Arbitration Provision TKOs Class Action Lawsuit by Online Viewer of Mayweather/McGregor Fight

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Arbitration Provision TKOs Class Action Lawsuit by Online Viewer of Mayweather/McGregor FightBoxing fan Victor Mallh, attempting to take a class action swing at Showtime Networks for failures in its livestream broadcast of the Mayweather/McGregor fight in August of this year, will have to pursue his claim in arbitration, the U.S. District Court for the Southern District of New York ruled last week (Mallh v. Showtime Networks, Inc., 2017 WL 5157247 (S.D.N.Y. Nov. 7, 2017)). While Mallh’s fight – unlike McGregor’s against Mayweather – hasn’t been stopped, it will apparently now be confined to a single-plaintiff arbitration against the entertainment company.

Mallh signed up to view the boxing match via livestream on Showtime’s website, paying $99.95 on the day of the fight. The website’s purchase page required purchasers to agree to Showtime’s Terms of Use (TOU), Privacy Policy and Video Services Policy, each of which were hyperlinked to the page. The TOU in turn contained an express arbitration provision and class action waiver, whereby purchasers agreed in the event of a dispute to either an individual action in small claims court or an individual arbitration proceeding administered by the AAA.  Purchasers also agreed to waive the right to trial by jury and the right to participate in a class action.

Mallh claimed that Showtime rabbit-punched him during the livestream, logging him out for a substantial portion of the fight, and then hit him below the belt by delaying or making incomplete various parts of the coverage. When his request for a refund was refused, he complained to the referee, but not the referee actually in charge of the fight. Ignoring the arbitration provision, Mallh filed a putative class action against Showtime in federal court, asserting contract, unfair practices and unjust enrichment claims. Showtime counterpunched by moving to compel arbitration pursuant to the TOU, or in the alternative to dismiss or strike the complaint’s class allegations.

The court granted Showtime’s motion to compel, sounding the final bell on Mallh’s quest for a class action jury trial. Acknowledging Second Circuit and other precedent, the court first recognized that an electronic click can sufficiently manifest assent to a contract, in the context of both “clickwrap” and “browsewrap” electronic agreements. (The former requires users to affirmatively click an “I agree” box after being presented with terms of use; the latter – as Showtime’s was – generally posts detailed terms of use via hyperlink and does not require the user to click an “I agree” box.) The court found that the Showtime website required Mallh to acknowledge that he had read and agreed to the TOU; the only remaining question was whether Mallh received adequate notice via the website and links that he was agreeing to individual arbitration.

The judge scored all rounds decisively for Showtime. Contrary to Mallh’s arguments, the court held that the website was not “cluttered” and the arbitration provision and class waiver were not “buried,” but instead were reasonably conspicuous. On this point the court held that there was nothing inherently wrong with the TOU being made available only via hyperlink.  Relying on Second Circuit authority, the court found it unobjectionable that the consumer is “prompted to examine the terms of sale . . . located somewhere else.” Given that Mallh did not deny that he clicked on a box agreeing to the TOU, thus manifesting his assent, the court granted the motion to compel arbitration, and left Mallh’s class action aspirations lying on the canvas.