American Family Mutual Insurance v. Tamko Building Products, Inc., 178 F. Supp. 3d 1121

Insurer (plaintiff) sued TAMKO as subrogee after paying claims for hail damage to condominium roofs that used TAMKO "impact resistant" shingles. Plaintiff asserted negligence, strict liability, breach of warranty, and misrepresentation claims.
Shingles were purchased by the insureds; a general contractor hired subcontractor Schall to open bundles and install shingles. Arbitration terms were printed on each bundle wrapper and within a Limited Warranty attached to the product.
Wrapper text stated opening a bundle constituted acceptance of the Limited Warranty, including a mandatory binding arbitration clause and JAMS rules to govern arbitration.
Defendant moved to compel arbitration and to dismiss (or stay) the action; court considered whether a valid agreement to arbitrate existed and whether the claims were arbitrable.
Court found Schall acted as agent/subagent of the insureds, and its opening of the bundles formed an implied-in-fact contract binding the insureds — and thus plaintiff as subrogee — to arbitration.
Court declined to find the clause unconscionable under Colorado law, held arbitrability issues (scope) are for the arbitrator under the JAMS rule, granted motion to compel arbitration, and dismissed the case.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a valid agreement to arbitrate exists	Insureds never saw the bundle/warranty; no meeting of minds	Opening the bundle by subcontractor Schall (agent/subagent) manifested acceptance; wrapper unambiguously formed contract	Valid agreement: Schall's conduct bound insureds; plaintiff (subrogee) bound too
Agency/subagent liability for arbitration clause	Schall was an independent contractor; insureds lacked direct assent	General contractor and Schall acted as insureds' agents/subagents; notice/imputed assent binds principals	Schall was principal's agent/subagent; notice and acceptance imputed to insureds
Unconscionability of shrinkwrap arbitration clause	Clause procedurally unconscionable (lack of opportunity to read, fine print, surprise)	Clause conspicuous (capital letters, bold, prominent text box); insureds chose shingles; agency negates lack-of-notice concerns	Not unconscionable under Colorado law; plaintiff failed to show both procedural and substantive unconscionability
Who decides arbitrability/scope of clause	Plaintiff: court should decide scope	Defendant: JAMS rules delegate arbitrability to arbitrator; parties agreed to JAMS	Clause delegates arbitrability to arbitrator via JAMS Rule 11(b); arbitrator decides scope; court compels arbitration and dismisses case

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614 (establishes two-step inquiry for enforcing arbitration agreements)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (threshold question of whether parties agreed to arbitrate is governed by state contract law)
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (arbitration agreements subject to general contract defenses including unconscionability)
National American Ins. Co. v. SCOR Reinsurance Co., 362 F.3d 1288 (arbitrability analysis: valid agreement and scope)
Sanchez v. Nitro-Lift Techs., L.L.C., 762 F.3d 1139 (broad arbitration clauses construed to cover disputes arising under or in connection with the agreement)
ProCD, Inc. v. Zeidenberg, 86 F.3d 1447 (shrinkwrap/terms supplied after purchase can be enforceable based on conduct manifesting assent)