Beltran v. Nationstar Mortgage LLC

Background

Martin Beltran sued Nationstar Mortgage LLC, doing business as Mr. Cooper, individually and on behalf of a proposed class. He alleged that Nationstar used third-party tracking technology on its website to collect and share users’ personal and financial information without authorization. His amended complaint asserted claims involving negligence, California computer-data law, California consumer-protection and privacy laws, breach of contract, unjust enrichment, breach of confidence, and the federal Electronic Communications Privacy Act.

Beltran had created an online account after obtaining a mortgage through Bank of America and used Nationstar’s website to review his account, manage his mortgage, and make payments. During account creation, the webpage stated directly above the “Save & Continue” button: “By clicking ‘Save & Continue’ you agree to the Terms of Use for Mr. Cooper’s website.” The words “Terms of Use” were bold, italicized, blue, and linked to the full Terms of Use.

Those Terms stated that use of the Mr. Cooper websites and mobile applications was governed by applicable federal law and Texas law, and that “venue shall be located in Dallas County, Texas.”

Motion to Transfer

Nationstar moved under 28 U.S.C. § 1404(a), which permits a federal court to transfer a civil case for convenience and the interests of justice. Nationstar argued that the online Terms of Use contained a valid and enforceable forum-selection clause covering Beltran’s claims.

The court applied California law to determine whether Beltran agreed to the online Terms of Use. It treated the account-creation process as a “sign-in wrap” agreement: a website tells a user that signing up requires acceptance of separate terms, but does not require the user to check a box confirming that the terms were read. Such an agreement is enforceable if the website gives reasonably conspicuous notice of the terms and the user takes an action that clearly indicates assent.

Agreement to the Terms of Use

The court held that the website provided reasonably conspicuous notice. Creating an account to make continuing mortgage payments suggested an ongoing relationship in which a user would expect terms and conditions to apply. The notice was also legible, appeared directly above the action button, and used blue, bold, and italicized text for the hyperlink to the Terms of Use.

The court further held that Beltran manifested assent by clicking “Save & Continue.” The webpage expressly told him that clicking that button constituted agreement to the Terms of Use. The court rejected his argument that a user might theoretically bypass the button through an automatically generated password and keyboard commands because he did not allege that he had done so.

The court also rejected Beltran’s argument that the forum-selection clause was ambiguous. Reading the clause in context, the court concluded that “venue” referred to the place where lawsuits arising from access to and use of the website would proceed. The court noted that Beltran did not offer a reasonable alternative interpretation that would make the clause ambiguous.

Public-Interest Factors

Because the court found a valid forum-selection clause, it gave the clause controlling weight except in an exceptional case. It disregarded Beltran’s choice of forum and the parties’ private-interest arguments and considered only public-interest factors.

The court held that Beltran had not shown that those factors overwhelmingly disfavored transfer. It noted that the Northern District of Texas was less congested than the Northern District of California based on the figures provided by Nationstar, and that Texas law governed use of the Mr. Cooper websites under the Terms of Use. Beltran’s argument that California had a local interest in the dispute was insufficient by itself to defeat transfer.

Disposition

The court GRANTED Nationstar’s motion to transfer venue to the Northern District of Texas under 28 U.S.C. § 1404(a). The order disposed of Docket No. 24. The opinion did not decide the merits of Beltran’s underlying claims.