United States Court of Appeals For the First Circuit
No. 23-1727
JOYCE TOTH,
Plaintiff, Appellant,
v.
EVERLY WELL, INC. and EVERLY HEALTH, INC.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Richard G. Stearns, U.S. District Judge]
Before
Barron, Chief Judge, Selya and Howard, Circuit Judges.
Stefanie L. Ostrowski, with whom Anna C. Haac, Gemma Seidita, Kristen G. Simplicio, Leora N. Friedman, Tycko & Zavareei LLP, Zachary Arbitman, Alan M. Feldman, Edward S. Goldis, Feldman Shephard, Wohlgelernter Tanner Weinstock & Dodig LLP, Jennifer D. Bennett, Matthew W.H. Wessler, Robert D. Friedman, Alisa Tiwari, and Gupta Wessler LLP were on brief, for appellant.
Katherine M. Peaslee, with whom Krysta Kauble Pachman, Susman Godfrey LLP, Fabien M. Thayamballi, Shapiro Arato Bach LLP, William F. McGonigle, and Arrowood LLP were on brief, for appellee. September 25, 2024 HOWARD, Circuit Judge. While registering an at-home lab
test on the testing company's website, Joyce Toth clicked on a
checkbox indicating that she read and accepted certain terms and
conditions, which were contained in a linked "User Agreement."
Her representation was only half true. Toth, like countless
consumers before her, did not read the terms and conditions that
she ostensibly accepted. Had she reviewed the User Agreement and
documents linked to it, she would have discovered arbitration
provisions (hereafter sometimes referred to collectively as the
"arbitration agreement") covering almost all disputes related to
her use of the test. Relying on the arbitration agreement, the
district court dismissed Toth's putative class action against the
testing company. Toth now challenges the district court's ruling,
arguing that no contract was formed between the company and herself
and that, even if one were, the arbitration agreement within was
invalid. Unfortunately for Toth, however, she formed a valid
"clickwrap" contract with the company when she clicked on the
checkbox. Accordingly, we affirm.
I.
A.
Everly Health, Inc. and its subsidiary Everly Well, Inc.
(collectively, "Everlywell") sell health-related services and
commodities. Everlywell offers a wide array of at-home health
tests, but few are more popular than its "Food Sensitivity Test."
- 3 - Relying on a blood sample provided by the user, the Food
Sensitivity Test claims to assess the user's "reactivity to 204
common foods that may be causing discomfort" by "measur[ing] [the]
user's immunoglobulin G (IgG) response to various foods."
Prospective users can purchase test kits directly from
Everlywell's website or indirectly from retailers, such as in
physical stores or online from Target. The test kit's packaging
suggests a simple process for obtaining results -- "Purchase
Kit . . . Collect Sample & Send . . . Receive Fast Online Results"
-- but also stipulates that "[p]urchase, registration, and use are
subject to agreeing to the Everlywell User Agreement, which can be
read at everlywell.com/terms[.]"
Because the test is designed to be taken at home,
instructions enclosed within each kit explain how to administer
the blood test, how to send the sample to Everlywell's laboratory,
and how to access test results. The instructions also direct the
user to create an account on Everlywell's website and register the
test kit, warning that "[t]he lab can only process your sample if
you . . . register your kit." The account-creation page on its
website asks users to input some basic information and then click
a checkbox indicating that they "have read and accept the Terms
and Conditions[.]" The phrase "Terms and Conditions" is
highlighted in green font and embedded with a link. The checkbox
and accompanying text are located directly above the "Create
- 4 - Account" button, and a user cannot register a kit without first
clicking the checkbox.
The "Terms and Conditions" link connects users to
Everlywell's User Agreement. In its opening sentence, the User
Agreement states that "[b]y clicking on the box, you indicate that
this User Agreement is a binding agreement between you . . . and
Everly Well, Inc. . . . and that you have read and understood the
following terms . . . ." A few lines below, under the bolded
subheading "Access to the Services and the Site[,]" the User
Agreement stipulates that "[s]ubject to your compliance with the
terms of this User Agreement . . . Everlywell grants you a
personal, limited, terminable, non-exclusive, non-transferable
right to access the Site and use the Services[.]"
The rest of the User Agreement further outlines the
terms. The "Fees and Payment" section promises that Everlywell
will "refund the applicable fees if, after the applicable review,
a Health Consultant does not authorize and order the test(s) you
requested." The "Limitation of Liability" section purports to
relieve Everlywell of liability for consequential, punitive, and
other special damages. It also limits recoverable damages to the
greater of "(i) THE AMOUNT ACTUALLY PAID BY YOU FOR THE SERVICES
AND (ii) ONE HUNDRED DOLLARS (U.S.)."
- 5 - An arbitration clause resides in the "Dispute
Resolution" section of the User Agreement.1 That section first
requires both Everlywell and the customer to "use their best
e orts [sic] to settle" any disputes that arise between them. It
then sets forth mutual promises to arbitrate "in Austin, Texas, in
accordance with the Commercial Arbitration Rules of the American
Arbitration Association (the 'AAA')[.]" Intellectual property
disputes and suits seeking preliminary specific performance or
injunctive relief are excepted from the arbitration provision.
The Dispute Resolution section ends by providing that "fees charged
by the AAA and arbitrator shall be shared equally by the parties."
Following the Dispute Resolution section, the "Governing Law"
section stipulates that Texas law will apply to any disputes
relating to the User Agreement; the "Class Action Waiver" section
bars collective and class actions against Everlywell; and the
"Limitation of Time to File Claims" section imposes a one-year
time bar on users' claims against Everlywell.
The User Agreement, in turn, links to three other
documents: Everlywell's Privacy Notice, Consent for Services, and
Terms of Use. The Privacy Notice and Consent for Services both
purport to give Everlywell various rights to its users'
"de-identified information," and the Terms of Use contains
1Other documents linked to the User Agreement also contain arbitration clauses that are materially identical to this one.
- 6 - disclaimers of warranties. Both the Privacy Notice and Terms of
Use contain unilateral-modification clauses.
B.
Plaintiff-Appellant Joyce Toth purchased a Food
Sensitivity Test from Target's website for $119.99. Following the
instructions enclosed in the test's box, she then created an
account, clicked the checkbox indicating that she "read and
accept[ed]" the User Agreement, and sent her completed kit to
Everlywell's labs. When she eventually received her results,
though, Toth was confused. Everlywell reported that she had a
sensitivity to eggs, but Toth had eaten eggs the night before
"without any problem[,]" and the test did not indicate that she
was sensitive to any foods to which she knew that she was allergic.
Toth alleges that her surprising results align with the actual
science underlying the Food Sensitivity Test. IgG levels, she
contends, do not track an individual's sensitivity to food; rather,
"elevated IgG . . . indicate[s] that a food has been regularly
consumed within the several months before the test." If this
contention is true, Everlywell's test does not tell users whether
they are sensitive to certain foods; it only tells users which
foods they have recently eaten.
Toth filed this putative class action in federal
district court, alleging that Everlywell "deceptively markets its
tests and misleads consumers into providing their personal medical
- 7 - information for Everlywell’s commercial use." In response,
Everlywell moved to compel arbitration under the Federal
Arbitration Act ("FAA") and, alternatively, to dismiss Toth's
complaint. Tasked with the burden of establishing that the parties
entered a valid, enforceable agreement to arbitrate, Everlywell
asserted in part that the parties had formed a "clickwrap" contract
when Toth checked the "I accept" checkbox before creating her
account. Toth opposed Everlywell's motion, advancing a host of
contractual defenses. She argued that the User Agreement lacked
consideration because Everlywell had already promised to deliver
her test results; that Everlywell did not provide reasonable notice
of the terms of the contract or secure Toth's assent to it as
required by Massachusetts law; that the contract was "illusory"
because Everlywell retained unilateral-modification power; and
that the arbitration provision was procedurally and substantively
unconscionable.2
After allowing the parties to conduct partial discovery,
the district court granted Everlywell's motion to compel
arbitration. The court held that Everlywell satisfied its burden
of proving that the contract to arbitrate is valid and enforceable
by providing "evidence that Toth affirmatively checked a box
2Toth also raises arguments based on Massachusetts's unfair trade practices statute and equitable estoppel. Because she did not raise these claims below, we decline to address them. See Carrozza v. CVS Pharmacy, Inc., 992 F.3d 44, 59 (1st Cir. 2021).
- 8 - accepting its Terms and Conditions[.]" And it found Toth's
arguments to the contrary unavailing. The contract did not lack
consideration, the court reasoned, because Everlywell was not
obligated to send Toth her test results "at the moment of
purchase[;]" reasonable consumers would expect that they must take
further action, such as collecting and submitting a blood sample,
before Everlywell can perform its contractual obligation.
The court went on to conclude that, by requiring Toth to
affirmatively check a highlighted "Terms and Conditions" checkbox
on the account-creation page, Everlywell sufficiently notified her
of the contract's terms and secured her effective assent. Despite
Toth's claims, the court went on, she did have a "meaningful choice
or opportunity" to reject the terms because the User Agreement
explicitly stated that she was free to turn down the terms.
Further, the court noted that Everlywell's website and Target's
website both authorized returns of the test kit. Finally, the
court dismissed Toth's validity challenge to the arbitration
agreement after noting that her "procedural unconscionability
arguments merely recycle under a new label her same previously
rejected arguments."
Toth then filed this timely appeal.
II.
The FAA codifies the "fundamental principle that
arbitration is a matter of contract." Rent-A-Center, W., Inc. v.
- 9 - Jackson, 561 U.S. 63, 67 (2010). It provides that arbitration
agreements in commercial contracts "shall be valid, irrevocable,
and enforceable, save upon such grounds as exist at law or in
equity for the revocation of any contract." Id. (quoting 9 U.S.C.
§ 2). Thus, so long as a federal court is "satisfied that the
making of the agreement for arbitration or the failure to comply
therewith is not in issue," the court must order parties to
arbitrate any claims subject to the agreement. 9 U.S.C. § 4.
This doctrinal rule reaffirms federal courts' authority
to determine the existence and validity of an arbitration
agreement. Farnsworth v. Towboat Nantucket Sound, Inc., 790 F.3d
90, 96 (1st Cir. 2015). But it also limits the scope of potential
challenges to arbitration clauses. Id. Because a mutual promise
to arbitrate constitutes effective consideration, an arbitration
agreement can be severed from an otherwise ineffectual contract.
Rent-A-Center, 561 U.S. at 70-71. This means in part that a party
seeking to avoid arbitration usually must show that the arbitration
clause itself is invalid. Id. A challenge to "another provision
of the contract, or to the contract as a whole, does not prevent
a court from enforcing a specific agreement to arbitrate." Id.
That said, a party may still challenge the contract's formation.
If an "agreement between [the parties] was [not] concluded,"
neither was an arbitration agreement within that contract. Buckeye
Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 n.1 (2006).
- 10 - Under this framework, a court has a somewhat
straightforward task when presented with a "delegation
clause" -- an agreement to submit to arbitration those issues
relating to the scope, validity, and enforceability of an
arbitration agreement. First Options of Chi., Inc. v. Kaplan, 514
U.S. 938, 942 (1995). The FAA treats these clauses like any other
arbitration agreement. Bossé v. N.Y. Life Ins. Co., 992 F.3d 20,
27 n.7 (1st Cir. 2021). Thus, whenever parties form a valid and
enforceable delegation agreement, the FAA compels courts to send
the entire action to arbitration. Id. at 27 ("[W]here the parties
'by clear and unmistakable evidence' delegate issues of
arbitrability to the arbitrator, 'the courts must respect the
parties' decision as embodied in the contract' and send the issue
to the arbitrator to decide." (quoting Henry Schein, Inc. v. Archer
& White Sales, Inc., 586 U.S. 63, 65, 69 (2019))); see also
Coinbase, Inc. v. Suski, 602 U.S. ___, 144 S. Ct. 1186, 1194 (2024)
("In cases where parties have agreed to only one contract, and
that contract contains an arbitration clause with a delegation
provision, then, absent a successful challenge to the delegation
provision, courts must send all arbitrability disputes to
arbitration.”). The party opposing arbitration can then only
- 11 - challenge the formation of the contract or the specific validity
of the delegation provision.3 Rent-A-Center, 561 U.S. at 71.
Toth lodges both formation and validity challenges. She
contends that she and Everlywell never formed a contract and, by
extension, never formed an agreement to arbitrate. Alternatively,
she argues that the unilateral-modification clauses render any
contract illusory and that various terms in the User Agreement
render the arbitration agreement unconscionable.
"In reviewing the district court's resolution of a
motion to compel arbitration, we review legal issues de novo and
factual determinations for clear error." Canales v. CK Sales Co.,
67 F.4th 38, 43 (1st Cir. 2023) (citing Fraga v. Premium Retail
Servs., Inc., 61 F.4th 228, 233 (1st Cir. 2023); and Cullinane v.
Uber Techs., Inc., 893 F.3d 53, 60 (1st Cir. 2018)).4
3 The parties agree that the contractual questions are governed by Massachusetts law. 4 Toth asks us to apply instead a summary-judgment standard, remanding if we find any disputed material facts. Although we "normally . . . accept the district court's findings of fact subject only to clear error review[,]" Toth correctly identifies that when the district court makes no factual findings, we "accept only those facts that are effectively undisputed, and otherwise identify those factual disputes that need be resolved, much as if we were ruling on a grant of summary judgment." Fraga, 61 F.4th at 233. Here, the district court made a finding on the only disputed fact -- whether Toth could return her test. Thus, the summary-judgment standard is inapplicable. And even if it did apply here, Toth's proposed standard would not affect the outcome of her appeal because, as we explain in Part II.A.2., whether Toth could return the test is immaterial.
- 12 - A.
We turn first to formation. To determine whether parties
have formed a contract, Massachusetts courts apply a
reasonableness test, "focusing on whether the contract provisions
at issue 'were reasonably communicated and accepted.'" Kauders v.
Uber Techs., Inc., 159 N.E.3d 1033, 1048-49 (Mass. 2021) (quoting
Ajemian v. Yahoo!, Inc, 987 N.E.2d 604, 611 (Mass. App. Ct. 2013)).
That is, the party against whom the contract is being enforced
must have (1) received "reasonable notice of the terms" and (2)
"reasonabl[y] manifest[ed] . . . assent to those terms." Id.
Applying this test, Massachusetts courts "regularly
enforce[]" so-called "clickwrap" contracts. Id. at 1049. A
clickwrap contract is an online agreement that requires a user to
affirmatively accept its terms by clicking a checkbox but does not
require the user to view or scroll through those terms. Cullinane,
893 F.3d at 61 n. 10. Courts distinguish clickwrap contracts from
"browsewrap" contracts, in which "the online host dictates that
assent is given merely by using the site[;]" "scrollwrap"
contracts, in which "users . . . physically scroll through an
internet agreement and click on a separate 'I agree' button in
order to assent to the terms and conditions of the host website[;]"
and "sign-in-wrap" contracts, in which "assent to the terms of a
website" is "couple[d] . . . with signing up for use of the site's
- 13 - services[.]" Id. (quoting Berkson v. Gogo LLC, 97 F.Supp. 3d 359,
394–95 (E.D.N.Y. 2015)).
Due to their similarity to traditional written
contracts, clickwrap contracts usually create equivalent
contractual obligations. 1 Corbin on Contracts § 2.12 (2023)
("From a contract law perspective, there is little controversy
surrounding clickwrap agreements. They are generally akin to
signing a traditional pen and ink contract."). And the
reasonableness test reflects this. Requiring users to signal their
agreement by clicking a checkbox "puts the user on notice that the
user is entering into a contractual arrangement," satisfying the
notice prong, and "[r]equir[es] an expressly affirmative action,"
satisfying the assent prong. Kauders, 159 N.E.3d at 1050-51; see
also Bekele v. Lyft, Inc., 199 F.Supp. 3d 284, 295-296 (D. Mass.
2016), aff'd, 918 F.3d 181 (2019) (“Massachusetts courts have
routinely concluded that clickwrap agreements -- whether they
contain arbitration provisions or other contractual terms --
provide users with reasonable communication of an agreement's
terms.”).
Everlywell presented its arbitration clauses to Toth as
a part of a clickwrap contract. To register her food-sensitivity
test, Toth had to "click 'I agree,' but [did] not necessarily [have
to] view the contract to which she [was] assenting." Cullinane,
893 F.3d at 61 n. 10 (quoting Berkson, 97 F. Supp. 3d at 394-402).
- 14 - And like most clickwrap contracts, the User Agreement, including
the arbitration agreement within, is a validly formed contract
under Massachusetts law.
1.
First, the account-creation page gave Toth proper notice
of the contract. The language next to the checkbox indicates that
users must read and accept the terms and conditions, signifying to
users that they are entering into a contractual arrangement, and
the terms themselves are linked. Although Toth maintains that she
did not read the User Agreement, "[i]n Massachusetts courts, it
has long been the rule that '[t]ypically, one who signs a written
agreement is bound by its terms whether [s]he reads and understands
them or not[,]'" especially when the offeror provides inquiry
notice. Awuah v. Coverall N. Am., Inc., 703 F.3d 36, 44 (1st Cir.
2012) (second alteration in original) (quoting St. Fleur v. WPI
Cable Sys./Mutron, 879 N.E.2d 27, 35 (Mass. 2008)); see also Good
v. Uber Techs., Inc., SJC-13490, slip op. at 34-35 (Mass. June 7,
2024) ("We do not require, for purposes of reasonable notice, that
the user actually scroll through the terms."). And we have
previously acknowledged that "requiring users to click a box
stating that they agree to a set of terms, often provided by
hyperlink, before continuing to the next screen" is "a common
method of conspicuously informing users of the existence and
location of terms and conditions[.]" Cullinane, 893 F.3d at 62;
- 15 - see also 15 Corbin on Contracts § 83.5 (2023) ("The overriding
authorities suggest that clicking a box indicating that 'I have
read and agreed to [the] User Agreement & Terms of Service' is
enough to put a reasonable user on notice that there were
contractual terms applicable to the usage of the site.").
Toth maintains that a "fact-intensive inquiry" into the
circumstances reveals that the website does not provide proper
notice. She relies on Kauders, a Supreme Judicial Court of
Massachusetts ("SJC") opinion which, in her view, establishes that
customers signing up for online services should not reasonably
expect to subject themselves to "extensive terms and conditions,"
such as an arbitration provision. 159 N.E.3d at 1051. Kauders,
however, does not sweep so broadly. The SJC did not conclude that
an online-service contract could never notify a customer of an
arbitration provision. It merely clarified that the unique nature
of online-service contracts requires courts to "carefully consider
the interface and whether it reasonably focused the user on the
terms and conditions." Id. at 1051-52. The user-registration
page in that case, the court held, did not sufficiently focus its
users on the terms and conditions that it was attempting to
enforce. Id. at 1054.
The same is not true of Everlywell's account-creation
page. The Kauders court specifically distinguished the browsewrap
contract at issue from clickwrap contracts, recognizing that the
- 16 - latter "alert users to the significance of their actions." Id. at
1051. Further, Everlywell's terms and conditions are far more
conspicuous than those in the putative contract at issue in
Kauders. On the user-registration pages in that case, the link to
the terms and conditions appeared on a separate payment screen,
not a general account-creation screen; "other terms on the same
screen" had "a similar or larger size, typeface, and . . . more
noticeable attributes[;]" and a user could have reasonably clicked
through the payment screen without scrolling down to the terms and
conditions. Id. at 1053-54 (quoting Cullinane, 893 F.3d at 63).
On Everlywell's account-creation page, by contrast, the linked
terms and conditions are bolded in green, directly above the
"Create My Account" button, and next to a checkbox that users must
click before creating an account.
Toth also contends that Everlywell's account-creation
page does not reasonably convey the nature of the contract. Even
if Everlywell's website does notify users that they are entering
into a contract, she argues, a reasonable consumer would infer
that the contract "relate[s] only to terms for using an account on
Everlywell's site[,]" not terms for using a test kit.
Toth cites only one case holding that a clickwrap
contract did not sufficiently notify users of an arbitration
clause's scope, Applebaum v. Lyft, Inc., 263 F. Supp. 3d 454
(S.D.N.Y. 2017), which has little import here. Applebaum applied
- 17 - New York law to invalidate a clickwrap contract that was
hyperlinked, in very small font, on a page titled "Add Phone
Number."5 Id. at 467. Reasonable users, the court concluded,
would assume that the terms and conditions related only to Lyft's
use of their phone numbers. Id. The User Agreement here is not
so misleading. It appears on the "Account Creation" page, which
users must access to receive their results, and Toth fails to
explain why, notwithstanding that distinction, Applebaum would
dictate the result here. A reasonable user would understand that
the terms and conditions on Everlywell's site applied to use of
the test kit.
2.
Second, Everlywell secured meaningful assent from Toth
when it required her to click the checkbox before creating her
account. As the SJC has reiterated, clickwrap contracts are the
"clearest manifestations of assent" because they require users to
affirmatively signal their acceptance of the attached terms.
Kauders, 159 N.E.3d at 1050; see also Hughes v. McMenamon, 204 F.
Supp. 2d 178, 181 (D. Mass. 2002) (collecting cases). And Toth
5 It is unclear whether Massachusetts courts impose as rigorous a notice requirement as New York courts. See Wickberg v. Lyft, Inc., 356 F. Supp. 3d 179, 183 n.2 (D. Mass. 2018) (finding the notice analysis in Applebaum "unpersuasive, as [it] appl[ies] New York . . . law, and not the law of Massachusetts").
- 18 - admits that she clicked the checkbox affirming that she read and
accepted the User Agreement.
Toth nevertheless maintains that she did not
meaningfully assent to the contract. In her view, "consumers had
no ability to reject Everlywell's contracts" because they could
not always return the test kits after purchase. She contends that
she was forced to decide between assenting to the User Agreement
or forfeiting the benefit of the test she had already paid for.6
But this supposition relies on the premise that Everlywell had a
pre-existing obligation to provide Toth the benefit of the test,
and Toth does not defend that premise in any developed way. Toth
purchased the test from Target, not Everlywell. The only source
Toth points to for Everlywell's purported obligation to her is
Everlywell's "express warranty" that it would provide results to
customers who purchased the test. But, as Everlywell points out,
the box containing the test Toth purchased stated on its exterior
that "[p]urchase, registration, and use are subject to agreeing to
the Everlywell User Agreement, which can be read at
6 Toth also frames this arrangement as lacking new consideration, because the only consideration that Everlywell purported to give in exchange for Toth's promise to arbitrate is a set of services it was already obligated to provide. But the User Agreement contained "bilateral obligations that independently constitute valid consideration[,]" Solo-Fonalledas v. Ritz-Carlton San Juan Hotel Spa & Casino, 640 F.3d 471, 475 (1st Cir. 2011), including Everlywell's mutual promise to arbitrate. Toth's only response, which boils down to questioning the adequacy of the consideration, is unsupported by any authority.
- 19 - everlywell.com/terms[.]" And while the parties dispute whether
that disclaimer was shown on Target's website, even if we assume
that it was not, Toth never explains why that omission on Target's
part would result in Everlywell having an obligation to Toth based
on having made an express warranty. Thus, Toth has failed to show
that Everlywell owed a pre-existing obligation to her and thereby
failed to show that Everlywell coerced her assent by threatening
non-performance.
Toth also charges Everlywell with failing to make clear
through its contracts that users can reject the User Agreement and
receive a refund. "[A]ny purported assent is meaningless[,]" Toth
claims, if users do not know that they can receive a refund. This
principle derives from the theory of "rolling" contracts: sales
contracts with terms that the seller conveys to the buyer after
the sale. See DeFontes v. Dell, Inc., 984 A.2d 1061, 1071 (R.I.
2009); ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1452 (7th Cir.
1996). The jurisdictions that recognize these contracts hold the
customer to the post-sale terms when the customer has "a right to
return the [product] if the terms are unacceptable." 7 ProCD, 86
F.3d at 1451.
7 Many states do not adopt a rolling-contract theory. See 15 Corbin on Contracts § 83.5 (2023) ("[T]he 'money now, terms later' line of cases, or the 'rolling contract' theory, upsets the usual chronology of contract formation and is controversial."); Howard v. Ferrellgas Partners, L.P., 748 F.3d 975, 982 (10th Cir. 2014).
- 20 - Even if we assume, albeit without deciding, that
Massachusetts recognizes rolling contracts,8 we discern no reason
to hold clickwrap contracts to a similar standard. The right to
return plays an essential role in a customer's assent to a rolling
contract. When a retailer notifies its customers of their right
to reject post-sale terms by returning a product, and a customer
continues to use that product after purchase, a court can assume
that the customer accepted the terms. See id. at 1452-53;
DeFontes, 984 A.2d at 1068. Clickwrap contracts, on the other
hand, provide much stronger evidence of the customer's assent --
that the customer affirmatively clicked on the checkbox. Thus, a
court need not determine whether the customer's use of the product
signaled assent to the post-sale terms.
Had Toth sued Everlywell before creating an account, her
case would present an intriguing assent question: Did Toth
effectively accept the User Agreement by buying and using the test
without attempting to return it? Instead, her case presents a
much more straightforward question, easily answered by Toth's
admission that she clicked the checkbox.
8 The cases cited by the parties reveal little on this score. Compare Feeney v. Dell Inc., 34 N.E.3d 780 (Mass. App. Ct. 2015) (unpublished) (enforcing a money-now-terms-later contract); with Casavant v. Norwegian Cruise Line, Ltd., 829 N.E.2d 1171, 1175 (Mass. App. Ct. 2001) (refusing to enforce additional terms after sale).
- 21 - B.
Having determined that Toth and Everlywell formed a
contract through the User Agreement, we turn next to the validity
of the arbitration agreement contained within that contract.
Recall that the FAA requires Toth to "challenge[] . . . the
validity of the specific agreement to resolve the dispute through
arbitration" and not merely "the validity of an entire contract
which contains an arbitration clause[.]" Farnsworth, 790 F.3d at
96 (emphasis added). Our first step, then, is to analyze the scope
of the parties' agreement to arbitrate.
We concur with the district court's conclusion that the
parties agreed to arbitrate issues of arbitrability, including the
validity and scope of the arbitration agreement. The User
Agreement states that disputes shall be resolved "in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association (the 'AAA')[.]" And other cases are "clear that
incorporation of the AAA arbitration rules constitutes clear and
unmistakable evidence of the parties' intent to delegate
arbitrability issues to the arbitrator." Bossé, 992 F.3d at 29.
Indeed, the AAA rules provide that the arbitrator must hear any
"objections with respect to the existence, scope, or validity of
the arbitration agreement or to the arbitrability of any claim or
counterclaim." Com. Arb. Rules & Mediation Procs. R-7(a) (2013).
A court can therefore consider validity challenges such as Toth's
- 22 - only insofar as they apply to the delegation provision -- the
provision incorporating the AAA arbitration rules.9 See Bossé,
992 F.3d at 27-28.
Toth first argues that the unilateral-modification
clauses render the User Agreement an illusory contract. Her
argument, however, is foreclosed by our decision in Emmanuel v.
Handy Technologies, Inc., 992 F.3d 1, 10-11 (1st Cir. 2021).
There, a house cleaner claimed that a unilateral-modification
clause contained in her employment contract rendered an
arbitration clause within that contract unconscionable. Id. at 3-
4, 10-11. We were not persuaded, holding that, "as a matter of
substantive federal arbitration law," the unconscionability
challenge "must be considered by the arbitrator in the first
instance." Id. at 11 (internal quotations omitted). The employer,
we reasoned, did not use the modification clause to revise the
arbitration provision, and the house cleaner did not "contend that
9 Toth claims that Everlywell waived any argument that the User Agreement delegates validity challenges. According to her, in its motion to compel arbitration, "the only issue Everlywell contended was delegated to the arbitrator was the scope of the arbitration clause -- not its validity." Everlywell's alleged waiver is of no moment, though, because the arbitration agreement "clear[ly] and unmistakabl[y]" delegates issues of validity to the arbitrator by incorporating the AAA rules. Bossé, 992 F.3d at 29. And we are "at liberty to affirm a district court's judgment on any ground made manifest by the record, whether or not that particular ground was raised below." United States v. George, 886 F.3d 31, 49 (1st Cir. 2018).
- 23 - the unconscionability of the modification clause so infects the
Agreement that severing that clause would effectively rewrite the
bargained-for exchange as to arbitration." Id.
Toth falls prey to the same trap. Not only is it unclear
whether the unilateral-modification provisions even apply to the
arbitration clause, but Toth also does not assert that Everlywell
modified the arbitration clause, nor that the modification clauses
would "rewrite the bargained-for exchange[.]" Id. Thus,
regardless of the merits of her illusoriness challenge to the User
Agreement as a whole, it is a subject for an arbitrator and not a
court.
Second and finally, Toth contends that the arbitration
agreement is unconscionable and therefore unenforceable against
her. Massachusetts courts apply a "lower threshold for finding
unconscionability" to contracts of adhesion, such as clickwrap
contracts. Good, SJC-13490, slip op. at 47 n.41. However, under
Massachusetts law, a contract is unconscionable if, and only if,
it is both substantively and procedurally unconscionable. Machado
v. System4 LLC, 28 N.E.3d 401, 414 (Mass. 2015); Bekele v. Lyft,
Inc., 918 F.3d 181, 187-88 (1st Cir. 2019). And Toth fails to
meet Massachusetts's lower standard because she has not shown that
the delegation provision itself is substantively unconscionable.
- 24 - Toth flags a litany of provisions in the User Agreement
that she claims renders the arbitration provisions substantively
unconscionable. She argues that because the damages limitation
caps her recovery to the test's price, but arbitration would cost
her at least $1,700, she will always lose money in arbitration.
Toth also explains that the shortened statute of limitations, the
scope provision (which she claims sends to arbitration only claims
that a customer would likely bring), and the forum-selection clause
collectively create an arbitration process that favors Everlywell.
The Supreme Court considered a similar challenge in
Rent-A-Center. Despite having signed an arbitration agreement
with his employer, the plaintiff-employee there sought to keep his
employment-discrimination suit in federal court by arguing that
the agreement was unconscionable. 561 U.S. at 66. The arbitration
agreement was substantively unconscionable, he contended, because
it applied only to claims that an employee would bring, contained
a fee-splitting arrangement, and limited his ability to conduct
discovery. Id. at 73-74. The Court disagreed, explaining that
the plaintiff-employee "did not make any arguments specific to the
delegation provision;" rather, he argued that these aspects of the
arbitration agreement "rendered the entire Agreement invalid."
Id. at 74 (emphasis in original). Thus, the Court concluded that
the arbitration panel must decide whether the rest of the
arbitration agreement was unconscionable.
- 25 - So too here. Toth identifies many allegedly one-sided
provisions in the dispute-resolution section of the User
Agreement, but none make the delegation provision itself unfair or
somehow restrict Toth's ability to challenge the validity of the
arbitration agreement before an arbitrator. Toth does target the
AAA clause insofar as its cost-sharing rules, along with
Everlywell's damages limitation, ensure that she loses money. But
this damages limitation affects Toth's eventual recovery; it does
not affect Toth's ability to challenge (in arbitration, pursuant
to the delegation provision) the validity of the parties' agreement
to arbitrate the merits of her dispute. See id. (rejecting the
same argument). The same is true of the clauses shortening the
statute of limitations and dictating which claims are subject to
arbitration.
Only one provision cited by Toth affects the parties'
ability to adjudicate arbitrability issues: the forum-selection
clause requiring Toth to arbitrate the validity of the arbitration
clause in Texas, Everlywell's home state. Yet, she does not
explain how litigating in Texas oppresses her. See Bekele, 918
F.3d at 188 (1st Cir. 2019) (defining substantive
unconscionability as "terms [that] are oppressive to one party").
Thus, Toth has not demonstrated that the agreement to arbitrate is
invalid.
- 26 - III.
For the foregoing reasons, we affirm.
- 27 -