Cornell v. Desert Financial Credit Union, 2:21-cv-00835

Plaintiff opened a Desert Financial account before an arbitration clause existed; her account application agreed she would be bound by terms Desert Financial could "change from time to time."
Desert Financial emailed monthly statements to Plaintiff’s primary email; the March 20, 2021 statement contained a prominent “Change-in-Terms” notice linking to an updated online account agreement that added an arbitration clause.
Plaintiff says she does not review monthly statements online and did not see the March 2021 notice; Desert Financial produced account-activity logs indicating an April 13, 2021 session that displayed and saved the March 2021 statement.
Plaintiff never opted out of the arbitration clause and filed this putative class action alleging improper overdraft disclosures; Desert Financial moved to compel arbitration.
The court requested supplemental briefing on whether Arizona law requires actual, subjective notice/affirmative assent to modify consumer contracts or whether constructive/notice-by-consent-to-channel suffices.
The court concluded Arizona law on consumer-contract modification is unsettled, ordered limited fact-finding (including an evidentiary hearing on whether Plaintiff viewed the March 2021 statement and the online disclosures), allowed limited expedited discovery, and indicated it will consider certifying the legal question to the Arizona Supreme Court.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a party may unilaterally modify an existing consumer contract by sending notice via a pre‑consented channel absent the offeree’s actual subjective knowledge or affirmative assent	Demasse requires affirmative assent and subjective knowledge; mere receipt or constructive notice is insufficient	Arizona would follow the Restatement/modern consumer‑contract approach: reasonable notice to a consented channel plus an opportunity to reject suffices; subjective knowledge not required	Court: Legal rule is unsettled under Arizona law. Ordered fact‑finding on whether Plaintiff actually viewed the notice; reserved decision and intends to seek Arizona Supreme Court guidance if needed

Demasse v. ITT Corp., 984 P.2d 1138 (Ariz. 1999) (holds unilateral modification of existing employment‑handbook contractual terms requires offeree’s informed, affirmative assent and consideration)
Darner Motor Sales v. Universal Underwriters Ins. Co., 682 P.2d 388 (Ariz. 1984) (endorses standardized forms and recognizes consumers often do not read terms but are bound subject to legal limitations)
In re Sky Harbor Hotel Props., LLC, 443 P.3d 21 (Ariz. 2019) (Arizona courts will follow the Restatement when it represents sound policy absent controlling authority to the contrary)
In re Krohn, 52 P.3d 774 (Ariz. 2002) (Arizona practice of following Restatement principles where appropriate)
Albano v. Shea Homes Ltd. P’ship, 634 F.3d 524 (9th Cir. 2011) (federal courts in diversity cases are bound by the state supreme court’s decisions when determining state law)
Sears Roebuck & Co. v. Avery, 593 S.E.2d 424 (N.C. App. 2004) (applied Arizona law and highlighted the absence of clear Arizona authority on consumer‑contract modification)