Long v. Provide Commerce, Inc.

• Decision Date: 17 March 2016
• Docket Number: B257910
• Court: California Court of Appeals Court of Appeals
• Parties: Brett LONG, Plaintiff and Respondent, v. PROVIDE COMMERCE, INC., Defendant and Appellant.

245 Cal.App.4th 855

200 Cal.Rptr.3d 117

Brett LONG, Plaintiff and Respondent,

v.PROVIDE COMMERCE, INC., Defendant and Appellant.

B257910

Court of Appeal, Second District, Division 3, California.

Filed March 17, 2016

Cooley, Michael G. Rhodes, San Francisco, Leo P. Norton and Shannon Sorrells, San Diego, for Defendant and Appellant.

Milstein Adelman, Santa Monica,Paul D. Stevens, Mayo L. Makarczyk ; Flaherty Hennessy, Raquel A. Flaherty and Sarah L. Gough for Plaintiff and Respondent.

JONES

, J.^*

INTRODUCTION

Defendant Provide Commerce, Inc. (Provide) appeals from an order denying its petition to compel arbitration of certain consumer fraud claims brought by Plaintiff Brett Long on behalf of himself and a putative class of California consumers who purchased flower arrangements through Provide's website, ProFlowers.com. Provide sought to compel arbitration based on a provision contained in the company's "Terms of Use," which were viewable via a hyperlink displayed at the bottom of each page on the ProFlowers.com website.

The Terms of Use on ProFlowers.com fall into a category of Internet contracts commonly referred to as "browsewrap" agreements. Unlike the other common form of Internet contract—known as "clickwrap" agreements—browsewrap agreements do not require users to affirmatively click a button to confirm their assent to the agreement's terms; instead, a user's assent is inferred from his or her use of the website. Because assent must be inferred, the determination of whether a binding browsewrap agreement has been formed depends on whether the user had actual or constructive knowledge of the website's terms and conditions.

Plaintiff opposed the petition to compel arbitration on the ground that he was never prompted to assent to the Terms of Use, nor did he actually read them, prior to placing his order on ProFlowers.com. The trial court concluded the Terms of Use hyperlinks were too inconspicuous to impose constructive knowledge on Plaintiff, and denied the petition as such. We likewise find the hyperlinks and the overall design of the ProFlowers.com website would not have put a reasonably prudent Internet user on notice of Provide's Terms of Use, and Plaintiff therefore did not unambiguously assent to the subject arbitration provision simply by placing an order on ProFlowers.com. We affirm.¹

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.

Provide moved to compel arbitration pursuant to the Federal Arbitration Act (9 U.S.C. § 1

), arguing Plaintiff was bound by the Terms of Use for ProFlowers.com, including the Dispute Resolution provision contained therein. Provide's evidence, consisting of a series of screen shots from the ProFlowers.com website, showed that at the time Plaintiff placed his order, the Terms of Use were available via a capitalized and underlined hyperlink titled "TERMS OF USE " located at the bottom of each webpage. The hyperlink was displayed in what appears to have been a light green typeface on the website's lime green background, and was situated among 14 other capitalized and underlined hyperlinks of the same color, font and size.

Provide's evidence also showed that, to complete his order, Plaintiff was required to input information and click through a multi-webpage "checkout flow." The checkout flow screenshots show the customer information fields and click-through buttons displayed in a bright white box set against the website's lime green background. At the bottom of the white box was a notice indicating "Your order is safe and secure ," displayed next to a "VeriSign Secured" logo. Below the white box was a dark green bar with a hyperlink titled "SITE FEEDBACK" displayed in light green typeface. Finally, below the dark green bar, at the bottom of each checkout flow page, were two hyperlinks titled "PRIVACY POLICY " and "TERMS OF USE, " displayed in the same light green typeface on the website's lime green background.

After Plaintiff placed his order on ProFlowers.com, Provide sent him an email confirming the order. The email, beginning from the top, displayed the ProFlowers logo alongside the title "order confirmation." This was followed by a dark green bar with several hyperlinks to apparent product offerings titled "Birthday," "Anniversary," "Get Well," "Roses," "Plants," and "Gourmet Gifts." Next, the email displayed a light green bar thanking Plaintiff for his order, followed by order summary information, including the order number, shipping address, delivery date, the product ordered, and a billing breakdown for the product, delivery charge, tax, and total charge. The order details were followed by two banner advertisements, then a notification regarding online account management services, with four hyperlinks to account management pages on ProFlowers.com. Another dark green bar with the text "Our Family of Brands" followed the account management hyperlinks, then six brand logos for "ProFlowers," "red ENVELOPE ," "ProPlants," "Shari's Berries," " CHERRY MOON FARMS ," and "personalcreations.com." Next, the email included a paragraph listing customer service contact information in small grey typeset. Then, in the same grey typeset, were two hyperlinks titled "Privacy Policy " and "Terms ". Finally, the email listed Provide's corporate address, again in the same grey typeset.

According to Plaintiff's declaration in opposition to Provide's petition to compel arbitration, Plaintiff "did not notice a reference of any kind to ProFlowers ‘Terms and Conditions' nor a hyperlink to ProFlowers ‘Terms of Use’ " when he purchased flowers for delivery on ProFlowers.com. Had Plaintiff noticed the hyperlink and clicked on it, he would have been taken to a page containing the full text of the Terms of Use, which began with the following notice: "By using any one of our Sites, you ... acknowledge that you have read, understand, and expressly agree to be legally bound by these Terms and Conditions. "³ Later, under the heading "Dispute Resolution," Plaintiff would have found the following arbitration provision:

"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 SPECIFICALLY 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."

Plaintiff argued he was not bound by the foregoing arbitration provision because he neither had notice of nor assented to the Terms of Use. In response, Provide argued the placement of the Terms of Use hyperlinks, particularly within the checkout flow, coupled with the hyperlink to "Terms" in the subsequent order confirmation email, was sufficiently conspicuous to put Plaintiff on inquiry notice as to the contents of the agreement. Accordingly, Provide maintained Plaintiff's decision to continue with the order, whether he took the time to review the Terms of Use or not, was sufficient to establish his assent to be bound by the arbitration and venue provisions contained therein. The trial court agreed with Plaintiff, concluding the hyperlinks were too inconspicuous to put a reasonably prudent Internet consumer on inquiry notice. Provide now appeals this order.

DISCUSSION

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, 183 Cal.Rptr.3d 17

, 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, 256 Cal.Rptr. 6.) "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, 133 Cal.Rptr. 775.) 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, 256 Cal.Rptr. 6.) 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, 121 Cal.Rptr. 477, ...