Oh Walmart. The 8th Circuit May Buy Your Bullcrap, but We Don’t
In Foster v. Walmart, Inc., plaintiffs allege that they bought Walmart gift cards that turned out to be worthless. Third parties allegedly had tampered with the cards. Walmart refused a refund, so the plaintiffs brought suit in federal court. Walmart moved to compel arbitration. Of course it did. On what basis? On the back of the gift cards, had plaintiffs looked, they would have read the following words: “See Walmart.com for complete terms.” Oh, wait, before I buy this gift card, let me get out my phone and go a website to read Terms of Use, because that’s what one does. Oh wait, my phone is dead. Let me go home, get on my computer and read the terms. Oh wait, I forgot, I have a life and in that life there are 3531 things that are currently more urgent than that.
If they went to that website, they would have seen that an arbitration provision provides that: “ALL DISPUTES ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND WALMART.” Except that they wouldn’t because those words do not appear on the landing page of Walmart.com (at least not when I tried just now). They would have had to scroll down to the bottom of the page and clicked on “Terms of Use.” But the back of the card did not instruct them to do so. You can try the website yourself if you like, but please do not buy anything there. Look, I get it. You like the convenience of a big box store. But all of the alternatives are better than Walmart. Try Costco or Target.
Anyway, according to the Eighth Circuit, customers “accept[ed]” arbitration, according to the website, by “[u]sing or accessing the Walmart Sites.” Oh right. So, plaintiffs, who may once have visited a Walmart site, are bound by the terms that they never saw just because had they read the back of their cards, they would have been bound by words they would not have seen unless they searched for them? C’mon Eighth Circuit!
The District Court rejected Walmart’s demand for arbitration. There was no agreement to arbitrate, the District Court concluded, because the plaintiffs had no notice of an arbitration clause they never saw. Not so fast, said the Eighth Circuit. We need a trial on the issue of arbitrability.
But the Eighth Circuit takes seriously Walmart’s equally balmy argument that the District Court needed to establish that none of the plaintiffs had ever used Walmart’s websites and were thus on inquiry notice, through Walmart’s browsewrap agreement, of the relevant terms. That is, the Eighth Circuit, thinks a trial is necessary to determine whether a reasonably prudent person in the position of one of the plaintiffs, who may at some point in their lives have used one of Walmart’s websites, was thus on notice that months, years, decades later, when they bought a gift card, they would be bound by the arbitration clause that they certainly never read on a page of Walmart’s site that they likely never visited. Yup. Great use of judicial resources, that is.
The answer is no. Plaintiffs were not on inquiry notice of Walmart’s terms. They were not presented with the terms at point of purchase. The back of the blasted card was not a hyperlink. Walmart never made any serious attempt to inform plaintiffs of its terms before the purchase of the gift card. Suck it, Walmart. And Eighth Circuit, I have a book recommendation for you.