Ninth Circuit

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Companies may spend significant time and resources carefully drafting their online terms and conditions, but those terms will not do much good if consumers are not adequately put on notice of them. A recent Ninth Circuit decision provides another reminder that courts will look closely not only at what an online disclosure says but also at how and where it appears.

In Schlueter-Beckner v. SimpliSafe, Inc., consumers filed a putative class action relating to their purchases of SimpliSafe home security systems and monitoring services. SimpliSafe moved to compel arbitration based on its online Terms of Sale and Terms of Service. Consumers encountered those terms at two different points—when purchasing the hardware and when later enrolling in a trial of SimpliSafe’s alarm-monitoring services.

Continue Reading Online Terms and Conditions: Why Presentation Matters

Last week, the Ninth Circuit Court of Appeals upheld a decision issuing a permanent injunction and over $7 million in sanctions against people engaged in an illegal multilevel marketing scheme. The court’s opinion in Federal Trade Commission (FTC) v. Noland sheds light on the scope of the agency’s power to obtain monetary relief after the Supreme Court restricted the FTC’s authority under Section 13(b) of the FTC Act in a 2021 case, AMG Capital Management v. FTC.

In Noland, the defendants attempted to use the AMG Capital decision to challenge the court’s ability to award compensatory sanctions for contempt and redress under Section 19 for a rule violation. The Ninth Circuit affirmed the district court’s rejection of those arguments.

Continue Reading Ninth Circuit Affirms the FTC’s Authority to Seek Damages After AMG Capital

The Ninth Circuit has never been shy about declining to compel arbitration, and the Court has issued multiple cases outlining what constitutes sufficient notice of certain provisions in consumer-facing terms and conditions, including website terms and conditions.

Just last year, in Berman v. Freedom Financial Network LLC, the Court agreed that a motion to compel arbitration should be denied where the plaintiff alleged that he did not see a notice stating, “I understand and agree to the Terms & Conditions which includes mandatory arbitration.”

The Court noted that the text that purported to notify users that they were agreeing to a mandatory arbitration provision was displayed “in a tiny gray font considerably smaller than the font used in the surrounding website elements, and indeed in a font so small that it is barely legible to the naked eye.” The Court further criticized how the notice was “further deemphasized by the overall design of the webpage, in which other visual elements draw the user’s attention away from the barely readable critical text.”

Continue Reading Ninth Circuit Rejects Dark Patterns Challenge to Arbitration Agreement