## Facts

- Randall Holl registered online for United Parcel Service, Inc.’s (UPS) “My Choice” program.
- To complete registration, users were required to click a checkbox stating they agreed to the UPS My Choice Service Terms, which were hyperlinked next to the checkbox and available to view.
- The My Choice Service Terms expressly incorporated UPS’s Tariff/Terms and Conditions of Service available on UPS’s website.
- The incorporated Tariff/Terms included a binding arbitration clause applying to controversies or claims arising out of or related to UPS’s provision of services.
- The Tariff/Terms also included a delegation clause assigning threshold questions about the arbitration agreement (such as scope and enforceability) to the arbitrator.
- The arbitration provision barred class-wide or collective arbitration.
- Holl did not recall reading the Tariff/Terms during enrollment. After his enrollment, UPS revised the Service Terms to include a more direct hyperlink to the Tariff/Terms.
- Holl later shipped a package and was charged a delivery-area surcharge that was higher than the amount listed in UPS’s retail-rate documents.
- Holl filed a putative class action against UPS alleging the surcharge discrepancy and asserted claims including civil RICO, violation of 49 U.S.C. § 13708(b), and unjust enrichment (under federal and state law).
- UPS moved to compel arbitration and to stay the federal action under the Federal Arbitration Act (FAA).

## Issues

1. Whether Holl formed an enforceable agreement to arbitrate by clicking a checkbox agreeing to hyperlinked My Choice Service Terms that incorporated UPS’s Tariff/Terms.
2. Whether the incorporated Tariff/Terms provided “clear and unmistakable” delegation of arbitrability questions to the arbitrator.
3. Whether the court should compel arbitration of Holl’s claims and stay (rather than dismiss) the litigation under 9 U.S.C. § 3.

## Decision

- The court granted UPS’s motion to compel arbitration.
- The court held Holl assented to the My Choice Service Terms through the online checkbox process and that those terms incorporated the Tariff/Terms containing the arbitration provision.
- The court enforced the delegation clause, requiring the arbitrator to decide threshold questions about the arbitration agreement’s scope and enforceability.
- The court stayed the action pending arbitration under 9 U.S.C. § 3.

## Legal Principles

- Under the FAA, courts determine whether an agreement to arbitrate was formed, applying ordinary state-law contract rules, and then enforce the agreement according to its terms absent a valid contract defense.
- Clickwrap-style assent is generally effective when the user must take an affirmative step (such as checking a box) and the terms are reasonably conspicuous and accessible by hyperlink; a party’s failure to read or remember reading the terms does not defeat assent.
- Incorporation by reference is effective when the agreement clearly identifies the external document and makes it available such that the party to be bound has at least constructive notice of the incorporated terms.
- A delegation clause is enforceable when it clearly assigns arbitrability questions (including scope and enforceability) to the arbitrator; when enforced, the court’s role is limited to sending the dispute to arbitration.
- When a party requests a stay and the court is satisfied the dispute is referable to arbitration under a written agreement, 9 U.S.C. § 3 authorizes staying the case while arbitration proceeds.

## Conclusion

The district court compelled arbitration and stayed Holl’s class action, concluding that Holl’s online registration manifested assent to My Choice Service Terms that incorporated UPS’s Tariff/Terms containing both a broad arbitration clause and a clear delegation provision, requiring the arbitrator to address arbitrability questions and sending Holl’s surcharge-related claims to individual arbitration.


Holl v. United Parcel Service, 2017 U.S. Dist. LEXIS 153317 (2017)