448 F.Supp.3d 873
N.D. Ill.2020Background
- Plaintiff Crystal Wilson sued Redbox under the TCPA after receiving automated texts she had asked Redbox not to send; Redbox moved to compel arbitration under its Terms of Use.
- Redbox’s Terms of Use (including a November 2016 mandatory arbitration clause) apply to rentals and account use; Redbox updated customers by email in 2016.
- Two interfaces are implicated: the kiosk "My Bag" payment screen ("Pay Now" button plus a separate "Terms & Privacy" button and small disclosure) and the website Sign In screen (disclosure at bottom with hyperlinks to "Terms of Use" and other policies).
- Wilson has been a Redbox customer since 2007, used kiosks and the website, but denies ever seeing or agreeing to the Terms of Use or the 2016 email.
- Redbox argues Wilson assented by (a) pressing "Pay Now" at kiosks, (b) signing into her online account, and (c) continuing to use Redbox after receiving the 2016 email.
- The district court denied Redbox’s motion to compel arbitration, finding no clear and conspicuous notice sufficient to bind Wilson to the Terms of Use.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether there was a binding agreement to arbitrate | Wilson never assented to the Terms of Use, so no contract to arbitrate exists | Wilson encountered screens that gave notice and tied assent to actions, so she agreed to arbitrate | No; no mutual assent—no enforceable arbitration agreement |
| Assent via kiosk "My Bag" screen (pressing "Pay Now") | The Terms link and disclosure were not clear/conspicuous; intervening buttons and clutter distracted notice | "Pay Now" was temporally coupled with disclosure on same screen, so constructive notice existed | No; spatial decoupling, intervening buttons, and clutter meant no constructive notice |
| Assent via website Sign In screen | The disclosure and Terms hyperlink were not conspicuous; formatting and color did not sufficiently signal a clickable contract link | Signing in disclosed that the user agreed to Terms (disclosure present at bottom of screen) | No; hyperlink formatting, gray text contrast, and placement were insufficiently conspicuous |
| Assent by email notice of 2016 Terms update and continued use | Mere receipt of an email and continued use does not show assent absent prior agreement or notice | Redbox emailed customers about the update; continued use manifested assent | No; absent prior assent or clear opt-out mechanism, silence after the email did not establish acceptance |
Key Cases Cited
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (arbitration policy and FAA principles)
- Tinder v. Pinkerton Security, 305 F.3d 728 (7th Cir. 2002) (summary-judgment standard applies to motions to compel arbitration)
- Zurich Am. Ins. Co. v. Watts Indus., Inc., 417 F.3d 682 (7th Cir. 2005) (elements required to compel arbitration)
- Sgouros v. TransUnion, 817 F.3d 1029 (7th Cir. 2016) (constructive notice and online assent principles)
- Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017) (hybrid agreements enforceable when terms reasonably communicated)
- Cullinane v. Uber Techs., Inc., 893 F.3d 53 (1st Cir. 2018) (webpage design and conspicuousness determine notice)
- Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016) (webpage clutter can obscure notice of terms)
- Gupta v. Morgan Stanley Smith Barney, LLC, 934 F.3d 705 (7th Cir. 2019) (state contract-formation law governs existence of arbitration agreement)
- Faulkenberg v. CB Tax Franchise Sys., LP, 637 F.3d 801 (7th Cir. 2011) (apply forum substantive law when parties do not address choice of law)
- Schnabel v. Trilegiant Corp., 697 F.3d 110 (2d Cir. 2012) (receipt of email alone does not establish assent to changed terms)