9th Circuit affirms district court’s ruling in TCPA case

Courts Appellate Ninth Circuit TCPA Arbitration Class Action

On April 5, the U.S. Court of Appeals for the Ninth Circuit affirmed a district court’s decision denying a defendants’ motion to compel arbitration in a putative class action under the TCPA. The defendants were a digital marketing company and a debt-relief service company. According to the opinion, the plaintiffs visited the defendants’ websites, but allegedly did not see a notice in fine print stating, “I understand and agree to the Terms & Conditions which includes mandatory arbitration.” The underlined phrases “Terms & Conditions” and “Privacy Policy” were hyperlinks, but they appeared in the same gray font as the rest of the sentence. The marketing company and one of the defendants allegedly used the consumer’s contact information to conduct a telemarketing campaign on behalf of the debt relief companies by allegedly placing unsolicited telephone calls and text messaging consumers. The plaintiffs filed a putative class action, alleging that the calls and text messages were made without their consent, and therefore violated the TCPA. The defendants moved to compel arbitration, arguing that, by clicking on the “continue” buttons, the plaintiffs had agreed to the mandatory arbitration provision hyperlinked in the terms and conditions. The district court denied the defendants’ motion, concluding “that the content and design of the webpages did not conspicuously indicate to users that, by clicking on the ‘continue’ button, they were agreeing to [the service company’s] terms and conditions.”

On appeal, the 9th Circuit agreed with the district court, finding that the digital marketing company’s website did not contain a reasonably conspicuous notice of its terms and conditions. The 9th Circuit ruled that such notice must be expressly displayed in a font size and format where it can be deemed that a reasonable Internet visitor saw it and was aware of it. The appellate court noted that, on the websites at issue, “[t]he text disclosing the existence of the terms and conditions … is the antithesis of conspicuous,” and that “is printed in a tiny gray font considerably smaller than the font used in the surrounding website elements, and indeed in a font so small that it is barely legible to the naked eye. The comparatively larger font used in all of the surrounding text naturally directs the user's attention everywhere else.” The 9th Circuit also held that, “while it is permissible to disclose terms and conditions through a hyperlink, the fact that a hyperlink is present must be readily apparent. …[T]he design of the hyperlinks must put such a user on notice of their existence.”