Aminoff & Co. LLC d/b/a Watch My Diamonds v. FedEx Corporation

Background

Aminoff, a company that provides custom high-end jewelry, used Parcel Pro as a shipping agent. In 2020, Aminoff arranged through Parcel Pro to ship a watch valued at more than $100,000 to a customer in California. FedEx carried the shipment, but the watch was never delivered and its whereabouts remained unknown. Aminoff alleged that a FedEx employee stole it. Aminoff also purchased a protection plan through Parcel Pro backed by an independent insurer and later filed an insurance claim that was denied.

Aminoff sued Parcel Pro and FedEx in state court, asserting breach of contract, unjust enrichment, negligence, gross negligence, and replevin. FedEx removed the case to federal court. Parcel Pro moved under the Federal Arbitration Act to require Aminoff to arbitrate its claims against Parcel Pro and to stay the case as to Parcel Pro.

Agreement to Arbitrate

The court applied New York contract law to determine whether the parties agreed to arbitrate. Parcel Pro’s online terms required binding arbitration in Los Angeles, California, under the Commercial Rules of the American Arbitration Association. The terms also prohibited class, mass, consolidated, or combined proceedings and included deadlines for written claims and arbitration demands.

The court concluded that Parcel Pro proved the existence of an arbitration agreement. During account registration, Aminoff’s co-owner entered his name as the company’s authorized representative and checked a box acknowledging and agreeing to the terms. The registration process could not be completed without checking the box. The court found that the interface clearly presented the terms through headings, highlighted hyperlinks, and text stating that the applicant had to read and agree to them.

The court rejected Aminoff’s argument that the notice was unreasonable because some text was small and the hyperlink was not noticed. It also noted that Aminoff received notice of the terms when requesting shipping labels, including for the shipment at issue. The court therefore found that Aminoff had inquiry notice—enough information to require a reasonable user to investigate the terms—and assented to a valid and enforceable online agreement.

Scope and Delegation

The court explained that the arbitration provision covered disputes involving Parcel Pro and that the terms separately addressed arbitration of disputes involving insurance underwriters. It further found that incorporating the American Arbitration Association’s Commercial Rules clearly and unmistakably delegated questions about the arbitration agreement’s existence, validity, scope, and applicability to the arbitrator.

Because the arbitrator must decide whether some or all of Aminoff’s claims fall within the agreement, the court did not resolve the ultimate scope of arbitration. The court noted that Aminoff’s argument that its claim arose from the insurance policy did not prevent referral to arbitration because the terms also required arbitration of disputes involving insurance claims.

Disposition

The court granted Parcel Pro’s motion insofar as Parcel Pro demonstrated that the parties had an arbitration agreement and that the arbitrator must decide arbitrability. Because the agreement required arbitration in California, the court stated that it lacked authority to compel arbitration outside the district. Instead, it referred the dispute between Aminoff and Parcel Pro to arbitration and stayed the litigation as to Parcel Pro pending arbitration. The stay does not apply to the claims against FedEx.