Court Denies Motion To Compel Arbitration, Finding Terms Of Agreement To Arbitrate Inadequately Disclosed

[author: Matthew Burrows – Law Clerk]

A New York district court denied defendant Gogo LLC and Gogo Inc. (collectively “Gogo”) motions to transfer venue, compel arbitration, and dismiss for lack of standing in a lawsuit relating to internet services.

Plaintiffs filed a putative class action against Gogo alleging common law breach of the implied covenant of good faith and fair dealing, unjust enrichment, and violation of various consumer protection statutes. The lawsuit stems from the purchase of wireless internet connectivity services, available in airports and aboard air flights. Plaintiffs’ allege that Gogo mislead customers into purchasing a single one-month wireless internet service subscription, but then automatically renewed those services without obtaining their signatures or authorization.

The court looked into whether plaintiffs were given effective notice of the terms and conditions for their online purchases. As such, the offeror, in this case Gogo, “must show that a reasonable person in the position of the consumer would have known about what he was assenting to.” The court found that Gogo did not effectively draw plaintiffs’ attention to their terms and conditions nor did they provide their terms and conditions to purchasers via email or other methods of delivery. The court finally addressed Gogo’s jurisdictional argument. Gogo alleged that because plaintiffs were eventually fully reimbursed for subsequent internet charges, they lacked standing to sue. The court, citing Second Circuit precedent, found that since plaintiffs have “a practical stake in the dispute,” they continue to have standing to sue. Berkson v. Gogo, Case No. 14-CV-1199 (USDC E.D.N.Y. April 9, 2015).