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Brett LONG, Plaintiff and Respondent, v. PROVIDE COMMERCE, INC., Defendant and Appellant.
FACTS AND PROCEDURAL BACKGROUND
There is no material dispute about the underlying facts. Provide is an online retailer that owns and operates several websites, including ProFlowers.com. Through ProFlowers.com, Provide advertises and sells a variety of floral products, which are shipped to order from the grower to the online customer.
Plaintiff alleges he purchased a floral arrangement on ProFlowers.com, which had been depicted and advertised on the website as a “completed assembled product,” but which was delivered as a “do-it yourself kit in a box requiring assembly by the recipient.” 2 Based on this allegation, Plaintiff sued Provide in the superior court, asserting claims for violations of the California Consumer Legal Remedies Act (Civ.Code, § 1750 et seq.) and Unfair Competition Law (Bus. & Prof.Code, § 17200 et seq.) on behalf of himself and a putative class of California consumers who purchased similarly advertised floral arrangements on ProFlowers.com.
“Agreement to Arbitrate Disputes: BY ACCESSING OR USING THE SITES, YOU EXPRESSLY AGREE THAT ANY LEGAL CLAIM, DISPUTE OR OTHER CONTROVERSY BETWEEN YOU AND PROVIDE COMMERCE ARISING OUT OF OR OTHERWISE RELATING IN ANY WAY TO THE SITES ․ SHALL BE RESOLVED IN CONFIDENTIAL BINDING ARBITRATION CONDUCTED BEFORE ONE COMMERCIAL ARBITRATOR FROM THE AMERICAN ARBITRATION ASSOCIATION (‘AAA’), RATHER THAN IN A COURT, AS DESCRIBED HEREIN․ YOU SPECIFICIALLY AGREE THAT YOU ARE BOUND TO RESOLVE ALL DISPUTES IN ARBITRATION, AND YOU ACKNOWLEDGE THAT YOU ARE VOLUNTARILY AND KNOWINGLY FORFEITING YOUR RIGHT TO A TRIAL BY JURY AND TO OTHERWISE PROCEED IN A LAWSUIT IN STATE OR FEDERAL COURT.”
A. Legal Principles; Arbitration and Browsewrap Agreements
“Under ‘both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.’ “ (Cruise v. Kroger Co. (2015) 233 Cal.App.4th 390, 396, italics omitted.) This threshold inquiry stems from the “ ‘basic premise that arbitration is consensual in nature.’ “ (Lawrence v. Walzer & Gabrielson (1989) 207 Cal.App.3d 1501, 1505.) “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.’ “ (Wheeler v. St. Joseph Hospital (1976) 63 Cal.App.3d 345, 355.) 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.’ “ (Lawrence, at p. 1505.) As our Supreme Court has observed, “[t]here 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․” (Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 481.)
This requirement applies with equal force to arbitration provisions contained in contracts purportedly formed over the Internet. While Internet commerce has exposed courts to many new situations, it has not fundamentally changed the requirement that “ ‘[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.’ “ (Nguyen v. Barnes & Noble Inc. (9th Cir.2014) 763 F.3d 1171, 1175 (Nguyen ).) “ ‘ “Mutual assent is determined under an objective standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable meaning of their words and acts, and not their unexpressed intentions or understandings.” [Citations.]’ “ (HM DG, Inc. v. Amini (2013) 219 Cal.App.4th 1100, 1109 (HM DG ).) In applying this objective standard, outward manifestations of a party's supposed assent are to be judged with due regard for the context in which they arise. California law is clear—”an offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious.” (Windsor Mills, Inc. v. Collins & Aikman Corp. (1972) 25 Cal.App.3d 987, 993; see Specht v. Netscape Communs. Corp. (2d Cir.2002) 306 F.3d 17, 30 (Specht ) [applying California law to commercial Internet transaction].)
In Specht, the Second Circuit declined to enforce an arbitration provision contained in a software licensing browsewrap agreement where the hyperlink to the agreement appeared on “a submerged screen” below the “ ‘Download’ “ button that the plaintiffs clicked to initiate the software download. (Specht, supra, 306 F.3d at pp. 30–32.) After reviewing California contract law, the Specht court acknowledged that a user's act of clicking a download button, combined with “ ‘circumstances sufficient to put a prudent man upon inquiry’ “ as to the existence of licensing terms, would constitute a sufficient manifestation of assent to be bound. (Id. at p. 31.) However, the court was quick to point out that the opposite must also be true—that “a consumer's clicking on a download button does not communicate assent to contractual terms if the offer did not make clear to the consumer that clicking on the download button would signify assent to those terms.” (Id. at pp. 29–30.) The design of the defendant's website, the Specht court concluded, exemplified the latter circumstance.
Though the website advised users to “ ‘Please review and agree to the terms of the ․ software license agreement before downloading and using the software,’ “ the Specht court emphasized that users would have encountered this advisement only if they scrolled down to the screen below the website's invitation to download the software by clicking the download button. (Specht, supra, 306 F.3d at p. 23.) This meant that when the plaintiffs clicked the download button, they “were responding to an offer that did not carry an immediately visible notice of the existence of license terms or require unambiguous manifestation of assent to those terms.” (Id. at p. 31.) The fact that users might have noticed from the position of the scroll bar that an unexplored portion of the webpage remained below the download button did not change the reasonableness calculation. Under the circumstances presented, “where consumers [were] urged to download free software at the immediate click of a button,” the Specht court concluded placing the notice of licensing terms on a submerged page “ ‘tended to conceal the fact that [downloading the software] was an express acceptance of [the defendant's] rules and regulations.’ “ (Id. at p. 32.) Thus, notwithstanding what the plaintiffs might have found had they taken “ ‘as much time as they need[ed]’ to scroll through multiple screens on a webpage” (ibid.), the Specht court held that “a reasonably prudent offeree in plaintiffs' position would not have known or learned ․ of the reference to [the software's] license terms hidden below the ‘Download’ button on the next screen.” (Id. at p. 35.)
As for Provide's contention that the subsequent order confirmation email somehow provides the notice that was missing from the checkout flow, again, we disagree. Unlike the hyperlink on some checkout flow pages, the screenshots suggest the hyperlink in the email is located on a submerged page, requiring the customer to scroll below layers of order summary details, advertisement banners, hyperlinks to “convenient account management services,” several logos for Provide's “Family of Brands,” and customer service contact information to finally find a reference to “Terms ” printed in grey typeface on a white background. This is not the sort of conspicuous alert that can be expected to put a reasonably prudent Internet consumer on notice to investigate whether disputes related to his order will be subject to binding arbitration.
C. Plaintiff Did Not Agree to the Venue Provision Either
Provide argues the trial court's reasoning was flawed, because forum selection clauses are presumptively valid. Thus, Provide maintains, though it had the burden to establish an enforceable arbitration agreement, “the presumption in favor of [forum selection clause] enforcement shift[ed] the burden to [Plaintiff] ․ to show why the provision should not be enforced.” Insofar as Plaintiff “fail[ed] to establish the unenforceability of the venue provision” in his opposition papers, Provide argues the trial court was required to enforce the provision and transfer the action to San Diego. We disagree.
The order is affirmed. Plaintiff Brett Long is entitled to his costs.
2. The evidence shows Plaintiff purchased a Mother's Day card and floral arrangement from ProFlowers.com for delivery to his mother in Kansas on the day before Mother's Day in 2013.
5. Notably, this was not a problem in Specht because, although the hyperlink to the subject license agreement was displayed on a submerged portion of the download page, the hyperlink included a notice to “ ‘Please review and agree to the terms of the Netscape SmartDownload software license agreement before downloading and using the software.’ “ (Specht, supra, 306 F.3d at p. 23.)
JONES, J.* FN* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
We concur: ALDRICH, Acting P. J. LAVIN, J.
Response sent, thank you
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Docket No: B257910
Decided: March 17, 2016
Court: Court of Appeal, Second District, Division 3, California.
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