Barclay v. Icon Health & Fitness, Inc. et al

Filing 53

OPINION AND ORDER: Defendants' Motion to Dismiss 23 is GRANTED IN PART and DENIED IN PART. Defendants' Motion to Compel Arbitration 28 is GRANTED IN PART and DENIED IN PART. See Order for specifics. (Written Opinion). Signed by Judge Eric C. Tostrud on 10/15/2020. (RMM)

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UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Teeda Barclay, Erin Ovsak, and Nicole
Nordick, individually and on behalf of all
others similarly situated,

File No. 19-cv-2970 (ECT/DTS)

Plaintiffs,
OPINION AND ORDER
v.
ICON Health & Fitness, Inc. and
NordicTrack, Inc.,
Defendants.
________________________________________________________________________
Karl L. Cambronne, Bryan L. Bleichner, and Christopher P. Renz, Chestnut Cambronne
PA, Minneapolis, MN; Nathan D. Prosser, Hellmuth & Johnson, PLLC, Edina, MN; W.B.
Markovits, Terence R. Coates, and Justin C. Walker, Markovits, Stock & DeMarco, LLC,
Cincinnati, OH, for Plaintiffs Teeda Barclay, Erin Ovsak, and Nicole Nordick.
Caitlinrose H. Fisher, X. Kevin Zhao, and Lawrence M. Shapiro, Greene Espel PLLP,
Minneapolis, MN, for Defendants ICON Health & Fitness, Inc. and NordicTrack, Inc.

Plaintiffs allege that NordicTrack treadmills each of them purchased cannot achieve
or maintain the continuous horsepower Defendants represented the treadmills were capable
of. Plaintiffs have asserted several claims on their own behalf and on behalf of proposed
nationwide and Minnesota-specific classes of persons who also purchased NordicTrack
treadmills. Defendants raise several issues in two motions. Defendants’ first motion seeks
to compel arbitration of Plaintiffs’ claims individually pursuant to the Federal Arbitration
Act, 9 U.S.C. §§ 3, 4, and Federal Rule of Civil Procedure 56. ECF No. 28. With their
second motion, Defendants seek dismissal of some or all of Plaintiffs’ claims for lack of

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personal jurisdiction, lack of subject-matter jurisdiction, and for failure to state a claim
upon which relief can be granted, all pursuant to Federal Rule of Civil Procedure 12. ECF
No. 23. With their Rule 12 motion, Defendants also ask that Plaintiffs’ allegations
regarding their proposed nationwide class be stricken from the operative complaint. Id.
Defendants’ motions will be granted in part. There is not subject-matter jurisdiction over
Plaintiffs’ request for prospective injunctive relief. Claims asserted by two of the three
Plaintiffs, Teeda Barclay and Nicole Nordick, are arbitrable as a matter of law. With
respect to the third Plaintiff, Erin Ovsak, discovery is necessary to determine whether her
claims are arbitrable.1 Once that discovery is completed, the Parties also will have the
opportunity to further address Utah law governing whether Ovsak is bound to arbitrate her
claims. Defendants’ motions will be denied in all other respects, at least for the time being.
I
Plaintiffs and Defendants are of diverse citizenship. Plaintiffs are Minnesota
citizens. Second Am. Compl. ¶ 14 [ECF No. 22]. Defendant ICON Health & Fitness owns
Defendant NordicTrack. Id. ¶ 28. Both ICON and NordicTrack are incorporated under
Utah law, and each maintains its principal place of business in Utah. Id. ¶¶ 28, 29.

1

There was a fourth Plaintiff—a California citizen named Larry Schwartz—who
asserted claims under California law on behalf of himself and a proposed class of persons
in California who purchased a NordicTrack treadmill. Second Am. Compl. ¶¶ 14, 71, 212–
287 [ECF No. 22]. Defendants moved to dismiss Schwartz’s California-law claims for
lack of personal jurisdiction under Rule 12(b)(2). Defs.’ Mot. to Dismiss [ECF No. 23];
Defs.’ Mem. in Supp. of Mot. to Dismiss at 6–10 [ECF No. 25]. In response, Schwartz
voluntarily dismissed his claims pursuant to Rule 41(a)(1)(A)(i). Not. of Voluntary
Dismissal [ECF No. 42]. Defendants’ Rule 12(b)(2) motion to dismiss Schwartz’s claims
will therefore be denied as moot.
2

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Plaintiffs purchased NordicTrack treadmills.

ICON, Plaintiffs allege, “is the

world’s largest manufacturer and marketer of fitness equipment.” Id. ¶ 28. ICON sells
treadmills under the NordicTrack brand. Id. ¶ 29; Cox Decl. ¶ 4 [ECF No. 33]. Barclay,
Ovsak, and Nordick each purchased a NordicTrack treadmill. Barclay “purchased a
NordicTrack 6.5 S treadmill online through Amazon.com on or about June 3, 2019[.]”
Second Am. Compl. ¶ 16. Barclay “paid over $500” for the treadmill and planned to use
the treadmill for exercise in her Coon Rapids, Minnesota home. Id. ¶¶ 16, 18. Ovsak
“purchased a NordicTrack Commercial 2950 treadmill online directly from Defendants’
website on or about February 13, 2016,” paying more than $2,000 and planning to use the
treadmill “for ordinary use” in her Breckenridge, Minnesota home. Id. ¶¶ 19, 21. Nordick
“purchased a NordicTrack T7.5 S treadmill online through NordicTrack.com on or about
January 22, 2019,” paying more than $1,500 and planning to use the treadmill for exercise
“in her home located just outside Breckenridge, Minnesota.” Id. ¶¶ 22, 24.
In purchasing their treadmills, Plaintiffs relied on Defendants’ representations
concerning the treadmills’ continuous horsepower ratings. Continuous horsepower is “a
measurement of [a] motor’s ability to maintain and continuously produce power over an
extended period of time without exceeding the current rating of the motor.” Id. ¶ 41. Put
another way, continuous horsepower is the “minimum horsepower delivered [by the
treadmill’s motor] at all points during a workout.” Id. ¶ 44 (quotation and emphasis
omitted). Each Plaintiff alleges that, before purchasing her NordicTrack treadmill, she read
content on NordicTrack’s website describing the treadmill’s continuous horsepower rating.
See id. ¶¶ 17, 20, 23.

Each alleges that Defendants’ representations regarding the
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treadmills’ continuous horsepower ratings were “a material factor” in her purchasing
decision and that she “would not have purchased” the treadmill “or would have paid less
but for” these representations. Id.
Plaintiffs allege that Defendants’ representations concerning the treadmills’
continuous horsepower ratings were false. This is the core allegation underlying Plaintiffs’
claims. Specifically, Plaintiffs allege that “NordicTrack consistently and prevalently
advertises and markets that the [t]readmills [it sold to Plaintiffs] operate at a continuous
horsepower [or “CHP”] of between 2.6 CHP and 4.25 CHP,” but that “all NordicTrack
treadmills operate in household use well below NordicTrack’s continuous horsepower
representations and maintain similar continuous horsepower regardless of the
misrepresented CHP.” Id. ¶ 7. Plaintiffs allege that Defendants base their treadmills’
continuous horsepower ratings “on an inflated laboratory testing power draw (amperage)
not possible in household use.” Id. ¶ 48. Because “[m]ost electrical outlets in American
homes are equipped with the standard 15-amps . . . and have an accompanying 120-volt
circuit,” id. ¶ 34, and not the “inflated laboratory testing power draw,” id. ¶ 48, Plaintiffs
allege that the continuous horsepower Defendants advertised cannot be achieved in a
household setting and is therefore “false and misleading,” id.
Plaintiffs assert claims in ten separate counts, two on behalf of a proposed
nationwide class, and eight on behalf of a proposed Minnesota class. The two proposed
classes consist of “[a]ll persons” either in the United States or Minnesota “who purchased
a NordicTrack treadmill, during the maximum period of time permitted by law, for
personal, family, or household purposes, and not for resale.” Id. ¶¶ 69–70. On behalf of
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themselves and the proposed nationwide class, Plaintiffs allege claims for breach of express
warranty (Count 1), id. ¶¶ 93–104, and breach of express warranty under the MagnusonMoss Warranty Act, 15 U.S.C. § 2301, et seq. (Count 2), id. ¶¶ 105–124. On behalf of
themselves and the proposed Minnesota class, Plaintiffs allege claims for breach of express
warranty in violation of Minn. Stat. § 336.2-313 (Count 3), id. ¶¶ 125–137, breach of
implied warranty in violation of Minn. Stat. § 336.2-314 (Count 4), id. ¶¶ 138–151, breach
of warranty under the Magnuson-Moss Warranty Act (Count 5), id. ¶¶ 152–162, violation
of the Minnesota Uniform Deceptive Trade Practices Act, Minn. Stat. § 325D.43, et seq.
(Count 6), id. ¶¶ 163–173, violation of the Minnesota Consumer Fraud Act, Minn.
Stat. § 325F.68, et seq. (Count 7), id. ¶¶ 174–178, violation of the Minnesota False
Statement in Advertising Act, Minn. Stat. § 325F.67 (Count 8), id. ¶¶ 179–185, violation
of the Minnesota Unlawful Trade Practices Act, Minn. Stat. § 325D.13 (Count 9), id.
¶¶ 186–201, and negligent misrepresentation (Count 10), id. ¶¶ 202–211. Plaintiffs seek
many remedies.

These include “compensatory, exemplary, and statutory” damages,

restitution, disgorgement, attorneys’ fees, injunctive relief, declaratory relief, pre- and
post-judgment interest, and “any such other and further relief the Court deems just and
equitable[]” (though it’s hard to hypothesize what that might be). Id. at 61, ¶¶ 3–10.
After purchasing their NordicTrack treadmills, Barclay and Nordick signed up as
members of ICON’s iFit service, and the iFit “Terms of Service” then in effect included an
arbitration clause. iFit is “a brand operated by ICON” that “connect[s] people with fitness
coaches.” Am. Brammer Decl. ¶ 3 [ECF No. 45]. “Many individuals [who] purchase
NordicTrack treadmills also register for iFit memberships . . . [to] access iFit’s training
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support technology while they exercise.” Id. ¶ 4. Barclay registered as an iFit member on
June 18, 2019. Id. ¶ 17; Barclay Decl. ¶ 5 [ECF No. 38]. Nordick registered as an iFit
member on March 4, 2019. Am. Brammer Decl. ¶ 16; Nordick Decl. ¶ 5 [ECF No. 39].
The record contains no evidence showing precisely how Barclay or Nordick registered as
an iFit member. The record does show the same four possible registration methods were
available on the dates Barclay and Nordick registered. Am. Brammer Decl. ¶¶ 8, 20–22.
They could have registered using iFit’s mobile application. Id. ¶ 8. They could have
registered on the iFit.com website’s registration page. Id. ¶ 20. They could have “unlocked
and activated [one of] ICON’s Bluetooth-equipped treadmills on iFit.com[.]” Id. ¶ 21. Or
they could have registered by setting up one of “ICON’s touchscreen-equipped treadmills
on their embedded console touchscreen[.]” Id. ¶ 22. Each of these methods would have
required Barclay and Nordick to “click a box” that read either “CREATE ACCOUNT,”
“PLACE ORDER,” “START TRIAL,” or “NEXT.” Id. ¶¶ 8, 20, 21, 22. Adjacent to
(either immediately below or left of) each of these boxes appeared a statement alerting the
registrant that by clicking on the box, she agreed to the hyperlinked iFit “Terms of Use,”
among other contracts. Id. When Barclay and Nordick registered as iFit members, the iFit
Terms of Use included the following arbitration provision:
You acknowledge and agree that ICON may, at its sole
discretion, require you to submit any disputes arising from the
use of these Terms of Use or the ICON Sites, including
disputes arising from or concerning their interpretation,
violation, invalidity, non-performance, or termination, to final
and binding arbitration under the Rules of Arbitration of the
American Arbitration Association applying Utah law.

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Am. Brammer Decl., Ex. 7 at 9–10 [ECF No. 45-7]. The Terms of Use defined “ICON”
to include “its[] affiliates, partners, licensors, subsidiaries, and/or related companies.” Id.
at 1. The iFit Terms of Use also included a class-action waiver providing that an iFit
member “may only resolve disputes with us on an individual basis” and not “as a plaintiff
or a class member in a class, consolidated, or representative action.” Id. at 9.
Ovsak did not register as an iFit member, but her spouse did. Erin Ovsak’s husband,
Jay Ovsak, became an iFit member on March 25, 2016. Am. Brammer Decl. ¶ 15; Ovsak
Decl. ¶ 5 [ECF No. 40]. As with Barclay and Nordick, the record lacks evidence showing
how Jay registered as an iFit member. The record shows two possible methods. First, Jay
might have registered through iFit’s mobile application, following the process described in
the preceding paragraph. Am. Brammer Decl. ¶ 8. Second, Jay might have registered
through the iFit.com website. Id. ¶ 19. If Jay registered through the website, then he would
have been required to click a box that read, “Purchase for $X,” where “X” was the purchase
price. Am. Brammer Decl. ¶ 19, Ex. 9 [ECF No. 45-9]. Directly beneath the “Purchase
for $X” button would have appeared a statement that read: “By clicking submit, you agree
to the Terms Of Service. View our Privacy Policy.” Id. Both the phrases “Terms Of
Service” and “Privacy Policy” were in blue font, and the Terms of Service phrase
hyperlinked directly to the iFit Terms of Use in effect at that time. Id. When Jay registered
as an iFit member, the then-effective iFit Terms of Use contained no arbitration provision,
but they did contain a modification clause. See id., Ex. 4 at 2 [ECF No. 45-4]. That
modification clause provided:

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We expressly reserve the right to change these Terms of Use
from time to time without notice to you. You acknowledge and
agree that it is your responsibility to review this site and these
Terms of Use from time to time and to familiarize yourself with
any modifications. Your continued use of this site after such
modifications will constitute acknowledgement of the
modified Terms of Use and agreement to abide and be bound
by the modified Terms of Use.
Id. ICON modified the Terms of Use in effect when Jay Ovsak registered multiple times,
and in March 2018, ICON added the arbitration provision in effect when Barclay and
Nordick became iFit members. Id., Ex. 6 at 10 [ECF No. 45-6]; compare with id., Ex. 7
at 9–10.
II
A
Defendants’ motions raise two threshold issues: (1) whether there is a lack of
subject-matter jurisdiction over parts of Plaintiffs’ claims, and (2) whether Plaintiffs agreed
to arbitrate their claims. Defendants argue that “the Court need not, and should not, reach
any arguments contained in [Defendants’] motion to dismiss until [the] motion to compel
arbitration is fully resolved.” Defs.’ Mem. in Supp. of Mot. to Compel Arbitration at 1 n.1
[ECF No. 30]; see also Defs.’ Mem. in Supp. of Mot. to Dismiss at 2 n.1 [ECF No. 25]. In
other words, Defendants argue that their motion to compel arbitration should be decided
before any questions of subject-matter jurisdiction. No authority is cited to support this
argument, and the better approach, it seems, is to address Defendants’ challenges to
subject-matter jurisdiction before addressing Defendants’ motion to compel arbitration.

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There is no question that jurisdiction must come first when a court’s jurisdiction
over the entire action is in question. A federal court must always assure itself of its
jurisdiction before proceeding to the merits of an action. See Ashley v. U.S. Dep’t of
Interior, 408 F.3d 997, 1000 (8th Cir. 2005) (citing Steel Co. v. Citizens for a Better Env’t,
523 U.S. 83, 94 (1998)). Though a decision whether to compel arbitration is not exactly
the “merits” of the underlying dispute, it does require a court to interpret contractual
language and issue an order that binds the parties. See generally Sadler v. Green Tree
Servicing, LLC, 466 F.3d 623, 625 (8th Cir. 2006) (describing the arbitrability inquiry).
Moreover, the Federal Arbitration Act (“FAA”) only allows a party to seek an order
compelling arbitration from a district court that “would have jurisdiction . . . of the subject
matter of a suit arising out of the controversy between the parties.” 9 U.S.C. § 4.
Unsurprisingly, then, courts faced with both a question of jurisdiction over the entire case
and a question of arbitration address jurisdiction first. See Gaming World Int’l, Ltd. v.
White Earth Band of Chippewa Indians, 317 F.3d 840, 847 (8th Cir. 2003) (addressing
subject-matter jurisdiction before deciding whether a district court properly granted a
motion to compel arbitration); see also, e.g., Mejia v. Uber Techs., Inc., 291 F. Supp. 3d
1314, 1317 (S.D. Fla. 2018) (raising the issue of standing sua sponte and dismissing the
action without addressing a pending motion to compel arbitration).
The wrinkle here is the nature of Defendants’ jurisdictional arguments: Defendants
argue that there is not subject-matter jurisdiction over, not the entire case, but discrete
aspects of it. Defendants say Plaintiffs lack standing to seek injunctive relief. Defs.’ Mem.
in Supp. of Mot. to Dismiss at 12. Defendants next argue that Plaintiffs lack standing to
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assert any claims with respect to treadmill models they did not purchase. Id. at 14. And
third, Defendants argue that there is not subject-matter jurisdiction over Plaintiffs’ claims
under the Magnuson-Moss Warranty Act because the action has fewer than 100 named
plaintiffs. Id. at 17. To reiterate, then, each of Defendants’ jurisdictional arguments
concerns only a portion of the case, so Defendants implicitly agree that there is subjectmatter jurisdiction over at least part of the case. Neither the Supreme Court nor the Eighth
Circuit, it appears, have addressed what to do in this precise scenario.
There is a plausible argument based on the text of the FAA and mere practicality
that Defendants’ jurisdictional arguments do not preclude reaching the motion to compel
arbitration first. The textual argument goes like this: the FAA only requires that a district
court entertaining a motion to compel “would have jurisdiction . . . of the subject matter of
a suit arising out of the controversy between the parties.” 9 U.S.C. § 4 (emphasis added).
If Defendants prevailed on all of their jurisdictional arguments, a justiciable “controversy
between the parties” would remain over which there would be subject-matter jurisdiction.
Id. And if the Article III baseline and the FAA are both satisfied, any lack of jurisdiction
over parts of Plaintiffs’ claims for relief should have no bearing on a district court’s power
to compel arbitration of the dispute as a whole. The practical point is that a federal district
court’s lack of subject-matter jurisdiction over a part or parts of a claim says nothing about
whether those aspects of a claim may be arbitrable. State courts may compel arbitration,
too. And in some cases (including this one, as will be discussed later), the arbitrator has
responsibility to decide whether a claim falls within the scope of an arbitration agreement.
In these circumstances, a federal court’s determination that it lacks subject-matter
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jurisdiction over a claim may not preclude an arbitrator from deciding the claim is
arbitrable.
Notwithstanding these points, the surer course is to address Defendants’
jurisdictional arguments before Defendants’ motion to compel arbitration. For starters, the
statutory argument outlined above has not been raised or addressed by the Parties, and
research has not unearthed an example of another court endorsing it. Second, the same
reasons federal courts decide a challenge to subject-matter jurisdiction over an entire case
before deciding a motion to compel arbitration support first addressing Defendants’
challenges to subject-matter jurisdiction here. Just as it is not possible for a federal court
to compel arbitration of an entire case over which it lacks subject-matter jurisdiction, it is
difficult to understand how a federal court might compel arbitration over specific claims
or parts of claims over which it lacks judicial power in the first place. Finally, it bears
noting that at least two district courts faced with a similar scenario have addressed
jurisdiction first. See Miller v. Time Warner Cable Inc., No. 16-cv-00329-CAS (ASx),
2016 WL 7471302, at *4 (C.D. Cal. Dec. 27, 2016) (holding that a plaintiff lacked standing
to seek injunctive relief before addressing whether the plaintiff should be compelled to
arbitrate her damages claim); Main v. Gateway Genomics, LLC, No. 15-cv-2945
(AJB/WVG), 2016 WL 7626581, at *8–9 (S.D. Cal. Aug. 1, 2016) (same).
B
1
Defendants argue that Plaintiffs lack standing to seek injunctive relief. When a
plaintiff seeks injunctive relief, “the ‘injury in fact’ element of standing requires a showing
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that the plaintiff faces a threat of ongoing or future harm.” Park v. Forest Serv. of U.S.,
205 F.3d 1034, 1037 (8th Cir. 2000); see also City of Los Angeles v. Lyons, 461 U.S. 95,
101–05, 107 n.8 (1983) (stating that the threat of future injury must be “real and
immediate”). “Past exposure to illegal conduct does not in itself show a present case or
controversy regarding injunctive relief . . . if unaccompanied by any continuing, present
adverse effects.” O’Shea v. Littleton, 414 U.S. 488, 495–96 (1974). ICON argues that
Plaintiffs lack standing because they claim no intent to purchase treadmills again. Defs.’
Mem. in Supp. at 13. Although Plaintiffs repeatedly claim that they “would not have
purchased the Treadmills absent Defendants’ representations” about the treadmills’
horsepower, Second Am. Compl. ¶¶ 12, 99, 118, 133, 184, 198, 210, they say nothing about
purchasing treadmills in the future.
Courts are split over whether such intent is required. Some conclude that there can
be no threat of injury unless the plaintiff has specific plans to purchase the product in the
future. See, e.g., Kelly v. Cape Cod Potato Chip Co., 81 F. Supp. 3d 754, 763 (W.D. Mo.
2015). If the injury is being fooled by misleading sales practices, the analysis goes, then a
plaintiff who isn’t going to buy anything faces no threat of suffering the injury again. See
id. Courts on the other side of the split typically focus on policy concerns: they observe
that depriving plaintiffs who avoid a given product because of the deceptive sales practices
surrounding it of standing would “denigrate” consumer-protection statutes, likely
preventing plaintiffs from ever obtaining injunctive relief in this type of case. Belfiore v.
Procter & Gamble Co., 94 F. Supp. 3d 440, 445 (E.D.N.Y. 2015); see also Yeldo v.
MusclePharm Corp., 290 F. Supp. 3d 702, 713–14 (E.D. Mich. 2017). For these courts, a
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defendant’s continuing deceptive trade practices are themselves an ongoing injury
sufficient to confer Article III standing to seek injunctive relief. See Leiner v. Johnson &
Johnson Consumer Cos., 215 F. Supp. 3d 670, 672–73 (N.D. Ill. 2016).
Resolving this question comes down to choosing one of these approaches. To better
honor the Supreme Court’s requirement that a threat of future harm be “real and
immediate,” Lyons, 461 U.S. at 105, it seems that there must be some plausible prospect of
future interactions between Plaintiffs and Defendants, even if there need not be specific
plans to purchase again. Otherwise, it is difficult to see how the allegedly deceptive
practices that occurred at the time Plaintiffs purchased their treadmills will affect them at
all going forward. It is true that Plaintiffs allege that ICON’s violations are continuing, but
this does not change the fact that all of Plaintiffs’ purchases occurred in the past. So the
better answer is that Plaintiffs lack standing to seek injunctive relief.2

Defendants have one additional argument on this point: that there is no realistic
threat of future injury because the Plaintiffs now know not to believe what ICON tells
them. Defs.’ Mem. in Supp. of Mot. to Dismiss at 13. Although some courts have accepted
this argument, see Kelly, 81 F. Supp. 3d at 762–63 (holding that a plaintiff lacked standing
to seek injunctive relief because the plaintiff was “now aware of Defendants’ alleged
deception” in marketing potato chips), others have not, see Le v. Kohls Dep’t Stores, Inc.,
160 F. Supp. 3d 1096, 1111 (E.D. Wis. 2016) (reasoning that the plaintiff’s “realistic fear
that [a] misleading marketing scheme will likely continue to cause economic harms to
consumers” was sufficient to confer standing even though the plaintiff now “recognize[d]”
the deception). This argument seems better directed to whether Plaintiffs are entitled to
injunctive relief on the merits, not whether they have standing. See, e.g., Indep. Glass
Ass’n, Inc. v. Safelite Grp., Inc., No. 05-cv-238 (ADM/FLN), 2005 WL 3079084, at *2 (D.
Minn. Nov. 16, 2005) (concluding that a plaintiff had not shown a threat of future harm—
a requirement to obtain injunctive relief under the relevant statute—in part because the
plaintiff was aware of the challenged conduct and was “likely to be vigilant in the future”).
2

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2
Defendants next argue that Plaintiffs lack standing to assert any claims concerning
treadmill models that they did not purchase. Each of the three remaining Plaintiffs alleges
she purchased a single treadmill model different from the model purchased by either of the
other two Plaintiffs; in other words, Plaintiffs collectively allege they purchased three
different treadmill models. Second Am. Compl. ¶¶ 16–24. The operative complaint,
however, identifies 24 different models for which ICON made “similar horsepower
misrepresentations.” Id. ¶ 1 n.1.
Rather than a standing issue, the distinction between product types may instead
create an issue for the typicality of Plaintiffs’ claims or the adequacy of their representation,
which is better resolved at class certification. At least one court in this District has
endorsed this approach.

See Johannessohn v. Polaris Indus., Inc., No. 16-cv-3348

(PJS/LIB), 2017 WL 2787609, at *5 (D. Minn. June 27, 2017); cf. Hudock v. LG Elecs.
U.S.A., Inc., No. 16-cv-1220 (JRT/FLN), 2017 WL 1157098, at *2 (D. Minn. Mar. 27,
2017) (stating that “standing questions may be postponed when class certification is
‘logically antecedent’ to standing”). Given the general rule that “[a] putative class action
can proceed as long as one named plaintiff has standing,” In re SuperValu, Inc., 870 F.3d
763, 768 (8th Cir. 2017), this approach seems most appropriate.
If this were an issue of Plaintiffs’ standing, Defendants are correct that some courts
have applied a rigid rule that a plaintiff lacks standing to assert claims related to products
that the plaintiff herself did not buy. See, e.g., Kelly, 81 F. Supp. 3d at 763 (holding that a
plaintiff had standing to challenge an allegedly false “all natural” label on four different
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flavors of chips that she purchased, but not on twelve other flavors that she did not
purchase); Ferrari v. Best Buy Co., No. 14-cv-2956 (MJD/FLN), 2015 WL 2242128, at
*7–*8 (D. Minn. May 12, 2015) (adopting report and recommendation) (holding that a
plaintiff who had purchased one model of LCD television could not challenge the same
marketing representation on a different model); Chin v. General Mills, Inc., No. 12-cv2150 (MJD/TNL), 2013 WL 2420455, at *3–4 (D. Minn. June 3, 2013) (holding that a
plaintiff who had purchased one variety of Nature Valley granola bars lacked standing to
challenge misrepresentations on another variety that he had not purchased). Most courts
follow a more nuanced approach, however, asking whether “the products and alleged
misrepresentations are substantially similar.” Brown v. Hain Celestial Grp., Inc., 913 F.
Supp. 2d 881, 890 (N.D. Cal. 2012) (collecting cases and describing this as the “majority”
approach). Under the reasoning of this more nuanced approach, Plaintiffs have plausibly
alleged standing. Although it is true, as Defendants point out, that their treadmill models
have many different features, see Defs.’ Mem. in Supp. at 16, only one feature—continuous
horsepower—matters for purposes of Plaintiffs’ claims. See Brown, 913 F. Supp. 2d at
892 (holding that plaintiffs had standing in part because “common misrepresentations
[were] the crux of [their] case”); see also Wagner v. Gen. Nutrition Corp., No. 16-CV10961, 2017 WL 3070772, at *5-*6 (N.D. Ill. July 19, 2017) (holding that a plaintiff had
standing regarding dietary supplements that were “materially the same” as the supplements
he purchased); Cox v. Chrysler Grp., No. 14-CV-7573 (MAS/DEA), 2015 WL 5771400,
at *15 (D.N.J. Sept. 30, 2015) (holding that plaintiffs had standing to bring productsliability claims for vehicle models that they did not purchase because the challenged
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“sunroof [was] the common denominator” across vehicles). Any differences among
treadmill models do not appear to be material, so they are not a basis to find that Plaintiffs
lack Article III standing under this approach.
3
Finally, Defendants argue that there is not subject-matter jurisdiction over Plaintiffs’
claim under the Magnuson-Moss Warranty Act (“MMWA”), which “provides a federal
cause of action for state law express and implied warranty claims.” Browe v. Evenflo Co.,
No. 14-cv-4690 (ADM/JJK), 2015 WL 3915868, at *5 (D. Minn. June 25, 2015) (quotation
omitted). Defendants rely on a sentence in the statute providing that “[n]o claim shall be
cognizable” if “the action is brought as a class action, and the number of named plaintiffs
is less than one hundred.” 15 U.S.C. § 2310(d)(3). According to Defendants, this 100plaintiff requirement is jurisdictional, and because there are now only three named
plaintiffs, it is not satisfied. Defs.’ Mem. in Supp. of Mot. to Dismiss at 17. Plaintiffs do
not contest that this numerosity requirement is jurisdictional,3 but they respond that they
need not satisfy it because they have alleged an alternative source of subject-matter
jurisdiction: the Class Action Fairness Act (“CAFA”), see 28 U.S.C. § 1332(d)(2). Pls.’
Mem. in Opp. to Mot. to Dismiss at 13–17 [ECF No. 43]. There is no serious question or
dispute that at this stage there is subject-matter jurisdiction over this case under CAFA.
See Second Am. Compl. ¶ 14 and at 61 ¶¶ 4–7.

3

Courts, including this one, have consistently treated the numerosity requirement as
jurisdictional, see, e.g., Loff v. Am. Arms, Inc., No. 00-cv-1139 (MJD/JGL), 2002 WL
29502, at *1 (D. Minn. Jan. 4, 2002), and it appears in the statute alongside another familiar
jurisdictional requirement: amount in controversy. See 15 U.S.C. § 2310(d)(3)(A)–(B).
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There is a split of authority on whether Plaintiffs asserting CAFA jurisdiction must
also meet the MMWA’s jurisdictional requirements, but Plaintiffs’ argument is more
consistent with the statute as a whole. The MMWA authorizes jurisdiction in two
alternative venues: (1) “any court of competent jurisdiction in any State or the District of
Columbia”;

and

(2)

“an

appropriate

district

court

of

the

United

States.”

15 U.S.C. § 2310(d)(1)(A)–(B). The 100-named-plaintiff limitation applies to the second
category, but not the first. See id. § 2310(d)(3) (providing restrictions for “a suit brought
under paragraph (1)(B) of this subsection”). By the statute’s plain text, federal courts fall
in both categories. They fall in the first category because federal courts are “in”—i.e.,
within the boundaries of—states and the District of Columbia. Had a different preposition
been used in describing the first category—“of,” for example—then the statute’s text would
not be susceptible to this interpretation. A federal court is not a court “of” any state. In
other words, if a federal court has some other source of subject-matter jurisdiction, then it
may be a “court of competent jurisdiction” under the MMWA. The second category is
limited to federal courts. If the MMWA is a plaintiff’s sole basis for asserting federal
jurisdiction, then that plaintiff needs to meet the MMWA’s extra jurisdictional
requirements. A number of courts in other jurisdictions have followed this general
analysis. See Kuns v. Ford Motor Co., 543 F. App’x 572, 574 (6th Cir. 2013); Carpenter
v. PetSmart, Inc., 441 F. Supp. 3d 1028, 1039 n.3 (S.D. Cal. 2020); Gelis v. Bayerische
Motoren Werke Aktiengesellschaft, No. 17-cv-07386, 2018 WL 6804506 (WHW), at *7
(D.N.J. Oct. 30, 2018); Keegan v. Am. Honda Motor Co., 838 F. Supp. 2d 929, 954 (C.D.

17

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Cal. 2012) (collecting cases reaching this result); Brothers v. Hewlett-Packard Co., No. C06-02254 (RMW), 2007 WL 485979, at *8 (N.D. Cal. Feb. 12, 2007).
The main counterargument is that reading the phrase “any court of competent
jurisdiction in any State” to include federal district courts reads out the provision
authorizing

suit

in

“an

appropriate

district

court

of

the

United

States.”

15 U.S.C. § 2310(d)(1). Defendants cite a number of courts that have treated the 100named-plaintiff threshold as a limitation that applies whenever a plaintiff brings a MMWA
claim in federal district court.4 Defs.’ Mem. in Supp. of Mot. to Dismiss at 17–18; Defs.’
Letter [ECF No. 51]; see, e.g., Floyd v. Am. Honda Motor Co., 966 F.3d 1027, 1031–35
(9th Cir. 2020); MacDougall v. Am. Honda Motor Co., No. 17-CV-01079 (AJG/DFM),
2017 WL 8236359, at *4 (C.D. Cal. Dec. 4, 2017); Ebin v. Kangadis Food Inc., No. 13CV-2311 (JSR), 2013 WL 3936193, at *1 (S.D.N.Y. July 26, 2013). But these courts do
not consider—at least not explicitly—whether a federal court could ever be a “court of
competent jurisdiction in any State.” Although § 2310(d)(1) may have functionally drawn
a distinction between state courts and federal courts when the MMWA was first passed in
1975, CAFA’s passage thirty years later significantly expanded federal jurisdiction over
class actions that would otherwise have remained in state courts. See generally Mary K.
Kane, 7A Federal Practice and Procedure § 1756.2 (3d. ed. Oct. 2020 Update) (describing

The parties do not cite a case in which the Eighth Circuit or District of Minnesota
has weighed in on this question, and research has not revealed one. In the only case from
the District that cites the MMWA’s jurisdictional limitations, Judge Michael J. Davis held
that the court lacked jurisdiction both because there was no diversity jurisdiction and
because there were fewer than 100 named plaintiffs. See Loff, 2002 WL 29502, at *1.

4

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the circumstances of CAFA’s passage). Given this statutory development, the better
answer is that once plaintiffs have satisfied CAFA, the MMWA’s additional requirements
do not apply.
III
A
A motion to compel arbitration is analyzed either as a motion to dismiss
under Federal Rule of Civil Procedure Rule 12(b)(6) or as a motion for summary judgment
under Rule 56, depending on how the motion is presented. Seldin v. Seldin, 879 F.3d 269,
272 (8th Cir. 2018); City of Benkelman v. Baseline Eng'g Corp., 867 F.3d 875, 881 (8th
Cir. 2017). Here, because “matters outside the pleadings” have been presented and
considered, the motion “must be treated as one for summary judgment under Rule
56.” Fed. R. Civ. P. 12(d); see also City of Benkelman, 867 F.3d at 882. If a genuine
dispute of material fact concerning “the making of the arbitration agreement” exists, then
a federal district court “shall proceed summarily to the trial thereof.” 9 U.S.C. § 4.
The FAA provides that “[a] written provision in . . . a contract evidencing a
transaction involving commerce to settle by arbitration a controversy thereafter arising out
of

such

contract

or

transaction

.

.

.

shall

be

valid,

irrevocable,

and

enforceable.” 9 U.S.C. § 2. The Supreme Court’s “cases place it beyond dispute that the
FAA was designed to promote arbitration. They have repeatedly described the [FAA] as
‘embod[ying] [a] national policy favoring arbitration[.]’” AT&T Mobility LLC v.
Concepcion, 563 U.S. 333, 346 (2011) (quoting Buckeye Check Cashing, Inc. v. Cardegna,
546 U.S. 440, 443 (2006)). Of course, “a party cannot be required to submit to arbitration
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any dispute which [s]he has not agreed . . . to submit.” United Steelworkers of Am. v.
Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960). When the making of the
agreement for arbitration is at issue, the Eighth Circuit “has refined this inquiry to asking
1) whether the agreement for arbitration was validly made and 2) whether the arbitration
agreement applies to the dispute at hand[.]” MedCam, Inc. v. MCNC, 414 F.3d 972, 974
(8th Cir. 2005). Though courts “presume that parties have not authorized arbitrators to
resolve” these “gateway questions, . . . parties are free to authorize arbitrators to resolve
[those] questions,” provided such authorization is based on neither “silence nor ambiguity”
in the arbitration agreement itself. Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1416–17
(2019) (citations and quotations omitted).
B
Here, the Parties agree that the issue of whether a valid arbitration agreement was
made between Plaintiffs and Defendants is an issue for judicial determination. Defs.’
Mem. in Supp. of Mot. to Compel Arbitration at 9–21; Pls.’ Mem. in Opp’n to Mot. to
Compel Arbitration at 20–29 [ECF No. 36]. As the parties seeking to compel arbitration,
ICON and NordicTrack “carr[y] the burden to prove a valid and enforceable agreement.”
Shockley v. PrimeLending, 929 F.3d 1012, 1017 (8th Cir. 2019). “To determine whether a
valid agreement to arbitrate exists,” a federal court ordinarily “look[s] to the forum state's
contract law[.]” Northport Health Servs. of Arkansas, LLC v. Posey, 930 F.3d 1027, 1030
(8th Cir. 2019) (citing Barker v. Golf U.S.A., Inc., 154 F.3d 788, 791 (8th Cir. 1998)). If
the contract in question includes a choice-of-law provision, however, then the state law
chosen by that provision controls unless a “persuasive reason [is] advanced” that might
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justify setting aside the provision. Barker, 154 F.3d at 791; see also Donaldson Co. v.
Burroughs Diesel, Inc., 581 F.3d 726, 731–36 (8th Cir. 2009) (applying Mississippi law
based on contract’s choice-of-law provision to determine whether contract’s arbitration
provision could be enforced by a non-signatory).
Defendants argue that Utah law governs the question of whether there is a valid
arbitration agreement because the relied-on iFit terms of use contain a Utah choice-of-law
provision. Defs.’ Mem. in Supp. of Mot. to Compel Arbitration at 9–10; Am. Brammer
Decl., Ex. 7 at 10. Defendants add, however, that whether Utah law is applied doesn’t
really matter because, in their view, “[t]he elements of contract formation are foundational
common-law principles widely adopted in the United States.” Defs.’ Mem. in Supp. of
Mot. to Compel Arbitration at 9 n.3. “Plaintiffs do not agree that Utah law . . . applies, but
agree with Defendants that the issue of applicable law need not be resolved at this point
given that the basic contract law at issue is the same however the choice-of-law issue is
resolved.” Pls.’ Mem. in Opp’n to Mot. to Compel Arbitration at 15 n.2.5 Consistent with
these views, the Parties cite several cases from jurisdictions other than Utah to support their
arguments. In view of the choice-of-law provision and the absence of any argument that
some other state’s law controls, Utah law will be applied here. Of course, that doesn’t
preclude reliance on other jurisdictions’ persuasive precedents, but Utah law should matter
most and come first.

5

Plaintiffs do not challenge the validity of the Utah choice-of-law clause. If they
were going to challenge the clause’s validity, this was the time to do it.
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Utah, like most states, follows the “basic” rule that “a contract is not formed unless
there is a meeting of the minds.” Lebrecht v. Deep Blue Pools & Spas, Inc., 374 P.3d 1064,
1069 (Utah Ct. App. 2016) (quoting Sackler v. Savin, 897 P.2d 1217, 1220 (Utah 1995)).
There must be “an offer, an acceptance, and consideration,” Cea v. Hoffman, 276 P.3d
1178, 1185 (Utah Ct. App. 2012), showing the parties’ mutual assent “to the ‘integral
features of the agreement,’” LD III, LLC v. BBRD, LC, 221 P.3d 867, 872 (Utah Ct. App.
2009) (alteration omitted) (quoting Prince, Yeates & Geldzahler v. Young, 94 P.3d 179,
183 (Utah 2004)). An offeree signals acceptance of an offer by “manifest[ing] . . . assent
to [the] offer, such that an objective, reasonable person is justified in understanding that a
fully enforceable contract has been made.” Cal Wadsworth Const. v. City of St. George,
898 P.2d 1372, 1376 (Utah 1995); see Com. Union Assocs. v. Clayton, 863 P.2d 29, 34–37
(Utah Ct. App. 1993) (noting that the parties can demonstrate mutual assent through
conduct). For the acceptance to be effective, however, an offeree must have “some form
of actual or constructive notice” of the contract’s essential terms. Mitchell v. Wells Fargo
Bank, 280 F. Supp. 3d 1261, 1285 n.22 (D. Utah 2017) (emphasis added). This rule is “no
less applicable on the Internet.” Koch Indus., Inc. v. Does, No. 2:10CV1275DAK, 2011
WL 1775765, at *9 (D. Utah May 9, 2011) (appearing to apply Utah law). Even without
actual notice of a contract’s terms, an internet user may be bound by it as long as she
received “[r]easonably conspicuous notice” of the terms. Id. (quoting Specht v. Netscape
Commc’ns. Corp., 306 F.3d 17, 35 (2d Cir. 2002)); accord Meyer v. Uber Techs., Inc., 868
F.3d 66, 74–76 (2d Cir. 2017). If a user’s actions “demonstrat[e] that they have at least
constructive knowledge of the terms of [an] agreement,” a court can “infer acceptance” of
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the terms. Hines v. Overstock.com, Inc. 380 F. App’x 22, 24–25 (2d Cir. 2010) (applying
both New York and Utah law and treating the two as essentially interchangeable). Utah
courts have not elaborated on exactly what type of notice is required to form a valid online
contract, but the appropriate question seems to be whether the website or application gives
the user enough information to “discover[]” the terms of the contract “by proper diligence.”
Rappleye v. Rappleye, 99 P.3d 348, 356 (Utah Ct. App. 2004) (citation omitted) (defining
“[c]onstructive notice” in a different legal context). This is a fact-dependent inquiry.
Generally, a user does not manifest assent to a website’s terms of use just by using the
website. See Hines, 380 F. App’x at 24. Nor is it enough when the terms are buried in a
“hyperlink at the bottom of the page.” Koch Indus., 2011 WL 1775765, at *9; cf. Mitchell,
280 F. Supp. 3d at 1283–84 (concluding that there was insufficient evidence to compel
arbitration when it was uncertain whether a plaintiff “had an opportunity to see [a
website’s] terms prior to accepting them” (internal quotation marks omitted)). Instead, at
least according to courts in other jurisdictions, a user typically must either “affirmatively
acknowledge” the terms by, for example, clicking or checking a box, or else be confronted
by an “explicit textual notice” that continuing to use the website will constitute agreement
to the terms. Engen v. Grocery Delivery E-Servs. USA Inc., 453 F. Supp. 3d 1231, 1237
(D. Minn. 2020) (collecting cases and quoting Nguyen v. Barnes & Noble Inc., 763 F.3d
1171, 1176 (9th Cir. 2014)).
1
Start with Barclay and Nordick and clarifying the Parties’ positions with respect to
them. Defendants do not argue that Barclay or Nordick agreed to arbitrate disputes when
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either purchased her treadmill; rather, Defendants argue that Barclay and Nordick agreed
to arbitration when they registered as iFit members. Defs.’ Mem. in Supp. of Mot. to
Compel Arbitration at 11–13; Defs.’ Reply Mem. at 3–8. Defendants do not present
evidence showing how either Barclay or Nordick actually registered as iFit members;
instead, Defendants have introduced evidence showing all of the ways Barclay and Nordick
might have registered, see Am. Brammer Decl. ¶¶ 8, 20–22, and argue that, regardless of
how Barclay and Nordick registered, Barclay and Nordick agreed to arbitrate disputes
because every possible registration method was sufficient to manifest Barclay and
Nordick’s assent to arbitration, Defs.’ Mem. in Supp. of Mot. to Compel Arbitration at 11–
13; Defs.’ Reply Mem. at 3–8. Barclay and Nordick do not seem to challenge Defendants’
evidence but argue instead that the sign-up methods Defendants describe are insufficient
to show Barclay and Nordick’s assent to arbitrate disputes concerning their prior treadmill
purchases. Pls.’ Mem. in Opp’n to Mot. to Compel Arbitration at 20–26.
As a matter of law, Barclay and Nordick agreed to arbitrate disputes with
Defendants.6 Each of the four possible iFit registration methods described in Defendants’
submissions would have required Barclay and Nordick to “click a box” that read either
“CREATE ACCOUNT,” “PLACE ORDER,” “START TRIAL,” or “NEXT.”

Am.

Brammer Decl. ¶¶ 8, 20, 21, 22. Adjacent to each of these boxes would have appeared a

6

It bears repeating that the Terms of Use in effect when Barclay and Nordick
registered as iFit members defined “ICON” to include “its[] affiliates, partners, licensors,
subsidiaries, and/or related companies.” Am. Brammer Decl., Ex. 7 at 2. In other words,
the Terms of Use governed, not merely Barclay and Nordick’s relationship with ICON
resulting from their iFit registration, but also NordicTrack. Plaintiffs, at the very least,
have given no reason to question this conclusion.
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statement alerting Barclay and Nordick that by clicking on the box, she agreed to the
hyperlinked iFit “Terms of Use,” among other contracts. Id. Any of these processes would
have provided Barclay and Nordick reasonably conspicuous notice of the iFit Terms of Use
(and the arbitration provision within them). The “clicking-means-assent” statement and
hyperlink to the Terms of Use were clear, conspicuous, adjacent to each other, and not
buried at the bottom of the page. Koch Indus., 2011 WL 1775765, at *9. Any of these
processes would have given Barclay and Nordick enough information to discover and
review the Terms of Use by proper diligence. Rappleye, 99 P.3d at 356. Each of the iFit
registration methods describes what many federal courts have called a “hybridwrap”
agreement: a process in which a user is prompted “to manifest their assent to particular
terms by engaging in some dual-purpose action, such as creating an account, . . . executing
a purchase order, . . . or downloading an application.” Nicosia v. Amazon.com, Inc., 384
F. Supp. 3d 254, 266 (E.D.N.Y. 2019) (collecting cases). Federal courts generally give
effect to such agreements “where the button required to perform the action manifesting
assent (e.g., signing up for an account or executing a purchase) is located directly next to a
hyperlink to the terms and a notice informing the user that, by clicking the button, the user
is agreeing to those terms.” Id.; see also 2 E-Commerce and Internet Law, 21.03[2]
Express and Implied Assent: Click-Through and Browsewrap Agreements at n.5 (April
2020) (collecting cases). There is no reason to think Utah law might require a different
result.

See Hines, 380 F. App’x at 25 (treating New York law and Utah law as

interchangeable on a similar question). And here, the evidence shows that the registration

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methods that were available to Barclay and Nordick did not diverge from the basic
hybridwrap layout. See Am. Brammer Decl., Exs. 2–12.
2
Now turn to the third Plaintiff, Erin Ovsak. Unlike Nordick and Barclay, Ovsak
never became an iFit member. Defendants seek to compel Ovsak to arbitrate her claims,
not through her own assent to the iFit Terms of Use, but through her spouse’s assent and
her alleged use and enjoyment of his membership. Defs.’ Mem. in Supp. of Mot. to Compel
Arbitration at 14. Ovsak’s spouse is Jay Ovsak, and for clarity’s sake, Erin and Jay will be
referred to by just their first names from this point forward. Defendants’ argument
proceeds in essentially three steps: (1) Jay registered as an iFit member and assented to the
then-effective iFit Terms of Use; (2) though the then-effective iFit Terms of Use contained
no arbitration provision, they included a modification provision pursuant to which the atissue arbitration provision properly was added; (3) Erin bound herself to the iFit Terms of
Use and the at-issue arbitration provision by using the iFit service through Jay’s
membership. Erin disputes each of these points.
a
As a matter of law, Jay agreed to be bound by the iFit Terms of Use in effect when
he registered as an iFit member. As with Barclay and Nordick, Defendants do not say how
Jay actually registered as an iFit member. Instead, Defendants identify the available
registration methods and argue that, no matter how Jay registered, he agreed to be bound.
To recap, Jay signed up for an iFit membership on March 25, 2016, roughly three years
before Barclay and Nordick. Am. Brammer Decl. ¶ 15; Ovsak Decl. ¶ 5. When Jay signed
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up, there were two ways to become an iFit member. First, users could register using the
iFit mobile application. The procedure for registering using the iFit mobile application
was the same when Jay signed up as when Nordick and Barclay signed up. Am. Brammer
Decl. ¶ 8. Second, users could register on iFit.com. To register this way, users were
required to click a box that read, “Purchase for $xx,” where “xx” was the purchase price.
Am. Brammer Decl. ¶ 19, Ex. 9. Directly beneath the “Purchase for $xx” button was a
statement that read, “By clicking submit, you agree to the Terms Of Service. View our
Privacy Policy.” Id. Both the phrases “Terms Of Service” and “Privacy Policy” were in
blue font, and the Terms of Service phrase hyperlinked directly to the iFit Terms of Use in
effect at that time. Id. Either of these two procedures was sufficient to manifest Jay’s
assent for the same reasons the procedures available to Barclay and Nordick were sufficient
to manifest their assent: the “clicking-means-assent” statement and the hyperlink to the
Terms of Use were clear and conspicuous, and either of these procedures gave Jay enough
information to discover and review the then-effective Terms of Use by proper diligence.
b
The unilateral modification provision in the Terms of Use to which Jay assented
was valid and by its terms permitted Defendants to subsequently add the at-issue arbitration
provision. To recap, the modification provision read:
We expressly reserve the right to change these Terms of Use
from time to time without notice to you. You acknowledge and
agree that it is your responsibility to review this site and these
Terms of Use from time to time and to familiarize yourself with
any modifications. Your continued use of this site after such
modifications will constitute acknowledgement of the
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Modified Terms of Use and agreement to abide and be bound
by the modified Terms of Use.
Am. Brammer Decl., Ex. 4 at 2 [ECF No. 45-4]. In March 2018, pursuant to this provision,
the at-issue arbitration clause was added to the iFit Terms of Use. Id., Ex. 6 at 10 [ECF
No. 45-6]; see also id., Ex. 7 at 9–10. Importantly, Plaintiffs identify no authority holding
or suggesting that a unilateral modification provision like this might not be valid under
Utah law.
Plaintiffs nonetheless argue that Jay is not bound by the arbitration provision that
Defendants added to the Terms of Use after he registered (pursuant to the modification
provision) for two reasons. Plaintiffs ground their first argument on a contract term that
doesn’t apply. Plaintiffs argue that the modification clause itself forbade retroactive
application of the later-added arbitration provision—i.e., to a dispute that arose before the
arbitration provision was added. Pls.’ Mem. in Opp’n to Mot. to Compel Arbitration at
27–28. To support this argument, however, Plaintiffs rely on the wrong version of the
modification clause, and their argument is defeated by the plain terms of the applicable
modification clause. Plaintiffs assert that the modification clause “states in part that ‘no
revisions to these Terms of Use will apply to any dispute between you and ICON that arose
prior to the effective date of those revisions.’” Id. at 28 (citing Brammer Decl., Ex. 8 at 1
[ECF No. 32]). The language Plaintiffs quote appeared in the Terms of Use in effect as of
September 2019, and the prohibition on retroactive application applies to revisions of
“these”—i.e., the September 2019—Terms of Use. See Brammer Decl. ¶ 14, Ex. 8 at 1.
Logically, the modification clause relevant to this analysis is not a modification clause from
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Terms of Use that already included the arbitration provision, but rather the modification
clause present in the Terms when Jay registered in March 2016 (and that remained in the
Terms of Use until March 1, 2018, when the arbitration provision was added). See Am.
Brammer Decl., Ex. 4 at 2 and Ex. 5 at 5. The relevant modification clause, by its plain
terms, did not forbid revision of the iFit Terms of Use to include retroactive provisions.
Id.
Plaintiffs’ second argument—that “unilateral modification to add arbitration
requires some notice to the consumer[,]” Mem. in Opp’n to Mot. to Compel Arbitration at
28—lacks support in the authorities Plaintiffs cite. But the argument may have support in
Utah law. Plaintiffs cite seven cases for the proposition that the unilateral modification of
a contract to add an arbitration provision requires some notice to the consumer, see Mem.
in Opp’n to Mot. to Compel Arbitration at 28 (citing cases), but these cases are legally and
factually distinguishable. They are legally distinguishable because none apply Utah law.
See Moore-Dennis v. Franklin, 201 So. 3d 1131 (Ala. 2016) (applying Alabama law);
Rodman v. Safeway, Inc., No. 11-cv-03003-JST, 2015 WL 604985 (N.D. Cal. Feb. 12,
2015) (California law); Karzon v. AT & T, Inc., No. 4:13-cv-2202 (CEJ), 2014 WL 51331
(E.D. Mo. Jan. 7, 2014) (Missouri law); Versmesse v. AT & T Mobility LLC, No. 3:13 CV
171, 2014 WL 856447 (N.D. Ind. Mar. 4, 2014) (Indiana law); Martin v. Wells Fargo Bank,
N.A., No. C 12-06030 SI, 2013 WL 6236762 (N.D. Cal. Dec. 2, 2013) (California law);
Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (Connecticut and California
law); Hudyka v. Sunoco, Inc., 474 F. Supp. 2d 712 (E.D. Pa. 2007) (Pennsylvania law).
Factually, unlike the Terms of Use at issue here, six of the seven cases Plaintiffs cite
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involved contracts that placed the burden of giving notice of modifications on the defendant
or at least placed no burden on the plaintiff to track modifications. Moore-Dennis, 201 So.
3d at 1133; Karzon, 2014 WL 51331, at *1, *3; Versmesse, 2014 WL 856447, at *2, *5;
Martin, 2013 WL 6236762, at * 1; Schnabel, 697 F.3d at 120, 123; Hudyka, 474 F. Supp.
2d at 714–15. In the seventh case, Rodman, the contract placed responsibility on the
consumer “to review the Terms and Conditions [for amendments] before submitting each
order.” 2015 WL 604985, at *2. In deciding that certain amendments to that contract did
not bind consumers, however, the court relied on the Ninth Circuit’s “skeptical view of
contracts in which online retailers have sought to alter the offer and acceptance structure
by contending that assent can be inferred by a customer’s continued use of a service even
in the absence of notice of the terms in question.” Id. at *10. No authorities are cited
suggesting that Utah law shares the Ninth Circuit’s skepticism regarding these
arrangements.
Nonetheless, a canvas of Utah authorities yields no obvious answer to whether
Defendants must have given Jay notice of the arbitration provision to bind him to arbitrate.
One federal district court applying Utah law seems to have rejected a notice requirement.
In Margae, Inc. v. Clear Link Techs., LLC, the United States District Court for the District
of Utah addressed whether one party may modify a contract pursuant to a unilateral
modification provision without giving notice beyond posting the modified contract on the
party’s website. No. 2:07-cv-916 TC, 2008 WL 2465450, at *6 (D. Utah June 16, 2008).
The modification clause at issue in Margae permitted modifications to be made “by
notifying the [other party] or by posting a new agreement on [Defendant’s website].” Id.
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at *2. The court determined that Utah law did not override the parties’ contract to require
actual notice and observed that the plaintiff “should have monitored to determine whether
any amendments had been posted.” Id. at *6; see also Zions Mgmt. Servs. v. Record, 305
P.3d 1062, 1071 (Utah 2013) (recognizing that, under Utah law, courts are not to “rewrite
an unambiguous contract,” and enforcing unambiguous contract terms though they may
“cause substantial delay, expense, duplication of effort, and risk of inconsistent
results [and] unnecessary procedural difficulties[]”) (quotations omitted).

However,

another federal district court applying Utah law appears to have reached a different
conclusion. Daniel v. eBay, Inc., 319 F. Supp. 3d 505, 511–514 (D.D.C. 2018) (applying
Utah law and denying motion to compel arbitration because “[n]otice of a later-added
arbitration provision is essential” and the defendant did not show that it had made “specific
efforts” to notify the plaintiff of the provision); see also McCoy v. Blue Cross and Blue
Shield of Utah, 20 P.3d 901, 905 (Utah 2001) (affirming the denial of a motion to compel
arbitration because “Blue Cross’s evidence failed to meet the minimum threshold of
specificity” required under the Utah Arbitration Act to show Blue Cross provided notice
of a later-added arbitration provision). Because the Parties have not had an opportunity to
address these authorities, they will be permitted to do so as part of the proceedings that
follow the necessary discovery described in the next section.
c
If Jay was bound to arbitrate disputes, then genuine disputes of material fact warrant
prompt and limited discovery, and probably a trial, as to whether Erin agreed to arbitrate
disputes. Defendants rely on the rule that “equitable estoppel doctrines may be used to
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enforce an arbitration agreement in a case involving a non-signatory to that agreement.”
Defs.’ Reply Mem. at 10 (citing GE Energy Power Conversion France SAS, Corp. v.
Outokumpu Stainless USA, LLC, 140 S. Ct. 1637 (2020)). Defendants assert that Erin
benefitted from Jay’s iFit membership and, therefore, that she is estopped from arguing
that she is not bound by the at-issue arbitration provision. Mem. in Supp. of Mot. to
Compel Arbitration at 14; Reply at 9–10. “Direct benefits estoppel applies when a
nonsignatory knowingly exploits the agreement containing the arbitration clause.” Reid v.
Doe Run Res. Corp., 701 F.3d 840, 846 (8th Cir. 2012) (quoting Bridas S.A.P.I.C. v. Gov’t
of Turkmenistan, 345 F.3d 347, 361–62 (5th Cir. 2003)). For Erin to be bound to arbitrate
under this theory, she must have “knowingly s[ought] and obtain[ed] direct benefits from
that contract; or [] s[ought] to enforce the terms of that contract or assert[] claims that must
be determined by reference to that contract.” Id. (citation and quotations omitted).
Defendants contend the first situation exists here—that Erin knowingly sought and
obtained direct benefits from Jay’s iFit membership. Defs.’ Mem. in Supp. of Motion to
Compel Arbitration at 14–15; Defs.’ Reply Mem. at 10–11.
The record lacks evidence sufficient to enter summary judgment on this question.
Defendants cite no specific record evidence to support this assertion in their opening brief.
Defs.’ Mem. in Supp. of Motion to Compel Arbitration at 14–15. Defendants describe
plausible scenarios: that Erin used iFit through Jay’s membership, or that Erin “may also
have created her own individual iFit account, used her household member’s email address
to create the ‘Jay Ovsak’ account, or even directed Jay [] to create an iFit account on behalf
of her and the household[.]” Id. at 15. But no materials in the record are cited to support
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these assertions. Erin has filed a declaration in opposition to Defendants’ motion in which
she has testified that Jay registered for the iFit membership and that she “did not register
or direct Jay to register,” Ovsak Decl. [ECF No. 40] ¶ 5, but she does not address the
assertion that she used iFit through Jay’s membership, see generally id. The lack of
evidence regarding whether or to what extent Erin directly benefitted from Jay’s iFit
membership is thus an “issue” regarding the “making of the arbitration agreement,” and
the FAA requires that this issue “proceed summarily to [] trial.” 9 U.S.C. § 4. To
implement this mandate, courts may order limited discovery relevant to determining
whether the parties agreed to arbitrate. See, e.g., Traylor v. I.C. System, Inc., No.
11-cv-2968 (DWF/SER), 2012 WL 1883814, at *4 (D. Minn. May 22, 2012) (ordering
“limited discovery directed at the issue of whether Plaintiff agreed to the Arbitration
Agreement”). Therefore, prompt and limited discovery will be ordered into this question.7
C
If a valid arbitration agreement was made between Plaintiffs and Defendants, then
the Parties agree that the issue of whether the arbitration agreement applies to the dispute
at hand is for the arbitrator to decide. In their opening brief, Defendants advanced this
argument. Defs.’ Mem. in Supp. of Mot. to Compel Arbitration at 13 n.6, 21–23. Plaintiffs

7

The Parties will be ordered to confer and then contact Magistrate Judge David T.
Schultz to determine appropriate limitations on the duration and scope of this discovery.
When that discovery is completed, and absent a voluntary resolution, Defendants may refile their motion to compel arbitration with respect to Erin, and additional motion practice
and a trial shall be scheduled to determine whether Erin agreed to arbitrate disputes.
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did not dispute this contention. See generally Pls.’ Mem. in Opp’n to Mot. to Compel
Arbitration.
The Parties’ agreement on this issue only makes sense in view of binding Eighth
Circuit precedent.

In Fallo v. High-Tech Inst., the court addressed whether the

incorporation of the American Arbitration Association’s (“AAA”) Rules into an arbitration
agreement constituted a clear and unmistakable expression of “the parties’ intent to leave
the question of arbitrability to the arbitrator[.]” 559 F.3d 874, 878 (8th Cir. 2009). The
arbitration agreement at issue in Fallo provided that disputes “arising out of the [contract]
. . . shall be settled by arbitration in accordance with the Commercial Rules of the American
Arbitration Association[.]” Id. at 876. The court noted that Rule 7(a) of the Commercial
Rules of the AAA provided that “arbitrators determine their own jurisdiction,” and
“conclude[d] that the arbitration provision’s incorporation of the AAA rules . . . constitutes
a clear and unmistakable expression of the parties’ intent to leave the question of
arbitrability to an arbitrator.” Id. at 877–78. As a result, the Eighth Circuit in Fallo
reversed the district court’s determination that the parties’ dispute did not fall within the
scope of the arbitration agreement because the incorporation of the AAA Rules stripped
the district court of the power to decide the gateway question of arbitrability. See id. at
880.
Here, as in Fallo, the arbitration provisions incorporate the American Arbitration
Association’s Rules. Am. Brammer Decl., Exs. 6, 7.8 The applicable rules provide that

8

It doesn’t matter to the outcome of this issue, but the applicable AAA Rules in this
case are the Consumer Arbitration Rules—not the Commercial Rules—because the
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“[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any
objections with respect to the existence, scope, or validity of the arbitration agreement or
to the arbitrability of any claim or counterclaim.” Consumer Arbitration Rules, Am.
Arbitration Ass’n, Rule 14(a). Accordingly, the arbitration agreements at issue here clearly
and unmistakably “express[] [] the parties’ intent to leave the question of arbitrability to an
arbitrator.” Fallo, 559 F.3d at 878; see Henry Schein, Inc. v. Archer & White Sales, Inc.,
139 S. Ct. 524, 529 (2019) (“When the parties’ contract delegates the arbitrability question
to an arbitrator, a court may not override the contract . . . even if the court thinks that the
argument that the arbitration agreement applies to a particular dispute is wholly
groundless.”).
Plaintiffs advance two arguments that they say concern contract formation and show
they did not assent to arbitrate disputes, but both arguments impermissibly challenge
arbitrability. First, Plaintiffs argue that, “if [they] had read the iFit Terms of Use in detail
at the time they registered, and had clearly agreed to them, no reasonable consumer would

arbitration agreements were “contained within a consumer agreement” as defined by the
Consumer Arbitration Rules of the American Arbitration Association. Consumer
Arbitration Rules, Am. Arbitration Ass’n, Rule 1 (“The parties shall have made these
Consumer Arbitration Rules a part of their arbitration agreement whenever they have
provided for arbitration by the American Arbitration Association . . . and . . . the
arbitration agreement is contained within a consumer agreement . . . that does not specify
a particular set of rules[.]”); see also id. (“The AAA defines a consumer agreement as an
agreement between an individual consumer and a business where the business has a
standardized, systematic application of arbitration clauses with customers and where the
terms and conditions of the purchase of standardized, consumable goods or services are
non-negotiable or primarily non-negotiable in most or all of its terms, conditions, features,
or choices. The product or service must be for personal or household use. . . . Examples
of contracts that typically meet the criteria for application of these
Rules . . . include . . . [h]ealth and fitness club membership agreements[.]”).
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interpret the iFit Terms to require arbitration of a dispute relating to a prior NordicTrack
treadmill purchase.” Pls.’ Mem. in Opp’n to Mot. to Compel Arbitration at 23. Whether
“the iFit Terms [] require arbitration of a dispute relating to a prior NordicTrack treadmill
purchase” sounds like an arbitrability question.

As support for this first argument,

Plaintiffs cite Bossé v. New York Life Ins. Co., No. 19-cv-016-SM, 2019 WL5967204
(D.N.H. Nov. 13, 2019). In Bossé, the defendant, New York Life, sought to compel
arbitration of the plaintiff Bossé’s discrimination claims asserted in connection with the
January 2016 termination of his agency contract under an arbitration agreement entered in
2004, when Bossé was an employee. Id. at *1–*2. The court determined “[t]here [was]
not an enforceable agreement to arbitrate [Bossé’s] claims.” Id. at *3. The court explained
that Bossé’s claims were “not tethered to, or related in any way, to the 2004 [agreement]
or the relationship established by that agreement[.]” Id. at * 6. Bossé’s rationale—that the
absence of a relationship between an arbitration agreement and a plaintiff’s claims
establishes a lack of assent to contract—is incompatible with Henry Schein. There, the
Supreme Court rejected a “wholly groundless” exception to an arbitrator’s authority to
decide arbitrability questions. 139 S. Ct. at 527–28. The Supreme Court reasoned:
We must interpret the [Federal Arbitration] Act as written, and
the Act in turn requires that we interpret the contract as written.
When the parties’ contract delegates the arbitrability question
to an arbitrator, a court may not override the contract. In those
circumstances, a court possesses no power to decide the
arbitrability issue. That is true even if the court thinks that the
argument that the arbitration agreement applies to a particular
dispute is wholly groundless.
That conclusion follows not only from the text of the Act but
also from precedent. We have held that a court may not “rule
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on the potential merits of the underlying” claim that is assigned
by contract to an arbitrator, “even if it appears to the court to
be frivolous.” AT & T Technologies, Inc. v. Communications
Workers, 475 U.S. 643, 649–650 (1986). A court has “‘no
business weighing the merits of the grievance’” because the
“‘agreement is to submit all grievances to arbitration, not
merely those which the court will deem meritorious.’” Id., at
650, (quoting Steelworkers v. American Mfg. Co., 363 U.S.
564, 568 (1960)).
That AT & T Technologies principle applies with equal force
to the threshold issue of arbitrability. Just as a court may not
decide a merits question that the parties have delegated to an
arbitrator, a court may not decide an arbitrability question that
the parties have delegated to an arbitrator.
Id. at 529–30. Saying that no agreement to arbitrate exists because claims lack “some
relationship to, [or] some connection with, the agreement or contract,” Bossé, 2019 WL
5967204, at *5, would impermissibly recast the “wholly groundless” exception rejected in
Henry Schein as a question of contract formation.9 True, this raises the possibility of
perhaps unexpected hypotheticals. Say, for example, Barclay sued Defendants after being
run over by a NordicTrack delivery truck, and Defendants moved to compel arbitration of
Barclay’s personal injury claim under the iFit Terms of Use. Under Henry Schein, and
because the iFit Terms delegate the arbitrability question to an arbitrator, any disconnect

9

Bossé understood that “Schein presupposes a dispute arising out of the contract or
transaction—i.e., some minimal relationship or connection between the contract and the
dispute.” 2015 WL 5967204, at * 5. This is not correct. Just the opposite, in fact. In those
cases where the parties’ contract delegates the arbitrability question to an arbitrator, Henry
Schein is clear that the presence of even a “wholly groundless” (or less than minimal)
connection between the arbitration clause and the asserted claims does not permit a federal
court to “short-circuit the process and decide the arbitrability question [itself.]” Schein,
139 S. Ct. at 527–28. Requiring “some minimal relationship” as a prerequisite to contract
formation would end run Henry Schein’s basic rule.
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between the claim and the iFit Terms could not justify denying the motion to compel. Even
in these perhaps unanticipated circumstances, Henry Schein requires the arbitrability
question to be left to the arbitrator.
Second, Plaintiffs argue that the iFit Terms of Use “cannot be applied
retroactively[]” because “[r]etroactive application of arbitration is often rejected where a
defendant illogically claims that a prior dispute ‘arises’ out of a subsequent agreement.”
Pls.’ Mem. in Opp’n to Mot. to Compel Arbitration at 25. In other words, Plaintiffs argue,
if they agreed to the iFit Terms of Use, the Terms do not apply to claims arising in
connection with their prior treadmill purchases. Whether Plaintiffs’ claims fall outside the
scope of the iFit Terms of Use (because they arose before Plaintiffs assented to the iFit
Terms of Use or for any other reason) is an arbitrability question. The cases Plaintiffs cite
to support this argument confirm this. In each, a court addresses the arbitrability of claims,
not the formation of a contract. Newbanks v. Cellular Sales of Knoxville, Inc., 548 Fed.
App’x 851, 854 (4th Cir. 2013) (“The primary issue on appeal is whether the district court
properly held that the Compensation Agreements’ arbitration provision did not apply to
FLSA and SCPWA-based claims arising before Newbanks and Walton became at-will
employees of Cellular Sales. We review de novo a district court's conclusions regarding
the arbitrability of a dispute[.]”); Sec. Watch, Inc. v. Sentinel Sys., Inc., 176 F.3d 369, 372
(6th Cir. 1999) (“We conclude that disputes arising under the pre-1994 contracts are not
governed by the ADR Clause of the 1994 Agreement.”); Austin Freight Sys., Inc. v. West
Wind Logistics, Inc., No. 18 C 4832, 2019 WL 2088056, at *4 (N.D. Ill. May 13, 2019)
(finding that a June 2016 “disputed sausage shipment” did not “fall within the scope of” an
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arbitration clause limited to disputes arising out of an August 2016 agreement); Smith v.
Swift Transp., Co., No. 13-2247-RDR, 2013 WL 5551804, at *3 (D. Kan. Oct. 7, 2013)
(“The language of the Contractor Agreement [including its arbitration clause] appears only
to include those claims arising in connection with that agreement[]” and not claims arising
prior to its execution). In each of these cases, the parties evidently left arbitrability
questions to be decided by the court, but that is not the situation here.10
ORDER
Based on the foregoing, and all the files, records, and proceedings herein, IT IS
ORDERED THAT:
1.

Defendants’ Motion to Dismiss [ECF No. 23] is GRANTED IN PART and
DENIED IN PART as follows:
a.

The Motion is GRANTED to the extent it seeks dismissal of
Plaintiffs’ claims for injunctive relief for lack of subject-matter
jurisdiction.

b.

The Motion is DENIED on the merits to the extent it seeks dismissal
of other aspects of Plaintiffs’ claims for lack of subject-matter
jurisdiction.

c.

The Motion is DENIED as moot to the extent it seeks dismissal of
Plaintiff Larry Schwartz’s claims for lack of personal jurisdiction.

10

If an arbitrator were to determine that Plaintiffs’ claims, or any of them, fall outside
the scope of the arbitration agreement, then this case would move forward, and Defendants’
Rule 12(b)(6) motion to dismiss for failure to state a claim and Rule 12(f) motion to strike
would be ripe for re-filing and adjudication.
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d.
2.

The Motion is DENIED without prejudice in all other respects.

Defendants’ Motion to Compel Arbitration [ECF No. 28] is GRANTED IN
PART and DENIED IN PART as follows:
a.

The Motion is GRANTED to the extent it seeks to compel Plaintiffs
Teeda Barclay and Nicole Nordick to submit their claims to
arbitration.

b.

The Motion is DENIED without prejudice to the extent it seeks to
compel Plaintiff Erin Ovsak to submit her claims to arbitration.

c.

The Parties shall confer with each other and consult with Magistrate
Judge David T. Schultz to determine a schedule pursuant to which the
Parties shall conduct limited expedited discovery regarding whether
Plaintiff Erin Ovsak is bound to arbitrate her claims.

3.

All merits proceedings are STAYED pending completion of this discovery
and resolution of the question whether Plaintiff Erin Ovsak is bound to
arbitrate her claims.

Date: October 15, 2020

s/ Eric C. Tostrud
Eric C. Tostrud
United States District Court

40