Putative TCPA Class Action Derailed by Hyperlinked Arbitration Provision

The Northern District of California recently granted a motion to compel arbitration in a putative class action brought under the Telephone Consumer Protection Act. In doing do, it enforced an arbitration provision that had been provided to the plaintiff by way of a hyperlink in an e-mail confirming her purchase of a subscription to an on-line real estate listing service.

The dispute in Silverman v. Move Inc., Case No. 18-cv-05919-BLF, concerns advertising text messages that were allegedly sent to Silverman’s cell phone without her consent in violation of the TCPA. Silverman is a licensed real estate sales associate and a member of the National Association of Realtors (“NAR”). Defendant NAR owns the Realtor.com website, which is operated on its behalf by defendant Move, Inc. (The claims asserted against NAR were dismissed for lack of personal jurisdiction.) The website serves as a promotional hub for NAR and is designed to assists Realtors with marketing homes and developing leads on behalf of their clients.

Silverman purchased a subscription to a “Connections” service that provides Realtors with leads to potential customers. Following her purchase, Move sent Silverman an e-mail confirming the subscription and indicating that she would be considered to have agreed to Move’s terms and conditions by “accessing or using any product or service included in your order and/or by not cancelling your order [within three days].” The email further stated that the terms and conditions apply not only to the specific services purchased, but to “all content and materials” that are exchanged with Move. Access to the terms and conditions was provided by a hyperlink included in the e-mail.

Among the terms and conditions provided by Move was an arbitration provision which, in relevant part, states:

You and Move agree that any and all disputes or claims that may arise between you and Move shall be resolved exclusively through final and binding arbitration, rather than in court, except that you may assert claims in small claims court if your claims qualify.

During her time as a Connections customer, Silverman signed up to receive text message alerts from Move. Her complaint alleges that she later unsubscribed from this service, but Move continued to send text messages to her cell phone using an automatic telephone dialing system, or “ATDS.” In her suit, she asserts a claim for violation of the TCPA on behalf of herself and an alleged nationwide class of individuals who similarly continued to receive texts concerning Realtor.com after requesting no further messages be sent.

Move responded to the lawsuit by filing a motion to compel arbitration. In ruling on the motion, the Court considered two issues: (1) whether the Court or an arbitrator would get to decide the question of “arbitrability” – that is, whether arbitration is the correct forum for resolving the dispute; and (2) whether the arbitration provision is unenforceable because Silverman did not receive adequate notice of the terms and conditions.

Because the terms and conditions expressly incorporate the rules and procedures of the American Arbitration Association, the Court found that questions of arbitrability – including Silverman’s argument that the arbitration provision had expired before the texts were sent – were to be decided by the arbitrator.

With regard to the second issue, Silverman argued that she did not have notice of the terms and conditions because they were sent to her as an inconspicuous hyperlink in the email confirming her order. She describes the link as unenforceable “browsewrap” – an agreement in which a user agrees to certain terms by merely visiting a website rather that by expressly indicating consent (such as by clicking on an “I agree” box). The Court rejected this argument, finding that Silverman had notice of the terms and conditions because they were sent to her after a telephone conversation with a Move representative who told her that she would be receiving a written confirmation of her order that would contain “all of the details and important information” about her purchase.

Based on these findings, the Court stayed the proceedings pending a determination by an arbitrator as to whether Silverman’s claim is arbitrable. If the arbitrator determines that it is, the Court will dismiss the action, including the class claims.

This case stands as a reminder that arbitration provisions are an effective tool in the defense of TCPA and other class action claims.