200 F.Supp.3d 408
S.D.N.Y.2016Background
- Plaintiff Spencer Meyer sued Travis Kalanick (and later Uber Technologies, Inc.) alleging an antitrust conspiracy relating to Uber's pricing algorithm; Kalanick and Uber later moved to compel arbitration.
- Meyer registered for Uber via the Uber mobile app on October 18, 2014 using an Android phone; the registration involved a two‑screen flow with a prominent "Register" button and a small hyperlink reading "Terms of Service & Privacy Policy" below it.
- The hyperlink was small (about 6‑point font), not required to complete registration, and led to an intermediate screen with a further button to access the full User Agreement; the arbitration clause was buried on page seven of the nine‑page User Agreement.
- Meyer testified he did not recall seeing or clicking the hyperlink; Uber did not assert actual knowledge but argued constructive or inquiry notice sufficed to form the contract.
- The court applied California law to the User Agreement under New York's interest‑analysis choice‑of‑law test and addressed whether Meyer had formed a binding agreement to arbitrate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Meyer formed a valid agreement to arbitrate with Uber | Meyer: registration did not give reasonably conspicuous notice or unambiguous assent to the arbitration clause | Uber/Kalanick: the registration screen and hyperlink put Meyer on notice; User Agreement governs | Held: No — Meyer did not have reasonably conspicuous notice or unambiguous assent; no enforceable arbitration agreement formed |
| Whether Meyer had actual or inquiry notice of the Terms | Meyer: no actual knowledge and layout/format did not create inquiry notice | Defendants: hyperlink and "By creating an account, you agree" language were sufficient for constructive/inquiry notice | Held: No — presentation (placement, size, wording) was too inconspicuous to impose inquiry notice |
| Whether arbitration clause was sufficiently prominent in the User Agreement | Meyer: clause buried deep; only discoverable after extra clicks and scrolling | Defendants: clause was in the User Agreement and highlighted in part (bold/all‑caps) | Held: Buried placement and multi‑step access meant clause was not adequately communicated; prominence insufficient |
| Choice of law for contract formation question | Meyer: California law applies (supports Specht standard) | Defendants: urged New York law based on subsequent facts; earlier briefing acknowledged California | Held: California law applies (court reaffirmed prior ruling); outcome same even under NY law |
Key Cases Cited
- Aetna Ins. Co. v. Kennedy to Use of Bogash, 301 U.S. 389 (Court presumes against waiver of jury trial)
- Specht v. Netscape Commc'ns Corp., 306 F.3d 17 (2d Cir. 2002) (electronic‑contract formation requires reasonably conspicuous notice and unambiguous assent)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (federal policy favoring arbitration generally applies)
- Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014) (distinction between actual notice and inquiry notice for website terms)
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (arbitration clauses are subject to ordinary contract‑formation rules)
- Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) (analogy on notice and repeated use; limits on enforcing obscure online terms)