United States District Court, E.D. Wisconsin
DECISION AND ORDER
WILLIAM E. DUFFIN U.S. Magistrate Judge
Jason and Andrea Abraham filed this action against defendants
JetSmarter Inc. and Sam Kimmell, alleging violations of the
Wisconsin Deceptive Trade Practices Act (Wis. Stat. §
100.18), common law fraud, breach of contract, breach of good
faith, and punitive damages. (ECF No. 1.) Defendants move for
dismissal in favor of mandatory arbitration pursuant to
Federal Rule of Civil Procedure 12(b)(3) and the Federal
Arbitration Act, 9 U.S.C. §§ 1-16. (ECF No. 12.)
All parties have consented to the full jurisdiction of a
magistrate judge. (ECF Nos. 4, 17.) Defendants' motion is
ready for resolution.
2016 the Abrahams became interested in a membership with
JetSmarter. (ECF No. 15, ¶ 2.) On December 27, 2016, Mr.
Abraham spoke with JetSmarter's sales representative Sam
Kimmell. (ECF No. 15-2 at 23.) Kimmell stated that, if the
Abrahams enrolled in a JetSmarter membership before January
1, 2017, they would receive membership benefits, including
but not limited to complimentary flights over three hours in
flight time with no additional fees, and they would be
allowed to book a minimum of four seats on a large jet or a
minimum of two seats on a "light" jet. (ECF No. 1,
some price negotiation, Mr. Abraham agreed to purchase
JetSmarter memberships for himself and his wife, plaintiff
Andrea Abraham. (See ECF No. 15-2 at 2-4.) Kimmell
sent Mr. Abraham an email containing a hyperlink to access
the Abrahams' electronic Membership Invoice. (ECF No.
15-2 at 2-3.) Below the itemized charges, the Membership
Invoice contained a "toggle button" next to the
phrase, "I ACCEPT TERMS AND CONDITIONS OF THE MEMBERSHIP
No. 15-3 at 2.) A hyperlink was embedded within the phrase,
"TERMS AND CONDITIONS OF THE MEMBERSHIP AGREEMENT,"
which, when clicked, would have directed the Abrahams to a
webpage displaying a complete Membership Agreement, which
included an arbitration provision. (ECF No. 15, ¶¶
5, 7.) The arbitration provision, entitled “Dispute
Resolution, ” stated in relevant part:
Any claim or dispute between the parties and/or against any
agent, employee, successor, or assign of the other, whether
related to this Agreement, any of the Terms and Conditions or
the relationship or rights or obligations contemplated
herein, including the validity of this clause, shall be
resolved exclusively by binding arbitration by the American
Arbitration Association, under the Commercial Arbitration
Rules and the Supplementary Procedures for Consumer Related
Disputes then in effect, by a sole arbitrator. The place of
arbitration shall be Broward County, Florida.
(ECF No. 15-5 at 10.) The Abrahams were required to click the
“toggle button” in order to pay for their
JetSmarter memberships. (Id., ¶¶ 4, 6.)
9, 2017, Kimmell communicated to Mr. Abraham that
“JetSmarter was offering a three-year membership at a
discounted rate with the same benefits included in their
annual membership plan if members pre-purchase all three
years.” (ECF No. 1, ¶¶ 11-12; ECF No. 15-6 at
8-10.) The Abrahams accepted the offer and pre-purchased two,
three-year memberships, normally priced at $45, 000.00 each,
for a discounted rate of $21, 877.28 per membership. (ECF No.
1, ¶ 13.) As before, Kimmell emailed Mr. Abraham an
email containing two hyperlinks, one corresponding to the
Membership Extension Invoice for Mr. Abraham and the second
corresponding to the Membership Extension Invoice for Mrs.
Abraham. (ECF No. 15-6 at 2.) Once clicked, the hyperlinks
would have taken the Abrahams to an invoice that was
nearly-identical to their original invoice. (ECF Nos. 15-7,
15-8.) As before, in order to pay for their JetSmarter
Membership Extensions, the Abrahams were required to click
the “toggle button” next to the phrase, “I
ACCEPT TERMS AND CONDITIONS OF MEMBERSHIP AGREEMENT.”
(ECF No. 15, ¶ 10.)
enrolling and extending their memberships, the Abrahams
discovered on or about September 5, 2018, that, in addition
to their membership fees, there would be a required fee per
flight in order to use the flights offered by JetSmarter.
(ECF No. 1, ¶ 15.) They also discovered that they were
now required to book a minimum of approximately ten seats in
order to fly on a large jet, and that the option to book
seats on a “light” jet was no longer available.
(Id., ¶ 17.) The Abrahams allege that these new
conditions and requirements are contrary to the express
representations made by JetSmarter and Kimmell.
(Id., ¶ 18.)
October 16, 2018, the Abrahams filed this action. (ECF No.
1.) On November 28, 2018, the defendants moved to dismiss the
complaint for improper venue, alleging that the Abrahams are
required to arbitrate their claims in Broward County, Florida
before the American Arbitration Association. (ECF No. 12.)
the arbitration clause calls for arbitration outside the
Eastern District of Wisconsin, a motion to dismiss for
improper venue under Rule 12(b)(3) of the Federal Rules of
Civil Procedure is the proper vehicle for dismissal of this
action. Faulkenberg v. CB Tax Franchise Sys., LP,
637 F.3d 801, 808 (7th Cir. 2011). When ruling on a motion to
dismiss under Rule 12(b)(3), “the district court is not
‘obligated to limit its consideration to the pleadings
[or to] convert the motion to one for summary judgment'
if the parties submit evidence outside the pleadings.”
Id. at 809-10 (quoting Cont'l Cas. Co. v.
American Nat. Ins. Co., 417 F.3d 727, 733 (7th Cir.
2005)). However, the district court shall assume “the
truth of the allegations in the plaintiff's complaint,
unless contradicted by the defendant's
affidavits.” Deb v. Sirva, Inc., 832 F.3d 800,
809 (7th Cir. 2016) (emphasis in original).
opposing a motion to compel arbitration bears the burden of
identifying a triable issue of fact as to the existence of
the purported arbitration agreement. Tinder v. Pinkerton
Security, 305 F.3d 728, 735 (7th Cir. 2002).
“[A] party cannot avoid compelled arbitration by
generally denying the facts upon which the right to
arbitration rests; the party must identify specific evidence
in the record demonstrating a material ...