Michael Omstead v. Dell, Inc.

I. BACKGROUND

Between July 2004 and January 2005 plaintiffs purchased notebook computers for $1200 to $1500 through Dell’s web- site. At the time of purchase, plaintiffs were required to accept a written agreement titled “U.S. Terms and Conditions of Sale” (the “Agreement”). The Agreement contained the fol- lowing provisions relevant to this appeal:

....

11 Governing Law.

THIS AGREEMENT AND ANY SALES THERE

UNDER SHALL BE GOVERNED BY THE LAWS

OF THE STATE OF TEXAS, WITHOUT

REGARD TO CONFLICTS OF LAWS RULES.

....

13 Binding Arbitration.

ANY CLAIM, DISPUTE, OR CONTROVERSY . . .

BETWEEN CUSTOMER AND DELL . . . SHALL

BE RESOLVED EXCLUSIVELY AND FINALLY

BY BINDING ARBITRATION ADMINISTERED

BY THE NATIONAL ARBITRATION FORUM

(NAF) . . . . NEITHER CUSTOMER NOR DELL

SHALL BE ENTITLED TO JOIN OR CONSOLI-

2106 OMSTEAD v. DELL, INC.

DATE CLAIMS BY OR AGAINST OTHER CUS-

TOMERS, OR ARBITRATE ANY CLAIM AS A

REPRESENTATIVE OR CLASS ACTION . . . .

Dell moved to stay proceedings and compel individual arbi- tration pursuant to the Agreement, and the district court granted the motion. Plaintiffs moved for reconsideration of the arbitration order; the district…