Reinsurance Focus (Jorden Burt LLP)

Ninth Circuit: Website Visit Four Years After Assent To a Contract Containing a Change-of-Terms Provision Does Not Bind Parties To New Contract Terms Addressing Arbitration

The Ninth Circuit affirmed the district courtaEUR(TM)s order compelling arbitration in a case brought under the Fair Credit Reporting Act (FCRA) and state law, based on the plaintiffaEUR(TM)s purchase of ExperianaEUR(TM)s Credit Score subscription service in 2014. The plaintiff agreed in 2014 to ExperianaEUR(TM)s terms of use, which included an arbitration provision and a aEURoechange-of-termsaEUR? provision, specifying that she would be bound to future versions of the contract by continuing to access ExperianaEUR(TM)s website. In 2018, on the day before the plaintiff filed her lawsuit, the plaintiff accessed ExperianaEUR(TM)s website, and subsequently argued that she became subject to new contract terms exempting FCRA claims from arbitration. The Ninth Circuit held that the plaintiffaEUR(TM)s claims were arbitrable under the 2014 terms of the contract, and that the 2018 terms did not apply. In order to bind parties to new terms pursuant to a change-of-terms provision, both parties must have notice that the terms have changed and an opportunity to review the changes. The plaintiff did not allege facts sufficient to conclude that this occurred. The court observed that aEURoethe opposite rule would lead to absurd results: contract drafters who included a change-of-terms provision would be permitted to bind individuals daily, or even hourly, to subsequent changes in the terms.aEUR? The Ninth Circuit also held that there was no concern that the 2014 contract required parties to waive their rights to seek public injunctive relief, which would have rendered the agreement unenforceable under California law (the aEURoeMcGill ruleaEUR?). Because the 2014 arbitration agreement subjected to arbitration aEURoeall disputes to the fullest extent allowed by law,aEUR? the court found that the arbitration agreement did not prohibit a plaintiff seeking public injunctive relief in court. The court also found that the McGill rule was inapplicable because the plaintiff failed to allege Article III standing to bring public injunctive relief. Stover v. Experian Holdings, Inc., Case No. 19-55204 (9th Cir. Oct. 21, 2020).

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