442 F.Supp.3d 825
S.D.N.Y.2020Background
- Postmates operates a website and mobile app requiring users to create accounts to place orders; sign-up screens state: “By clicking the Sign Up or Facebook button, you agree to our Terms of Service and Privacy Policy” with hyperlinked Terms and Privacy entries.
- Postmates’ Terms of Service (TOS) include a mandatory arbitration clause and a class/representative-action waiver, with three limited exceptions (small claims, agency actions, and IP disputes).
- Plaintiff Jamie Feld signed up for Postmates in 2019 and filed a putative class action alleging violations of N.Y. Gen. Bus. Law § 349 and unjust enrichment based on allegedly misleading marketing and “hidden” fees.
- Postmates moved to compel arbitration, arguing Feld agreed to the TOS when she registered; Feld argued she lacked notice and never assented (hyperlinks inconspicuous, no affirmative click to accept).
- The Court examined the website and app sign-up interfaces, applied Second Circuit standards for internet contracts (sign-in‑wrap), found the notice was spatially and temporally coupled with registration, and held Feld was on inquiry notice and manifested assent.
- Conclusion: Court granted Postmates’ motion to compel arbitration, held the dispute falls within the broad arbitration clause, and stayed proceedings pending arbitration.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a valid arbitration agreement exists (notice/inquiry notice) | Feld: TOS hyperlinks were inconspicuous on a cluttered screen; no affirmative click; she never saw or agreed to TOS | Postmates: Sign-up notice immediately above sign-up buttons with hyperlinked TOS put users on inquiry notice; registration manifests assent | Court: Notice was reasonably conspicuous; a prudent user was on inquiry notice and assent was manifested by signing up; agreement exists |
| Whether assent required an affirmative click (clickwrap v sign-in-wrap) | Feld: No affirmative assent required so no contract | Postmates: Sign-in‑wrap is enforceable where notice is clear and proximate to sign-up | Court: Affirmative click not required; spatial/temporal coupling of hyperlinked notice sufficed |
| Whether the arbitration clause covers Feld's claims (scope/class waiver) | Feld: Her §349 and unjust enrichment claims should proceed in court/class forum | Postmates: TOS broadly covers disputes arising out of or relating to the Terms or use of the platform, including these claims | Court: Clause is broad and encompasses the dispute; class waiver applies subject to listed exceptions (none applicable) |
| Remedy if arbitration clause applies | Feld: Proceed in court (class claims) | Postmates: Compel arbitration and stay proceedings under the FAA | Court: Granted motion to compel arbitration and stayed the case pending arbitration |
Key Cases Cited
- AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643 (arbitrability questions for the court; presumption in favor of arbitration)
- Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir.) (standards for conspicuous online notice and inquiry notice in sign-in‑wrap cases)
- Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir.) (cluttered interface can defeat inquiry notice)
- Specht v. Netscape Commc'ns Corp., 306 F.3d 17 (2d Cir.) (online assent principles; clarity required)
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir.) (offeree bound if on inquiry notice and conduct manifests assent)
- Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir.) (internet contracts governed by ordinary contract principles)
- Louis Dreyfus Negoce S.A. v. Blystad Shipping & Trading Inc., 252 F.3d 218 (2d Cir.) (broad arbitration clauses create presumption of arbitrability)
- Carnival Cruise Lines, Inc. v. Shute, 499 U.S. 585 (online or redirected notice to terms can be enforceable)
- Fteja v. Facebook, 841 F. Supp. 2d 829 (S.D.N.Y.) (user assented to hyperlinked terms by registering when notice was proximate and cautionary)