Michael Kowalok v. ARB Gaming, LLC d/b/a Modo

Summary

This Report and Recommendation addresses ARB Gaming, LLC d/b/a Modo’s motion to compel individual arbitration in a putative class action alleging that Modo operated an illegal online gambling platform in Ohio and violated Ohio law. The magistrate judge recommends granting the motion, concluding that the plaintiff agreed to an arbitration provision and that challenges based on illegality, mutual assent, and unconscionability do not preclude arbitration.

Holdings

1. The parties entered into an arbitration agreement because Plaintiff accepted Modo's Terms of Use, the agreement covered his claims, and he did not dispute the agreement's existence or scope.
2. Plaintiff's challenge that the Modo contract was illegal and void because it involved unlawful gambling challenged the contract as a whole, not the arbitration provision specifically; under the severability rule, the arbitrator should decide the contract's illegality and enforceability in the first instance.
3. The unilateral-modification provision did not make the arbitration agreement illusory or defeat mutual assent under Ohio law.
4. Plaintiff failed to establish procedural unconscionability, and therefore the court did not reach substantive unconscionability.

Questions Presented

1. Whether the parties formed an agreement to arbitrate Plaintiff's claims through Modo's Terms of Use.
2. Whether Plaintiff's contention that Modo's online gambling operation was illegal rendered the entire contract, including the arbitration and delegation provisions, void and placed the issue before the court rather than the arbitrator.
3. Whether Modo's unilateral-modification provision rendered the arbitration agreement illusory for lack of mutual assent.
4. Whether the arbitration agreement was procedurally or substantively unconscionable under Ohio law.
5. Whether Defendant should be ordered to arbitrate Plaintiff's claims individually rather than on a class or representative basis.

Disposition

other