Rushing v. Williams-Sonoma, Inc.

Background

The defendants—Williams-Sonoma, Inc., William-Sonoma DTC, Inc., and Williams-Sonoma Advertising, collectively referred to as WSI—asked the court to modify the certified class definition to exclude consumers whose claims were allegedly subject to WSI arbitration agreements. The request arose during a dispute about the class-notice plan. The court had previously directed WSI to renew the request through a properly noticed motion supported by fuller evidence.

The certified class covered people in California who, from January 19, 2007, to the present, purchased specified bedding products directly from Williams-Sonoma, Inc. WSI relied on terms and conditions presented through its e-commerce websites, mobile applications, gift-registry pages, and Key Rewards enrollment processes. Those terms allegedly included arbitration provisions.

Court’s authority and legal standard

The court explained that, because a class had already been certified, WSI’s request was properly treated as a motion to modify the class definition—not as a motion ordering absent class members to arbitrate. The court rejected WSI’s argument that the named representative, Perlin, had given up the ability to challenge whether class members had reasonably noticed and agreed to the terms. The court also declined to decide whether incorporation of American Arbitration Association rules assigned questions about arbitrability to an arbitrator.

Under California law, the party seeking arbitration must prove, more likely than not, that a valid arbitration agreement exists and covers the dispute. For online terms, a consumer must have actual notice or be placed on inquiry notice—meaning the website or app reasonably made the terms apparent to a prudent user. Unless the consumer actually knew about the agreement, enforceability generally requires reasonably noticeable disclosure and an action that clearly shows agreement.

Reasons for denying the motion

The court held that WSI’s evidence was insufficient in two independently adequate ways.

First, WSI did not adequately show what consumers saw across each brand, website, mobile application, mobile-device browser, purchasing channel, and relevant time period. WSI submitted screenshots that appeared to show desktop or laptop webpages but did not provide comparable screenshots or testimony explaining how the disclosures appeared in the apps or on mobile devices. WSI also did not establish that the pages shown in its examples were materially identical across brands or time periods. Its declarations acknowledged that visual elements may have changed but did not explain those changes sufficiently.

The court found additional gaps in the evidence for gift registries and Key Rewards. The gift-registry screenshots showed different page designs that WSI did not explain. For the Gold Key program, WSI did not provide a screenshot of the page containing the application-submission button. For the Silver Key program, WSI did not provide adequate evidence about how the design changed between the 2019 example and the present-day example.

Second, the court found that the example pages were not visually conspicuous enough to establish inquiry notice. The disclosures were often in smaller, black, uncapitalized text, and the hyperlinks were not visually distinguished by color. Some pages were crowded with product images, payment options, shipping information, or other prominent buttons. On the gift-registry pages, the disclosure was separated from the button used to create a registry. For Gold Key Rewards, the disclosure appeared among more prominent credit-card terms and did not clearly show that applying for the card unambiguously accepted the Rewards terms.

Disposition

The court denied WSI’s motion to modify the class definition on the basis of arbitration agreements. It separately stated that WSI’s requests to exclude e-commerce purchasers from the various periods, gift-registry users, mobile-device and app users, and Gold Key Rewards members were denied. The existing class definition from the February 21, 2024, class-certification order remained in place. The court did not reach certain additional arguments because WSI’s evidentiary showing already failed to meet its burden.