms/Policies; no assent | IML: registration required affirmative clicking to accept terms that include arbitration | Court: genuine dispute of material fact exists; remand for trial to resolve assent |
| Burden and standard on motion to compel | Duncan: district court correctly viewed evidence in her favor and found IML failed to prove agreement | IML: federal policy favors arbitration and it met its burden to show agreement | Court: movant bears burden; appellate review is de novo for legal issues and clearly erroneous for factual findings; factual disputes remain for trial |
| Whether court must hold a trial under 9 U.S.C. §4 when formation is disputed | Duncan: contends no trial necessary because district court concluded IML failed its burden (asks to affirm) | IML: implicitly argues district court should have compelled arbitration without a trial | Court: §4 requires the district court to proceed summarily to trial on arbitrability when there are genuine disputes of material fact; remand for trial |
| Scope/waiver defenses (arbitrability and waiver by litigation) | Duncan: claims fall outside any arbitration scope and IML waived arbitration by litigating | IML: asserts arbitration applies and did not waive it | Court: district court did not decide these defenses; appellate court declines to address them now and remands for trial/addressing in district court |
Key Cases Cited
- Shockley v. PrimeLending, 929 F.3d 1012 (8th Cir. 2019) (movant bears burden to prove existence of valid arbitration agreement)
- Nebraska Machinery Co. v. Cargotec Solutions, LLC, 762 F.3d 737 (8th Cir. 2014) (remand for trial required when factual disputes remain about contract formation)
- Jin v. Parsons Corp., 966 F.3d 821 (D.C. Cir. 2020) (§4 requires a summary trial on arbitrability when factual disputes exist)
- Berkeley County School Dist. v. Hub Int’l Ltd., 944 F.3d 225 (4th Cir. 2019) (district court must conduct trial where genuine factual disputes exist about assent to arbitration)
- Epic Systems Corp. v. Lewis, 138 S. Ct. 1612 (2018) (FAA establishes a liberal federal policy favoring arbitration)
- Moses H. Cone Memorial Hospital v. Mercury Construction Corp., 460 U.S. 1 (1983) (federal policy favors enforcement of arbitration agreements)