James Duhon v. Activelaf, LLC, D/B/A Skyzone Lafayette and Underwriters at Lloyds, London
2016-CC-0818
| La. | Oct 19, 2016Background
- Patron James Duhon electronically signed Sky Zone Lafayette’s standard "Participant Agreement" (click-through) for himself and three minors before entering the trampoline park.
- The Agreement included broad liability waivers, a one-year statute of limitations, a $5,000 liquidated-damages penalty for filing suit, and a clause waiving trial rights and requiring binding arbitration administered by JAMS in Louisiana under Louisiana law.
- Duhon was injured at Sky Zone and sued for negligence; Sky Zone filed an exception of prematurity to compel arbitration under the Agreement.
- The district court denied Sky Zone’s exception, finding lack of mutuality and consent problems; the court of appeal reversed and ordered arbitration enforced.
- The Louisiana Supreme Court granted certiorari and reversed the court of appeal, holding the arbitration clause is a contract of adhesion and unenforceable because the arbitration language was concealed within a larger paragraph and the clause lacked mutuality.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of arbitration clause | Duhon: did not knowingly consent; clause is adhesionary and ambiguous | Sky Zone: strong presumption favors arbitration; patron assented by checking boxes and signing | Held: arbitration clause unenforceable — adhesionary due to concealment and lack of mutuality |
| Whether electronic "clickwrap" assent suffices | Duhon: electronic signature did not show true consent to arbitration specifically | Sky Zone: electronic signature is valid; checking boxes manifested assent | Held: electronic form/signature not dispositive; consent analyzed under ordinary contract principles |
| Concealment/placement of arbitration language | Duhon: arbitration buried mid-paragraph among boilerplate and not separately checked | Sky Zone: clause was within a checked paragraph and legible like other terms; patrons had opportunity to read | Held: placement camouflaged arbitration; no separate checkbox or clear highlighting called it to attention |
| Mutuality of arbitration obligation | Duhon: contract binds only patrons to arbitrate and penalizes patrons for suing; Sky Zone retains litigation freedom | Sky Zone: clause applies to disputes under the agreement; no evidence of grossly unequal bargaining power | Held: lack of mutuality (and $5,000 penalty) reinforces adhesion finding and invalidates clause |
Key Cases Cited
- Aguillard v. Auction Management Corp., 908 So. 2d 1 (La. 2005) (framework for analyzing whether an arbitration clause in a standard-form contract is adhesive and whether consent was given)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (federal policy favoring arbitration and limits on state rules that single out arbitration provisions)
- Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681 (1996) (state contract defenses apply to arbitration agreements but states may not impose special arbitration-only requirements)
- Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (establishing federal policy favoring arbitration)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (ordinary state-law principles govern whether parties agreed to arbitrate)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (arbitrability issues and parity of arbitration agreements with other contracts)