Berman v. Freedom Financial Network, LLC

Background

Daniel Berman, Stephanie Hernandez, and Erica Russell brought claims under the Telephone Consumer Protection Act concerning autodialed text messages and prerecorded voice calls. The messages and calls allegedly were part of a telemarketing campaign by Lead Science, LLC, also known as “Drips,” and Fluent, Inc., promoting services of Freedom Financial Network, LLC and Freedom Debt Relief, LLC. Fluent obtained leads through consumer-facing websites offering rewards, discounts, product samples, or sweepstakes entries.

The motion at issue concerned only Hernandez’s and Russell’s claims. The defendants moved to compel arbitration under the Federal Arbitration Act, which generally requires courts to enforce written arbitration agreements covering the parties’ claims. The party seeking arbitration bears the burden of showing that an agreement exists, that the claims fall within its scope, and that the agreement is valid and enforceable.

Evidence and Website Terms

The defendants relied on a declaration from Mitenkumar Bhadania, a Fluent computer system engineer, who recreated multiple webpages that each plaintiff allegedly would have seen based on a session-specific visitor identification number. The court found an evidentiary dispute over whether those screenshots showed an agreement with either plaintiff. The screenshots appeared equivalent to blank form contracts and did not clearly show that these plaintiffs had agreed to the terms. Fluent also omitted other pages from the users’ website interactions that might have shown whether these particular users encountered or interacted with the displayed pages. Hernandez and Russell submitted declarations disputing that they saw elements of those pages.

The court separately held that, even assuming the webpages caused the plaintiffs’ telephone numbers to be recorded as leads, the webpages did not conspicuously communicate that users were agreeing to the Terms and Conditions, including mandatory arbitration. A hyperlink to the terms appeared near a button that users had to click to continue, but the page did not state that clicking would indicate agreement and did not require an affirmative act directed toward accepting the Terms and Conditions. There was no checkbox or “I agree” button. The “This is correct, Continue!” and “Continue” buttons referred to entering other information, rather than consenting to the terms. The arbitration language was also in very small black text against a white background compared with the larger, more colorful text elsewhere on the page.

Ruling

The court found that the defendants failed to meet their burden of establishing that Hernandez and Russell assented to a mandatory arbitration agreement. It therefore DENIED the motion to compel arbitration. The order stated that it terminated Docket No. 224.