Foster v. Walmart, Inc., No. 20-1787 (8th Cir. 2021)
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The Eighth Circuit reversed the district court's ruling that an arbitration clause found in Walmart.com's terms of use was unenforceable against purchasers of gift cards. In this case, plaintiffs filed suit against Walmart after gift cards they purchased turned out to be worthless because third parties tampered with, and stole the funds on, the gift cards. Walmart sought to compel arbitration based on a notation on the back of the gift cards directing purchasers to see Walmart.com for complete terms.
The court concluded, under the point-of-purchase theory, that the parties did not enter into a binding arbitration agreement at the moment plaintiffs purchased their gift cards because Walmart did not state that it wished to have the arbitration agreement bind the parties at the moment of purchase. Rather, the arbitration provision states that a customer accepts arbitration only by using or accessing the Walmart Sites. While the parties do not dispute that this case involves a browsewrap agreement, the court concluded that material disputes of fact exists on the question of whether the parties agreed to arbitration. The court explained that material disputes exist regarding whether plaintiffs used the website, whether the design of the website was sufficient to give a reasonable browser notice of the arbitration, and whether the language on the card was sufficient to put the buyer on notice. Accordingly, the court remanded for further proceedings.
Court Description: [Stras, Author, with Smith, Chief Judge, and Wollman, Circuit Judge] Civil case - Arbitration. Plaintiffs alleged the gift cards they purchased at Walmart were worthless because the value of the card was stolen by third parties; Walmart filed a motion to compel arbitration based on a notation on the back of the cards which directed the buyer to Walmart's website; based on the notation on the card, a binding arbitration agreement was not formed at the moment plaintiffs purchased the card; the parties do not dispute that this is a "browsewrap" agreement case, but the record is lacking on several material facts - whether the plaintiffs used the website, whether the design of the website was sufficient to give a reasonable browser notice of the arbitration, and whether the language on the card was sufficient to put the buyer on notice - and the matter is remanded to the district court for a trial on the question of whether the parties agreed to arbitrate. [ October 07, 2021 ]
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