Applebaum v. LYFT, Inc., 263 F. Supp. 3d 454

Plaintiff Applebaum (NY) alleges Lyft charged him full cash tolls instead of drivers’ discounted E‑ZPass tolls and brings NY GBL § 349 and unjust enrichment claims on behalf of a putative class.
Applebaum registered with the Lyft app on April 6, 2016; during registration he entered his phone number and checked a small, hyperlinked “I agree to Lyft’s Terms of Service” box that linked to the February 8, 2016 Terms (clickwrap-style).
The February 8, 2016 Terms contained a broad arbitration clause waiving class actions. Applebaum says he did not read or knowingly agree to arbitration then.
Lyft later updated its Terms on September 30, 2016 and presented those Terms to existing users as a scrollable, full-text screen titled “Terms of Service” requiring an explicit “I accept” click; Applebaum clicked “I accept” on November 22, 2016.
Lyft moved to compel arbitration under the FAA; the court considered whether Applebaum assented to the February 8, 2016 Terms and/or the September 30, 2016 Terms and whether arbitration covers the dispute.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Applebaum agreed to arbitrate under the Feb. 8, 2016 Terms presented during initial registration	Applebaum: the phone‑number screen did not put a reasonable user on inquiry notice of the lengthy Terms (hyperlink inconspicuous, page framed as phone verification), so he did not assent	Lyft: clicking the checkbox next to “I agree to Lyft’s Terms of Service” and clicking Next manifested assent to the Feb. 8, 2016 Terms (including arbitration)	Court: No — the presentation was not reasonably conspicuous; a prudent user would not be on inquiry notice, so Applebaum did not assent to the Feb. 8, 2016 arbitration clause
Whether Applebaum assented to the Sept. 30, 2016 Terms and whether arbitration (including arbitrability) applies	Applebaum: even if he accepted the Sept. 30 Terms, his claims are outside arbitration because they were already the subject of litigation	Lyft: Applebaum accepted the Sept. 30, 2016 scrollwrap Terms; those Terms contain a broad arbitration clause plus a clear delegation clause sending arbitrability questions to the arbitrator	Court: Applebaum assented to the Sept. 30, 2016 Terms by clicking “I accept”; the delegation clause is clear and unmistakable, so arbitrability is for the arbitrator; motion to compel arbitration granted and case stayed

Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (establishes district court’s role under the FAA to compel arbitration when agreement is not in issue)
Genesco, Inc. v. T. Kakiuchi & Co., Ltd., 816 F.2d 840 (outlines four tasks for courts when asked to stay proceedings pending arbitration)
Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (electronic assent requires reasonably conspicuous notice and unambiguous manifestation of assent)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (contract‑formation principles govern whether parties agreed to arbitrate)
Rent‑A‑Ctr., W., Inc. v. Jackson, 561 U.S. 63 (parties may delegate questions of arbitrability to arbitrators if delegation is clear and unmistakable)
Nicosia v. Amazon.com, Inc., 834 F.3d 220 (clarity and conspicuousness of online terms determine whether user had notice and assented)