Shingled Out: Eleventh Circuit Binds Homeowners to Individual Arbitration Provisions Displayed on Roofing Shingle Packaging
This case involved a twist on the classic “shrinkwrap” agreement. Here, plaintiff homeowners brought a putative class action seeking damages and declaratory relief on behalf of a class of building owners who had used Tamko shingles. In response, Tamko filed a motion to compel arbitration, contending that by unwrapping and retaining its shingles, the homeowners had accepted the terms of its purchase agreement and warranty which were both printed—in full—on the outside wrapper of every shingle package. Specifically, each package wrapper displayed the all-capped word “IMPORTANT” and warned the purchaser in all caps to “READ CAREFULLY BEFORE OPENING [THE] BUNDLE.” The warranty also contained a mandatory arbitration clause, which was similarly printed in capital letters on the outside of every shingle wrapper and specified that any action against Tamko must be arbitrated individually rather than as part of a consolidated or class action. The district court granted Tamko’s motion and dismissed the homeowners’ complaint, reasoning that the homeowners were bound to arbitrate because through their roofers, they had accepted the terms of Tamko’s purchase agreement, including its mandatory-arbitration provision.
On appeal, the Eleventh Circuit affirmed, finding that (1) Tamko’s packaging sufficed to convey a valid offer of contract terms; (2) unwrapping and retaining the shingles was an objectively reasonable means of accepting that offer; and (3) the homeowners’ grant of express authority to their roofers to buy and install shingles necessarily included the act of accepting purchase terms on the homeowners’ behalf. In so finding, the appellate panel reasoned that “[a]s in the shrinkwrap cases, Tamko’s packaging provided conspicuous notice of its offer—something a reasonable, objective person would understand as an invitation to contract.” The panel further stated that, as master of its offer, Tamko was “free to invite acceptance by specified conduct” and rejected the plaintiffs’ arguments that they never saw the shingle packaging and thus never had a reasonable opportunity to consider Tamko’s purchase terms. Instead, the panel found that “acceptance of Tamko’s purchase terms—arbitration clause and all—was incidental to, and reasonably necessary to accomplish, the homeowners’ express grant of agency authority to their roofers to purchase and install shingles” and therefore, notice of the terms printed on the shingle wrappers was properly imputed to the homeowners. Dye v. Tamko Bldg. Prods., Inc., Case No. 17-14052 (11th Cir. Nov. 2, 2018).