Massel v. Millionaire Match

Background

Michael Massel filed a proposed class action against SuccessfulMatch.com, doing business as Millionaire Match. He alleged five violations of the Illinois Biometric Information Privacy Act. Millionaire Match moved under the Federal Arbitration Act to compel Massel to arbitrate his claims individually, arguing that he agreed to Millionaire Match’s Service Agreement and its arbitration provision when he created an account.

The signup page included a checkbox labeled “Agree to both the Service Agreement and Privacy Policy.” Millionaire Match asserted that “Service Agreement” and “Privacy Policy” were hyperlinks. The Service Agreement contained an arbitration clause requiring disputes to be resolved by binding arbitration in San Francisco before a retired judge or justice with JAMS. It also contained a class-action waiver and a provision stating that the arbitrator would decide questions about the agreement’s interpretation, enforceability, and scope.

Legal standard

The court explained that an arbitration agreement is a contract and must be formed under ordinary state-law contract principles. Under California law, an online contract generally requires reasonably conspicuous notice of the terms and an action that clearly shows the user agreed to those terms, unless the website operator proves the user had actual knowledge of the agreement.

The court also explained that the question whether the parties formed an arbitration agreement must be decided by the court, even when the agreement contains a delegation provision assigning other arbitration-related questions to the arbitrator. Because Massel challenged whether an agreement was formed, the court—not the arbitrator—had to resolve that issue.

Court’s analysis

Millionaire Match did not show that Massel had actual knowledge of the Service Agreement. Massel stated that the “Service Agreement” and “Privacy Policy” did not appear to be hyperlinks when he created his account, that he was unaware of an opportunity to review the Service Agreement, and that he did not read either document.

The court therefore considered whether the signup page gave reasonably conspicuous notice of the terms and whether Massel’s checking the box clearly showed assent. The court relied on Ninth Circuit decisions applying California law. Those decisions recognize that terms may be provided through a hyperlink, but the hyperlink must be readily apparent. Merely underlining text that appears in the same color as surrounding text is not enough. A contrasting color, even without underlining or capitalization, can make a link sufficiently noticeable.

The court found that Millionaire Match’s design fell short of this standard. The links to the Service Agreement and Privacy Policy were underlined but were not displayed in a contrasting color. The court also noted that other links on the signup page appeared in all capital letters, while these links appeared in title case. Because the terms were not presented conspicuously enough, Massel could not be treated as having assented to them by checking the box.

Ruling

The court concluded that Massel did not assent to the Service Agreement and therefore never formed an agreement to arbitrate his claims against Millionaire Match or to delegate arbitration-related questions to an arbitrator. Judge P. Casey Pitts denied Millionaire Match’s motion to compel arbitration. The opinion does not state that the court ruled on the merits of Massel’s biometric-information claims.