Berman v. Freedom Financial Network LLC

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

ANIEL

ERMAN

;

TEPHANIE

HERNANDEZ; ERICA RUSSELL,

Plaintiffs-Appellees,

FREEDOM FINANCIAL NETWORK,

LLC; FREEDOM DEBT RELIEF, LLC;

FLUENT, INC.; LEAD SCIENCE, LLC,

Defendants-Appellants.

No. 20-16900

D.C. No.

4:18-cv-01060-

YGR

OPINION

Appeal from the United States District Court

for the Northern District of California

Yvonne Gonzalez Rogers, District Judge, Presiding

Argued and Submitted October 21, 2021

San Francisco, California

Filed April 5, 2022

Before: Paul J. Watford and Andrew D. Hurwitz, Circuit

Judges, and M. Miller Baker,

International Trade Judge.

Opinion by Judge Watford;

Concurrence by Judge Baker

The Honorable M. Miller Baker, Judge for the United States Court

of International Trade, sitting by designation.

2 BERMAN V. FREEDOM FINANCIAL NETWORK

SUMMARY

Arbitration

The panel affirmed the district court’s order denying

defendants’ motion to compel arbitration in a putative class

action under the Telephone Consumer Protection Act.

In Part I of its opinion, the panel summarized the facts

and procedural history. Plaintiffs used defendants’ websites

but did not see a notice in fine print stating, “I understand

and agree to the Terms & Conditions which includes

mandatory arbitration.” When a dispute arose and plaintiffs

filed this lawsuit, defendants moved to compel arbitration,

arguing that plaintiffs’ use of the websites signified their

agreement to the mandatory arbitration provision found in

the hyperlinked terms and conditions.

In Part II, the panel held that plaintiffs did not

unambiguously manifest their assent to the terms and

conditions when navigating through the websites, and as a

result they never entered into a binding agreement to

arbitrate their dispute, as required under the Federal

Arbitration Act. The parties agreed that either New York or

California contract law governed. To form a contract under

New York or California law, including a contract formed

online, the parties must manifest their mutual assent to the

terms of the agreement, and they may do so through conduct.

The panel explained that the courts have routinely found

enforceable “clickwrap” agreements, in which a website

presents users with specified contractual terms on a pop-up

This summary constitutes no part of the opinion of the court. It

has been prepared by court staff for the convenience of the reader.

BERMAN V. FREEDOM FINANCIAL NETWORK 3

screen and users must check a box explicitly stating “I agree”

in order to proceed. Courts are more reluctant to enforce

“browsewrap” agreements, in which a website offers terms

that are disclosed only through a hyperlink and the user

supposedly manifests assent to those terms simply by

continuing to use the website.

The panel held that unless the web operator can show

that a consumer has actual knowledge of an arbitration

agreement, an enforceable contract will be found based on

an inquiry notice theory only if: (1) the website provides

reasonably conspicuous notice of the terms to which the

consumer will be bound; and (2) the consumer takes some

action, such as clicking a button or checking a box, that

unambiguously manifests his or her assent to those terms.

The panel concluded that defendants’ webpages did not

provide reasonably conspicuous notice because of the small

font size and format and because the fact that a hyperlink

was present was not readily apparent. The panel further

concluded that by clicking on a large green “continue”

button, plaintiffs did not unambiguously manifest their

assent to be bound by the terms and conditions.

In Part III, the panel held that the district court properly

exercised its discretion in denying defendants’ motion for

reconsideration based on deposition testimony taken two

months prior to the district court’s ruling on the motion to

compel arbitration.

Concurring, Judge Baker wrote that he joined Parts I and

III of Judge Watford’s opinion, and he would reach the same

result by a different route. Judge Baker wrote that he would

conduct a choice-of-law analysis and, pursuant to Supreme

Court precedent, would utilize the forum state of

California’s choice-of-law rules and apply California law.

4 BERMAN V. FREEDOM FINANCIAL NETWORK

He would conclude that under recent decisions of the

California Court of Appeal, defendants’ websites contained

“sign-in wrap” agreements, which fall within a gray zone in

which enforceability requires conspicuous textual notice that

completing a transaction or registration signifies consent to

the site’s terms and conditions. Under this standard,

defendants’ notices were insufficiently conspicuous and

were not unambiguously tied to some act of the website user

that manifested assent to the site’s terms and conditions.

Accordingly, defendants’ sign-in wrap agreements were not

enforceable.

COUNSEL

Jay T. Ramsey (argued), Sheppard Mullin Richter &

Hampton LLP, Los Angeles, California; Matthew G.

Halgren, Sheppard Mullin Richter & Hampton LLP, San

Diego, California; for Defendants-Appellants.

Matthew W.H. Wessler (argued), Gupta Wessler,

Washington, D.C.; Anthony I. Paronich, Paronich Law P.C.,

Hingham, Massachusetts; Beth E. Terrell, Terrell Marshall

Law Group PLLC, Seattle, Washington; for Plaintiffs-

Appellees.

BERMAN V. FREEDOM FINANCIAL NETWORK 5

OPINION

WATFORD, Circuit Judge:

We revisit an issue first addressed by our court in Nguyen

v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir. 2014):

Under what circumstances can the use of a website bind a

consumer to a set of hyperlinked “terms and conditions” that

the consumer never saw or read?

In this case, plaintiffs used defendants’ websites but did

not see a notice in fine print stating, “I understand and agree

to the Terms & Conditions which includes mandatory

arbitration.” When a dispute arose and plaintiffs filed this

lawsuit, defendants moved to compel arbitration, arguing

that plaintiffs’ use of the websites signified their agreement

to the mandatory arbitration provision found in the

hyperlinked terms and conditions. The district court rejected

this argument, and so do we. Plaintiffs did not

unambiguously manifest their assent to the terms and

conditions when navigating through the websites, and as a

result they never entered into a binding agreement to

arbitrate their dispute. We therefore affirm the district

court’s order denying defendants’ motion to compel

arbitration.

Defendant Fluent, Inc. is a digital marketing company

that generates leads for its clients by collecting information

about consumers who visit Fluent’s websites. Fluent’s

websites offer rewards like gift cards and free product

samples as an enticement to get consumers to provide their

contact information and answer survey questions. Fluent

then uses the information it collects in targeted marketing

campaigns conducted on behalf of its clients.

6 BERMAN V. FREEDOM FINANCIAL NETWORK

The plaintiffs involved in this appeal, Stephanie

Hernandez and Erica Russell, each visited a website

operated by Fluent. The two websites differed in certain

respects, but as described below, both contained a set of

hyperlinked terms and conditions that included a mandatory

arbitration provision, the enforceability of which is the

principal issue raised on appeal.

According to Fluent’s records, Hernandez visited the

Fluent website www.getsamplesonlinenow.com from a

desktop computer. Because Hernandez had visited a Fluent

website before and had previously entered some of her

contact information, the webpage she saw stated, in large

orange letters across the top of the page, “Welcome back,

stephanie!” See Appendix A.

In the middle of the screen,

the webpage proclaimed, “Getting Free Stuff Has Never

Been Easier!” and included brightly colored graphics. In

between those two lines of text appeared a box that stated at

the top, “Confirm your ZIP Code Below,” followed

immediately by a pre-populated text box displaying the zip

code 93930. Below that, the page displayed a large green

button inviting Hernandez to confirm the accuracy of the zip

code so that she could proceed to the next page in the website

flow. The text inside the button stated, in easy-to-read white

letters, “This is correct, Continue! >>.” Clicking on this

button led to the next page, which asked Hernandez to

Appendix A is a recreation of the key webpage that defendants

contend Hernandez saw when she visited Fluent’s website. For purposes

of this opinion, we will assume that the recreations produced by

defendants accurately depict the relevant webpages viewed by each

plaintiff, although plaintiffs contested that fact below. Given our

disposition, we need not address the district court’s alternative holding

that material disputes of fact exist as to the accuracy and completeness

of defendants’ webpage recreations.

BERMAN V. FREEDOM FINANCIAL NETWORK 7

provide personal information in order to obtain free product

samples and promotional deals.

Between the comparatively large box displaying the zip

code and the large green “continue” button were two lines of

text in a tiny gray font, which stated: “I understand and agree

to the Terms & Conditions which includes mandatory

arbitration and Privacy Policy.” The underlined phrases

“Terms & Conditions” and “Privacy Policy” were

hyperlinks, but they appeared in the same gray font as the

rest of the sentence, rather than in blue, the color typically

used to signify the presence of a hyperlink. If Hernandez

had seen the “Terms & Conditions” hyperlink and clicked

on it, she would have been taken to a separate webpage

displaying a lengthy set of legal provisions, one of which

stated that any disputes related to telemarketing calls or text

messages received from Fluent or its marketing partners

would have to be resolved through arbitration.

According to Fluent’s records, Russell visited a different

Fluent website, www.retailproductzone.com, using a mobile

phone. The key webpage she viewed while registering to

receive a free gift card stated at the top, “Shipping

Information Required,” and below that, “Complete your

shipping information to continue towards your reward.” See

Appendix B. What followed were several fields requiring

Russell to input her name, address, telephone number, and

date of birth. Below a line instructing the user to “Select

Gender,” two buttons appeared side by side marked “Male”

and “Female.” Below that was a large green button with text

that stated, in easy-to-read white letters, “Continue >>.”

Russell had to click on the “continue” button to proceed to

the next page in the website flow.

As with the webpage Hernandez viewed, sandwiched

between the buttons allowing Russell to select her gender

8 BERMAN V. FREEDOM FINANCIAL NETWORK

and the large green “continue” button were the same two

lines of text in tiny gray font stating, “I understand and agree

to the Terms & Conditions which includes mandatory

arbitration and Privacy Policy.” The hyperlinks were

underlined but again appeared in the same gray font as the

rest of the sentence. The “Terms & Conditions” contained a

mandatory arbitration provision similar to the one described

above.

Fluent and defendant Lead Science, LLC used the

contact information provided by consumers like Hernandez

and Russell to conduct a telemarketing campaign on behalf

of defendants Freedom Financial Network, LLC and

Freedom Debt Relief, LLC (collectively, Freedom). As part

of the campaign, Fluent and Lead Science allegedly placed

unsolicited telephone calls and text messages to hundreds of

thousands of consumers, including Hernandez and Russell,

marketing Freedom’s debt-relief services.

Plaintiffs filed this putative class action on behalf of

consumers who received unwanted calls or text messages

from defendants during the telemarketing campaign

conducted on Freedom’s behalf. They allege that the calls

and text messages were made or sent without their consent

and therefore violated the Telephone Consumer Protection

Act (TCPA), 47 U.S.C. § 227 et seq.

Defendants moved to compel arbitration, arguing that,

by clicking on the “continue” buttons, Hernandez and

Russell had agreed to the hyperlinked terms and conditions,

including the mandatory arbitration provision. The district

court denied defendants’ motion. The court concluded that

the content and design of the webpages did not

conspicuously indicate to users that, by clicking on the

“continue” button, they were agreeing to Fluent’s terms and

conditions.

BERMAN V. FREEDOM FINANCIAL NETWORK 9

Shortly after the district court denied defendants’ motion

to compel arbitration, defendants filed a motion for

reconsideration. They asserted that testimony given by

plaintiffs in depositions taken two months earlier was

material to the motion to compel. The district court denied

the reconsideration motion, concluding that defendants had

failed to act with reasonable diligence in producing the new

evidence and, alternatively, that plaintiffs’ deposition

testimony was not materially different from the facts the

district court had previously considered.

On appeal, defendants challenge the denial of both

motions. We review de novo the denial of a motion to

compel arbitration, while underlying factual findings are

reviewed for clear error. Nguyen, 763 F.3d at 1175. We

review the denial of a motion for reconsideration for abuse

of discretion. Kona Enterprises, Inc. v. Estate of Bishop, 229

F.3d 877, 883 (9th Cir. 2000).

The Federal Arbitration Act (FAA) requires district

courts to compel arbitration of claims covered by an

enforceable arbitration agreement. 9 U.S.C. § 3. The FAA

limits the court’s role to “determining whether a valid

arbitration agreement exists and, if so, whether the

agreement encompasses the dispute at issue.” Lifescan, Inc.

v. Premier Diabetic Services, Inc., 363 F.3d 1010, 1012 (9th

Cir. 2004). Plaintiffs do not contest that the arbitration

provision in the websites’ terms and conditions encompasses

10 BERMAN V. FREEDOM FINANCIAL NETWORK

their TCPA claims. Thus, the only issue we must resolve is

whether an agreement to arbitrate was validly formed.

In determining whether the parties have agreed to

arbitrate a particular dispute, federal courts apply state-law

principles of contract formation. See First Options of

Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Here,

the parties agree that either New York or California law

governs. “New York and California apply ‘substantially

similar rules for determining whether the parties have

mutually assented to a contract term.’” Meyer v. Uber

Technologies, Inc., 868 F.3d 66, 74 (2d Cir. 2017) (quoting

Schnabel v. Trilegiant Corp., 697 F.3d 110, 119 (2d Cir.

2012)). As in Nguyen, we need not decide which State’s law

governs “because both California and New York law dictate

the same outcome.” 763 F.3d at 1175.

To form a contract under New York or California law,

the parties must manifest their mutual assent to the terms of

the agreement. See id. (applying New York law); Specht v.

Netscape Communications Corp., 306 F.3d 17, 29 (2d Cir.

2002) (applying California law). Parties traditionally

manifest assent by written or spoken word, but they can also

do so through conduct. Specht, 306 F.3d at 29. However,

“[t]he conduct of a party is not effective as a manifestation

of his assent unless he intends to engage in the conduct and

knows or has reason to know that the other party may infer

While plaintiffs do not dispute that the arbitration provision is

broad enough to cover their claims, they do contend that even if the

provision is enforceable, it cannot be enforced by Freedom and Lead

Science as they were not signatories to any agreement. Because we

affirm the district court’s denial of the motion to compel arbitration on

other grounds, we need not decide whether Freedom and Lead Science

could compel arbitration in this case.

BERMAN V. FREEDOM FINANCIAL NETWORK 11

from his conduct that he assents.” Restatement (Second) of

Contracts § 19(2) (1981).

These elemental principles of contract formation apply

with equal force to contracts formed online. Thus, if a

website offers contractual terms to those who use the site,

and a user engages in conduct that manifests her acceptance

of those terms, an enforceable agreement can be formed.

The most straightforward application of these principles

in the online world involves so-called “clickwrap”

agreements, in which a website presents users with specified

contractual terms on a pop-up screen and users must check a

box explicitly stating “I agree” in order to proceed. See

Nguyen, 763 F.3d at 1175–76. In that scenario, the consumer

has received notice of the terms being offered and, in the

words of the Restatement, “knows or has reason to know that

the other party may infer from his conduct that he assents”

to those terms. Restatement (Second) of Contracts § 19(2).

As a result, courts have routinely found clickwrap

agreements enforceable. See Meyer, 868 F.3d at 75.

At the other end of the spectrum are so-called

“browsewrap” agreements, in which a website offers terms

that are disclosed only through a hyperlink and the user

supposedly manifests assent to those terms simply by

continuing to use the website. See Nguyen, 763 F.3d at 1176.

Courts are more reluctant to enforce browsewrap agreements

because consumers are frequently left unaware that

contractual terms were even offered, much less that

continued use of the website will be deemed to manifest

acceptance of those terms. Id. at 1178 (noting “courts’

traditional reluctance to enforce browsewrap agreements

against individual consumers”).

12 BERMAN V. FREEDOM FINANCIAL NETWORK

To avoid the unfairness of enforcing contractual terms

that consumers never intended to accept, courts confronted

with online agreements such as those at issue here have

devised rules to determine whether meaningful assent has

been given. Unless the website operator can show that a

consumer has actual knowledge of the agreement, an

enforceable contract will be found based on an inquiry notice

theory only if: (1) the website provides reasonably

conspicuous notice of the terms to which the consumer will

be bound; and (2) the consumer takes some action, such as

clicking a button or checking a box, that unambiguously

manifests his or her assent to those terms. See Meyer,

868 F.3d at 75; Nguyen, 763 F.3d at 1173 (refusing to

enforce an arbitration provision to which the consumer “did

not unambiguously manifest assent”). As the Second Circuit

has explained, “[r]easonably conspicuous notice of the

existence of contract terms and unambiguous manifestation

of assent to those terms by consumers are essential if

electronic bargaining is to have integrity and credibility.”

Specht, 306 F.3d at 35.

Defendants did not contend, in their motion to compel

arbitration, that plaintiffs had actual knowledge of an

agreement to arbitrate. And, as explained below, defendants

failed to show that either of the conditions necessary for

finding an enforceable agreement based on inquiry notice

were satisfied.

Reasonably conspicuous notice. The webpages

reproduced in Appendix A and Appendix B did not provide

reasonably conspicuous notice of the terms and conditions

for two reasons. First, to be conspicuous in this context, a

notice must be displayed in a font size and format such that

the court can fairly assume that a reasonably prudent Internet

user would have seen it. See id. at 30; Nguyen, 763 F.3d

BERMAN V. FREEDOM FINANCIAL NETWORK 13

at 1177. The text disclosing the existence of the terms and

conditions on these websites is the antithesis of conspicuous.

It is printed 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

comparatively larger font used in all of the surrounding text

naturally directs the user’s attention everywhere else. And

the textual notice is 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. Far from meeting the requirement that a webpage must

take steps “to capture the user’s attention and secure her

assent,” the design and content of these webpages draw the

user’s attention away from the most important part of the

page. Nguyen, 763 F.3d at 1178 n.1.

Website users are entitled to assume that important

provisions—such as those that disclose the existence of

proposed contractual terms—will be prominently displayed,

not buried in fine print. Because “online providers have

complete control over the design of their websites,” Sellers

v. JustAnswer LLC, 289 Cal. Rptr. 3d 1, 16 (Ct. App. 2021),

“the onus must be on website owners to put users on notice

of the terms to which they wish to bind consumers,” Nguyen,

763 F.3d at 1179. The designer of the webpages at issue here

did not take that obligation to heart.

Second, while it is permissible to disclose terms and

conditions through a hyperlink, the fact that a hyperlink is

present must be readily apparent. Simply underscoring

words or phrases, as in the webpages at issue here, will often

be insufficient to alert a reasonably prudent user that a

clickable link exists. See Sellers, 289 Cal. Rptr. 3d at 29.

Because our inquiry notice standard demands

conspicuousness tailored to the reasonably prudent Internet

14 BERMAN V. FREEDOM FINANCIAL NETWORK

user, not to the expert user, the design of the hyperlinks must

put such a user on notice of their existence. Nguyen,

763 F.3d at 1177, 1179.

A web designer must do more than simply underscore

the hyperlinked text in order to ensure that it is sufficiently

“set apart” from the surrounding text. Sellers, 289 Cal. Rptr.

3d at 29. Customary design elements denoting the existence

of a hyperlink include the use of a contrasting font color

(typically blue) and the use of all capital letters, both of

which can alert a user that the particular text differs from

other plain text in that it provides a clickable pathway to

another webpage. See id. (finding “Terms of Service”

insufficiently conspicuous because it did not use all capital

letters or contrasting font color). Consumers cannot be

required to hover their mouse over otherwise plain-looking

text or aimlessly click on words on a page in an effort to

“ferret out hyperlinks.” Nguyen, 763 F.3d at 1179. The

failure to clearly denote the hyperlinks here fails our

conspicuousness test. Cf. Meyer, 868 F.3d at 78–79 (finding

hyperlinks reasonably conspicuous because they were both

in blue and underlined).

Unambiguous manifestation of assent. In using the

websites, Hernandez and Russell did not take any action that

unambiguously manifested their assent to be bound by the

terms and conditions. Defendants rely on plaintiffs’ act of

clicking on the large green “continue” buttons as

manifestation of their assent, but merely clicking on a button

on a webpage, viewed in the abstract, does not signify a

user’s agreement to anything. A user’s click of a button can

be construed as an unambiguous manifestation of assent only

if the user is explicitly advised that the act of clicking will

constitute assent to the terms and conditions of an

agreement. See Specht, 306 F.3d at 29–30. The presence of

BERMAN V. FREEDOM FINANCIAL NETWORK 15

“an explicit textual notice that continued use will act as a

manifestation of the user’s intent to be bound” is critical to

the enforceability of any browsewrap-type agreement.

Nguyen, 763 F.3d at 1177.

The webpages here did provide advisals concerning the

terms and conditions in proximity to the “continue” buttons.

On the webpage Russell visited, the notice appeared directly

above the button, and on the webpage Hernandez visited it

appeared above the button separated by several intervening

lines of text. But “even close proximity of the hyperlink to

relevant buttons users must click on—without more—is

insufficient to give rise to constructive notice.” Id. at 1179.

Rather, the notice must explicitly notify a user of the

legal significance of the action she must take to enter into a

contractual agreement. The notice did not do so here. Both

webpages stated, “I understand and agree to the Terms &

Conditions,” but they did not indicate to the user what action

would constitute assent to those terms and conditions.

Likewise, the text of the button itself gave no indication that

it would bind plaintiffs to a set of terms and conditions. This

notice defect could easily have been remedied by including

language such as, “By clicking the Continue >> button, you

agree to the Terms & Conditions.” See, e.g., Meyer,

868 F.3d at 78–80 (concluding that an enforceable

agreement was formed where the mobile app explicitly

warned, “By creating an Uber account, you agree to the

Defendants assert that the presence of the phrase “which

includes mandatory arbitration” in the textual notice

distinguishes the webpages at issue here from those rejected

by other courts. This argument is unavailing, as it fails to

appreciate the key issue in this appeal. The question before

us is not whether Hernandez and Russell may have been

16 BERMAN V. FREEDOM FINANCIAL NETWORK

aware of the mandatory arbitration provision in particular,

but rather whether they can be deemed to have manifested

assent to any of the terms and conditions in the first place.

Because the textual notice was not conspicuous and did not

explicitly inform Hernandez and Russell that by clicking on

the “continue” button they would be bound by the terms and

conditions, the presence of the words “which includes

mandatory arbitration” in the notice is of no relevance to the

outcome of this appeal.

We conclude that the design and content of the webpages

Hernandez and Russell visited did not adequately call to

their attention either the existence of the terms and

conditions or the fact that, by clicking on the “continue”

button, they were agreeing to be bound by those terms. The

district court properly denied defendants’ motion to compel

arbitration because an enforceable agreement to arbitrate

was never formed.

III

Following the district court’s denial of their motion to

compel arbitration, defendants filed a motion for

reconsideration, asserting that testimony from the

depositions they took of Russell and Hernandez two months

prior to the court’s ruling was material to resolution of the

motion to compel. The district court denied the

reconsideration motion because defendants failed to act with

reasonable diligence and, alternatively, because plaintiffs’

deposition testimony was not materially different from the

facts the court had already considered. Because we agree

with the court’s first rationale, we need not address the

second.

BERMAN V. FREEDOM FINANCIAL NETWORK 17

A district court may, in its discretion, reconsider an

interlocutory order denying a motion to compel arbitration.

See Fed. R. Civ. P. 60(b); N.D. Cal. Civ. L.R. 7-9. However,

reconsideration of such an order is an “extraordinary

remedy, to be used sparingly in the interests of finality and

conservation of judicial resources.” Kona Enterprises,

229 F.3d at 890. Reconsideration motions may not be used

to raise new arguments or introduce new evidence if, with

reasonable diligence, the arguments and evidence could have

been presented during consideration of the original ruling.

Id.

As the district court explained, had defendants acted with

reasonable diligence, plaintiffs’ deposition testimony could

have been presented to the court in connection with the

motion to compel arbitration. Defendants could have

deposed plaintiffs before filing the motion or before the

close of briefing on the motion. During that period, the

district court granted each extension of the briefing and

discovery schedules the parties requested. Moreover,

defendants could have submitted plaintiffs’ deposition

testimony at any point during the two-month period between

the taking of the depositions and issuance of the court’s order

denying the motion to compel. Instead, defendants waited

until after the court had issued its ruling to present the

deposition testimony in support of their new theory that

plaintiffs had actual knowledge of the hyperlinked terms and

conditions. The district court did not abuse its discretion in

concluding that defendants’ “tactical decision not to submit

the deposition testimony until after their motion was denied”

failed to provide any basis for seeking reconsideration of the

court’s earlier ruling.

* * *

18 BERMAN V. FREEDOM FINANCIAL NETWORK

We affirm the district court’s denial of defendants’

motion to compel arbitration and their motion for

reconsideration.

AFFIRMED.

BERMAN V. FREEDOM FINANCIAL NETWORK 19

Appendix A

20 BERMAN V. FREEDOM FINANCIAL NETWORK

Appendix B

BERMAN V. FREEDOM FINANCIAL NETWORK 21

BAKER, Judge, concurring:

I join Parts I and III of Judge Watford’s opinion for the

Court. Although my colleagues and I reach the same

destination, I would take a different route, one that first

walks through the applicable choice-of-law analysis and

then, based on that analysis, relies more on recent decisions

of the California Court of Appeal. Those decisions establish

that the websites here contain “sign-in wrap” agreements,

which—as this case illustrates—tempt fate under California

law.

“In determining the validity of an agreement to arbitrate,

federal courts should apply ordinary state-law principles that

govern the formation of contracts.” Pokorny v. Quixtar, Inc.,

601 F.3d 987, 994 (9th Cir. 2010) (cleaned up and quoting

Ferguson v. Countrywide Credit Indus., Inc., 298 F.3d 778,

782 (9th Cir. 2002)). The first issue here is what body of state

law governs whether the parties agreed to arbitration. The

parties agree that California and New York are the options

and further agree that there is no material difference between

the applicable law of those jurisdictions. But when asked at

argument which state’s law would apply if forced to choose,

plaintiffs asserted California and defendants asserted New

York. My colleagues decline to decide this issue because,

like the parties, they conclude that both California and New

York law dictate the same outcome. Ante at 10 (citing

Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir.

2014)).

I am not sure this is correct at the margins in this

evolving and fact-bound area. I also think that due respect

for state courts should lead us to begin by identifying the

relevant jurisdiction and then determining its law as

22 BERMAN V. FREEDOM FINANCIAL NETWORK

enunciated by those courts. Cf. 19 Wright & Miller, Federal

Practice and Procedure § 4507 (3d ed. 2021) (“Because of

the important federalism concerns implicated in the

application of state law by the federal courts, the accurate

ascertainment of that law is extremely important.”). We are

messengers, not catalysts, of state law.

“Before a federal court may apply state-law principles to

determine the validity of an arbitration agreement, it must

determine which state’s laws to apply.” Pokorny, 601 F.3d

at 994. If we were sitting in diversity, it is long-settled that

we would apply the choice-of-law rules of the forum state—

here, California—to resolve whether the parties agreed to

arbitrate their dispute. See, e.g., Patton v. Cox, 276 F.3d 493,

495 (9th Cir. 2002) (“When a federal court sits in diversity,

it must look to the forum state’s choice of law rules to

determine the controlling substantive law.”).

But because we exercise our federal-question

jurisdiction here,

the selection of choice-of-law principles

is not so straightforward. “[T]here is some inconsistency” in

our circuit precedent “as to whether federal courts [in

federal-question cases] should apply federal common law

choice-of-law principles or the choice-of-law principles of

the forum state when the particular issue is governed by

substantive state law.” Setty v. Shrinivas Sugandhalaya LLP,

986 F.3d 1139, 1148 (9th Cir.) (Bea, J., dissenting),

Plaintiffs brought this suit under the Telephone Consumer

Protection Act (TCPA), 47 U.S.C. § 227. It permits concurrent federal

and state court jurisdiction over private-party claims such as those

brought by plaintiffs here. See Mims v. Arrow Fin. Servs., LLC, 565 U.S.

368, 379–87 (2012).

BERMAN V. FREEDOM FINANCIAL NETWORK 23

withdrawn on denial of reh’g en banc, 998 F.3d 897 (9th Cir.

2021).

“For bankruptcy cases founded on federal question

jurisdiction, we have opted to use federal choice-of-law rules

to determine which state law to apply to pendent state

claims.” Id. (citing In re Lindsay, 59 F.3d 942, 948 (9th Cir.

1995)). And in some federal-question contexts outside of

bankruptcy, we have applied federal choice-of-law rules to

state-law issues. See, e.g., Huynh v. Chase Manhattan Bank,

465 F.3d 992, 997 (9th Cir. 2006) (characterizing circuit

precedent as standing for the general proposition that “where

jurisdiction is not premised on diversity of citizenship,

federal common law governs” and applying that law to

determine which state’s limitations period to use).

But in other federal-question contexts, “when the

particular issue is ultimately determined by state rather than

federal law . . . , the Ninth Circuit and the lower courts have

sometimes applied the forum state’s choice-of-law rule.”

Setty, 986 F.3d at 1149 (Bea, J., dissenting) (citing SEC v.

Elmas Trading Corp., 683 F. Supp. 743, 748 (D. Nev. 1987),

aff’d w/o opinion, 865 F.2d 265 (9th Cir. 1988), and Paracor

Fin., Inc. v. Gen. Elec. Cap. Corp., 96 F.3d 1151, 1164 (9th

Cir. 1996)). Paracor involved supplemental state-law

claims, and later in Pokorny (which, as here, was a federal-

question case) we followed Paracor in applying forum state

choice-of-law rules to the state-law question of whether the

parties agreed to arbitrate their dispute. See Pokorny,

601 F.3d at 994.

I think analysis of the Supreme Court’s decisions

resolves our intra-circuit conflict and favors applying forum

state choice-of-law rules to state-law issues arising in

federal-question cases, at least where Congress has vested

concurrent jurisdiction in state and federal courts. In

24 BERMAN V. FREEDOM FINANCIAL NETWORK

enacting federal law, “Congress acts . . . against the

background of the total corpus juris of the states . . . .”

Atherton v. FDIC, 519 U.S. 213, 218 (1997) (ellipses in

original) (cleaned up and quoting Wallis v. Pan Am.

Petroleum Corp., 384 U.S. 63, 68 (1966)). “Thus, normally,

when courts decide to fashion rules of federal common law,

‘the guiding principle is that a significant conflict between

some federal policy or interest and the use of state law . . .

must first be specifically shown.” Id. (ellipsis in original)

(quoting Wallis, 384 U.S. at 68); see also O’Melveny &

Myers v. FDIC, 512 U.S. 79, 87 (1994) (“Cases in which

judicial creation of a special federal rule would be justified”

are “few and restricted, limited to situations where there is a

significant conflict between some federal policy or interest

and the use of state law.”) (cleaned up).

Where, as here, Congress vests concurrent jurisdiction in

state and federal courts to hear federal causes of action,

absent any statutory indication to the contrary it implicitly

authorizes state courts to apply their own choice-of-law rules

to state-law issues arising in such cases. This implied

authorization necessarily signifies that federal courts’

application of forum state choice-of-law rules to state-law

issues arising under those same statutes does not conflict

with any federal policy or interest. Cf. A.I. Trade Fin., Inc.

v. Petra Int’l Banking Corp., 62 F.3d 1454, 1464 (D.C. Cir.

1995) (“The Supreme Court has decreed that in the absence

of federal legislation there shall be what one might call

‘vertical uniformity’: a suit in federal court shall be handled

as it would be in the courts of the state where that federal

court sits.”). For that reason, given the TCPA’s silence on

the matter we should apply the choice-of-law rules of the

forum state—here, California—to resolve the state-law issue

of whether the parties agreed to arbitrate plaintiffs’ federal

claims. In other words, we should apply the same choice-of-

BERMAN V. FREEDOM FINANCIAL NETWORK 25

law rules that we would apply in a diversity case, or to

supplemental state-law claims.

Under California choice-of-law principles, “when there

is no advance agreement on applicable law, but the action

involves the claims of residents from outside California, the

trial court may analyze the governmental interests of the

various jurisdictions involved to select the most appropriate

law.” Wash. Mut. Bank, FA v. Super. Ct., 15 P.3d 1071, 1077

(Cal. 2001).

This analysis has three steps.

First, a court will apply California substantive law unless

the party timely invoking another state’s law “show[s] it

materially differs from the law of California.” Wash. Mut.,

15 P.3d at 1080. If the states’ laws are identical, the court

applies California law. Id. Second, if the laws are materially

The California Court of Appeal has held that “notwithstanding the

application of the governmental interest analysis to other choice-of-law

issues,” the “choice-of-law rule in Civil Code section 1646 determines

the law governing the interpretation of a contract.” Frontier Oil Corp. v.

RLI Ins. Co., 63 Cal. Rptr. 3d 816, 835 (Ct. App. 2007). Section 1646

provides that “[a] contract is to be interpreted according to the law and

usage of the place where it is to be performed; or, if it does not indicate

a place of performance, according to the law and usage of the place

where it is made.” Cal. Civ. Code § 1646. Because § 1646 presupposes

the existence of a contract, it is inapplicable to the antecedent question

of whether the parties formed a valid contract. See Glob. Commodities

Trading Grp., Inc. v. Beneficio de Arroz Choloma, S.A., 972 F.3d 1101,

1111 (9th Cir. 2020) (“Section 1646 governs only the interpretation of

contractual terms. . . . [A]ll other issues in a contract dispute, including

the validity of a contract, are governed by governmental interest

analysis.”); Miller v. Stults, 300 P.2d 312, 318 (Cal. App. 1956) (stating

that “[t]he rules stated in” § 1646 and related provisions “govern the

interpretation of contracts which might otherwise be uncertain, not the

formation of contracts”).

26 BERMAN V. FREEDOM FINANCIAL NETWORK

different, the court must “determine what interest, if any,

each state has in having its own law applied to the case.” Id.

Finally, “[o]nly if the trial court determines that the laws are

materially different and that each state has an interest in

having its own law applied, thus reflecting an actual conflict,

must the court take the final step and select the law of the

state whose interests would be ‘more impaired’ if its law

were not applied.” Id. at 1081 (emphasis in original).

Here, step one resolves the issue because while

defendants (if forced to choose) urge us to apply New York’s

law instead of California’s, they have not met their burden

of identifying differences in the applicable law of both states.

We must therefore apply California law.

In so doing, we must apply the law as enunciated by the

California Supreme Court. Vestar Dev. II, LLC v. Gen.

Dynamics Corp., 249 F.3d 958, 960 (9th Cir. 2001). Absent

any such authority, we “must predict how the highest state

court would decide the issue using intermediate appellate

court decisions, decisions from other jurisdictions, statutes,

treatises, and restatements as guidance.” Id. (quoting Lewis

v. Tel. Emps. Credit Union, 87 F.3d 1537, 1545 (9th Cir.

1996)). But “where there is no convincing evidence that the

state supreme court would decide differently, a federal court

is obligated to follow the decisions of the state’s

intermediate appellate courts.” Id. (quoting Lewis, 87 F.3d

at 1545); see also Hayes v. Cnty. of San Diego, 658 F.3d 867,

872 (9th Cir. 2011) (same).

As the California Supreme Court has not yet addressed

internet contract formation, and as I am unaware of any

evidence suggesting that it would decide these questions any

differently, I would decide this case based on two relevant

published decisions of the California Court of Appeal.

BERMAN V. FREEDOM FINANCIAL NETWORK 27

The first relevant state court decision is Long v. Provide

Commerce, Inc., 200 Cal. Rptr. 3d 117 (Ct. App. 2016). In

that case, a user of ProFlowers.com argued that an

arbitration provision in a website’s terms and conditions was

unenforceable for lack of notice.

Long began with first principles. Federal and state

policies favoring arbitration cannot compel someone to

arbitrate when he has not agreed to do so, id. at 122 (citing

Freeman v. State Farm Mut. Auto. Ins. Co., 535 P.2d 341,

346 (Cal. 1975)), and e-commerce “has not fundamentally

changed the requirement that mutual manifestation of assent,

whether by written or spoken word, is the touchstone of

contract,” id. (cleaned up) (citing Nguyen, 763 F.3d at 1175).

“California law is clear—an offeree, regardless of apparent

manifestation of his consent, is not bound by inconspicuous

contractual provisions of which he was unaware, contained

in a document whose contractual nature is not obvious.” Id.

(cleaned up).

Long then noted the distinction between

“clickwrap” (or “click-through”) agreements,

in which website users are required to click

on an “I agree” box after being presented with

a list of terms and conditions of use; and

“browsewrap” agreements, where a website’s

terms and conditions of use are generally

posted on the website via a hyperlink at the

bottom of the screen.

Id. at 123 (quoting Nguyen, 763 F.3d at 1175–76). “[A]bsent

actual notice, ‘the validity of a browsewrap agreement turns

on whether the website puts a reasonably prudent user on

28 BERMAN V. FREEDOM FINANCIAL NETWORK

inquiry notice of the terms of the contract.” Id. (cleaned up)

(quoting Nguyen, 763 F.3d at 1177).

Long involved a browsewrap agreement where the

website’s hyperlinked terms of use were buried at the bottom

of the relevant webpages and confirming emails. The court

noted that “what sort of Web site design elements would be

necessary or sufficient to deem a browsewrap agreement

valid in the absence of actual notice” was an issue of first

impression under California law, and accordingly said it

would be “largely guided” by the reasoning in Nguyen and

Specht v. Netscape Communications Corp., 306 F.3d 17 (2d

Cir. 2002). Id. at 124. Applying these decisions, Long held

that the website’s hyperlinks to the terms of use—“their

placement, color, size, and other qualities relative to the

ProFlowers.com Web site’s overall design—[were] simply

too inconspicuous” to put reasonably prudent users on

inquiry notice. Id. at 125–26.

“While the lack of conspicuousness” of the terms of use

resolved the case, id. at 126, Long went further and approved

Nguyen’s conclusion that if browsewrap is to be enforceable,

“a textual notice should be required to advise consumers that

continued use of a Web site will constitute the consumer’s

agreement to be bound by the Web site’s terms of use.” Id.

at 126 (citing Nguyen, 763 F.3d at 1178–79). The court

reasoned that merely placing a hyperlink in a “prominent or

conspicuous place” is not enough because “the phrase ‘terms

of use’ may have no meaning or a different meaning to a

large segment of the Internet-using public.” Id. at 126–27.

Long thereby endorsed “the bright line rule established by

Nguyen” as to textual notice, which “is necessary to ensure

that Internet consumers are on inquiry notice of a

browsewrap agreement’s terms, regardless of each

consumer’s degree of technological savvy.” Id. at 127. Thus,

BERMAN V. FREEDOM FINANCIAL NETWORK 29

“[o]nline retailers would be well-advised to include a

conspicuous textual notice with their terms of use hyperlinks

going forward.” Id.

A recent California Court of Appeal decision builds on

Long and further develops state law in this area. In Sellers v.

JustAnswer LLC, 289 Cal. Rptr. 3d 1 (Ct. App. 2021),

petition for review filed, No. S273056 (Cal. Feb. 8, 2022),

the court—drawing on a scholarly opinion by Judge

Weinstein, see Berkson v. Gogo LLC, 97 F. Supp. 3d 359,

394–401 (E.D.N.Y. 2015)—helpfully classifies internet

contract formation “by the way in which the user purportedly

gives [her] assent to be bound by the associated terms:

browsewraps, clickwraps, scrollwraps, and sign-in wraps.”

Sellers, 289 Cal. Rptr. 3d at 15. Those four ways are as

follows:

A “browsewrap” agreement is one in which

an internet user accepts a website’s terms of

use merely by browsing the site. A

“clickwrap” agreement is one in which an

internet user accepts a website’s terms of use

by clicking an ‘I agree’ or ‘I accept’ button,

with a link to the agreement readily available.

A “scrollwrap” agreement is like a

“clickwrap,” but the user is presented with

the agreement and must physically scroll to

The Court of Appeal issued Sellers after we heard argument in this

case. It “involved a $5 ‘trial’ that automatically enrolled allegedly

unwitting consumers in a more expensive recurring monthly

membership.” Id. at 5. The California Automatic Renewal Law, Cal.

Bus. & Prof. Code §§ 17,600 et seq., therefore applied and the court

applied statutory standards. See 289 Cal. Rptr. 3d at 26–28. The court,

however, also applied Long and the relevant federal cases addressing the

sufficiency of inquiry notice. See id. at 28–30.

30 BERMAN V. FREEDOM FINANCIAL NETWORK

the bottom of it to find the “I agree” or “I

accept” button. “Sign-in wrap” agreements

are those in which a user signs up to use an

internet product or service, and the sign-up

screen states that acceptance of a separate

agreement is required before the user can

access the service. While a link to the

separate agreement is provided, users are not

required to indicate that they have read the

agreement’s terms before signing up.

Id. (cleaned up).

Using these criteria, Sellers classified the website before

it as “a sign-in wrap agreement.” Id. at 16. The website

purportedly notif[ied] consumers of the

existence of a separate, hyperlinked webpage

containing contractual terms, along with a

textual notice that they agree to the terms by

clicking the “Start my trial” button. While a

hyperlink to the separate agreement was

provided, the consumer was not required to

click the hyperlink or otherwise read the

terms to proceed, and was not required to

affirmatively indicate that [he had] read the

agreement’s terms before signing up.

Id. at 17 (cleaned up).

Sellers then “set some basic guideposts as to the

enforceability” of the four types of internet contract

formation. Id. at 20. First, the court expressly stated what

Long implied—“On one end of the spectrum, a browsewrap

agreement like the one at issue in Long . . . is not sufficient

to bind the consumer.” Id. “Toward the other end of the

BERMAN V. FREEDOM FINANCIAL NETWORK 31

spectrum, clickwrap agreements . . . are generally

considered enforceable.” Id. at 20–21. “Scrollwrap

agreements go one step further and place the contractual

terms directly in front of the user . . . . [T]here should be little

doubt scrollwrap agreements are enforceable under

California law because the consumer is given the contract, a

sufficient circumstance to place the consumer on inquiry

notice of the contractual terms.” Id. at 21.

That left sign-in wrap, which Sellers described as

“fall[ing] somewhere in the middle of the two extremes of

browsewrap and scrollwrap agreements.” Id. The court

explained that although sign-in wrap displays a textual

notice that the user will be bound by the site’s terms, unlike

scrollwrap it does not require the user to scroll through the

terms before clicking “I agree” or the like. And unlike

clickwrap, it does not require a user to click “I agree” or the

like to accept the site’s hyperlinked terms and conditions. Id.

“Instead, the consumer is purportedly bound by clicking

some other button that [he] would otherwise need to click to

continue with [his] transaction or [his] use of the website—

most frequently, a button that allows the consumer to ‘sign

in’ or ‘sign up’ for an account.” Id. (emphasis in original).

Sellers doubted whether most consumers know that clicking

that “some other button” constitutes agreeing to contract

terms, and the court therefore concluded that “the existence

of a contract ‘turns on whether a reasonably prudent offeree

would be on inquiry notice of the terms at issue.’ ” Id.

(quoting Selden v. Airbnb, Inc., No. 16-CV-00933 (CRC),

2016 WL 6476934, at *4 (D.D.C. Nov. 1, 2016)). “ ‘There

is nothing automatically offensive about such agreements, as

long as the layout and language of the site give the user

reasonable notice that a click will manifest assent to an

agreement.’ ” Id. (emphasis and alterations in original)

32 BERMAN V. FREEDOM FINANCIAL NETWORK

(quoting Meyer v. Uber Techs., Inc., 868 F.3d 66, 75 (2d Cir.

2017)).

Sellers outlined two other considerations bearing on the

validity of sign-in wrap agreements. First, “the full context

of the transaction is critical to determining whether a given

textual notice is sufficient to put an internet consumer on

inquiry notice of contractual terms.” Id. at 26. Specifically,

in transactions involving “a consumer signing up for an

ongoing account,” id. at 21 (emphasis added), “it is

reasonable to expect that the typical consumer in that type of

transaction contemplates entering into a continuing,

forward-looking relationship,” id. In contrast, where the

“transaction is one in which the typical consumer would not

expect to enter into an ongoing contractual relationship,” the

consumer would be “less likely to be looking for”

contractual terms. Id. at 25. In short, websites inviting one-

off transactions will be held to higher standards than those

proposing continuing associations, as the “transactional

context . . . is key to determining the expectations of a

typical consumer.” Id. at 29–30.

Second, as “not all internet users are alike,” id. at 24, “the

onus must be on website owners to put users on notice of the

terms to which they wish to bind consumers . . . .

[C]onsumers cannot be expected to ferret out hyperlinks to

terms and conditions to which they have no reason to suspect

they will be bound.” Id. at 25.

Sellers then applied these principles, beginning with the

transaction’s context. Website users were not asked to “sign

up” for an account but were invited to “ ‘start a trial’ to

determine whether they wanted to use the service at all and

were not likely expecting that their ‘trial’ would be governed

by approximately 26 pages of contractual terms.” Id. at 29

(cleaned up). Thus, this was “not a situation in which ‘the

BERMAN V. FREEDOM FINANCIAL NETWORK 33

registration process clearly contemplated some sort of

continuing relationship that would require some terms and

conditions.’ ” Id. (cleaned up and quoting Meyer, 868 F.3d

at 80). In the latter case, users might be on the lookout for

“small text outside the payment box or at the bottom of the

screen linking them to 26 pages of contractual terms.” Id.

Sellers also stated that “[a]bsent such scrutiny, it is not

likely a typical consumer would notice the relatively

inconspicuous notice of contractual terms that would govern

[her] use of the” website at issue:

[T]he notice appears in extremely small print,

outside the white box containing the payment

fields where the consumer’s attention would

necessarily be focused. Although the text of

the notice appears in white against a dark

background, the font is so small that the

contrast is not sufficient to make the text

apparent. Further, the hyperlink to the terms

of service is underlined, but it is not set apart

in any other way that may draw the attention

of the consumer, such as with blue text or

capital letters.

Id. (footnote reference omitted). The court clarified that it

“consider[ed] the size of the textual notice in relation to the

other text on the screen.” Id. at 29 n.10.

“Considering all of these factors together,” Sellers held

that the website’s notice was not “sufficiently conspicuous

to put Plaintiffs on inquiry notice that they would be bound

by the terms of service by proceeding with their trial.” Id.

The website’s designer “chose to use a textual notice

attached to a hyperlink as opposed to a pure clickwrap or

scrollwrap form, and then chose to display that notice in

34 BERMAN V. FREEDOM FINANCIAL NETWORK

extremely small print and not immediately adjacent to the

‘Start my trial’ button. By doing so, JustAnswer ran the risk

of a court concluding, as we do here, that the notice was not

sufficiently conspicuous.” Id. at 30.

The court warned website owners that “particularly

where, as here, the consumer is not likely expecting to be

bound by such terms,” id. (emphasis added), “text that is just

slightly smaller, or slightly further away from the box or

button the consumer must click on must, at some point,

exceed the limits of what constitutes adequate notice.” Id.

“The onus is on” website owners “to provide adequate notice

of contractual terms.” Id.

* * *

Long and Sellers teach that, pending further word from

the California appellate courts, browsewrap agreements are

unenforceable per se; sign-in wrap agreements are in a gray

zone; and clickwrap and scrollwrap agreements are

presumptively enforceable. And in the gray zone of sign-in

wrap agreements, enforceability requires conspicuous

textual notice that completing a transaction or registration

signifies consent to the site’s terms and conditions. Whether

such notice is sufficiently conspicuous will turn on the

transactional context, the notice’s size relative to other text

on the site, the notice’s proximity to the relevant button or

box the user must click to complete the transaction or

are readily identifiable. A court must “[c]onsider[ ] all of

these factors” together. Sellers, 289 Cal. Rptr. 3d at 29.

Given the present state of California law, website designers who

knowingly choose sign-in wrap—to say nothing of browsewrap—over

BERMAN V. FREEDOM FINANCIAL NETWORK 35

III

Under Sellers’s classification scheme, there is no

contention that the websites here operate as scrollwrap or

clickwrap. Defendants also do not argue that merely

accessing the websites constitutes agreement to the terms of

use, so their sites do not use browsewrap. Instead, defendants

argue that their sites’ terms and conditions, including

mandatory arbitration, are enforceable because of the sites’

notices that consumers agree to those provisions. These sites

therefore employ sign-in wrap under Sellers.

To determine whether the sign-in wrap agreements here

are sufficiently conspicuous, Sellers requires that we first

consider the context—whether reasonably prudent users

would understand defendants’ websites to invite one-off

transactions or continued dealings of some kind. As in

Sellers, defendants’ websites—whatever else their

hyperlinked terms and conditions may say—do not clearly

propose forward-looking relations such as memberships or

subscriptions. See, e.g., Appendix B, ante (requesting that

the website user “complete your shipping information to

continue towards your reward,” a $100 Target gift card).

That in turn means that the conspicuousness of these sites’

textual notices must undergo the most rigorous scrutiny,

because a reasonably prudent user would not have been on

the lookout for fine print.

clickwrap and scrollwrap designs practically invite litigation over the

enforceability of their sites’ terms and conditions, as the fact-intensive

inquiry over what “makes a given textual notice sufficiently conspicuous

. . . invariably lends itself to a more subjective than objective analysis

. . . .” Id. at 23.

36 BERMAN V. FREEDOM FINANCIAL NETWORK

Also as in Sellers, the notices here appeared in

“extremely small print” in comparison to “the other text on

the screen.” 289 Cal. Rptr. 3d at 29 & n.10. But in Sellers,

the notice was “outside the white box containing the

payment fields where the consumer’s attention would

necessarily be focused.” Id. at 29. In one of the sites here,

the notice was in the same white box and immediately above

the “Continue” button. See Appendix B, ante. In the other

site, the notice was also in the same box, but not immediately

adjacent to the “This is correct, Continue!” button. See

Appendix A, ante.

Moreover, in Sellers “the font [was] so small that the

contrast [was] not sufficient to make the text apparent.

Further, the hyperlink to the terms of service [was]

underlined, but it [was] not set apart in any other way that

may [have] draw[n] the attention of the consumer, such as

with blue text or capital letters.” 289 Cal. Rptr. 3d at 29.

Here, the very small text is nonetheless apparent, and the

underscored hyperlinks are capitalized, though in title case,

not all caps.

Although the notices here are relatively more

conspicuous than the one at issue in Sellers—to say nothing

Sellers does not explain whether its reference to “capital letters” in

hyperlinks refers to title case or all caps. See 289 Cal. Rptr. 3d at 29

(stating that an underscored hyperlink was insufficiently conspicuous in

part because it was not “set apart in any other way that may draw the

attention of the consumer, such as with blue text or capital letters”). We

can infer that Sellers meant all caps because the court also found the

hyperlinks in the website’s mobile device version insufficiently

conspicuous, in part because the underscored and title case hyperlinks

did not “otherwise draw the user’s attention in any way.” See id.; see also

id. at 8 (quoting the mobile device hyperlinks as “Terms of Service” and

“Privacy Policy”).

BERMAN V. FREEDOM FINANCIAL NETWORK 37

of Long, where the terms of use were buried at the bottom of

the relevant webpages—I agree with my colleagues that

these notices are still insufficiently conspicuous. Under

Sellers, we must hold defendants to the most exacting

standard because the transactions at issue were one-off, and

for that reason the much smaller size of the notices compared

to the surrounding text independently suffices to find the

notices insufficiently conspicuous. As my colleagues

correctly observe, “[t]he comparatively larger font used in

all of the surrounding text naturally directs the user’s

attention everywhere else.” Ante at 13. The comparative size

of the text is critical because it suggests the designer’s intent

to minimize the user’s attention to the terms and conditions.

In this case involving one-off transactions, reasonably

prudent users of defendants’ sites are unlikely to be on the

lookout for fine print.

Moreover, at least on the page Hernandez allegedly

viewed, ante at Appendix A, an intervening graphical

element (an “I agree” button through which a user consents

to receiving daily emails) is confusingly placed so that a user

who does notice the reference to the terms and conditions

might think it necessary to click “I agree” before continuing

with the transaction. On the page Hernandez allegedly

viewed the crucial text is, to use the Sellers court’s

formulation, “not immediately adjacent to” the button the

user must click to proceed with the transaction. This is an

On the other hand, if defendants’ websites invited ongoing

dealings, Sellers suggests that reasonably prudent users would expect

there to be terms and conditions or fine print. It therefore follows in such

cases that a textual notice could be somewhat smaller than adjoining text

or the relevant button, provided (as discussed below) the notice is

immediately adjacent to the relevant button or box. But see above note 4.

38 BERMAN V. FREEDOM FINANCIAL NETWORK

independent reason to find the notice in the website

identified as Appendix A insufficiently conspicuous.

As discussed above, Long endorsed Nguyen’s conclusion

that “a textual notice” is “required to advise consumers that

continued use of a Web site will constitute the consumer’s

agreement to be bound by the Web site’s terms of use.”

200 Cal. Rptr. 3d at 126 (citing Nguyen, 763 F.3d at 1178–

79); see also Sellers, 289 Cal. Rptr. 3d at 25 (observing that

website owners must “eliminate any uncertainty as to the

consumer’s notice of contractual terms and assent to those

very terms”) (emphasis added). To that end, Sellers explains

that the defining feature of sign-in wrap is that “the sign-up

screen states that acceptance of a separate agreement is

required before the user can access the service.” Id. at 15.

Sellers does not explain what form that statement must

take, but Nguyen noted that the hyperlink’s mere proximity

to the relevant button is not enough without “something

more to capture the user’s attention and secure her consent”

like a text warning that stated, “By clicking and making a

request to Activate, you agree to the terms and conditions

. . . .” 763 F.3d at 1179 n.1 (emphasis added). That is a useful

example for sign-in wrap agreements because Sellers

requires that the user’s action of accessing the service or

completing the transaction be linked to acceptance of the

site’s terms and conditions.

Thus, I agree with my colleagues that, for an otherwise

conspicuous notice to be effective, it must be unambiguously

tied to some act of the website user that manifests assent to

the site’s terms and conditions. Here, neither notice passes

that test. They only imply—rather than explicitly state—that

consumers signify such assent by clicking the greenish

BERMAN V. FREEDOM FINANCIAL NETWORK 39

button with the word “Continue.” Neither one says, for

example, “By clicking CONTINUE, I agree to the Terms &

Conditions which includes mandatory arbitration and

transaction, I agree . . .” See Beland v. Expedia, Inc., No.

C086061, 2021 WL 3046742, at **6–7 (Cal. App. July 20,

2021) (in unpublished decision

finding sign-in wrap

enforceable, twice noting the inclusion of the words “[b]y

selecting to complete this booking” in the relevant notice).

Under Long and Sellers, the sign-in wrap agreements here

are not enforceable because even apart from their

insufficient conspicuousness, the relevant notices do not

expressly advise users that clicking “Continue” signifies

assent to the sites’ arbitration provisions and other terms and

conditions. Such express warnings are necessary to

“eliminate any uncertainty as to the consumer’s . . . assent to

those very terms.” Sellers, 289 Cal. Rptr. 3d at 25.

* * *

“[W]e may consider unpublished state decisions, even though such

opinions have no precedential value.” Emps. Ins. of Wausau v. Granite

State Ins. Co., 330 F.3d 1214, 1220 n.8 (9th Cir. 2003). Unlike published

decisions of the Court of Appeal, however, “we are not bound by them.”

Nunez ex rel. Nunez v. City of San Diego, 114 F.3d 935, 942 n.4 (9th Cir.

1997).

The Beland court characterized the design at issue as “more like a

browsewrap agreement.” 2021 WL 3046742, at *6. But the court only

identified browsewrap and clickwrap as possible choices. Id. Viewed

through the prism of Sellers—and Berkson, which the Beland court also

cited—the design is more accurately classified as sign-in wrap because

the Expedia screen notified the user that proceeding with booking also

constituted consent to the hyperlinked terms and conditions. See id.

at *14 (screenshot).

40 BERMAN V. FREEDOM FINANCIAL NETWORK

For the foregoing reasons, I concur in affirming the

decision below.