On May 3, 2019, the United States District Court for the Northern District of California granted Defendant’s motion to compel arbitration, finding that its online terms of use agreement (the “Terms”) was enforceable even in the absence of the consumer’s express assent to the Terms.  Guttierrez v. Friendfinder Networks, Inc., No. 18-05918 (N.D. Cal. May 3, 2019). 

Defendant AdultFriendFinder (“AFF”) is an adult online dating site.  Plaintiff website user alleges that in October 2016 “a hacker or group of hackers breached Defendant’s system and downloaded two decades worth of personal information of 339 million AFF users.”  Compl. ¶ 32.  Based on this breach, and Defendant’s alleged failure to prevent and timely cure it, Plaintiff brought a putative class action against AFF.  Defendant moved to compel arbitration and dismiss the action based on the arbitration provision contained in the Terms.  The Court stated that the Ninth Circuit’s decision in Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014) guided its decision.

“In Nguyen, the Ninth Circuit determined that the plaintiff had not agreed to the defendant’s terms of use (and the arbitration clause therein) by purchasing a product on the defendant’s website, even though the terms were displayed on every page of the website and on each page of the website’s online-checkout process.  The court rejected the defendant’s argument that ‘the placement of the terms of use hyperlink on its website put [the plaintiff] on constructive notice of the arbitration agreement’ such that the plaintiff’s ‘subsequent use of the website[] was enough to bind him to the Terms of Use.'”

Guttierrez at *5.  In reaching this conclusion, the Ninth Circuit noted that courts are “traditional[ly] reluctant to enforce browsewrap agreements against individual consumers,” and set forth the basic legal framework governing online contracts:  

“Contracts formed on the Internet come primarily in two flavors: ‘clickwrap’ (or ‘click-through’) agreements, in which website users are required to click on an ‘I agree’ box after being presented with a list of terms and conditions of use; and ‘browsewrap’ agreements, where a website’s terms and conditions of use are generally posted on the website via a hyperlink at the bottom of the screen. . . . Unlike a clickwrap agreement, a browsewrap agreement does not require the user to manifest assent to the terms and conditions expressly . . . a party instead gives his assent simply by using the website. . . . The defining feature of browsewrap agreements is that the user can continue to use the website or its services without visiting the page hosting the browsewrap agreement or even knowing that such a webpage exists.”

Nguyen, supra, at 1175–76 (citations, alterations, and internal quotation marks omitted).  In the case at hand, although “the website did not require Plaintiff to agree to the Terms or otherwise acknowledge that he had read them,” (Guttierrez at *10), a call with a customer service representative placed Plaintiff on inquiry notice of the Terms:

“The customer service representative informed Plaintiff that he had been banned because he violated the Terms.  A few seconds later, when Plaintiff asked for further elaboration as to why he had been banned from the chat, the customer service representative reiterated: ‘Because we set restrictions on the website so you need to follow our rules and regulations.’  This constituted notice to Plaintiff that if he wanted to use the site, he needed to comply with the Terms. . . .Plaintiff responded with ‘Yeah I know,’ acknowledging that he understood that he needed to follow those rules and regulations when using the site.  And the Terms were readily available to Plaintiff on the website, such that his failure to read them, despite knowing he was bound by them, cannot absolve him of his need to comply with them.”

Id. at *12-13 (internal citations omitted).

“Because the Terms clearly stated that continued use of the site would constitute acceptance of the Terms, Plaintiff’s continued use of the site after being put on notice of the Terms and his need to comply with them constituted acceptance of the Terms.”  Id.