Makuc v. Smatko
2:24-cv-00633
D. Ariz.Sep 17, 2024Background
- Plaintiff Mary Makuc purchased an electric tricycle from Mobilityless, LLC’s website for $2,950.27; she alleges the tricycle was defective and that related promised goods/services were not provided.
- Plaintiff claims Mobilityless, LLC also withdrew an unauthorized $125 fee from her account after delivery.
- Plaintiff sues for violations of the Massachusetts Consumer Protection Act, civil RICO, conspiracy, and the Uniform Fraudulent Transfer Act, seeking to proceed as a class action.
- Defendants moved to compel arbitration based on an arbitration agreement allegedly accepted at checkout on the website, and sought a stay of litigation.
- Plaintiff contests the existence or enforceability of any arbitration agreement and notes that Mobilityless, LLC is now dissolved.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Existence of valid arbitration agreement | Makuc did not see or assent to an arbitration clause or click an agreement | Website requires affirmative assent via clickbox before purchase | Valid hybridwrap agreement exists, binding Plaintiff |
| Reasonable notice of arbitration clause | Website provided insufficient or hidden notice of relevant terms | Check-out box, bold hyperlink, and agreement were conspicuous and accessible | Website design provides reasonable constructive notice |
| Adequate consideration for arbitration | No consideration existed as payment initially went to Mobilitytrend, LLC | Mutual promises in agreement sufficient; third-party beneficiary status asserted | Consideration is adequate for arbitration agreement |
| Authority of dissolved LLC to compel arbit. | Dissolved LLC lacks power to compel arbitration under state law | Dissolved LLC may wind up affairs and defend lawsuits, including via arbitration | Dissolved LLC can compel arbitration as part of wind-up |
Key Cases Cited
- Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (federal policy favors resolving doubts in favor of arbitration)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (standards for compelling arbitration under FAA)
- Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220 (1987) (arbitration agreements under FAA presumed valid)
- Circuit City Stores, Inc. v. Adams, 279 F.3d 889 (9th Cir. 2002) (apply ordinary state contract law to validity of arbitration agreements)
- In re Holl, 925 F.3d 1076 (9th Cir. 2019) (affirmative assent via click sufficient for online agreement enforceability)