93 F. Supp. 3d 95
E.D.N.Y2015Background
- EA manufactures and distributes video games and offers online play (EA Online).
- Plaintiff Justin Bassett purchased EA games and alleges reliance on online-play availability despite notices that online access requires registration and a paid subscription.
- Plaintiff activated EA Online in FIFA 12 and FIFA 13 after accepting EA’s Terms of Service (ToS) and privacy policy.
- ToS presented at registration and upon updates required affirmative assent; updates could be accepted or rejected within a 30-day window.
- The ToS include a broad arbitration provision and a mechanism to modify terms; EA moved to compel arbitration and stay the action under the FAA, or transfer venue; Judge Gold recommended arbitration and the Court adopted it.
- The Court grants EA’s motion to compel arbitration, stays proceedings pending arbitration, and denies transfer of venue without prejudice to renewal after arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there is a binding arbitration agreement. | Bassett contends no binding contract; agreement formation challenges. | EA argues clickwrap assent formed an arbitration agreement. | Yes; arbitration agreement formed and enforceable. |
| Whether assent to arbitration was properly formed (mutual assent). | Assent to terms occurred only via later or non-incorporated contracts. | assent manifested at registration and upon updating terms. | Mutual assent established; agreement to arbitrate valid. |
| Whether the arbitration clause is illusory due to unilateral modification. | Modification power makes arbitration illusory/not binding. | Modification right is constrained by notice and entry into good faith; not illusory. | Not illusory; reasonable notice and good-faith constraints. |
| Whether the arbitration agreement is unconscionable. | Not unconscionable; arbitration clause enforceable. | ||
| Whether the action should be stayed pending arbitration or dismissed. | Stay pending arbitration ordered; venue transfer denied without prejudice. |
Key Cases Cited
- Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (arbitration is a matter of contract; assent required to arbitrate)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (U.S. 2006) (arbitration clause separable from contract; challenges to contract as a whole go to arbitrator)
- Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (arbitration clauses are enforceable and severable; contract formation issues barred from non-arbitration court)
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (mutuality and consideration can support arbitration agreements; limits to illusory claims)
- Mehler v. Terminix International Co., 205 F.3d 44 (2d Cir. 2000) (discusses contract formation principles applicable to arbitration)