A Michigan federal court upheld an arbitration clause found on a lead generation website, granting a defendant’s motion to dismiss a Telephone Consumer Protection Act (TCPA) case.
On August 15, 2021, Dustin Shirley visited LowerMyBills.com (LMB) seeking mortgage refinance information. According to LMB’s business records, Shirley provided his contact information and clicked two separate submission buttons confirming that he consented and agreed to LMB’s terms of use, which included an arbitration clause.
Shirley also clicked a third button confirming that he agreed to Rocket Mortgage’s terms of use, which similarly contained an arbitration provision.
When Rocket Mortgage began texting Shirley in response to his inquiry, Shirley filed a lawsuit alleging that Rocket Mortgage violated the TCPA by texting his cellphone while his phone number was registered on the National Do Not Call Registry.
Rocket Mortgage responded by filing a motion to compel arbitration and dismiss the complaint, arguing that Shirley consented to receive the texts by submitting his contact information as part of his request for mortgage refinance information. As part of that submission, Rocket Mortgage argued that Shirley also agreed to arbitrate all claims against Rocket Mortgage and LMB.
U.S. District Court Judge Sean F. Cox agreed, finding the website provided reasonably conspicuous notice of the terms to which consumers will be bound and that Shirley took action that unambiguously manifested his assent to those terms.
Shirley argued that the website failed to provide adequate notice because the gray text was “dwarfed and overshadowed by the much larger colorful green button.”
The court disagreed, pointing out that the hyperlink to the terms of use was underlined and in a blue contrasting color to the rest of the gray text and, therefore, “was readily apparent to a reasonably prudent Internet user” even though the text was smaller than the green button.
The court also ruled that Shirley unambiguously manifested his assent to LMB’s terms of use by clicking three buttons, two of which had an explicit textual notice informing Shirley that “By clicking the button above,” Shirley agreed to LMB’s terms of use.
Therefore, the court concluded that Shirley had inquiry notice of LMB’s terms of use and held that the mandatory arbitration provision contained within those terms of use was enforceable. The court also ruled that Rocket Mortgage could enforce LMB’s arbitration agreement as an intended third-party beneficiary, which Shirley did not dispute.
To read the opinion and order in Shirley v. Rocket Mortgage, click here.
Why it matters: The court’s ruling provides important guidance for companies seeking to obtain agreement to their terms online, including arbitration agreements and class action waivers. The decision emphasizes the importance of distinguishing hyperlinks from the surrounding text with the use of a contrasting font color or all capital letters and providing a textual notice indicating unambiguous assent to the company’s terms. Companies that simply underscore their terms may have difficulty compelling arbitration in future disputes.