953 F. Supp. 2d 713
N.D. Tex.2013Background
- Consolidated price-fixing case against online travel and hotel companies; Plaintiffs allege conspiratorial price fixing and MFN restraints silencing resale below fixed prices.
- Travelocity moves to compel arbitration under its User Agreement, which requires arbitration for claims under $10,000 and contains a non‑consolidation/class action waiver.
- Travelocity contends the User Agreement is a valid clickwrap, not a browsewrap, and binding as to all post‑Feb 4, 2010 bookings.
- Plaintiffs argue assent is transaction-specific and that the agreement is illusory because Travelocity can modify unilaterally without notice, potentially undermining rights.
- Court evaluates (1) whether there is a valid agreement to arbitrate, (2) scope of the arbitration clause, (3) federal policy favoring arbitration, (4) non‑financial barriers, and (5) motion to strike absent-class claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is there a valid arbitration agreement between the parties? | Plaintiffs argue no assent or that assent is illusory. | Travelocity shows assent via click‑wrap after Feb 4, 2010; three versions share the same arbitration clause. | Arbitration agreement valid; assent shown via clickwrap. |
| Is the User Agreement unenforceable as a browsewrap? | Agreement is browsewrap and unenforceable. | Agreement is conspicuously presented clickwrap and enforceable. | Clickwrap valid and enforceable; browsewrap rejected. |
| Is the arbitration clause illusory due to unilateral modification rights? | Modification right could render clause illusory. | Modifications require new assent through further transactions; retroactivity is precluded. | Clause not illusory; modifications require continued assent. |
| Is the class-action waiver enforceable under the FAA? | Class waiver would thwart vindicating federal statutory rights. | Stolt-Nielsen controls; contract forbids class actions; waiver enforceable. | Class waiver enforceable; independent of antitrust policy constraints. |
| Do non-financial barriers or forum provisions defeat arbitration? | Forum in Texas and in-person aspects undermine vindication. | Forum in Dallas area is reasonable; no unfairness shown; arbitration near claimant’s residence contemplated. | Forum and live-appearance restrictions do not defeat arbitration; grounds insufficient. |
Key Cases Cited
- Carter v. Countrywide Credit Indus., Inc., 362 F.3d 294 (5th Cir. 2004) (enforceability of class-action waivers under FAA; FLSA analogue)
- Stolt-Nielsen S.A. v. AnimalFeeds International Corp., 559 U.S. 662 (Supreme Court 2010) (explicit prohibition against forced class arbitration when contract silent on class arbitration)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state law on class arbitration waivers in consumer contracts)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (Supreme Court 1985) (antitrust claims arbitrable under FAA)
- Green Tree Financial Corp.-Alabama v. Randolph, 531 U.S. 79 (Supreme Court 2000) (arbitration costs may bar vindication; strong presumption in favor of arbitrability)
- In re American Express Merchants’ Litigation, 667 F.3d 204 (2d Cir. 2012) (discussion of costs; not controlling here)
- RealPage, Inc. v. EPS, Inc., 560 F.Supp.2d 539 (E.D. Tex. 2007) (assent and enforceability of clickwrap in Texas)
- Recursion Software Inc. v. Interactive Intelligence, Inc., 425 F.Supp.2d 756 (N.D. Tex. 2006) (distinguishes clickwrap from browsewrap)
- Specht v. Netscape Communications Corp., 306 F.3d 17 (2d Cir. 2002) (assent requirements for online terms)
- M/S Bremen v. Zapata Off-Shore Co., 407 U.S. 1 (Supreme Court 1972) (forum-selection clause enforceability standard)