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Affirmed: “Cluttered” Website Means No Agreement To Arbitrate

Clean up that website!! “Clutter” may obscure and negate attempts to highlight terms and conditions that require arbitration of Telephone Consumer Protection Act (TCPA) disputes.  A “hard to find [link to Ts & Cs] on a cluttered web page” can be a recipe for such a result.

In Luis Arnaud v. Doctors Associates, Inc. d/b/a Subway, 2020 U.S. App. LEXIS 29504, United States Court of Appeals for the Second Circuit, Case No. 19-3057-cv, September 15, 2020, the Court addressed an appeal from the United States District Court for the Eastern District of Long Island. Mr. Arnaud brought a TCPA class action in that Court after allegedly receiving unsolicited text messages.

The defendant moved to compel arbitration of the dispute, arguing that “Arnaud had agreed to arbitrate any claims against Subway at the moment he entered his phone number on a promotional page of Subway’s website and then clicked a button labeled “I’M IN” in order to receive a free sandwich the next time he purchased a 32-ounce beverage.” That action, Arnaud claimed, “constituted assent to the terms and conditions contained on a separate webpage that was accessible via a hyperlink on the promotional page—terms and conditions that included an agreement to arbitrate.”

The District Court denied the motion because “no arbitration agreement existed between the parties since the terms and conditions were not reasonably clear and conspicuous on the promotional page itself.” The defendant appealed arguing that Judge Nicholas Garaufis applied the wrong standard in evaluating whether the terms and conditions were reasonably clear and conspicuous to Arnaud; and … that Arnaud did not provide sufficient evidence, in the form of an affidavit or otherwise, to create a factual dispute over whether he manifested his assent to the terms and conditions.”

In the absence of actual notice to Arnaud, the Second Circuit, its de novo review under New York law, applied the doctrine of “inquiry notice.” The Court explained that “‘in determining whether an offeree is on inquiry notice of contract terms, New York courts look to whether the term was obvious and whether it was called to the offeree’s attention.’” In the web-based contract context that meant looking at “‘the design and content of the relevant interface to determine if the contract terms were presented to the offeree in [a] way that would put her on inquiry notice of such terms.’” Bottom line:  “whether the ‘design and content of [a] webpage rendered the existence of [those] terms reasonably conspicuous.’”

The District Court had found that “because the Subway webpage was relatively cluttered, did not use a conspicuous size or font for the terms and conditions link, and did not provide language informing the user that by clicking “I’M IN” the user was agreeing to anything other than the receipt of a coupon, the user would not have been on inquiry notice of the arbitration provision.”

The Second Circuit affirmed. “A reasonable user would not find the terms and conditions link contained on the page to be conspicuous, since the link was at the bottom of the page, in relatively small font, and was introduced by no language other than the shorthand ‘T & Cs.’ A reasonable user would therefore not recognize that by clicking ‘I’M IN’ he agreed to be bound by those terms and conditions.” Moreover, because the defendant had not produced evidence that Mr. Arnaud was on actual notice, the plaintiff’s general denials were sufficient to counter the defendant’s claims to the contrary.

TCPA World readers take guidance on web page design and display of access to terms and conditions to which you want the web site user to be bound.

© Copyright 2020 Squire Patton Boggs (US) LLPNational Law Review, Volume X, Number 265
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About this Author

Paul Besozzi Telecommunications Attorney Squire Patton Boggs Washington DC
Senior Partner

Paul Besozzi concentrates his practice in the wireless, broadband and emerging technology areas. His extensive experience of more than 30 years in the telecommunications field includes regulatory, transactional, legislative and litigation matters for clients ranging from wireless service and infrastructure providers to resellers of long-distance service, including cellular, personal communications services, specialized mobile radio, point-to-point microwave, advanced wireless services and other emerging wireless technologies.

Paul represents clients before the federal and state...

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