Plaintiffs Francesco Plazza and Sylvie Naude (collectively, "Plaintiffs") bring this putative class action against Defendant Airbnb, Inc. ("Defendant" or "Airbnb"). Before me is Airbnb's motion to compel arbitration and dismiss the action. Because Plaintiffs and Defendant entered into a valid and enforceable arbitration agreement, Airbnb's motion is granted in part and denied in part, and this action is stayed pending the outcome of arbitration.
I. Background
A. Plaintiffs' Claims
Plaintiff Naude originally created her account and registered as a user with Airbnb on July 29, 2009. (Naude Decl. ¶ 3; Miller Decl. ¶¶ 4-5.)
B. Defendant's Terms of Service
Since at least 2009, in order to use Airbnb's online platform, Hosts (third parties who offer their accommodations on Airbnb's website) and Guests (third parties who book such accommodations) have been required to create an account. (Miller Decl. ¶¶ 2, 4; see also Naude Decl. ¶ 3; Plazza Decl. ¶ 2.)
You and Airbnb agree that any dispute, claim or controversy arising out of or relating to these Terms or the breach, termination, enforcement, interpretation or validity thereof, or to the use of the Services or use of the Site or Application (collectively, "Disputes ") will be settled by binding arbitration, except that each party retains the right to seek injunctive or other equitable relief in a court of competent jurisdiction to prevent the actual or threatened infringement, misappropriation or violation of a party's copyrights, trademarks, trade secrets, patents, or other intellectual property rights. You acknowledge and agree that you and Airbnb are each waiving the right to a trial by jury or to participate as a plaintiff or class member in any purported class action or representative proceeding. Further, unless both youand Airbnb otherwise agree in writing, the arbitrator may not consolidate more than one person's claims, and may not otherwise preside over any form of any class or representative proceeding.
(Id. ¶ 13, Exs. 4-8.)
PLEASE READ THESE TERMS OF SERVICE CAREFULLY AS THEY CONTAIN IMPORTANT INFORMATION REGARDING YOUR LEGAL RIGHTS, REMEDIES AND OBLIGATIONS. THESE INCLUDE VARIOUS LIMITATIONS AND EXCLUSIONS, A CLAUSE THAT GOVERNS THE JURISDICTION AND VENUE OF DISPUTES ....
(Id. Exs. 5-8.)
According to Airbnb's archived computer code, as of 2009, the sign-up screen for potential users included a sentence, directly below the sign-up button, stating that "By clicking 'Sign Up,' you confirm that you accept the Terms of Service." (Id. ¶ 5, Ex. 1.)
Plaintiffs further referenced, and presented in advance of an April 28, 2016 conference in this matter, a "screenshot" of a 2016 sign-up screen. (Norton Decl. ¶¶ 2-4, Ex. A; Pls.' Pre-Mot. Letter.)
Quite apart from the initial sign-up process, Airbnb presented its modified TOS to users the first time they attempted to log in to their Airbnb accounts after the particular modified TOS took effect. (Miller Decl. ¶ 16.) Users were required to accept the modified TOS prior to accessing any part of the Airbnb platform. (Id. ; see Naude Decl. ¶ 7; Plazza Decl. ¶ 6.) Airbnb terms these acceptances "consent events." (Miller Decl. ¶ 16.) The 2012, 2014, and 2015 modifications of the TOS each presented Airbnb users with a screen box titled either "Updated Terms of Service and Privacy Policy," "Terms of Service," or "Updated Terms of Service." (Id. Exs. 9-11.) Below the title was a short paragraph notifying users that Airbnb recently updated its terms. (Id. ) In that introductory paragraph, the 2014 and 2015 screen boxes further told users to read each term carefully and provided a hyperlink for users to "[l]earn more about what's changed." (Id. Exs. 10-11.) Below the introductory paragraph, each screen box provided a scrollable version of the TOS and tabs to the other relevant agreements that had been modified. (Id. Exs. 9-11.) Finally, each screen box required users,
Airbnb's records indicate that Plaintiff Naude "consented" to the TOS on July 29, 2009, May 23, 2012, May 7, 2014, and August 16, 2015. (Id. ¶¶ 21-23, Exs. 17-19.) Similarly, Airbnb's records indicate that Plaintiff Plazza "consented" to the TOS on August 21, 2011, May 22, 2012, May 30, 2014, and November 22, 2015 under his first account, and on October 2, 2014 and August 6, 2015 under his second account. (Id. ¶¶ 21-22, 24, Exs. 17-19.) In addition to the modification screens, Airbnb's records indicate that since 2014, Plaintiffs would have received emails after these modifications were enacted notifying Plaintiffs of the TOS modifications and providing links to explanations of those changes as well as the old and new versions of the TOS itself. (Id. ¶ 20, Exs. 12-16.) Plaintiffs provided copies of emails sent to Plaintiff Naude on July 10, 2015 and March 30, 2016, and to Plaintiff Plazza on March 31, 2016, which informed Plaintiffs in the subject line that "We're updating our Terms of Service and Privacy Policy," informed Plaintiffs that they would be asked to agree to these terms upon using the site, and linked to information explaining the changes as well as old and new versions of the TOS. (Nadler Decl. ¶¶ 2-4, Exs. A-C.)
Plaintiffs do not appear to dispute the accuracy of the modification and email records, (see Pls.' Mem. 7-10),
Plaintiff Plazza similarly has "no specific recollection of either seeing the Terms of Service hyperlink or any statement" noting his agreement to the TOS before setting up his accounts. (Plazza Decl. ¶ 3.) Plaintiff Plazza further notes that while creating his accounts, he was not actually presented with the TOS, and was able to enter the site without clicking on an actual button reading "I Agree." (Id. ¶ 4.) Plaintiff Plazza does recall being required to click such a button "[o]n several occasions" after he created his accounts, but also indicates that he did not read the TOS. (Id. ¶ 6.)
II. Procedural History
Plaintiffs filed their putative class action complaint on February 11, 2016, claiming violations under New York Real Property Law § 440, et seq ., deceptive trade practices under New York General Business Law § 349, fraud, and unjust enrichment. (Compl. ¶¶ 47-73.) In accordance with my Individual Rules, on March 28, 2016, Defendant filed a letter that requested a pre-motion conference on its anticipated motion to compel arbitration and outlined the basis for such a motion. (Doc. 8.) Defendant filed a letter with supplemental authority on March 29, 2016. (Doc. 9.) On March 31, 2016, Plaintiffs responded to this letter, (Doc. 10), and on April 28, 2016, I held a conference regarding Defendant's anticipated motion. (See Doc. 14.)
On May 9, 2016, I granted the parties' joint letter proposing deadlines for discovery and motion practice. (Doc. 13.) On July 7, 2016, I granted the parties' stipulation requesting an extension of time in connection with the motion to compel arbitration. (Doc. 17.) Pursuant to that stipulation, Defendant filed its motion to compel arbitration on July 22, 2016, (Docs. 18-21), Plaintiffs filed their opposition on August 22, 2016, (Docs. 22-23), and Defendant filed its reply on September 12, 2016, (Doc. 26). Plaintiffs filed a notice of supplemental authority on October 5, 2016, (Doc. 27), to which Defendant responded on October 11, 2016, (Doc. 28). Defendant filed its own notice of supplemental authority on November 1, 2016, (Doc. 29), to which Plaintiffs responded on November 16, 2016, (Doc. 30). Defendant filed an additional notice of supplemental authority on August 17, 2017, (Doc. 37), to which Plaintiffs responded on August 18, 2017, (Doc. 38). Defendants filed a reply to Plaintiffs' letter that same day, (Doc. 39), and Plaintiffs filed a response on August 30, 2017, which provided an update noting that the Second Circuit had denied without prejudice a motion to amend its decision in Meyer v. Uber Technologies, Inc. ,
III. Legal Standard
The Federal Arbitration Act ("FAA"),
In determining whether claims are subject to arbitration, courts in this Circuit consider "(1) whether the parties have entered into a valid agreement to arbitrate, and if so, (2) whether the dispute at issue comes within the scope of the arbitration agreement." In re Am. Express Fin. Advisors Sec. Litig. ,
When determining whether the parties have entered into a valid agreement to arbitrate, "courts 'should apply ordinary state-law principles that govern the formation of contract,' " and evaluate the allegations "to determine whether they raise a genuine issue of material fact." Sacchi v. Verizon Online LLC , No. 14-CV-423,
IV. Discussion
A. The Agreement to Arbitrate
Although the Internet age has certainly introduced new twists with regard to entering into contracts, the fundamental elements of contract law, including mutual assent of the parties, have not changed. Meyer ,
Here, both Plaintiffs in this action claim that they did not read Airbnb's TOS and, as such, actual notice of the arbitration provision at issue in this case is not present. However, Plaintiffs can still be bound by the contractual terms if there is inquiry notice of the terms and Plaintiffs "assent[ed] to [the terms] through the conduct that a reasonable person would understand to constitute assent."
The scenario of notice given through terms of service drafted unilaterally and presented to an Internet user online is not unique, and has been the subject of an abundance of case law addressing what is required in these circumstances to find reasonable notice of and assent to those terms. Of notable, but not necessarily outcome determinative, importance is the distinction between what have been dubbed "clickwrap" and "browsewrap" agreements. Clickwrap agreements are generally defined by the requirement that users "click" some form of "I agree" after being presented with a list of terms and conditions. See, e.g. , Nicosia ,
Plaintiffs acknowledge that Airbnb's modified versions of its TOS were presented to them in what "appear to be" clickwrap form. (Pls.' Mem. 16-17.) However, Plaintiffs maintain that the screens were insufficient notice because they did not directly refer to the arbitration provision, nor did the emails concurrently sent after the 2014 and 2015 modifications advise users of the arbitration provision. (Id. at 17-18.) These facts alone do not mandate a finding that there is no notice, and the other facts present do support the conclusion that there was a valid agreement to arbitrate. Specifically, after modifying the TOS, Airbnb provided the modified TOS to users the first time that any user tried to access his or her account after the modified TOS took effect. (Miller Decl. ¶ 16.) During those times, Airbnb presented an actual scroll box with the modified TOS and would not allow users to access any part of Airbnb's website or continue using the platform until they indicated their assent to the TOS. (Id. ; see
Although both parties agree that the 2009 TOS, operative when Plaintiff Naude first created her account, did not include an arbitration provision, Airbnb has presented evidence that Plaintiff Naude accessed her account, and therefore was presented with the modified TOS containing the arbitration clause, on May 23, 2012.
The emails sent by Airbnb to its users upon the modification of the TOS in 2014 and 2015 are yet another form of notice provided to Plaintiffs. While the subject lines of these emails are not apparent from the exhibits attached by Airbnb to the Miller declaration, (
Given that Airbnb's broad arbitration clause applies retroactively, the arbitration clauses in the modified versions of the TOS are sufficient to govern this dispute and refer the entire matter to arbitration, including any claims of Plaintiff Naude that arose when she first signed up for Airbnb in 2009 prior to the incorporation of any arbitration provision.
Even without the notice provided after the terms of service were modified, I find that Airbnb's original sign-up procedure was sufficient inquiry notice of the terms of service which-at least during the time that Plaintiff Plazza created his account-included an arbitration provision. As Plaintiff Naude signed up during a time when the TOS did not include the arbitration provision, I do not look to the circumstances surrounding her initial sign-up, but
Nevertheless, I note that while Airbnb's initial sign-up procedure was not a classic clickwrap in the sense that the terms were presented by hyperlink instead of being shown to the user and there was no clear button affirmatively stating "I accept," it also was not a "true browsewrap" either. The resulting "hybrid agreement" weighs in favor of valid notice, as courts have generally been "more willing to find the requisite notice for constructive assent where the browsewrap agreement resembles a clickwrap agreement-that is, where the user is required to affirmatively acknowledge the agreement before proceeding with use of the website." Nguyen ,
In making the ultimate determination that Airbnb provided inquiry notice during Plaintiff Plazza's initial sign-up, I look to "whether the design and content of [the] webpage rendered the existence of the terms reasonably conspicuous." Nicosia ,
Plaintiff Plazza signed up for his first account on August 21, 2011. (Miller Decl. ¶ 7.) Depending on the algorithm assigned to the particular user, on the date that Plaintiff Plazza signed up for his account, one of two screens would have appeared. (Id. Ex. 2.) I find that both screens contained a limited amount of text in clear font size and color. (Id. ) In one screen, directly underneath text directing users to "Connect with Facebook" or "Create an account with your email address," written in similar, if not the same, font size was text warning users that "By clicking 'Connect with Facebook,' you confirm that you accept the Terms of Service." (Id. ) "Terms of Service" was highlighted with blue font and an underline, indicating a hyperlink that took users directly to the TOS. Although there were two other hyperlinks on the screen, one simply informed users that they could "Create an account with your email address" and the other, which appeared in a separate box below the box allowing persons to sign up, simply allowed existing Airbnb members to "Sign In Now." (Id. ) The second screen that Plaintiff Plazza may have seen upon signing up was substantially similar, except
These facts are easily distinguishable from those cases where browsewraps have been deemed invalid. Cf. Nicosia ,
As a result of the foregoing, I find that Airbnb put Plaintiffs on reasonably conspicuous notice of the terms of the arbitration provision and that Plaintiff Plazza's actions in signing up, as well as Plaintiffs' explicit agreement to the modifications and continued use of Airbnb, manifested their assent. See, e.g. ,
Plaintiffs argue in the alternative that the placement of the arbitration clause toward the end of a long agreement necessarily means that Airbnb did not provide notice. (Pls.' Mem. 18-20.) This argument is equally unpersuasive. Regardless of the placement of the arbitration clause, Plaintiffs do not dispute that, beginning in May 2012, the TOS was preceded by a capitalized admonition warning users to read the terms carefully as they contained important legal information, including a clause governing "JURISDICTION AND VENUE OF DISPUTES." (Miller Decl. Exs. 5-8.) It is also undisputed that Plaintiffs would have been confronted by that sentence when they attempted to access their respective accounts after the TOS had been modified. (Id. ¶¶ 16-19, Exs. 9-11; see also Naude Decl. ¶ 7; Plazza Decl. ¶ 6.) Moreover, in the emails sent by Airbnb and received by Plaintiffs in 2014 and 2015, Airbnb told users that they "should review the documents in full on [their] own." (Miller Decl. Exs. 12-16.) Finally, the arbitration provision could at all times be found under a bolded heading, titled "Dispute Resolution." (Id. Exs. 4-8.) The facts here are thus quite unlike those in the cases cited by Plaintiffs with respect to this issue. See, e.g. , Bruni v. Didion ,
B. The Enforceability of the Arbitration Clause
Notwithstanding the liberal policy favoring arbitration, the FAA still permits the invalidation of an otherwise valid arbitration clause when certain "generally applicable contract defenses, such as fraud, duress, or unconscionability" apply. See
1. Fraudulent Inducement of the Arbitration Provision
Plaintiffs set forth their facts supporting a fraudulent inducement claim in a single, brief paragraph, arguing that Defendant surreptitiously inserted an arbitration provision into its TOS materially altering the rights of users, and buried the arbitration provision deep within a voluminous document without drawing the users' attention to that provision. (Pls.' Mem. 21.) Putting aside the fact that Plaintiff Plazza initially signed up for his account after the date that the arbitration provision was added-a fact that makes Plaintiff Plazza's assertion of this argument more flawed and unpersuasive-I find that these arguments fail with regard to both Plaintiffs.
If the claim involves fraudulent inducement of an arbitration provision as opposed to the contract itself, a court as opposed to the arbitrator may decide the claim. See Buckeye ,
2. Unconscionability of the Arbitration Provision
Plaintiffs' final claim is that the arbitration provision contained in Airbnb's TOS is unconscionable. To find an arbitration clause unconscionable, I must find both procedural and substantive unconscionability. See, e.g. , Merkin v. Vonage Am., Inc. ,
One common definition of unconscionability as it relates to contract formation is the "absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party." Sanchez v. Valencia Holding Co., LLC ,
California law strongly supports the notion that substantive unconscionability is "concerned not with 'a simple old-fashioned bad bargain,' but rather terms that are 'unreasonably favorable to the more powerful party,' " which includes "terms that impair the integrity of the bargaining process or otherwise contravene the public interest or public policy; terms (usually of an adhesion or boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the law, fine-print terms, or provisions that seek to negate the reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having to do with price or other central aspects of the transaction."
Here, Plaintiffs claim that the arbitration provision is unconscionable for myriad reasons. With respect to procedural
Plaintiffs' second argument of procedural unconscionability relates to the unavailability of the arbitration rules. (Pls.' Mem. 22-23.) However, this fact alone does not necessitate a finding of procedural unconscionability. See, e.g. , Lane v. Francis Capital Mgmt. LLC ,
Airbnb's TOS is a standard adhesion contract, which does suggest some level of procedural unconscionability. See Baltazar ,
In defense against procedural unconscionability, Defendant also cites case law determining that contracts that concern nonessential activities cannot be procedurally unconscionable. See, e.g. , Mazzola ,
With respect to substantive unconscionability, California courts have presented some examples of what is considered "overly harsh," "unduly oppressive," or "so one-sided so as to shock the conscience," such that substantive unconscionability can be found. See Mikhak v. Univ. of Phoenix , No. C16-00901,
With respect to substantive unconscionability, Plaintiffs argue only that the arbitration clause suffers from a lack of mutuality. (Pls.' Mem. 23-25.) In support
Plaintiffs' first argument-that the arbitration provision is substantively unconscionable because Airbnb is more likely to bring an action for injunctive or equitable relief with respect to intellectual property issues-is also unpersuasive, and certainly does not bring the provision to the level of "shocking the conscience." Cf. Peng ,
Since any argument that the arbitration clause at issue here is procedurally or substantively unconscionable is unpersuasive and not supported by the case law; I find that the arbitration clause in Airbnb's TOS is not unconscionable.
C. To Stay or Dismiss
Although Defendant urges that I dismiss this action, I find that a stay, rather than dismissal, is appropriate given the Second Circuit's holding in Katz v. Cellco Partnership ,
V. Conclusion
For the foregoing reasons, Defendant's motion to compel arbitration and dismiss the action is GRANTED in part and DENIED in part, and this action is STAYED pending the outcome of arbitration. The Clerk of the Court is respectfully directed to close this motion on the docket.
SO ORDERED.
Notes
"Naude Decl." refers to the August 20, 2016 Declaration of Sylvie Naude, Exhibit L to the August 22, 2016 Declaration of Jeffrey M. Norton, (Doc. 23), filed in support of Plaintiffs' Opposition to Defendant's Motion to Compel Arbitration. "Miller Decl." refers to the July 22, 2016 Declaration of Kyle Miller, (Doc. 21), filed in support of Defendant's Motion to Compel Arbitration.
"Plazza Decl." refers to the August 20, 2016 Declaration of Francesco Plazza, Exhibit M to the August 22, 2016 Declaration of Jeffrey M. Norton, (Doc. 23), filed in support of Plaintiffs' Opposition to Defendant's Motion to Compel Arbitration.
"Compl." refers to the Complaint filed in this action on February 11, 2016. (Doc. 1.)
Although Plaintiffs assert that Miller's declaration is "unreliable" and otherwise state that they do not concede that the screens presented by Miller "are accurate representations of the sign up screens presented to them," (Pls.' Mem. 12, 16 n.11), I do not agree that Miller's failure to include an alternative sign-up screen from 2016, a screen that itself was not tied to the date Plaintiffs accessed the site, is reason to disregard his entire declaration. In fact, even if I were to evaluate Plaintiffs' 2016 sign-up screen as the operative screen that appeared when Plaintiffs first registered for their accounts, this would not change my analysis of either the impact of the Terms of Service modifications-the content of which Plaintiffs do not dispute-or the notice provided to Plaintiff Plazza by the initial sign-up. "Pls.' Mem." refers to Plaintiffs' Memorandum of Law in Opposition to Defendant's Motion to Compel Arbitration, filed on August 22, 2016. (Doc. 22.)
"Def.'s Mem." refers to Defendant's Memorandum of Law in Support of Defendant's Motion to Compel Arbitration, filed on July 22, 2016. (Doc. 19.)
Although Defendant did not provide a copy of the 2009 TOS, the August 15, 2011 version of the TOS contained a modification provision reserving to Airbnb the right to modify the TOS and informing users that "[i]f the modified Terms are not acceptable to you, your only recourse is to cease using the Site, Application and Services." (Miller Decl. Ex. 4.)
Although the May 22, 2012 version of the TOS inexplicably removed the clause "except that each party retains the right to seek injunctive or other equitable relief ... or other intellectual property rights," (Miller Decl. Ex. 5), this clause returned to the TOS with precisely the same wording in the April 7, 2014 version, (id. Ex. 6).
Plaintiffs note that the later versions of the TOS refer to the Supplementary Procedures for Consumer Related Disputes, notwithstanding that those procedures were no longer in effect as of September 1, 2014. (Norton Decl. ¶ 5.) Although this apparent error does not alter the legal analysis, I note that I find an agreement to arbitrate based on events occurring prior to September 1, 2014.
One difference exists between this wording, which was present in the August 15, 2011, May 22, 2012, April 7, 2014, and July 6, 2015 versions of the TOS, and the wording in the June 30, 2014 version of the TOS. This difference is not material to my consideration of the current motion.
Certain differences exist between this wording, which was present in the April 7, 2014, June 30, 2014, and July 6, 2015 versions of the TOS, and the wording in the May 22, 2012 version of the TOS. These differences are not material to my consideration of the current motion.
Although Plaintiffs submit that the wireframe images are "inaccurate or, at least, misleading," they do so based only on the fact that Plaintiffs' counsel was able to retrieve a screenshot of an alternate sign-up screen in 2016. (Pls.' Mem. 12.) Therefore, Plaintiffs conclude that there is no way to state with "any degree of certainty which sign-in screen Plaintiffs viewed." (Id. ) This argument is not compelling. The availability of an alternate sign-up screen does not mean that the archived sign-up screens attached to the Miller declaration are either made up or inaccurate.
The second alternate sign-up screen told users they could "Sign up with Facebook or Google," hyperlinking "Facebook" and "Google," or provide their first name, last name, email address, password, and password confirmation, and thereafter click a red button stating "Sign up." (Miller Decl. Ex. 3.) Again, directly above the red "Sign up" button was the text "By signing up, I agree to Airbnb's Terms of Service, Privacy Policy, Guest Refund Policy, and Host Guarantee Terms." (Id. ) The Terms of Service, Privacy Policy, Guest Refund Policy, and Host Guarantee Terms were all separately hyperlinked. (Id. )
"Pls.' Pre-Mot. Letter" refers to the March 31, 2016 letter submitted to me in advance of the April 28, 2016 pre-motion conference. (Doc. 10.)
"Nadler Decl." refers to the July 22, 2016 Declaration of Michael L. Nadler filed in support of Defendant's Motion to Compel Arbitration. (Doc. 20.)
Plaintiffs point out that Plaintiff Naude's August 16, 2015 "consent" purportedly occurred despite the fact that she claims to have been restricted from using her Airbnb account in March 2014, but do not otherwise dispute the validity of that record. (Pls.' Mem. 11.) If Plaintiff Naude was restricted from using her Airbnb account in March 2014 and has not had any transactions through her Airbnb account since that time, (Naude Decl. ¶ 8), then it could be argued that she would not have standing to bring any claims after March 2014 and would not be an adequate class representative for any class members with claims accruing after March 2014.
"Def.'s Reply Mem." refers to Defendant's Corrected Reply Memorandum of Law in Support of its Motion to Compel Arbitration. (Doc. 26.)
Although the same warning does not appear in the screenshot of the May 22, 2012 scroll-through box attached as Exhibit 9 to the Miller declaration, the same sentence does appear in the actual May 22, 2012 TOS, attached as Exhibit 5 to the Miller declaration.
These facts further distinguish this case from the single case cited by Plaintiffs, a Maryland decision that is not binding on me. See DirecTV v. Mattingly ,
Although Plaintiffs do not recall certain facts related to seeing, being provided with, or being required to agree to Airbnb's TOS during the initial registration process or at certain points thereafter, (Naude Decl. ¶¶ 4-5; Plazza Decl. ¶ 3), Plaintiffs' lack of recollection does not create a meaningful dispute of fact. Cf. Moule v. United Parcel Serv. Co. , No. 16-CV-00102-JLT,
I note that Sacchi involved an email where the body of the email referred to the arbitration provision, whereas Airbnb's emails did not refer to the arbitration clause. However, like Sacchi , Airbnb's subject line clearly indicated the content of the emails and, in any event, the Court in Sacchi mitigated the import of the above-mentioned distinction when finding that, with respect to the argument that the notices failed to mention the ban on class-wide arbitration, "[n]otice of the terms of the agreement is sufficient where the offeree is given 'adequate notice of the existence of additional documents' that contain those terms."
Although the Court in Specht noted an exception when the writing does not appear to be a contract and the terms are not called to the attention of the recipient, the Court found that the contractual nature was not obvious specifically because the plaintiffs were responding to an offer that "did not carry an immediately visible notice of the existence of license terms or require unambiguous manifestation of assent to those terms,"
I note that Defendant only briefly addresses whether the scope of the arbitration clause encompasses the claims alleged by Plaintiffs, (Def.'s Mem. 10), and Plaintiffs do not address the issue at all. In any event, I find that Defendant's broadly worded arbitration provision does cover this dispute.
Although the Smith/Enron case was distinguished by the Second Circuit later on, the Court there merely noted that it would not read an arbitration clause to have an expansive temporal scope without looking first at whether the parties intended the arbitration clause to cover the dispute, and ultimately found in the negative because the parties' contractual positions and relationship had changed over time in a way that impacted arbitrability. See Holick v. Cellular Sales of N.Y., LLC ,
However, the same reasoning applied here applies to any evaluation of the notice provided during the other sign-up periods identified by the parties in their papers.
Defendant's description of the sign-up screens comport with Plaintiff Plazza's recollection that he did not have to click on a button reading "I Agree" when registering his Airbnb accounts. (Plazza Decl. ¶ 4.)
Since I find that Plaintiff Plazza had notice of the arbitration provision when he signed up for his account on August 21, 2011, I need not examine the sign-up screen that popped up when he created his second account on October 2, 2014.
Plaintiffs' citation to Judge Weinstein's opinion in Berkson v. Gogo, LLC ,
Plaintiffs state that they felt forced into accepting the modified TOS because they otherwise would be unable to access their account information. Plaintiffs do not explain why this justifies failure to read the contract, nor do they state that they otherwise requested that Airbnb provide to them, and delete from its own servers, any personal, account-related information.
As an aside, Plaintiffs also cite to a clause in the section limiting liability, which is not part of the arbitration provision they argue is unconscionable. (Pls.' Mem. 24-25.) To the extent that Plaintiffs are arguing that this portion of the agreement is also unconscionable, I leave that to the arbitrator to decide.