LONG v. Amway Corp., 1:17-cv-02613

Background

Plaintiff Keyu Long registered (2011) and renewed (2015) as an Amway Independent Business Owner (IBO); the 2015 online Registration Agreement incorporated Amway’s Rules of Conduct, including a multi-step ADR process (conciliation → hearing panel → binding arbitration).
The Registration Agreement contains a delegation clause assigning “arbitrability” challenges to the arbitrator and states disputes not resolved in conciliation proceed to binding arbitration under Rule 11.
Long alleges Amway withheld an annual sales bonus for 2016 (approx. $170,000), claiming breach/unjust enrichment and racial discrimination under 42 U.S.C. § 1981, asserting Amway deprived 75–100 other distributors of Chinese extraction of bonuses.
Long initially requested conciliation in November 2016, scheduled for March 2017, but withdrew the request on March 6, 2017, and filed this suit on April 11, 2017 seeking declaratory relief that the Arbitration Agreement is unconscionable and unenforceable.
Amway produced a Chinese-language Registration Agreement signed by Long and argued the arbitration terms were presented (and sufficiently conspicuous) at the time of re-registration; Long contends she only saw an English online form and lacked notice.
The district court (Failla, J.) resolved Amway’s motion to compel arbitration, considering FAA principles and Second Circuit web-contract precedent.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a valid arbitration agreement was formed	Long says she lacked actual or constructive notice of the arbitration terms (language/accessibility issues) and therefore did not assent	Amway says the Registration Agreement (signed by Long) disclosed the ADR scheme and was presented (including in Chinese); terms were sufficiently conspicuous	Court held the arbitration agreement was valid; Registration Agreement provided adequate notice and assent was manifested
Whether delegation clause requires arbitrator to decide arbitrability	Long argued the court should decide whether she even assented to arbitration despite the delegation clause	Amway argued the delegation clause is valid and delegates arbitrability to the arbitrator; Long did not specifically challenge the delegation clause itself	Court enforced the delegation clause and held that arbitrability challenges (including unconscionability of the arbitration clause) must be decided by the arbitrator
Whether Plaintiff’s claims fall within the scope of the arbitration clause	Long sought judicial resolution of breach/unjust enrichment and § 1981 racial-discrimination claims	Amway argued the claims arise out of the IBO relationship/compensation plan and fall squarely within the broad arbitration language	Court held the clause was broad and encompassed Long’s claims, so they are subject to arbitration
Whether alleged language barriers/extrinsic facts create triable issue preventing enforcement	Long asserted her limited English and the online-registration presentation create factual disputes as to formation	Amway argued language illiteracy does not excuse assent; court may draw reasonable inferences for summary-style review and Long bears evidentiary burden	Court found those contentions insufficient to defeat enforcement; any dispute about language/presentation did not preclude compelling arbitration

Key Cases Cited

Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017) (web-based contract notice turns on clarity and conspicuousness of interface)
Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016) (interface design affects web-contract notice)
Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (U.S. 2010) (delegation clauses enforceable; challenges to arbitration clause generally go to arbitrator unless delegation clause itself is specifically attacked)
Monarch Consulting, Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 26 N.Y.3d 659 (N.Y. 2016) (New York enforces clear delegation clauses assigning arbitrability)
Mehler v. Terminix Int’l Co. L.P., 205 F.3d 44 (2d Cir. 2000) (broad arbitration clauses compel arbitration of disputes ‘arising out of or relating to’ the agreement)
Peerless Imps., Inc. v. Wine, Liquor & Distillery Workers Union Local One, 903 F.2d 924 (2d Cir. 1990) (where clause is broad, courts must compel arbitration of on-face covered claims)
Katz v. Cellco P’ship, 794 F.3d 341 (2d Cir. 2015) (stay of court proceedings pending arbitration outcome)