18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 635 when the user is actually aware of the terms of use, most commonly after clicking on a hyperlink and reviewing them, or based on inquiry notice, which likely depends on "whether the website puts a reasonably prudent user on inquiry notice of the terms.” Id . at *7-8. The Eighth Circuit determined that the District Court erred when it concluded that inquiry notice was absent. The Eighth Circuit opined that the question was whether Plaintiffs actually use] or accessed Defendant’s website. The parties disputed whether or not this occurred, as Defendants contended that they must have because the complaint referenced specific parts of the website, and Plaintiff asserted that only their lawyers accessed it, and even then, only in the course of preparing the complaint. The Eighth Circuit found that without more information, it could not determine whether Plaintiffs had inquiry notice of the arbitration agreement. The Eighth Circuit also ruled that the record was unclear about the structure of the terms and conditions on the website and whether a reasonably prudent user would have known to inquire further, where the terms-of-use hyperlink was located, how many clicks it would have taken for the user to discover the arbitration provision, and whether the website changed during the relevant period. Id . at *10. The Eighth Circuit determined that the existence of material issues of fact required that it follow the Federal Arbitration Act directive for the District Court to "proceed summarily to a trial." Id . at *11. Accordingly, the Eighth Circuit reversed and remanded the District Court’s ruling denying Defendant’s motion to compel arbitration. Goldstein, et al. v. Media, 2021 U.S. Dist. LEXIS 139153 (S.D. Fla. July 27, 2021). Plaintiff filed a class action alleging that Defendant’s website, where he purchased movie tickets, tracked his activity online in violation of the Florida Security of Communications Act ("FSCA"). Defendant moved to compel arbitration pursuant to an agreement on its webpage. The Court denied the motion. The parties did not dispute the presence of the agreement on the website, but Plaintiff asserted that the agreement language was "inconspicuous" and "buried below the ‘Complete My Purchase’ button" and that "once he clicked to complete his purchase, there was no reason” for him “to continue scrolling down the page to view the purported arbitration language at issue." Id . at *3. The Court ruled that there was no genuine dispute as to any material fact concerning the formation of an arbitration agreement. The Court looked to whether the browse-wrap agreement on the webpage was conspicuous enough that a reasonably prudent user would be on notice of the arbitration agreement, without considering the actions of any individual user. Id . at *6. The Court determined that Defendant’s notice was deficient because of its placement on the webpage and because the notice failed to alert the user of the arbitration agreement. Id . at *7. The Court opined that it was not reasonable to expect a user to continue reading below the highly conspicuous purchase button, and the miniscule size of the typeface used made it particularly difficult to read. Id . at 10. The Court reasoned that the language in the agreement only contained a hyperlink to its Terms and Policies and did not include any indication that there was an arbitration agreement included therein. For these reasons, the Court denied Defendant’s motion to compel arbitration. Hayden, et al. v. Retail Equation, 2021 U.S. Dist. LEXIS 137531 (C.D. Cal. July 8, 2021). Plaintiff, a credit card holder, filed a class action alleging breach of contract against Defendant, The Gap. Defendant filed a motion to compel arbitration as a third-party beneficiary based on the terms & conditions that Plaintiff assented to when she opened up a Gap credit card account, which was issued by Synchrony Bank. The Court denied the motion. Defendant argued that it had a right to enforce the arbitration clause in the credit card agreement because it was an intended third-party beneficiary of the contract. The agreement in question stated "You and we must arbitrate any dispute or claim . . ." and "Synchrony Bank may be referred to as ‘we,’ ‘us’ or ‘our.’" Id . at *11. The Court found that a plain reading of the clause indicated that the credit card holder and Synchrony Bank, and not The Gap, must arbitrate disputes between themselves. The Court opined that taken as a whole, the arbitration agreement at issue did not indicate an intention to make The Gap a third-party beneficiary. Further, the Court reasoned that the instructions for commencing arbitration stated that a notice demanding arbitration "must be sent to Synchrony Bank,” which made it unlikely that a demand for only The Gap could be expected to be sent to the credit card issuer. Id . Further, the Court ruled that because the arbitration agreement pertained to a credit card, Plaintiff and Synchrony Bank might also have to arbitrate a dispute between Plaintiff and The Gap if Plaintiff were to dispute a charge to her credit card regarding a purchase at The Gap. Id . at *12. However, the Court held that including the language "and/or The Gap, Inc." did not compel the conclusion that Plaintiff had a separate obligation to arbitrate her disputes with The Gap, which did not involve Synchrony Bank. Id . Accordingly, the Court denied Defendant’s motion to compel arbitration.