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Ninth Circuit Ruling on Online Disclosure Form Could Set Dangerous Precedent for Leads Industry

Mouse Cursor Clicking Accept for Terms and Conditions Agreement

A Ninth Circuit decision from last month is already serving as a precedent for Telephone Consumer Protection Act (TCPA) cases that center on online disclosure forms. It demonstrates how courts could use inadequate webform design to undermine otherwise valid arbitration agreements.

The decision in Berman v. Freedom Financial LLC relates to the enforceability of an arbitration agreement in a TCPA class action. The Ninth Circuit ruled that the defendant could not compel arbitration due to specific issues with the design of the website used to get the plaintiffs to agree to the terms and conditions containing the arbitration clause. The court ruled that the arbitration clause could not be enforced because the plaintiffs did not “unambiguously manifest their assent to the terms and conditions when navigating through the [defendants’] websites.” Among the reasons cited were the size of the text in the disclosure, the color of the text containing the hyperlink to the full terms and conditions, and the specific phrase used on the button that users click to agree to the terms and conditions.

This decision, which was handed down in early April, is already serving as a precedent with the Ninth Circuit’s jurisdiction. In early May, a plaintiff directly cited the Berman decision in another TCPA complaint that involved the design of a website disclosure form.

For more specific analysis of the issues that the Ninth Circuit found with the website at issue in Berman, see blog posts from TCPAWorld and Digital Thrive. And for a more in depth discussion of the Berman decision and its implications, sign up for our June 2 webinar with Eric J. Troutman of TCPAWorld.