In Williams v. DDR Media, LLC, No. 22-cv-03789-SI, 2023 U.S. Dist. LEXIS 33319, at *1-5 (N.D. Cal. Feb. 28, 2023), Judge Illston denied a Petition to Compel Arbitration in a CIPA class action. The CIPA class action was based on the following facts.
On June 27, 2022, Loretta Williams filed a class action complaint against defendants DDR Media LLC and Lead Intelligence Inc., d/b/a/ Jornaya, alleging that defendants violated the California Invasion of Privacy Act, Cal. Penal Code § 631.1 and California’s Unfair Competition Law, and invaded Williams’s and class members’ privacy rights under the California Constitution. Williams alleges that defendants unlawfully recorded her electronic communications or interactions with DDR Media’s website “SnappyRent2own.com” when she used the website on or around December 10, 2021. Compl. ¶¶ 20-24 (Dkt. No. 1). According to the complaint, Jornaya offers a product called “TCPA Guardian” to lead generators and telemarketers. Id. ¶ 5. The product is “designed to allow these lead generators and telemarketers to attempt compliance with the federal Telephone Consumer Protection Act by documenting alleged evidence of prior express consent to receive telemarketing calls provided on websites.” Id. One feature of TCPA Guardian is a “visual playback” function, which records, in real time, a person’s interactions with a website that is using TCPA Guardian. Id. ¶ 6. DDR Media installed TCPA Guardian by embedding Jornaya’s code onto the SnappyRent2own.com website. Id. ¶ 11. Williams alleges that when she visited SnappyRent2own.com on December 10, 2021, “the Jornaya TCPA Guardian replay function created a video that captured Williams’ keystrokes and clicks on the website.” Id. ¶ 21. TCPA Guardian also captured the date and time of the visit, her IP address, and her geographic location, as well as Williams’ name, address, and phone number. Id. [*3] ¶¶ 21-23. Williams alleges that the recording was done without her consent, and that defendants did not inform website visitors that their strokes and clicks would be recorded. Id. ¶ 24. On December 15, 2022, defendants filed a joint motion to compel arbitration based upon an arbitration agreement contained in the Terms of Use on the SnappyRent2Own.com website. Defendants have submitted pictures of the website, which they implicitly represent is the version of the website that Williams accessed. See Swaminathan Decl., Ex. 1 (Dkt. No. 29-2). The hyperlink to the Terms of Use is on lines sixteen and seventeen of twenty-one in a full-justified paragraph of text.3 See id.; see also Appendix A. The paragraph states, “By clicking the “Get Started” button, I am agreeing by my electronic signature to give SnappyRent2Own, NHAProgram, and its partners my prior express written consent and permission to send emails, as well as to call and send to me recurring text messages at the cellphone number(s) I provided above and to any other subscriber or user of these cellphone number(s), using an automated dialing system at any time from and after my inquiry to SnappyRent2Own, NHAProgram for purposes of all federal and state telemarketing and Do-Not-Call laws, in each case to market to me products and services and for all other purposes. I understand that my telephone company may impose charges on me for these contacts. I understand that my consent is not required to buy any of these business’s products or services and it can be revoked at any time. For SMS message campaigns: text STOP to stop and HELP for help. Terms & Conditions/privacy policy apply. In addition, I agree to the Terms of Use and the Privacy Policy. I also authorize the auto dealers and financial institutions that receive my request to order my credit report to determine my creditworthiness. I understand that SnappyRent2own.com, NHAProgram does not make credit decisions and is not a lender or broker.” Id. The text of the entire paragraph is darker gray on a lighter gray background. Id. The Terms of Use hyperlink is underlined, but otherwise is in the same style and color as the surrounding words. Id. Above the paragraph containing the Terms of Use hyperlink are four white data fields, which contain font approximately two times the size of the Terms of Use hyperlink font, where users are prompted to fill in their contact information (first name, last name, phone number, and email address). Id. Below the Terms of Use hyperlink paragraph is a large “CHECK LISTINGS” button. Id. The button is blue and the text within it is white, in all caps, and the font is approximately two to three5 times the size of the Terms hyperlink font. Id. Below the “CHECK LISTINGS” button are photos of listings and their locations. Id. Below the photos is a “Get Started Today” button, which is the same size as the “CHECK LISTINGS” button. Id. The “Get Started Today” button is blue, the text within the button is white, and the font is approximately two to three times the size of the Terms hyperlink font. Id. The Terms of Use hyperlink leads to a page titled “Terms and Conditions.” Dkt. No. 29-3. The Terms and Conditions document is seven pages and is mostly single-spaced. Id. The arbitration agreement appears on page five of seven. Id. at 5.
The District Court found the Arbitration not to be clear and conspicuous.
The Court concludes that the SnappyRent2own.com website8 did not provide reasonably conspicuous notice of the Terms of Use, and that the website is closer to (and arguably worse than) the deficient Berman websites, and different from the Pizarro website in several material respects. Here, like Berman, the text disclosing the Terms of Use is in a very small gray font. See Appendix A. Worse than Berman, where the notice was two lines of gray text on a contrasting white background, the text here is darker gray against a lighter gray background, and is buried in lines sixteen and seventeen of twenty-one in a full-justified block paragraph. Id. The long paragraph begins by stating “By clicking the ‘Get Started’ button, I am agreeing to,” followed by a long list of items before reaching the sentence “In addition, I agree to the Terms of Use . . . .” Id. In addition, similar to the websites in Berman, “the textual notice is further deemphasized by the overall design of the webpage, in which other visual elements draw the user’s attention away from the barely readable critical text.” Berman, 30 F.4th at 857; see Appendix A (text and images to the left of the textual notice, photographs of properties underneath textual notice, “CHECK LISTINGS” button directly below notice). This design runs contrary to the Ninth Circuit’s admonition that “[w]ebsite users are entitled to assume that important provisions—such as those that disclose the existence of proposed contractual terms—will be prominently displayed, not buried in fine print.” Berman, 30 F.4th at 857. Further, “[b]ecause ‘online providers have complete control over the design of their websites,’ the onus must be on website owners to put users on notice of the terms to which they wish to bind consumers.” Id. (internal citations omitted). The Court finds that Pizarro does not aid defendants because in that case the notice disclosing the Terms of Use was much more conspicuous. In Pizarro, directly below the “See My Rates” button, the website user was notified that “By clicking See My Rates you agree to the following:” followed by “To AmOne’s Privacy Notice, Terms of Use, and Consent to Receive Electronic Communications.” Both “By clicking See My Rates . . .” and “To AmOne’s . . . Terms of Use . . .” were set off by white space, and the text containing the Terms of Use hyperlink was only two lines. See Appendix C; Pizarro, 2022 U.S. Dist. LEXIS 145556, 2022 WL 3357838, at *1. In contrast, here the notice of the Terms of Use is contained in a long gray-on-gray paragraph and it does not have any distinguishing qualities to make the text conspicuous. See Appendix A. In addition, unlike Pizarro’s website, which had “only two data fields,” was “relatively uncluttered,” and “a muted, and essentially uniform, color scheme,” Pizarro, 2022 U.S. Dist. LEXIS 145556, 2022 WL 3357838, at *3, the SnappyRent2Own.com website has four data fields, multiple colors, pictures, and a more cluttered appearance—all “elements that draw the user’s attention away from the barely readable critical text.” Berman, 30 F.4th at 857.
Thus, the Court found no mutual assent.
The Court is unpersuaded by defendants’ arguments under either theory, and concludes that defendants have not met their burden to show that Williams took some action that unambiguously manifested her assent to the Terms and Conditions. As a threshold matter, the Court finds it problematic that the notice informs users that they agree to the Terms and Conditions by clicking the “Get Started” button, while neither button on the website is labeled “Get Started.” Even if Williams clicked the “CHECK LISTINGS” button, as defendants’ originally argued, it is the Court’s view that doing so would not unambiguously manifest assent to the Terms of Use because the notice informs users that they agree to the Terms of Use by clicking a “Get [*20] Started” button, not the “CHECK LISTINGS” button….Further, defendants have not submitted any evidence showing that Williams actually clicked the “CHECK LISTINGS” button. Berman explicitly holds that a website user must “take[] some action, such as clicking a button or checking a box, that unambiguously manifests his or her assent to those terms.” Berman, 30 F.4th at 856. Finally, as to defendants’ assertion that Williams manifested her assent to the Terms of Use simply by visiting the website, the Ninth Circuit has repeatedly stated that “[c]ourts are generally reluctant to enforce such agreements because they often leave users ‘unaware that contractual terms were even offered, much less that continued use of the website will be deemed to manifest acceptance of those terms.'” Oberstein, 2023 U.S. App. LEXIS 3378, 2023 WL 1954688, at *5 (quoting Berman, 30 F.4th at 856). Because the Court concludes that defendants have not shown that Williams agreed to arbitrate her claims, the Court does not reach the other arguments raised by the parties’ briefs, including the question of whether Jornaya has standing to seek arbitration.