Williams v. DDR Media, LLC

Background

Loretta Williams filed a proposed class action against DDR Media, LLC and Lead Intelligence Inc., doing business as Jornaya. She alleged that the defendants violated the California Invasion of Privacy Act and California’s Unfair Competition Law and invaded privacy rights protected by the California Constitution.

Williams alleged that, when she used DDR Media’s SnappyRent2own.com website on or around December 10, 2021, Jornaya’s “TCPA Guardian” technology recorded her keystrokes and clicks in real time. She also alleged that the technology captured the date and time of her visit, her internet protocol address, geographic location, name, address, and phone number, without her consent or notice that the recording would occur.

The defendants moved jointly to compel arbitration based on an arbitration agreement in the website’s Terms of Use. The version of the website presented to the court included a long paragraph stating that, by clicking a “Get Started” button, the user agreed to the Terms of Use. The paragraph appeared in small gray text on a lighter gray background. The Terms of Use hyperlink was underlined but was not blue or otherwise strongly distinguished from the surrounding text. The arbitration agreement itself appeared on page five of a seven-page Terms and Conditions document.

Legal standard

Under the Federal Arbitration Act, a party seeking to compel arbitration must prove, more likely than not, that an enforceable arbitration agreement exists and that it covers the dispute. The court applies ordinary state-law principles governing contract formation.

The court relied on Ninth Circuit standards for internet agreements that fall between “clickwrap” agreements, which require a user to click an acceptance box after seeing terms, and “browsewrap” agreements, in which terms are available through a hyperlink and the website treats continued use as acceptance. Unless the website operator proves that the user actually knew about the agreement, the website must provide reasonably conspicuous notice of the terms, and the user must take an action that clearly shows agreement.

Court’s analysis

The court held that the website did not provide reasonably conspicuous notice. The notice appeared in very small gray text within lines sixteen and seventeen of a twenty-one-line, fully justified paragraph. The paragraph began with a statement about clicking the “Get Started” button and presented several other matters before stating that the user agreed to the Terms of Use. The website’s larger buttons, photographs, multiple colors, and other features drew attention away from the notice.

The court also held that the Terms of Use hyperlink was not readily apparent. Although it was underlined, it was not in the customary contrasting blue color, in all capital letters, or otherwise sufficiently distinguishable from the surrounding text.

The court separately found that the defendants had not shown that Williams took an action that clearly accepted the Terms of Use. The notice referred to a “Get Started” button, but the website shown to the court contained a “CHECK LISTINGS” button and a “Get Started Today” button, not a button labeled “Get Started.” The defendants offered no evidence that Williams clicked the “CHECK LISTINGS” button. The court also rejected the argument that merely visiting the website established agreement to the arbitration provision.

Disposition

Because the defendants did not show that Williams agreed to arbitrate her claims, the court denied the defendants’ joint motion to compel arbitration. The court did not reach the parties’ other arguments, including whether Jornaya had standing to seek arbitration. Judge Susan Illston signed the order on February 28, 2023.