Klocek v. Gateway

104 F.Supp. 2d 1332 (2000)

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Nature of the Case

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Facts

Klocek (P) brought individual and class action claims against Gateway (D), alleging that it induced him and other consumers to purchase computers and special support packages by making false promises of technical support. P also claims breach of contract and breach of warranty, in that D, breached certain warranties that its computer would be compatible with standard peripherals and standard internet services. D asserts that P must arbitrate his claims under Gateway's Standard Terms and Conditions Agreement ('Standard Terms'). For each computer that D sells it includes a copy of the Standard Terms in the box which contains the computer battery power cables and instruction manuals. At the top of the first page, the Standard Terms includes a notice that by keeping the computer system beyond five (5) days after the date of delivery, that the user has accepted the Terms and Conditions. The Standard Terms are four pages long and contain 16 numbered paragraphs. Paragraph 10 provides the following arbitration clause: Any dispute or controversy arising out of or relating to this Agreement or its interpretation shall be settled exclusively and finally by arbitration. The arbitration shall be conducted in accordance with the Rules of Conciliation and Arbitration of the International Chamber of Commerce. The arbitration shall be conducted in Chicago, Illinois, U.S.A. before a sole arbitrator. Any award rendered in any such arbitration proceeding shall be final and binding on each of the parties, and judgment may be entered thereon in a court of competent jurisdiction. D motioned the Court to dismiss P's claims under the Federal Arbitration Act. The FAA ensures that written arbitration agreements in maritime transactions and transactions involving interstate commerce are 'valid, irrevocable, and enforceable.' FAA Section 3 states: If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.