— A Walmart Auto Care Center lawsuit is on hold as Walmart appeals a district court ruling that denied Walmart's motion to compel arbitration.
The Walmart Auto Care Center class action lawsuit was filed by a customer who purchased tires from Walmart's website in July 2018.
Those tires were installed at a Walmart Auto Care Center where the plaintiff separately purchased the Walmart lifetime tire balance and rotation service at an additional cost.
In April 2020, the plaintiff visited a Texas Walmart Auto Care Center to have the tires rotated and balanced, but he was denied service because the Center was shut down due to COVID-19.
"Our people are working hard to have every part of the store ready to serve customers. To help support our people and focus on the most critical areas of the store right now, we will temporarily shut down our Auto Care Centers to allow those associates to focus on stocking and cleaning in the rest of the store." — Walmart's website / Message posted on March 18, 2020
The plaintiff says he sought service at other Auto Care Centers in Texas, Arizona and California and was also denied service at those locations.
According to the plaintiff, he filed the Auto Care Center lawsuit because Walmart's representations about lifetime tire services were false and misleading.
Walmart Auto Care Center Lawsuit: Arbitration Denied
Walmart argues the court must compel arbitration of the plaintiff’s claims on an individual basis and dismiss the lawsuit because the plaintiff agreed to a binding arbitration clause contained in the website’s Terms of Use when he purchased tires on Walmart.com.
But the lawsuit counters the court cannot compel arbitration because the claim at issue arises from an in-store purchase of tire services, not the purchase of the tires themselves.
According to the plaintiff, that purchase was a separate transaction and should not be subject to the arbitration clause on Walmart's website Terms of Use which related to his earlier online tire purchase.
However, Walmart argues the plaintiff accepted the Terms of Use containing the arbitration clause by completing his tire order on Walmart.com.
“'By clicking Place Order, you agree to Walmart’s Updated Privacy Policy and Terms of Use.' Customers may click on the bold, underlined terms to view those documents. No customer can complete an order on the website without agreeing to Walmart.com’s Terms of Use and Privacy Policy." — Walmart
The plaintiff does not dispute the arbitration clause covers his purchase of tires on Walmart.com. But he argues it has nothing to do with his later separate purchase of the tire service agreement from an Auto Care Center.
Judge Jennifer L. Thurston found both parties already agree the plaintiff did not sign any other contract or document with a mandatory arbitration clause when he purchased the tire services agreement.
"Thus, the central dispute is whether the Walmart.com Terms of Use, which the parties agree cover plaintiff’s actual tire purchase, can be applied to the tire services plaintiff later purchased separately in-store." — Judge Jennifer L. Thurston
According to the judge, by its very terms, the Walmart.com website Terms of Use and arbitration clause applies solely to a customer’s use of “Walmart sites," meaning online purchases.
"Here, the Terms of Use, and its arbitration clause, is specifically limited by its very terms to disputes related to online purchases. As a result, plaintiff cannot be compelled to arbitrate his claims relating to an in-store purchase which is not covered by the Terms of Use provision on its face. By clicking 'Place Order' on defendant’s website, plaintiff did not agree to arbitrate all disputes related to a separate, in-person purchase that was made well after the online purchase." — Judge Thurston
According to the judge, no valid agreement exists between Walmart and the plaintiff and arbitration cannot be compelled.
The lawsuit has been stayed pending the result of Walmart's appeal of the ruling.
The Walmart Auto Care Center lawsuit was filed in the U.S. District Court for the Eastern District of California: Kevin Johnson, v. Walmart, Inc.
The plaintiff is represented by Yoon Law, APC.