Sollinger v. SmileDirectClub, LLC

Background

Taylor Sollinger brought a proposed class action against SmileDirectClub, LLC, alleging that the company’s custom teeth aligners caused him tooth pain, sensitivity, cracked teeth, and a need for fillings. He asserted claims under state and federal law on behalf of purchasers, owners, and users of SmileDirectClub aligners.

SmileDirectClub moved to compel arbitration under the Federal Arbitration Act. During online registration, Sollinger checked a box stating that he agreed to SmileDirectClub’s “Informed Consent,” “Terms,” and “SmilePay Conditions.” The Informed Consent contained an arbitration provision covering disputes concerning SmileDirectClub’s products and services, including medical-malpractice disputes. Sollinger did not click the hyperlink displaying the Informed Consent during registration.

Agreement to Arbitrate

The court applied New York contract law because the parties did not dispute that New York law governed. Under that law, a contract requires a mutual manifestation of assent. When a website user does not have actual knowledge of an online agreement, the question is whether the website gave a reasonably prudent user notice that an agreement existed.

The court held that SmileDirectClub’s registration process provided that notice. The screen was relatively uncluttered, the checkbox was next to text stating that the user agreed to the Informed Consent and related terms, and the hyperlinks were blue, underlined, and directly adjacent to the checkbox. The entire screen was visible without scrolling. The court therefore concluded that a reasonable user would have been on notice to investigate the Informed Consent, even though Sollinger did not open the hyperlink.

The court rejected Sollinger’s arguments that the arbitration provision was invalid because it appeared in the Informed Consent rather than in the Terms or SmilePay Conditions. It also rejected his argument that a forum-selection clause in the Terms, referring certain disputes to state or federal court in Southeastern Michigan, conflicted with the arbitration provision. The court read the agreements together and concluded that the Terms governed website use and shopping, while the Informed Consent governed health-care and dental-care treatment. Because Sollinger’s claims arose from dental treatment rather than website use, the court found that the forum-selection clause did not displace the arbitration provision.

Who Decides Arbitrability

After finding an agreement to arbitrate, the court considered who should decide whether the particular disputes fell within that agreement. The Informed Consent required arbitration under the rules of the American Arbitration Association. The court treated the incorporation of those rules as clear and unmistakable evidence that the parties agreed to let the arbitrator decide arbitrability—the question whether a dispute is covered by the arbitration agreement.

Disposition

The court held that an arbitrator, rather than the court, should determine whether the disputes were subject to arbitration. Because it concluded that all issues raised in the complaint were subject to arbitration, it determined that dismissal, rather than merely pausing the case, was appropriate.

The court granted Defendant’s motion to compel arbitration. It dismissed the case and directed the Clerk of Court to close the motions and the case. The court also denied Plaintiff’s motion for oral argument as moot. The opinion does not state that the dismissal was with or without prejudice.