Maldonado v. National Football League, Inc.

Background

The plaintiffs filed a proposed nationwide class action against Fanatics, Inc.; the National Football League; NFL Properties; NFL Enterprises; and each of the 32 NFL teams. They alleged that the defendants violated the Sherman Act by conspiring to dominate the online market for NFL-licensed merchandise, causing plaintiffs to pay excessively high prices. They also sought injunctive relief under the Clayton Act.

The defendants moved to compel arbitration. They argued that the plaintiffs agreed to arbitration by creating accounts or completing purchases on Fanatics.com or NFLShop.com, using either desktop computers or mobile devices. The plaintiffs argued that they lacked adequate notice of the websites’ terms of use and therefore did not assent to the arbitration provisions. They also argued that some defendants were not specifically named in the agreements and that some disputes were outside the agreements’ scope.

Court’s Analysis

The court applied the Federal Arbitration Act and ordinary state-law contract-formation principles. It examined whether the plaintiffs agreed to arbitrate, which defendants were covered by the agreements, and whether the court or an arbitrator should decide the scope of the agreements.

The court found that the websites provided reasonable notice of the terms of use. The screens were described as uncluttered; the terms links were underlined and contrasted with the white background; and the links appeared directly below the “Create An Account” and “Complete Order” buttons. The websites also told users that signing up or placing an order meant agreeing to the terms. The court concluded that plaintiffs accepted the agreements by clicking those buttons. It reached the same conclusion for the mobile-device interfaces, rejecting the argument that a pop-up keyboard obscured the terms sufficiently to prevent notice.

The court also held that the defendants not specifically named in the agreements were covered. It concluded that the NFL teams were affiliates of NFL Properties under the ordinary meaning of “affiliate” and that Fanatics and the NFL defendants were covered by the relevant agreements. In the alternative, the court held that affiliated defendants could compel arbitration under equitable estoppel, a doctrine that can allow a non-signing party to enforce an arbitration agreement when the claims against that party depend on the agreement and involve the same coordinated conduct.

Finally, the court held that the parties delegated questions about whether particular disputes were covered by the arbitration agreements to the arbitrator. It relied on the agreements’ broad language covering “any and all disputes” connected with the websites or properties and on the agreements’ incorporation of American Arbitration Association rules, which authorize arbitrators to decide arbitrability questions.

Disposition

The court granted the defendants’ motion to compel arbitration. It stayed the case pending resolution of the arbitration and required the parties to file a status report within 30 days after arbitration ended or within six months of the order, whichever came first. Judge Andrew L. Carter, Jr. did not decide the merits of the plaintiffs’ antitrust allegations in this order.