Weeks v. Interactive Life Forms

319 Cal.Rptr.3d 666

Brinan WEEKS, Plaintiff and Respondent,

v.INTERACTIVE LIFE FORMS, LLC, Defendant and Appellant.

B323430

Court of Appeal, Second District, Division 1.

Filed March 25, 2024

APPEAL from an order of the Superior Court of Los Angeles County, David S. Cunningham III, Judge. Affirmed. (Los Angeles County Super. Ct. No. 22STCV03531)

Sullivan Johnson and Daniel A. Johnson for Defendant and Appellant.

Russell Law, L. David Russell, Manhattan Beach; Qureshi Law and Omar G. Qureshi for Plaintiff and Respondent.

WEINGART, J.

E-commerce websites typically contain terms of use, which can include terms providing for arbitration in the event of disputes. Sometimes those terms are prominently displayed and require express acknowledgment; other times they can be inconspicuous and never seen by a consumer. Prior cases hold that so-called "browsewrap" provisions on a website, which deem a consumer to have agreed to the website’s terms of use simply by using the website and without taking any affirmative steps to confirm knowledge and acceptance of the terms of use, generally do not form an enforceable agreement to arbitrate under California law.

In seeking to compel arbitration, the website owner in this case asks us to depart from these prior cases and announce a new rule permitting broader enforcement of browsewrap provisions, or alternatively to find that the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) preempts existing state law adverse to browsewrap provisions. We find no grounds to deviate from prior precedent and reject the novel FAA preemption claim.

FACTS AND PROCEEDINGS BELOW

Defendant Interactive Life Forms, LLC (Interactive) operates an online business selling sex toys under the brand name Fleshlight. Plaintiff Brinan Weeks filed a putative class-action suit against Interactive alleging that the company falsely advertised and misrepresented products sold on its website. Weeks alleged that he purchased a device called a Stamina Training Unit (STU) from the fleshlight.com website (the website) on or around September 21, 2021, on the basis of Interactive’s claims that the device would help him "perform better," "last longer," and "improve [his] sexual stamina." Despite his frequent use of the product over several months, Weeks alleged "there was no improvement in [his] sexual performance or stamina." Weeks asserted causes of action for negligent misrepresentation, violation of the Consumer Legal Remedies Act (Civ. Code, § 1750 et seq.), false advertising, breach of express and implied warranty, and violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) on behalf of himself and similarly situated plaintiffs.

Interactive responded by moving to compel arbitration. Interactive alleged that "[e]very page of [its] website contains a hyperlink to the ‘[t]erms of [u]se’ that govern use of the website in the lower right quadrant of the webpage," and that "[t]he [t]erms of [u]se mandate mediation and arbitration of any controversy, claim or dispute related in any way to access to or use of [its] website." The company claimed these terms of use bound customers regardless of whether they clicked on this link, and without the need for any affirmative assent to the terms of use when using the site or buying products from it.

In support of its motion, Interactive included a declaration from one of its employees attaching the website’s landing page as of June 9, 2022. The employee attested that the same terms of use had been in effect since January 2020, and that a link to those terms of use was on every page of the website since at least 2012. The landing page exhibit showed, in the bottom right corner, the words "terms of use" (capitalization omitted) in small gray text against a black background. According to Interactive, all pages on the website included similar links to the terms of use.

Interactive attached as another exhibit a printout of the terms of use. The document begins with the following statement: "The terms of use set forth below … govern your use of the site via the internet, the world wide web, mobile networks, or any other communication methods now known or in the future developed. In consideration for access to and/or use of the site, you … agree to read the terms carefully before accessing the site, you acknowledge that you have read and understood the terms, and you agree to be bound by the terms. The terms are a legal contract between you and [Interactive], and govern your access to and/or use of the site." (Capitalization omitted.) Later, the document states, "By accessing or otherwise using the site you agree to these terms [and] conditions." (Capitalization omitted.)

Eleven pages later, in a section under the heading "Dispute Resolution," the document states, "You agree first to try to resolve any controversy, claim, or dispute arising out of or relating to the [t]erms or the access and/or use of the [s]ite, with the help of a mutually agreed upon mediator in Austin, Travis County, Texas…. [¶] If it proves impossible to arrive at a mutually satisfactory solution through mediation, [y]ou agree to submit the dispute to binding arbitration in Austin, Travis County, Texas. You agree to arbitrate on an individual basis to resolve disputes rather than jury or any other court proceedings, or class actions of any kind…. " (Capitalization omitted.)

Interactive argued that Weeks impliedly agreed to the terms of use, including the arbitration provision, by using the website to purchase the STU "regardless of any assertion that he did not read the" terms of use. In Interactive’s view, the fact that Weeks filed suit rather than contacting Interactive first for a refund or replacement showed that he was not an ordinary consumer, and this "permits the inference that [Weeks] either had actual knowledge of the arbitration agreement or intentionally avoided reading the [terms of use] so that he could claim ignorance of its arbitration provisions."

In opposing the motion to compel arbitration, Weeks declared that he visited the website from his smartphone, and that he did not navigate to the very bottom of the page before purchasing an STU. Weeks denied seeing a link to the terms of use and explained that he "did not expect that [his] one-time purchase of a product from the www.fleshlight.com website required [him] to enter into the [t]erms of [u]se or any other agreement."

The trial court denied the motion to compel arbitration, finding that Interactive failed to show the parties agreed to arbitrate their dispute. The court first questioned whether Interactive’s exhibits accurately reflected the contents of the website at the time Weeks purchased the STU, as the employee who purported to authenticate them was on leave around the purchase. Even if the exhibits did accurately reflect the website’s content at the time of Weeks’s purchase, the court found Interactive had failed to show that Weeks assented to the terms of use. The court stated that the link to the terms of use "is tiny, illegible, and inconspicuous," and found that Weeks "never saw it or agreed to any provisions. The design and content of [Interactive]’s website pages were insufficient to put a reasonable user or [Weeks] on notice of the terms of use and the arbitration agreement."

STANDARD OF REVIEW

[1–3] "We review an order denying a motion to compel arbitration based on findings of fact for substantial evidence. [Citations.] Where the facts are undisputed, we review the denial of a motion to compel arbitration de novo. [Citations.] Likewise, we independently review the order if the trial court’s denial rests solely on a question of law. [Citations.]" (Villareal v. LAD-T, LLC (2022) 84 Cal.App.5th 446, 456, 300 Cal.Rptr.3d 415.)

DISCUSSION

A. There Was No Agreement to Arbitrate under California Law

In denying the motion to compel arbitration, the trial court relied on three prior decisions finding browsewrap or other similar provisions unenforceable: Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 461, 289 Cal.Rptr.3d 1 (Sellers), Long v. Provide Commerce, Inc. (2016) 245 Cal. App.4th 855, 200 Cal.Rptr.3d 117 (Long), and Nguyen v. Barnes & Noble Inc. (9th Cir. 2014) 763 F.3d 1171, 1175 (Nguyen). Interactive acknowledges that it cannot demonstrate an agreement to arbitrate under the test set forth in these cases and instead urges us to "revisit and reject" this precedent.¹ Before turning to the question of whether these cases remain correctly decided, we first explain their reasoning.

[4–6] "Arbitration under the [FAA] is a matter of consent, not coercion" (Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ. (1989) 489 U.S. 468, 479, 109 S.Ct. 1248, 103 L.Ed.2d 488), and a court may not compel parties to arbitrate a dispute "when they have not agreed to do so." (Id. at p. 478, 109 S.Ct. 1248.) In determining whether an arbitration agreement exists, we apply the same rules of contract formation as for any other contract. (Sandquist v. Lebo Automotive, Inc. (2016) 1 Cal.5th 233, 244, 205 Cal.Rptr.3d 359, 376 P.3d 506.) In particular, " ‘[m]utual manifestation of assent, whether by written or spoken word or by conduct, is the touchstone of contract.’ " (Nguyen, supra, 763 F.3d at p. 1175, quoting Specht v. Netscape Communications Corp. (2d Cir. 2002) 306 F.3d 17, 29 (Specht).)

[7, 8] On the internet, "a manifestation of assent may be inferred from the consumer’s actions on the website—including, for example, checking boxes and clicking buttons." (Sellers, supra, 73 Cal.App.5th at p. 461, 289 Cal.Rptr.3d 1.) Courts have generally enforced agreements to arbitrate formed via "clickwrap,"² where " ‘an internet user accepts a website’s terms of use by clicking an "I agree" or "I accept" button, with a link to the agreement readily available.’ " (Id. at p. 463, 289 Cal. Rptr.3d 1.) Clickwrap agreements have been held to manifest assent, even on consumers who did not read them, because ...