United States District Court, D. Massachusetts
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO
COMPEL ARBITRATION AND TO DISMISS
ALLISON D. BURROUGHS, U.S. DISTRICT JUDGE.
Tim McNamara filed this action against Defendants Green
Smoke, Inc. (“Green Smoke”), Nu Mark, LLC, and
Altria Group, Inc. (collectively, “Defendants”)
alleging claims for breach of contract, quantum meruit,
conversion, breach of the covenant of good faith and fair
dealing, promissory estoppel, civil conspiracy, fraud, unjust
enrichment, and interference with advantageous business
relations. [ECF No. 1-3 (hereinafter, “Complaint”
or “Compl.”)]. Currently before the Court is
Defendants' motion to compel arbitration and dismiss the
Complaint. [ECF No. 22]. For the reasons set forth below, the
motion is DENIED.
Defendants' motion to compel arbitration was made in
connection with a motion to dismiss, the Court “draw[s]
the relevant facts from the operative complaint and the
documents submitted to the district court in support of the
motion to compel arbitration.” Cullinane v. Uber
Techs., Inc., 893 F.3d 53, 55 (1st Cir. 2018) (citation
omitted). The facts outlined herein are undisputed except
the time period relevant to the Complaint, Green Smoke was in
the business of selling electronic cigarettes online. Compl.
¶ 6. Green Smoke hired third-party contractor
“Affiliates” to market Green Smoke's products
on independent websites and paid them commissions on the
sales that they generated. Id. ¶¶ 7, 9.
Green Smoke was eventually acquired by Defendant Nu Mark,
LLC, which is a subsidiary of Defendant Altria Group, Inc.
Id. ¶¶ 4-5, 25.
became an Affiliate of Green Smoke some time between October
2009 and February 2010. Id. ¶ 8; [ECF No. 24
¶ 4]. Green Smoke Affiliates had access, through
user accounts, to an online portal called “Back Office,
” which displayed announcements, marketing materials,
and administrative and customer information. [ECF No. 28 at
4]. In fall 2011, Green Smoke released a New Affiliate Terms
of Services Agreement (the “2011 Agreement”)
through the Back Office portal. [ECF No. 24 ¶ 7; ECF No.
24-1]. The terms of the 2011 Agreement were electronically
displayed in a text box that contained a scroll feature. [ECF
No. 24 ¶ 8]. The 2011 Agreement begins:
Please review the following terms carefully. If you do not
agree to these terms, you have no right from Green Smoke®
to obtain information from or otherwise use this Web site. .
BY CHECKING THE BOX STATING THAT YOU HAVE READ AND AGREE TO
THE TERMS AND CONDITIONS OF THIS AFFILIATE PROGRAM AGREEMENT
AS PART OF YOUR REGISTRATION WITH THE COMPANY, YOU AGREE AND
CONSENT TO BE CONTRACTUALLY BOUND BY THE TERMS AND CONDITIONS
OF THIS AFFILIATE PROGRAM AGREEMENT FOR AS LONG AS YOU ARE A
PART OF THE COMPANY'S AFFILIATE PROGRAM.
[ECF No. 24-1 at 2].
provisions of the 2011 Agreement that are relevant to the
Complaint include a termination provision, an arbitration
provision, and an integration provision. First, the
termination provision set forth in Section 2.5 states:
You warrant and agree that You understand that this Affiliate
Program Agreement is an at-will agreement, meaning the
Company can terminate this Agreement for any or no reason by
serving You with a thirty (30) day notice of termination in
accordance with Section 19 of this Affiliate Program
Agreement. Such termination at-will by the Company shall not
entitle You to any type of payment or compensation
[ECF No. 24-1 at 5]. In addition, “SECTION 23 -
In the event any controversy or claim arises out of this
Agreement and cannot be settled by the Parties, such dispute
shall be resolved by arbitration only in accordance with the
then current rules of the American Arbitration Association or
the International Chamber of Commerce, in Miami, Florida, and