Dye v. Tamko Bldg. Prods. - 908 F.3d 675 (11th Cir. 2018)

Rule:

Although the Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., embodies an emphatic federal policy in favor of arbitral dispute resolution, this policy does not apply to the threshold question of whether there is a valid agreement to arbitrate between the parties. That question is governed instead by the ordinary state-law principles that govern the formation of contracts.

Facts:

Defendant Tamko Building Products was a roofing company. Its "Heritage 30" shingles come with a 30-year limited warranty, printed in full on the outside wrapper of every package. Each package wrapper, for instance, displayed the all-capped word "IMPORTANT" and warns the purchaser—again in all caps—to "READ CAREFULLY BEFORE OPENING THE BUNDLE." The wrapper further explained that the consumer must notify defendant of any warranty-related claims within thirty days following discovery of the problem with the product and that the warranty and other purchase terms were available not only on the face of the wrapper itself but also on defendant’s website and via a toll-free telephone number. Particularly relevant to this appeal was defendant’s limited warranty which contained a mandatory arbitration clause which, significantly printed in its entirety, and in all caps, on the outside of every shingle wrapper. Plaintiffs Douglas Bohn and Stephen Dye, both Florida residents whose homes were fitted with defendant’s Heritage 30 shingles through their roofers. Plaintiffs noticed that the installed shingles were crumbling and that asphalt granules were shedding. Plaintiffs then filed a putative class action seeking damages and declaratory relief on behalf of a class of building owners who had used defendant’s shingles. The complaint alleged that defendant manufactured its Heritage 30 shingles with less asphalt than necessary to comply with industry standards and building codes, which caused the shingles to crack and split. The complaint included claims for breach of express and implied warranties, strict products liability, negligence, and violations of the Florida Deceptive and Unfair Trade Practices Act. Fr its part, defendant filed a motion to compel arbitration and an accompanying motion to dismiss or stay court proceedings. Defendant contended that by unwrapping and retaining its shingles, plaintiffs had accepted the terms of its purchase agreement and were thus bound, pursuant to the agreement's plain terms, to arbitrate their claims. The district court granted defendant’s motion and dismissed the complaint. The court reasoned that plaintiffs were bound to arbitrate because through their roofers, whom they had hired to buy and install the shingles, they had accepted the terms of defendant’s purchase agreement, including its mandatory-arbitration provision. Plaintiffs appealed.

Issue:

Did the district court err in dismissing the complaint?

Answer:

No.

Conclusion:

The court affirmed the judgment and held that the putative class suit instituted by plaintiffs alleging breach of express and implied warranties, strict products liability, negligence, and violations of a state deceptive and unfair trade practices law was subject to mandatory arbitration because plaintiff, through their roofers, had accepted the defendant’s agreement, which included mandatory arbitration. The court ruled that in particular, defendant’s packaging conveyed a valid offer of contract terms that included submission of any disputes to binding arbitration, and unwrapping and retaining the shingles was an objectively reasonable means of accepting that offer. Additionally, plaintiff’s grant of express authority to their roofers to buy and install the shingles necessarily included the act of accepting the purchase terms on their behalf, which included mandatory arbitration.