Davis v. USA Nutra Labs, Co., 303 F. Supp. 3d 1183

In Dec. 2013 Davis ordered Garcinia Cambogia from Groupon after creating an online account and clicking to accept Groupon's Terms of Use and Privacy Statement and a “Complete Order” button that referenced the Terms via a hyperlink.
Groupon's Terms of Use (in effect at the time) included a broad arbitration clause incorporating the American Arbitration Association (AAA) Rules and a waiver of class actions.
Davis alleges the product caused acute liver failure requiring a transplant and sued Groupon on strict liability, failure to warn, negligence, and unfair trade practices claims.
Groupon moved to compel arbitration and stay the litigation; Davis opposed, arguing she never agreed to the Terms and that the arbitration provision is unconscionable and does not cover her claims.
The court found Groupon’s clickwrap evidence sufficient to show assent, rejected unconscionability challenges under New Mexico and Illinois law, and concluded the AAA Rules delegate arbitrability questions to the arbitrator.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Existence of an agreement to arbitrate	Davis says she never saw or agreed to Terms and doesn’t recall assent	Groupon says clickwrap (checkbox + "Complete Order" with hyperlink) and screenshots show Davis assented	Court: assent proven as a matter of law; clickwrap valid and evidence authenticated
Substantive unconscionability	Clause is one-sided and Groupon can unilaterally modify Terms; Davis surrenders jury right for minimal consideration	Groupon says clause is mutual in effect, no carve-out reserving judicial remedies, and consideration (service, fee structure, cost-sharing of arbitration) is adequate	Court: no substantive unconscionability; non-retroactive modification clause avoids unfairness
Procedural unconscionability / adhesion contract	Terms are standardized, take-it-or-leave-it, so unconscionable	Groupon: clickwrap gave notice and opportunity to read; no sharp practice or lack of alternatives shown	Court: adhesion status alone insufficient; no patently unfair terms; procedural unconscionability not shown
Who decides arbitrability / scope	Davis: her claims may fall outside Terms; court should decide scope	Groupon: AAA Rules are incorporated so arbitrator decides arbitrability	Court: incorporation of AAA Rules is clear and unmistakable; arbitrator decides arbitrability; court must defer

AT & T Mobility LLC v. Concepcion, 563 U.S. 333 (Sup. Ct. 2011) (federal policy favors enforcement of arbitration agreements)
Southland Corp. v. Keating, 465 U.S. 1 (Sup. Ct. 1984) (FAA creates substantive rule applicable in state and federal courts)
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (Sup. Ct. 2010) (parties can delegate arbitrability to arbitrator; courts enforce delegation when clear and unmistakable)
Belnap v. Iasis Healthcare, 844 F.3d 1272 (10th Cir. 2017) (incorporation of arbitration provider rules constitutes clear and unmistakable evidence delegating arbitrability)
Hancock v. Am. Tel. & Tel. Co., 701 F.3d 1248 (10th Cir. 2012) (standards for enforcing online clickwrap agreements and routine-practice evidence)
Fteja v. Facebook, Inc., 841 F. Supp. 2d 829 (S.D.N.Y. 2012) (hyperlinked terms in clickwrap can be enforceable; reasonable user would notice link)