California Court Compels Arbitration in TCPA Dispute

TCPA Connect

In a victory for a Telephone Consumer Protection Act (TCPA) defendant, a California federal court granted a motion to compel arbitration based on an agreement found in hyperlinked terms and conditions.

A member of the National Association of Realtors (NAR), Florida Realtor Courtney Silverman purchased a product called “Connections” to generate leads from the website. To purchase the product, she had to place her order over the phone with NAR’s third-party vendor, Move.

After the call, Move emailed Silverman an order confirmation, which included details about her purchase as well as the terms and conditions. Silverman called Move one year later to purchase Connections for a second one-year term. Move again emailed her a confirmation of the purchase.

Under the heading “Order Details,” the message stated, “For the terms and conditions that apply to your order, please click here. By accessing or using any product or service included in your order and/or by not cancelling your order [within three days], you agree to these terms and conditions.” The words “click here” hyperlinked directly to Move’s terms and conditions, which included an arbitration provision.

Silverman also opted in to Move’s text message program while she was a Connections customer, although she allegedly later opted out. She filed a putative class action suit against NAR and Move based on an advertising text message that she claimed violated the TCPA.

Move responded with a motion to compel arbitration. Emphasizing that the Federal Arbitration Act (FAA) reflects a strong policy in favor of arbitration, U.S. District Court Judge Beth Labson Freeman granted the motion.

Silverman contended that she could not have agreed to the terms and conditions of the contract, including the arbitration provision, because she did not have notice as they were sent via an “inconspicuous hyperlink” in a confirmatory email after her phone call to sign up for the product. She characterized the contract as an unenforceable browsewrap agreement.

While the court agreed that a party cannot agree to a contract if she has no means of knowing what she is agreeing to, Judge Freeman determined Silverman “had at least inquiry notice” of the terms and conditions.

“Though Plaintiff did not have actual notice of the [terms], she does not dispute that the Move account executive to whom she spoke on the phone informed her that she would be receiving written confirmation of her order and that it would contain ‘all of the details and important information about [her] purchase and agreement with Move,’” the court wrote. “And this admonition makes sense: The Connections service is fairly extensive, requiring monthly payments in return for specific services available through the website . . . . This admonition constitutes inquiry notice that she would subsequently be receiving the terms of her agreement (i.e., the [terms and conditions]).”

Despite having this notice, Silverman continued to use the service and did not cancel within three days, which constituted her acceptance of the terms, the court said.

“Moreover, any failure by Plaintiff to review the confirmatory email or the [terms and conditions] does not change the fact that the Agreement is enforceable against her because she had notice that she would be bound by the [terms],” Judge Freeman said.

Whether or not the arbitration provision applied to the text message sent by Move was an issue for the arbitrator to decide, the court added, staying the class claims pending the arbitrator’s decision.

To read the order in Silverman v. Move, Inc., click here.

Why it matters: The facts of the case did not sit neatly in the category of browsewrap case law, with the court finding the cases “to be an ill fit” because the contract wasn’t formed online by an unwitting plaintiff. However, the court leveraged the browsewrap case law for a broader proposition that the plaintiff must have had notice—be it constructive, inquiry or actual—for the contract to be enforceable. Finding that the plaintiff had inquiry notice that she would be receiving the terms of her agreement via an email, the court was satisfied the contract was not an unenforceable browsewrap agreement.



pursuant to New York DR 2-101(f)

© 2022 Manatt, Phelps & Phillips, LLP.

All rights reserved