Hansen v. Ticketmaster

Background

Derek Hansen filed a class action against Ticketmaster Entertainment, Inc. and Live Nation Entertainment Co. He alleged that the defendants violated the law by retroactively changing Ticketmaster’s refund policy after the coronavirus pandemic. The defendants moved to compel arbitration.

The defendants argued that Hansen agreed to Ticketmaster’s Terms of Use at account creation, account sign-in, and ticket purchase. The court stated that it only needed to consider the sign-in page. Hansen had to sign in to his Ticketmaster account before purchasing tickets for two Rage Against the Machine concerts in February 2020.

The sign-in page required an email address and password and included a blue “Sign in” button. Directly above the button, the page stated: “By continuing past this page, you agree to the Terms of Use and understand that information will be used as described in our Privacy Policy.” “Terms of Use” appeared in blue and linked to the terms. Those terms included an arbitration agreement requiring covered disputes to be resolved through binding, individual arbitration rather than in court, and a class-action waiver.

Legal standard

The court applied California contract law. Under that law, contract formation requires a manifestation of mutual assent, meaning that the parties’ outward actions would lead a reasonable person to believe that they agreed to the contract’s terms.

The court distinguished between clickwrap agreements, which require a user to click an “I agree” box, and browsewrap agreements, in which terms are posted through a website hyperlink and the user supposedly agrees merely by using the site. The parties agreed that Ticketmaster’s sign-in page fit neither category exactly and was instead a modified clickwrap agreement.

Because Hansen disputed whether an arbitration agreement was formed, the court considered whether he had constructive knowledge of the Terms of Use. Constructive knowledge means that the circumstances provided enough notice that a reasonable person should have known about the terms.

Court’s analysis

The court relied on Ninth Circuit decisions involving Ticketmaster and another sign-in page. In the Ticketmaster decision, the Ninth Circuit held that a similar sign-in page gave sufficient notice for constructive assent and created a binding arbitration agreement. Another Ninth Circuit decision found contract formation where terms were linked directly below a sign-in button on a relatively uncluttered page.

The court found Hansen’s sign-in page relatively uncluttered, with the sign-in box prominently displayed. It also found the notice conspicuous because it appeared directly above the sign-in button, was not markedly smaller than the other text, contrasted sufficiently with the white background, and displayed “Terms of Use” in blue hyperlink text.

The court rejected Hansen’s arguments that the notice was inadequate because few users clicked the Terms of Use hyperlink and because the page said “by continuing past this page” rather than “by clicking on the Sign In button.” The court reasoned that a customer could not continue past the sign-in page to purchase tickets without clicking the sign-in button. It also stated that a user could not avoid the terms simply by failing to read them when the user had a legitimate opportunity to review them.

Disposition

The court concluded that Hansen validly assented to Ticketmaster’s Terms of Use when he clicked the sign-in button required to purchase the tickets. By agreeing to those terms, he also agreed to the arbitration provision. The court granted the defendants’ motion to compel arbitration, stayed the proceedings pending arbitration, and stated that the order disposed of Docket No. 22.