©2015. Published in Landslide, Vol. 8, No. 1, September/October 2015, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.
Harris v. comScore
In Harris v. comScore, the plaintiffs were suing because the defendant’s user-tracking software was bundled with other software that the plaintiffs downloaded and installed.18 The plaintiffs alleged the software improperly obtained and sold their personal information. During the installation process for the free downloadable software, the user had to click a checkbox acknowledging that he or she had read the terms and conditions. The defendant moved to enforce a forum selection clause in the terms of service and to move the litigation to Virginia. The plaintiffs responded that, though they had clicked the box acknowledging the terms and conditions, the hyperlink to those terms was obscured and not readily available on the webpage when the user had to accept the terms. The court held that it would not “infer that clicking a box . . . indicate[d] that the agreement was reasonably available.”19
While the defendants cited prior case law where forum selection clauses in click-through agreements were enforced, the court identified the unique issue in comScore to be the allegation that the hyperlink to the agreement was obscured and therefore not readily available to the user at the time of acknowledgment. In prior cases, courts had found click-through agreements were not enforceable if the terms were not reasonably apparent to the user. The comScore court concluded it was not reasonable to expect a user to search for an agreement that was not immediately available or obvious and, therefore, the forum selection clause was not reasonably communicated.20
Nguyen v. Barnes & Noble
The court further found the onus is on the website operator to put users on notice of binding terms.
Friedman v. Guthy-Renker
In reviewing the website at the time of the first plaintiff’s purchase, “with a particular focus on hyperlink placement, terminology, and clarity,” the court concluded the layout did not meet the standards of putting a reasonable user on inquiry notice of the terms.26 For instance, the checkbox and the link were not consistently labeled with letter casing, the link was third in a list at the bottom of the website, and the layout seemed to indicate the checkbox was related to the credit card purchase. When the second plaintiff later made a purchase from the website, the site’s new design brought the website into alignment with the Barnes & Noble standards.27 The checkbox text was now consistent and hyperlinked to the terms and conditions, and other text on the webpage was moved to make the layout clearer to the reasonable user. Thus, the court found the second plaintiff did have inquiry notice of the terms and conditions and was therefore bound by the arbitration clause.28
Rodriguez v. Instagram
Facebook v. Grunin
Other recent cases have reiterated core concepts. For example, Facebook v. Grunin held that in creating an account, the terms and conditions, if violated, can be used as an element in the prima facie case for breach of contract.32 The defendant created over 70 user accounts and used other fraudulent means to obtain over $340,000 worth of advertising on Facebook. The court found that each time the defendant created a new account, he violated the terms and conditions barring: (1) posting pornographic images, (2) creating accounts in a name other than your own, and (3) providing false information.33 This was sufficient to support a claim for breach of contract.
Savetsky v. LegalShield
In yet another case from the Northern District of California, Savetsky v. LegalShield, the court reiterated the importance of notice in a case involving whether an arbitration provision in LegalShield’s “member contract” was enforceable.34 The court found that the provision was unenforceable due to the relatively inconspicuous nature of the member contract on the website. When a prospective customer entered LegalShield’s website, he or she could choose to either “Buy Now” or “Learn More.” If the customer chose “Buy Now,” he or she had the option of reviewing “More Plan Details,” which led to a link to access the member contract containing the contested arbitration clause. LegalShield argued that customers assented to forming an agreement to arbitrate because its website adequately put customers on notice of the member contract and arbitration provision. The court disagreed, finding no evidence that the plaintiff had actual notice of the sample member contract or could acknowledge the existence of contract; a customer could simply check services, click “Buy Now” without viewing “More Plan Details,” and not be aware that a contract existed.35
The court also found that LegalShield’s arbitration clause was inconspicuous; to access this provision, consumers had to click two optional links and scroll to page seven before locating the arbitration provision. Finally, the court also found that the context in which LegalShield’s member contract appeared did not put users on “inquiry notice” of the contract because customers had to go to “More Plan Details” to find the contract, which did not clearly indicate that a contract was present.
In re Zappos.com Data Breach Litigation
Knutson v. Sirius XM Radio
The court also found nothing indicated that Sirius’s offer was clearly and effectively communicated to the plaintiff; by mailing the customer agreement, the plaintiff would have only had notice of the opportunity to cancel the subscription by opening the welcome kit, which he had no reason to do given his lack of awareness of the contractual relationship with Sirius. Because Sirius’s offer was not effectively communicated, there was no knowing consent to the customer agreement and its arbitration clause. Thus, the Ninth Circuit held that the clause was unenforceable and reversed the district court’s grant of Sirius’s motion to compel arbitration.42
In re Google Gmail Litigation
In In re Google Gmail Litigation, the ever-present Northern District of California considered non-Gmail users’ lawsuit against Google alleging a violation of state and federal antiwiretapping laws (18 U.S.C. § 2511).43 The lawsuit centered on Google’s technology that scanned e-mails from the nonusers that were sent to Gmail users. The court held that Google’s terms of service and privacy policies did not create express or implied consent to Google intercepting incoming e-mail, which Google used to create profiles to send targeted advertising.44 There were two sets of terms of service at issue: one effective from April 2007 to March 2012, and one that had been in effect since March 2012. The 2007 terms stated that Google reserved the right to:
pre-screen, review, flag, filter, modify, refuse or remove any or all Content from any Service. For some Services, Google may provide tools to filter out explicit sexual content. These tools include the SafeSearch preference settings. . . . In addition, there are commercially available services and software to limit access to material that you may find objectionable.45
The 2012 terms of service deleted such language, saying that users gave Google a “worldwide license to use[,] create derivative works[,] and distribute such content.”46 Both terms referenced Google’s privacy policies stating that Google could collect information that users provided to Google, cookies, log information, user communications, etc.
Google asserted that by agreeing to its terms of service and privacy policies, Gmail users expressly consented to the interception of their e-mails. Google also alleged that because of its nature of operation, non-Gmail users knew that their e-mails would be intercepted. The court disagreed, finding that none of Google’s agreements explicitly notified the plaintiffs that Google would intercept users’ e-mails for the purposes of creating user profiles or providing targeted advertising. Though the terms of service stated that Google’s advertisements could be targeted to the content of information stored on Gmail’s services, this demonstrated only that Google had the capacity to intercept communications, but not that it would intercept communications. The court also found that the language in the terms of service established only that Google’s advertisements were based on information stored on the services or queries made through the services, not information in transit via e-mail. Thus, the court found that Google’s 2007 terms of service did not establish consent.47
As for the 2012 terms, the court found that the new policies did not specifically mention the content of users’ e-mails to each other or to or from nonusers; the new policies were not broad enough to encompass such interceptions and did not put users on notice that their e-mails were intercepted to create new profiles. Therefore, based on Google’s terms of service and privacy policies, the court found it did not have express or implied consent within the meaning of 18 U.S.C. § 2511(2)(d) to intercept e-mail to create profiles and send targeted advertising.48
In re Yahoo Mail Litigation
A similar class action targeted Yahoo and also involved scanning and analyzing e-mails (of non-Yahoo e-mail users).49 The plaintiffs there claimed such acts violated federal and California antiwiretapping laws as well as were a violation of privacy under the Electronic Communications Privacy Act (ECPA), California’s Invasion of Privacy Act (CIPA), and the California Constitution. Yahoo moved to dismiss, and the district court held that (1) users explicitly consented under the Wiretap Act to Yahoo’s practices, (2) senders of e-mails sufficiently alleged a violation of the Stored Communications Act (SCA), and (3) senders failed to allege an invasion of a protected privacy interest under the California Constitution.50
Song fi v. Google
In our final case update, the Northern District of California found in Song fi v. Google that YouTube’s terms of service were enforceable and binding on the plaintiffs.55 This case involved a class action lawsuit against YouTube and parent company Google over the removal of the plaintiffs’ video from the YouTube website.
The court first considered whether the plaintiffs were all bound by YouTube’s terms of service, finding it was immaterial that the plaintiffs did not personally upload the LuvYa video to the YouTube website. The plaintiffs were closely related to Song fi: they shared an office, had the same registered agent, Brotherton was the president of Song fi, and his son starred in the LuvYa video. By virtue of their close relation to Song fi, which had agreed to the terms of service, the other plaintiffs were also bound.57
Then, the court considered whether the terms of service and forum selection clause were void for being unconscionable. The court did not find that the clauses rendered the contract unconscionable given that the plaintiffs could have uploaded their video onto another website, and the mere fact that they did not have bargaining power did not render the entire contract or forum selection clause procedurally unconscionable. Finally, the court found that YouTube’s terms of service were not obscured or hidden, giving the plaintiffs a clear opportunity to understand the terms, which weighed against a finding of procedural unconscionability.58
1. McVicker v. King, 266 F.R.D. 92, 95–96 (W.D. Pa. 2010).
2. Woodrow Hartzog, Website Design as Contract, 60 Am. U.L. Rev. 1635 (2011).
3. Id. at 1656.
5. Nancy S. Kim, Clicking and Cringing, 86 Or. L. Rev. 797 (2007).
6. Mark A. Lemley, Intellectual Property and Shrinkwrap Licenses, 68 S. Cal. L. Rev. 1239, 1241 (1995).
7. Hartzog, supra note 2, at 1642.
8. Kim, supra note 5, at 846; Michael Terasaki, Do End User License Agreements Bind Normal People?, 41 W. St. U. L. Rev. 467, 472 (2014).
9. Kim, supra note 5, at 846.
10. SoftMan Prods. Co. v. Adobe Sys. Inc., 171 F. Supp. 2d 1075, 1083 (C.D. Cal. 2001).
11. Hartzog, supra note 2, at 1643.
12. Burcham v. Expedia, Inc., No. 4:07CV1963 CDP, 2009 WL 586513, at *2 (E.D. Mo. Mar. 6, 2009).
13. Id. at *3 n.5.
14. Restatement (Second) of Contracts § 17 cmt. c (1981); Register.com, Inc. v. Verio, Inc., 356 F.3d 393, 429 (2d Cir. 2004).
15. Ian Rambarran & Robert Hunt, Are Browse-Wrap Agreements All They Are Wrapped Up to Be?, 9 Tul. J. Tech. & Intell. Prop. 173, 176 (2007).
16. Juliet M. Moringiello, Signals, Assent and Internet Contracting, 57 Rutgers L. Rev. 1307, 1314–15 (2005).
17. Hartzog, supra note 2, at 1644.
18. Harris v. comScore, Inc., 825 F. Supp. 2d 924, 926 (N.D. Ill. 2011).
19. Id. at 927.
21. Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1173 (9th Cir. 2014).
22. Id. at 1176–77.
23. Notice Definition, Black’s Law Dictionary (10th ed. 2014); see also Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 30 n.14 (2d Cir. 2002) (defining “inquiry notice” as “actual notice of circumstances sufficient to put a prudent man upon inquiry”).
24. Barnes & Nobel, 763 F.3d at 1178–79.
25. Friedman v. Guthy-Renker LLC, No. 2:14-CV-06009-ODW, 2015 WL 857800, at *3 (C.D. Cal. Feb. 27, 2015).
26. Id. at *3, *5.
27. Id. at *6.
29. Rodriguez v. Instagram, LLC, No. C 12-06482 WHA, 2013 WL 3732883 (N.D. Cal. July 15, 2013).
30. Id. at *1.
32. Facebook, Inc. v. Grunin, No. C 14-02323 WHA, 2015 WL 124781, at *3 (N.D. Cal. Jan. 8, 2015).
34. Savetsky v. Pre-Paid Legal Servs., Inc., No. 14-03514 SC, 2015 WL 604767 (N.D. Cal. Feb. 12, 2015).
35. Id. at *3–4.
36. In re Zappos.com, Inc., Customer Data Sec. Breach Litig., 893 F. Supp. 2d 1058 (D. Nev. 2012).
37. Id. at 1063–66.
38. Knutson v. Sirius XM Radio Inc., 771 F.3d 559 (9th Cir. 2014).
39. Id. at 562.
40. Id. at 563–65.
41. Id. at 566.
42. Id. at 567–70.
43. In re Google Inc. Gmail Litig., No. 13-MD-02430-LHK, 2013 WL 5423918 (N.D. Cal. Sept. 26, 2013).
44. Id. at *12–15.
45. Id. at *2.
46. Id. at *3.
47. Id. at *12–15.
49. In re Yahoo Mail Litig., 7 F. Supp. 3d 1016 (N.D. Cal. 2014).
50. Id. at 1020.
51. Id. at 1021-22.
52. Id. at 1020; see also 18 U.S.C. § 2511(1)(a).
53. In re Yahoo Mail Litig., 7 F. Supp. 3d at 1026; see also § 2511(2)(d).
54. In re Yahoo Mail Litig., 7 F. Supp. 3d at 1026–32.
55. Song fi Inc. v. Google Inc., No. CV 14-283 (RMC), 2014 WL 5472794 (D.D.C. Oct. 29, 2014).
56. Id. at *1–2.
57. Id. at *4.
58. Id. at *5–6.