I’ve written before about the possibility that a properly written clickwrap or browsewrap arbitration agreement could help tame the ADA litigation monster, which like the Hydra seems to grow two new heads for each one that is cut off. A new decision from the United States District Court in Illinois, Miracle-Pond, et al. v. Shutterfly, Inc., No. 19-CV-4722, 2020 WL 2513099 (N.D. Ill. May 15, 2020) confirms that except in cases involving California consumers* a clickwrap or browsewrap type agreement can indeed force a lawsuit to arbitration provided it is properly written and presented to the user.
In Miracle-Pond the plaintiff opened a Shutterfly account when the Terms and Conditions included a class-action waiver and a provision permitting unilateral amendments to those Terms. Later an arbitration provision was added. That provision remained in place when the lawsuit – which claimed Shutterfly improperly used biometric information – was filed. Then, three months after the lawsuit was filed, Shutterfly sent all its account holders an email notice that listed a number of changes to the Terms and Conditions and included a reference to the arbitration provision. The email declared that leaving an account open would constitute assent to the new Terms and Conditions.
The Court first found that the agreement was a clickwrap rather than a browsewrap agreement because it required explicit consent. This distinction is important because browsewrap agreements are harder to enforce. They require actual or constructive knowledge of the terms and conditions. In Miracle-Pond the plaintiff was using a mobile app. that required a click to use the software, making it somewhat easier to show assent to the arbitration clause.** Since she clicked, her assent was clear. Website operators need to consider how to force users to acknowledge the existence of terms and conditions before they begin to use the website; something that should be easier as businesses adapt to consumer laws that require notice of how cookies are used.
The Court next found that based on Illinois state law¹ Shutterfly’s unilateral addition of an arbitration provision was enforceable. This was true even without the post-lawsuit email notice, which the Court discusses but does not rely on.
A typical ADA website lawsuit is not filed with the intent to prosecute the claims to trial, but rather to use the threat of litigation expense to make immediate settlement the only business-like response. That is why plaintiffs’ firms ask for amounts that are clearly absurd in terms of work performed but slightly less than the cost of any likely defense. The only way to eliminate this leverage is to move the lawsuit from federal court to arbitration, where a defense can be mounted at a reasonable cost and the plaintiff’s lawyers forced to go beyond mere allegations to actual proof – an expense many are not prepared to incur. Unlike a motion to dismiss based on a lack of standing or a claim concerning the ADA’s application to the internet that is almost certain to fail, a motion to compel arbitration has a reasonable chance of success if the arbitration provision is properly drafted and, most important, properly presented to the user. Miracle-Pond and similar cases confirm that click-wrap or browse-wrap agreements could tame the ADA litigation monster, and no website or mobile app operator should fail to act to take advantage of this fact.²
* California’s consumer protection laws limit class action waivers of any kind.
** Those interested in how to create an enforceable browsewrap arbitration agreement for ADA website lawsuits can refer to my earlier blog “Browsewrap could tame the ADA website litigation monster.” I advise all of my clients to include a properly formatted browsewrap arbitration agreement for website accessibility claims in their Terms and Conditions.
¹ Arbitration agreements and their enforcement are generally a matter of state law, even when federal claims are involved. Although most ADA website lawsuits are filed in California, New York and Florida, choice of law principles may require that the law of another state be followed, so website operators need to consider their own state’s laws in structuring these agreements.
² The good news doesn’t mean you can simply slap an arbitration agreement in your terms and conditions. Careful thought has to be given to the relevant choice of law principles as noted above. In addition local consumer protection laws need to be considered; it may be desirable to have a narrow arbitration provision in order to avoid triggering application of one of those laws. Most important, the terms and conditions must be properly presented to the user.