Hansen v. Ticketmaster

• Court: District Court, N.D. California
• Decided: December 11, 2020
• Docket: 3:20-cv-02685
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 DEREK HANSEN, Case No. 20-cv-02685-EMC

8 Plaintiff, ORDER GRANTING DEFENDANTS’ 9 v. MOTION TO COMPEL ARBITRATION 10 TICKETMASTER ENTERTAINMENT, INC., et al., Docket No. 22 11 Defendants. 12 13 14 15 Plaintiff Derek Hansen has filed a class action against Defendants Ticketmaster 16 Entertainment, Inc. and Live Nation Entertainment Co. Mr. Hansen asserts that Defendants 17 violated the law when Ticketmaster, a division of Live Nation, retroactively changed its refund 18 policy after the coronavirus pandemic. In response to the complaint, Defendants have filed a 19 motion to compel arbitration. 20 Having considered the parties’ briefs and accompanying submissions, as well as the oral 21 argument of counsel, the Court hereby GRANTS Defendants’ motion. 22 I. FACTUAL & PROCEDURAL BACKGROUND 23 Defendants contend that the parties’ dispute must be compelled to arbitration because Mr. 24 Hansen agreed to the Ticketmaster TOU and the TOU contain an arbitration agreement. 25 According to Defendants, Mr. Hansen agreed to the TOU

26 at three distinct points: [1] at account creation [on the Ticketmaster website], [2] [at] account sign-in, and [3] [at] ticket purchase. 27 Plaintiff [further] agreed to the [TOU] via a notice at the bottom of agree to the Terms by using the site. 1 2 Mot. at 3. For purposes of this order, the Court need only consider the sign-in page. 3 Mr. Hansen purchased the tickets for the two Rage Against the Machine (“Rage”) concerts 4 in February 2020. See Moon Decl. ¶ 5. In order to purchase the tickets, Mr. Hansen had to sign 5 into his Ticketmaster account. 6 Defendants have provided evidence about how the sign-in page appeared in February 2020 7 when Mr. Hansen purchased the tickets. See Tobias Decl. ¶ 7 & Ex. 3 (testifying that “[u]sers of 8 the Ticketmaster website in February 2020 would have seen the same ‘Sign In’ page as that shown 9 in Exhibit 3). To sign in, a person would provide certain information (email address and 10 password) and then click a blue button that says “Sign in.” Right above the blue button is the 11 following text (which is in a slightly smaller font size compared to other text): “By continuing past 12 this page, you agree to the Terms of Use and understand that information will be used as described 13 in our Privacy Policy.” The blue font indicated that there was a hyperlink to the TOU. 14 The TOU that governed when Mr. Hansen signed in and purchased tickets in February 15 2020 can be found at Exhibit 12 to the Tobias Declaration. See Tobias Decl. ¶ 13 (testifying that 16 that Exhibit 12 is the current TOU and that the current TOU has been effective since June 2019). 17 The first page of the TOU has two bolded headers that precede the Table of Contents. The 18 second bolded header and the text underneath it provide as follows:

19 NOTICE REGARDING ARBITRATION AND CLASS ACTION WAIVER: 20 These terms contain an arbitration agreement and class action 21 waiver, whereby you agree that any dispute or claim relating in any way to your use of the Site, or to products or services sold, 22 distributed, issued, or serviced by us or through us will be resolved by binding, individual arbitration, rather than in court, and you 23 waive your right to participate in a class action lawsuit or class-wide arbitration. We explain this agreement and waiver, along with some 24 limited exceptions, in Section 17, below. 25 Tobias Decl., Ex. 12 (TOU at 1). 26 Section 17 in turn contains, inter alia, the following provisions:

27 The arbitration agreement in these Terms is governed by the Federal interpretation and enforcement of this arbitration agreement and all 1 of its provisions, including, without limitation, the class action waiver discussed below. State arbitration laws do not govern in any 2 respect.

3 . . . . The arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to the extent permitted by law 4 to resolve all disputes arising out of or relating to the interpretation, applicability, enforceability, or formation of this Agreement, 5 including but not limited to, any claim that all or any part of this Agreement is void or voidable. 6 7 Tobias Decl., Ex. 12 (TOU § 17). 8 II. DISCUSSION 9 A. Legal Standard 10 Defendants argue that the FAA governs the arbitration agreement in the instant case given 11 the express terms of the agreement, as quoted above. Mr. Hansen does not expressly disagree but 12 contends that the provisions of the FAA are largely beside the point because the question here is 13 whether an agreement to arbitrate was ever formed in the first instance. See Three Valleys Mun. 14 Water Dist. v. E.F. Hutton & Co., 925 F.2d 1136, 1140-41 (9th Cir. 1991) (“[A] party who 15 contests the making of a contract containing an arbitration provision cannot be compelled to 16 arbitrate the threshold issue of the existence of an agreement to arbitrate. Only a court can make 17 that decision.”); see also Sanford v. Member Works, Inc., 483 F.3d 956, 962 (9th Cir. 2007) 18 (“[W]hen one party disputes ‘the making of the arbitration agreement,’ the Federal Arbitration Act 19 requires that ‘the court [] proceed summarily to the trial thereof’ before compelling arbitration 20 under the agreement.”) (quoting 9 U.S.C. § 4). 21 According to Mr. Hansen, there was no contract formation because he did not have actual 22 knowledge of the arbitration agreement, see Hansen Decl. ¶¶ 2, 6 (testifying that “I have never 23 reviewed the Terms of Use on Defendants’ website” and that, “[u]ntil this case was filed, I was 24 unaware that the Terms of Use on Defendants’ website included an arbitration provision 25 purporting to waive my rights”), and constructive knowledge cannot reasonably be inferred. 26 The Ninth Circuit has directed that, “in determining whether a valid arbitration agreement 27 exists, [a court] ‘appl[ies] ordinary state-law principles that govern the formation of contracts.’ 1 making choice of law determinations.” Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th 2 Cir. 2014). “In California, ‘[g]enerally speaking the forum will apply its own rule of decision 3 unless a party litigant timely invokes the law of a foreign state.’” Peter v. DoorDash, Inc., No. 4 19-cv-06098-JST, 2020 U.S. Dist. LEXIS 73984, at *8 (N.D. Cal. Apr. 23, 2020). In the instant 5 case, Mr. Hansen assumes that California law applies, see Opp’n at 5 (citing California authority), 6 and Defendants do not appear to argue that any other law applies. Therefore, the Court applies 7 California law. Under California law, contract formation requires a manifestation of mutual 8 assent. See Peter, 2020 U.S. Dist. LEXIS 73984, at *9. More specifically, “[u]nder California 9 law, ‘[c]ourts must determine whether the outward manifestations of consent would lead a 10 reasonable person to believe the offeree has assented to the agreement.’” Lee v. Ticketmaster 11 L.L.C., 817 F. App’x 393, 394 (9th Cir. 2020) (quoting Knutson v. Sirius XM Radio, Inc., 771 F.3d 12 559, 565 (9th Cir. 2014)). 13 Both parties agree that the Ninth Circuit’s decision in Nguyen provides importance 14 guidance regarding manifestation of mutual assent. See Nguyen, 763 F.3d at 1175 (applying New 15 York law “to the extent possible” but noting that there would be no difference under California 16 law). In Nguyen, the Ninth Circuit made a distinction between two kinds of Internet contracts: (1) 17 clickwrap (or click-through) agreements “in which website users are required to click on an ‘I 18 agree’ box after being presented with a list of terms and conditions of use” and (2) browsewrap 19 agreements “where a website’s terms and conditions of use are generally posted on the website via 20 a hyperlink at the bottom of the screen” – i.e., a user does not expressly manifest agreement to the 21 terms and conditions but instead gives assent simply by using the website. Id. at 1175-76.

22 “The defining feature of browsewrap agreements is that the user can continue to use the website or its services without visiting the page 23 hosting the browsewrap agreement or even knowing that such a webpage exists.” “Because no affirmative action is required by the 24 website user to agree to the terms of a contract other than his or her use of the website, the determination of the validity of the 25 browsewrap contract depends on whether the user has actual or constructive knowledge of a website’s terms and conditions.” 26 . . . Courts have . . . been more willing to find the requisite notice for 27 constructive assent where the browsewrap agreement resembles a use of the website. 1 2 Id. at 1176. 3 B. Sign-In Page 4 As indicated above, the critical issue in the instant case is whether Mr. Hansen had 5 constructive knowledge of the arbitration agreement – or rather, of the TOU which contain the 6 arbitration agreement. As to whether Mr. Hansen had constructive knowledge of the TOU, the 7 Court must consider how the Ticketmaster sign-in page, which made reference to the TOU, 8 appeared to Mr. Hansen. 9 As noted above, Ticketmaster has provided evidence that, during the relevant period, a 10 customer would sign into a Ticketmaster account by providing certain information (email address 11 and password) and then clicking a blue button that says “Sign in.” Right above the blue button is 12 the following text (which is in a slightly smaller font size compared to other text): “By continuing 13 past this page, you agree to the Terms of Use and understand that information will be used as 14 described in our Privacy Policy.” The blue font indicated that there was a hyperlink to the TOU. 15 The sign-in page had a graphic with text at the lefthand side; however, the sign-in box itself was 16 still prominently displayed. The parties agree that the sign-in page thus presented neither a 17 browsewrap agreement nor a clickwrap agreement, but rather something in between – what is 18 sometimes characterized as a modified clickwrap agreements. 19 Ticketmaster’s sign-in page has been challenged but approved by the Ninth Circuit. More 20 specifically, in Lee v. Ticketmaster L.L.C., No. 18-cv-05987-VC (N.D. Cal.), the plaintiff 21 purchased tickets on the Ticketmaster website for sporting events held in 2016 and 2018. See Lee, 22 No. 18-cv-05987 (N.D. Cal.) (Docket No. 1) (Compl. ¶ 7). The defendants moved to compel 23 arbitration and, in support of contract formation, provided evidence of the sign-in page as it 24 existed in November 2018. See Lee, No. 18-cv-05987 (N.D. Cal.) (Docket No. 26) (Tobias Decl., 25 Exs. F); see also Reply at 6-7 (providing screenshot of sign-in page in Lee and screenshot of sign- 26 in page in the instant case; citing O’Mara Reply Declaration). The sign-in page in November 27 2018 is very similar – in terms of language as well as look and feel – to the sign-in page at issue 1 arbitration in April 2019, and, in June 2020, the Ninth Circuit affirmed. 2 The Ninth Circuit noted first that the Ticketmaster TOU were neither a browsewrap 3 agreement (“because they are not merely posted on Ticketmaster’s website at the bottom of the 4 screen”) nor a “pure” clickwrap agreement (“because Ticketmaster does not require users to click 5 a separate box indicating that they agree to its Terms”). Lee, 817 Fed. Appx. at 394. But 6 whatever category the TOU fell into, the court held that “Ticketmaster’s website provided 7 sufficient notice for constructive assent, and therefore, there was a binding arbitration agreement 8 between Lee and Ticketmaster.” Id.

9 “Lee validly assented to Ticketmaster’s Terms of Use, including the arbitration provision, each time he clicked the “Sign In” button 10 when signing into his Ticketmaster account, where three lines below the button, the website displayed the phrase, “By continuing past 11 this page, you agree to our Terms of Use,” as well as each time he clicked the “Place Order” button when placing an order for tickets, 12 where directly above the button, the website displayed the phrase, “By clicking ‘Place Order,’ you agree to our Terms of Use,” where 13 in both contexts, “Terms of Use” was displayed in blue font and contained a hyperlink to Ticketmaster’s Terms. Thus, 14 Ticketmaster’s website required users to “affirmatively acknowledge the agreement before proceeding,” and “the website 15 contain[ed] an explicit textual notice that continued use will act as a manifestation of the user’s intent to be bound.” Lee “cannot avoid 16 the terms of [the] contract on the ground that he . . . failed to read it before signing,” especially when he “had a legitimate opportunity to 17 review it.” 18 Id. at 394-95. 19 Several months after Lee, the Ninth Circuit issued a decision in Dohrmann v. Intuit, Inc., 20 823 Fed. Appx. 482 (9th Cir. 2020), where it again found contract formation based on a sign-in 21 page.

22 During the relevant timeframe, a user accessing a TurboTax account, after entering a user ID and password, was required to click 23 a “Sign In” button, directly under which the following language appeared: “By clicking Sign In, you agree to the Turbo Terms of 24 Use, TurboTax Terms of Use, and have read and acknowledged our Privacy Statement.” The terms “Turbo Terms of Use,” “TurboTax 25 Terms of Use” and “Privacy Statements” were each light blue hyperlinks which, if clicked, directed the user to a new webpage. A 26 user clicking on the hyperlink “TurboTax Terms of Use” was directed to a copy of the “Intuit Terms of Service for TurboTax 27 Online Tax Preparation Services,” which contained the arbitration 1 Id. at 484. The Ninth Circuit stated: “The relevant warning language and hyperlink to the Terms 2 of Use were conspicuous – they were the only text on the webpage in italics, were located directly 3 below the sign-in button, and the sign-in page was relatively uncluttered.” Id. 4 In light of Lee and Dohrmann, Mr. Hansen’s position lacks merit. 5 • The sign-in page at issue was relatively uncluttered. Although there was a graphic 6 with text, that was set to the side so that the sign-in box itself was prominently 7 featured. 8 • In the sign-in box, the following text was right above the blue “Sign in” button: 9 “By continuing past this page, you agree to the Terms of Use and understand that 10 information will be used as described in our Privacy Policy.” The proximity of the 11 text to the “Sign in” button makes the text conspicuous. Mr. Hansen criticizes the 12 text for being smaller than other text and for being grey in color. But the text is not 13 markedly smaller than the other text, and the grey is in sufficient contrast to the 14 background which is white. Moreover, the phrase “Terms of Use” appears in blue 15 font so that there is even more contrast. Although Mr. Hansen protests that the use 16 of blue font was not sufficient – e.g., “Terms of Use” should have been underlined 17 as well – that argument is not overly compelling. Although Judge Orrick has 18 suggested that “the mere change in color of the hyperlinks, without more, is 19 enough” – in other cases, “the hyperlinks are also underlined, highlighted, in all 20 caps, or in a box” – he ultimately found a sign-in page inadequate for other reasons: 21 “[A]s plaintiffs note, the other hyperlink on the page is formatted differently. The 22 hyperlink to the password recovery page is bolded, underlined, and appears to be in 23 a larger font size than the hyperlink at issue.” Colgate v. Juul Labs., Inc., 402 F. 24 Supp. 3d 728, 765-66 (N.D. Cal. 2019) (Orrick, J.). 25 Nowhere in the opposition does Mr. Hansen expressly address Lee – or for that matter, 26 Dohrmann. Instead, he highlights that the actual number of people who clicked on “Terms of 27 Use” is very small – less than 1 percent. But, under the circumstances, that fact does not weigh 1 TOU was not conspicuous. Indeed, in Lee, the Ninth Circuit underscored that the plaintiff 2 “‘cannot avoid the terms of [the] contract on the ground that he . . . failed to read it before 3 signing,’ especially when he ‘had a legitimate opportunity to review it.’” Lee, 817 Fed. Appx. at 4 394. Moreover, in Dohrmann, the Ninth Circuit reversed the lower court decision that had denied 5 the motion to compel arbitration and that had noted, inter alia, the relevance of click data. See 6 Arena v. Intuit Inc., 444 F. Supp. 3d 1086, 1093 (N.D. Cal. 2020) (“find[ing] it relevant that less 7 than 0.55% of users logging into TurboTax’s website between January 1 and April 30, 2019, 8 actually clicked on the hyperlink to the Terms” because “[t]he fact that so few users actually 9 clicked on the hyperlink supports the inference that many of them did not notice it”). 10 At the hearing on the motion to compel arbitration, Mr. Hansen expressly addressed Lee 11 for the first time. The arguments that he presented were not convincing. First, Mr. Hansen noted 12 that the sign-in page in the instant case does not state that, “by clicking on the Sign In button,” the 13 customer agrees to the TOU, but instead says that, “by continuing past this page,” the customer 14 accepts the TOU. According to Mr. Hansen, the sign-in page at issue in Lee is distinguishable 15 because it did not specify that a customer agrees to a TOU “by continuing past this page.” As a 16 factual matter, he is incorrect. That phrase “by continuing past this page”) was used both in Lee 17 and in the instant case. Second, there is no material difference between “by clicking on the Sign 18 In button” and “by continuing past this page,” as Mr. Hansen posits. It is obvious that one who 19 wants to purchase tickets may not advance “past this page” unless the customer clicks the sign-in 20 button. Mr. Hansen’s contention that, under the terms of the sign-in page, a customer could agree 21 to the TOU simply by clicking on the TOU or going to a different part of the website lacks merit. 22 Such a detour would not take the customer past the sign-in page necessary in order to make the 23 purchase. 24 Accordingly, the Court concludes, as in Lee, that Mr. Hansen validly assented to the 25 Ticketmaster TOU when he clicked the Sign In button, as required before he could move on to 26 purchase tickets for the Rage concerts. By assenting to the TOU, Mr. Hansen also assented to the 27 arbitration agreement contained therein. Mr. Hansen has not made any other argument as to why 1 Defendants’ motion to compel arbitration is granted. 2 III. CONCLUSION 3 For the foregoing reasons, the Court grants Defendants’ motion and stays proceedings 4 pending resolution of the arbitration. 5 This order disposes of Docket No. 22. 6 7 IT IS SO ORDERED. 8 9 Dated: December 11, 2020 10 11 ______________________________________ EDWARD M. CHEN 12 United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27