In A Victory For NELF And Its Supporters, The United States Supreme Court Holds That Mere Ambiguity In An Arbitration Agreement Does Not Satisfy The Federal Arbitration Act’s Requirement That Parties Must Consent To Class Arbitration.
 
   Lamps Plus, Inc. v. Varela (United States Supreme Court)
 
At issue in this case was whether the Federal Arbitration Act (FAA) permits a court to order class arbitration when the parties’ agreement makes no express mention of class arbitration, but the court concludes nonetheless that certain contractual language is ambiguous and could be interpreted to support class arbitration.  Nearly a decade ago, in Stolt-Nielsen S.A. v. AnimalFeeds Internat’l Corp., 559 U.S. 662, 684  (2010), the Supreme Court held that, because class arbitration is so inimical to the individual arbitration contemplated by the FAA, “a party may not be compelled under the FAA to submit to class arbitration unless there is a contractual basis for concluding that the party agreed to do so.” (Emphasis in original).  In that case, however, the Court did not have to explain what constitutes a “contractual basis” authorizing class arbitration because the parties had stipulated that there was none.  (Not only was their agreement silent on the issue, but the parties in Stolt-Nielsen also made the unusual stipulation before the arbitral panel that this silence meant that they had not agreed to class arbitration.)  Faced in this case with an arbitration agreement that was purportedly ambiguous on the issue of class arbitration, the Court had to decide whether contractual ambiguity alone could  provide the necessary contractual basis authorizing class arbitration under Stolt-Nielsen and the FAA.
 
Lamps Plus and one of its employees, Frank Varela, executed the company’s standard arbitration agreement, in which the two parties (“I” and “the company”) agreed to “resolve[,] by final and binding arbitration as the exclusive remedy,” “all disputes, claims or controversies arising out of or relating to this Agreement, the employment relationship between the parties, or the termination of the employment relationship . . . .”  The agreement also provided Varela with express notice that, by agreeing to arbitrate all employment-related disputes, he was thereby waiving his right to sue in court and obtain a jury trial for those claims.  (E.g., “I agree that arbitration shall be in lieu of any and all lawsuits or other civil legal proceedings relating to my employment.” (emphasis added.)). The agreement further provided Varela with detailed notice of the kinds of employment-related claims that he was agreeing to arbitrate with his employer.
 
Notwithstanding the parties’ arbitration agreement, Varela filed a class action complaint in federal court for the Central District of California, alleging that Lamps Plus, through one of its employees, had wrongfully disclosed personal identifying information of its employees, in a mistaken response to a phishing scam requesting such information.  Lamps Plus moved to compel arbitration on an individual basis.  The district court ordered arbitration, but on a classwide basis.  The Ninth Circuit affirmed, crediting Varela’s argument that there was contractual language (namely, “lawsuits or other civil legal proceedings,” quoted above) that could be interpreted to include class arbitration.  (Needless to say, Lamps Plus argued strenuously that the agreement contemplated individual arbitration only.)  The Ninth Circuit resolved this purported ambiguity by construing it against the drafter, Lamps Plus, under California contract law.  Accordingly, the lower court held that the parties had consented to class arbitration.
 
NELF filed an amicus brief supporting Lamps Plus’s position, arguing that, in fact, the parties’ standard arbitration agreement provided no contractual basis supporting class arbitration.  NELF argued that the agreement unambiguously provided for individual arbitration only.  It was a simple contract between two parties to arbitrate their disputes, and nothing more.  Not only was the agreement dead silent on the issue of class arbitration, but also, NELF argued, none of its boilerplate language could reasonably be interpreted to permit class arbitration.  In particular, NELF argued that the language purportedly authorizing class arbitration (“lawsuits or other civil legal proceedings”) added nothing new to the agreement.  That language merely explained to the employee what it meant to agree, in the first sentence of the agreement, to submit all employment disputes with his employer to binding and final arbitration.
 
In a 5-4 decision issued on April 24, 2019, the Court agreed with NELF that the arbitration agreement at issue did not authorize class arbitration, but for different reasons.  Surprisingly in NELF’s view, the Court, in a majority opinion by Chief Justice Roberts, deferred to the Ninth Circuit’s conclusion that the agreement was ambiguous on the issue of class arbitration, as a matter of California contract law (identifying such deference to state law as the Court’s “normal practice”).  In NELF’s view, however, the entire question of whether an arbitration agreement supplies a contractual basis for class arbitration is a matter of federal law under the FAA.  Even though the Court did defer to state law on that issue, the Court nonetheless went on to hold that this purported ambiguity made no difference under federal law, because neither contractual silence nor contractual ambiguity is sufficient to authorize class arbitration under the FAA.  “Like silence,” the Court explained, “ambiguity does not provide a sufficient basis to conclude that parties to an arbitration agreement agreed to sacrifice the principal advantage[s] of [individual] arbitration” contemplated by the FAA, namely, “its speed and simplicity and inexpensiveness.” (Citation and internal punctuation marks omitted).  In short, a court may not presume that a party has consented to the costly, burdensome and virtually unreviewable procedure of class arbitration, based on merely ambiguous contract language.
 
Importantly, the Court also held that the FAA preempted the lower court’s attempt to resolve the purported contractual ambiguity on class arbitration by applying the general rule of state contract law that construes an ambiguity against the drafter.  As the Court explained, that rule resolves a contractual ambiguity as a matter of public policy, based on considerations of relative bargaining strength.  It does not address in any way what the parties actually agreed to.  The FAA, however, requires the parties’ consent to class arbitration.  Therefore, the application of that general rule of state contract law to resolve the purported ambiguity would have impermissibly imposed class arbitration without the parties’ consent.  This the FAA does not permit
 
While the Court did hold that neither silence nor ambiguity is enough to satisfy the FAA, the Court never did state affirmatively what contractual language is required to warrant class arbitration under the FAA.  At the very least, such language would have to be unambiguous, but most likely it would have to be clear and unmistakable, given the high stakes involved in submitting to class arbitration.  Notably, the Court relied for support on an analogous area of its FAA jurisprudence, in which the Court requires “clear and unmistakable” contract language to overcome the presumption that certain “gateway” issues of arbitrability (such as the validity and scope of the agreement) should be decided by a court, not an arbitrator.  Just as the Court will not presume that parties who have agreed to arbitrate have also agreed to class arbitration:

Arguing that, in a Regulatory Taking case, Penn Central Does Not Establish a Rule that Two Legally and Economically Distinct Parcels Must be Combined as the “Parcel as a Whole” in the Takings Analysis Simply Because They are Contiguous and Commonly Owned.
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​This case had presented the Supreme Court with an opportunity to take a first step toward defining, or at least setting some limits to, the “parcel as a whole,” which has been a key concept in regulatory takings law since the phrase first appeared in the Court’s 1978 decision Penn Central Transportation Co. v. City of New York, 438 U.S. 104.  It is against the value of the parcel as a whole that the extent of any alleged regulatory taking is measured.
The Murrs had attempted sell one of two contiguous lakeside lots they own.  The lot, left (unlike the neighboring lot) undeveloped, was bought and retained specifically for the purpose of appreciation and sale.  They found, however, that the sale was blocked by environmental regulations that rendered the lot individually unsaleable and largely worthless.  After the Wisconsin courts had found that there had been no regulatory taking of the lot because the regulations had legally merged it with the developed lot, the Murrs petitioned the U.S. Supreme Court.
NELF filed a brief in support of the Murrs, urging the court to clarify the concept of the parcel as a whole and arguing that the court should reject the rigid rule used by the Wisconsin courts whereby contiguity of lots plus common ownership equals the parcel as a whole.
NELF first argued on equitable principles that the Court should strike a fair and just balance when identifying the “parcel as a whole.”  Invoking the principles of fairness and justice on which the Court has avowedly founded its takings jurisprudence, NELF expressed its concern, echoed by distinguished legal commentators, that the tendency of courts to expand the “parcel as a whole” concept has created a serious risk of under-compensation of property owners. 
NELF then went on to illustrate analytically the insufficiency of the rigid two factor rule (based on adjacency and common ownership) that had been applied by the Wisconsin court.  NELF argued that these two factors alone are too tenuous to justify evaluating separate parcels as one, and it urged the Court to require at least integrated “unity of economic use” as a third factor (the Murrs’ two parcels, of course, always had different economic uses, one being a developed residential parcel and the other being an investment asset).  NELF developed its argument by drawing a close analogy to well-established principles of eminent domain law.  As NELF pointed out, both eminent domain law and takings law sometimes must answer a common question: what parcel (if any), other than the one directly affected by government action, must be considered along with the affected parcel in order to evaluate the claim for compensation in a fair and just way in relation to the whole of the relevant property?  In eminent domain law this question arises when there has been a taking of one parcel, and additional damages are sought for the economic effects of that taking on a second parcel.  The key factor, widely recognized by the states, is that there must be an integrated unity of economic use of the two parcels; mere contiguity and common ownership are insufficient.  NELF urged the Supreme Court to reject the two-factor test of the Wisconsin court and to adopt “unity of economic use” as the crucial factor.
When the case was argued before the Supreme Court on March 20, 2017, NELF was encouraged to see that its analogy played a role in the oral argument.
However, on June 23, 2017, the Supreme Court, in a five-justice majority opinion written by Justice Kennedy, rejected NELF’s arguments and affirmed the judgment below.  The majority rejected the “formalistic” appeals to state rules made by both sides for determining the parcel as a whole.  The state parties had relied on the merger regulation to supply the defining principle, while the Murrs had argued that state laws that establish the identity of legally separate lots should be taken to identify the presumptive parcel as a whole (a position NELF endorsed).  Instead, the Court used a multifactor test that first gives substantial weight to state laws regarding how land is bounded and divided, then looks at the physical characteristics of the land in question, especially its topography and environmental features, and then assesses the value of the land under the regulation, with special attention to the value of the burdened land to other holdings.  By this test the Court found that the parcel as a whole comprised both Murr lots, and it then concluded that there had been no regulatory taking because the lots, taken together, retained sufficient value.
In a “dissent” which read more like a concurrence in the judgment, Chief Justice Roberts, joined by Justices Alito and Thomas, wrote that while the outcome “does not trouble me,” the majority’s methodology does.  He said that the majority double-counted the factors of the takings analysis proper by incorporating them into the threshold analysis of what constitutes the parcel as a whole.  The result of this error, he said, is to “tip the scales in favor of the government.”  He favored the methodology of the Murrs for identifying the presumptive the parcel as a whole, but apparently believed that the facts of the case overcame the presumption.  (Justice Gorsuch did not take part in the decision.)

Arguing that the National Labor Relations Act does not override the Federal Arbitration Act’s mandate to enforce class and collective action waivers in employment arbitration agreements
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On October 2, the Supreme Court heard oral argument in these three consolidated cases, in which NELF filed an amicus brief in support of the employers, both at the certiorari stage and on the merits..  NELF argued that the Supreme Court should decide that the NLRA does not displace the FAA’s mandate to enforce class action waivers in employment arbitration agreements.  The FAA is the necessary starting point here, and the FAA requires the enforcement of a class action waiver that is contained in a valid arbitration agreement.  AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (“The overarching purpose of the FAA . . . is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.”).  The FAA’s mandate to enforce class action waivers applies equally in “claims that allege a violation of a federal statute, unless the FAA’s mandate has been ‘‘overridden by a contrary congressional command.”  American Exp. Co. v. Italian Colors Restaurant, 133 S.Ct. 2304, 2309 (2013) (emphasis added) (citation and internal quotation marks omitted).  In this case, the burden rests on the employees and the NLRB, as the parties opposing the class action waiver, to show that the NLRA displaces the FAA’s mandate to enforce that contract provision.  See Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 227 (1987).  And to meet their burden, the parties must show that “such an intent [if any] will be deducible from [the NLRA’s] text or legislative history, or from an inherent conflict between arbitration and the [NLRA’s] underlying purposes.” McMahon, 482 U.S. at 227.  And even if this issue of statutory interpretation were a close one, any doubts should be resolved in favor of enforcing the class action waiver under the FAA.  See CompuCredit Corp. v. Greenwood, 565 U.S. 95, 109 (2012) (Sotomayor, J., concurring) (“[W]e resolve [any] doubts in favor of arbitration.”).
The Seventh and Ninth Circuits in this consolidated case held that § 7 of the NLRA, enacted in 1935 at the height of the Great Depression, contains a “contrary congressional command” that displaces the FAA’s mandate to enforce class action waivers in employment arbitration agreements.  That section protects an employee’s right to “to self-organization,  to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157 (emphasis added).
NELF argued that neither the employees nor the NLRB can show that the NLRA displaces the FAA’s mandate to enforce class action waivers in arbitration agreements.  The residual phrase “other concerted activities,” in § 7 of the NLRA, does not mean that employees have the right to join together and sue their employer.  Quite to the contrary, this language simply means that employees have the right to join together in the workplace to discuss working conditions among themselves and with their employer, without having to form a union.  Interpreting this catch-all phrase “other concerted activities” in isolation, as the lower courts have done, would contravene the basic canon of statutory construction that the specific governs the general.  The enumerated examples of concerted activities in § 7 must limit the meaning of the residual phrase “other concerted activities” to similar conduct.  And all of the enumerated examples address employees’ right to associate in the workplace in order to form a union and negotiate a collective bargaining agreement with their employer.
The lower courts’ interpretation of “other concerted activities” would also contravene the NLRA’s statement of purpose, which is to avoid “industrial strife” (such as strikes and lock-outs) by promoting “the friendly adjustment of industrial disputes,” chiefly by protecting employees’ “full freedom of association” in the workplace, so that they may achieve an “equality of bargaining power” with their employer “for the purpose of negotiating the terms and conditions of their employment . . . .”  29 U.S.C. § 151 (“Findings and declaration of policy”) (emphasis added).  Clearly, the NLRA’s stated purpose is to protect employees’ freedom of association in the workplace, not in a courtroom or before an arbitrator, so that they may negotiate their differences, not litigate over them.  Group legal action would be antithetical to this broad aspirational goal of achieving industrial peace through negotiation and compromise.
NELF also argued that there are other clear indications in the NLRA that Congress did not intend to endow employees with a nonwaivable right of group legal action against their employer.  Most conspicuously, Congress chose the phrase “concerted activities,” as opposed to “concerted legal action” or even just “concerted action”--phrases that could entail the right to sue.  When Congress wants to protect or proscribe certain conduct, it uses the word “activity,” as it has done here.  But when Congress wants to create a right to sue, it generally uses the word “action,” whether by itself or in such phrases as “civil action” or “cause of action.” (And, in some instances, Congress has used both words--“activity” and “action”--in the same statutory section, precisely to distinguish between regulated conduct (the activity) and a right to sue over that regulated conduct (the action).)  This point is reinforced by the fact that the NLRA does not provide employees with a private right of action against their employer. Instead, Congress saw fit to delegate exclusive enforcement powers to the NLRB to prosecute claims of unfair labor practices.  See 29 U.S.C. § 160(a) (“Powers of Board generally”) (“The Board is empowered, as hereinafter provided, to prevent any person from engaging in any unfair labor practice . . . .”).  It is unlikely, then, that Congress would have intended the term “other concerted activities” to include group legal action when Congress did not even allow employees to sue on their own behalf.  Moreover, the NLRA was enacted in 1935, decades before the invention of the modern-day, Rule 23 class action, in 1966.  Thus, it is unlikely that Congress would have considered group legal action as a form of “concerted activity” in 1935, since there was no such procedural mechanism as we now understand it.
The NLRA’s legislative history also works against the employees’ and NLRB’s position.  “Concerted activity” was a loaded word with a specific historical meaning when the NLRA was enacted.  In the years preceding the NLRA’s passage, workers were prosecuted under state criminal conspiracy laws, and even under the Sherman Antitrust Act, whenever they acted “in concert” in the workplace, whether to unionize or engage in any other kind of collective conduct.  And so the term “concerted activities,” which appeared in two other Depression-era federal labor statutes immediately preceding the NRLA, was intended to provide affirmative legal protection to collective workplace conduct that had been sanctioned in earlier years.
Finally, NELF argued that the Seventh and Ninth Circuits’ reliance on Eastex, Inc. v. NLRB, 437 U.S. 556 (1978), is entirely misplaced.  Eastex did not involve the FAA, did not involve a dispute over the NLRA’s “other concerted activities” language, and it did not involve any judicial action taken by employees.  Instead, that case decided the unrelated issue whether the purpose or object of certain concerted workplace activity satisfied the NLRA’s “other mutual aid or protection” requirement.  In particular, employees wanted to distribute a union newsletter in the workplace, during nonworking hours, urging employees to oppose recent legislative and executive action on wage and other work-related matters.  The Court held that the political purpose of this concerted workplace activity did satisfy the “other mutual aid or protection” requirement.

Does the Dodd-Frank Act’s whistleblower anti-retaliation provision apply to employees who have not reported a violation of the securities laws to the Securities Exchange Commission, when the Act defines a “whistleblower” as an individual who “provide[s] information relating to a violation of the securities laws to the Commission?”
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NELF, joined by Associated Industries of Massachusetts, filed an amicus brief in the certiorari and merits stages of this case, on behalf of the employer, Digital Realty Trust.  The case is now scheduled for oral argument on November 28.  At issue is the meaning of a subsection of Dodd-Frank’s “Securities whistleblower incentives and protection” section, 15 U.S.C. § 78u-6, which protects “a whistleblower [from retaliation in the workplace] . . . because of any lawful act done by the whistleblower . . . in making disclosures that are required or protected under the Sarbanes-Oxley Act [SOX] . . . .”  15 U.S.C. § 78u-6(h)(1)(A)(iii).  That same section of Dodd-Frank defines a “whistleblower” as “any individual who provides     . . . information relating to a violation of the securities laws to the [SEC] . . . .”  15 U.S.C. § 78u-6(a)(6).  SOX, however, affords protection to the employee who only reports a potential securities law violation to his employer.  And the Ninth Circuit in this case interpreted the disputed subsection of Dodd-Frank to mean that Dodd-Frank also protects the employee who only reports to his employer.
 
This case matters to NELF and its supporters because an employee who sues for whistleblower retaliation under Dodd-Frank is entitled to very generous remedies--a six-to-ten year limitations period, double back pay damages, and a direct right of action in federal court, without having to exhaust any administrative remedies.  15 U.S.C. § 78u-6(h)(1)(B)-(C).  Dodd-Frank also awards the whistleblower a substantial monetary bounty if her reporting to the SEC results in a successful administrative or judicial enforcement action by that agency.  § 78u-6(b). [1]
 
The lower court erred because it abandoned Dodd-Frank’s clear provision that a “whistleblower” is an employee who reports to the SEC.  This definition must apply whenever the word “whistleblower” appears in the disputed subsection of Dodd-Frank.  And applying this definition to the disputed language yields only one meaning.  The employee who reports information to the SEC is protected when he also reports that information to his employer and then suffers retaliation because of his internal reporting.    
 
This subsection of Dodd-Frank therefore protects an employee who has reported to both the SEC and her employer, when the employer does not know that the employee has reported to the SEC.  And this subsection is necessary because, without it, such an employee would not be protected under Dodd-Frank.  She would only be protected under SOX for her internal reporting.  By affording Dodd-Frank protection under these circumstances, then, the disputed subsection encourages an employee to report to both the SEC and her employer.
 
The Ninth Circuit apparently rejected the statute’s plain meaning.  In that court’s view, the disputed language identified a set of circumstances that  was “narrow[] to the point of absurdity . . . .”  Appendix to Petitioner’s Petition for Certiorari 8a.  But it is not for the courts to pass judgment on congressional line drawing of this sort.  Nor is it a court’s role to conform an unambiguous statute such as this one to the court’s own notion of what Congress may have had in mind. 
 
But this is precisely what the Ninth Circuit did here, when it “interpreted” the disputed language to protect employees who are not Dodd-Frank whistleblowers because they have not reported to the SEC.  The Ninth Circuit impermissibly substituted the word “employee” for the defined term “whistleblower.”  And Dodd-Frank’s specific definition of a whistleblower excludes all other possible meanings of that term.  Moreover, Congress chose the word “employee” in SOX’s whistleblower provision but did not do so when it later enacted Dodd-Frank.  It must be presumed that this choice was deliberate.
 
In any event, it is hardly absurd for Congress to assume that an employee may choose to report to both the SEC and her employer, and that the employer may not know that such an employee has reported to the SEC.  Consistent with SOX’s purposes, an employee may wish to report a potential violation to her employer, for speedy internal resolution of the matter.  But, consistent with Dodd-Frank’s purposes, that same employee may also wish to alert the SEC to the matter, to secure her right to pursue Dodd-Frank’s special financial incentives (a potentially large bounty) and legal protection (including the right to recover double back pay).  And the employer may not know that such an employee has reported to the SEC because Dodd-Frank and the SEC regulations both preserve the confidentiality of a whistleblower’s identity.
 
If allowed to stand, the Ninth Circuit’s decision would certainly eviscerate Dodd-Frank’s definition of a whistleblower.  But in so doing, the lower court’s approach would also contravene Congress’ purpose of linking Dodd-Frank’s special financial incentives with its enhanced remedial protection.  In the lower court’s view, an employee can sue for retaliation under Dodd-Frank even though he is not eligible for a bounty under that statute, because he has not reported to the SEC.  But Dodd-Frank’s incentives and remedies are not severable from each other.  Instead, they go hand in hand.  And they are only available to the employee who has earned them both, by reporting information to the SEC.


[1] In particular, Dodd-Frank’s whistleblower provision creates the SEC Investor Protection Fund, § 78u-6(g), and requires the SEC to pay employees between 10% and 30% of the penalties collected by the SEC in a “covered judicial or administrative action,” which is defined as “any judicial or administrative action brought by the Commission under the securities laws that results in monetary sanctions exceeding $1,000,000.”  15 U.S.C. § 78u-6(b).

Arguing that an online business should be allowed to enforce its mandatory arbitration policy and class action waiver against a customer, when those contract terms are viewable by clicking on a clearly marked hyperlink to the business’s “terms and conditions,” and the business has clearly provided that the customer is deemed to accept those terms once she has created an account.
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On October 2, the First Circuit heard oral argument in this case, which raises an important issue of online contract formation that arises from a large and growing category of online standardized consumer agreements.  At issue is whether a business has provided the online customer with sufficient notice of its mandatory arbitration policy and class action waiver, and whether the customer has consented to those terms, when the arbitration provisions are viewable only by clicking on a hyperlink to the agreement’s terms and conditions, and the customer is not required to check an online box indicating that she has accepted those terms.  Instead, the business has clearly provided that the customer will be deemed to have accepted all of the contract terms once she has created an online account.
 
The defendant business in this case is Uber Technologies, Inc., the online ride-sharing service.  When a customer creates an online account with Uber, Uber clearly states that “[b]y creating an Uber account, you agree to the Terms of Service & Privacy Policy.” (Emphasis in original.)  The words “Terms of Service” appear as a highlighted button with a hyperlink that, if clicked, opens a ten-page agreement containing a mandatory arbitration clause and a class action waiver, under the bold-faced heading, “Dispute Resolution.”
 
The plaintiff and putative lead class representative, Rachel Cullinane, argues, so far without success, that she had inadequate notice of Uber’s arbitration provisions because they were viewable only in a separate document, and because Uber did not require her to state affirmatively that she had accepted those terms.  In essence, she argues that Uber structured the online sign-up process to discourage her from finding out about Uber’s arbitration policy.  Consequently, Cullinane filed a putative class action in court, rather than submit her underlying claim to individual arbitration.  (In her underlying claim, she alleges that Uber imposed fictitious fees that were hidden in charges for legitimate local tolls to and from Logan Airport, in violation of Mass. G. L. c. 93A.)
 
NELF filed an amicus brief in support of Uber, arguing that, under well-established principles of Massachusetts contract law, a customer has indeed consented to a business’s arbitration policy once the customer has indicated her consent to all of the terms contained in the agreement, in the manner of acceptance defined by the business.  It is well settled in Massachusetts that a party who enters into a contract is bound by all of its terms, whether she has read them or not.  That is, the contracting party is presumed to know all of the agreement’s terms and has a duty to read them.  This duty applies equally to contract terms that are incorporated by reference in that agreement, such as Uber’s arbitration provisions that are viewable through a hyperlink in this case.  It is also well settled in Massachusetts that the offeror, here Uber, controls the manner of acceptance.  Accordingly, Cullinane accepted Uber’s arbitration policy once she completed the online registration process, because Uber clearly stated that completion of that process would indicate her acceptance of Uber’s contract terms.
 
In short, NELF argues that Massachusetts law treats contract formation as an objective process, in which the contracting party’s actual state of mind is irrelevant once that party has manifested her consent to the terms of an agreement, in the manner of acceptance prescribed by the offeror.  NELF points out that a decision in Cullinane’s favor would contravene these bedrock principles of contract formation.  Such a decision would allow a consumer to evade her contractual responsibility to read and understand the agreement’s terms before she accepts them.  She would then be free to attempt to undo the countless transactions that occur over the internet every day, by pleading ignorance of contract terms that she does not like.  This, in turn, would disrupt and undermine free enterprise on the internet, to the financial detriment of the business community.