September 20, 2010
Fifth Circuit Blesses Vistaprint's Rewards Program Sign-Up Process -- Bott v. Vistaprint USA Inc.
[Post by Venkat]
Bott v. Vistaprint USA Inc., No. 09-20648 (5th Cir.; Aug. 23, 2010).
I recently blogged about an online rewards program class action which survived a motion to dismiss. (In re: Easysaver Rewards Litigation: "Internet Rewards Program Class Action Survives Initial Motion to Dismiss.") Defendants in that case tried unsuccessfully to rely on a trial court's dismissal of a similar class action against Vistaprint. The Fifth Circuit recently affirmed the district court's decision in Vistaprint, endorsing Vistaprint's process for signing up online and its disclosures. The Fifth Circuit issued a per curiam decision, highlighting the reasoning of the district court in Vistaprint.
The Vistaprint and Easysaver cases differ in one important procedural respect: in Vistaprint, there was no dispute about the sign up process and consumer experience. In Easysaver, partially because the sign up process seemed to change over time, the court did not accept as fact the webpages put forth by Easysaver that supposedly represented the consumer experience. [It would be helpful for the court to have actually reproduce the webpages in question in an appendix to the court order.] In both cases, defendants brought an initial motion to dismiss. In Vistaprint, the court granted the motion and dismissed the case. In Easysaver, the court held that motion was properly brought as a summary judgment motion and declined to dismiss the case at the initial stage. (In contrast to Easysaver, in Vistaprint, the plaintiffs did not dispute the authenticity of the webpages submitted by Vistaprint along with its motion to dismiss.)
The Vistaprint district court decision is worth reading because it shows how details in an online transaction matter, and what types of thing courts point to when they decide to not credit the "I didn't read the online disclaimer" argument:
1. the text itself indicated that the rewards program offer was presented after the transaction with Vistaprint;
2. the Vistaprint program had a disclosure which was presented to consumers above the space for entry of the consumers' email address;
3. consumers had to check the box indicating that they had read and agreed to the (rewards program) offer details;
consumers had to enter their email address twice, the second time to confirm that they wished to enroll;
4. the "offer details" specified the terms of the offer and were "in the same size and color as most of the [other] print on the webpage except that the title [was] in bold print . . . ."
The court held that the disclosures were provided in a "clear, prominent, and conspicuous manner," and that:
a consumer cannot decline to read clear and easily understandable terms that are provided on the same webpage in close proximity to the location where the consumer indicates his agreement to those terms and then claim that the webpage, which the consumer has failed to read, is deceptive.
The court also rejected plaintiffs' Electronic Funds Transfer Act claims. With respect to the class of plaintiffs who used credit cards, the court held that the EFTA does not apply to these claims. With respect to the plaintiffs who used debit cards, the court held that there was no EFTA claims because the initial transfers were authorized and defendants did not continue any transfers after plaintiffs provided notice to their financial institutions that the transactions were not initially authorized. In addition to the EFTA claim, the court also dismissed a slew of ancillary claims.
[Oddly, the Vistaprint terms had a forum selection clause which provided for venue in Bermuda (??). The court rejected Vistaprint's attempt to rely on the forum selection clause on the basis that Bermuda's consumer protection rules did not have extraterritorial application.]
I'd slot this case (roughly) in the same category as Scherillo v. Dun & Bradstreet, discussed by Professor Goldman here: "Clickthrough Agreement With Acknowledgement Checkbox Enforced." Both cases contain useful teaching on how careful drafting of online terms can undercut a plaintiff's argument that they didn't read an online contract.
Posted by Venkat at September 20, 2010 02:08 PM | E-Commerce