Britt v. ContextLogic, Inc.

Background

Tiffany Britt brought a proposed class action against ContextLogic, Inc. She alleged that ContextLogic’s Wish.com website and mobile applications sold or offered contact lenses without the required license and without requiring purchasers to provide a prescription. Her claims arose under California’s Consumer Legal Remedies Act and Unfair Competition Law, as well as the Fairness to Contact Lens Consumers Act.

ContextLogic petitioned to compel arbitration based on a mandatory arbitration provision in its terms of use. Britt moved for partial summary judgment, arguing that she had not assented to the terms and that, even if an arbitration agreement existed, it was unenforceable.

Contract Formation and Assent

The court applied the Federal Arbitration Act and California contract-formation principles. Because there was no evidence that Britt had actual knowledge of the terms, the court considered whether the Wish website and application gave a reasonably careful user notice that the terms existed.

ContextLogic’s evidence showed that Britt signed into the Apple iOS version of the Wish application on December 22, 2018, and again on March 11, 2019, using the Facebook sign-in button. The sign-in screen stated that clicking “Sign In” or Facebook or Google meant the user agreed to the Wish Terms of Use and Privacy Policy. The terms contained a mandatory arbitration provision.

The court concluded that the sign-in screen provided constructive notice, meaning notice the law treats a user as having received based on the screen’s presentation. Under California law, assent is judged objectively by a person’s outward conduct rather than by a person’s unexpressed understanding or intent. Because Britt signed in through the screen and did not dispute the evidence about how she signed in, the court found that she objectively assented to the terms. The court further concluded that this assent applied when she later purchased contact lenses through the Wish application in January and March 2019.

The court rejected Britt’s arguments that the notice might have been hidden by a keyboard, confused users about whose terms applied, or been obscured by moving product images. Those concerns did not apply to Britt’s sign-ins: she used Facebook rather than the email and password fields, the screen specifically identified the Wish Terms of Use, and the screen did not contain distracting scrolling product images.

Delegation of Arbitrability

The terms of use stated that the arbitrator, rather than a federal, state, or local court or agency, had exclusive authority to decide disputes concerning the interpretation, applicability, enforceability, or formation of the arbitration agreement. The court held that this language clearly and unmistakably delegated questions about the arbitration agreement’s enforceability and validity to the arbitrator.

As a result, the court ruled that Britt had to present her unconscionability arguments—arguments that the agreement was so unfair that it should not be enforced—to the arbitrator first. The opinion did not decide the underlying contact-lens claims.

Disposition

Judge William Alsup denied Britt’s motion for partial summary judgment and granted ContextLogic’s petition to compel arbitration. The court retained jurisdiction to enforce any arbitration award and said it could reactivate the civil action if ContextLogic delayed initiating the arbitration. A further case-management conference was set for October 7, 2021.