Ramirez v. Trusper, Inc.

Background

Elia Ramirez brings claims on behalf of herself and a proposed class against Trusper, Inc., doing business as Musely. She alleges that Musely embedded Facebook Pixel surveillance software into its website, allowing Meta Platforms, Inc., to intercept patients’ personally identifiable information and protected health information in violation of California privacy laws.

Ramirez purchased prescription skincare treatment from Musely’s website on June 6, 2023. Musely required users to enroll before purchasing, using a multi-step process. In Step One, titled “Find My Doctor,” users entered their home state and encountered a pre-checked box stating, “I agree to the terms of Telehealth Consent.” The words “Telehealth Consent” linked to a separate pop-up. That pop-up referred users to a “terms page,” but also said users could click a link “provided below,” although no such link appeared below the message. Musely alleged that the “terms page” ultimately led to its Participation Agreement.

In Step Two, titled “Create an Account,” users entered their name, email address, and password. A statement at the bottom said, “By signing up, you agree to Musely’s Privacy Policy and Terms of Use.” Musely alleged that the “Terms of Use” link led to a table of contents, from which users could reach the Participation Agreement. Musely did not provide the table of contents, its hyperlink, or other evidence showing how that page appeared to users.

The sixteen-page Participation Agreement contained an arbitration clause on pages fourteen and fifteen, under a section titled “7. Applicable Law.” The clause required binding arbitration in Santa Clara, California, for legal disputes relating to or arising from use of Musely’s site or services.

Legal standard

Under the Federal Arbitration Act, a written arbitration provision in a qualifying contract is generally enforceable, subject to ordinary contract defenses. The court must first determine whether a valid arbitration agreement exists and, if so, whether it covers the dispute.

The parties agreed that the Participation Agreement was a modified “sign-in wrap” agreement. In this type of online agreement, a user is told that taking an affirmative action—such as clicking a button or creating an account—means the user accepts linked terms. Under California law, enforcement requires both reasonably conspicuous notice of the terms and an action that clearly shows assent to them.

Court’s analysis

The court held that Musely failed to prove that the Participation Agreement’s terms were presented with reasonably conspicuous notice. Notice must be displayed in a format and font size that would allow a reasonably careful internet user to see it, and any hyperlink must be readily identifiable.

The court acknowledged that Ramirez’s transaction involved an ongoing relationship involving telehealth services and prescription skincare treatment. Ramirez also had a sixty-day check-in period with an e-Nurse after receiving treatment. The court found, however, that this context did not eliminate Musely’s obligation to make the terms visually conspicuous.

For Step One, the court found several problems. The “Telehealth Consent” link appeared in smaller black text next to a pre-checked box. The court did not decide whether that presentation alone gave adequate notice because clicking the link did not directly lead to the Participation Agreement. Instead, users reached another page containing a less noticeable, underlined “terms page” link within three paragraphs of text. The page’s reference to a link “provided below” could make users believe that the relevant link was somewhere else. The different labels—“Telehealth Consent,” “terms page,” and “Participation Agreement”—also made the route to the arbitration terms confusing. The court further found that requiring multiple clicks reduced the likelihood that users would receive adequate notice. Musely also failed to provide the actual hyperlink or an image of the page to which the “terms page” link led.

For Step Two, the court found similar problems with the multi-step route from “Terms of Use” to the Participation Agreement. More importantly, Musely did not provide evidence showing what the alleged table of contents looked like or whether its final link to the Participation Agreement was reasonably conspicuous. The court stated that the burden was on Musely, as the party asserting that a contract existed, to provide evidence of mutual assent and contract formation.

The court also noted, although it was not necessary to its decision, that the arbitration clause was difficult to locate because it appeared on page fourteen under the heading “7.1 Applicable Law.” The court found that this further supported Ramirez’s position that Musely had not provided reasonably conspicuous notice of the terms.

Because Musely failed to establish adequate notice, the court did not analyze whether Ramirez had unambiguously manifested assent to the Participation Agreement.

Disposition

The court denied Musely’s motion to compel arbitration.