Judge Matthew C. Braner, Case 37-2023-00012108-CU-BT-CTL 2024-02-14 Tentative Ruling

Judge: Matthew C. Braner, Case: 37-2023-00012108-CU-BT-CTL, Date: 2024-02-14 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - January 18, 2024

01/19/2024 09:00:00 AM C-60 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Matthew C. Braner

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Civil - Unlimited Business Tort Motion Hearing (Civil) 37-2023-00012108-CU-BT-CTL CALDWELL VS IDENTITY INTELLIGENCE GROUP [E-FILE] CAUSAL DOCUMENT/DATE FILED:

Defendant Identity Intelligence Group, LLC's motion to compel arbitration is DENIED.

Defendant's motion to stay is DENIED.

Under 'both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.' (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 861 (citation omitted).) 'Mutual assent, or consent, of the parties 'is essential to the existence of a contract' [citations] and '[c]onsent is not mutual, unless the parties all agree upon the same thing in the same sense' [citation].' (Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 460.) This principle of consent 'applies with particular force to provisions for arbitration,' (Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993), 'including provisions contained in contracts purportedly formed over the internet.' (Sellers v. JustAnswer LLC, supra, 73 Cal.App.5th at p. 460 [citing Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 862].) As the party seeking to compel arbitration, Defendant has the burden of proving by a preponderance of the evidence the existence of an arbitration agreement. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 239.) As the parties opposing arbitration, Plaintiffs Keith Caldwell and Asya Hunter have the burden of establishing, by a preponderance of the evidence, a defense to the agreement's enforcement. (Id.) Here, Defendant presents evidence that Plaintiffs each broadly agreed to arbitrate all claims arising from or relating to Defendant's terms of service (the agreement containing the arbitration provision) and the credit monitoring services provided by Defendant. Defendant contends that by clicking the 'NEXT' button on the online offer webpage, Plaintiffs manifested assent to the terms of service, because elsewhere on the same page is language that reads: By clicking 'next,' you consent, acknowledge, and agree to the following: Our Terms and Conditions. Privacy Policy, and to receive important notices and other communications electronically.

The phrases 'Terms and Conditions,' 'Privacy Policy,' and 'other communications electronically,' are all hyperlinks in blue font that would have directed Plaintiffs to separate pages containing the agreements, had Plaintiffs clicked on them. Defendant argues that this kind of sign-in wrap agreement (whereby a user signs up to use an internet product or service, and the sign-up screen states that acceptance of a Calendar No.: Event ID: TENTATIVE RULINGS

2978656 10 CASE NUMBER: CASE TITLE: CALDWELL VS IDENTITY INTELLIGENCE GROUP [E-FILE] 37-2023-00012108-CU-BT-CTL separate agreement is required before the user can access the service) is enforceable. In opposition, Plaintiffs contend that while sign-in wrap agreement may be enforceable, the one at issue in this case is not. Plaintiffs rely primarily on Sellers v. JustAnswer LLC, in which the Fourth District rejected an agreement Plaintiffs contend is very similar to the one here.

Having reviewed and considered the webpage structure in Sellers in comparison to the webpages here, as well as the similar context (claims grounded in the Automatic Renewal Law), the court agrees with Plaintiffs they are similar in most of the important ways discussed in Sellers. As such, the court concludes that Plaintiffs had neither actual nor constructive notice of the arbitration provisions, and they are therefore unenforceable.

'[I]n order to establish mutual assent for the valid formation of an internet contract, a provider must first establish the contractual terms were presented to the consumer in a manner that made it apparent the consumer was assenting to those very terms when checking a box or clicking on a button.' (Sellers v. JustAnswer LLC, supra, 73 Cal.App.5th at p. 461.) As general guidance for the enforceability of various types of agreements formed over the internet, the court in Sellers explained that on 'one end of the spectrum, a browsewrap agreement like the one at issue in Long-in which the website provider assumes assent is given by mere use of the website, based exclusively on the existence of a hyperlink that takes the consumer to the applicable set of contractual terms-is not sufficient to bind the consumer.' (Id at p. 470.) 'Toward the other end of the spectrum, clickwrap 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' to 'confirm their assent to the agreement's terms,' are generally considered enforceable.' (Id. [quoting Long v. Provide Commerce, Inc., supra, 245 Cal.App.4th at pp. 858, 862].) Scrollwrap agreements, which require the user to fully scroll through the terms in order to check the box or click the button affirming consent, go even further than clickwrap agreements, and are consistently found to be enforceable. (Id.) For sign-in wrap agreements, like the one in Sellers and the one here, which fall somewhere in between the extremes of browsewrap and scrollwrap agreements, the existence of a contract turns on whether a reasonably prudent offeree would be on inquiry notice of the terms at issue. (Id. at p. 471.) In both Sellers and here, the consumers who 'signed up' for services believed they were agreeing to a one-time fee, but in fact were unknowingly entering into an ongoing and relatively costly monthly subscription service. The Sellers court emphasized that '[b]ecause website providers have full control over the design of their websites, the onus is on them to provide adequate notice of contractual terms, particularly where, as here, the consumer is not likely expecting to be bound by such terms.' (Sellers v. JustAnswer LLC, supra, 73 Cal.App.5th at p. 481.) As such, 'courts must establish clear limits on what constitutes sufficient notice. Even text that is just slightly smaller, or slightly further away from the box or button the consumer must click on must, at some point, exceed the limits of what constitutes adequate notice.' (Id. at pp. 481-82.) The court is not persuaded by Defendant's argument that the differences between the webpages here and the one in Sellers (namely, that the 'Terms and Conditions' hyperlink here was in a blue font) are sufficient to find that Plaintiffs assents to the arbitration provisions. It is plain from the design of the page, particularly the extremely small font used for the consent language (i.e., 'By clicking 'next,' you consent .

. .') and hyperlinks, and the position of the 'Next' button directly below the order summary and set off from the box containing the consent language and hyperlinks, that Defendant's goal was to divert the consumer's attention away from both the language establishing consent and the agreement containing the arbitration provision. Like the defendant in Sellers, here Defendant 'chose to display that notice in extremely small print,' and not 'immediately adjacent to' the 'Next' button. (Id. at p. 482.) In sum, the textual notices at issue here were not sufficiently conspicuous to establish inquiry notice by Plaintiffs or to infer their manifestation of assent, and therefore are not sufficient to bind Plaintiffs to the arbitration provision set forth in the terms of service. Accordingly, Defendant's motion to compel arbitration is denied, and the motion to stay is denied as moot.

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