In a recent decision from the 11th Circuit, the court found that an arbitration agreement printed on the outside wrapper of a package of roofing shingles is fully enforceable if a consumer purchases, opens, and retains the product. Dye v. Tamko Bldg. Prod., Inc., No. 17-14052 (11th Cir. Nov. 2, 2018) (click here for a copy of the decision). A picture of the packaging appears on this blog page, although the print is too tiny to view with this low quality picture. It appears that one entire side of the packaging is filled with detailed contract terms.
Here’s a key quote from the court’s decision:
At the end of the day, the point is simply this: modern consumers are on notice that products come with warranties and other terms and conditions of purchase. And they are free to research (or not), request (or not), and read (or not) those terms before unwrapping their purchases. As to the case before us, Florida law makes clear that providing conspicuously printed product packaging is an OK way to convey purchase terms. Florida consumers who purchase, open, and retain a product are thus bound in accordance with warranty terms conspicuously printed on that product’s packaging, whether they actually take the time to read them or not.
The overall tone of the court’s opinion seems a bit humorous, sarcastic, or tongue-in-cheek at times. If the drafters of the Federal Arbitration Act from the 1920s could read this new opinion, they would probably think this opinion is dystopian fiction or a bad joke. Several years ago, I interviewed an in-house counsel for a restaurant who told me he considered printing arbitration clauses on every napkin, cup, or straw wrapper used in the restaurant. Like the court’s opinion in this new roofing shingles case, the in-house counsel seemed partly-joking, but serious at the same time. This new case would provide support for the inclusion and enforcement of arbitration clauses in consumer packaging. What’s next? Will Amazon start printing arbitration clauses on all of its boxes, and will retail stores start placing arbitration clauses on all their brown paper or plastic bags?