118 F.4th 403
1st Cir.2024Background:
- Joyce Toth purchased a Food Sensitivity Test from Everlywell (via Target), registered her kit online, and assented to Everlywell’s User Agreement by clicking an online checkbox linked to the full terms.
- The User Agreement contained an arbitration provision, requiring customer disputes to be arbitrated under AAA rules in Texas, along with a class action waiver and one-year claim limit.
- Toth did not read the User Agreement before accepting but later challenged the scientific validity of the test and Everlywell’s marketing practices in a putative class action.
- Everlywell moved to compel arbitration based on the clickwrap agreement; the district court granted the motion, finding a valid and enforceable contract.
- Toth appealed, raising issues regarding contract formation, validity, and enforceability of the arbitration provisions.
Issues:
| Issue | Plaintiff’s Argument | Defendant’s Argument | Held |
|---|---|---|---|
| Contract Formation & Notice | No contract formed—insufficient notice of binding terms and arbitration | Sufficient notice; clickwrap method is valid under Massachusetts law | Valid contract formed; notice and assent adequately shown |
| Right to Reject/Return | No meaningful choice; inability to return meant coerced assent | Terms stated up front; user affirms assent by clicking checkbox | Ability to return immaterial for clickwrap—assent shown |
| Unilateral Modification | User Agreement is illusory—unilateral-change clauses undermine validity | Modification clauses don't apply to arbitration or weren’t used | Challenge to modification must go to arbitrator |
| Unconscionability of Arbitration Clause | Arbitration process oppressively costly/one-sided (fees, limits, etc.) | AAA rules delegate such challenges to arbitrator, not court | Delegation valid; specific challenges to go to arbitrator |
Key Cases Cited
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (mutual promise to arbitrate is effective consideration and challenges to arbitration provisions must be specific)
- Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (2006) (court may only adjudicate challenges to contract formation, not contract validity, when arbitration clause present)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (1995) (delegation clauses must be enforced if agreed to)
- Kauders v. Uber Techs., Inc., 159 N.E.3d 1033 (Mass. 2021) (clickwrap agreements generally enforceable when reasonable notice and assent exist)
- Awuah v. Coverall N. Am., Inc., 703 F.3d 36 (1st Cir. 2012) (parties are bound by contracts even if terms are unread)
- Bekele v. Lyft, Inc., 918 F.3d 181 (1st Cir. 2019) (clickwrap arbitration agreements regularly enforced)
- Machado v. System4 LLC, 28 N.E.3d 401 (Mass. 2015) (Massachusetts unconscionability requires both procedural and substantive components)