Daniel Berman v. Freedom Financial Network LLC
30 F.4th 849
9th Cir.2022Background
- Fluent operated reward websites that solicited consumer contact info; site pages contained a small gray sentence with underlined hyperlinks reading “I understand and agree to the Terms & Conditions which includes mandatory arbitration and Privacy Policy” placed near a large green “Continue” button.
- Hernandez (desktop) and Russell (mobile) clicked the site’s Continue buttons while registering for rewards; the hyperlinked Terms contained a mandatory arbitration clause covering TCPA-type claims.
- Fluent and Lead Science used collected contact information in a telemarketing campaign that allegedly sent unsolicited calls/texts; plaintiffs filed a putative TCPA class action.
- Defendants moved to compel arbitration; the district court denied the motion, finding the notice and hyperlinks were not reasonably conspicuous and clicking Continue did not unambiguously manifest assent.
- Defendants’ motion for reconsideration (relying on deposition testimony allegedly showing actual knowledge) was denied for lack of reasonable diligence; the Ninth Circuit affirmed both denials.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether users were bound to hyperlinked Terms (including arbitration) by using the websites / clicking Continue | Hernandez & Russell: No mutual assent—notice was buried, tiny gray font; clicking Continue did not unambiguously indicate agreement | Defendants (Fluent/Freedom): The textual sentence (which referenced mandatory arbitration) plus clicking Continue manifested assent to the hyperlinked terms | No. Court affirmed: no enforceable agreement — notice was not reasonably conspicuous and clicking Continue without explicit tying language is insufficient to show assent |
| Whether district court abused discretion in denying reconsideration based on depositions | Plaintiffs: depositions were not newly discovered or material and did not alter facts | Defendants: deposition testimony showed plaintiffs had actual knowledge; district court should reconsider | No abuse of discretion. Reconsideration denied because defendants lacked reasonable diligence in presenting deposition evidence earlier |
Key Cases Cited
- Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014) (establishes inquiry-notice framework and distinguishes enforceable clickwrap from less enforceable browsewrap/sign-in notices)
- Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002) (browsewrap assent requires actual or inquiry notice; lack of explicit notice defeats assent)
- Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017) (hyperlinks are reasonably conspicuous where visually set apart and coupled with clear textual notice tying account creation to assent)
- Sellers v. JustAnswer LLC, 289 Cal. Rptr. 3d 1 (Ct. App. 2021) (California classification: browsewrap, clickwrap, scrollwrap, sign-in wrap; sign-in-wrap enforceability hinges on conspicuous textual notice and transaction context)
- Long v. Provide Commerce, Inc., 200 Cal. Rptr. 3d 117 (Ct. App. 2016) (endorses Nguyen; requires textual notice linking continued use to assent for browse/sign-in wrap agreements)
- Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010 (9th Cir. 2004) (court’s role under the FAA is to decide whether a valid arbitration agreement exists and whether it covers the dispute)