Case 16-2750, Document 219-1, 08/17/2017, 2102722, Page1 of 34

162750cv,162752cv
Meyerv.UberTechnologies,Inc.

UNITEDSTATESCOURTOFAPPEALS
FORTHESECONDCIRCUIT

AugustTerm2016

(Argued:March24,2017 Decided:August17,2017)

DocketNos.162750cv,162752cv

SPENCERMEYER,Individuallyandonbehalfofthosesimilarlysituated,

PlaintiffCounterDefendantAppellee,

v.

UBERTECHNOLOGIES,INC.,

DefendantCounterClaimantAppellant,

TRAVISKALANICK,

DefendantAppellant,

ERGO,

ThirdPartyDefendant.


ONAPPEALFROMTHEUNITEDSTATESDISTRICTCOURT
FORTHESOUTHERNDISTRICTOFNEWYORK

 Case 16-2750, Document 219-1, 08/17/2017, 2102722, Page2 of 34

Before:
RAGGI,CHIN,ANDCARNEY,CircuitJudges.

InthisputativeclassactionfiledintheUnitedStatesDistrictCourt

fortheSouthernDistrictofNewYork(Rakoff,J.),auserofatechnology

companyscarservicesmartphoneapplicationallegesthatthecompanyandits

formerchiefexecutiveengagedinillegalpricefixing.Defendantsmovedinthe

districtcourttocompelarbitration,contendingthattheuseragreedtoa

mandatoryarbitrationprovisioninthecompanystermsofservicewhenhe

registeredforanaccountusingtheapplication.Thedistrictcourtdeniedthe

motions.Intheseconsolidatedappeals,defendantscontend,interalia,thatthe

districtcourterredinconcludingthatthenoticeoftheTermsofServicewasnot

reasonablyconspicuousandthattheuserdidnotunambiguouslymanifest

assenttothearbitrationprovisionbyregisteringforanaccount.

VACATEDANDREMANDED.

JEFFREYA.WADSWORTH(BrianMarcFeldman,Edwin
MichaelLarkin,III,GregoryM.Dickinson,onthe
brief),HarterSecrest&EmeryLLP,Rochester,
NewYork,andBryanL.Clobes,Ellen
Meriwether,CaffertyClobesMeriwether&
SprengelLLP,Philadelphia,Pennsylvania,and
MatthewL.Cantor,AnkurKapoor,Constantine

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CannonLLP,NewYork,NewYork,forPlaintiff
CounterDefendantAppelleeSpencerMeyer.

THEODOREJ.BOUTROUSJR.(DanielG.Swanson,Cynthia
E.Richman,JoshuaS.Lipshutz,ReedBrodsky,on
thebrief),Gibson,Dunn&CrutcherLLP,Los
Angeles,California,Washington,D.C.,andNew
York,NewYork,forDefendantCounterClaimant
AppellantUberTechnologies,Inc.

KarenL.Dunn,WilliamA.Isaacson,RyanY.Park,
PeterM.Skinner,Boies,Schiller&FlexnerLLP,
Washington,D.C.andNewYork,NewYork,for
DefendantAppellantTravisKalanick.

JonathanD.Selbin,JasonL.Lichtman,LieffCabraser,
Heimann&Bernstein,LLP,NewYork,New
York,andJahanSagafi,PaulW.Mollica,Outten&
GoldenLLP,SanFrancisco,Californiaand
Chicago,Illinois,forAmicusCuriaePublicJustice,
P.C.

AlexanderH.Schmidt,WolfHaldensteinAdler
Freeman&HerzLLP,NewYork,NewYork,for
AmiciCuriaeLawProfessors.

ReesF.Morgan,MarkL.Hejinian,SkyeD.Langs,
CoblentzPatchDuffyandBassLLP,San
Francisco,California,forAmiciCuriaeInternet
AssociationandConsumerTechnologyAssociation.

KateComerfordTodd,WarrenPostman,U.S.Chamber
LitigationCenter,Washington,D.C.,andAndrew
J.Pincus,EvanM.Tager,ArchisA.Parasharami,
MayerBrownLLP,Washington,D.C.,forAmicus

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CuriaeTheChamberofCommerceoftheUnitedStates
ofAmerica.

CHIN,CircuitJudge:

In2014,plaintiffcounterdefendantappelleeSpencerMeyer

downloadedontohissmartphoneasoftwareapplicationofferedbydefendant

counterclaimantappellantUberTechnologies,Inc.(Uber),atechnology

companythatoperates,amongotherthings,aridehailingservice.Meyerthen

registeredforanUberaccountwithhissmartphone.Afterusingtheapplication

approximatelytentimes,Meyerbroughtthisactiononbehalfofhimselfand

othersimilarlysituatedUberaccountholdersagainstUberscofounderand

formerChiefExecutiveOfficer,defendantappellantTravisKalanick,alleging

thattheUberapplicationallowsthirdpartydriverstoillegallyfixprices.The

districtcourtjoinedUberasadefendantanddeniedmotionsbyKalanickand

Ubertocompelarbitration.Indoingso,thedistrictcourtconcludedthatMeyer

didnothavereasonablyconspicuousnoticeofanddidnotunambiguously

manifestassenttoUbersTermsofServicewhenheregistered.Thedistrictcourt

heldthatMeyerthereforewasnotboundbythemandatoryarbitrationprovision

containedintheTermsofService.

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Forthereasonssetforthbelow,wevacateandremandforfurther

proceedingsconsistentwiththisopinion.

BACKGROUND

A. TheFacts

Thefactsareundisputedandaresummarizedasfollows:

Uberoffersasoftwareapplicationforsmartphones(theUberApp)

thatallowsriderstorequestridesfromthirdpartydrivers.OnOctober18,2014,

MeyerregisteredforanUberaccountwiththeUberApponaSamsungGalaxy

S5phonerunninganAndroidoperatingsystem.Afterregistering,Meyertook

tenrideswithUberdriversinNewYork,Connecticut,Washington,D.C.,and

Paris.

Insupportofitsmotiontocompelarbitration,Ubersubmitteda

declarationfromSeniorSoftwareEngineerVincentMi,inwhichMirepresented

thatUbermaintainedrecordsofwhenandhowitsusersregisteredforthe

serviceandthat,fromhisreviewofthoserecords,Miwasabletoidentifythe

datesandmethodsbywhichMeyerregisteredforauseraccount.Attachedto

thedeclarationwerescreenshotsofthetwoscreensthatauserregisteringin

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October2014withanAndroidoperatedsmartphonewouldhaveseenduringthe

registrationprocess.1

Thefirstscreen,atwhichtheuserarrivesafterdownloadingthe

applicationandclickingabuttonmarkedRegister,islabeledRegisterand

includesfieldsfortheusertoenterhisorhername,emailaddress,phone

number,andapassword(theRegistrationScreen).TheRegistrationScreen

alsoofferstheusertheoptiontoregisterviaaGoogle+orFacebookaccount.

AccordingtoUbersrecords,MeyerdidnotsignupusingeitherGoogle+or

Facebookandwouldhavehadtoentermanuallyhispersonalinformation.2

AftercompletingtheinformationontheRegistrationScreenand

clickingNext,theuseradvancestoasecondscreenlabeledPayment(the

PaymentScreen),onwhichtheusercanentercreditcarddetailsorelectto

1 Inhisbrief,Meyerarguesthatdefendantsdidnotestablishafoundation
forthescreenshots,butyetconcedesthattheevidenceintherecordisundisputed.
2 ThescreenshotsattachedtotheMiDeclarationarelargerthantheactual
sizeoftheSamsungS5sscreen,whichis5.1inches,measureddiagonally.Therecord
doesnotcontainaccuratelysizedimagesofbothscreens.Ubersubmittedanaccurately
scaledscreenshotofthePaymentScreenwithdefendantsjointmotiontostaythecase
pendingappeal,whichisreproducedbelowasAddendumA.Inhisbriefonappeal,
Meyerincludedwhatherepresentsareaccuratelyscaledscreenshotsofboththe
RegistrationandPaymentScreens.ThesearereproducedbelowasAddendumB.
Althoughthepartieshavenotchallengedtheaccuracyoftheseimages,wenotethatthe
screenshotsinMeyersbriefareslightlysmaller(approximately4.8inches,measured
diagonally)thanthescreenshotofthePaymentScreenintherecord.

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makepaymentsusingPayPalorGoogleWallet,thirdpartypaymentservices.

AccordingtoUbersrecords,Meyerenteredhiscreditcardinformationtopayfor

rides.Tocompletetheprocess,theprospectiveusermustclickthebutton

markedREGISTERinthemiddleofthePaymentScreen.

BelowtheinputfieldsandbuttonsonthePaymentScreenisblack

textadvisingusersthat[b]ycreatinganUberaccount,youagreetotheTERMS

OFSERVICE&PRIVACYPOLICY.SeeAddendumB.Thecapitalizedphrase,

whichisbrightblueandunderlined,wasahyperlinkthat,whenclicked,tookthe

usertoathirdscreencontainingabuttonthat,inturn,whenclicked,wouldthen

displaythecurrentversionofbothUbersTermsofServiceandPrivacyPolicy.3

Meyerrecallsenteringhiscontactinformationandcreditcarddetailsbefore

registering,butdoesnotrecallseeingorfollowingthehyperlinktotheTerms

andConditions.HedeclaresthathedidnotreadtheTermsandConditions,

includingthearbitrationprovision.

WhenMeyerregisteredforanaccount,theTermsofService

containedthefollowingmandatoryarbitrationclause:

3 AlthoughthehyperlinkonthePaymentScreenreferencedTermsof
Service,thefollowingscreenreferencedTermsandConditions.Becausetheinitial
hyperlink,whichdefendantsarguenotifiedMeyerofthearbitrationclause,referstothe
relevantagreementtheTermsofService,weusethattitlethroughoutthisopinion.

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DisputeResolution

YouandCompanyagreethatanydispute,claimorcontroversy
arisingoutoforrelatingtothisAgreementorthebreach,
termination,enforcement,interpretationorvaliditythereoforthe
useoftheServiceorApplication(collectively,Disputes)willbe
settledbybindingarbitration,exceptthateachpartyretainsthe
righttobringanindividualactioninsmallclaimscourtandtheright
toseekinjunctiveorotherequitablereliefinacourtofcompetent
jurisdictiontopreventtheactualorthreatenedinfringement,
misappropriationorviolationofapartyscopyrights,trademarks,
tradesecrets,patentsorotherintellectualpropertyrights.You
acknowledgeandagreethatyouandCompanyareeachwaiving
therighttoatrialbyjuryortoparticipateasaplaintifforclass
Userinanypurportedclassactionorrepresentativeproceeding.
Further,unlessbothyouandCompanyotherwiseagreeinwriting,
thearbitratormaynotconsolidatemorethanonepersonsclaims,
andmaynototherwisepresideoveranyformofanyclassor
representativeproceeding.Ifthisspecificparagraphisheld
unenforceable,thentheentiretyofthisDisputeResolutionsection
willbedeemedvoid.Exceptasprovidedintheprecedingsentence,
thisDisputeResolutionsectionwillsurviveanyterminationofthis
Agreement.

AppellantsApp.at11112.4TheTermsofServicefurtherprovidedthatthe

AmericanArbitrationAssociation(AAA)wouldhearanydispute,andthatthe

AAACommercialArbitrationRuleswouldgovernanyarbitrationproceeding.

4 AcopyoftheTermsofServiceineffectatthetimeMeyerregisteredforan
accountwasattachedtothedeclarationofUberOperationsSpecialistMichaelColman,
submittedinsupportofKalanicksmotiontodismisstheAmendedComplaint.The
applicableversionoftheTermsofServicehadbeenupdatedlastonMay17,2013.

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B. TheDistrictCourtProceedings

OnDecember16,2015,Meyer,onbehalfofaputativeclassofUber

riders,filedthisactionagainstKalanick,allegingthattheUberAppallows

driverstofixpricesamongstthemselves,inviolationoftheShermanAct,15

U.S.C.1,andtheDonnellyAct,N.Y.Gen.Bus.Law340.Meyeramendedhis

complaintonJanuary29,2016;theAmendedComplaintalsonamedonly

Kalanick,andnotUber,asthedefendant.

ThedistrictcourtdeniedKalanicksmotiontodismisstheAmended

Complaintforfailuretostateaclaim.5KalanickfiledamotiontojoinUberasa

necessaryparty,andUberseparatelymovedtointervene.OnJune19,2016,the

districtcourtgrantedKalanicksmotionandorderedthatUberbejoinedasa

defendant.ItsubsequentlydeniedUbersmotionasmoot.

Afterthepartiesbegantoexchangediscoverymaterials,Kalanick

andUberfiledmotionstocompelMeyertoarbitrate.Thedistrictcourtdenied

themotions,concludingthatMeyerdidnothavereasonablyconspicuousnotice

oftheTermsofServiceanddidnotunambiguouslymanifestassenttotheterms.

SeeMeyerv.Kalanick,200F.Supp.3d408,420(S.D.N.Y.2016).Holdingthatno

5 Inhismotiontodismiss,Kalanickexpresslyreserve[d]hisrighttomove
tocompelarbitrationinothercasesarisingoutoftheUserAgreement.Supp.App.at
34n.9.

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agreementhadbeenformed,thedistrictcourtdidnotreachMeyersother

defensestoarbitration,includingwhetherdefendantswaivedtheirrightto

arbitratebyactivelyparticipatinginthelitigationandwhetherKalanickwasalso

entitledtoenforceanarbitrationagreementtowhichhewasnotasignatory.Id.

at412.

DefendantstimelyappealedthedistrictcourtsJuly29,2016order

denyingthemotionstocompelarbitrationpursuantto9U.S.C.16,which

permitsinterlocutoryappealsfromthedenialofamotiontocompelarbitration.

Thedistrictcourtstayedtheunderlyingactionpendingappealonthejoint

motionofdefendants,takingintoaccount,interalia,theneedforfurther

appellateclarificationofwhatconstitutesadequateconsenttosocalled

clickwrap,browsewrap,andothersuchwebsiteagreements.Meyerv.

Kalanick,203F.Supp.3d393,396(S.D.N.Y.2016).

DISCUSSION

Weconsiderfirstwhetherthereisavalidagreementtoarbitrate

betweenMeyerandUberandthenwhetherdefendantshavewaivedtheirright

toenforceanysuchagreementtocompelarbitration.

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I. TheArbitrationAgreement

Wereviewdenovothedenialofamotiontocompelarbitration.

Spechtv.NetscapeCommcnsCorp.,306F.3d17,26(2dCir.2002).The

determinationofwhetherpartieshavecontractuallyboundthemselvesto

arbitrateisalegalconclusionalsosubjecttodenovoreview.Id.Thefactual

findingsuponwhichthatconclusionisbased,however,arereviewedforclear

error.Id.

Thepartiesdisputewhetherthedistrictcourtsdeterminations

regardingthelackofreasonablyconspicuousnoticeoranunambiguous

manifestationofassentarefindingsoffact,subjecttoclearerrorreview,or

conclusionsoflaw,subjecttodenovoreview.Althoughdeterminations

regardingmutualassentandreasonablenoticeusuallyinvolvequestionsoffact,

Chi.TitleIns.Co.v.AMZIns.Servs.,Inc.,115Cal.Rptr.3d707,725(Cal.Ct.App.

2010)(mutualassent);UnionOilCo.v.ORiley,276Cal.Rptr.483,492(Cal.Ct.

App.1990)(reasonablenotice),thefactsinthiscaseareundisputed,andthe

districtcourtdeterminedasamatteroflawthatnoreasonablefactfindercould

havefoundthatthenoticewasreasonablyconspicuousandtheassent

unambiguous.Cf.HMDG,Inc.v.Amini,162Cal.Rptr.3d412,418(Cal.Ct.App.

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2013)([I]fthematerialfactsarecertainorundisputed,theexistenceofacontract

isaquestionforthecourttodecide.(citationandinternalquotationomitted)).6

Wethereforereviewthedistrictcourtsconclusionsdenovo.See

Specht,306F.3dat2728;Longv.ProvideCommerce,Inc.,200Cal.Rptr.3d117,123

(Cal.Ct.App.2016)(Becausethematerialevidenceconsistsexclusivelyof

screenshotsfromtheWebsiteandorderconfirmationemail,andthe

authenticityofthesescreenshotsisnotsubjecttofactualdispute,wereviewthe

issuedenovoasapurequestionoflaw.).

A. ApplicableLaw

1. ProceduralFramework

UndertheFederalArbitrationAct(theFAA),[a]writtenprovision

in...acontract...tosettlebyarbitrationacontroversythereafterarisingoutof

6 Meyerarguesthatthedistrictcourtproceedingsconstituted,inessence,a
benchtrialonthepapersandthereforethatthedistrictcourtsconclusionsarefactual
findingssubjectonlytoclearerrorreview.AppelleesBr.at3334.Thedistrictcourt
heredidnotpresenttheproceedingsasabenchtrial,andtherecorddoesnotreflect
thatitconductedanyfactfinding:therewerenomaterialfactsindispute,nohearings
conducted,andonlylimiteddevelopmentoftherecord.Thosefactorsdistinguishthe
districtcourtproceedingsherefromtheexceptionalcaseinwhich,althoughadistrict
courtdidnotconductanevidentiaryhearing,wemighttreatasfactualfindingsthe
courtsconclusionsaboutwhetherpartiesenteredintoanarbitrationagreement.See
U.S.Titan,Inc.v.GuangzhouZhenHuaShippingCo.,241F.3d135,145(2dCir.2001)
(holdingthatdistrictcourtfindingsweresubjecttoclearerrorreviewwherepartiesdid
notseekevidentiaryhearingandfiledmultiplebriefsandextensiveevidencewiththe
courtoveratwoyearperiod).

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suchcontract...shallbevalid,irrevocable,andenforceable.9U.S.C.2.The

FAAreflectsaliberalfederalpolicyfavoringarbitrationagreements,AT&T

MobilityLLCv.Concepcion,563U.S.333,346(2011)(quotingMosesH.ConeMeml

Hosp.v.MercuryConstr.Corp.,460U.S.1,24(1983)),andplacesarbitration

agreementsonthesamefootingasothercontracts,Schnabel,697F.3dat118

(quotingScherkv.AlbertoCulverCo.,417U.S.506,511(1974)).Ittherebyfollows

thatpartiesarenotrequiredtoarbitrateunlesstheyhaveagreedtodoso.Id.

Thus,beforeanagreementtoarbitratecanbeenforced,thedistrict

courtmustfirstdeterminewhethersuchagreementexistsbetweentheparties.

Id.Thisquestionisdeterminedbystatecontractlaw.Nicosiav.Amazon.com,Inc.,

834F.3d220,229(2dCir.2016).

Here,thequestionofarbitrabilityaroseinthecontextofamotionto

compelarbitration.Courtsdecidingmotionstocompelapplyastandardsimilar

tothatapplicableforamotionforsummaryjudgment.Id.(quotingBensadoun

v.JobeRiat,316F.3d171,175(2dCir.2003)).Onamotionforsummary

judgment,thecourtconsider[s]allrelevant,admissibleevidencesubmittedby

thepartiesandcontainedinpleadings,depositions,answerstointerrogatories,

andadmissionsonfile,togetherwith...adavits,Chambersv.TimeWarner,

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Inc.,282F.3d147,155(2dCir.2002)(quotingFed.R.Civ.P.56(c))(second

alterationinoriginal),anddrawsallreasonableinferencesinfavorofthenon

movingparty.Nicosia,834F.3dat229.

[W]heretheundisputedfactsintherecordrequirethematterof

arbitrabilitytobedecidedagainstonesideortheotherasamatteroflaw,we

mayruleonthebasisofthatlegalissueandavoidtheneedforfurthercourt

proceedings.WachoviaBank,Nat.Assnv.VCGSpecialOpportunitiesMaster

Fund,661F.3d164,172(2dCir.2011)(quotingBensadoun,316F.3dat175).Ifa

factualissueexistsregardingtheformationofthearbitrationagreement,

however,remandtothedistrictcourtforatrialisnecessary.Bensadoun,316F.3d

at175;9U.S.C.4.

Ifthedistrictcourtconcludesthatanagreementtoarbitrateexists,

itshouldthenconsiderwhetherthedisputefallswithinthescopeofthe

arbitrationagreement.Specht,306F.3dat26(quotingGenesco,Inc.v.T.Kakiuchi

&Co.,815F.2d840,844(2dCir.1987)).Inthiscase,thepartiesdonotdispute

thatMeyersclaimswouldbecoveredbythearbitrationprovisionoftheTerms

ofService.

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2. StateContractLaw

Statelawprinciplesofcontractformationgovernthearbitrability

question.Nicosia,834F.3dat231.ThedistrictcourtappliedCalifornialawinits

opinion,butacknowledgedthatit[did]notviewthechoicebetweenCalifornia

lawandNewYorklawasdispositivewithrespecttotheissueofwhetheran

arbitrationagreementwasformed.Meyer,200F.Supp.3dat41213.

Defendantshavenotchallengedthedistrictcourtschoiceoflawbutstatethatif

thisCourtconcludesthatNewYorklawdiffersfromCalifornialawwithrespect

toanydeterminativeissues,itshouldapplyNewYorklaw.AppellantsBr.at

17n.2.WeagreewiththedistrictcourtsdeterminationthatCaliforniastatelaw

applies,andnotethatNewYorkandCaliforniaapplysubstantiallysimilarrules

fordeterminingwhetherthepartieshavemutuallyassentedtoacontractterm.

Schnabel,697F.3dat119.

Toformacontract,theremustbe[m]utualmanifestationofassent,

whetherbywrittenorspokenwordorbyconduct.Specht,306F.3dat29.

Californialawisclear,however,thatanofferee,regardlessofapparent

manifestationofhisconsent,isnotboundbyinconspicuouscontractual

provisionsofwhichheisunaware,containedinadocumentwhosecontractual

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natureisnotobvious.Id.at30(quotingWindsorMills,Inc.v.Collins&Aikman

Corp.,101Cal.Rptr.3d347,351(Cal.Ct.App.1972)).Thus,Californiacontract

lawmeasuresassentbyanobjectivestandardthattakesintoaccountbothwhat

theoffereesaid,wrote,ordidandthetransactionalcontextinwhichtheofferee

verbalizedoracted.Id.at30.

Wherethereisnoevidencethattheoffereehadactualnoticeofthe

termsoftheagreement,theoffereewillstillbeboundbytheagreementifa

reasonablyprudentuserwouldbeoninquirynoticeoftheterms.Schnabel,697

F.3dat120;Nguyenv.Barnes&NobleInc.,763F.3d1171,1177(9thCir.2014).

Whetherareasonablyprudentuserwouldbeoninquirynoticeturnsonthe

[c]larityandconspicuousnessofarbitrationterms,Specht,306F.3dat30;inthe

contextofwebbasedcontracts,asdiscussedfurtherbelow,clarityand

conspicuousnessareafunctionofthedesignandcontentoftherelevant

interface.SeeNicosia,834F.3dat233.

Thus,onlyiftheundisputedfactsestablishthatthereis

[r]easonablyconspicuousnoticeoftheexistenceofcontracttermsand

unambiguousmanifestationofassenttothosetermswillwefindthatacontract

hasbeenformed.SeeSpecht,306F.3dat35.

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3. WebbasedContracts

WhilenewcommerceontheInternethasexposedcourtstomany

newsituations,ithasnotfundamentallychangedtheprinciplesofcontract.

Register.com,Inc.v.Verio,Inc.,356F.3d393,403(2dCir.2004).Courtsaround

thecountryhaverecognizedthat[an]electronicclickcansufficetosignifythe

acceptanceofacontract,andthat[t]hereisnothingautomaticallyoffensive

aboutsuchagreements,aslongasthelayoutandlanguageofthesitegivethe

userreasonablenoticethataclickwillmanifestassenttoanagreement.Sgouros

v.TransUnionCorp.,817F.3d1029,103334(7thCir.2016).

Withtheseprinciplesinmind,onewayinwhichwehavepreviously

distinguishedwebbasedcontractsisthemannerinwhichtheusermanifests

assentnamely,clickwrap(orclickthrough)agreements,whichrequire

userstoclickanIagreeboxafterbeingpresentedwithalistoftermsand

conditionsofuse,orbrowsewrapagreements,whichgenerallyposttermsand

conditionsonawebsiteviaahyperlinkatthebottomofthescreen.SeeNicosia,

834F.3dat233;seealsoNguyen,763F.3dat117576.7Courtsroutinelyuphold

7 Thisnomenclaturederivesfromsocalledshrinkwraplicenses,inwhich
asoftwareconsumerarguablyassentstothelicensetermscontainedinsideafter
breakingtheshrinkwrapsealandusingtheenclosedsoftware.SeeSpecht,306F.3dat22
n.4.

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clickwrapagreementsfortheprincipalreasonthattheuserhasaffirmatively

assentedtothetermsofagreementbyclickingIagree.SeeFtejav.Facebook,Inc.,

841F.Supp.2d829,837(S.D.N.Y.2012)(collectingcases).Browsewrap

agreements,ontheotherhand,donotrequiretheusertoexpresslyassent.See

JulietM.Moringiello,Signals,AssentandInternetContracting,57RutgersL.Rev.

1307,1318(2005)([B]rowsewrapencompassesalltermspresentedbyawebsite

thatdonotsolicitanexplicitmanifestationofassent.).Becausenoaffirmative

actionisrequiredbythewebsiteusertoagreetothetermsofacontractother

thanhisorheruseofthewebsite,thedeterminationofthevalidityofthe

browsewrapcontractdependsonwhethertheuserhasactualorconstructive

knowledgeofawebsitestermsandconditions.Nguyen,763F.3dat1176

(citationomitted);seealsoSchnabel,697F.3dat129n.18;Specht,306F.3dat32.

Ofcourse,thereareinfinitewaystodesignawebsiteorsmartphone

application,andnotallinterfacesfitneatlyintotheclickwraporbrowsewrap

categories.Someonlineagreementsrequiretheusertoscrollthroughtheterms

beforetheusercanindicatehisorherassentbyclickingIagree.SeeBerksonv.

GogoLLC,97F.Supp.3d359,386,398(E.D.N.Y.2015)(termingsuchagreements

scrollwraps).Otheragreementsnotifytheuseroftheexistenceofthewebsites

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termsofuseand,insteadofprovidinganIagreebutton,advisetheuserthathe

orsheisagreeingtothetermsofservicewhenregisteringorsigningup.Id.at

399(describingsuchagreementsassigninwraps).

Intheinterfaceatissueinthiscase,aputativeuserisnotrequiredto

assentexplicitlytothecontractterms;instead,theusermustclickabutton

markedRegister,underneathwhichthescreenstatesBycreatinganUber

account,youagreetotheTERMSOFSERVICE&PRIVACYPOLICY,with

hyperlinkstotheTermsofServiceandPrivacyPolicy.Wewerefirstpresented

withasimilaragreementinSchnabel,buttheplaintiffshadnotpreservedthe

issueofwhethertheywereoninquirynoticeofthearbitrationprovisionbya

termsandconditionshyperlinkonanenrollmentformavailablebefore

enrollment.Schnabel,697F.3dat121n.9,12930.MostrecentlyinNicosia,we

heldthatreasonablemindscoulddisagreeregardingthesufficiencyofnotice

providedtoAmazon.comcustomerswhenplacinganorderthroughthewebsite.

Nicosia,834F.3dat237.8

8 InNicosia,theAmazonwebsitestatedontheleftsideofthepage:By
placingyourorder,youagreetoAmazon.comsprivacynoticeandconditionsofuse,
withthelatterphraseshyperlinkedtothetermsandconditions.Nicosia,834F.3dat236.
TheuserplacedanorderbyclickingonaPlaceyourorderbuttononadifferentpart
ofthepage.Id.

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Followingourprecedent,districtcourtsconsideringsimilar

agreementshavefoundthemvalidwheretheexistenceofthetermswas

reasonablycommunicatedtotheuser.CompareCullinanev.UberTechs.,Inc.,No.

1414750DPW,2016WL3751652,at*7(D.Mass.July11,2016)(applying

Massachusettslawandgrantingmotiontocompelarbitration);Starkev.Gilt

Groupe,Inc.,No.13Civ.5497(LLS),2014WL1652225,at*3(S.D.N.Y.Apr.24,

2014)(applyingNewYorklawandgrantingmotiontodismiss);andFteja,841F.

Supp.2dat83940(grantingdefendantsmotiontotransferbasedon,interalia,

forumselectionclauseintermsofservice);withApplebaumv.Lyft,Inc.,No.16cv

07062(JGK),2017WL2774153,at*89(S.D.N.Y.June26,2017)(applyingNew

Yorklawanddenyingmotiontocompelarbitrationwherenoticeofcontract

termswasinsufficienttobindplaintiff).SeealsoWoodrowHartzog,Website

DesignAsContract,60Am.U.L.Rev.1635,1644(2011)(Courtsoscillateon

noticesentencebrowsewraps,whichprovideuserswithalinktotermsofuse

butdonotrequireuserstoacknowledgethattheyhaveseenthem.).

Classificationofwebbasedcontractsalone,however,doesnot

resolvethenoticeinquiry.SeeJulietM.MoringielloandWilliamL.Reynolds,

FromLordCoketoInternetPrivacy:ThePast,Present,andFutureoftheLawof

20
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ElectronicContracting,72Md.L.Rev.452,466(2013)(Whethertermsare

classifiedasclickwrapsayslittleaboutwhethertheoffereehadnoticeofthem.).

Insofarasitturnsonthereasonablenessofnotice,theenforceabilityofaweb

basedagreementisclearlyafactintensiveinquiry.SeeSchnabel,697F.3dat124.

Nonetheless,onamotiontocompelarbitration,wemaydeterminethatan

agreementtoarbitrateexistswherethenoticeofthearbitrationprovisionwas

reasonablyconspicuousandmanifestationofassentunambiguousasamatterof

law.SeeSpecht,306F.3dat28.

B. Application

Meyeratteststhathewasnotonactualnoticeofthehyperlinktothe

TermsofServiceorthearbitrationprovisionitself,anddefendantsdonotpoint

toevidencefromwhichajurycouldinferotherwise.Accordingly,wemust

considerwhetherMeyerwasoninquirynoticeofthearbitrationprovisionby

virtueofthehyperlinktotheTermsofServiceonthePaymentScreenand,thus,

manifestedhisassenttotheagreementbyclickingRegister.

Asaninitialmatter,defendantsarguethatMeyerisprecludedfrom

arguingthatnocontractwasformedbyanallegationinhiscomplaintthat[t]o

becomeanUberaccountholder,anindividualfirstmustagreetoUbersterms

21
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andconditions.AppellantsBr.at1819,32(quotingCompl.29;Am.Compl.

29).Wedisagree.First,asthedistrictcourtobserved,thepleadingisnot

obviouslyaconcessioninthatitmakesnoreferencetoMeyersknowledge.See

Meyer,200F.Supp.3dat413.Second,Meyervolunteeredtoamendhis

complaintontherecordtodeletetheallegationatissue,anofferthatwas

acceptedbythedistrictcourt.Third,regardlessoftheallegationoreventhe

validityofMeyersamendment,Meyerhasattestedthat,atthetimehesignedup

foranUberaccount,hewasnotawareoftheexistenceoftheTermsofServiceor

thearbitrationclausecontainedtherein.ConstruingthefactsinMeyersfavor,

wedeclinetoholdthatheagreedtoarbitrationbasedonthepurported

concessioninhiscomplaint.SeeWindsorMills,Inc.,101Cal.Rptr.at351([A]n

offeree,regardlessofapparentmanifestationofhisconsent,isnotboundby

inconspicuouscontractualprovisionsofwhichheisunaware,containedina

documentwhosecontractualnatureisnotobvious.).

1. Reasonablyconspicuousnotice

Inconsideringthequestionofreasonableconspicuousness,

precedentandbasicprinciplesofcontractlawinstructthatweconsiderthe

perspectiveofareasonablyprudentsmartphoneuser.SeeSchnabel,697F.3dat

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124([T]hetouchstoneoftheanalysisiswhetherreasonablepeopleinthe

positionofthepartieswouldhaveknownaboutthetermsandtheconductthat

wouldberequiredtoassenttothem.).[M]oderncellphones...arenowsucha

pervasiveandinsistentpartofdailylifethattheproverbialvisitorfromMars

mightconcludetheywereanimportantfeatureofhumananatomy.Rileyv.

California,134S.Ct.2473,2484(2014).Asof2015,nearlytwothirdsofAmerican

adultsownedasmartphone,afigurethathasalmostdoubledsince2011.See

U.S.SmartphoneUsein2015,PewResearchCenter,at2(Apr.2015),

http://assets.pewresearch.org/wpcontent/uploads/sites/14/2015/

03/PI_Smartphones_0401151.pdf(lastvisitedAug.17,2017).Consumersuse

theirsmartphonesfor,amongotherthings,followingthenews,shopping,social

networking,onlinebanking,researchinghealthconditions,andtakingclasses.

Id.at5.Ina2015study,approximately89percentofsmartphoneuserssurveyed

reportedusingtheinternetontheirsmartphonesoverthecourseoftheweek

longstudyperiod.Id.at33.Apurchaserofanewsmartphonehashisorher

choiceoffeatures,includingoperatingsystems,storagecapacity,andscreensize.

Smartphoneusersengageintheseactivitiesthroughmobile

applications,orapps,liketheUberApp.Tobeginusinganapp,theconsumers

23
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needtolocateanddownloadtheapp,oftenfromanapplicationstore.Many

appsthenrequirepotentialuserstosignupforanaccounttoaccesstheapps

services.Accordingly,whenconsideringtheperspectiveofareasonable

smartphoneuser,weneednotpresumethattheuserhasneverbefore

encounteredanapporenteredintoacontractusingasmartphone.Moreover,a

reasonablyprudentsmartphoneuserknowsthattextthatishighlightedinblue

andunderlinedishyperlinkedtoanotherwebpagewhereadditionalinformation

willbefound.

Turningtotheinterfaceatissueinthiscase,weconcludethatthe

designofthescreenandlanguageusedrenderthenoticeprovidedreasonableas

amatterofCalifornialaw.9ThePaymentScreenisuncluttered,withonlyfields

fortheusertoenterhisorhercreditcarddetails,buttonstoregisterforauser

accountortoconnecttheuserspreexistingPayPalaccountorGoogleWalletto

theUberaccount,andthewarningthatBycreatinganUberaccount,youagree

totheTERMSOFSERVICE&PRIVACYPOLICY.Thetext,includingthe

hyperlinkstotheTermsandConditionsandPrivacyPolicy,appearsdirectly

belowthebuttonsforregistration.Theentirescreenisvisibleatonce,andthe

9 Inevaluatingtheapplicationinterface,weusetheactualsizescreenshot
ofthelaststepintheregistrationprocess,asitwouldhaveappearedonMeyers
SamsungGalaxyS5.

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userdoesnotneedtoscrollbeyondwhatisimmediatelyvisibletofindnoticeof

theTermsofService.Althoughthesentenceisinasmallfont,thedarkprint

contrastswiththebrightwhitebackground,andthehyperlinksareinblueand

underlined.10Thispresentationdifferssharplyfromthescreenweconsideredin

Nicosia,whichcontained,amongotherthings,summariesoftheuserspurchase

anddeliveryinformation,betweenfifteenandtwentyfivelinks,text...inat

leastfourfontsizesandsixcolors,andseveralbuttonsandadvertisements.

Nicosia,834F.3dat23637.Furthermore,thenoticeofthetermsandconditions

inNicosiawasnotdirectlyadjacenttothebuttonintendedtomanifestassentto

theterms,unlikethetextandbuttonatissuehere.Id.at236.

Inadditiontobeingspatiallycoupledwiththemechanismfor

manifestingassenti.e.,theregisterbuttonthenoticeistemporallycoupled.

AsweobservedinSchnabel,

inasmuchasconsumersareregularlyandfrequentlyconfronted
withnonnegotiablecontractterms,particularlywhenenteringinto
transactionsusingtheInternet,thepresentationofthesetermsata
placeandtimethattheconsumerwillassociatewiththeinitial
purchaseorenrollment,ortheuseof,thegoodsorservicesfrom

10 Defendantschallengethedistrictcourtspurportedrelianceonalow
resolutionduplicationoftheRegistrationandPaymentScreens.Defendantsofferno
basis,however,fortheirassumptionthatthedistrictcourtevaluatedtheblackand
whiteimagesreproducedinitsopinionratherthantheclearerversionsavailableinthe
record.SeeMeyer,200F.Supp.3dat415(describingbluehyperlink).

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whichtherecipientbenefitsatleastindicatestotheconsumerthat
heorsheistakingsuchgoodsoremployingsuchservicessubjectto
additionaltermsandconditionsthatmayonedayaffecthimorher.

Schnabel,697F.3dat127.Here,noticeoftheTermsofServiceisprovided

simultaneouslytoenrollment,therebyconnectingthecontractualtermstothe

servicestowhichtheyapply.Wethinkthatareasonablyprudentsmartphone

userwouldunderstandthatthetermswereconnectedtothecreationofauser

account.

ThattheTermsofServicewereavailableonlybyhyperlinkdoesnot

precludeadeterminationofreasonablenotice.SeeFteja,841F.Supp.2dat839

([C]licking[a]hyperlinkedphraseisthetwentyfirstcenturyequivalentof

turningoverthecruiseticket.Inbothcases,theconsumerispromptedto

examinetermsofsalethatarelocatedsomewhereelse.).Moreover,the

language[b]ycreatinganUberaccount,youagreeisaclearpromptdirecting

userstoreadtheTermsandConditionsandsignalingthattheiracceptanceofthe

benefitofregistrationwouldbesubjecttocontractualterms.Aslongasthe

hyperlinkedtextwasitselfreasonablyconspicuousandweconcludethatit

wasareasonablyprudentsmartphoneuserwouldhaveconstructivenoticeof

theterms.Whileitmaybethecasethatmanyuserswillnotbotherreadingthe

26
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additionalterms,thatisthechoicetheusermakes;theuserisstilloninquiry

notice.

Finally,wedisagreewiththedistrictcourtsdeterminationthatthe

locationofthearbitrationclausewithintheTermsandConditionswasitselfa

barriertoreasonablenotice.Meyer,200F.Supp.3dat421(citing,interalia,

Sgouros,817F.3dat1033).InSgouros,theSeventhCircuitdeterminedthatthe

defendantswebsiteactivelymisledusersbyexplicitlystatingthataclickonthe

buttonconstitutedassentforTransUniontoobtainaccesstothepurchasers

personalinformation,withoutsayinganythingaboutcontractualterms,and

withoutanyindicationthatthesameclickconstitutedacceptanceoftheService

Agreement.817F.3dat103536.Thewebsitedidnotcontainahyperlinktothe

relevantagreement;instead,ithadascrollboxthatcontainedtheentiretyofthe

agreement,onlythefirstthreelinesofwhichwerevisiblewithoutscrolling,and

ithadnopromptforthereadertoscrollforadditionalterms.Seeid.at103536

(Wherethetermsarenotdisplayedbutmustbebroughtupbyusinga

hyperlink,courtsoutsideofIllinoishavelookedforaclearpromptdirectingthe

usertoreadthem....Nocourthassuggestedthatthepresenceofascrollable

windowcontainingburiedtermsandconditionsofpurchaseoruseis,initself,

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sufficientforthecreationofabindingcontract....).Here,thereisnothing

misleading.Althoughthecontracttermsarelengthyandmustbereachedbya

hyperlink,theinstructionsareclearandreasonablyconspicuous.Onceauser

clicksthroughtotheTermsofService,thesectionheading(DisputeResolution)

andthesentencewaivingtheusersrighttoajurytrialonrelevantclaimsare

bothbolded.

Accordingly,weconcludethattheUberAppprovidedreasonably

conspicuousnoticeoftheTermsofServiceasamatterofCalifornialawandturn

tothequestionofwhetherMeyerunambiguouslymanifestedhisassenttothose

terms.

2. Manifestationofassent

AlthoughMeyersassenttoarbitrationwasnotexpress,weare

convincedthatitwasunambiguousinlightoftheobjectivelyreasonablenotice

oftheterms,asdiscussedindetailabove.SeeRegister.com,356F.3dat403

([R]egardlesswhether[auser]didordidnotsay,Iagree...[theusers]choice

waseithertoaccepttheofferofcontract,takingtheinformationsubjecttothe

termsoftheoffer,or,ifthetermswerenotacceptable,todeclinetotakethe

benefits.);seealsoSchnabel,697F.3dat128([A]cceptanceneednotbeexpress,

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butwhereitisnot,theremustbeevidencethattheoffereekneworshouldhave

knownofthetermsandunderstoodthatacceptanceofthebenefitwouldbe

construedbytheofferorasanagreementtobebound.).Aswedescribedabove,

thereisampleevidencethatareasonableuserwouldbeoninquirynoticeofthe

terms,andthespatialandtemporalcouplingofthetermswiththeregistration

buttonindicate[d]totheconsumerthatheorsheis...employingsuchservices

subjecttoadditionaltermsandconditionsthatmayonedayaffecthimorher.

Schnabel,697F.3dat127.Areasonableuserwouldknowthatbyclickingthe

registrationbutton,hewasagreeingtothetermsandconditionsaccessiblevia

thehyperlink,whetherheclickedonthehyperlinkornot.

Thefactthatclickingtheregisterbuttonhadtwofunctions

creationofauseraccountandassenttotheTermsofServicedoesnotrender

Meyersassentambiguous.TheregistrationprocessallowedMeyertoreviewthe

TermsofServicepriortoregistration,unlikewebplatformsthatprovidenotice

ofcontracttermsonlyaftertheusermanifestedhisorherassent.Furthermore,

thetextonthePaymentScreennotonlyincludedahyperlinktotheTermsof

Service,butexpresslywarnedtheuserthatbycreatinganUberaccount,theuser

wasagreeingtobeboundbythelinkedterms.Althoughthewarningtextused

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thetermcreat[e]insteadofregister,asthebuttonwasmarked,thephysical

proximityofthenoticetotheregisterbuttonandtheplacementofthelanguage

intheregistrationflowmakecleartotheuserthatthelinkedtermspertaintothe

actiontheuserisabouttotake.

Thetransactionalcontextofthepartiesdealingsreinforcesour

conclusion.MeyerlocatedanddownloadedtheUberApp,signedupforan

account,andenteredhiscreditcardinformationwiththeintentionofentering

intoaforwardlookingrelationshipwithUber.Theregistrationprocessclearly

contemplatedsomesortofcontinuingrelationshipbetweentheputativeuserand

Uber,onethatwouldrequiresometermsandconditions,andthePayment

Screenprovidedclearnoticethatthereweretermsthatgovernedthat

relationship.

Accordingly,weconcludeontheundisputedfactsofthiscasethat

MeyerunambiguouslymanifestedhisassenttoUbersTermsofServiceasa

matterofCalifornialaw.

3. Remandfortrial

Finally,weseenoneedtoremandthiscasefortrial.Meyeroffersno

basisforhisargumentthatweshouldremandforfurtherfactfindingifwevacate

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thedistrictcourtsruling,otherthanhisassertionthatnocircuithaspreviously

compelledarbitrationinsimilarcircumstances.AlthoughMeyerpurportsto

challengetheevidentiaryfoundationfortheregistrationscreens,defendants

havesubmittedadeclarationfromanUberengineerregardingMeyers

registrationforanduseoftheUberApp,aswellastheregistrationprocessand

termsofuseineffectatthetimeofhisregistration.Accordingly,weconcludeon

thisrecord,asamatteroflaw,thatMeyeragreedtoarbitratehisclaimswith

Uber.11

II. Waiver

Meyerarguesinthealternativethatdefendantshavewaivedtheir

righttoarbitratebyactivelylitigatingtheunderlyinglawsuit.[O]rdinarilya

defenseofwaiverbroughtinoppositiontoamotiontocompelarbitration...isa

mattertobedecidedbythearbitrator.S&RCo.ofKingstonv.LatonaTrucking,

Inc.,159F.3d80,8283(2dCir.1998)(citingDoctorsAssocs.,Inc.v.Distajo,66F.3d

11 AlthoughKalanickisnotapartytotheTermsandConditionsbetween
UberandMeyer,heisnonethelessprotectedbythem.Courtsinthisandothercircuits
consistentlyhaveheldthatemployeesordisclosedagentsofanentitythatisapartyto
anarbitrationagreementareprotectedbythatagreement.SeeRobyv.Corp.ofLloyds,
996F.2d1353,1360(2dCir.1993)(holdingthatindividualdefendantswereentitledto
relyonarbitrationprovisionsincorporatedintotheiremployersagreementswith
investorsnotwithstandingthattheindividualdefendantswerenotsignatoriestoanyof
theagreements).

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438(2dCir.1995)).Whenthepartyseekingarbitrationhasparticipatedin

litigationregardingthedispute,thedistrictcourtcanproperlydecidethe

questionofwaiver.Bellv.CendantCorp.,293F.3d563,569(2dCir.2002).

BecauseMeyerswaiverargumentisbasedondefendantsdefenseofthis

litigationinthedistrictcourt,weconcludethatisaquestionforthedistrictcourt

ratherthananarbitrator.Accordingly,weremandthecasetothedistrictcourt

toconsiderinthefirstinstancewhetherdefendantshavewaivedtheirrightto

arbitrate.

CONCLUSION

Forthereasonssetforthabove,theorderofthedistrictcourt

denyingdefendantsmotionstocompelarbitrationisVACATED,andthecaseis

REMANDEDtothedistrictcourttoconsiderwhetherdefendantshavewaived

theirrightstoarbitrationandforanyfurtherproceedingsconsistentwiththis

opinion.

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Addendum A (Appellants' App. at 560)
 Case 16-2750, Document 219-1, 08/17/2017, 2102722, Page34 of 34
Addendum B (Appellee's Br. at 38)

The district court permissibly found that the phrase, By creating an

Uber account, you agree to the and the following hyperlink were not

reasonably conspicuous. The district court cited a series of observations that

supported these findings: the key words, By creating an Uber account, you

agree to are not in any way highlighted; those key words were in

approximately 6-point font or even smaller; those key words and the

following hyperlink were in considerably smaller font than the text on the

buttons. (SPA 12 & n.15). The court ultimately found that the screen did

38