Pizarro v. Quinstreet, Inc.

Background

Sharon Pizarro alleged that QuinStreet, Inc., a marketing company, collected consumer contact information through the AmOne website and sold that information to lenders for referral fees. She alleged that, on or around November 13, 2021, QuinStreet caused a prerecorded voice message identifying itself as “AmOne” to be sent to her cellular telephone. The message said the caller wanted to help with her financial situation and asked her to call a specified number.

Pizarro asserted a claim under the Telephone Consumer Protection Act, a federal law governing certain telephone solicitations and prerecorded calls. She brought the claim for herself and a proposed class.

Arbitration Agreement

QuinStreet moved to compel arbitration and to dismiss the action. Its website Terms of Use stated that disputes between the user and QuinStreet concerning the user’s relationship with the site, including privacy disputes, would be resolved through binding individual arbitration under the American Arbitration Association’s consumer-arbitration rules. Those rules gave the arbitrator authority to decide questions about the arbitration agreement’s scope, validity, and whether a claim could be arbitrated.

Pizarro did not dispute that the arbitration clause, on its face, covered her Telephone Consumer Protection Act claim or that it delegated arbitrability questions to the arbitrator. Instead, she challenged whether any arbitration agreement had been formed. The court explained that challenges to the existence of the agreement must be decided by the court, using ordinary California contract-formation principles.

Notice and Assent

QuinStreet argued that Pizarro showed assent by clicking the “See My Rates” button. Pizarro argued that the Terms of Use were not presented conspicuously enough and that her assent was obtained through misrepresentations. She contended that QuinStreet suggested she would receive a loan rate or quote, when she was instead referred to third-party lenders offering loan options.

The court found that the website gave reasonably conspicuous notice of the Terms of Use. The notice and hyperlink appeared directly below the “See My Rates” button, had ample white space around them, and were surrounded primarily by text no larger than the notice. The court also found the webpage relatively uncluttered, with only two data fields, and found that the underlined hyperlink contrasted adequately with the white background.

The court rejected Pizarro’s misrepresentation argument. It explained that a misrepresentation prevents contract formation only when it causes a person to appear to assent without knowing, and without a reasonable opportunity to learn, the basic character or essential terms of the proposed contract. The court found that Pizarro had not shown that her assent was negated by fraud so fundamental that she was deceived about the basic character of the contract and had no reasonable opportunity to learn the truth.

Disposition

The court concluded that Pizarro and QuinStreet entered into an agreement to arbitrate and granted QuinStreet’s motion to compel arbitration. It denied QuinStreet’s request to dismiss the action. Instead, the court stayed the action pending completion of arbitration proceedings and vacated the case-management conference scheduled for October 7, 2022.