Judge Grants Samsung Motion to Compel Galaxy Z Fold3 Fraud Claims to Arbitration

U.S. District Judge Jennifer Rochon for Southern New York in Manhattan granted Samsung’s May 1 motion to compel plaintiff Antonio Lewis’ fraud claims to arbitration (see 2305020029), according to her signed opinion and order Tuesday (docket 1:22-cv-10882). The judge also denied Samsung’s request for dismissal. Instead, the case is stayed pending the conclusion of proceedings before the arbitrator. Rochon held that dismissal would have opened an avenue for Lewis to appeal, and that would have delayed the arbitration, with the associated costs and uncertainties.

Lewis’ putative class action alleged Samsung duped consumers into believing its Galaxy Z Fold3 foldable smartphone was more durable than it really was. The complaint said that Samsung’s durability claims were false because they were premised on unrealistic testing methods.

In deciding on a motion to compel under the Federal Arbitration Act, the court must first determine whether the plaintiff and defendant “entered into an agreement to arbitrate,” say the opinion and order. Samsung argues that the parties have done so, but Lewis argues that they haven’t, it said. The court agrees with Samsung, it said.

Lewis doesn’t challenge the “straightforward reading” of Samsung’s arbitration agreement, but instead disputes whether he “assented” to it, said the opinion and order. He claims that he didn’t “unambiguously manifest assent” to the terms of the arbitration provision, as he never actually viewed the terms, and they weren’t presented in a clear and conspicuous manner, it said. But the court finds that Lewis agreed to the arbitration agreement by assenting to the shrinkwrap agreement embedded in the device’s external label, and again by agreeing to terms and conditions during the device set-up process, it said.

On Lewis’ arguments that the terms of the arbitration agreement weren’t presented to him clearly and conspicuously, “the uncontested facts presented here” show that the arbitration agreement wasn’t buried in a webpage or tucked away in an obscure corner, said the opinion and order. “To be sure,” the full text of the arbitration agreement is available only online, it said. But information about the arbitration agreement, including links to the full text online, “is presented to the consumer in an adequately prominent manner,” it said.

Lewis also argued that the arbitration agreement is unconscionable and therefore unenforceable, said the opinion and order. But the issue “has been delegated to the arbitrator,” so the court “need not resolve it,” it said. The court finds that Lewis and Samsung “clearly and unmistakably delegated the resolution of enforceability issues to the arbitrator” through the adoption of the American Arbitration Association’s consumer rules, it said.