PHILADELPHIA – Counsel for a Bucks County man and fencing instruction facility continues to disagree with the MyLife.com website’s argument that the dispute between the parties should be governed by an arbitration agreement, arguing that the agreement wasn’t obviously mentioned in the site’s terms and conditions.
Mark Holbrow of New Hope first filed suit in the Bucks County Court of Common Pleas on Feb. 3, 2021 versus MyLife.com, Inc., of Los Angeles, Calif.
Holbrow is the owner and operator of the Bucks County Academy of Fencing, an athletic facility which has provided lessons and competitive training in the sport of fencing to all ages, particularly children. It was said the plaintiff substantially relies on his reputation for personal and business development.
The defendant sells consumer background reports through their website, www.mylife.com. The website allows users to run free background searches for an individual’s name, and then displaying search results that imply, often falsely, according to the plaintiff, that the subject of a search may have records of criminal or sexual offenses – records the plaintiffs said which “can conveniently be viewed only by purchasing a MyLife subscription.”
“On Jan. 22, 2021, plaintiff ‘Googled himself’ and discovered his name listed at www.mylife.com. He followed up by clicking on the publicly available link and discovered to his horror that the website unequivocally states the following concerning him, which is false: ‘Criminal or civil court records found on Mark’s background report,” the suit stated.
“Detailed information beyond this label could only be obtained by purchasing a subscription. The subscription page invites the viewer to ‘Get instant information on Mark now!’ and states further that there are one or more ‘Incarceration and Public Records.”
The suit added that once a person subscribes to the website, the news is revealed as follows: “Good news! After scanning the web and government sources, we did not find any negative information about Mark Holbrow. The background report you pulled has no derogatory entries. Specifically, concerning ‘Criminal and Court Records’, the website stated that no arrest or criminal records were found.”
“The detailed report further provides plaintiff’s home address, his age, his home telephone number, his race, his registered political affiliation and his religious affiliation, the last two of which are incorrect. It also includes his associates, his reported annual income and his net worth. The report further confirms that the defendant’s ‘reputation profile’ indicates ‘no criminal or civil court records, lawsuits, liens or negative reviews’, contrary to what it stated in its publicly available teaser,” per the suit.
“Defendant therefore knew or should have known based on its own information that its public statement, ‘Criminal or civil court records found on Mark’s background report’ was false.”
Counsel for MyLife.com filed to remove the case to the U.S. District Court for the Eastern District of Pennsylvania on Feb. 23, 2021, citing complete diversity of jurisdiction and an indication that the amount in controversy exceeds the federal court threshold of $75,000.
MyLife.com’s attorneys responded with a motion to dismiss the case on May 3, 2021, citing an alleged failure on the part of the plaintiff to state a claim and mandating that the case must head to arbitration, under the Federal Arbitration Act.
When Holbrow registered to use the MyLife.com website, defense counsel said that he consented to terms of agreement which included the following stipulation:
“These terms require that disputes between MyLife and you be resolved by binding arbitration rather than by jury trials or class actions. MyLife.com and you...agree to arbitrate all disputes and claims arising out of or relating to this agreement between MyLife.com and you.”
“Holbrow agreed to arbitrate his claims by choosing to click ‘continue’ and to proceed with knowledge that doing so constituted agreement to MyLife’s terms and conditions,” the motion stated.
“Those terms are embodied in a user agreement accessible via blue, bolded hyperlink right below the ‘continue’ button with a warning that clicking the button constitutes agreement to the terms. The user agreement contains a clear and conspicuous mandatory arbitration provision. Accordingly, Holbrow agreed to arbitrate this dispute, and the complaint should be dismissed.”
U.S. District Court for the Eastern District of Pennsylvania Mitchell S. Goldberg denied the defense’s motion to dismiss and/or arbitrate in a memorandum opinion on Nov. 10, 2021, citing U.S. Court of Appeals for the Third Circuit precedent as to lack of clarity and arbitrability.
“The complaint makes no mention of the user agreement or the purported arbitration provision therein. Rather, defendant introduced the arbitration clause and user agreement in its present motion and accompanying exhibits. Because the current dispute centers on the existence and enforceability of an arbitration agreement, neither of which were mentioned in the complaint, resolution of the present motion necessitates review of evidence outside of the pleadings. Accordingly, applying the Rule 12(b)(6) standard of review in deciding the instant motion is inappropriate,” Goldberg said.
“Accordingly, because the complaint is devoid of any reference to the user agreement or arbitration clause, I am unable to review the merits of defendant’s motion. I will afford the parties some time to conduct limited discovery on the narrow issue of whether an agreement to arbitrate the present dispute exists. Following discovery, defendant may refile its motion pursuant to Rule 56.”
The defendant filed a motion for summary judgment on March 7, contending that the Federal Arbitration Act should govern the resolution of the matter moving forward.
“The Federal Arbitration Act governs written arbitration agreements in contracts involving interstate commerce. Written agreements to arbitrate ‘shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.’ Where a dispute falls within the scope of a valid arbitration agreement, the FAA requires a Court to compel arbitration. If all claims are subject to arbitration, the court has discretion to dismiss the action in its entirety. The purpose of the FAA is to ensure private arbitration agreements are enforced. Federal law recognizes a strong policy in favor of arbitration, which requires that arbitration clauses be read liberally and that all doubts resolved in favor of arbitrability. There is, moreover, a presumption of arbitrability,” the motion stated.
“This case involves a ‘browsewrap agreement. In browsewrap agreements, a company’s terms and conditions are generally posted on a website via hyperlink at the bottom of the screen. Courts enforce browsewrap agreements ‘where notice of the agreement was reasonably conspicuous and manifestation of asset unambiguous as a matter of law.’ Here, the Court must determine whether notice of the browsewrap agreement was sufficiently clear and conspicuous such that by clicking the ‘Continue’ icon, that Cotlar agreed to the MyLife.com ‘Terms & Conditions.”
The defense further argued the following:
• That Cotlar saw, directly below the blue “Continue” icon, the sentence: “By clicking the button above, I agree to the MyLife Terms & Conditions and Privacy Policy”;
• Cotlar saw the foregoing sentence prior to clicking the “CONTINUE” icon, and he understood its meaning;
• Prior to clicking the “Continue” icon, Cotlar was aware that the MyLife.com “Terms & Conditions” existed;
• Cotlar understood that the phrase “Terms & Conditions” was a hyper-link, meaning that he could have viewed the MyLife.com terms by clicking on that link to navigate to a page containing the full MyLife.com User Agreement;
• Had Cotlar clicked on the hyper-link to MyLife.com’s “Terms & Conditions,” he would have been directed to the webpage containing the full User Agreement.”
UPDATE
In a March 17 response brief, plaintiff counsel countered that the arbitration agreement in question was “well-hidden” from users of the website.
“The case would have been substantially different legally if, in the paragraph below the blue ‘Continue’ button, Defendant had provided disclosure language to the effect that ‘by clicking above, you agree to waive certain rights’ or something similar. This extra precaution would have prompted any reasonably prudent user to know that by accessing the website further certain rights may be waived. In the absence of such clear and conspicuous language, an ordinary consumer of reasonable prudence would do nothing further other than click on the ‘Continue’ button,” the brief said.
“This hypothetical alternative is not unreasonable. Indeed, defendant did in fact provide additional language in the paragraph immediately below the blue ‘Continue’ button that disclaimed any status of being a ‘consumer reporting agency’ under the Fair Credit Reporting Act (FCRA). So, providing a summary of the waivers any user would be purported to agree to at the initial stage immediately below the ‘Continue’ button would not be unexpected and would not have imposed any additional burden on defendant. And it would have provided clear and conspicuous additional notice or incentive for a consumer to investigate further. In this case, defendant felt it necessary to highlight a waiver under the FCRA in the initial language but hid the ball with regard to arbitration.”
Plaintiff counsel argued that this was a case of “important information concerning mandatory arbitration is hidden away in a non-conspicuous portion of a 12-page license agreement that is only accessible if a consumer takes the initiative to click on a link that gives no hint or description of the contents therein.”
For counts of defamation, defamation per se and invasion of privacy, the plaintiff is seeking compensatory and punitive damages in excess of $50,000.
The plaintiff is represented by Andrew D. Cotlar of the Law Office of Steven A. Cotlar, in Doylestown.
The defendant is represented by Jordan M. Rand of Klehr Harrison Harvey Branzburg, in Philadelphia.
U.S. District Court for the Eastern District of Pennsylvania case 2:21-cv-00819
Bucks County Court of Common Pleas case 2021-00634
From the Pennsylvania Record: Reach Courts Reporter Nicholas Malfitano at nick.malfitano@therecordinc.com