In re Zappos

Zappos (now owned by Amazon) is an oniine retaler of "apparel, shoes, handbags, home furnishing, beauty products, and accessories," as the court notes.

In 2012, a hacker gained unauthorized access to Zappos computers and downloaded (or attempted to download) customer information. The court notes that "[p]laintiffs have filed complaints in federal district courts across the country seeking relief pursuant to state and federal statutory and common law for damages resulting from the Security Breach."

Zappos filed a Motion To Compel Arbitration based on the fact that its Terms Of Use agreement contained a provision in which the parties agreed to resolve disputes through arbitration.

The court is willing to grant Zappos motion--provided the Terms Of Use Agreement is enforceable. The court holds that the agreement is not enforceable against the customers because there promise to arbitrate lacks consideration.

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