Donovan Lee v. Intelius Inc
2013 U.S. App. LEXIS 24850
| 9th Cir. | 2013Background
- In June 2008 Donovan Lee purchased a background report from Intelius and was redirected to a post-purchase webpage showing Intelius branding and a prominent orange button labeled “YES And show my report.”
- The page solicited Lee’s email (stating that typing it would be his electronic signature) and referenced “Offer Details” in small grey print to the right; Adaptive Marketing’s name did not appear on the page.
- The Offer Details described a 7‑day free trial for a “Family Safety Report” followed by $19.95/month; a hyperlink to “Terms and Conditions” (containing an arbitration clause) led to another page that did not identify Adaptive by name.
- Lee clicked the orange YES button, did not read the small grey text or click the Terms link, and later discovered monthly $19.95 charges from Adaptive on his credit card.
- Plaintiffs sued Intelius; Intelius impleaded Adaptive; Adaptive moved to compel arbitration of Lee’s and Intelius’s claims. The district court denied the motion as to Lee; Adaptive appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Lee formed a contract to purchase the Family Safety Report | Lee argued he did not assent to purchase; page was misleading and did not identify contracting party | Adaptive argued clicking YES and providing email constituted objective assent to the offer | Court held no contract: page did not sufficiently identify Adaptive as contracting party and the design was deceptive |
| Whether clicking the YES button manifested assent to arbitration | Lee argued he did not see or agree to Terms & Conditions containing arbitration clause | Adaptive argued the Terms link contained arbitration and clicking YES manifested assent to linked terms | Court held no assent to arbitration: the page text limited assent to the Offer Details and reasonably suggested Terms were Intelius’s, not Adaptive’s |
| Whether a click can serve as an electronic signature under Washington law | Lee noted he did not sign or read terms; argued no mutual assent | Adaptive relied on electronic signature/statute and clickwrap principles | Court declined to rest decision on click-as-signature uncertainty and resolved issue on identification/mutual assent grounds |
| Whether the contract (if any) would be lawful under later federal law | Lee pointed to consumer-protection concerns; ROSCA later banned data‑pass practices | Adaptive did not rely on ROSCA retroactively | Court noted the data‑pass practice would later be unlawful under ROSCA but based decision on state contract principles |
Key Cases Cited
- Cox v. Ocean View Hotel Corp., 533 F.3d 1114 (9th Cir.) (standard: de novo review of denial to compel arbitration)
- Balen v. Holland Am. Line Inc., 583 F.3d 647 (9th Cir.) (appellate review of underlying factual findings for clear error)
- Milenbach v. Comm’r, 318 F.3d 924 (9th Cir.) (contract interpretation reviewed de novo)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir.) (two-step FAA inquiry: existence and scope of arbitration agreement)
- Becker v. Wash. State Univ., 266 P.3d 893 (Wash. Ct. App.) (identification of contracting parties is an essential written element)
- DePhillips v. Zolt Constr. Co., 959 P.2d 1104 (Wash.) (same: party identification required in written contract)
- Jacob's Meadow Owners Ass’n v. Plateau 44 II, LLC, 162 P.3d 1153 (Wash. Ct. App.) (mutual assent may be deduced from circumstances)