Sellers v. JustAnswer LLC

Filed 12/30/21
CERTIFIED FOR PUBLICATION
COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
TINA SELLERS et al., D077868
Plaintiffs and Respondents,
v. (Super. Ct. No. 37-2020-
00005869-CU-BT-CTL)
JUSTANSWER LLC,
Defendant and Appellant.
APPEAL from an order of the Superior Court of San Diego County,
Kenneth J. Medel, Judge. Affirmed.
Gaw Poe, Randolph Gaw and Flora Vigo for Defendant and Appellant.
Dostart Hannink & Coveney, James T. Hannink and Zach P. Dostart
for Plaintiffs and Respondents.
INTRODUCTION
JustAnswer LLC (JustAnswer) appeals from an order denying its
petition to compel arbitration. Tina Sellers and Erin O’Grady (together,
Plaintiffs) used the JustAnswer website to submit a single question to an
“expert” for what they believed would be a one-time fee of $5, and
JustAnswer automatically enrolled them in a costlier monthly membership.
After discovering additional charges to their credit cards, Plaintiffs filed a
class action lawsuit against JustAnswer, alleging it routinely enrolled online
consumers like them in automatic renewal membership programs without
providing “clear and conspicuous” disclosures and obtaining their “affirmative
consent” as mandated by the Automatic Renewal Law (Bus. & Prof. Code,1
§ 17600 et seq.; the ARL). (§ 17602, subds. (a)(1) and (a)(2).)
Seeking to avoid the class action litigation, JustAnswer filed a petition
to compel individual arbitration. JustAnswer claimed Plaintiffs agreed to
their “Terms of Service,” which included a class action waiver and a binding
arbitration clause, when they entered their payment information on the
website and clicked a button that read, “Start my trial.” The following
textual notice appeared in very small print further down the page below the
“Start my trial” button: “By clicking ‘Start my trial’ you indicate that you
agree to the terms of service and are 13+ years old.” The underlined “terms
of service” was a hyperlink2 to a separate webpage that displayed the 26-
page-long terms of service. Plaintiffs asserted they were not bound by the
arbitration provision because the textual notice was not sufficiently
conspicuous to establish they had constructive notice of the terms of service.
The trial court found Plaintiffs had not agreed to binding arbitration “[b]ased
on the inconspicuous language” in JustAnswer’s notice and denied its petition
to compel arbitration.
In a case of first impression under California law, we consider whether
and under what circumstances a “sign-in wrap” agreement⎯the manner in
1 All further statutory references are to the Business and Professions
Code, unless otherwise indicated.
2 In the computing world, a hyperlink is a word, phrase, or
image⎯typically underlined or in blue font⎯that the user can click on to
jump to a new document or a new section within the current document.
2
which JustAnswer sought to impose contractual terms on consumers over the
internet⎯is valid and enforceable. As we shall explain, the full context of
any transaction is critical to determining whether any particular notice is
sufficient to put a consumer on inquiry notice of contractual terms contained
on a separate, hyperlinked page. Here, the transaction involved a $5 “trial”
that automatically enrolled allegedly unwitting consumers in a more
expensive recurring monthly membership. This is precisely the type of
transaction from which the Legislature intended to protect consumers when
it enacted the ARL. (§§ 17600, 17602.) And since the Legislature has
specifically addressed the issue of consumers being unwittingly entered into
automatically recurring memberships, we consider the notice requirements
the Legislature has imposed in such transactions when evaluating the
sufficiency of JustAnswer’s textual notice.
Doing so, we conclude the notices on the “Start my trial” screens of the
JustAnswer website were not sufficiently conspicuous to bind Plaintiffs,
because they were less conspicuous than the ARL’s statutory notice
requirements and they were not sufficiently conspicuous under other criteria
courts have considered in determining whether a hyperlinked notice to terms
of services is sufficient to put a user on inquiry notice of an arbitration
agreement. We therefore affirm the trial court’s order denying JustAnswer’s
petition to compel arbitration.
FACTUAL AND PROCEDURAL BACKGROUND
I.
The Complaint
JustAnswer operates a website, www.justanswer.com, on which users
can ask “experts” to answer questions on a wide variety of topics, including,
among others, medical, legal, tax, veterinary, computer, and electrical. Users
3
can access the JustAnswer website on a standard computer, such as a
desktop or laptop, or a mobile device. When a user first accesses the
JustAnswer website, they are informed they can “[t]alk to doctors, lawyers,
vets, [and] more in minutes” and are presented with a box where they can
type a question.3 There is no mention of cost, but, if the user enters a
question in the box and clicks “Continue,” they are taken to a payment page.
3 The facts in this case are largely undisputed. Our description of the
JustAnswer website and the user sign-up process reflect the website as it was
when Plaintiffs accessed it in May and October 2019.
4
If a user accesses the JustAnswer website on a desktop or laptop
computer, the payment page looks like this:
As shown in the image, the page states, in fairly large white print
against a dark background, “Join for $5 and get your answer in minutes.”
Below, in smaller print, it says: “Unlimited conversations with doctors—try 7
days for just $5. Then $46/month. Cancel anytime.” Below that, there is a
white box with fields for the user to enter their credit card information and
an email address. Below those fields is an orange button that says, “Start my
5
trial.” Next to the button, the user is told: “Cancel anytime. [¶] We’ll
remind you one day before trial ends.” Below the button and outside the
white box, in very small print, there is an additional advisement that reads,
“By clicking ‘Start my trial’ you indicate that you agree to the terms of service
and are 13+ years old.” The underlined “terms of service” is a hyperlink that
takes the user to another webpage with approximately 26 pages of terms,
including, among others, a binding arbitration clause, a class action waiver,
and a disclaimer that JustAnswer does not “guarantee any particular level of
expertise” from their experts. The user is not required to actually view the
hyperlinked terms of service in order to begin using JustAnswer’s service.
Once a user submits their payment information and clicks on the “Start my
trial” button, they are automatically enrolled in a recurring monthly
membership.
6
If a user accesses the website on a mobile device, they see a payment
page like this:
Similar to the computer version, there is fairly large white print
against a dark background instructing the user they can “Join for $5” and
“get [their] answer in minutes.” Below that, there are several fields to enter
payment information and a large orange button that reads, “Start my trial.”
Below the button, in smaller white print, is the following text: “Try 7 days
for $5. Then $28/mo. Cancel anytime. We’ll remind you before trial ends.”
7
And below that, in even smaller, grey print, it states, “By clicking ‘Start my
trial’ you indicate that you agree to the Terms of Service, Privacy Policy and
are over 13 years old.” Both the “Terms of Service” and “Privacy Policy” are
hyperlinks to separate pages containing the respective terms, including a
binding arbitration clause and class action waiver, and privacy policy. As
with the computer version, the user is not required to actually view the
hyperlinked terms of service in order to click “Start my trial” and begin using
JustAnswer’s service.
In addition, users on mobile devices are directed to the following screen
once the response to their initial question is ready:
The screen includes another large orange button that reads “View
response,” and below that is a checkbox followed by the statement, in smaller
8
white font, “I agree to the Disclaimer and re-agree to the Terms of Service.”
The underlined text “Disclaimer and re-agree to the Terms of Service” is a
hyperlink that leads the user to another page with a series of disclaimers, but
not to the terms of service containing the arbitration clause. Rather, the
hyperlinked page contains two separate sets of disclaimers and, after each,
states, “You can read more about these policies in our Terms of Service.” The
words “Terms of Service” appear in blue font and are hyperlinks to the same
terms of service page linked on the payment screens. Here, the user must
check the box next to the statement in order to view the response to their
question. However, the user does not need to actually click on and view the
hyperlinked pages containing either the disclaimers or the terms of service in
order to check the box or to continue using JustAnswer’s service.
If the user does click on the hyperlinked terms of service, the following
arbitration clause appears on the second page, in bold font and capitalized
lettering:
“PLEASE NOTE THAT THESE TERMS PROVIDE THAT IF
YOU AND JUSTANSWER ARE UNABLE TO RESOLVE ANY
DISPUTES THAT ARISE EITHER INFORMALLY OR
THROUGH MEDIATION, THE DISPUTE WILL BE RESOLVED
BY BINDING ARBITRATION. ARBITRATION USES A
NEUTRAL ARBITRATOR INSTEAD OF A JUDGE OR JURY
AND IS SUBJECT TO VERY LIMITED REVIEW BY COURTS.
YOU AND JUSTANSWER ALSO AGREE THAT ANY CLAIMS
OR DISPUTES CANNOT BE BROUGHT AS A CLASS ACTION.
PLEASE CAREFULLY REVIEW THE DISPUTE RESOLUTION
SECTION BELOW. IF YOU DO NOT ACCEPT THE
9
ARBITRATION PROVISION BELOW, YOU MAY NOT USE
THE SITE.” (Boldface omitted.)
Although the arbitration clause purports to bind the user, the terms of
service elsewhere indicate that “JustAnswer may modify any of the [t]erms at
any time by posting them on the [JustAnswer website].”
O’Grady accessed the JustAnswer website on a laptop computer in May
2019 and Sellers accessed the JustAnswer website on a mobile phone in
October 2019. Each submitted a single question and provided payment
information with the expectation that they would be charged a one-time fee of
$5 to have their question answered by an “expert,” and that they would not
be charged if they were not satisfied with the answer they received. Neither
was satisfied with the answer they received, and both thought they should
not be charged. Sellers notified a JustAnswer online representative and was
told she could receive a more complete answer for an additional charge of
$39. She declined that option and, at that point, believed she had concluded
all business dealings with JustAnswer. O’Grady “notified the ‘expert’ ” that
she was not satisfied with her answer and, likewise, believed she had
concluded all business dealings with JustAnswer.
However, JustAnswer charged each of their credit cards a monthly fee
of $46 for several months before Plaintiffs discovered and disputed the
charges. Sellers contested the charges with JustAnswer and was refunded a
total of $138. O’Grady disputed the charges with her credit card company
and obtained a credit for $230. Neither received a refund for their initial $5
“trial” payment.
In January 2020, Plaintiffs filed a class action lawsuit on behalf of all
individuals in California that were similarly enrolled in a “trial” on the
JustAnswer website and were subsequently charged for an automatically
10
renewing monthly membership. Plaintiffs alleged they were “not the only
consumers to be victimized” by JustAnswer; rather, “[t]here are hundreds of
customer complaints about JustAnswer posted on various consumer websites,
including the Better Business Bureau (‘BBB’) website, which illustrate that
[JustAnswer’s] scheme has affected many consumers.” They cited examples
of consumers who complained to the BBB that they were “duped into a
membership” when they “thought [they were] paying $5 . . . to have a . . .
question answered.” On behalf of the putative class, Plaintiffs alleged
JustAnswer violated the ARL, the Consumers Legal Remedies Act (Civ. Code,
§ 1750 et seq.; the CLRA), and the Unfair Competition Law (§ 17200 et seq.;
the UCL).
As set forth in the complaint, the Legislature enacted the ARL in 2009,
finding that:
“It has become increasingly common for consumers to complain
about unwanted charges on their credit cards for products or
services that the consumer did not explicitly request or know
they were agreeing to. Consumers report they believed they were
making a one-time purchase of a product, only to receive
continued shipments of the product and charges on their credit
card. These unforeseen charges are often the result of
agreements enumerated in the ‘fine print’ on an order or
advertisement that the consumer responded to.”
(Sen. Jud. Com., Analysis of Sen. Bill. No. 340 (2009–2010 Reg. Sess.) as
amended Apr. 2, 2009, p. 4.) The ARL states that “[i]t is the intent of the
Legislature to end the practice of ongoing charging of consumer credit or
debit cards . . . without the consumers’ explicit consent for ongoing shipments
of a product or ongoing deliveries of service.” (§ 17600.)
To achieve its purpose, the ARL makes it unlawful for a business to
enroll a customer in an automatic renewal or continuous service agreement
without presenting the service terms to the customer in a “clear and
11
conspicuous manner before the subscription or purchasing agreement is
fulfilled and in visual proximity . . . to the request for consent to the offer.”
(§ 17602, subd. (a)(1).) It defines “ ‘clear and conspicuous’ ” to mean “in larger
type than the surrounding text, or in contrasting type, font, or color to the
surrounding text of the same size, or set off from the surrounding text of the
same size by symbols or other marks, in a manner that clearly calls attention
to the language.” (§ 17601, subd. (c).) The ARL also makes it unlawful for a
business to charge the customer’s credit or debit card “without first obtaining
the consumers’ affirmative consent” to the automatic renewal or continuous
service agreement. (§ 17602, subd. (a)(2).)
Plaintiffs alleged JustAnswer violated the ARL, CLRA, and UCL by
“enroll[ing] consumers in automatic renewal membership programs without
providing the ‘clear and conspicuous’ disclosures mandated by California law,
and post[ing] charges to consumers’ credit or debit cards for purported
membership charges without first obtaining the consumers’ affirmative
consent to an agreement containing the requisite clear and conspicuous
disclosures.”
II.
JustAnswer’s Petition to Compel Arbitration
In response to Plaintiffs’ complaint, JustAnswer petitioned to compel
individual arbitration. It asserted Plaintiffs agreed to binding arbitration by
clicking the “Start my trial” button on the JustAnswer website, thereby
indicating their agreement to its terms of service containing the arbitration
clause and, in the case of the mobile version, by checking the box and “re-
agree[ing]” to the terms of service before viewing the response to their initial
question.
12
Plaintiffs opposed the petition, asserting they were not bound by the
arbitration provision because there was no evidence they had actual notice of
the terms and the notice provisions were not sufficiently conspicuous to
provide constructive notice. They argued the notices on the “Start my trial”
pages were not immediately adjacent to the “Start my trial” buttons; the text
was “tiny,” “faint,” and “set against a background lacking significant
contrast”; and the hyperlinks were not in a different color, “contrary to
customary website design practice.” In addition, Plaintiffs asserted, “taken
as a whole, the screen gives the impression that by clicking on the ‘Start my
trial’ button, a consumer is simply authorizing JustAnswer to charge $5.00 to
the [consumer’s] credit card, which the consumer has just finished inputting
into the payment fields.” Thus, “the mere act of clicking ‘Start my trial’ is not
an unambiguous manifestation of assent to the terms.” Plaintiffs further
asserted the text on the “View response” mobile screen was similarly very
small and without color contrast, and that the hyperlink took users to a
“ ‘Disclaimer’ ” page, rather than the terms of service page.
The trial court examined the screenshots of both the computer and
mobile versions of the “Start my trial” page on the JustAnswer website and
the mobile “View Response” page. It found the font of the terms of service
notices was “tiny, smaller than any other printing on the screen,” the print
was “faint, set against a background lacking significant contrast,” and there
was “no color contrast between the terms of service hyperlink and the other
text in that sentence.” The court also found “[t]he terms of service hyperlink
and its associated sentence [were] not immediately adjacent to the ‘Start my
trial’ button, but instead [were] at a location that is not suggestive of any
connection between them.” Further still, the court found the “View
Response” page contained a hyperlink that took them to a disclaimer page
13
regarding liability for the expert advice, and not directly to the terms of
service. The court concluded Plaintiffs had not agreed to binding arbitration
“[b]ased on the inconspicuous language” and denied JustAnswer’s petition to
compel arbitration.
JustAnswer timely appealed.
DISCUSSION
I.
General Principles in Determining the Existence of an
Enforceable Agreement to Arbitrate
“While [i]nternet commerce has exposed courts to many new situations,
it has not fundamentally changed the requirement that ‘ “[m]utual
manifestation of assent, whether by written or spoken word or by conduct, is
the touchstone of contract.” ’ ” (Long v. Provide Commerce, Inc. (2016) 245
Cal.App.4th 855, 862 (Long).) Mutual assent, or consent, of the parties “is
essential to the existence of a contract” (Civ. Code, § 1550; see also Civ. Code,
§ 1565), and “[c]onsent is not mutual, unless the parties all agree upon the
same thing in the same sense” (Civ. Code, § 1580). “Mutual assent is
determined under an objective standard applied to the outward
manifestations or expressions of the parties, i.e., the reasonable meaning of
their words and acts, and not their unexpressed intentions or
understandings.” (Alexander v. Codemasters Group Limited (2002) 104
Cal.App.4th 129, 141; accord Weddington Productions, Inc. v. Flick (1998) 60
Cal.App.4th 793, 810−811 (Weddington).) “The parties’ outward
manifestations must show that the parties all agreed ‘upon the same thing in
the same sense.’ (Civ. Code, § 1580.) If there is no evidence establishing a
manifestation of assent to the ‘same thing’ by both parties, then there is no
14
mutual consent to contract and no contract formation. (Civ. Code, §§ 1550,
1565 & 1580.)” (Weddington, at p. 811.)
“This principle of knowing consent applies with particular force to
provisions for arbitration” (Windsor Mills, Inc. v. Collins & Aikman Corp.
(1972) 25 Cal.App.3d 987, 993 (Windsor Mills)), including arbitration
provisions contained in contracts purportedly formed over the internet (Long,
supra, 245 Cal.App.4th at p. 862). “Under both federal and state law, the
threshold question presented by a petition to compel arbitration is whether
there is an agreement to arbitrate.” (Cheng-Canindin v. Renaissance Hotel
Associates (1996) 50 Cal.App.4th 676, 683.) “Indeed, a trial court has no
power to order parties to arbitrate a dispute that they did not agree to
arbitrate.” (Bouton v. USAA Casualty Ins. Co. (2008) 43 Cal.4th 1190, 1202;
see also, Code Civ. Proc., § 1281.2 [“the court shall order the petitioner and
the respondent to arbitrate the controversy if it determines that an
agreement to arbitrate the controversy exists”].) While California public
policy favors arbitration, “ ‘ “there is no policy compelling persons to accept
arbitration of controversies which they have not agreed to arbitrate.” ’ ”
(Victoria v. Superior Court (1985) 40 Cal.3d 734, 744.) Thus, whether the
terms appear on a physical piece of paper or a computer screen, “California
law is clear—‘an offeree, regardless of apparent manifestation of his consent,
is not bound by inconspicuous contractual provisions of which he was
unaware, contained in a document whose contractual nature is not obvious.’ ”
(Long, at p. 862, quoting Windsor Mills, at p. 993.)
In the world of paper contracting, the outward manifestation of assent
to the same thing by both parties is often readily established by the offeree’s
receipt of the physical contract. (See California State Automobile Assn. Inter-
Insurance Bureau v. Barrett Garages, Inc. (1967) 257 Cal.App.2d 71, 76
15
(Barrett Garages) [“[T]he general rule is that a person is bound by the printed
contractual provisions of an instrument which he accepts delivery of if, as an
ordinarily prudent [person], he could and should have read such provisions.”];
see also Specht v. Netscape Communications Corp. (2d Cir. 2002) 306 F.3d 17,
31 (Specht) [Under California contract law, the “receipt of a physical
document containing contract terms or notice thereof is frequently deemed, in
the world of paper transactions, a sufficient circumstance to place the offeree
on inquiry notice of those terms.”].)
By contrast, when transactions occur over the internet, there is no face-
to-face contact and the consumer is not typically provided a physical copy of
the contractual terms. In that context, and in the absence of actual notice, a
manifestation of assent may be inferred from the consumer’s actions on the
website—including, for example, checking boxes and clicking buttons—but
any such action must indicate the parties’ assent to the same thing, which
occurs only when the website puts the consumer on constructive notice of the
contractual terms. (See Nguyen v. Barnes & Noble Inc. (9th Cir. 2014) 763
F.3d 1171, 1177 (Nguyen) [validity of an internet agreement “turns on
whether the website puts a reasonably prudent user on inquiry notice of the
terms of the contract”].) Thus, in order to establish mutual assent for the
valid formation of an internet contract, a provider must first establish the
contractual terms were presented to the consumer in a manner that made it
apparent the consumer was assenting to those very terms when checking a
box or clicking on a button. (Ibid.)
A party seeking to compel arbitration “bears the burden of proving the
existence of a valid arbitration agreement by the preponderance of the
evidence.” (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951,
972.) Under traditional contract principles, where there is no dispute as to
16
the material facts, “the existence of a contract is a question [of law] for the
court to decide.”4 (Bustamante v. Intuit, Inc. (2006) 141 Cal.App.4th 199,
208.) Where, as here, the trial court denies a petition to compel arbitration
based on the threshold issue of the existence of a contract, and the evidence of
the alleged contract formation consists primarily of undisputed screenshots of
the website at issue, our review is de novo. (See Long, supra, 245
Cal.App.4th at pp. 861, 863; Bono v. David (2007) 147 Cal.App.4th 1055,
1061−1062 (Bono) [“Where there is no ‘factual dispute as to the language of
the agreement’ [citation] or ‘conflicting extrinsic evidence’ regarding the
terms of the contract [citation], our standard of review of a trial court order
granting or denying a motion to compel arbitration under section 1281.2 is de
novo.”].)
Before considering whether there is mutual assent by the parties to the
arbitration provision at issue here, we first turn to the various ways contracts
are formed over the internet and, from which, assent is inferred.
II.
Contract Formation Over the Internet
A significant portion of consumer transactions for both goods and
services now occur over the internet, and providers of websites offering those
goods and services frequently seek to impose contractual terms on consumers.
(See Selden v. Airbnb, Inc. (D.D.C., Nov. 1, 2016, No 16-cv-00933 (CRC)) 2016
4 In its petition to compel arbitration, JustAnswer asserted that Idaho
law applied pursuant to a choice-of-law provision contained in the terms of
service at issue here. On appeal, however, JustAnswer concedes California
law governs the formation of contracts. We agree with this concession that
courts generally apply state law principles governing the formation of
contracts when deciding whether an agreement to arbitrate exists in the first
instance. (See Specht, supra, 306 F.3d at p. 22, fn. 4; Perry v. Thomas (1987)
482 U.S. 483, 492, fn. 9.)
17
WL 6476934 at *5 (Selden) [“The act of contracting for consumer services
online is now commonplace in the American economy.”].) As a result,
providers of online goods and services have developed various ways to
purportedly bind consumers to contractual terms in transactions done over
the internet.
Even before the rise of internet transactions, software providers
included contractual terms of use in their packaging. (Femminella, Online
Terms and Conditions Agreements: Bound by the Web (2003) 17 St. John’s J.
Legal Comment. 87, 88 [Femminella].) These agreements, which restricted
how the software could be used and provided protection from widespread
illegal copying, came to be “called shrink-wrap licenses [fn. omitted] because
although the packaging contains notice of the agreement inside, the entire
agreement can only be viewed after buying the product and breaking through
the plastic shrink-wrap packaging.” (Id. at pp. 88–89.) Courts have
characterized such licenses as contracts of adhesion, since they are offered on
a “take-it-or-leave-it basis,” but have generally found them to be enforceable
if consistent with the reasonable expectations of the consumer. (See DVD
Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009) 176 Cal.App.4th 697,
716.)
As consumers began downloading software from websites, agreements
similar to shrink-wrap licenses began to appear online. (Femminella, supra,
17 St. John’s J. Legal Comment. at p. 89.) But since there is no packaging on
the internet, there was no way for providers to include a physical copy of the
contractual terms. Instead, providers would ask customers to agree to the
terms, displayed somewhere on their website, by clicking on an “ ‘I accept’ ” or
“ ‘I agree’ ” button. (Id. at p. 89, fns. 10, 11.) This type of agreement became
known as a “ ‘clickwrap’ ” agreement, “by analogy to ‘shrinkwrap,’ used in the
18
licensing of tangible forms of software sold in packages[,] because it ‘presents
the user with a message on his or her computer screen, requiring that the
user manifest his or her assent to the terms of the license agreement by
clicking on an icon.’ ” (Specht, supra, 306 F.3d at p. 22, fn. 4.) In most
instances, the contractual terms were not actually displayed on the same
screen as the “ ‘I accept’ ” button, but were instead provided via a hyperlink
that, when clicked, took the user to a separate page displaying the full set of
terms. (Id. at pp. 23−24; Nguyen, supra, 763 F.3d at pp. 1175−1176.)
As the internet evolved, so did the various manners in which providers
sought to impose contractual terms on consumers. Most courts now have
identified at least four types of internet contract formation, most easily
defined by the way in which the user purportedly gives their assent to be
bound by the associated terms: browsewraps, clickwraps, scrollwraps, and
sign-in wraps. (See Selden, supra, 2016 WL 6476934 at *4.)
“A ‘browsewrap’ agreement is one in which an internet user accepts a
website’s terms of use merely by browsing the site. A ‘clickwrap’ agreement
is one in which an internet user accepts a website’s terms of use by clicking
an ‘I agree’ or ‘I accept’ button, with a link to the agreement readily available.
A ‘scrollwrap’ agreement is like a ‘clickwrap,’ but the user is presented with
the entire agreement and must physically scroll to the bottom of it to find the
‘I agree’ or ‘I accept’ button. . . . ‘Sign-in-wrap’ agreements are those in which
a user signs up to use an internet product or service, and the sign-up screen
states that acceptance of a separate agreement is required before the user
can access the service. While a link to the separate agreement is provided,
users are not required to indicate that they have read the agreement’s terms
before signing up.” (Selden, supra, 2016 WL 6476934 at *4, italics added; see
also Nguyen, supra, 763 F.3d at p. 1176; Berkson v. Gogo LLC (E.D.N.Y 2015)
19
97 F.Supp.3d 359, 394−395 (Berkson).) Instead, “the website is designed so
that a user is notified of the existence and applicability of the site’s ‘terms of
use’ [usually by a textual notice] when proceeding through the website’s sign-
in or login process.” (Berkson, at p. 399.)
By their nature, internet contracts almost always fall into the category
of adhesion contracts. “ ‘The term [contract of adhesion] signifies a
standardized contract, which, imposed and drafted by the party of superior
bargaining strength, relegates to the subscribing party only the opportunity
to adhere to the contract or reject it.’ ” (Armendariz v. Foundation Health
Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113; see also Specht, supra, 306
F.3d at p. 31 [comparing internet contracts to paper adhesion contracts];
Selden, supra, 2016 WL 6476934 at *4 [characterizing internet contract
formation as “[o]nline [a]dhesion [c]ontracting”]; Berkson, supra, 97
F.Supp.3d at pp. 388−391, 394−395 [discussing paper-based and “[e]lectronic
[a]dhesion [c]ontracts”].) In an internet transaction, the contractual terms
are drafted solely by the provider and placed most often on a separate
webpage that is accessible only if the user sees and clicks on a hyperlink.
The consumer usually does not have any direct contact with the provider and,
thus, even if the consumer is aware of the terms the provider wishes to
impose, the consumer does not have any ability to bargain. Thus, the terms
are offered on a purely take-it or leave-it basis. (See Neal v. State Farm Ins.
Companies (1961) 188 Cal.App.2d 690, 694 [“Such an agreement does not
issue from that freedom in bargaining and equality of bargaining which are
the theoretical parents of the American law of contracts.”].)
At the same time, internet commerce is now ubiquitous, and it is
becoming increasingly difficult for consumers to avoid online transactions
altogether. This has been particularly true during the recent Covid-19
20
pandemic. Many brick-and-mortar businesses closed, at least temporarily,
and consumers were subject to stay-at-home orders. As a result, consumers
have been forced to rely on online stores to fulfill even their most basic,
everyday needs.
With the ubiquity of internet commerce, online providers have sought
to impose contractual terms on even the most trivial of transactions. For
example, a website provider may seek to impose contractual terms in
connection with the sale of a single item, such as a pair of socks, a
transaction in which most consumers would not expect to be bound by
contractual terms. (See Long, supra, 245 Cal.App.4th at p. 866 [suggesting a
consumer does not expect to be bound by contractual “Terms of Use” when
purchasing flowers].) Further, the terms may appear on a separate page,
accessible only if the consumer clicks on a hyperlink, that they likely are not
looking for since, of course, they do not expect to be bound by contractual
terms when buying socks. That separate page may also present significantly
more content than a traditional single sheet of paper as the scroll feature
allows a single webpage to go on almost indefinitely or, as here, for the
equivalent of approximately 26 standard sheets of letter-sized paper. And
because the terms appear on a separate, scrollable page—and not, for
example, on the package of socks itself—the provider may include far more
terms than the consumer would typically expect for such a simple
transaction.
Those terms could include, as relevant here, limitations on the
consumer’s remedies if unsatisfied with their purchase or service, such as
agreements to arbitrate, waivers of class action litigation, or consent to the
provider’s ability to sell data regarding the consumer’s shopping profile to
other companies. (See Silver v. Stripe, Inc. (N.D.Cal., Jul. 28, 2021, No. 4:20-
21
cv-08196-YGR) 2021 WL 3191752 at *1, 4 [online merchant collected and sold
customer data based in part on a hyperlinked privacy policy].) Even where
the transaction is not as trivial as the purchase of socks or flowers, online
providers have complete control over the design of their websites and may
present extensive contractual terms in such a manner that the consumer
never sees them and, in some cases, may not even know they exist. (See
Berkson, supra, 97 F.Supp.3d at p. 389 [“Often overlooked in our electronic
age is the principle undergirding the validity of contracts of adhesion—
knowledge by parties of terms.”].)
III.
Enforceability of Sign-In Wrap Agreements to Arbitrate
Of the four types of internet contract formation, JustAnswer asserts its
website employed a sign-in wrap agreement, and that federal courts applying
California law “have held that this type of display of a hyperlinked notice to
the terms of service suffices to put a user on inquiry notice of an arbitration
agreement.” We agree this case involves a sign-in wrap agreement. (See
Selden, supra, 2016 WL 6476934 at *4.) JustAnswer’s website was designed
to purportedly notify consumers of the existence of a separate, hyperlinked
webpage containing contractual terms, along with a textual notice that they
agree to the terms by clicking the “Start my trial” button. (See ibid.) While a
hyperlink to the separate agreement was provided, the consumer was not
required to click the hyperlink or otherwise read the terms to proceed, and
was “not required to [affirmatively] indicate that they have read the
agreement’s terms before signing up.” (See ibid.)
However, the “[c]lassification of web based contracts alone . . . does not
resolve the [issue of legally sufficient] notice inquiry.” (Meyer v. Uber
Technologies, Inc. (2d Cir. 2017) 868 F.3d 66, 76 (Meyer).) The enforceability
22
of contractual terms presented to consumers in a sign-in wrap agreement,
including arbitration provisions, is a matter of first impression under
California law. While federal courts have addressed these issues, only one
California appellate court has considered the enforceability of internet-
formed agreements, see Long, supra, 245 Cal.App.4th 855, and it addressed a
browsewrap agreement only. (Id. at p. 863.) As we discuss next, the Long
court and federal courts have reached consistent conclusions when evaluating
the enforceability of agreements at either end of the spectrum, generally
finding scrollwrap and clickwrap agreements to be enforceable and
browsewrap agreements to be unenforceable. To determine where sign-in
wrap agreements fall on this spectrum, we first consider Long and the federal
decisions on sign-in wrap agreements.5
A. Long v. Provide Commerce, Inc.
As noted, Long is the first and only California appellate case to have
considered the enforceability of internet-formed agreements, and it addressed
a browsewrap agreement only. The plaintiffs in Long brought a class action
on behalf of consumers who purchased flower arrangements on the website,
ProFlowers.com, claiming violations of the CLRA and UCL. (Long, supra,
245 Cal.App.4th at pp. 858−859.) The website provider sought to compel
arbitration based on a provision in the company’s “Terms of Use,” which were
5 “We, of course, are not bound by the decision of a sister Court of
Appeal. [Citation.] But ‘[w]e respect stare decisis, however, which serves the
important goals of stability in the law and predictability of decision.’ ” (The
MEGA Life & Health Ins. Co. v. Superior Court (2009) 172 Cal.App.4th 1522,
1529.) Federal court decisions applying California law also are not binding
on this court, but may hold persuasive value. (People v. Brooks (2017) 3 Cal.
5th 1, 90 (Brooks) [“We are not bound by the decisions of the federal appellate
courts, although they may be considered for their persuasive weight.”].)
23
viewable via a hyperlink displayed at the bottom of each page of the website.6
(Ibid.)
The Long court determined the terms of use agreement was a
browsewrap agreement. It noted that “[u]nlike the other common form of
[i]nternet contract⎯known as ‘clickwrap’ agreements⎯browsewrap
agreements do not require users to affirmatively click a button to confirm
their assent to the agreement’s terms; instead, a user’s assent is inferred
from his or her use of the [website]. Because assent must be inferred, the
determination of whether a binding browsewrap agreement has been formed
depends on whether the user had actual or constructive knowledge of the
[website’s] terms and conditions.” (Long, supra, 245 Cal.App.4th at p. 858.)
However, acknowledging “that no California appellate court has yet
addressed what sort of [website] design elements would be necessary or
sufficient to deem a browsewrap agreement valid in the absence of actual
notice,” the court sought guidance from two federal circuit cases⎯Specht and
6 ProFlowers.com’s terms of use “were available via a capitalized and
underlined hyperlink titled ‘TERMS OF USE’ located at the bottom of each
Web page. The hyperlink was displayed in what appears to have been a light
green typeface on the [website’s] lime green background, and was situated
among 14 other capitalized and underlined hyperlinks of the same color, font
and size.” (Long, supra, 245 Cal.App.4th at p. 859.) “[T]o complete his order,
Plaintiff was required to input information and click through a multi-Web-
page ‘checkout flow.’ The checkout flow screenshots show the customer
information fields and click-through buttons displayed in a bright white box
set against the [website’s] lime green background. At the bottom of the white
box was a notice indicating ‘Your order is safe and secure,’ displayed next to a
‘VeriSign Secured’ logo. [Boldface omitted.] Below the white box was a dark
green bar with a hyperlink titled ‘SITE FEEDBACK’ displayed in light green
typeface. Finally, below the dark green bar, at the bottom of each checkout
flow page, were two hyperlinks titled ‘PRIVACY POLICY’ and ‘TERMS OF
USE,’ displayed in the same light green typeface on the [website’s] lime green
background.” (Id. at pp. 859−860.)
24
Nguyen⎯which, applying California contract law, considered the
enforceability of browsewrap agreements. (Long, at p. 863.)
As the court in Long explained, in Specht, the Second Circuit Court of
Appeals “declined to enforce an arbitration provision contained in a software
licensing browsewrap agreement where the hyperlink to the agreement
appeared on ‘a submerged screen’ below the ‘ “Download” ’ button that the
plaintiffs clicked to initiate the [free] software download.” (Long, supra, 245
Cal.App.4th at pp. 863−864, citing Specht, supra, 306 F.3d at pp. 30−32.)
Then Judge Sotomayor, writing for the Specht court, held “ ‘a consumer’s
clicking on a download button does not communicate assent to contractual
terms if the offer did not make clear to the consumer that clicking on the
download button would signify assent to those terms.’ ” (Long, at p. 864,
citing Specht, at pp. 29−30.)
“Though the [website] advised users to ‘ “Please review and agree to the
terms of the . . . software license agreement before downloading and using the
software,” ’ the Specht court emphasized that users would have encountered
this advisement only if they scrolled down to the screen below the [website’s]
invitation to download the software by clicking the download button. (Specht,
supra, 306 F.3d at p. 23, italics omitted.) This meant that when the plaintiffs
clicked the download button, they ‘were responding to an offer that did not
carry an immediately visible notice of the existence of license terms or
require unambiguous manifestation of assent to those terms.’ (Id. at p. 31.)
The fact that users might have noticed from the position of the scroll bar that
an unexplored portion of the Web page remained below the download button
did not change the reasonableness calculation. Under the circumstances
presented, ‘where consumers [were] urged to download free software at the
immediate click of a button,’ the Specht court concluded placing the notice of
25
licensing terms on a submerged page ‘ “tended to conceal the fact that
[downloading the software] was an express acceptance of [the defendant’s]
rules and regulations.” ’ (Id. at p. 32.) Thus, notwithstanding what the
plaintiffs might have found had they taken ‘ “as much time as they need[ed]”
to scroll through multiple screens on a webpage’ (ibid.), the Specht court held
that ‘a reasonably prudent offeree in plaintiffs’ position would not have
known or learned . . . of the reference to [the software’s] license terms hidden
below the “Download” button on the next screen.’ (Id. at p. 35.)” (Long,
supra, 245 Cal.App.4th at p. 864.)
The Long court then looked to Nguyen, in which the Ninth Circuit
Court of Appeals, more than a decade after Specht, “considered whether the
conspicuous placement of a “ ‘Terms of Use’ hyperlink, standing alone, would
be sufficient to put an [i]nternet consumer on inquiry notice.” (Long, supra,
245 Cal.App.4th at p. 864, citing Nguyen, supra, 763 F.3d at p. 1178, italics
added.) Although “the hyperlink in Nguyen was visible ‘without scrolling’ on
some of the [website’s] pages, while on others ‘the hyperlink [was] close
enough to the “Proceed with Checkout” button that a user would have to
bring the link within his field of vision’ to complete an online order,”
the Nguyen court “concluded the plaintiff’s act of placing an order did not
constitute an unambiguous manifestation of assent to be bound by the
browsewrap agreement, holding ‘proximity or conspicuousness of the
hyperlink alone is not enough to give rise to constructive notice.’ ” (Long, at
pp. 864–865, citing Nguyen, at p. 1178.)
The Nguyen court observed that “in cases where [federal district] courts
had ‘relied on the proximity of the hyperlink to enforce a browsewrap
agreement,’ . . . those [websites] had ‘also included something more to capture
the user’s attention and secure her assent.’ . . . Typically that ‘something
26
more’ had taken the form of an explicit textual notice warning users to
‘ “Review terms” ’ or admonishing users that by clicking a button to complete
the transaction ‘ “you agree to the terms and conditions in the
[agreement].” ’ . . . From those cases, the Nguyen court derived the following
bright-line rule for determining the validity of browsewrap agreements:
‘[W]here a website makes its terms of use available via a conspicuous
hyperlink on every page of the website but otherwise provides no notice to
users nor prompts them to take any affirmative action to demonstrate assent,
even close proximity of the hyperlink to relevant buttons users must click
on—without more—is insufficient to give rise to constructive notice.’ ” (Long,
supra, 245 Cal.App.4th at p. 865, citing Nguyen, supra, 763 F.3d at
pp. 1178−1179 & fn. 1.)
Applying the principles articulated in Specht and Nguyen, the court in
Long concluded “the design of the ProFlowers.com [website], even when
coupled with the hyperlink contained in the confirmation e-mail,[7] was
insufficient to put Plaintiff on inquiry notice of the subject Terms of Use.”
(Long, supra, 245 Cal.App.4th at p. 863.) The court rejected the website
provider’s argument that its hyperlink was sufficiently conspicuous to put “ ‘a
reasonable user’ ” on notice of the terms of use because it was “ ‘immediately
7 After an order for flowers is placed on the website, the website provider
sends the consumer an e-mail confirming the order, which included two
hyperlinks titled “ ‘PRIVACY POLICY’ ” and “ ‘TERMS OF USE.’ ” (Long,
supra, 245 Cal.App.4th at p. 866.) The court explained, “[u]nlike the
hyperlink on some checkout flow pages,” these hyperlinks were located on a
“submerged page . . . printed in grey typeface on a white background,” and
concluded “[t]his is not the sort of conspicuous alert that can be expected to
put a reasonably prudent [i]nternet consumer on notice to investigate
whether disputes related to his or her order will be subject to binding
arbitration.” (Id. at pp. 866−867.)
27
visible on the checkout flow, [was] viewable without scrolling, and located
next to several fields that the website user [was] required to fill out and the
buttons he must click to complete an order.’ ” (Id. at p. 865.) The court held:
“Though it may be that an especially observant [i]nternet consumer could
spot the Terms of Use hyperlinks on some checkout flow pages without
scrolling, that quality alone cannot be all that is required to establish the
existence of an enforceable browsewrap agreement. Rather, as the
Specht court observed, ‘[r]easonably 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.’ [Citation.] Here, the Terms of Use hyperlinks—their placement,
color, size and other qualities relative to the ProFlowers.com [website’s]
overall design—are simply too inconspicuous to meet that standard.” (Id. at
pp. 865−866, citing Specht, supra, 306 F.3d at p. 35.)
Although “the lack of conspicuousness resolve[d] the instant matter,”
the Long court went on to express its agreement with Nguyen that, “to
establish the enforceability of a browsewrap agreement, a textual notice
should be required to advise consumers that continued use of a [website] will
constitute the consumer’s agreement to be bound by the [website’s] terms of
use.” (Long, supra, 245 Cal.App.4th at p. 867, citing Nguyen, supra, 763 F.3d
at pp. 1178−1179.) “In [the court’s] view, the problem with merely displaying
a hyperlink in a prominent or conspicuous place is that, without notifying
consumers that the linked page contains binding contractual terms, the
phrase ‘terms of use’ may have no meaning or a different meaning to a large
segment of the [i]nternet-using public.” (Long, at p. 867.) “In other words, a
conspicuous ‘terms of use’ hyperlink may not be enough to alert a reasonably
prudent [i]nternet consumer to click the hyperlink. As the Nguyen court
28
observed, ‘[w]hile failure to read a contract before agreeing to its terms does
not relieve a party of its obligations under the contract, [citation], the onus
must be on website owners to put users on notice of the terms to which they
wish to bind consumers. Given the breadth of the range of technological
savvy of online purchasers, consumers cannot be expected to ferret out
hyperlinks to terms and conditions to which they have no reason to suspect
they will be bound.’ ” (Ibid., citing Nguyen, at p. 1179.) The Long court, in
dicta, suggested that “[o]nline retailers would be well-advised to include a
conspicuous textual notice with their terms of use hyperlinks going forward.”
(Long, at p. 867.)
B. Internet Contract Formation Following Long
Although Long directly addressed only a browsewrap agreement, it,
along with the federal cases it relied upon, provides general guidance that
allows us to set some basic guideposts as to the enforceability of the various
types of agreements formed over the internet.
On one end of the spectrum, a browsewrap agreement like the one at
issue in Long—in which the website provider assumes assent is given by
mere use of the website, based exclusively on the existence of a hyperlink
that takes the consumer to the applicable set of contractual terms—is not
sufficient to bind the consumer. (Long, supra, 245 Cal.App.4th at pp. 865,
867; see also Berkson, supra, 97 F.Supp.3d at p. 396 [“Following the ruling in
Specht, [federal district] courts generally have enforced browsewrap terms
only against knowledgeable accessors, such as corporations, not against
individuals.”].) Toward the other end of the spectrum, clickwrap agreements,
“ ‘in which website users are required to click on an “I agree” box after being
presented with a list of terms and conditions of use’ ” to “confirm their assent
to the agreement’s terms,” are generally considered enforceable. (Long, at
29
pp. 858, 862, citing Nguyen, supra, 763 F.3d at pp. 1175−1176; see also
Berkson, at p. 397 [“Clickwrap agreements necessitate an active role by the
user of a website” and thus “[c]ourts, in general, find them enforceable.”].)
Scrollwrap agreements go one step further and place the contractual terms
directly in front of the user, requiring them to scroll through the terms before
checking a box or clicking a button to indicate their assent, and, therefore,
are consistently found to be enforceable. (See Berkson, at pp. 398−399 [citing
cases finding “scrollwrap” agreements enforceable].) Although not explicitly
addressed in Long, there should be little doubt scrollwrap agreements are
enforceable under California law because the consumer is given the contract,
a sufficient circumstance to place the consumer on inquiry notice of the
contractual terms. (See Barrett Garages, supra, 257 Cal.App.2d at p. 76;
Specht, supra, 306 F.3d at p. 31.)
Sign-in wrap agreements fall somewhere in the middle of the two
extremes of browsewrap and scrollwrap agreements. Sign-in wrap
agreements do include a textual notice indicating the user will be bound by
the terms, but they do not require the consumer to review those terms or to
expressly manifest their assent to those terms by checking a box or clicking
an “I agree” button. Instead, the consumer is purportedly bound by clicking
some other button that they would otherwise need to click to continue with
their transaction or their use of the website—most frequently, a button that
allows the consumer to “sign in” or “sign up” for an account. Thus, it is not
apparent that the consumer is aware that they are agreeing to contractual
terms simply by clicking some other button. Instead, “the consumer’s assent
is ‘largely passive,’ ” and the existence of a contract turns “ ‘on whether a
reasonably prudent offeree would be on inquiry notice of the terms at issue.’ ”
(Selden, supra, 2016 WL 6476934 at *4.)
30
C. Federal District Court Decisions on Sign-In Wrap Agreements
Since Long, a number of federal courts have found the textual notices
associated with various sign-in wrap agreements sufficient to bind consumers
to contractual terms appearing in hyperlinked terms of use. (See, e.g.,
Dohrmann v. Intuit, Inc. (9th Cir. 2020) 823 Fed.Appx. 482, 484 (Dohrmann);
Meyer, supra, 868 F.3d at pp. 77−78; Selden, supra, 2016 WL 6476934 at *5;
Metter v. Uber Technologies, Inc. (N.D.Cal., Apr. 17, 2017, No. 16-cv-06652-
RS) 2017 WL 1374579 (Metter).) JustAnswer urges us to recognize sign-in
wrap agreements as a “new species” of online contract formation under
California law, to set “clear rules” for evaluating their enforceability in
“uniformity with the federal precedents,” and to hold that its website satisfies
the criteria set forth in the federal cases.
We recognize sign-in wrap agreements as a potential form of internet
contract formation, and acknowledge that “ ‘[c]ourts around the country have
recognized that [an] electronic ‘click’ can suffice to signify the acceptance of a
contract,’ and that ‘[t]here is nothing automatically offensive about such
agreements, as long as the layout and language of the site give the user
reasonable notice that a click will manifest assent to an agreement.’ ” (Meyer,
supra, 868 F.3d at p. 75, italics added.) But, in our view, the federal courts
have trended towards finding nearly any textual notice sufficient to bind a
consumer, while also applying largely subjective criteria that, at times,
results in inconsistent conclusions. This is perhaps in part because the
transactions at issue in the federal cases addressing sign-in wrap agreements
mostly involve a consumer signing up for an ongoing account and, thus, it is
reasonable to expect that the typical consumer in that type of transaction
contemplates entering into a continuing, forward-looking relationship.
However, given the context of the specific transaction at issue in this case, in
31
which the Legislature has acknowledged that consumers often do not expect
to enter into an ongoing relationship (see Sen. Jud. Com., Analysis of Sen.
Bill. No. 340 (2009–2010 Reg. Sess.) as amended Apr. 2, 2009, p. 4), we are
not persuaded that the federal cases JustAnswer relies upon are sufficiently
analogous.
As we have noted, no California appellate court has directly addressed
the validity of sign-in wrap agreements. The court in Long suggested
“[o]nline retailers would be well-advised to include a conspicuous textual
notice with their terms of use hyperlinks going forward.” (Long, supra, 245
Cal.App.4th at p. 867, italics added.) However, the court made that
statement in the context of addressing a browsewrap agreement that did not
include any textual notice and the advisement was not essential to the court’s
holding. (Ibid.) As JustAnswer acknowledges, the court’s statement was
dicta. (See Fireman’s Fund Ins. Co. v. Maryland Cas. Co. (1998) 65
Cal.App.4th 1279, 1301.) Moreover, we do not read Long to suggest that any
textual notice accompanying a hyperlink is sufficient to bind a consumer, and
the court in Long did not provide any guidance regarding what would make a
given textual notice sufficiently conspicuous to bind the consumer. (Long,
supra, at p. 867.)
In surveying the federal court decisions, it appears the overall trend
has been to find sign-in wrap agreements enforceable based on the existence
of essentially any textual notice that purports to inform consumers they
agree to the terms by signing up for an account or otherwise continuing to
use the website. (See, e.g., Britt v. ContextLogic, Inc. (N.D.Cal., Apr. 9, 2021,
No. 3:20-cv-04333-WHA) 2021 WL 1338553 at *3−5; Dohrmann, supra, 823
Fed.Appx. at p. 484; Allen v. Shutterfly, Inc. (N.D.Cal., Sept. 14, 2020, No. 20-
cv-02448-BLF) 2020 WL 5517172 at *6; Feld v. Postmates, Inc. (S.D.N.Y.
32
Mar. 3, 2020) 442 F.Supp.3d 825, 831−832 (Feld).) Indeed, there are
relatively few cases finding a sign-in wrap agreement insufficient to bind the
consumer. (See, e.g., Colgate v. JUUL Labs, Inc. (N.D.Cal. 2019) 402
F.Supp.3d 728, 764−766 (JUUL); Cullinane v. Uber Technologies, Inc. (1st
Cir. 2018) 893 F.3d 53, 63 (Cullinane); Berkson, supra, 97 F.Supp.3d at
pp. 403−404.) While some may characterize these latter cases as outliers, in
our view, they reveal some important limitations of the current state of the
law in these federal cases.
We first note the inconsistencies inherent in the subjective criteria
federal courts have relied upon to find sign-in wrap agreements enforceable.
While Long did not provide any specific guidance regarding the design
elements necessary to make a textual notice sufficiently conspicuous to bind a
consumer, it did rely on the “placement, color, size and other qualities [of the
terms of service hyperlinks] relative to the . . . [website’s] overall design” to
conclude the hyperlinks standing alone were not sufficiently conspicuous to
establish inquiry notice. (Long, supra, 245 Cal.App.4th at p. 866; see also
Nguyen, supra, 763 F.3d at pp. 1177−1178 [discussing placement, color, and
contrast of hyperlinks and the website’s general design].) Federal courts
relying on Long and Nguyen have generally considered similar criteria when
determining whether a textual notice is sufficiently conspicuous under
California law. These criteria include: 1) the size of the text; 2) the color of
the text as compared to the background it appears against; 3) the location of
the text and, specifically, its proximity to any box or button the user must
click to continue use of the website; 4) the obviousness of any associated
hyperlink; and 5) whether other elements on the screen clutter or otherwise
obscure the textual notice. (See, e.g., Dohrmann, supra, 823 Fed.Appx. at
p. 484 [considering the website’s general design and the font and location of
33
the advisement]; Meyer, supra, 868 F.3d at p. 78 [considering font, contrast,
and location of the advisement, and the style of the hyperlinks]; Selden,
supra, 2016 WL 6476934 at *5 [considering font size and contrast with the
background, and the proximity of the advisement].)
Because the threshold issue of the existence of a contract is for the
courts to decide, the issue of conspicuousness is typically characterized as a
question of law. (See Long, supra, 245 Cal.App.4th at p. 863; Bono, supra,
147 Cal.App.4th at pp. 1061−1062.) What the courts are actually conducting
when considering these criteria, however, is a fact-intensive inquiry. (Meyer,
supra, 868 F.3d at p. 76 [“Insofar as it turns on the reasonableness of notice,
the enforceability of a web-based agreement is clearly a fact-intensive
inquiry.”].) Moreover, the criteria are largely subjective, and there naturally
may be different views regarding, for example, what size or color of text
makes a given textual notice sufficiently conspicuous to bind a user. Thus,
the inquiry invariably lends itself to a more subjective than objective analysis
and, as a result, some courts have reached seemingly inconsistent results.
For example, in Metter, the court considered whether a textual notice
next to the “ ‘REGISTER’ ” button on the Uber sign-up page that read, “ ‘BY
CREATING AN UBER ACCOUNT, YOU AGREE TO THE TERMS OF
SERVICE & PRIVACY POLICY,’ ” was sufficient to bind consumers to an
arbitration provision contained in the hyperlinked terms of service. (Metter,
supra, 2017 WL 1374579 at *3.) Relying on Nguyen, the court acknowledged,
“[i]n the context of an electronic consumer transaction, the occurrence of
mutual assent ordinarily, as here, turns on whether the consumer had
reasonable notice of a merchant’s terms of service agreement,” and concluded
“the alert’s font, size, color, and placement relative to the ‘REGISTER’ button
render it sufficiently conspicuous to alert an Uber registrant that he is
34
agreeing to Uber’s terms of service.” (Id. at *2−3.) A number of other federal
courts evaluating similar Uber sign-up webpages have likewise concluded
that consumers “affirmatively assent to Uber’s terms and conditions by
clicking ‘DONE’ ” or “ ‘REGISTER’ ” on a sign-up page containing a similar
textual notice. (Cordas v. Uber Technologies, Inc. (N.D.Cal 2017) 228
F.Supp.3d 985, 990 (Cordas); West v. Uber Technologies (C.D.Cal., Sep. 5,
2018, No. 18-CV-3001-PSG-GJS) 2018 WL 5848903 at *3−6); see also Meyer,
supra, 868 F.3d at p. 78.)
However, looking at essentially the same Uber sign-up webpages,
another court found the textual notice was not sufficiently conspicuous in the
context of the overall “design and content” of the relevant screens.
(Cullinane, supra, 893 F.3d at p. 63.) Although JustAnswer argues Cullinane
is distinguishable because it was decided under Massachusetts law, the court
there similarly considered whether the notice was “ ‘[r]easonably
conspicuous.’ ” (Id. at p. 61.) Moreover, in JUUL, the court relied, in part, on
Cullinane to conclude textual notices similar in style, format, and placement
also were not sufficiently conspicuous. (JUUL, supra, 402 F.Supp.3d at
pp. 764−766.) Thus, as the Second Circuit Court of Appeals has
acknowledged, “reasonable minds could disagree on the reasonableness of
notice.” (Nicosia v. Amazon.com, Inc. (2d Cir. 2016) 834 F.3d 220, 238; Meyer,
supra, 868 F.3d at p. 76 [citing Nicosia and acknowledging “reasonable minds
could disagree regarding the sufficiency of notice” provided to online
consumers].)
JustAnswer urges this court to set “clear rules” for the evaluation of
sign-in wrap agreements, but, to do so in “uniformity with the federal
precedents.” While we agree a bright-line rule, or set of rules, preferably
developed by the Legislature, would provide greater certainty to both
35
providers and consumers, these federal precedents do not provide such
certainty. Metter and Cullinane is one example of two different courts
applying the same substantive law to essentially the same facts, but reaching
opposite conclusions. JustAnswer fails to acknowledge the inconsistencies
inherent in the subjective criteria those courts have relied upon to find other
sign-in wrap agreements enforceable.
Second, we note the individual courts have relied on similarly,
subjective views about the experience, knowledge, and skill level of the
“typical” online consumer. Relying on Nguyen, the court in Long explained,
“ ‘the validity of [a] browsewrap agreement turns on whether the website
puts a reasonably prudent user on inquiry notice of the terms of the
contract.’ ” (Long, supra, 245 Cal.App.4th at pp. 858, 863.) Although the
court in Long did not explicitly define the term “ ‘reasonably prudent user,’ ”
it used it in a limiting sense, focusing primarily on what “ ‘a reasonably
prudent offeree in plaintiffs’ position would not have known or learned.’ ” (Id.
at pp. 864, 866−867, italics added.) Indeed, the court impliedly rejected the
standard of “an especially observant [i]nternet consumer.” (Id. at pp. 865–
866.)
Contrary to the analysis in Long, federal courts have taken
significantly different views about the typical online consumer. In Selden,
the court believed “[t]he act of contracting for consumer services online is now
commonplace in the American economy,” such that “[a]ny reasonably-active
adult consumer will almost certainly appreciate that by signing up for a
particular service, he or she is accepting the terms and conditions of the
provider.” (Selden, supra, 2016 WL 6476934 at *5.) Thus, “while the record
[was] silent as to [the plaintiff’s] particular history with e-commerce, [the
Selden court found] the prevalence of online contracting in contemporary
36
society lends general support to the [c]ourt’s conclusion that [plaintiff] was on
notice that he was entering a contract with” the provider. (Ibid.) Similarly,
other courts have refused to “presume that the user has never before
encountered an app or entered into a contract using a smartphone.” (Meyer,
supra, 868 F.3d. at p. 77; see also Feld, supra, 442 F.Supp.3d at p. 830
[quoting Meyer]; but see Dohrmann, supra, 823 Fed.Appx. at pp. 484−485
[majority and dissenting judge disagree over whether “reasonably prudent
user would have inquiry notice of the terms of use”].)
However, not all internet users are alike. Given the proliferation of
internet-based commerce in recent years, more and more consumers are
using the internet each day. Although “ ‘[m]odern cell phones . . . are now
such a pervasive and insistent part of daily life’ ” for many (Meyer, supra, 868
F.3d at p. 77), others have only recently, and perhaps begrudgingly, begun to
use cell phones, or other internet-enabled devices, for the purpose of online
commerce. Importantly, the website service at issue here is marketed
towards users as young as 13 years old. Even if children knew how to use a
smartphone and are familiar with the internet, they are not likely to
understand that their use of a website may be governed by contractual terms,
or that those terms may be included in a hyperlinked “terms of use.”
Despite conducting extensive research on the topic, the court in
Berkson concluded there is very little empirical evidence regarding “what the
average internet user perceives to be the meaning of the phrase ‘terms of use’
or ‘terms and conditions,’ or the degree to which he or she is aware that each
time a purchase is conducted over the internet, a binding contract regarding
more than just the promise to pay may be being entered into.” (Berkson,
supra, 97 F.Supp.3d at p. 380; accord Long, supra, 245 Cal.App.4th at p. 867
[“the phrase ‘terms of use’ may have no meaning or a different meaning to a
37
large segment of the [i]nternet-using public”].) Thus, the Berkson court
observed that “[c]ourts have ‘decided,’ based largely on speculation, what
constitutes inquiry notice of a website’s ‘terms of use.’ ” (Berkson, at p. 380.)
In our view, it is more appropriate to focus on the providers, which
have complete control over the design of their websites and can choose from
myriad ways of presenting contractual terms to consumers online. These
include clickwrap and scrollwrap agreements that eliminate any uncertainty
as to the consumer’s notice of contractual terms and assent to those very
terms. We therefore agree with the courts in Long and Nguyen that “ ‘the
onus must be on website owners to put users on notice of the terms to which
they wish to bind consumers. Given the breadth of the range of technological
savvy of online purchasers, consumers cannot be expected to ferret out
hyperlinks to terms and conditions to which they have no reason to suspect
they will be bound.’ ” (Long, supra, 245 Cal.App.4th at p. 867, citing Nguyen,
supra, 763 F.3d at p. 1179; see also Berkson, supra, 97 F.Supp.3d at p. 382
[“The offeror has thought through the problems with the aid of lawyers and
other experts and is a ‘repeat player.’ ”)
This is particularly true when the transaction is one in which the
typical consumer would not expect to enter into an ongoing contractual
relationship, regardless of whether the transaction occurs online or in person.
As we have noted, it is questionable whether a consumer buying a single pair
of socks, or signing up for a free trial, would expect to be bound by
contractual terms, and a consumer that does not expect to be bound by
contractual terms is less likely to be looking for them.
In Specht, the court concluded, “where consumers are urged to
download free software at the immediate click of a button, a reference to the
existence of license terms on a submerged screen is not sufficient to place
38
consumers on inquiry or constructive notice of those terms.” (Specht, supra,306 F.3d at p. 32.) As the court explained, “[w]hen products are ‘free’ and
users are invited to download them in the absence of reasonably conspicuous
notice that they are about to bind themselves to contract terms, the
transactional circumstances cannot be fully analogized to those in the paper
world of arm’s length bargaining.” (Ibid.)
Similarly, the court in Long emphasized the expectations of a consumer
in the context of the transaction at issue, the purchase of a single flower
arrangement. After noting the hyperlinks to the terms of service at the
bottom of the page were difficult to find “even when one is looking for them,”
the court went on to explain, “[t]his of course is to say nothing of how
observant an [i]nternet consumer must be to discover the hyperlinks in the
usual circumstance of using ProFlowers.com to purchase flowers, without any
forewarning that he or she should also be on the lookout for a reference to
‘Terms of Use’ somewhere on the [website’s] various pages.” (Long, supra,
245 Cal.App.4th at p. 866.)
By contrast, the majority of the federal cases finding an enforceable
sign-in wrap agreement involve continuing, forward-looking relationships.
For example, in Meyer, the court concluded that the “transactional context of
the parties’ dealings reinforce[d] [its] conclusion” of sufficient inquiry notice.
(Meyer, supra, 868 F.3d at p. 80.) There, the plaintiff “located and
downloaded the Uber app, signed up for an account, and entered his credit
card information with the intention of entering into a forward-looking
relationship with Uber. The registration process clearly contemplated some
sort of continuing relationship between the putative user and Uber, one that
would require some terms and conditions, and the Payment Screen provided
39
clear notice that there were terms that governed that relationship.” (Ibid.,
italics added.)
Here, Plaintiffs were offered a $5 “trial” and alleged—like the consumer
downloading free software or purchasing flowers—that they did not
anticipate that they would enter into an ongoing relationship governed by
extensive contractual terms simply because they submitted a single question
for a “trial” and a one-time fee of $5. Indeed, as we discuss next, in this
specific type of transaction, the Legislature has acknowledged that
consumers are often enrolled in automatic renewal membership programs
without their knowledge or consent, and has therefore set forth specifically
defined statutory notice requirements pertaining to the enrollment of
consumers in such programs. (See § 17601, subd. (c).)
IV.
The Textual Notices on the JustAnswer “Start my trial” Screens Were Not
Sufficiently Conspicuous to Bind Plaintiffs to the Arbitration Provision
A. A Textual Notice of the Existence of Contractual Terms That Limit the
Consumer’s Ability to Address Alleged ARL Violations Must Be
Considered in the Context of the ARL
As we have just explained, the full context of the transaction is critical
to determining whether a given textual notice is sufficient to put an internet
consumer on inquiry notice of contractual terms. (See Long, supra, 245
Cal.App.4th at p. 866; Specht, supra, 306 F.3d at p. 32; Meyer, supra, 868
F.3d at p. 80.) Here, the underlying transaction involved a $5 “trial” that
automatically enrolled consumers in a relatively costly recurring monthly
membership. Since the Legislature has specifically addressed the notice
requirements for this type of transaction under the ARL, we consider those
40
requirements when evaluating the transaction as a whole.8 Doing so, we
conclude the notices on the “Start my trial” screens of the JustAnswer
website were not sufficiently conspicuous to bind Plaintiffs, both because they
were less conspicuous than the ARL’s statutory notice requirements9 and
because they were not sufficiently conspicuous even when considering the
more subjective criteria applied in the more recent federal cases.
When a user first accesses the JustAnswer website, regardless of the
type of device they use, they are offered the chance to “[t]alk to doctors,
lawyers, vets, [and] more in minutes” and are presented with a box where
8 During oral argument, counsel for JustAnswer agreed it was critical for
courts to consider the transactional context in determining whether there is
sufficient inquiry notice. Yet, he then asserted there was “no significance” to
the ARL or its statutory definition of “clear and conspicuous” notice for the
very transaction at issue here. Counsel argued the ARL provides specific
remedies for violations, those remedies do not include the right to void a
contract, and, as evidenced by other statutes, the Legislature could have
included a right to cancel or void the contract if it had so intended. We are
not persuaded. Counsel focused primarily on section 17603, which addresses
when a business sends merchandise under an automatic renewal agreement
without the consumer’s consent. Although that circumstance is not present
here, the remedy in section 17603 is for the item to be deemed an
“unconditional gift” to the consumer, “without any obligation whatsoever on
the consumer’s part,” which, effectively, voids at least any contractual term
requiring the consumer to pay for the item. Further, the ARL addresses
continuous service agreements, and section 17604 provides that “all available
civil remedies that apply to a violation of this article may be employed.”
9 We express no opinion as to whether the notice of JustAnswer’s
automatic renewal membership program met the ARL requirements or the
viability of Plaintiffs’ second cause of action (see Mayron v. Google LLC
(2020) 54 Cal.App.5th 566, 572 (Mayron) [concluding the ARL may be
enforced through the UCL but does not establish an independent private
right of action], and instead conclude only that JustAnswer may not preclude
Plaintiffs from litigating that claim based on a significantly less conspicuous
notice of an agreement to arbitrate.
41
they can type a question. Notably, there is no mention of cost on this initial
screen. However, once the user submits their question, instead of receiving a
response, they are directed to a payment page and offered the opportunity to
“get [their] answer in minutes” by signing up for a $5 “trial.” Instead of a $5
trial, though, they are enrolled in a costly monthly membership.
As the Legislature explained in enacting the ARL, it has become
increasingly common for consumers to complain about being charged for
services they did not request—or to find out they allegedly entered into an
ongoing contract for services they did not realize they were agreeing to—after
making what they believed to be a one-time purchase. (See Sen. Jud. Com.,
Analysis of Sen. Bill. No. 340 (2009–2010 Reg. Sess.) as amended Apr. 2,
2009, p. 4.) Similarly, here, as alleged in the underlying complaint, Plaintiffs
believed they would be charged a one-time fee of $5 and would not be charged
at all if they were not satisfied with the answers they received. Plaintiffs
raised complaints about the quality of the response they received, and both
believed their business dealings with JustAnswer were complete, but both
were charged a monthly membership fee for several months.
This is precisely the type of transaction the Legislature intended to
regulate in the ARL. (§ 17600 [“It is the intent of the Legislature to end the
practice of ongoing charging of consumer credit or debit cards . . . without the
consumers’ explicit consent for . . . ongoing deliveries of service.”]; Sen. Jud.
Com., Analysis of Sen. Bill. No. 340 (2009–2010 Reg. Sess.) as amended Apr.
2, 2009, p. 4.) To ensure consumers are not enrolled in such programs
without their explicit consent, the ARL mandates that businesses present the
terms of enrollment in a “clear and conspicuous manner . . . in visual
proximity . . . to the request for consent to the offer.” (§ 17602.) Further, the
Legislature defined “ ‘clear and conspicuous’ ” to mean “in larger type than
42
the surrounding text, or in contrasting type, font, or color to the surrounding
text of the same size, or set off from the surrounding text of the same size by
symbols or other marks, in a manner that clearly calls attention to the
language.” (§ 17601, subd. (c), italics added.) Violations of the ARL are
addressed through civil remedies. (§ 17604.)
Here, JustAnswer attempts to thwart Plaintiffs’ ability to address the
alleged ARL violations by seeking to enforce an arbitration provision and
class action waiver included in JustAnswer’s terms of service. However, the
textual notices of the existence of those terms are significantly less
conspicuous than the statutory notice requirements governing Plaintiffs’
underlying claims. The text on the “Start my trial” page for desktop users is
not “in larger type than the surrounding text” and is not “in contrasting type,
font, or color to the surrounding text of the same size, or set off from the
surrounding text of the same size by symbols or other marks, in a manner
that clearly calls attention to the language.” (§ 17601, subd. (c).) Further,
the text appears below the white payment box, outside the user’s primary
area of focus, and not in “visual proximity . . . to the request for consent.”
(§ 17602.) Similarly, the textual notice on the mobile version is at the very
bottom of the screen, in smaller text than anything else on the page, and in a
grey hue that contrasts less with the dark background than any other text on
the page. (See § 17601, subd. (c).)
Enforcing a mandatory arbitration provision that includes a class
action waiver based on these textual notices—which are less conspicuous
than the statutory notice requirements governing Plaintiffs’ underlying
claims—would permit JustAnswer to end-run around legislation designed to
protect consumers in these specific transactions. Although Plaintiffs could at
least theoretically address their ARL claim through individual arbitration,
43
those claims are not likely worth pursuing on an individual basis as the value
of each individual claim is small. As the California Supreme Court has
explained, “ ‘[a] company which wrongfully exacts a dollar from each of
millions of customers will reap a handsome profit; the class action is often the
only effective way to halt and redress such exploitation.’ ” (Linder v. Thrifty
Oil Co. (2000) 23 Cal.4th 429, 446; see also Mayron, supra, 54 Cal.App.5th at
p. 572 [concluding the ARL may be enforced through the UCL with the
available civil remedies limited to restitution and injunctive relief].)
Certainly, JustAnswer was aware of this when they included the arbitration
provision and the class action waiver in its terms of service.
Because “ ‘the onus must be on website owners to put users on notice of
the terms to which they wish to bind consumers’ ” (Long, supra, 245
Cal.App.4th at p. 867), a textual notice of the existence of contractual terms
that limit the consumer’s ability to address ARL violations should, in our
view, be at least as conspicuous as the notice required by the statute in the
first instance. At a minimum, though, and in the absence of a bright-line
rule, the statutory requirements of the ARL, and its stated intent to protect
consumers from unwittingly being entered into automatically recurring
memberships, must be considered as part of the overall transactional context.
The textual notices of the JustAnswer terms of service at issue here not only
circumvent the statutory requirements of the ARL, but also fail to provide
sufficient notice when considering the overall context of the transaction and
the more subjective criteria applied in the federal cases JustAnswer relies
upon.
B. JustAnswer’s Textual Notices Were Not Sufficiently Conspicuous to
Provide Plaintiffs with Inquiry Notice
Again, we begin by considering the context of the transaction. As
discussed, a consumer on the JustAnswer website is not asked to “sign up” for
44
an account but is instead invited to “Start my trial” and get the answer to a
single question for a one-time fee of $5. This is not a situation in which “[t]he
registration process clearly contemplated some sort of continuing relationship
. . . that would require some terms and conditions,” nor is there any evidence
the Plaintiffs were familiar with the service being offered. (See Meyer, supra,
868 F.3d at p. 80.) To the contrary, Plaintiffs were attempting to “[s]tart [a]
trial” to determine whether they wanted to use the service at all and were not
likely expecting that their “trial” would be governed by approximately 26
pages of contractual terms. Thus, just as they would not likely be looking for
small print regarding enrollment in an automatically recurring membership,
they also would not likely be scrutinizing the page for small text outside the
payment box or at the bottom of the screen linking them to 26 pages of
contractual terms. (See Long, supra, 245 Cal.App.4th at pp. 866–867.)
Absent such scrutiny, it is not likely a typical consumer would notice
the relatively inconspicuous notice of contractual terms that would govern
their use of the JustAnswer website. On the desktop version, the notice
appears in extremely small print,10 outside the white box containing the
payment fields where the consumer’s attention would necessarily be focused.
Although the text of the notice appears in white against a dark background,
the font is so small that the contrast is not sufficient to make the text
apparent. Further, the hyperlink to the terms of service is underlined, but it
10 JustAnswer asks us to consider the size of the text as it would appear
on a 20-inch desktop monitor. We decline to do so. Users view webpages on
all sizes of screens and, even on a larger screen, may view the website in a
smaller window or may increase or decrease the zoom. Rather than consider
the size of the text on a particular sized screen, we consider the size of the
textual notice in relation to the other text on the screen.
45
is not set apart in any other way that may draw the attention of the
consumer, such as with blue text or capital letters.
The textual notice on the mobile version of the “Start my trial” screen
fares no better. It also appears in smaller print than any other print on the
page and in a grey shade that contrasts with the dark background
significantly less than the other text on the page. And, again, the hyperlink
to the terms of service is underlined, but does not otherwise draw the user’s
attention in any way. Considering all of these factors together, we agree with
the trial court that neither of these notices were sufficiently conspicuous to
put Plaintiffs on inquiry notice that they would be bound by the terms of
service by proceeding with their trial.
JustAnswer asserts its notices are similar to others found sufficiently
conspicuous by federal courts. We are not bound by those decisions (see
Brooks, supra, 3 Cal.5th at p. 90), and, as we have explained, the relevant
criteria they applied to evaluate conspicuousness is largely subjective.
Moreover, none of the federal cases address a transaction that implicates the
ARL, or any other similar statute containing a statutory definition of
conspicuous notice that is directly relevant to the context of the transaction.
As the courts in Long and Specht acknowledged, the transactional context is
an important factor to consider and is key to determining the expectations of
a typical consumer. (See Long, supra, 245 Cal.App.4th at p. 866; Specht,
supra, 306 F.3d at p. 32.)
Further, we note that even minor differences in one or more of the
criteria may be sufficient to render a textual notice insufficient. Because
website providers have full control over the design of their websites, the onus
is on them to provide adequate notice of contractual terms, particularly
where, as here, the consumer is not likely expecting to be bound by such
46
terms. (Nguyen, supra, 763 F.3d at pp. 1178−1179.) With that in mind,
courts must establish clear limits on what constitutes sufficient notice. Even
text that is just slightly smaller, or slightly further away from the box or
button the consumer must click on must, at some point, exceed the limits of
what constitutes adequate notice. (See, e.g., In re Ring LLC Privacy
Litigation (C.D.Cal., June 24, 2021, No CV 19-10899-MWF (RAOx)) 2021 WL
2621197, Appendix [showing progression from clickwrap to sign-in wrap and
associated textual notice moving further away from the sign-in or sign-up
button].) Here, JustAnswer chose to use a textual notice attached to a
hyperlink as opposed to a pure clickwrap or scrollwrap form, and then chose
to display that notice in extremely small print and not immediately adjacent
to the “Start my trial” button. By doing so, JustAnswer ran the risk of a
court concluding, as we do here, that the notice was not sufficiently
conspicuous.
JustAnswer also asserts the Plaintiffs here did not actually deny seeing
the textual notice, and instead only denied seeing the terms of service.
However, as JustAnswer acknowledges, both Plaintiffs averred they “did not
know about [the terms of service] document.” Those statements at least
suggest Plaintiffs did not see the textual notices. Had they seen them, they
would have known about the terms of service document, even if they had
chosen not to read it. JustAnswer relies on Cordas, where the court pointed
out the plaintiff offered no testimony of what he did see, but there, the
plaintiff disputed the website providers’ description of the relevant screens.
(See Cordas, supra, 228 F. Supp. 3d at pp. 989−990.) Here, there is no such
dispute.
In sum, we conclude JustAnswer’s textual notices were not sufficiently
conspicuous to establish inquiry notice or to infer manifestation of assent
47
and, therefore, are not sufficient to bind Plaintiffs to the arbitration provision
set forth in its terms of service.
V.
The Textual Notices on the Mobile “View Response” Screen Was Not
Sufficiently Conspicuous to Bind Plaintiffs
Finally, we consider the textual notice on the mobile “View response”
screen. Although somewhat more like a clickwrap agreement that is
generally enforceable (see Nguyen, supra, 763 F.3d at p. 1177), this particular
notice was also not sufficient to bind Plaintiffs for two reasons.
First, the “View response” screen occurs only after the user has already
signed up for a “trial”—that is, after the user has already been automatically
enrolled in a recurring monthly membership. Therefore, it is not “in visual
proximity . . . to the request for consent to the offer,” and is not at least as
conspicuous as the notice required by the ARL governing these transactions.
(See § 17602.) Moreover, and even setting the ARL aside, the user does not
see this screen until they attempt to retrieve the answer they have already
paid for, and this is not where “ ‘a reasonably prudent user’ ” would expect to
enter into a contract. (See Long, supra, 245 Cal.App.4th at p. 863.)
Second, the entirety of the underlined text, “Disclaimer and re-agree to
the Terms of Service” is a single hyperlink that goes to a set of disclaimers
regarding the accuracy of the answer the user is about to receive, and not to
the terms of service. The consumer finds the terms of service, and the
associated arbitration provision, only if they click on a separate hyperlink
contained in the following text, which appears at the end of each of two sets
of disclaimers on the disclaimer page: “You can read more about these
policies in our Terms of Service.” This language does not suggest the
consumer will be bound by those terms and instead, the entire scenario
requires the user “to ferret out hyperlinks to terms and conditions to which
48
they have no reason to suspect they will be bound.” (Nguyen, supra, 763 F.3d
at p. 1179; see also Wilson v. Huuuge, Inc. (9th Cir. 2019) 944 F.3d 1212,
1221 (Wilson).)
JustAnswer contends the Ninth Circuit’s decision in In re Holl (9th Cir.
2019) 925 F.3d 1076 is instructive, but it is not. There, the court considered a
similar scenario in which the consumer had to click a box to agree to the
“UPS Technology Agreement” and the “UPS My Choice® Service Terms,”
both of which were hyperlinked from the accompanying textual notice. (Id. at
p. 1080.) Neither contained the arbitration provision at issue, and instead,
the consumer could find it only by examining one of several documents
incorporated by reference in the service terms. (Id. at p. 1081.) The court
noted, “locating the arbitration clause at issue here requires several steps
and a fair amount of web-browsing intuition.” (Id. at p. 1083.) It went on to
point out that the “My Choice Service Terms now include a hyperlink to the
UPS Tariff/Terms and Conditions of Service and expressly inform the user
that the incorporated document contains an agreement to arbitrate,” and
indicated it would be “much easier” to determine whether the terms as
modified provided sufficient notice of the arbitration provision. (Id. at
p. 1084.)
However, the matter came to the Ninth Circuit on a petition for writ of
mandamus and the court had discretion to deny the writ even if the
petitioner demonstrated error. (In re Holl, supra, 925 F.3d at pp.
1082−1083.) In that context, the court concluded, “[w]e cannot say, with
‘definite and firm conviction,’ that the district court erred by finding the
incorporation [of the document containing the agreement to arbitrate] valid”
and denied the petition. (Id. at pp. 1084−1085.)
49
Here, the only evidence in the record establishes the hyperlink does not
take the consumer to terms advising them they would be bound by an
agreement to arbitrate. Instead, the terms are available only if the consumer
scrolls through the disclaimers and clicks on a secondary link to the terms of
service. Considering the context of the transaction, the notice was
insufficient to bind Plaintiffs.11 (See Wilson, supra, 944 F.3d at p. 1221
[“courts decline to enforce agreements where the terms are available only if
users scroll to a different screen [citation], complete a multiple-step process of
clicking non-obvious links, [citation], or parse through confusing or
distracting content and advertisements”].)
To conclude, we hold that none of the textual notices on the JustAnswer
website were sufficiently conspicuous to bind Plaintiffs to the arbitration
provision set forth in the terms of service. The trial court properly denied
JustAnswer’s petition to compel arbitration.
11 In any event, JustAnswer acknowledges the “View response” screen
was presented only to mobile users. Even if we were to conclude for
argument sake that the notice on this page is sufficient to bind users, it
would apply only to Sellers and not to O’Grady or other putative class
members that viewed the website on a desktop or laptop computer.
50
DISPOSITION
The trial court’s order denying the petition to compel arbitration is
affirmed. Plaintiffs are awarded their costs on appeal. (Cal. Rules of Court,
rule 8.278(a)(1) & (2).)
DO, J.
WE CONCUR:
HALLER, Acting P. J.
O'ROURKE, J.
51