The Eleventh Circuit recently held that consumers were properly compelled to arbitration, and a putative class action was properly dismissed based on an arbitration provision and class action waiver conspicuously appearing on the product’s packaging.
In Dye v. Tamko Building Products, Inc., homeowners filed a class action complaint against Tamko, alleging that the company’s shingles failed to comply with industry standard and were not as-warranted. In response, Tamko moved to compel arbitration and dismiss the class action complaint based on an arbitration provision and class action waiver that appeared on the exterior wrapping of every package of shingles. The United States District Court for the Middle District of Florida granted the motion, and the homeowners appealed.
In affirming the District Court, the Eleventh Circuit held that: (1) the shingle wrappers conveyed a valid offer of Tamko’s product terms, including that any dispute must be arbitrated on an individual basis; and (2) the roofer’s acceptance of the product terms by opening and installing the shingles was imputed to the homeowners.
The Eleventh Circuit recognized that “in the age of Amazon Prime,” “shrinkwrap” agreements, and “click” agreements (i.e., checking the “I accept” box), consumers have come to expect that products will include the company’s terms and conditions on the packaging and generally understand that by opening and retaining the product, the consumer is agreeing to those terms. The Court noted that the arbitration provision was in a conspicuous font and appeared in all caps – holding that “Florida law makes clear that providing conspicuously printed product packaging is an OK way to convey purchase terms.”
Further, the Court held that by opening and installing the shingles, the contractor accepted the product terms as agent of the homeowners, thereby binding the homeowners to the company’s terms, even if the homeowners had no opportunity to review the product packaging and were completely unaware of it.