Haythe v. Samsung Electronics America, Inc.

Background

Sonya Haythe, Douglas Smith, and Peter Coffin filed a proposed class action against Samsung Electronics America, Inc. They alleged that Samsung misrepresented the capabilities of certain Samsung televisions that they purchased. Their claims included alleged violations of New York, New Jersey, and Massachusetts consumer-protection laws; breach of express warranty; violation of the Magnuson-Moss Warranty Act; unjust enrichment; and fraud.

Samsung moved to compel arbitration and stay the case. The plaintiffs had agreed to Samsung’s terms and conditions when purchasing the televisions in 2020 and 2021. The terms included an arbitration clause requiring claims connected in any way with Samsung’s services, or with determining the clause’s scope or applicability, to be resolved through final and binding arbitration administered by the International Chamber of Commerce. The clause also incorporated the International Chamber of Commerce’s arbitration rules.

The parties did not dispute that the plaintiffs entered into the arbitration agreements, and neither side claimed that a factual dispute required a trial on whether the agreements were made.

Court’s Analysis

Under the Federal Arbitration Act, arbitration agreements generally must be enforced according to their terms. Before compelling arbitration, a court ordinarily determines whether an arbitration agreement exists and whether the dispute falls within its scope. But whether the parties agreed to let the arbitrator decide those questions—called “arbitrability”—is a separate preliminary question. A court sends arbitrability to the arbitrator only when the agreement provides clear and unmistakable evidence that the parties intended that result.

Judge Valerie Caproni concluded that the agreement contained that clear and unmistakable evidence. The arbitration clause expressly covered disputes concerning the “scope or applicability” of the clause. The clause’s incorporation of the International Chamber of Commerce rules reinforced that conclusion because those rules assign the arbitrator initial responsibility for deciding jurisdictional and arbitrability issues.

The plaintiffs argued that the clause applied only when the user raised the dispute, while Samsung—not the plaintiffs—invoked arbitration. The court rejected that interpretation, concluding that the plaintiffs’ underlying claims were connected to the dispute about whether the arbitration clause applied. Because the court assigned that scope question to the arbitrator, it did not decide whether the plaintiffs’ claims actually fall within the arbitration clause.

Disposition

Judge Valerie Caproni granted Samsung’s motion to compel arbitration and to stay the case. The action was stayed pending the conclusion of arbitration. The parties must submit a joint update on the arbitration’s status every six months, with the first report due December 1, 2023. The Clerk of Court was directed to close the pending motion and stay the case.