Lopez v. Dave Inc.
- Vince Chhabria
- 3:22-cv-04160
- U.S. District Court · Northern District of California
- 4
In Lopez v. Dave Inc., Judge Chhabria denied arbitration and improper-venue dismissal because Dave did not show Lopez saw clear arbitration terms.
Lopez and Dave Inc.; the order leaves the dispute in court rather than requiring arbitration and does not dismiss it for improper venue.
What happened
Lopez v. Dave Inc. concerned whether Lopez agreed to arbitrate by signing up for Dave’s app. Dave asked the court to require arbitration and dismiss the case for improper venue.
The court found that Dave had not shown Lopez received actual notice of the arbitration agreement. The sign-up page also did not clearly alert a reasonably careful internet user to the Terms of Use or to arbitration, and the evidence about the page Lopez saw was inconsistent.
Judge Vince Chhabria denied both the motion to require arbitration and the motion to dismiss for improper venue. The court also granted the requests for judicial notice and the request to file a reply responding to new material.
The detailed version
- Lopez v. Dave Inc. · No. 3:22-cv-04160
- Vince Chhabria
- Nov. 21, 2022
Background
Lopez sued Dave Inc. Dave asked the court to compel arbitration, meaning to require Lopez to resolve the dispute through arbitration rather than in court, and to dismiss for improper venue. Dave had the burden of proving that Lopez agreed to arbitrate.
Analysis
The court applied state-law principles of contract formation. Dave did not establish that Lopez had actual notice of the arbitration agreement, so it had to show that she was on “inquiry notice.” Inquiry notice requires a website to give reasonably conspicuous notice of the terms and requires the consumer to take an action that clearly shows agreement to them.
The court identified conflicting evidence about the sign-up screen Lopez would have seen when she registered for the app in 2019. One declaration said the “Terms of Use” link appeared above the button used to join Dave, while a screenshot showed “TOS” below the “Join” button. The court also found a declaration supporting Dave’s reply deficient because it did not expressly state that the attached sign-up page was the version displayed when Lopez joined.
Even assuming Lopez saw the specific sign-up page Dave submitted, the court held that it did not provide reasonably conspicuous notice of the Terms of Use. The disclosure appeared in tiny gray text, while the larger “Join” button and a cartoon bear drew attention away from it. The underlined “TOS” did not use customary design features, such as contrasting color or all-capital lettering, to clearly signal that it was a hyperlink. The link appeared below the “Join” button, and the page did not mention arbitration or clearly identify what the “TOS” contained.
Rulings
The court denied Dave’s motion to compel arbitration and denied its motion to dismiss for improper venue. The court stated that the same lack of notice supported both denials. It also granted the requests for judicial notice and granted the motion for leave to file a surreply, which is a further response addressing new material raised in a reply. The order was signed by United States District Judge Vince Chhabria.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.