Wednesday, May 23, 2018

visiting a website without buying through it binds user to arbitration for offline purchase, court finds

Himber v. Live Nation Worldwide, Inc., 2018 WL 2304770, No. 16-CV-5001(JS) (E.D.N.Y. May 21, 2018)

In this decision, the court compels arbitration because the plaintiff had (1) previously purchased tickets from Live Nation’s website and, perhaps more surprisingly, independently because he had (2) visited the website, though not purchased tickets, to find the ticket prices for the relevant transaction.  Himber saw that the tickets he wanted were $49.50 each, but that there was a $15.25 online-service fee added to the price of each ticket. He decided to go to the box office, which was 20 minutes away, to buy the tickets and avoid the fee. But at the box office was charged an additional $6 per ticket, a charge that was not disclosed on the website. Given that it is impossible to avoid the $6 charge at the box office, he argued that the true price of a ticket was $55.50, and that Live Nation’s advertising was deceptive under GBL §§ 349 and 350.

The court found that the homepage and virtually all interior pages of the website state that use of the site is subject to the Terms of Use, with each page advising users that they agree to abide by those terms if they continue past the page and use the site, and with each page providing a hyperlink directly to the Terms of Use.  “[I]n the context of agreements made over the internet, New York courts find that binding contracts are made when the user takes some action demonstrating that they have at least constructive knowledge of the terms of the agreement, from which knowledge a court can infer acceptance.” In other words, “[w]here there is no evidence that the offeree had actual notice of the terms of the agreement, the offeree will still be bound by the agreement if a reasonably prudent user would be on inquiry notice of the terms,” a determination turning on the “ ‘[c]larity and conspicuousness of arbitration terms.’ ”  Himber didn’t “sufficiently contest that the layout and language of the website provided reasonably conspicuous inquiry notice of the arbitration provision when he used the website to purchase tickets.” The court gave short shrift to the argument that a user who only used the website to find out what shows were available would have no reason to read the ToU far enough to understand their claim to cover every interaction, online or off, between the parties, even though the beginning of the ToU states: “Welcome! The following are the terms of use (‘Terms’) that govern your use of the Live Nation sites and applications where this appears (collectively, the ‘Site’).”

The court found that Himber manifested assent to be bound by the Terms of Use when he used the website, which gave reasonable notice of the terms, whether or not a user ultimately purchased tickets. “A user who actually notices the Terms of Use … would not be reasonable in believing that provisions following the first paragraph apply only to users purchasing tickets online, not at the box office,” given the language that the terms “govern your use of the [website]” (emphasis added) unqualified by later language stating or reasonably suggesting that the terms apply only to users making online purchases. [Is that what an ordinary consumer would expect “use” to mean in the context of a ticket sales website?  Somehow I doubt it.]

Anyway, even if the scope of the arbitration provision were an issue for the court and not the arbitrator, it was broad enough to cover these claims because it covered “Any dispute or claim relating in any way to your use of the Site, or to products or services sold or distributed by us or through us.”  Himber’s claims depended on the conflict between the prices advertised on the website and the true, unavoidable price, so his claim was related to the use of the website.

Himber also failed in his argument that Live Nation was judicially estopped from taking this position because Ticketmaster, its affiliate, took a contrary position in two earlier, unrelated cases. In those cases, Ticketmaster argued that its arbitration clause wasn’t unconscionable because a customer was free to buy tickets at a box office without being bound by the arbitration clause.  But here, the claims were based on the use of the website to get information + going to the box office, not going to the box office alone, so there was no conflict.

Nor did Himber’s argument that any agreement to arbitrate was induced by misrepresentation get any traction.

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