Source: https://recreation-law.com/tag/arbitration/
Timestamp: 2019-04-24 13:56:33+00:00

Document:
New Jersey does not allow a parent to sign away a minor’s right to sue so a binding arbitration agreement is a good idea, if it is written correctly.
The arbitration agreement in this case did not state how long the agreement was valid for, so the court held it was only valid for the day it was signed.
When a parent cannot sign a release for a minor, because the states don’t enforce them, one option may be a binding arbitration agreement. Arbitration usually does not allow massive damages, is cheaper and quicker than going to trial.
However, your arbitration agreement, like a release, must be written in a way to make sure it is effective. This one was not, and the plaintiff can proceed to trial.
In a state where there are no defenses except assumption of the risk for claims by minor’s arbitration can be a good way to speed up the process and limit damages. Each state has laws that encourage arbitration and, in most cases, create limits on what an arbitration panel (the people hearing the case) can award in damages. In man states, arbitration judges cannot award punitive damages.
You need to check your state laws on what if any benefits arbitration provides.
However, if you can use a release, the release is the best way to go because it cuts off all damages. Many times, in arbitration damages are awarded, they are just less.
To determine which states do not allow a parent to sign away a minor’s right to sue see States that allow a parent to sign away a minor’s right to sue.
The best way of dealing with minor claims is the defense of assumption of the risk. However, this takes more time on the front end in making sure the minor participants understand the risk before embarking on the activity.
There were two issues before the appellate court: Whether the first agreement signed by the mother of the injured plaintiff extended beyond the day it was signed. The second issue was whether a second agreement signed by a friend, not a parent, legal guardian or someone acting under a power of attorney had any legal validity.
The first agreement was silent as to how long it was valid. There was no termination date, (which is a good thing) and nothing to indicate the agreement was good for a day or a lifetime. Because the contract was blank as to when the agreement was valid, the court ruled against the creator of the contract.
There is no evidence in the record before us to support defendants’ argument as the agreements are silent as to any period of validity. Defendants drafted these agreements and required a signature from all participants waiving certain claims and requiring submission to arbitration prior to permitting access to the facility. Any ambiguity in the contract must be construed against defendants.
When a contract is written any issues are held against the writer of the agreement. Here because the contract had no end date or did not say it was good forever, there was a gap in the agreement that was held against the defendant as the writer of the agreement.
So, the court ruled the agreement signed by the mother was only valid on the day it was signed and was not valid the second time when the minor came in and was injured.
The second argument made by the defendant was the friend who signed for the minor on the second visit signed an agreement that should be enforced and compel arbitration.
The court laughed that one out the door.
We further find that defendants’ argument regarding the November agreement lacks merit. The signor of that agreement was neither a parent, a legal guardian, nor the holder of a power of attorney needed to bind the minor plaintiff to the arbitration agreement. Defendants’ reliance on Hojnowski v. Vans Skate Park, is misplaced. While the Court found that a parent had the authority to waive their own child’s rights under an arbitration agreement in Hojnowski, there is no suggestion that such authority would extend to a non-legal guardian. Not only would such a holding bind the minor to an arbitration agreement, it would also serve to bind the minor’s parents, waiving their rights to bring a claim on behalf of their child. We decline to so hold.
New Jersey law is quite clear. A parent cannot sign away a minor’s right to sue, Hojnowski v. Vans Skate Park. Consequently, arbitration was probably the way to go. In this case, one little slip up made the arbitration agreement worthless.
The one flaw in using an arbitration agreement is you could use a release to stop the claims for a parent. So, you should write a release that stops the claims of the parents/legal guardians and compels arbitration of the minor’s claims. Those get tricky.
And as far as another adult signing for a minor who is not their child, that is always a problem. A parent can sign for a minor, to some extent, and a spouse can sign for another spouse in certain situations. An officer of a corporation or a manager of a limited liability company can sign for the corporation or company. The trustee can sign for a trust, and any partner can sign for a partnership. But only you can sign for you.
The issue that outdoor businesses see all day long is a volunteer youth leader take groups of kids to parks, amusement rides and climbing walls, etc. Neighbors take the neighborhood kids to the zoo, and friends grab their kids’ friends to take on vacation. Unless the adult has a power of attorney saying they have the right to enter agreements on behalf of the minor child, their signature only has value if they are a celebrity or sports personality.
THIS DECISION IS NOT FINAL UNTIL EXPIRATION OF THE FOURTEEN DAY REHEARING PERIOD.
PRIOR HISTORY: [*1] ON WRIT OF CERTIORARI TO THE COURT OF APPEAL, FIRST CIRCUIT, PARISH OF EAST BATON ROUGE.
DISPOSITION: REVERSED AND REMANDED TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS.
OVERVIEW: HOLDINGS: -Where plaintiff patron sued defendant trampoline park, alleging he was injured due to its negligence, the provision of an agreement he signed waiving his right to trial and compelling arbitration was adhesionary and thus unenforceable due to the lack of mutuality of obligations together with the obscure placement of the arbitration language in the agreement; -As the high court applied Louisiana law applicable to contracts generally, not just to arbitration agreements, its ruling was consistent with the savings clauses in 9 U.S.C.S. § 2 of the FAA and La. Rev. Stat. § 9:4201.
OUTCOME: The judgment of the intermediate appellate court was reversed.
[HN1] Where a case involves legal questions, the appellate court reviews the matter de novo.
[HN2] Louisiana and federal law explicitly favor the enforcement of arbitration clauses in written contracts. Louisiana Binding Arbitration Law (LBAL) is set forth in La. Rev. Stat. Ann. § 9:4201 et seq. and expresses a strong legislative policy favoring arbitration. § 9:4201. Such favorable treatment echoes the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq. The LBAL is virtually identical to the FAA, and determinations regarding the viability and scope of arbitration clauses are the same under either law; thus, federal jurisprudence interpreting the FAA may be considered in construing the LBAL. Further, to the extent that federal and state law differ, the FAA preempts state law as to any written arbitration agreement in a contract involving interstate commerce.
[HN3] The Federal Arbitration Act, 9 U.S.C.S. § 1 et seq., makes arbitration agreements valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contact. 9 U.S.C.S. § 2. This provision reflects both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract. In line with these principles, courts must place arbitration agreements on an equal footing with other contracts. Despite this policy favoring enforcement of arbitration agreements, the U.S. Supreme Court has also recognized that, under the savings clause in § 2, general state contract principles still apply to assess whether those agreements to arbitrate are valid and enforceable, just as they would to any other contract dispute arising under state law. Accordingly, ordinary state-law principles that govern the formation of contracts are applied when deciding whether the parties agreed to arbitration. Importantly, the savings clause in § 2 does not permit courts to invalidate an arbitration agreement under a state law applicable only to arbitration provisions.
[HN4] Louisiana law gives legal effect to both electronic contracts and signatures. La. Rev. Stat. Ann. § 9:2607. The court interprets and analyzes the terms of an electronic agreement using the same rules that it would apply to oral and written contracts.
[HN5] Broadly defined, a contract of adhesion is a standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party. Often in small print, these contracts sometimes raise a question as to whether or not the weaker party actually consented to the terms. Although a contract of adhesion is a contract executed in a standard form in the vast majority of instances, not every contract in standard form may be regarded as a contract of adhesion. Therefore, the Louisiana Supreme Court is not willing to declare all standard form contracts adhesionary; rather, it finds standard form serves merely as a possible indicator of adhesion. The real issue in a contract of adhesion analysis is not the standard form of the contract, but rather whether a party truly consented to all the printed terms. Thus, the issue is one of consent.
[HN6] In determining if a contract is adhesionary, consent is called into question by the standard form, small print, and most especially the disadvantageous position of the accepting party, which is further emphasized by the potentially unequal bargaining positions of the parties. An unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party. Once consent is called into question, the party seeking to invalidate the contract as adhesionary must then demonstrate the non-drafting party either did not consent to the terms in dispute or his consent was vitiated by error, which in turn, renders the contract or provision unenforceable. A contract is one of adhesion when either its form, print, or unequal terms call into question the consent of the non-drafting party and it is demonstrated that the contract is unenforceable, due to lack of consent or error, which vitiates consent. Accordingly, even if a contract is standard in form and printed in small font, if it does not call into question the non-drafting party’s consent and if it is not demonstrated that the non-drafting party did not consent or his consent is vitiated by error, the contract is not a contract of adhesion.
[HN7] The party seeking to enforce an arbitration provision has the burden of showing the existence of a valid contract to arbitrate.
[HN8] The U.S. Supreme Court has admonished that, under the doctrine of preemption, state courts cannot adopt defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. Nor can courts apply state law rules that stand as an obstacle to the accomplishment of the objectives of the Federal Arbitration Act (FAA), 9 U.S.C.S. § 1 et seq. Setting forth a legal requirement relative to a particular form or method of distinguishing or highlighting arbitration clauses, or requiring term-for-term mutuality in an arbitration clause could risk running afoul of the FAA. However, the Supreme Court has made it clear that state courts may apply standard state law contract defenses to arbitration agreements.
[HN9] Consideration of enforceability of contracts of adhesion is an issue of consent, and determining whether a party truly consented to the contract terms. Consideration of consent is not limited to arbitration clauses; courts consider the issue of consent in any contract. Lack of consent is a generally applicable contract defense. La. Civ. Code Ann. art. 1927. The factors discussed in Aguillard v. Auction Management Corp. simply provide a template for considering consent to an arbitration clause contained in a standard contract. Aguillard did not create a per se rule that any degree of non-mutuality in an arbitration agreement renders it unenforceable, nor did Aguillard prescribe a definitive rule that arbitration agreements must be delineated a particular way to be enforceable.
[HN10] The determination of whether an arbitration clause in a standard form contract is adhesionary is necessarily made on a case by case basis.
COUNSEL: WILLIAMSON, FONTENOT, CAMPBELL & WHITTINGTON, LLC, Christopher Lee Whittington; For Applicant.
TAYLOR, PORTER, BROOKS & PHILLIPS, LLP, Tom Samuel Easterly; For Respondent.
JUDGES: JOHNSON CHIEF JUSTICE. WEIMER J. dissenting. GUIDRY J. dissents and assigns reasons. CRICHTON J. additionally concurs and assigns reasons. CLARK J. concurring. Hughes J. concurring.
Patrons of Sky Zone Lafayette, an indoor trampoline park, are required to complete a “Participant Agreement, Release and Assumption of Risk” document (“Agreement”) prior to entering the facility. The Agreement contains a clause waiving the participant’s right to trial and compelling arbitration. Plaintiff, James Duhon, was a patron at Sky Zone and was injured in the course of participating in the park’s activities. After Mr. Duhon filed suit seeking damages, Sky Zone filed an exception of prematurity seeking to compel arbitration pursuant to the Agreement. The district court overruled Sky Zone’s exception, but the court of appeal reversed, finding the arbitration provision should be enforced.
For the following reasons, we reverse the ruling of the court of appeal, holding the arbitration clause in the Sky Zone agreement [*2] is adhesionary and therefore unenforceable.
On April 19, 2015, James Duhon, accompanied by three minors, went to Sky Zone in Lafayette. Upon entering the facility, Mr. Duhon was directed by Sky Zone staff to a computer screen to check himself and the minors into the facility. Check-in [Pg 2] required all participants to complete a Participation Agreement which requested names and dates of birth for all participants, required participants to check three boxes next to certain terms of the Agreement, and required participants to digitally sign the Agreement.
[ ] I acknowledge that my participation in [Sky Zone] trampoline games or activities entails known and unanticipated risks that could result in physical or emotional injury including, but not limited to broken bones, sprained or torn ligaments, paralysis, death, or other bodily injury or property damage to myself my children, or to third parties. I understand that such risks simply cannot be eliminated without jeopardizing the essential qualities of the activity. I expressly agree [*3] and promise to accept and assume all of the risks existing in this activity. My and/or my children’s participation in this activity is purely voluntary and I elect to participate, or allow my children to participate in spite of the risks. If I and/or my children are injured, I acknowledge that I or my children may require medical assistance, which I acknowledge will be at my own expense or the expense of my personal insurers. I hereby represent and affirm that I have adequate and appropriate insurance to provide coverage for such medical expense.
[ ] In consideration for allowing me and the minor child(ren) identified herein to participate in the [Sky Zone] activities and use the [Sky Zone] facility, I expressly and voluntarily agree to forever release, acquit, indemnify and discharge [Sky Zone] and agree to hold [Sky Zone] harmless on behalf of myself, my spouse, my children, my parents, my guardians, and my heirs, assigns, personal representative and estate, and any and all other persons and entities who could in any way represent me, or the minor children identified herein or act on our respective halves, from any and all actions or omissions, cause and causes of action, suits, debts, [*4] damages, judgments, costs, including, but not limited to attorney’s fees, and claims and demands whatsoever, in law or in equity, for any personal injury, death, or property damages that I and/or the minor children’s use of [Sky Zone] activities, [Sky Zone] premises or at offsite and camp activities related to [Sky Zone]. This waiver is intended to be a complete release of any and all responsibility or duties owed by [Sky Zone] as indemnitees for personal injuries, death and/or property loss/damage sustained by myself or any minor children identified herein while on the [Sky Zone] premises, or with respect to [Sky Zone] activities, whether using [Sky Zone] equipment or not, even if such injury or damage results from [Sky Zone] negligence, [Sky Zone] employee [Pg 3] negligence, improper supervision, improper maintenance of [Sky Zone] equipment or premises or negligence by other [Sky Zone] guests.
[ ] I certify that I and/or my child(ren) are physically able to participate in all activities at the Location without aid or assistance. I further certify that I am willing to assume the risk of any medical or physical condition that I and/or my child(ren) may have. I acknowledge that I have [*5] read the rules, (the “Sky Zone Rules”) governing my and/or my child(ren)’s participation in any activities at the Location. I certify that I have explained the [Sky Zone] Rules to the child(ren) identified herein. I understand that the [Sky Zone] Rules have been implemented for the safety of all guests at the Location. I agree that if any portion of this Agreement is found to be void and unenforceable, the remaining portions shall remain in full force and effect. If there are any disputes regarding this agreement, I on behalf of myself and/or my child(ren) hereby waive any right I and/or my child(ren) may have to a trial and agree that such dispute shall be brought within one year of the date of this Agreement and will be determined by binding arbitration before one arbitrator to be administered by JAMS pursuant to its Comprehensive Arbitration Rules and Procedures. I further agree that the arbitration will take place solely in the state of Louisiana and that the substantive law of Louisiana shall apply. If, despite the representations made in this agreement, I or anyone on behalf of myself and/or my child(ren) file or otherwise initiate a lawsuit against [Sky Zone], in addition to [*6] my agreement to defend and indemnify [Sky Zone], I agree to pay within 60 days liquidated damages in the amount of $5,000 to [Sky Zone]. Should I fail to pay this liquidated damages amount within the 60 day time period provided by this Agreement, I further agree to pay interest on the $5,000 amount calculated at 12% per annum.
I further grant [Sky Zone] the right, without reservation or limitation, to videotape, and/or record me and/or my children on closed circuit television.
I further grant [Sky Zone] the right, without reservation or limitation, to photograph, videotape, and/or record me and/or my children and to use my or my children’s name, face, likeness, voice and appearance in connection with exhibitions, publicity, advertising and promotional materials.
I would like to receive free email promotions and discounts to the email address provided below. I may unsubscribe from emails from Sky Zone at any time.
By signing this document, I acknowledge that if anyone is hurt or property is damaged during my participation in this activity, I may be found by a court of law to have waived my right to maintain a lawsuit [Pg 4] against [Sky Zone] on the basis of any claim from which I have [*7] released them herein. I have had sufficient opportunity to read this entire document. I understand this Agreement and I voluntarily agree to be bound by its terms.
I further certify that I am the parent or legal guardian of the children listed above on this Agreement or that I have been granted power of attorney to sign this Agreement on behalf of the parent or legal guardian of the children listed above.
Mr. Duhon electronically completed the Agreement on behalf of himself and the minors by checking the three boxes provided in the agreement, furnishing the relevant personal identifying information, and clicking on an “accept” button. Mr. Duhon and the minors then entered the facility.
Mr. Duhon asserts he was injured at the facility due to Sky Zone’s negligence. On August 12, 2015, Mr. Duhon filed suit against Activelaf, L.L.C., d/b/a Sky Zone Lafayette and its insurer (“Sky Zone”). In response, Sky Zone filed several exceptions, including an exception of prematurity. Sky Zone alleged that the Agreement contained a mandatory arbitration clause, thereby rendering Mr. Duhon’s suit premature. Mr. Duhon asserted he did not knowingly consent to arbitration, and argued the Agreement was adhesionary [*8] and ambiguous.
Following a hearing, the district court determined there was a lack of mutuality in the Agreement relative to the arbitration clause because only Mr. Duhon was bound to arbitrate claims. Thus, relying on this court’s decision in Aguillard Auction Management Corp., 04-2804 (La. 6/29/05), 908 So. 2d 1 and the Third Circuit’s opinion in Sutton Steel & Supply, Inc. v. Bellsouth Mobility, Inc., 07-146 (La. App. 3 Cir. 12/12/07), 971 So. 2d 1257, the district court refused to enforce the arbitration agreement and overruled Sky Zone’s exception of prematurity.
There is a strong presumption favoring the enforceability of arbitration [Pg 5] clauses. The weight of this presumption is heavy and arbitration should not be denied unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation that could cover the dispute at issue. Aguillard v. Auction Management Corp., 2004-2804 (La. 6/29/05), 908 So. 2d 1. We find that plaintiff failed to establish that this arbitration provision is adhesionary, and accordingly, the arbitration provision should be enforced.
Judge Theriot dissented without reasons, stating he would deny the writ application. Duhon v. ActiveLaf, LLC, 16-0167, 2016 La. App. LEXIS 629 (La. App. 1 Cir. 4/5/16) (unpublished).
On Mr. Duhon’s application, we granted certiorari to review the correctness of the court of appeal’s ruling. Duhon v. ActiveLaf, LLC, 16-0818 (La. 6/17/16), 192 So. 3d 762.
This [HN1] case involves the legal [*9] questions of whether the court of appeal erred in its “contract of adhesion” analysis of the arbitration clause in the Agreement, and whether the arbitration clause is unenforceable on general contract principles of consent or adhesion. Thus, we review the matter de novo. See Aguillard, 908 So. 2d at 3; Prasad v. Bullard, 10-291 (La. App. 5 Cir. 10/12/10), 51 So. 3d 35, 39; Horseshoe Entertainment v. Lepinski, 40,753 (La. App. 2 Cir. 3/8/06), 923 So. 2d 929, 934, writ denied, 06-792 (La. 6/2/06), 929 So. 2d 1259.
A provision in any written contract to settle by arbitration a controversy thereafter arising out of the contract, or out of the refusal to perform the whole or any part thereof, or an agreement in writing between two or more persons to submit to arbitration any controversy existing between them at the time of the agreement to submit, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
As this court recognized in Aguillard, “[s]uch favorable treatment echos the Federal [Pg 6] Arbitration Act (“FAA”), 9 U.S.C. § 1, et seq.” 908 So. 2d at 7. We noted the LBAL is virtually identical to the FAA, and determinations regarding [*10] the viability and scope of arbitration clauses are the same under either law, thus federal jurisprudence interpreting the FAA may be considered in construing the LBAL. Id. at 18. Further, to the extent that federal and state law differ, the FAA preempts state law as to any written arbitration agreement in a contract involving interstate commerce. Hodges v. Reasonover, 12-0043 (La. 7/2/12), 103 So. 3d 1069, 1072; FIA Card Services, N.A. v. Weaver, 10-1372 (La. 3/15/11), 62 So. 3d 709, 712; Collins v. Prudential Ins. Co. of America, 99-1423 (La. 1/19/00), 752 So. 2d 825, 827.
[HN3] The FAA makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contact.” 9 U.S.C. §2 (emphasis added). The United States Supreme Court has explained that this provision reflects both a “liberal federal policy favoring arbitration,” and the “fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339, 131 S. Ct. 1740, 1745, 179 L.Ed. 2d 742 (2011) (citing Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24, 103 S.Ct. 927, 74 L.Ed. 2d 765 (1983) and Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67, 130 S.Ct. 2772, 2776, 177 L.Ed. 2d 403 (2010)). The Supreme Court has instructed that in line with these principles, courts must place arbitration agreements on an equal footing with other contracts. Concepcion, 563 U.S. at 339 (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed. 2d 1038 (2006)). Despite this policy favoring enforcement of arbitration agreements, the Supreme Court has also recognized that, under the savings clause in §2, general state contract principles still apply to assess whether those agreements to arbitrate are valid and enforceable, just as they would to any other [*11] contract dispute arising under state law.[Pg 7] Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 686-87, 116 S.Ct. 1652, 1656, 134 L. Ed. 2d 902 (1996). Accordingly, ordinary state-law principles that govern the formation of contracts are applied when deciding whether the parties agreed to arbitration. First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed. 2d 985 (1995). Importantly, the savings clause in § 2 does not permit courts to invalidate an arbitration agreement under a state law applicable only to arbitration provisions. Concepcion, 563 U.S. at 339; Aguillard, 908 So. 2d at 8.
With these principles in mind, we consider whether the arbitration clause in the Sky Zone Agreement should be invalided under Louisiana law. As an initial matter, we note the electronic nature of the Agreement in this case is of no legal consequence and does not fundamentally change the principles of contract. [HN4] Louisiana law gives legal effect to both electronic contracts and signatures. See La. R.S. 9:2607. We interpret and analyze the terms of the Agreement using the same rules that we would apply to oral and written contracts.
[HN6] Consent is called into question by the standard form, small print, and most especially the disadvantageous position of the accepting party, which is further emphasized by the potentially unequal bargaining positions of the parties. An unequal bargaining position is evident when the contract unduly burdens one party in comparison to the burdens imposed upon the drafting party and the advantages allowed to that party. Once consent is called into question, the party seeking to invalidate the contract as adhesionary must then demonstrate the non-drafting party either did not consent to the terms in dispute or his consent was vitiated by error, which in turn, renders the contract or provision unenforceable.
In summation, a contract is one of adhesion when either its form, print, or unequal terms call into question the consent of the non-drafting party and it is demonstrated that the contract is unenforceable, due to lack of consent or error, which vitiates consent. Accordingly, even if a contract is standard in form and printed in small font, if it does not call into question the non-drafting party’s consent and if it is not demonstrated that the non-drafting party did not consent or his [*14] consent is vitiated by error, the contract is not a contract of adhesion.
Id. at 10-11. Thus, the question we consider is whether Mr. Duhon truly consented to the arbitration provision in the Agreement.
In concluding the arbitration provision in Aguillard was not adhesionary, we noted (1) the arbitration provision was contained in a short, two-page document and was contained in a single sentence paragraph; (2) the arbitration provision was not concealed; (3) the contract did not lack mutuality because defendants did not reserve their right to litigate issues arising from the contract; and (4) the parties did not have a significant difference in bargaining power because a real estate auction is not a [Pg 9] necessary transaction that plaintiff was compelled to enter. Id. Thus, while not declaring a definitive test, this court effectively established a framework for examining the validity of an arbitration clause within a standard form contract by generally describing the characteristics of an unenforceable adhesionary agreement. Finding our analysis in Aguillard instructive, we consider the following factors to determine the enforceability of the arbitration clause in the Sky Zone Agreement: (1) [*15] the physical characteristics of the arbitration clause, (2) the distinguishing features of the arbitration clause, (3) the mutuality of the arbitration clause, and (4) the relative bargaining strength of the parties. After our review of the Agreement in light of the above factors, we hold the arbitration clause is adhesionary and not enforceable because of its placement in the Agreement and its lack of mutuality.
Examining the physical characteristics of the arbitration clause, we observe the arbitration language is consistent in size and font with the other provisions in the Agreement. However, the lack of distinguishing features and the specific placement of the arbitration clause serve to conceal the arbitration language from Sky Zone patrons. The Agreement is structured with check boxes next to the first three paragraphs, followed by five additional paragraphs without corresponding check boxes. The first check box is placed next to a single, six-sentence paragraph generally discussing participants’ risks of injuries and assumption of those risks. The second check box is placed next to a single paragraph containing two long sentences purporting to release Sky Zone from any liability. [*16] The third check box is placed next to one long paragraph discussing multiple topics. Specifically, the arbitration language is located starting in the eleventh line of this third paragraph, following provisions regarding patrons’ physical ability to participate in the activities, assumption of the risks, certification that Sky Zone’s rules have been explained to any children, and expressing agreement to follow those rules.
[Pg 10] In Aguillard, we noted “the arbitration provision, although not distinguished, was not concealed in any way, but rather was contained in a single sentence paragraph separated from the preceding and following paragraphs by double spacing.” 908 So. 2d at 16. Sky Zone argues the paragraph containing the arbitration clause was sufficiently distinguished and brought to patrons’ attention through the use of the check box feature. We disagree. Although patrons are required to check a box adjacent to the top of the third paragraph, significantly no check box was placed next to the arbitration language. In contrast, the other two check boxes in the Agreement were placed next to paragraphs limited to one subject matter. The Agreement also contains five additional paragraphs following [*17] the third paragraph that do not include corresponding check boxes. Each of these are short one-topic paragraphs addressing such items as Sky Zone’s right to videotape and record patrons and to use recordings for promotional materials. Thus, looking at the Agreement as a whole, the arbitration language appears to be the only specific provision not relegated to a separate paragraph or set apart in some explicit way. Here, the two-sentence provision mandating arbitration is camouflaged within the confines of an eleven sentence paragraph, nine of which do not discuss arbitration. The effect of the placement of the arbitration language is to cloak it within a blanket of boilerplate language regarding rules and risks of participating in the Sky Zone activities. Thus, although it is undisputed that Mr. Duhon electronically signed the Agreement, purportedly demonstrating an acceptance of its terms, under Louisiana contract law, we find Mr. Duhon did not truly consent to the arbitration provision.
Additionally, the lack of mutuality in the arbitration clause fortifies our finding that it is adhesionary. The arbitration provision requires only Sky Zone patrons to submit their claims to arbitration. [*18] The entire contract, including the arbitration clause, repeatedly includes “I acknowledge” and “I agree” language, with the “I” referencing [Pg 11] the “applicant” – here, Mr. Duhon. Specifically, the Agreement provides if there are any disputes regarding this agreement “I … hereby waive any right … to a trial and agree that such dispute shall be … determined by binding arbitration …” Although Sky Zone does not expressly reserve itself the right to pursue litigation, nowhere in the Agreement are “the parties” or Sky Zone particularly bound to arbitration. This is in stark contrast to the arbitration clause in Aguillard which clearly applied to both parties by providing: “Any controversy or claim arising from or relating to this agreement or any breach of such agreement shall be settled by arbitration administered by the American Arbitration Association under is [sic] rules, and judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.” 908 So. 2d at 4. Thus, in Aguillard, we found the arbitration clause did not lack sufficient mutuality to invalidate the clause as adhesionary because the arbitration clause severely limited both the defendants’ [*19] and the plaintiff’s right to litigate, and the defendants did not reserve their right to litigate in the document. Id. at 16. Even more troublesome in this case is the punitive provision compelling patrons to pay Sky Zone liquidated damages of $5,000 within sixty days should the patron file suit, with legal interest added at 12% per year. Sky Zone has no mutual obligation in the Agreement.
[HN7] The party seeking to enforce an arbitration provision has the burden of showing the existence of a valid contract to arbitrate. FIA Card Services, 62 So. 3d at 719. Sky Zone has failed to meet this burden. Considering the lack of mutuality together with the obscure placement of the arbitration language in the Agreement, and in comparison to the contract in Aguillard, we are compelled to find the arbitration clause in the Sky Zone Agreement is adhesionary and unenforceable.
In finding this arbitration clause invalid, we have carefully considered [HN8] the Supreme Court’s admonition that, under the doctrine of preemption, state courts [Pg 12] cannot adopt defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue. See, e.g., Concepcion, 563 U.S. at 339; Casarotto, 517 U.S. at 687. Nor can we apply state law rules that stand as an obstacle [*20] to the accomplishment of the FAA’s objectives. Concepcion, 563 U.S. at 343. We are mindful that setting forth a legal requirement relative to a particular form or method of distinguishing or highlighting arbitration clauses, or requiring term-for-term mutuality in an arbitration clause could risk running afoul of the FAA. However, the Supreme Court has made it clear that state courts may apply standard state law contract defenses to arbitration agreements. Id. at 339. Our application of Louisiana contract law to invalidate the arbitration provision in the instant case is consistent with § 2 of the FAA, and we find no conflict between our holding today and Supreme Court decisions discussing preemption.
As explained earlier, [HN9] consideration of enforceability of contracts of adhesion is an issue of consent, and determining whether a party truly consented to the contract terms. Consideration of consent is not limited to arbitration clauses; we consider the issue of consent in any contract. Lack of consent is a generally applicable contract defense. See La. C.C. art. 1927. The factors discussed in Aguillard simply provided a template for considering consent to an arbitration clause contained in a standard contract. Aguillard did not create a per se rule that any [*21] degree of non-mutuality in an arbitration agreement renders it unenforceable, nor did Aguillard prescribe a definitive rule that arbitration agreements must be delineated a particular way to be enforceable. Considering the Aguillard analysis in its entirety, it is clear we viewed the arbitration provision in the context of the overall contract and the surrounding circumstances, and our determination was based on weighing several factors. Were we not to consider factors relative to consent when examining the validity of an arbitration agreement, we would be operating in contravention to the mandate of the Supreme Court by [Pg 13] treating arbitration agreements differently from other contracts. Thus, we find our application of Louisiana contract law to invalidate the arbitration provision in this case is consistent with the savings clauses in § 2 of the FAA and La. R.S. 9:4201.
[HN10] The determination of whether an arbitration clause in a standard form contract is adhesionary is necessarily made on a case by case basis. Based on the facts of this case, the concealment of the arbitration clause and the lack of mutuality compels us to find the arbitration clause in the Sky Zone Agreement is adhesionary and unenforceable. [*22] Accordingly, we find the court of appeal erred in reversing the district court’s ruling on Sky Zone’s exception of prematurity.1 Therefore, the ruling of the court of appeal is reversed, and the ruling of the district court is reinstated.
1 Because we hold the arbitration clause is adhesionary and unenforceable based on consideration of the factors set forth in Aguillard, we pretermit discussion of Mr. Duhon’s additional arguments relative to ambiguity of the Agreement or whether the scope of the arbitration clause covers personal injury.
REVERSED AND REMANDED TO THE DISTRICT COURT FOR FURTHER PROCEEDINGS.
[Pg 1] CRICHTON, J., additionally concurs and assigns reasons.
I agree with the majority decision, and write separately to emphasize that I do not view this decision as a rejection of arbitration agreements. To the contrary, Louisiana law favors the enforcement of arbitration agreements. See La. R.S. 9:4201 (Validity of arbitration agreements). Consistent with the Federal Arbitration Act (“FAA”), arbitration agreements must be placed “upon the same footing” as other types of contracts.” Scherk v. Alberto-Culver Co., 417 U.S. 506, 511, 94 S. Ct. 2449, 41 L. Ed. 2d 270 (1974); see also 9 U.S.C. § 2. But just as Louisiana law should not create obstacles to the enforceability of arbitration [*23] agreements, see AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 131 S. Ct. 1740, 179 L. Ed. 2d 742 (2011) (applying the FAA to preempt a state law condition to the enforceability of an arbitration agreement), neither should Louisiana law create exceptions for arbitration agreements that do not exist for other types of contracts.
Without question, arbitration can be a waiver of the traditional access to our judicial system. And so, applying Aguillard v. Auction Management Corp., 04-2804 (La. 6/29/05), 908 So. 2d 1, this waiver must be in accord with Louisiana contract law, otherwise a party’s consent may be called into question. Thus, a [Pg 2] business entity or individual seeking to draft a contract that includes an arbitration agreement must meet all of the elements of an enforceable contract.
By concealing the existence of the arbitration agreement, this agreement deprives a party of redress in the justice system. To make a bad situation worse, this agreement does not bind Sky Zone to arbitration, yet it penalizes a Sky Zone patron–but not Sky Zone–for seeking to initiate a lawsuit. These blatant asymmetries exhibit a stunning lack of draftsmanship and fail to adhere to the principles set forth in Aguillard. Accordingly, in my view, this Court is bound to deem this agreement unenforceable.
I find that the contract at issue [*24] lacks mutuality to such an extent that the contract is adhesionary. Not only does the contract bind only patrons to arbitration, the contract stipulates that if a patron files a lawsuit against Sky Zone, the patron is liable for $5,000 in liquidated damages. At the same time, Sky Zone is free to file a lawsuit against the patron without any penalty.
[Pg 1] Hughes, J., concurring.
Although I do not agree that the arbitration language was hidden, I concur that it lacked mutuality, and thus with the result.
[Pg 1] WEIMER, J., dissenting.
I agree with the majority’s assessment that the factors outlined in Aguillard v. Auction Management Corp., 04-2804 (La. 6/29/05), 908 So.2d 1, are an appropriate starting point for analyzing the issue presented in this matter.1 See Duhon v. ActiveLaf, LLC, 16-0818, slip op. at 7 (La. 10/ /16). However, I respectfully disagree with the majority’s conclusion that analysis of the Sky Zone Agreement using Aguillard’s four-factor “framework” supports a finding that the arbitration clause is adhesionary and not enforceable. To the contrary, I find the arbitration clause to be valid and enforceable. I also find that analysis of the clause using Aguillard’s factors, viewed in light of the strong and, as Aguillard describes it, “heavy” [*25] presumption in favor of arbitration, dictates that finding of enforceability. Aguillard, 04-2804 at 25, 908 So.2d at 18.
1 While I dissented in Aguillard, I did so solely on grounds that there was a threshold legal question that I believed needed to be resolved before reaching the issue of the enforceability of the arbitration clause: whether the arbitration clause at issue even applied in light of the fact that the Auction Agreement for the Purchase and Sale of Real Estate had been completed. Aguillard, 04-2804 at 1, 980 So.2d at 20-21 (Weimer, J., dissenting.).
As the majority recognizes, a contract of adhesion is broadly defined as “a standard contract, usually in printed form, [often in small print,] prepared by a party [Pg 2] of superior bargaining power for adherence or rejection of the weaker party.” Duhon, 16-0818, slip op. at 7-8 (quoting Aguillard, 04-2804 at 9, 908 So.2d at 8-9.) (Emphasis added.) Pursuant to this definition, a predicate factor to consider in determining whether a contract is adhesionary is the existence of unequal bargaining power. Indeed, this is one of the four factors delineated in the Aguillard analysis. Yet, the majority opinion does not mention, much less weigh, this factor in conducting its analysis-this, despite [*26] the fact that there must be unequal bargaining power for the contract to meet the definitional hurdle of a contract of adhesion in the first instance.
In this case, it is clear that, as in Aguillard, there was not “such a difference in bargaining positions between the parties so as to justify the application of the principle of contract of adhesion to the arbitration clause.” Aguillard, 04-2804 at 22, 908 So.2d at 16-17. As Aguillard explained in defining a contract of adhesion, “[o]wing to the necessities of modern life a particular kind of contract has been developed where one of the parties is not free to bargain.” Id., 04-2804 at 10, 908 So.2d at 9 (quoting Saul Litvinoff, Consent Revisited: Offer, Acceptance, Option, Right of First Refusal, and Contracts of Adhesion in the Revision of the Louisiana Law of Obligations, 47 La.L.Rev. 699, 757-59 (1986-1987)). Such a lack of bargaining power exists where “[t]he party in the weaker position is left with no other choice than to adhere to the terms proposed by the other.” Id. (Emphasis added.) Typical examples of such contracts include those entered into with “airlines, public utilities, railroad or insurance companies.” Id.
In Aguillard, this court recognized that the relative bargaining positions of the real estate auctioneer and the [*27] individual auction participant involved in that case were not so unequal as to justify invalidating the arbitration clause on grounds of adhesion, [Pg 3] reasoning that, although the participant was required to sign the agreement containing the arbitration clause in order to participate in the auction, “the underlying transaction, the real estate auction, [was] not … such a necessary transaction” that the participant “was compelled to enter it.” Id., 04-2804 at 22-23, 908 So.2d at 16-17. Indeed, the participant could have avoided arbitration by not signing the agreement, not participating in the auction, and simply walking away. See Id. 04-2804 at 22, 908 So.2d at 17. Under such circumstances, the court found “nothing sufficient to establish the [auctioneers] were in such a superior bargaining position as to render the [auction participant] a far weaker party or the contract adhesionary.” Id. 04-2804 at 23, 908 So.2d at 17.
The rationale of the court in Aguillard applies with equal force to the Sky Zone Agreement at issue in this case. Here, the Agreement concerns not a “necessity of modern life,” but a purely voluntary recreational activity. The plaintiff was not compelled-physically, economically or otherwise-to visit the trampoline park, jump on its trampolines, or sign the Agreement [*28] containing the arbitration clause. Jumping on a trampoline is simply not a practical necessity of modern living like water, electricity, or even airline flight. Like the auction participant in Aguillard, the plaintiff, here, retained the ultimate bargaining chip in this situation: he could have refused to sign Sky Zone’s Agreement, walked away, and pursued an alternative form of recreational activity. Given these circumstances, there is simply no evidence to establish that Sky Zone was in such a superior bargaining position as to render the plaintiff a far weaker party or the contract adhesionary.
Further, and also contrary to the majority, I find nothing in the Sky Zone Agreement, itself, that would call into question the validity of the plaintiff’s consent to the terms of the Agreement. This determination is based on my analysis of the [Pg 4] three factors that are addressed in the majority’s Aguillard analysis-(1) the physical characteristics of the arbitration clause; (2) the distinguishing features of that clause; and (3) the mutuality of the clause-and my differing conclusions as to each.
In addressing the first Aguillard factor-the physical characteristics of the arbitration clause-the [*29] majority acknowledges that “the arbitration language is consistent in size and font with the other provisions in Agreement.” Duhon, slip op. at 9. In fact, the clause is not in small print or otherwise unreadable, but is just as legible as every other word in the Agreement. The majority apparently concedes, therefore, and I agree, that the physical characteristics of the arbitration clause weigh in favor of finding the clause enforceable.
In addressing the second of the Aguillard factors-the distinguishing features of the clause-the majority, in my view, falls into error. It downplays the very feature that distinguishes the arbitration clause and calls its attention to the participant: the box located next to the paragraph in which the clause appears, a box which must be affirmatively checked before the Agreement can be completed. The majority chooses, instead, to focus solely on the fact that the arbitration language is not set out in a stand-alone paragraph to reach the conclusion that it is “camouflaged” and “cloak[ed] … within a blanket of boilerplate language” to such an extent that plaintiff could not have not consented to its terms, despite affirmatively indicating by checking the electronic box that he [*30] did just that. See Duhon, 16-0818, slip op. at 10. While it is true that the arbitration clause appears in a paragraph not limited to the single topic of arbitration, more than one-half of that paragraph concerns the agreed-upon arbitration, its procedure, its locale, governing law, and the consequences for refusing or otherwise breaching the agreement to arbitrate.2 The arbitration language is hardly [Pg 5] camouflaged. Further, the majority’s suggestion, that failure to set the arbitration language out in a stand-alone paragraph fails to sufficiently distinguish the arbitration clause, ignores the check box. See Duhon, 16-0818, slip op. at 10. The presence of that box is akin to, and has the same legal force and effect as, requiring the plaintiff to initial next to the paragraph, a requirement that affirmatively alerts the participant to the contents and significance of the paragraph.3 Like the arbitration provision in Aguillard, and contrary to the majority, I find the arbitration language in the Sky Zone Agreement was not concealed in any way and that the use of the electronic check boxes reasonably distinguished the clause.
2 See Duhon, 16-0818, slip op’n at 3.
3 Modern technology has introduced what is referred [*31] to as a “clickwrap” agreement as a mechanism for having a “user manifest his or her assent to the terms of the … agreement by clicking on an icon.” See Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 429 (2nd Cir. 2004).
4 See Duhon, 16-0818, slip op. at 13.
5 See Duhon, 16-0818, slip op. at 12.
6 See Duhon, 16-0818, slip op. at 11-13.
7 See [*32] Duhon, 16-0818, slip op. at 11.
Consequently, unlike the majority, I find an analysis of all four of the factors outlined in Aguillard leads to the conclusion that the Sky Zone Agreement is not adhesionary and is valid and enforceable. This conclusion is strengthened, not only by the strong legislative policy that favors arbitration,8 but also by the long-standing principle that signatures to documents are not mere ornaments.9 As Aguillard notes: “It is well[-]settled that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him.” Id., 04-2804 at 22, 908 So.2d at 17. In this case, as in Aguillard, the plaintiff signed the Agreement acknowledging that he “had sufficient opportunity to read this entire document … understand this Agreement and … voluntarily agree to be bound by its terms.”10 As in Aguillard, there was no evidence that the plaintiff was not in an equal bargaining position with Sky Zone because the plaintiff could have avoided arbitration and the contractual provisions as a whole by simply not signing the Sky Zone Agreement and pursuing an alternative recreational [*33] activity. Also as in Aguillard, there is nothing in the Sky Zone Agreement itself-its physical or distinguishing characteristics-that would call into question the validity of the plaintiff’s consent to the terms of the Sky Zone Agreement as indicated by his signature. I would affirm the decision of the court of appeal.
8 See Duhon, 16-0818, slip op. at 5 (citing La. R.S. 9:4201, et seq.).
9 See Tweedel v. Brasseaux, 433 So. 2d 133, 137 (La. 1983) (quoting Boullt v. Sarpy, 30 La.Ann. 494, 495 (La. 1878)).
10 See Duhon, 16-0818, slip op. at 4.
[Pg 1] GUIDRY, J., dissents and assigns reasons.
I respectfully dissent from the majority’s reversal of the ruling of the court of appeal. In my view, the arbitration clause in the Sky Zone Agreement is not part of a contract of adhesion which would render it unenforceable.
As the majority correctly states, a contract of adhesion is a “standard contract, usually in printed form, prepared by a party of superior bargaining power for adherence or rejection of the weaker party.” Aguillard v. Auction Management Corp., 2004-2804, 2004-2857, p.9 (La. 6/29/05), 908 So.2d 1, 8-9. It is undisputed that the real issue in a contract of adhesion analysis is consent, whether the non-drafting party, considered to be the weaker party, truly consented to all the printed terms. Id. In addressing the issue of consent, a court must look to the form, print, or unequal terms [*34] of the contract by considering the factors set forth in Aguillard, namely, the physical characteristics and distinguishing features of the arbitration clause, the relative bargaining position of the parties, and the mutuality or lack thereof in the arbitration clause. Id., 2004-2804, 2004-2857, p. 9, 908 So.2d at 17.
As an initial matter, I disagree with the majority’s finding that the arbitration clause was hidden and camouflaged within the Sky Zone Agreement in such a way that would indicate the plaintiff’s consent to the agreement could be called into [Pg 2] question. Neither the print nor the font size of the arbitration clause differed from that of the remainder of the contract executed by the plaintiff. The standard form agreement was relatively short and straightforward, consisting of a total of nine paragraphs, three of which were set off with boxes to be checked to signify the patron’s consent. The arbitration clause, while not set off alone, consisted of one-half of a paragraph that was required to be checked off. The clause commenced midway through the paragraph and ran until the end of the paragraph. The plaintiff does not dispute that he checked off the box reflecting his consent to the terms of the arbitration [*35] clause.
Furthermore, the record is absent any evidence that the plaintiff was not in an equal bargaining position with the defendants. At the heart of the transaction, the plaintiff was seeking admittance to a recreational facility. Indisputably, this was not a contract to which the plaintiff was compelled to enter into the terms. He could have simply elected to not sign the agreement and bypass the recreational activity. Instead, the plaintiff signed the arbitration agreement acknowledging that he had sufficient opportunity to read the entire document and understood its terms. Having signed the agreement, the plaintiff cannot seek to avoid his obligations by contending that he did not read or understand it. Basic contract law dictates that a party who signs a written instrument is presumed to know its contents and cannot avoid its obligations by contending that he did not read it, that he did not understand it, or that the other party failed to explain it to him. Coleman v. Jim Walter Homes, Inc., 2008-1221, p. 7 (La. 3/17/09), 6 So.3d 179, 183 (citing Tweedel v. Brasseaux, 433 So.2d 133, 137 (La.1983)). To overcome the presumption, the party has the burden of proving with reasonable certainty that he was deceived. Id. The plaintiff is unable to satisfy this burden, because there is no evidence in the record that [*36] the plaintiff made any effort to contact the defendant for an explanation or to discuss the terms of the contract in [Pg 3] any respect.
Next, the arbitration clause at issue substantially mirrors the Aguillard arbitration clause, which this court found to be mutual. The plaintiff has not shown anything in the clause that reserves Sky Zone’s right to litigate disputes related to the agreement that is not equally afforded to the plaintiff. As such, the majority errs in finding the lack of mutuality as to the parties.
[E]ven when the scope of an arbitration clause is fairly debatable or reasonably in doubt, the court should decide the question of construction in favor of arbitration. The weight of this presumption is heavy and arbitration should not be denied unless it can be said with positive assurance that an arbitration clause is not susceptible of an interpretation that could cover the dispute at issue. Therefore, even if some legitimate doubt could be hypothesized, this Court, in conjunction with the Supreme Court, requires resolution of the doubt in favor of arbitration.
Id., 04-2804 at 18, 908 So.2d at 18.
Id., 04-2804 at 18, 908 So.2d at 25. In light of the controlling law indicating [*37] the favorable consideration afforded arbitration agreements, coupled with the plaintiff’s failure to satisfy his burden of proving the contract was adhesionary, the majority erred in invalidating the contract. Accordingly, I respectfully dissent and would affirm the ruling of the court of appeal.
Joseph P. Littlejohn, Plaintiff, v. Timberquest Park at Magic, LLC, and Corporate Challenge, Inc., d/b/a Adventure Más, Defendants.
COUNSEL: [*1] For Joseph P. Littlejohn, Plaintiff: Daniel L. Burchard, Esq., Thomas E. McCormick, McCormick, Fitzpatrick, Kasper & Burchard, P.C., Burlington, VT.
For Timberquest Park at Magic, LLC, Defendant: Andrew A. Beerworth, Esq., Robert G. Cain, Paul Frank Collins PC, Burlington, VT.
For Corporate Challenge, Inc., doing business as Adventure Mas, Defendant: Heather Z. Cooper, Rodney Edward McPhee, Kenlan, Schwiebert, Facey & Goss, P.C., Rutland, VT.
For ENE Evaluator, ENE Evaluator: Michael J. Marks, Esq., MarksPowers LLP, Middlebury, VT.
For Timberquest Park at Magic, LLC, Cross Claimant: Robert G. Cain, Paul Frank Collins PC, Burlington, VT.
For Corporate Challenge, Inc., Cross Defendant: Rodney Edward McPhee, Kenlan, Schwiebert, Facey & Goss, P.C., Rutland, VT.
JUDGES: Geoffrey W. Crawford, United States District Judge.
Plaintiff Joseph Littlejohn was severely injured while participating in an adventure zip-line course at Magic Mountain Ski Area in Londondeffy, Vermont on October 5, 2013. He claims that defendants negligently designed, constructed, and operated the course, leading to the [*2] accident which caused his injuries. Both Littlejohn and defendant TimberQuest Park at Magic, LLC (TimberQuest) have filed motions for summary judgment, seeking a determination regarding the enforceability of a liability waiver and arbitration provision signed by Littlejohn prior to participating in the course.
The following facts are undisputed for the purposes of summary judgment, except where otherwise noted. On October 5, 2013, Littlejohn was injured while traversing a self-guided aerial adventure course at Magic Mountain. At the time of his injury, Littlejohn was seventy-six years old. He had never participated in an adventure course before. Defendant TimberQuest operated the adventure course at the time of the incident. Defendant Corporate Challenge, Inc. d/b/a Adventure Mas designed and constructed the course.
The adventure course consists of a series of rope bridges, ladders, cargo nets and zip lines placed between elevated platforms constructed around trees and poles. Participants gradually gain elevation by climbing and traversing a series of uphill course elements and then return to the bottom of the course by sliding down a series of zip lines. Participants wear a [*3] climbing harness equipped with a “smart belay” system that is meant to keep them attached at all times to both a safety cable and a zip line cable. The “smart belay” system is intended to ensure that the participant is always attached to at least one of the cables.
The trees and poles which support the course platforms are stabilized by guy wires. These guy wires are anchored at one end to the tree or pole where a course platform is located and at the other end to another nearby tree or the ground.
On the day he visited, Littlejohn was equipped with a climbing harness and was instructed how to use the smart belay system’s dual carabiners. According to Littlejohn, he was not warned that there were guy wires on the course in addition to safety cables and zip line cables or that he should avoid clipping onto the guy wires.
Littlejohn climbed through the uphill course elements and began to descend on the zip lines. As he was preparing to descend one of the sections of the course, he mistook a guy wire for the zip line cable. He attached his smart belay to the guy wire and slid down the guy wire. At the bottom he ran into the tree which anchored the other end of the guy wire. He suffered severe [*4] injuries.
Littlejohn’s friend Miki Conn had purchased their tickets for the adventure course through TimberQuest’s website on September 12, 2013.
According to Littlejohn, TimberQuest’s website does not alert customers that they will be required to sign a liability waiver prior to participating in the adventure course. Littlejohn alleges that neither Conn nor he was aware that they would have to sign a liability waiver until they arrived at TimberQuest three weeks later. At oral argument, counsel for both sides cleared up some confusion on this point: there is a notice on the website concerning the liability waiver, but it appears only at the point of purchase by the customer. A company other than TimberQuest provides the ticketing, reservation and credit card services. That company’s website includes a warning to customers that they will be required to sign a liability waiver before they enter the course. Since Littlejohn’s counsel did not actually buy a ticket, he did not encounter this information in preparing his motion for summary judgment.
When they arrived at TimberQuest on October 5, Littlejohn and Conn were each presented with a document entitled “Release of Liability, Waiver [*5] of Claims, Indemnification, and Arbitration Agreement.” The agreement was presented to them in digital format on an electronic device and they were instructed to read and sign it electronically.
The agreement contains a severability clause stating that if any provision is invalidated, the remainder of the agreement will continue to be binding. Littlejohn signed the agreement prior to participating in the course.
Summary judgment is appropriate [*7] where “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). In considering a motion for summary judgment, “[t]he evidence of the non-movant is to be believed, and all justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986).
The enforceability of a contract provision providing for the waiver of a customer’s claims for negligence arising out of recreational activities is a matter of Vermont law. It is governed by four Vermont Supreme Court cases which seek to define the circumstances under which a business may contract out of liability for its own negligent conduct.
The leading case remains Dalury v. S-K-I, Ltd., 164 Vt. 329, 670 A.2d 795 (Vt. 1995), in which the Vermont Supreme Court rejected the exculpatory language in ski tickets issued by the Killington ski resort to its customers. The court reviewed the criteria announced by the California Supreme Court in Tunkl v. Regents of University of California, 60 Cal. 2d 92, 32 Cal. Rptr. 33, 383 P.2d 441 (Cal. 1963),1 and identified the longstanding rule that business owners are responsible for the safety of their premises as the basis on which to strike the exculpatory provisions in the ticket. Dalury, 670 A.2d at 799. The decision [*8] recognized that the ski area–and not the skiers–had the expertise and opportunity to foresee and control hazards and to reduce negligent conduct by its employees.
It concerns a business of a type generally thought suitable for public regulation. The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some members of the public. The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services. In exercising a superior bargaining power the party confronts the public with a standardized adhesion contract of exculpation, and makes no provision whereby a purchaser may pay additional reasonable fees and obtain protection against negligence. Finally, [*9] as a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents.
Tunkl, 383 P.2d at 445-46.
The Dalury decision did not depend upon a determination that skiing was an essential industry or service. “Whether or not [the ski resort] provide[s] an essential public service does not resolve the public policy question in the recreational sports context.” Id. Skiing is not like taking a cab or visiting the hospital–services for which there may be no substitute and which are necessary to everyday life. Rather, the decision rests upon two related principles: the business is open to the general public without regard to special training or ability and the premises owner is in the best position to assure the safety of visitors. These principles have remained unchanged in the cases which have followed Dalury.
There is a significant difference between the expectations of the general [*10] public, which has a right to assume reasonable care on the part of the ski area operator, and a ski racer who consciously undertakes risks that he or she knows may strain or exceed the tolerance of any safety system.
Id. at 38 (Allen, C.J., dissenting). Over time this distinction between members of the general public and people engaging in high-risk sports would become more marked.
In Thompson v. Hi Tech Motor Sports, Inc., 183 Vt. 218, 945 A.2d 368, 372 (Vt. 2008), the Vermont Supreme Court upheld the enforceability of a liability waiver on public policy grounds.2 The case concerned a customer at a motorcycle dealership who was injured on her test ride. The court distinguished the policy concerns at issue in Dalury, explaining that “whereas public policy places the burden of maintaining safe premises on a landowner, public policy concerning motorcycle safety places the burden of safe driving on the operator of the motorcycle.” Id. The court also determined that motorcycle dealerships do not provide a necessary service. Id. at 373. In this respect, the case followed Dalury. In contrast to skiers, however, the customer operated the motorcycle on the public road. There were no business premises relevant to the case. The decision also compared motorcyclists to customers of skydive [*11] companies, underwater diving schools, and mountain guiding services–high-risk sports for people with special skills. Id. Further, unlike the ski area in Dalury, the motorcycle dealership only allowed licensed motorcycle drivers with sufficient experience and training to take its motorcycles out for a ride. Id.
2 Although the waiver provision was held not to be void on public policy grounds, the court concluded that the provision failed release the defendant from liability for negligence because the language was ambiguous. Id. at 375.
Finally, in Provoncha v. Vermont Motorcross Association, 185 Vt. 473, 974 A.2d 1261, 1267 (Vt. 2009), the exculpatory language for an off-road motorcycle racing club was enforced because the activities were “neither of great importance to the public nor open to the public at large.” The majority distinguished the case from Dalury because the premises where the accident occurred was a private racetrack open only to members of a small club of 300 members. Id. The general public was not permitted to ride. The decision also drew a parallel to the enforcement of similar provisions in cases involving parachute jumping, stock car racing, scuba diving, and mountaineering–all sports which were said not to be matters of legitimate public interest. Id.
All four [*12] cases call for a flexible case-specific analysis of the factors originally identified in the Dalury decision. Of these, the least significant is whether a recreational activity is necessary to society. Few of them are. Not surprisingly, skiing and motorcycle riding–the two activities which generated the four decisions–were both found to be inessential to daily life. The factors which were most consistently applied were whether the defendant was in control of the location where the injury occurred and whether these premises were open to the general public. When these factors are present–as in Dalury and Spencer–the exculpatory clauses are not enforced. When these factors are absent–as in Thompson and Provoncha–the exculpatory clauses are likely to be enforced.
The court is not persuaded by TimberQuest’s argument that the Dalury case is on its last legs and will not survive much longer. Although the result was different in Thompson and Provoncha, neither case suggested that any member of the Vermont Supreme Court sought to discard the rule announced in Dalury. Instead, the debate from both sides concerned the differences between activities open to the general public and the more risky [*13] pursuits of riding motorcycles, skydiving, scuba diving and mountaineering, all of which generally take place in settings that are not under the control of the business operators.
The remaining factors set out in Tunkl had no particular application in Dalury and the subsequent cases and have little in this case either. These include whether the activity is suitable for public regulation, whether the business enjoys unequal bargaining strength as a result of its essential nature, and whether the contract is one of adhesion. Tunkl, 383 P.2d at 445-46. Although ski lifts are regulated, see 31 V.S.A. §§ 701-12, the downhill experience is not. Neither are rope courses or motorcycle races. Although a person who sought to negotiate the terms of his ski ticket or his adventure course ticket might not be admitted, in the absence of any necessity the customer can always walk away, which gives him or her some degree of economic strength. And all of the contracts involved in these cases–whether enforced or not–were preprinted contracts of adhesion which appeared on tickets and entrance forms.
Before leaving the Dalury factors, the court must consider one final factor which is heavily relied upon by the defendants. This factor arises from [*14] the language in Dalury that thousands of skiers visit Killington every day, 670 A.2d at 799, while only a few come to TimberQuest’s zip-line course. In the course of discovery, TimberQuest’s owner estimated that he has 1000 visitors a season–the number he put down on his worker’s compensation insurance application. (Doc. 52-6 at 3.) He does not actually have a real count. Assuming a 100-day season, this amounts to ten visitors each day or one or two visitors per hour. (The estimate may not be very reliable, but it is the only number in the record.) The defense argues that a small business which is open to the public should receive treatment which is different from a large business. Although the court has reviewed the language in the Dalury decision about the thousands of daily visitors, the court is not convinced that the size of the business alone plays a significant role in whether the exculpatory clause in the ticket should be enforced.
The course is designed and controlled by defendants. There is no indication in the record that anyone needs to learn to use the course beyond an initial training class offered at the park. (Doc. 52-4 at 14.) It is even more open to the public than skiing, which typically involves beginner’s lessons and some degree of acquired skill. The zip-line course requires no such training or skill.
This court’s decision to invalidate the exculpatory clause on public policy grounds falls within the principles laid down by the Vermont Supreme Court in Dalury and the later cases. It recognizes the longstanding [*16] rule that business owners are responsible for the safety of their premises. It also recognizes the expectation that a recreational activity which is open to the general public will be reasonably safe for use by all users. In other words, the business cannot contract out of liability for negligence in the design, maintenance and operation of its business premises.
For these reasons, the court will not enforce the exculpatory language on the public policy grounds first identified in Dalury.
Littlejohn seeks to invalidate the assumption-of-risk provision in the agreement. The court has already concluded that the first sentence of this provision, which states that by signing the agreement the participant agrees to assume all risks of participating in the adventure course including those caused by TimberQuest’s negligence, is invalid.
However, Littlejohn’s argument does not specifically address the second sentence of this provision, which states that “[t]he Participant … understand[s] that there are inherent risks of participating in the Programs and using the Equipment, which may be both foreseen and unforeseen and include serious physical injury and death.” (Doc. 44-3 [*17] at 2.) Under Vermont law, “a person who takes part in any sport accepts as a matter of law the dangers that inhere therein insofar as they are obvious and necessary.” 12 V.S.A. § 1037. This defense remains viable even if the defendant’s exculpatory agreement is found to be void as contrary to public policy. Spencer, 702 A.2d at 38. This provision of the agreement remains valid and TimberQuest is free to assert assumption of risk as a defense.
There is no third-party claim against TimberQuest for indemnity. The court does not address this issue.
After disposing of the exculpatory clause, the court considers the enforceability of the arbitration clause.
Littlejohn challenges this provision on the following grounds. First, he argues that the provision is procedurally unconscionable because it is contained in small print in a contract of adhesion that was presented to him well after he paid for his tickets. Second, he maintains that the arbitration clause is substantively unconscionable because the third arbitrator is required to be an officer or director of another company that operates a zip-line course, thus tilting the arbitration panel in favor of TimberQuest. Finally, he argues that the arbitration clause lacks mutuality because it has no application to a claim by TimberQuest against a customer.
The first issue is what law governs this dispute. Both the Federal Arbitration Act, 9 U.S.C. §§ 1-16, and the Vermont Arbitration Act, 12 V.S.A. §§ 5651-5681, apply to this arbitration agreement which was formed in Vermont and which the defendant seeks to enforce in Vermont. When the two statutes differ, the federal provision preempts state law. See David L. Threlkeld & Co., Inc. v. Metallgesellschaft Ltd. (London), 923 F.2d 245, 249-50 (2d Cir. 1991) (holding that FAA preempts VAA); Little v. Allstate Ins. Co., 167 Vt. 171, 705 A.2d 538, 540 (Vt. 1997) (same). The claims of unconscionability raised by Littlejohn, however, are matters arising under state [*19] substantive law and are enforced in the same way under either the federal or state arbitration acts. See 9 U.S.C. § 2 (stating agreements to arbitrate “shall be valid, in-evocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract”); AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1746, 179 L. Ed. 2d 742 (2011) (explaining that final phrase of § 2 provides that agreements to arbitrate may be invalidated by generally applicable state-law contract defenses such as fraud, duress, or unconscionability). In considering issues of both procedural unconscionability relating to the form of the contract to arbitrate and substantive unconscionability relating to its content, the court is guided by Vermont decisional law where it is available.
Littlejohn’s claim of procedural unconscionability is unconvincing. Unlike the provisions at issue in Glassford v. BrickKicker, 191 Vt. 1, 35 A.3d 1044, 1053 (Vt. 2011), the arbitration provision is on the middle of the page, directly under the waiver provisions and is prefaced with a conspicuous header stating “Arbitration.” The print is normal-sized. The customer’s signature line is on the second page, giving him an opportunity to read the text before signing. Although the agreement was presented to Littlejohn as a preprinted contract with no real opportunity [*20] to negotiate the terms, he could have declined to participate in the course and requested his money back if he objected to the arbitration provision. This was not a contract for a necessary service such as home inspection where the weaker party was “at the mercy” of the drafter. See id. at 1052. As the Vermont Supreme Court has repeatedly pointed out, “unequal bargaining power alone will not nullify a contract.” Maglin v. Tschannerl, 174 Vt. 39, 800 A.2d 486, 490 (Vt. 2002).
Turning to Littlejohn’s argument of substantive unconscionability, it is obvious that the requirement that the “neutral arbitrator” be drawn from the ranks of the zip-line industry is unfair. It is no more than a requirement that the arbitration be conducted among friends–or at least people who share the same concerns about defending against claims by injured customers. Courts have long refused to enforce arbitration clauses which call for the appointment of panel members who are likely to harbor a bias in favor of one side or another. See Halligan v. Piper Jaffray, Inc., 148 F.3d 197, 202 (2d. Cir. 1998) (discussing possibility of institutional bias due to industry influence over selection of arbitration panel); Rosenberg v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 995 F. Supp. 190, 209 (D. Mass. 1998) (listing cases). TimberQuest’s suggestion that a member of the same industry [*22] will be biased against TimberQuest because he or she will be a competitor willing to do harm to a rival company demonstrates only that the arbitration clause requires the choice of someone likely to hold some form of bias or self-interest–maybe for TimberQuest and maybe against.
The contract between the parties includes a severability clause: “To the extent that any portion of this Agreement is deemed to be invalid under the law of the applicable jurisdiction, the remaining portions of the Agreement shall remain binding and available for use by the Host and its counsel in any proceeding.” (Doc. 52-4 at 32.) Setting aside for a moment the one-sided nature of this clause–“available for use by the Host and its counsel”–the severability clause authorizes the court to reform the arbitration provision by striking the requirement that the neutral be drawn from the zip-line industry and providing for the more conventional selection of a genuinely neutral arbitrator by the other two panel members with provision for selection of a third by the court in the event of a deadlock.
The court will enforce the severability clause to strike the provision requiring the choice of a “neutral” arbitrator [*23] who is likely to hold a bias in favor of the zip-line industry. The remaining question is the issue of mutuality.
Some courts have found arbitration clauses in contracts of adhesion that required one party to go to arbitration but imposed no similar obligation on the other party to be unconscionable. See, e.g., Iberia Credit Bureau, Inc. v. Cingular Wireless LLC, 379 F.3d 159, 170-71 (5th Cir. 2004) (holding arbitration clause in cellular telephone customer service agreement was unconscionable under Louisiana law because it required customer but not provider to arbitrate all claims); Abramson v. Juniper Networks, Inc., 115 Cal. App. 4th 638, 9 Cal. Rptr. 3d 422, 437 (Cal. Ct. App. 2004) (“When only the weaker party’s claims are subject to arbitration, and there is no reasonable justification for that lack of symmetry, the agreement lacks the requisite degree of mutuality.”).
However, this appears to be a minority position. The Second Circuit has rejected the argument that an arbitration clause is void for lack of mutuality where it only requires one party to submit all claims to arbitration. In Doctor’s Associates, Inc. v. Distajo, 66 F.3d 438 (2d Cir. 1995), the court held that an arbitration clause in a franchise agreement was not void for lack of mutuality under Connecticut law, even though the clause required the franchisees to submit all controversies to arbitration while reserving to the franchisor the right to seek summary eviction [*24] against the franchisees. The court explained that mutuality was “not an issue.” Id. at 451. Under modern contract law, the doctrine of “mutuality of obligation,” which requires that a contract be based on reciprocal promises, is no longer required so long as the agreement as a whole is supported by consideration. Id. (citing Restatement (Second) of Contracts § 79 (1979)). The court rejected the idea that the arbitration clause must be considered as a separate contract within a contract, supported by its own consideration. Id. at 452. Likewise, the court held that the doctrine of “mutuality of remedy,” which provides that a “plaintiff shall not get specific enforcement unless the defendant could also have obtained it,” is also defunct and did not support the franchisees’ argument. Id. at 453 (citing Restatement (Second) of Contracts § 363 cmt. c. (1979)). Because the agreement to arbitrate was part of a larger contract which was supported by consideration, it did not fail for lack of mutuality.
Other circuits have reached similar conclusions. See Soto v. State Indus. Prods., Inc., 642 F.3d 67, 77 (1st Cir. 2011) (applying Puerto Rico law); Harris v. Green Tree Fin. Corp., 183 F.3d 173, 181 (3d Cir. 1999) (applying Pennsylvania law); Barker v. Golf U.S.A., Inc., 154 F.3d 788, 791 (8th Cir. 1998) (applying Oklahoma law); see also Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1108 (9th Cir. 2002) (applying California law and holding that employer’s promise to be bound by arbitration process was sufficient consideration for employee’s agreement [*25] to arbitrate); Michalski v. Circuit City Stores, Inc., 177 F.3d 634, 636 (7th Cir. 1999) (applying Wisconsin law and reaching same conclusion as Najd).
Vermont courts have not specifically addressed whether an arbitration clause may be void for lack of mutuality. Vermont contract law does not otherwise require parties to an agreement to have equivalent obligations for the agreement to be valid. See H.P. Hood & Sons v. Heins, 124 Vt. 331, 205 A.2d 561, 566 (Vt. 1964) (“[T]here is no requirement that the option of one promisor must be coextensive with the privilege of termination extended to the counter-promisor.”). “Even if one party has options not provided to the other party … the contract is not per se unsupported by consideration. Rather, a contract is incomplete only if one party’s obligations are so attenuated as to render consideration merely illusory.” Petition of Dep’t of Pub. Serv., 157 Vt. 120, 596 A.2d 1303, 1309 (Vt. 1991) (Morse, J., dissenting); Restatement (Second) of Contracts§ 79 (1981) (“If the requirement of consideration is met, there is no additional requirement of … ‘mutuality of obligation.'”). The FAA would preempt Vermont from imposing such a requirement only in the case of arbitration provisions. See AT&T Mobility LLC, 131 S. Ct. at 1741. Given that Vermont law strongly favors arbitration, Union Sch. Dist. No. 45 v. Wright & Morrissey, Inc., 183 Vt. 555, 945 A.2d 348, 354 (Vt. 2007), the court concludes that mutuality is not required in order for the arbitration provision to be enforceable.
Littlejohn argues that the agreement was unsupported [*26] by consideration because he was forced to sign it weeks after he had paid for the tickets. This argument is without merit. “[A]ny performance which is bargained for is consideration.” Restatement (Second) of Contracts § 72 (1981). TimberQuest’s performance in this case was allowing Littlejohn to use its adventure zip-line course. In exchange, Littlejohn’s friend paid for their tickets. Upon arrival at the park, he promised that he would submit his claims to arbitration or agree to limit his recovery in court to $75,000. As noted above, the payment page required Littlejohn to agree to sign the agreement prior to participating in the course. “In other words, defendant’s offer of services did not extend to anyone who did not sign the Agreement.” Mero v. City Segway Tours of Washington DC, LLC, 962 F. Supp. 2d 92, 103 (D.D.C. 2013) (holding that liability waiver signed by plaintiff who paid for Segway tour in advance was supported by consideration in form of defendant’s provision of Segway and guided tour where confirmation email warned that he would have to sign liability waiver prior to tour). Thus, Littlejohn’s promise was supported by consideration.
As reformed by the court, the arbitration provision is valid. Under the agreement, there is no cap on damages if the participant chooses to go to arbitration. If [*27] the participant chooses to go to court, he or she agrees to seek $75,000 or less in damages. This court only has jurisdiction over a diversity case if the amount in controversy “exceeds the sum or value of $75,000.” 28 U.S.C. § 1332(a). This provision is strictly construed, and does not extend jurisdiction to a claim for an even $75,000. Salis v. Am. Export Lines, 331 Fed. Appx. 811, 814 (2d Cir. 2009); Matherson v. Long Island State Park Comm’n, 442 F.2d 566, 568 (2d Cir. 1971). Thus, Littlejohn may not bring suit in this court. The court accordingly dismisses plaintiff’s negligence claims for lack of subject matter jurisdiction and without prejudice to plaintiff’s right to demand arbitration.
For the reasons stated above, defendant TimberQuest’s motion for partial summary judgment (Doc. 44) is GRANTED. TimberQuest’s cross-motion for summary judgment dismissing all claims (Doc. 52) is DENIED. Plaintiff’s cross-motion for summary judgment (Doc. 46) is GRANTED in part and DENIED in part. The case is dismissed for lack of subject matter jurisdiction without prejudice to plaintiff’s right to demand arbitration.
Dated at Rutland, in the District of Vermont, this 20th day of July, 2015.
Larger issue is should you use arbitration and if you should, when?
The facts of this case are unknown. What is known is the plaintiff enrolled in the defendant college. To enroll she had to sign an Enrollment and Tuition Agreement. The Enrollment and Tuition Agreement (Enrollment form) had a mandatory arbitration clause.
Arbitration is a cross between mediation and a trial. Arbitration is usually done by a member of the American Arbitration Association or by a neutral party picked by both sides. Arbitration is a lot cheaper and faster than going to trial. In many states, an arbitrator cannot award all the types of damages that a jury or judge could. Arbitrators rarely award as much money in damages as a jury does.
Arbitration is supported by state law, which limits damages, compels arbitration and encourages and forces parties to an arbitration clause to arbitrate.
In this case, the plaintiff objected the required arbitration required in the contract. That arbitration was required by the trial court, and the plaintiff appealed to the United States Court of Appeals for the Fifth Circuit. The Fifth circuit court upheld the mandatory arbitration.
The discussion in this case is fairly simple. The plaintiff was unhappy about how the defendant school had retained portions of the federal financial aid she had received. She sued claiming the arbitration clause was void because it was unconscionable.
…is proven by oppressive contract terms such that there is a one-sided agreement whereby one party is deprived of all the benefits of the agreement or left without a remedy for another party’s nonperformance or breach.
The plaintiff argued that the enrollment agreement was unconscionable because it limited damages, had a jurisdiction and venue clause and awarded the defendant attorney fees if it won its case. To overcome some of the issues, the defendant in its written argument to the appellate court considered the attorney fee’s clause stating the clause allowed any winning party to recover its attorney fees.
Consequently, the arbitration clause was not found to be unconscionable in this situation applying Mississippi law.
The real issue to look at in this case is, should you use arbitration if you run an outdoor recreation business or program and if so when.
Probably, if you are an outdoor recreation activity in a state that supports the use of a release, and you have a well-written release, then no, do not require arbitration. The reason is simple; arbitration does not allow motions for summary judgment, which is a quick and final ending to the litigation.
Arbitration will allow the parties to go to arbitration and allow the plaintiff to have their day in court. Usually, a motion for summary judgment is faster, simpler and cheaper.
The only places I would consider arbitration in an outdoor recreation business setting would be those states that do not allow the use of a release, if those states support mandatory arbitration. At the time of the writing of this article, those states are: Louisiana, Montana, and Virginia (although Virginia attorneys continuously tell me lower courts uphold releases?).
Possibly Alaska, Hawaii, New York, Arizona, New Mexico, and West Virginia for some activities were the state legislature or the courts have held that releases are not valid for those activities. However, in all of those states, you must investigate the statute and make sure arbitration works the way you need as well as limits the damages that can be awarded by an arbitrator.
Arbitration is not a cover up for having a bad release. If your release is bad, an arbitration clause is not going to provide any greater protection. Besides if you have a bad release, you probably have a bad arbitration clause also.
For an article on failed arbitration see: Complicated serious of cases created to defend against a mountaineering death.

References: v. 
 v. 
 § 2
 § 9
 § 9
 § 9
 § 1
 § 1
 § 2
 § 2
 § 2
 § 9
 § 1
 art. 1927
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 1
 v. 
 v. 
 v. 
 §2
 v. 
 v. 
 v. 
 v. 
 §2
 v. 
 v. 
 § 2
 § 2
 art. 1927
 § 2
 v. 
 § 2
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 1037
 v. 
 v. 
 § 2
 v. 
 § 2
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 79
 § 363
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 72
 v. 
 § 1332
 v. 
 v.