Monday, May 2, 2016

Caveat Venditor!

Loving v. Provide Commerce, Inc., No. B257910 (D2d3 Mar. 17, 2016)

This lawsuit alleges that some pictures on an online flower delivery service’s website violated Business & Professions Code § 17200 because the bouquets depicted in website photos required arrangement on delivery. (Yes, people sue about that sort of stuff in California all the time. Word is that it’s a good living.) The flower company had an arbitration policy in its online terms of use, but to get to them, a viewer needed to click on either its TERMS OF USE hyperlink, which plaintiff said he never looked at, or on a hyperlink in the email sent to confirm an order. Flowerco moved to compel arbitration but its motion was denied.

The Court of Appeal, relying on some recent Ninth Circuit cases, affirms. The decision turns on the different kinds of user agreements on the Internet. In one kind, called “clickwrap,” the user needs to check a box or otherwise manifest consent to certain terms of use as a condition of proceeding. In the other—“browsewrap”—the terms of use are in some form of notice that says by using the service you consent to the terms. Under the Ninth Circuit’s Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014), to compel arbitration in a browsewrap scenario, the web defendant needs to actually show that the customer viewed or had sufficient notice of the policy in order for it to be binding. Available hyperlinks somewhere on a browsed page aren’t enough.

Everyone agrees that this is a browsewrap scenario, because there’s no requirement for a user to check a box or something like that before proceeding. Absent that seemingly minuscule affirmative act, 
proof of contract formation becomes a tricky issue. The court here notes that the web-links to the policy in this case were pretty hard to find. And the links in the confirmation email were even harder to find, potentially requiring scrolling downward through pages worth of junk stuff. To the court, that isn’t enough to form an agreement that includes the linked provisions. But the court goes a little farther and states what purports to be a bright-line rule: For a browsewrap arb clause to be enforceable, there needs to be a conspicuous textual notice on the page itself that advises users that continued use of the website will bind the user to the TOUs. A hyperlink to a a page saying that won’t cut it.

And for essentially the same reasons, a browsewrap TOU venue provision requiring suit to be brought in San Diego County would not be enforced.


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