Patricia Sarchi v. Uber Technologies, Inc. , 2022 ME 8 ( 2022 )

MAINE SUPREME JUDICIAL COURT Reporter of Decisions
Decision: 2022 ME 8Docket: Cum-21-117
Argued: October 6, 2021
Decided: January 27, 2022
Panel: STANFILL, C.J., and MEAD, GORMAN, JABAR, HUMPHREY, HORTON, and CONNORS, JJ.
PATRICIA SARCHI, et al.
v.
UBER TECHNOLOGIES, INC., et al.
HORTON, J.
[¶1] Uber Technologies, Inc., and Rasier, LLC, (collectively, Uber) appeal
from an order denying their motion to compel arbitration entered by the
Superior Court (Cumberland County, McKeon, J.). Uber moved to compel
arbitration pursuant to the Terms and Conditions (Terms) of its user
agreement after Patricia Sarchi, a user of Uber’s ride-sharing service, and the
Maine Human Rights Commission (the Commission)1 filed a complaint against
Uber for violating the Maine Human Rights Act, 5 M.R.S. §§ 4592(8), 4633(2)
(2021). We agree with Sarchi’s contention that the Terms were not binding
1 The Commission has the authority to bring a civil action when it “finds reasonable grounds to
believe that unlawful discrimination has occurred.” 5 M.R.S. § 4612(4)(A) (2021). Before filing her
complaint in the Superior Court, Sarchi filed a complaint with the Commission, and the Commission
investigated and found reasonable grounds to believe that discrimination occurred.
2
upon her under the circumstances and affirm the court’s denial of Uber’s
motion to compel arbitration.
I. BACKGROUND
[¶2] The following undisputed facts are drawn from the motion court’s
order. Uber Technologies, Inc., is a business that offers a ride-sharing service
through software applications (apps) for smartphones, including the Uber
driver app and the Uber rider app, that enable registered riders to arrange and
obtain rides from registered drivers. Rasier, LLC, is a wholly owned subsidiary
of Uber Technologies, Inc., that contracts with persons who use the Uber driver
app to register as Uber drivers and provide rides to registered Uber riders.
Patricia Sarchi is blind and uses a guide dog. With the help of her son, Sarchi
registered for an Uber rider account in June 2015 through the Uber app on her
phone.
[¶3] The Uber rider app enables a user to register for an Uber rider
account by interacting with a series of screens. The third screen in the
registration process displays the heading “LINK PAYMENT” at the top in black
font with a light background. The background of the screen beneath the
heading is black. Under the heading, a white bar appears and indicates that the
user should enter a credit or debit card number. Directly under the white bar,
3
bright blue text reads “scan your card” and “enter promo code.” At the bottom
of the screen, light gray text reads “By creating an Uber account, you agree to
the” and beneath that text is darker gray text, which is enclosed in a finely
outlined gray box, that reads “Terms & Conditions and Privacy Policy.” The
darker gray text in the box is hyperlinked to a screen containing additional
hyperlinks to the referenced Terms and Privacy Policy.
[¶4] Once the user clicks on the white bar to enter the credit card
information, a keyboard pops up at the bottom of the screen, pushing the gray
and darker gray text at the bottom upward toward the middle of the screen, as
appears below in Figure 1. When the user has entered payment information, a
small “DONE” button at the top right of the screen becomes clickable. Clicking
“DONE” finalizes the creation of the user’s account, although this is not
specifically indicated anywhere on the screen. Thus, a user can complete the
registration process and create a rider account without clicking on the
hyperlink to the Terms and without reading or affirmatively acknowledging the
Terms.
4
Figure 1
[¶5] At the time Sarchi registered, the Terms included the following
language:
You agree that any dispute, claim or controversy arising out of or
relating to these Terms or the breach, termination, enforcement,
interpretation or validity thereof or the use of the Services
(collectively, ‘Disputes’) will be settled by binding arbitration
between you and Uber . . . . You acknowledge and agree that you
and Uber are each waiving the right to a trial by jury . . . .
[¶6] In contrast to Uber’s app for registering riders, its app for
registering drivers required express assent to the terms and conditions of
5
Uber’s driver contracts. The driver registration process required, first, that the
user click a button labeled “YES, I AGREE” below the statement “By clicking
below you represent that you have reviewed all the documents above and that
you agree to all the contracts above.” Then, after the user clicked “YES, I
AGREE,” a pop-up box with the words “PLEASE CONFIRM THAT YOU HAVE
REVIEWED ALL THE DOCUMENTS AND AGREE TO ALL THE NEW
CONTRACTS” appeared, requiring the user to click another “YES, I AGREE”
button.
[¶7] In November 2016, Uber sent Sarchi and other registered riders an
email notifying them of updates to the arbitration provision and providing a
hyperlink to the updated Terms. Rather than requiring the user expressly to
signify assent to the updated Terms, Uber’s email stated that continued use of
Uber constituted the user’s agreement to the updated Terms. The updated
language read as follows:
You and Uber agree that any dispute, claim or controversy arising
out of or relating to (a) these Terms or the existence, breach,
termination, enforcement, interpretation, or validity thereof, or
(b) your access to or use of the Services at any time, whether before
or after the date you agreed to the Terms, will be settled by binding
arbitration between you and Uber, and not in a court of law.
6
[¶8] The email did not require users to open it or to read or acknowledge
the updated Terms in order to remain registered or to use Uber’s services, and
Sarchi never became aware of the email or the updated Terms.
[¶9] On January 5, 2017, Sarchi, accompanied by her guide dog, attended
a manicure appointment. After the appointment, she asked her manicurist to
call her a taxi, and he suggested that she use Uber. Despite having downloaded
the app in 2015, Sarchi had not used Uber. The manicurist used Sarchi’s Uber
app to request a ride for her. When the Uber driver arrived, he refused to drive
Sarchi because of her guide dog.
[¶10] Sarchi and the Commission filed a complaint on April 23, 2020,
alleging that Uber, through the act of its driver, had violated subsections
4592(8) and 4633(2) of the Maine Human Rights Act, 5 M.R.S. §§ 4592(8),
4633(2). Uber moved to compel Sarchi to arbitrate, and to dismiss or stay the
action pending arbitration pursuant to the Federal Arbitration Act (FAA),
9 U.S.C.S. §§ 1-307 (LEXIS through Pub. L. 117-80, approved December 27,
2021, with a gap of Pub. L. 117-58), and, alternatively, the Maine Uniform
Arbitration Act (MUAA), 14 M.R.S. §§ 5927-5949 (2021).
7
[¶11] The motion court held a nontestimonial hearing and denied the
motion to compel on March 20, 2021.2 The court concluded that Sarchi did not
become bound by either the original Terms during the registration process in
June 2015 or the updated Terms referenced in the November 2016 email.
Noting the absence of Maine precedent on the enforceability of online contracts,
the motion court rested its analysis on the traditional contract principle of
mutual assent and echoed the reasoning of the Massachusetts Supreme Judicial
Court in Kauders v. Uber Technologies, Inc., which discussed a very similar Uber
rider interface. 159 N.E.3d 1033, 1040 (Mass. 2021).
[¶12] Uber timely appealed.3 14 M.R.S. §§ 1851, 5945(1)(A) (2021); M.R.
App. P. 2B(c)(1).
2 Because the court denied the motion to compel, it did not rule on Uber’s motion to stay the
action. Even if Sarchi were required to arbitrate her complaint, the action would not necessarily be
stayed, because the Commission has independent standing under the Maine Human Rights Act. See
5 M.R.S. §§ 4612(4), 4613(1) (2021). The Commission’s authority to file an action derives not only
from discrimination that the Commission determines has occurred against an individual complainant
such as Sarchi but also from the potential for future discrimination against a protected class. Id.
§ 4612(4) (providing that the Commission’s action is appropriate when it “believes that irreparable
injury or great inconvenience will be caused . . . to members of a protected class group”). In this
respect, the Commission is like the federal Equal Employment Opportunity Commission, which “has
independent standing to sue in its own name, and its authority to seek victim-specific remedies for
private individuals is not derivative of the rights of those individuals.” EEOC v. 5042 Holdings Ltd.,
2010 U.S. Dist. LEXIS 8242, at *3 (N.D. W. Va. Jan. 11, 2010) (citing EEOC v. Waffle House, Inc., 534 U.S.
279, 295-97 (2002)).
3 Although no final judgment has been entered in this case, interlocutory appeals from “order[s]
denying an application to compel arbitration” are permitted by 14 M.R.S. § 5945(1)(A) (2021). This
appeal thus falls within an exception to the final judgment rule and is reviewable by this Court. See
id.; Saga Commc’ns of New England, Inc. v. Voornas, 2000 ME 156, ¶ 6 n.4, 756 A.2d 954.
8
II. DISCUSSION
A. Standard of Review
[¶13] “We review the denial of a motion to compel arbitration for errors
of law and for facts not supported by substantial evidence in the record.”4 Snow
v. Bernstein, Shur, Sawyer & Nelson, P.A., 2017 ME 239, ¶ 7, 176 A.3d 729(quotation marks omitted).
B. Applicable Substantive Law
[¶14] This case involves issues of arbitration law and contract law. Both
the FAA and the MUAA promote arbitration.5 See, e.g., Snow, 2017 ME 239, ¶ 10,
176 A.3d 729 (stating that the “Maine legislature[ has a] strong policy favoring
arbitration” (quotation marks omitted)); AT&T Mobility LLC v. Concepcion,
In Snow v. Bernstein, Shur, Sawyer & Nelson, P.A., in which we also considered the enforceability
4
of an arbitration clause and, as here, “the facts before the Superior Court were set out in affidavits”
rather than in a formal evidentiary record, we explained that “[b]ecause those affidavits did not
contain any disputed facts, we determine de novo whether the court made any errors of law and
whether the court’s conclusion is supported by the facts.” 2017 ME 239, ¶ 7, 176 A.3d 729.
The FAA and the MUAA are both generally applicable to Maine arbitration agreements, see Snow,
5
2017 ME 239, ¶¶ 10, 25, 176 A.3d 729, but when addressing arbitration agreements, we generally
focus on the MUAA rather than the FAA, see, e.g., V.I.P., Inc. v. First Tree Dev. Ltd. Liab. Co., 2001 ME 73,
¶¶ 3-4, 770 A.2d 95; Roosa v. Tillotson, 1997 ME 121, ¶¶ 3-4, 695 A.2d 1196; Westbrook Sch. Comm.
v. Westbrook Tchrs. Ass’n, 404 A.2d 204, 206-07 (Me. 1979); 9 U.S.C.S. §§ 1-307 (LEXIS through Pub. L.
117-80, approved December 27, 2021, with a gap of Pub. L. 117-58); 14 M.R.S. §§ 5927-5949 (2021).
In Snow, however, we addressed the question of federal preemption in the arbitration field.
2017 ME 239, ¶¶ 24-26, 176 A.3d 729. We explained that “the FAA contains no express preemptive
provision and does not reflect a congressional intent to occupy the entire field of arbitration [unless]
state law . . . stands as an obstacle to the accomplishment and execution of the full purposes and
objectives of Congress” or “sing[les] out arbitration contracts specifically” such that arbitration
provisions are not on “the same footing as other contracts.” Id. ¶ 25 (quotation marks omitted).
9
563 U.S. 333, 339 (2011) (describing that the FAA “reflect[s] . . . a liberal federal
policy favoring arbitration” (quotation marks omitted)). However, to be
enforceable, an arbitration agreement must constitute a validly formed
contract. See Nisbet v. Faunce, 432 A.2d 779, 782 (Me. 1981) (holding that
under the MUAA “parties to a dispute cannot be compelled to submit the
controversy to arbitration unless they have manifested in writing a contractual
intent to be bound to do so”).6 Substantive arbitrability is governed by
traditional rules of contract law. See, e.g., V.I.P., Inc. v. First Tree Dev. Ltd. Liab.
6 Although the parties have not raised the issue, we note that our decision in Nisbet v. Faunce can
be read to imply that, to be bound by an arbitration provision, a party must have either signed an
agreement containing it or agreed to it in a separate writing. 432 A.2d 779, 782 (Me. 1981)
(interpreting the MUAA to require that an agreement to arbitrate must be reflected in either “a single
signed document” or in “writings exchanged between the parties”). However, that conclusion went
beyond the holding of the case on which we relied to support it. See Me. Cent. R.R. Co. v. Bangor
& Aroostook R.R. Co., 395 A.2d 1107, 1121 (Me. 1978). There, we decided that an exchange of writings
was sufficient to manifest an intent to arbitrate but not that it was necessary. Id. We also stated that
because the FAA is “substantially identical [and] has been interpreted not to require a signed
agreement[,] . . . [w]e cannot believe that the [MUAA] is amenable to a contrary construction.” Id.; see
14 M.R.S. § 5927 (“A written agreement to submit any existing controversy to arbitration . . . is valid
. . . .”); 9 U.S.C.S. § 2 (“A written provision in any . . . contract evidencing a transaction involving
commerce to settle by arbitration a controversy . . . shall be valid . . . .”).
The federal courts have generally held that the FAA requires neither a signed writing nor that
writings be exchanged by the parties. See Galloway v. Santander Consumer USA, Inc., 819 F.3d 79,
89-90 (4th Cir. 2016) (collecting cases and holding that an arbitration agreement need not include a
signature or written assent in order to meet the writing requirement in the FAA). For example, the
Sixth Circuit held that, under the FAA, a written arbitration agreement was enforceable when
employees were given a pamphlet which included an arbitration agreement and the pamphlet stated
that continued employment constituted acceptance. Seawright v. Am. Gen. Fin. Servs., Inc.,
507 F.3d 967, 978 (6th Cir. 2007). Although our statement in Nisbet would bolster Sarchi’s argument,
432 A.2d at 782, we need not rest our conclusion in her favor on Nisbet because Uber has not shown
that Sarchi assented to Uber’s arbitration provision by any sufficient means, whether through her
signature, in a writing, or otherwise.
10
Co., 2001 ME 73, ¶ 3, 770 A.2d 95 (holding that the MUAA renders arbitration
invalid if “the parties did not agree to arbitrate,” a determination to which
“[g]eneral rules of contract interpretation apply”); First Options of Chi., Inc. v.
Kaplan, 514 U.S. 938, 944 (1995) (explaining that “[w]hen deciding whether the
parties agreed to arbitrate a certain matter . . . , courts generally . . . should apply
ordinary state-law principles that govern formation of contracts”).
[¶15] Under Maine contract law principles, “[a] contract exists when the
parties mutually assent to be bound by all its material terms [and] the assent is
either expressly or impliedly manifested in the contract.” McClare v. Rocha,
2014 ME 4, ¶ 16, 86 A.3d 22 (quotation marks omitted). “It is essential to the
formation of a valid and enforceable contract that there be a meeting of the
minds of the parties to the contract, i.e. a mutual assent to be bound by its
terms . . . .” Ouellette v. Bolduc, 440 A.2d 1042, 1045 (Me. 1982). We have held,
however, that a party need not actually have read the terms of the contract in
order to be bound by them. See Francis v. Stinson, 2000 ME 173, ¶ 42,
760 A.2d 209 (stating that “parties to a contract are deemed to have read the
contract and are bound by its terms”).
[¶16] We have not yet considered the enforceability of online contracts,
but other courts have held that the formation of online contracts is governed
11
by the same principles as traditional contracts. See, e.g., Cullinane v. Uber Techs.,
Inc., 893 F.3d 53, 61 (1st Cir. 2018) (noting that courts should not apply
different legal principles just because a contract is formed online); Meyer v.
Uber Techs., Inc., 868 F.3d 66, 75 (2d Cir. 2017) (explaining that “[w]hile new
commerce on the Internet has exposed courts to many new situations, it has
not fundamentally changed the principles of contract” (quotation marks
omitted)).
[¶17] Thus, we apply Maine contract law in deciding whether Uber is
entitled to enforce the arbitration provision against Sarchi. Because we have
not addressed the formation and enforceability of online contracts, however,
we look for guidance from jurisdictions that have explored those topics.
C. Online Contracts
1. Categories of Online Contracts
[¶18] At least four different types of online consumer contracts have
evolved in the internet era: browsewrap, clickwrap, scrollwrap, and sign-in
wrap.7
The “wrap” suffix in online contract nomenclature derives from the “shrinkwrap” agreement, an
7
earlier form of consumer adhesion contract. See Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 366 n.1
(E.D.N.Y. 2015). A shrinkwrap agreement differs from the four online “wrap” agreement types in that
“[a]ssent to a shrinkwrap agreement is not demonstrated at the time of purchase (like in the
clickwrap context), and instead the customer’s actions after receiving the product or service
demonstrates his assent.” Savetsky v. Pre-Paid Legal Servs., Inc., 2015 U.S. Dist. LEXIS 17591, at
*8 (N.D. Cal. Feb. 12, 2015). “A classic shrinkwrap agreement generally involves ‘(1) notice of a
12
Browsewrap exists where the online host dictates that assent is
given merely by using the site. Clickwrap refers to the assent
process by which a user must click “I agree,” but not necessarily
view the contract to which she is assenting. Scrollwrap requires
users to physically scroll through an internet agreement and click
on a separate “I agree” button in order to assent to the terms and
conditions of the host website. Sign-in[]wrap couples assent to the
terms of a website with signing up for use of the site’s services . . . .
Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 394-95 (E.D.N.Y. 2015).
[¶19] Of these four online contract types, only a scrollwrap agreement
requires a user actually to view (albeit not necessarily read) the terms of the
online contract before manifesting assent. “[C]ourts have consistently found
scrollwrap agreements enforceable because they present the consumer with a
‘realistic opportunity’ to review the terms of the contract and they require a
physical manifestation of assent.” Applebaum v. Lyft, Inc., 263 F. Supp. 3d 454,
465 (S.D.N.Y. 2017) (quoting Berkson, 97 F. Supp. 3d at 398-99).
[¶20] Likewise, courts generally uphold clickwrap agreements.8
Berkson, 97 F. Supp. 3d at 397-98 (“[A]lmost every lower court to consider the
license agreement on product packaging (i.e., the shrinkwrap), (2) presentation of the full license on
documents inside the package, and (3) prohibited access to the product without an express indication
of acceptance.’” Id. (quoting Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 428 (2d Cir. 2004)).
8Some of the judicial support for clickwrap agreements may actually have been directed to
scrollwrap agreements, because “courts have not been consistent in distinguishing between
scrollwrap and clickwrap agreements.” Applebaum v. Lyft, Inc., 263 F. Supp. 3d 454, 465 (S.D.N.Y.
2017); see also Berkson, 97 F. Supp. 3d at 398 (“Some court decisions that use the term ‘clickwrap’
are in fact dealing with ‘scrollwrap’ agreements . . . .”). As an example, the court in Applebaum points
to a Second Circuit opinion that characterizes clickwrap agreements as “typically requiring users to
13
issue has found ‘clickwrap licenses’ . . . enforceable.” (quotation marks and
alterations omitted)); Kauders, 159 N.E.3d at 1050 (noting that clickwrap
agreements “are regularly enforced” and “are certainly the easiest method of
ensuring the terms are agreed to” (quotation marks omitted)); Meyer, 868 F.3d
at 75 (“Courts routinely uphold clickwrap agreements . . . .”); In re Facebook
Biometric Info. Priv. Litig., 185 F. Supp. 3d 1155, 1165 (N.D. Cal. 2016) (“[T]he
closer digital agreements are to the clickwrap end of the spectrum, the more
often they have been upheld as valid and enforceable.”); Hancock v. Am. Tel.
& Tel. Co., 701 F.3d 1248, 1256 (10th Cir. 2012) (“Clickwrap agreements are
increasingly common and have routinely been upheld.” (quotation marks
omitted)).
[¶21] A browsewrap agreement, in contrast, is one in which “website
terms and conditions of use are posted on the website typically as a hyperlink
at the bottom of the screen.” Kauders, 159 N.E.3d at 1054 n.26 (quotation
marks omitted). Browsewrap agreements “are often unenforceable because
there is no assurance that the user was ever put on notice of the existence of
the terms or the link to those terms.” Id.; see also Berkson, 97 F. Supp. 3d at 396
click an ‘I agree’ box after being presented with a list of terms or conditions of use.” 263 F. Supp. 3d
at 465-66 (alteration omitted) (quoting Nicosia v. Amazon.com, Inc., 834 F.3d 220, 233 (2d Cir. 2016)).
14
(noting that courts generally do not enforce browsewrap agreements against
individuals); In re Facebook, 185 F. Supp. 3d at 1164-65 (holding that
browsewrap agreements are at the opposite end of the “enforceability
spectrum” from clickwrap agreements).
[¶22] “Sign-in wrap” agreements are a hybrid of clickwrap and
browsewrap agreements. In re Juul Labs, Inc., 2021 U.S. Dist. LEXIS 157126, at
*27 (N.D. Cal. Aug. 19, 2021). Instead of requiring the user to click a box
indicating agreement to the terms of service, as with a clickwrap agreement,
sign-in wrap agreements notify the user of “the existence and applicability of
the site’s ‘terms of use’ when [the user] proceed[s] through the website’s
sign-in or login process,” Berkson, 97 F. Supp. 3d at 399, effectively “bundl[ing]
signing up for a service with agreement to the website’s contractual terms,”
Selden v. Airbnb, Inc., 4 F.4th 148, 156 (D.C. Cir. 2021). Determining the
enforceability of a sign-in wrap agreement “requires a fact-intensive inquiry.”
Id. (quotation marks omitted); see also McKee v. Audible, Inc., 2017 U.S. Dist.
LEXIS 174278, at *17-18 (C.D. Cal. July 17, 2017).
15
[¶23] In their analyses of the enforceability of online agreements, courts
have focused on three primary variables in the technical features of the
presentation of terms and conditions:9
• Conspicuous terms or access to terms: The more likely that the user
must at least view, if not read, the terms themselves as a condition of
utilizing the website or the product, the more likely that a court will
hold that the terms are binding. See, e.g., Kauders, 159 N.E.3d at 1049.
If the user can use the website or the product without viewing the
terms themselves, the conspicuousness of a hyperlink to the terms
will strongly influence the determination of whether the terms are
binding. See Berkson, 97 F. Supp. 3d at 401-02; Kauders, 159 N.E.3d
at 1050. A hyperlink to terms should be clearly labeled as such—e.g.,
“Terms and Conditions”—and be readily recognizable as a hyperlink
according to the conventions of the internet, by, for example,
appearing in brightly-colored, underlined text. See Cullinane, 893 F.3d
at 63; Meyer, 868 F.3d at 77-78.
• Uncluttered screen: Where notice or the hyperlink to agreement terms
appears on an interface that is cluttered with other features and
therefore is not easily spotted, an agreement is less likely to be binding
on the user. See Meyer, 868 F.3d at 78; In re Juul, 2021 U.S. Dist. LEXIS
157126, at *36 (holding that the agreement was enforceable where
the page was “relatively clear and uncluttered”); Selden, 4 F.4th at
156-57 (upholding the agreement where the notice was “unobscured
by other visual elements”).
9 Beyond these variables having to do with the features of the website, the substantive content of
the terms of an online contract bears upon their enforceability, as it does upon the enforceability of
traditional contracts. See, e.g., Restatement (Second) of Contracts §§ 178, 208 (Am. L. Inst. 1981).
Although contractual arbitration provisions are commonly enforced, see Snow, 2017 ME 239, ¶ 10,
176 A.3d 729, our conclusion that the features of Uber’s interface were insufficient to bind Sarchi to
the Terms obviates any need to address the substantive enforceability of Uber’s arbitration
provisions, including whether public policy precludes the enforcement of an arbitration provision
when the underlying claim involves alleged unlawful discrimination.
16
• Explicit manner of expressing assent: The more obvious the user’s
assent to terms, the more likely the terms will be binding. See, e.g.,
Kauders, 159 N.E.3d at 1054-55. A clear and specific description of the
effect of clicking on a button or a link is more likely to bind the user
than a description that is vague. See id.; Peter v. Doordash, Inc.,
445 F. Supp. 3d 580, 582, 587 (N.D. Cal. 2020) (holding that the
agreement was enforceable where the notice read “by tapping Sign Up,
Continue with Facebook, or Continue with Google, you agree to our
Terms”). Likewise, an agreement is more likely to be enforceable if
the button to be clicked clearly signals assent, such as “I agree,” rather
than, for example, “continue” or “register.” See Kauders, 159 N.E.3d at
1054-55; Nicosia v. Amazon.com, Inc., 834 F.3d 220, 236-37 (2d Cir.
2016) (“[C]licking ‘Place your order’ does not specifically manifest
assent to the additional terms.”). But see Meyer, 868 F.3d at 79-80.
[¶24] Based on criteria such as these, browsewrap agreements occupy
one end of the spectrum of enforceability, clickwrap (and scrollwrap)
agreements occupy the other, and sign-in wrap agreements fall somewhere in
the middle, with their precise location on the spectrum almost entirely
dependent on the features of the interfaces on which they appear. See In re
Facebook, 185 F. Supp. 3d at 1165.
2. Two-Step Inquiry
[¶25] The increasing prevalence of online contracts means that
“reasonably conspicuous notice of the existence of contract terms and
unambiguous manifestation of assent to those terms by consumers are
essential if electronic bargaining is to have integrity and credibility.” Cullinane,
893 F.3d at 61 (alteration, quotation marks, and emphasis omitted). The basic
17
question presented is “what level of notice and assent is required in order for a
court to enforce an online adhesion contract?” Id. (quotation marks omitted);
see also Colgate v. JUUL Labs, Inc., 402 F. Supp. 3d 728, 764 (N.D. Cal. 2019)
(“[T]he question is whether the plaintiffs were on inquiry notice of the
arbitration provision by virtue of the hyperlink to the Terms of Service on the
sign-up page and manifested their assent to the agreement by clicking
‘sign up.’”). The essential requisites of reasonable notice and manifestation of
assent have led many courts, in determining the enforceability of online
adhesion contracts, to conduct a two-step inquiry. See Cullinane, 893 F.3d at 62;
Meyer, 868 F.3d at 76; Kauders, 159 N.E.3d at 1049.
[¶26] The first step focuses on whether a user had reasonable notice of
the online contract terms “consider[ing] the perspective of a reasonably
prudent . . . user” of online technology. Meyer, 868 F.3d at 75, 77 (holding that
whether a user is on notice “turns on the clarity and conspicuousness” of the
terms (alteration and quotation marks omitted)); see also Kauders, 159 N.E.3d
at 1050 (evaluating “the clarity and simplicity of the communication of the
terms”); Cullinane, 893 F.3d at 62 (analyzing whether “terms were reasonably
communicated” to the user). Whether an interface provides reasonable notice
of the terms of an online contract does not necessarily turn on the classification
18
of the agreement as a scrollwrap, clickwrap, browsewrap, or sign-in wrap
agreement; rather, it is essentially a function of how likely the terms and
conditions themselves, or a hyperlink to them, are to come to the attention of
the reasonably prudent user.
[¶27] The requirement of reasonable notice is necessarily satisfied if the
user has actual notice of the terms, either by reviewing them or by otherwise
interacting with them, such as by having to scroll through them. See Kauders,
159 N.E.3d at 1049 (concluding that actual notice will “generally be found
where the user must somehow interact with the terms before agreeing to
them”). “Absent actual notice, the totality of the circumstances must be
evaluated in determining whether reasonable notice has been given . . . .” Id.
[¶28] If the user received reasonable notice of the terms of the online
contract, the analysis moves to the second step—whether the user has
manifested assent to the terms. Meyer, 868 F.3d at 76; Cullinane, 893 F.3d at 62;
Kauders, 159 N.E.3d at 1050-51. Under Maine law, a party’s assent to the terms
of a contract can be express, as through words of agreement, or implied, as
through conduct, but the words or conduct must objectively indicate an intent
to be contractually bound. See Forrest Assocs. v. Passamaquoddy Tribe,
2000 ME 195, ¶ 9, 760 A.2d 1041. In the context of online contracts, the
19
question of assent often comes down to whether the website adequately
informs the user that conduct such as clicking on a button constitutes assent to
contract terms so as to justify an inference that the user intends to be bound.
See Restatement (Second) of Contracts § 19 (Am. Law. Inst. 1981) (“[T]he
conduct of a party is not effective as a manifestation of h[er] assent unless [s]he
. . . knows or has reason to know that the other party may infer from h[er]
conduct that [s]he assents.”). It follows that courts are more likely to enforce
clickwrap contracts, which require explicit assent to contract terms, than
browsewrap and sign-in wrap contracts, which do not.
[¶29] We conclude that this two-step analysis, focusing on notice and
assent, is appropriate for determining the enforceability of online contracts
generally, and we turn to the question whether a contract was formed between
Uber and Sarchi during the 2015 registration process, through the
November 2016 email, or both.
D. Analysis
1. The Registration Process
[¶30] Uber’s registration process for riders is best characterized as a
sign-in wrap agreement because, rather than requiring an affirmative
manifestation of assent by the user, it informs the user that she is assenting to
20
the Terms by creating an Uber rider account. In contrast, Uber’s registration
process for drivers involves a clickwrap agreement in which the user must
affirmatively signify agreement with the terms.
[¶31] The fact that Uber’s registration interface has changed periodically
complicates the analysis, because the enforceability of a sign-in wrap
agreement is highly dependent on the particular layout and features of the
interface at issue. See, e.g., Meyer, 868 F.3d at 76. Ultimately, based on the
appearance of the interface at the time Sarchi registered for Uber, we conclude
that she was not bound by the Terms because Uber’s registration procedure did
not provide her with reasonable notice of their content and did not obtain a
valid manifestation of her assent to be bound by them.
a. Reasonable Notice
[¶32] Although the decisions in Kauders and Cullinane are not binding,
the similarities between the Uber interfaces that they analyzed and the
interface at issue here mean that both decisions provide helpful guidance on
whether Uber’s interface gave Sarchi reasonable notice of the Terms.10 See
Cullinane, 893 F.3d at 56-57; Kauders, 159 N.E.3d at 1040.
10 In Cullinane v. Uber Technologies, Inc., the interface at issue was substantially similar to the one
here, except that the text at the bottom of the screen reading “Terms of Service & Privacy Policy” was
white, as opposed to gray, and was slightly larger. 893 F.3d 53, 56-57 (1st Cir. 2018). The description
of the interface at issue in Kauders v. Uber Technologies, Inc., matched that of the interface in Cullinane.
21
[¶33] In Cullinane, the court concluded that the Uber interface did not
provide reasonable notice of the terms to users who had not actually reviewed
them. Cullinane, 893 F.3d at 63-64. The court noted that the hyperlink to the
terms was not clearly identifiable as a hyperlink and that more eye-catching
text on the screen detracted from the hyperlink’s prominence:
It is . . . the design and content of the “Link Card” and “Link
Payment” screens of the Uber App interface that lead us to conclude
that Uber’s “Terms of Service & Privacy Policy” hyperlink was not
conspicuous. Even though the hyperlink did possess some of the
characteristics that make a term conspicuous, the presence of other
terms on the same screen with a similar or larger size, typeface, and
with more noticeable attributes diminished the hyperlink’s
capability to grab the user’s attention. If everything on the screen
is written with conspicuous features, then nothing is conspicuous.
Id.
[¶34] In Kauders, the Massachusetts Supreme Judicial Court likewise
determined that Uber’s terms were not binding on the plaintiff, reasoning that
(1) “the interface did not require the user to scroll through the conditions or
even select them,” (2) the notice provided in the rider app was much less
conspicuous than the notice in the driver app because it did not require
checking a box, “enabl[ing], if not encourag[ing], users to ignore the terms and
Kauders v. Uber Techs., Inc., 159 N.E.3d 1033, 1040 (Mass. 2021). Sarchi incorrectly asserts that the
interface at issue in Kauders was “the very same” as the one here. See id.22
conditions,” and (3) the placement of the terms and conditions at the end of the
process on the “LINK PAYMENT” screen failed to draw the user’s attention to
the terms. 159 N.E.3d. at 1052-53.
[¶35] All of the observations about the Uber registration interface for
riders in Cullinane and Kauders that led those courts to decide that Uber had
not provided reasonable notice of its terms apply fully here. The appearance of
the hyperlink to the Terms, specifically the lack of underlining and the muted
gray coloring, means that it is not obviously identifiable as a hyperlink. The
sequence in which it appears during the registration process renders it less
likely to draw the user’s attention. Its placement on the screen, particularly in
light of the more prominent features on the same page, renders it relatively
inconspicuous. Based on the totality of the features of the Uber interface that
Sarchi utilized in registering—the focus on entering payment information
rather than on the Terms; the small, lowercase font in which the notice and the
Terms appeared; and the lightly outlined box containing the link to the Terms
that did not have the appearance of a hyperlink or a clickable button—we
conclude that the Uber interface Sarchi used to register failed to provide a
prudent user with reasonable notice of the Terms.
23
[¶36] Uber argues that Kauders and Cullinane represent the minority
rule.11 Uber relies heavily on Meyer, where the Second Circuit concluded that a
different version of Uber’s registration interface for rider accounts provided
the plaintiff with reasonable notice of Uber’s terms. Meyer, 868 F.3d at 78-79,
81-82. However, the differences between the registration interface at issue in
Meyer and the one at issue here are highly material. The interface in Meyer
increased the likelihood that the terms would come to the user’s attention—the
hyperlink text to the terms in Meyer was underlined and in blue, and the
hyperlink itself appeared in close proximity to the “REGISTER” button.12 Id.
at 71, 81. In concluding that there was reasonable notice, the Second Circuit
11 Contrary to Uber’s arguments, the overwhelming majority of case law does not support its
position that Uber’s interface gave Sarchi reasonable notice of the Terms. As Uber contends, some
decisions involving similar interfaces to the one involved here have enforced Uber’s arbitration
provisions. See Cordas v. Uber Techs., Inc., 228 F. Supp. 3d 985, 988, 990 (N.D. Cal. 2017); Cubria v.
Uber Techs., Inc., 242 F. Supp. 3d 541, 544, 548 (W.D. Tex. 2017); West v. Uber Techs., Inc., 2018 U.S.
Dist. LEXIS 233550, at *9-10, *14 (C.D. Cal. Sept. 5, 2018); Grice v. Uber Techs., Inc., 2020 U.S. Dist.
LEXIS 14803, at *3-4, *33 (C.D. Cal. Jan. 7, 2020). However, some of the cases cited by Uber, like Meyer
v. Uber Technologies, Inc., involve a significantly different interface and are therefore less helpful
given the fact-specific nature of this inquiry. See Meyer, 868 F.3d 66, 81 (2d Cir. 2017); Flores v. Uber
Techs, Inc., 2018 U.S. Dist. LEXIS 219400, at *11-13 (C.D. Cal. Sept. 5, 2018) (stating that the
registration process was the same as in Meyer, 868 F.3d 66); Johnson v. Uber Techs., Inc., 2018 U.S.
Dist. LEXIS 161155, at *10-12 (N.D. Ill. Sept. 20, 2018) (relying on Meyer and describing the interface
displaying the words “Terms of Service & Privacy Policy” as “appear[ing] in a larger-sized font”).
12 In addition to the color and underlining of the hyperlink, the screen at issue in Meyer looked
considerably different from the one at issue here and in Cullinane or Kauders because, instead of
clicking the “DONE” button in the upper right corner of the screen to complete registration, the user
would click a large “REGISTER” button, which appeared in the middle of the screen in closer
proximity to the hyperlinked terms. Compare Cullinane v. Uber Techs., Inc., 893 F.3d 53, 56-57
(1st Cir. 2018), and Kauders, 159 N.E.3d at 1040, with Meyer, 868 F.3d at 70-71.
24
relied on the uncluttered nature of the screen and the conspicuousness of the
blue hyperlinked text. Id. at 76-81. Those material differences distinguish
Meyer from this case. Id. at 70-71, 81.13
b. Manifestation of Assent
[¶37] Even if the Uber registration process for rider accounts had
provided reasonable notice of the Terms, we agree with Sarchi that the process
was insufficient to place her on notice that registration as a rider would
constitute assent to the Terms.
[¶38] We reject Uber’s contention that Sarchi became bound to the
Terms by clicking on the “DONE” button after entering payment information.
First, to a reasonably prudent user, clicking “DONE” would not indicate assent
Our conclusion and the context-specific methodology underlying it comport with cases dealing
13
with other sign-in wrap agreements. See McKee v. Audible, Inc., 2017 U.S. Dist. LEXIS 217391, at
*22-24 (C.D. Cal. Oct. 26, 2017) (holding that there was not reasonable notice in part because “the
disclosure appears in small, undifferentiated font” and because it did “not appear directly below the
button [and was] separated by several lines of text, an Audible insignia, and a border”); Berkson,
97 F. Supp. 3d at 404 (“The hyperlink to the ‘terms of use’ was not in large font, all caps, or in bold. . . .
By contrast, the ‘SIGN IN’ button is very user-friendly and obvious, appearing in all caps . . . .”).
Although courts have occasionally held that sign-in wrap agreements do give reasonable notice to
users, the features of the websites at issue in some of those cases are distinguishable from the
features of the interface in this case. See, e.g., Selden v. Airbnb, Inc., 4 F.4th 148, 152, 155-56 (D.C. Cir.
2021) (concluding that there was reasonable notice because the hyperlinked terms appeared in red
text on a white background on the uncluttered sign-up screen); Snow v. Eventbrite, Inc., 2020 U.S. Dist.
LEXIS 193249, at *19-20 (N.D. Cal. Oct. 19, 2020) (explaining that the user had reasonable notice of
a sign-in wrap agreement when the “I accept the terms of service” statement was directly above the
“pay now” button and the hyperlink appeared in blue); Peter v. Doordash, Inc., 445 F. Supp. 3d 580,
582-83, 587 (N.D. Cal. 2020) (concluding that there was reasonable notice where the hyperlink to the
terms was blue and underlined).
25
to a contract or, in fact, anything beyond having completed the registration
process. Given that the heading of the window read “LINK PAYMENT,” a
reasonable user could easily think that clicking “DONE” meant that she was
merely done entering her payment information, not done creating an account,
much less agreeing to specific terms and conditions of the account. As Uber
points out, the hyperlink notice leading to the Terms was on the same page as
the “DONE” button. But the notice did not refer to the “DONE” button or explain
the significance of clicking the “DONE” button, as it could have by indicating, for
example, “By clicking DONE, you agree to the Terms.”
[¶39] In addition to the ambiguity of the “DONE” button, the distance on
the screen between the notice and the button was problematic. The “DONE”
button appeared on the upper right corner of the screen, as far as possible from
the notice and hyperlink, which appeared at the bottom of the screen. As the
court in Meyer noted, the proximity of the notice to the button is important in
determining whether the act of clicking the button can serve as a manifestation
of the user’s assent. 868 F.3d at 80.
[¶40] The courts that have addressed Uber’s registration process have
been inconsistent on whether the user actually manifests assent to the terms
when registering for an account. Decisions concluding that the user does
26
manifest assent have sometimes evaluated a different interface than the one at
issue here. See id. at 81; Flores v. Uber Techs., Inc., 2018 U.S. Dist. LEXIS 219400,
at *12-13 (C.D. Cal. Sept. 5, 2018); Johnson v. Uber Techs., Inc., 2018 U.S. Dist.
161155, at *10-12 (N.D. Ill. Sept. 20, 2018). In Meyer, for instance, the Second
Circuit held that the user had manifested assent, but it rested its conclusion on
the proximity of the hyperlinked terms to the “REGISTER” button in the
iteration of the interface at issue in that case. 868 F.3d at 79-80. In Kauders,
although the court did not reach the issue of assent because it found that there
was not reasonable notice, the court noted that “the interface . . . obscured the
manifestation of assent” because clicking “DONE” on the payment screen is
“different from, and less clear than, other affirmative language such as ‘I agree.’”
159 N.E.3d at 1054.14
[¶41] Our conclusion that Sarchi did not manifest assent does not
necessarily conflict with courts’ analyses of other sign-in wrap agreements.
Although many courts have held that sign-in wrap agreements do obtain users’
valid assent, the cases before those courts often presented distinguishable facts.
See, e.g., In re Juul, 2021 U.S. Dist. LEXIS 157126, at *17 (“[T]he [users] were
The court in Cullinane did not reach this question because it held that Uber had not succeeded
14
in establishing reasonable notice. See Cullinane, 893 F.3d at 64.
27
required to affirmatively check a box . . . .”); Selden, 4 F.4th at 156-57 (holding
that the user manifested assent where the language of the button—“Sign up”—
matched the notice—“By signing up, I agree . . .”); In re Facebook, 185 F. Supp.
3d at 1166 (holding that the agreement was enforceable where the notice
language matched the button).
[¶42] We also agree with the Kauders court that, although not
dispositive, Uber’s use of a clickwrap agreement in its driver app undermines
its defense of its use of a sign-in wrap agreement for riders. “Clearly, Uber
knows how to obtain clear assent to its terms.” Kauders, 159 N.E. 3d at 1055.
2. The November 2016 Email
[¶43] Finally, Uber contends that, whether or not Sarchi’s registration of
her rider account bound her to the Terms, Sarchi’s use of Uber after Uber sent
her the November 2016 email with the updated Terms “constituted a second
and independent . . . acceptance.” Like the original Terms, the updated Terms
included an arbitration provision that Uber claims is binding on Sarchi. We thus
must separately determine whether Uber’s November 2016 email created an
enforceable contract that bound Sarchi to the updated Terms. Neither party
argues that the updated Terms made any material change to the original Terms.
28
[¶44] We need not apply the online contract analysis discussed above
because the record does not indicate that Sarchi ever became aware of or
interacted with Uber’s November 2016 email. She stated that she was unaware
of the email and that she would have had no reason to pay attention to an email
from Uber because she was unaware of the original Terms or that Uber deemed
her to have assented to them. Although the November 2016 email provided
that use of the Uber app constituted acceptance of Uber’s updated terms, it did
not notify users who opened the app that they were bound by the updated
Terms. Moreover, that Sarchi never opened the email message but was able to
retain her status as a registered Uber rider and book an Uber ride justifies the
inference that the email lacked even the limited indicia of notice and assent
associated with a browsewrap contract.
[¶45] Because Sarchi had no reason to know that her use of Uber
constituted acceptance of the updated Terms, no contract was formed based on
those terms. See Restatement (Second) of Contracts § 19 (Am. Law.
Inst. 1981).15
We are unpersuaded by Uber’s citations to out-of-state trial court decisions, most of which are
15
inapposite because the courts had already established that the users were bound by the original
terms. See Sacchi v. Verizon Online LLC, 2015 U.S. Dist. LEXIS 21349, at *11-12 (S.D.N.Y.
Feb. 23, 2015); In re Facebook Biometric Info. Priv. Litig., 185 F. Supp. 3d 1155, 1166-67 (N.D. Cal.
2016); Pincaro v. Glassdoor, Inc., 2017 U.S. Dist. LEXIS 147517, at *15-16 (S.D.N.Y. Sept. 12, 2017);
West, 2018 U.S. Dist. LEXIS 233550, at *11, *13.
29
E. Conclusion
[¶46] Uber could have designed its rider app to incorporate scrollwrap
or clickwrap contracts that provided adequate notice of Uber’s original and
updated Terms and required consumers to express actual assent, and it
apparently decided not to do so. The consequence of that choice is that Sarchi
was not bound by either the original Terms or the updated Terms.
The entry is:
Order denying motion to compel arbitration
affirmed.
Jesse E. Weisshaar, Esq., Shook, Hardy & Bacon L.L.P., Washington, District of
Columbia; Daniel B. Rogers, Esq. (orally), Shook, Hardy & Bacon L.L.P., Miami,
Florida; and Riley C. Mendoza, Esq., Shook, Hardy & Bacon L.L.P., Chicago,
Illinois, for appellants Uber Technologies, Inc., and Rasier, LLC
Kristin L. Aiello, Esq. (orally), Disability Rights Maine, Augusta, for appellee
Patricia Sarchi
Barbara Archer Hirsch, Esq., Maine Human Rights Commission, Augusta, for
appellee Maine Human Rights Commission
Cumberland County Superior Court docket number CV-2020-175
FOR CLERK REFERENCE ONLY