ActiveLAF, LLC v. Duhon

Topic(s): 
Arbitration
Docket Number: 
16-1157
Documents:
Case Description: 

Sky Zone, an indoor trampoline park in Lafayette, LA, requires its customers to sign an electronic agreement as a condition of using its facilities. Buried in this agreement among a set of unrelated terms is a provision in which the customer “agrees” to forgo judicial resolution of claims against Sky Zone in favor of arbitration––and to pay a $5,000 penalty for filing a lawsuit in violation of the agreement. Nowhere does Sky Zone agree to reciprocal terms. After two injured customers filed separate negligence suits against Sky Zone in Louisiana trial courts, Sky Zone sought to enforce the arbitration provision and have the cases dismissed. The cases ultimately reached the Louisiana Supreme Court, which held that the arbitration provision was unenforceable. Despite the presumptive enforceability of mutually agreed arbitration agreements under state and federal law, the court held that the provision’s obscure placement and inequitable terms meant that the customers who signed the agreement should not be presumed to have agreed to the provision’s harsh terms. Sky Zone filed a petition for certiorari in the U.S. Supreme Court, arguing that the lower court’s ruling discriminated against arbitration in violation of the Federal Arbitration Act (FAA).

Public Citizen Litigation Group, as cocounsel for the respondents, prepared and filed a brief in opposition. The brief explained that the FAA does not bar state courts from invalidating arbitration agreements that violate generally applicable state-law contract principles, and that the Louisiana Supreme Court’s ruling was based on precisely such a violation. In June 2017, the U.S. Supreme Court denied certiorari.