United States District Court, M.D. Tennessee, Nashville Division
MEMORANDUM AND ORDER
WAVERLY D. CRENSHAW, JR. UNITED STATES DISTRICT JUDGE.
before the Court is Carbonite, Inc. and Carbonite Securities
Corp.'s Motion to Dismiss and Compel Arbitration. (Doc.
No. 5.) For the reasons discussed below, the Court DENIES the
Motion to Dismiss and Compel Arbitration.
Speight (“Speight”) is a Tennessee resident who
purchased a backup service provided by Carbonite, Inc.
(together with Carbonite Securities Corporation,
“Carbonite”). (Doc. No. 1-1 ¶¶ 1, 5.)
Speight alleges that, “sometime prior to February 22,
2011, ” he entered an agreement with Carbonite that it
would back up his computer files for a year for a fee.
(Id. at ¶ 4.) Speight claims that he “was
not asked to read or accept any additional terms.”
(Id. at ¶ 5.) Speight further alleges that on
March 24, 2012, he saw a notice that his last backup had been
on March 24, 2012 and decided not to renew the service.
(Id. at ¶ 6.)
March 24, 2014, Speight alleges that he “entered into a
new, completely, separate and distinct contract by purchasing
another Personal Basic-One year Carbonite subscription”
that included two additional years of backup coverage.
(Id. at ¶ 7.) Again, he “was not asked to
read or accept any additional terms.” (Id.)
The following year, Carbonite automatically renewed
Speight's service for 2015. (Id. at ¶ 8.)
On June 8, 2015, Speight's computer crashed and his files
were lost. (Id. at ¶ 9.) When he attempted to
retrieve his files from Carbonite's servers, he found
that the files were never backed up and the last set of
backed up files were from his original subscription on March
24, 2012. (Id. at ¶ 10.) On March 28, 2016,
Speight was again charged for renewal of the Carbonite
service for 2016. (Id. at ¶ 14.)
filed this lawsuit in the Circuit Court for Davidson County,
Tennessee on May 2, 2016, alleging violations of the
Tennessee Consumer Protection Act (“TCPA”), the
subscription agreement, consumer protection law, intentional
and negligent misrepresentation, and express and implied
warranties. (Doc. No. 1-1.) Carbonite timely removed the case
to this Court. (Doc. No. 1.)
crux of Carbonite's Motion is that the February 22, 2011
agreement that Speight entered into included a Customer
Contract, whereby Speight agreed to mandatory arbitration and
forum selection terms that bar the prosecution of the case.
(Doc. No. 5-1 at 2-3.) Specifically, the Declaration of David
Raissipour, Senior Vice President of Product and Engineering
for Carbonite, states that, on February 22, 2011, Speight
“purchased a cloud back-up service from Carbonite, and,
in doing so, agreed to the Customer Contract detailing the
agreed upon terms and conditions of the parties'
relationship.” (Doc. No. 5-2 at ¶ 4.) Attached to
Raissipour's Declaration is a copy of the Contract, which
states as follows:
These Terms shall be governed, construed and enforced in
accordance with the laws of the Commonwealth of Massachusetts
without reference to conflicts of law principles. The parties
agree that the exclusive jurisdiction of any actions arising
out of, relating to, or in any way connected with these
Terms, shall be in the state or federal courts, as
applicable, located in the City of Boston, or the County of
Any dispute, controversy or claim arising out of or relating
to this Agreement, including the arbitrability of the matter,
or the formation, interpretation, scope, applicability,
termination or breach thereof, shall be referred to and
finally determined by arbitration in accordance with the JAMS
streamlined Arbitration Rules and Procedures . . . shall be
conducted in Boston, Massachusetts . . . .
No. 5-3 at 3.) Carbonite claims that Speight accepted this
Contract because, to run the program, Speight had to complete
the installation process which required agreeing to the terms
of a “pop-up text box on [his] computer screen alerting
[him] that he . . . must agree to the . . . Customer Contract
to continue installing the product.” (Docs. No. 5-2 at
¶ 3.) The Parties' central dispute, therefore, is
whether Speight agreed to the Customer Contract in 2011.
Indeed, as the Contract requires the question of
arbitrability to be resolved by JAMS, a finding that Speight
agreed to these terms obviates the need to rule on the issue
12(b)(6), requires the Court to take all the factual
allegations in the complaint as true. Ashcroft v.
Iqbal, 556 U.S. 662, 677 (2009). To survive a motion to
dismiss, a complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is
plausible on its face. Id. A claim has facial
plausibility when the plaintiff pleads factual content that
allows the court to draw the reasonable inference that the
defendant is liable for the misconduct alleged. Id.
Threadbare recitals of the elements of a cause of action,
supported by mere conclusory statements, do not suffice.
Id. When there are well-pleaded factual allegations,
a court should assume their veracity and then determine
whether they plausibly give rise to an entitlement to relief.
Id. at 679.
compelling arbitration, “[t]he first task of a court
asked to [resolve arbitrability] of a dispute is to determine
whether the parties agreed to arbitrate that dispute.”
Teamsters Local Union 480 v. United Parcel Serv.,
Inc., 748 F.3d 281, 286-87 (6th Cir. 2014) (quoting
Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,
Inc., 473 U.S. 614, 626 (1985)). This is because
“[a]rbitration is a ‘matter of