Bill Hansen v. Lmb Mortgage Services, Inc.
1 F.4th 667
| 9th Cir. | 2021Background:
- LMB (LowerMyBills.com) collected borrower info via a web form in March 2014; the form had a submit button and a Terms of Use containing an arbitration clause.
- The form entry listed the phone number of Bill Hansen though the visitor name was Willena Hansen (Bill’s mother).
- In Nov. 2018 Bill received an automated text and sued LMB under the TCPA for sending autodialed texts without consent.
- LMB moved to compel arbitration, asserting Bill assented to the Terms of Use by clicking the submit button or, alternatively, that Bill was bound as a third‑party beneficiary of his mother’s assent.
- The district court found the existence of an arbitration agreement was "in issue" (genuine factual disputes whether Bill or his mother clicked submit and whether Bill is bound) and ordered a jury trial, but also issued a nonfinal denial of the motion to compel.
- LMB appealed; the Ninth Circuit concluded it had appellate jurisdiction over the denial but vacated the district court’s nonfinal order and remanded for a summary trial under 9 U.S.C. § 4.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appealability under 9 U.S.C. § 16 of a nonfinal denial of a motion to compel arbitration | The district court’s nonfinal, docket-management denial is not a final appealable order | §16(a)(1)(B) authorizes immediate appeal of orders denying petitions to compel arbitration, regardless of finality | Court: §16 grants jurisdiction to appeal denials of motions to compel arbitration even if nonfinal; majority of circuits agree |
| Proper procedure under 9 U.S.C. § 4 when arbitrability is "in issue" | Hansen: factual disputes exist; district court should conduct a trial on arbitrability (he demanded jury if necessary) | LMB: district court erred in finding genuine disputes and should have compelled arbitration | Court: When arbitrability is in issue, §4 requires the district court to proceed summarily to trial on those factual disputes; the district court erred by issuing a nonfinal denial instead of holding a trial |
| Whether appellate court may resolve arbitrability before district-court trial | Hansen: district court’s planned trial makes appeal premature; factual resolution belongs to trial | LMB: appealed district court’s finding of genuine disputes | Court: Appellate courts should not decide merits of arbitrability where district court found factual disputes; vacated denial and remanded for trial under §4 |
| Merits — whether Bill is bound by the arbitration clause (clickwrap or third‑party beneficiary) | Bill: never visited/clicked; never assented; not bound even if his mother interacted with the site | LMB: site records indicate a submit occurred; Bill is bound either by his own assent or as a third‑party beneficiary of his mother’s assent | Court: Did not decide on the merits; remanded for summary trial to resolve these factual questions |
Key Cases Cited
- Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51 (3d Cir. 1980) (motions to compel arbitration are decided using a summary-judgment-type inquiry)
- Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (FAA policy favors rapid enforcement of arbitration agreements)
- Sandvik AB v. Advent Int’l Corp., 220 F.3d 99 (3d Cir. 2000) (orders declining to compel arbitration are reviewable on appeal)
- Boomer v. AT&T Corp., 309 F.3d 404 (7th Cir. 2002) (§16 permits appeal of nonfinal denials of motions to compel arbitration)
- Jin v. Parsons Corp., 966 F.3d 821 (D.C. Cir. 2020) (when arbitrability is in dispute, district courts must proceed summarily to trial)
- Neb. Mach. Co. v. Cargotec Sols., LLC, 762 F.3d 737 (8th Cir. 2014) (district courts required to hold prompt trial on arbitrability when factual issues exist)