Long v. Provide Commerce, Inc. - 245 Cal. App. 4th 855, 200 Cal. Rptr. 3d 117 (2016)

Rule:

Where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice.

Under both federal and California law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate. This threshold inquiry stems from the basic premise that arbitration is consensual in nature. The fundamental assumption of arbitration is that it may be invoked as an alternative to the settlement of disputes through the judicial process solely by reason of an exercise of choice by all parties. Thus, notwithstanding the cogency of the policy favoring arbitration and despite frequent judicial utterances that because of that policy every intendment must be indulged in favor of finding an agreement to arbitrate, the policy favoring arbitration cannot displace the necessity for a voluntary agreement to arbitrate. There is indeed a strong policy in favor of enforcing agreements to arbitrate, but there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.

Facts:

Brett Long, on behalf of himself and a putative class of California consumers who purchased flower arrangements through defendant Provide's website, ProFlowers.com, filed consumer fraud claims against Provide. Provide sought to compel arbitration based on a provision contained in the company's “Terms of Use,” which were viewable via a hyperlink displayed at the bottom of each page on the ProFlowers.com Web site. Plaintiff opposed the petition to compel arbitration on the ground that he was never prompted to assent to the Terms of Use, nor did he actually read them, prior to placing his order on ProFlowers.com. The trial court concluded the Terms of Use hyperlinks were too inconspicuous to impose constructive knowledge on plaintiff and denied the petition to compel the arbitration, pursuant to the Federal Arbitration Act. Defendant appealed.

Issue:

Should the petition to compel arbitration be granted?

Answer:

No.

Conclusion:

The appellate court affirmed the trial court, concluding that there was no mutual assent to an arbitration provision in the seller's terms of use and the provision did not bind a buyer who was unaware of its existence. The website's checkout flow did not prominently indicate that placing an order was an express acceptance of the seller's rules and regulations. Neither was an inconspicuous link to the seller's terms of use in an order confirmation e-mail sufficient to put a reasonably prudent internet consumer on notice to investigate whether disputes related to the order would be subject to binding arbitration. Because the buyer did not agree to the seller's terms of use, the buyer also did not agree to a forum selection clause contained therein as an alternative to a class arbitration waiver.