FITZGERALD v. GRAND CIRCLE, LLC, 2:20-cv-02586

Plaintiff Sally Fitzgerald paid $9,258 for an Overseas Adventure Travel cruise scheduled July–August 2020; Grand Circle canceled the trip due to COVID-19 and refused refunds, offering only rescheduling.
Fitzgerald sued on behalf of a proposed class alleging contract and tort claims; Grand Circle moved to dismiss and compel arbitration under the ticket’s Passenger Agreement.
The Agreement mandates JAMS-administered binding arbitration in Boston, MA, with costs split between parties and delegates arbitrability to the arbitrator; it includes a severability and Massachusetts choice-of-law clause.
Fitzgerald argued the arbitration clause is unenforceable because two terms conflict with JAMS Consumer Minimum Rules: (1) JAMS requires a right to an in-person hearing in the consumer’s hometown area (Fitzgerald lives in Collegeville, PA), and (2) JAMS caps consumer fees at $250 while the Agreement requires a $1,000 consumer contribution.
Grand Circle urged enforcement and argued the conflicting terms are ancillary and severable; the parties agreed the Agreement otherwise delegates arbitrability to JAMS.
The Court found the Boston-forum and fee-splitting terms made the designated JAMS forum illusory, severed those two terms, stayed the action, and compelled arbitration with remaining issues to be decided by a JAMS arbitrator.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of arbitration clause given conflicts with JAMS rules	Clause unenforceable because forum and fee provisions conflict with JAMS, making forum illusory	Conflicting terms are ancillary/procedural and severable; enforce arbitration	Court severed the Boston-location and equal-cost-splitting terms and compelled arbitration; stayed court proceedings
Who decides arbitrability	Court may decide because JAMS cannot accept case as written	Delegation clause gives arbitrator exclusive authority	Court severed obstructive terms then left arbitrability and merits for JAMS arbitrator
Whether forum-selection is integral	Forum is central if it defeats arbitration availability	Forum-selection is logistical and not central	Court treated Boston requirement as illusory and severable under Massachusetts law
Fee-allocation conflict with JAMS rules	$1,000 consumer fee violates JAMS $250 cap and prevents JAMS from administering arbitration	Fee term is procedural and severable; should be addressed in arbitration	Court severed the equal fee-splitting provision so arbitration may proceed under JAMS rules

Guidotti v. Legal Helpers Debt Resolution LLC, 716 F.3d 764 (3d Cir. 2013) (when arbitration defense is apparent on complaint and relied-upon documents, resolve under Rule 12(b)(6))
Quilloin v. Tenet HealthSystem Phila., Inc., 673 F.3d 221 (3d Cir. 2012) (plaintiff may challenge arbitration enforceability under generally applicable contract defenses)
AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that interfere with arbitration agreements)
Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (procedural questions of arbitration are for arbitrator unless clear intent otherwise)
MacDonald v. CashCall, Inc., 883 F.3d 220 (3d Cir. 2018) (forum is nonexistent/illusory where chosen forum will not arbitrate under its rules)
Awuah v. Coverall N. Am., Inc., 554 F.3d 7 (1st Cir. 2009) (courts defer to arbitrator when agreement delegates arbitrability)
Williams v. Medley Opportunity Fund II, LP, 965 F.3d 229 (3d Cir. 2020) (district court may decide enforceability of delegation clause before compelling arbitration)
Feeney v. Dell Inc., 908 N.E.2d 753 (Mass. 2009) (under Massachusetts law, an arbitration term is severable if not integral to dispute-resolution mechanism)
Machado v. System4 LLC, 989 N.E.2d 464 (Mass. 2013) (court may sever offending arbitration terms while preserving the arbitral forum)