Lessons from Bumble’s Choice of Law Clause–King v. Bumble
This is a lawsuit against the dating app “Bumble” challenging Bumble’s refund and renewal practices. Plaintiffs allege Bumble violated two California statues: (1) the Dating Service Law, and (2) the Automatic Renewal Law. The first requires dating services to give subscribers a “cooling off” period and notice of their statutory rights. The second is similar to a portion of the federal statute known as the Restoring Online Shoppers Confidence Act.
Bumble is based in Texas (Austin) and the United Kingdom. It includes a New York choice of law provision in its terms of service. The dispute largely centers on whether this clause is effective.
Whether Bumble’s Choice of Law Clause Covered the Dispute: As an initial matter, plaintiffs argued the clause is ambiguous, since the terms contain references to “applicable law” and because the clause is not clear it applies to extra-contractual matters. The court rejects these arguments. While the clause refers to applicable law, it could fairly be read to mean New York law. In other cases, the clauses in question actually referenced local, state, and federal laws and regulations. Second, the scope of the clause was sufficiently broad. It stated that the user’s “access to the App, [any] content, and any [m]ember content, as well as these Terms are governed and interpreted by the laws of the State of New York.” The court held this covered plaintiffs’ claims, which challenged the terms as well as access to the Bumble platform.
The Choice of Law Analysis: The next question is whether Bumble could articulate a reasonable basis to require its users to agree to New York law. Bumble had a significant number of users in New York and had an interest in having a uniform body of law apply to its numerous users. Bumble easily satisfied this threshold, so the question became whether either of the laws in question embodied a fundamental policy of California (such that the court should consider overriding the choice of law clause).
The Dating Service Law contains an anti-waiver provision but does not contain language saying it represents the fundamental policy of the State of California. Thus, the choice of law clause is enforceable against this law. In contrast, the Automatic Renewal Law does contain a strong statement of legislative intent. Bumble relied on the fact that the statute does not confer a private right of action, but the court says this is not dispositive. The court also notes that California law conflicts with New York law on the issue of automatic renewal and confers greater rights to a consumer (the New York law is of much more limited applicability). Finally, the court finds that California has a greater interest than New York in enforcing this rule. Bumble is actually based in the UK and Texas, and it does not appear to have a connection to New York beyond the users it has there. The court concludes that the choice of law clause is not enforceable against the Automatic Renewal Law claims.
The court also states that plaintiffs state a claim under California’s broad unfair competition statute. The plaintiff alleging this particular claim said that the online interface did not clearly advise him that the subscription to Bumble’s app would continue until cancelled or that his affirmative consent is required.
This case offers a valuable lesson for drafters of online terms. Those who don’t regularly draft such things may think that a choice of law clause merely involves saying the parties agree that the agreement will be governed by a particular jurisdiction’s law. As the case shows, the analysis can be slightly more nuanced. On a related note, picking New York as the jurisdiction whose laws would apply is an interesting choice for a company with connections to the United Kingdom and Texas. Understandably, companies would want to try to escape the web of regulation in California, but one wouldn’t think that New York would necessarily be the first choice as an alternative.
The same goes for lawmakers. Legislation that is intended to apply notwithstanding a choice of law clause that points to another jurisdiction’s laws must contain specific language before a court will even consider applying the law.
This is not the first case where an online dating site has addressed the Dating Service Law. We blogged about Grindr’s run-in with the statute here.
Finally, the case is a reminder that auto-renewal should be accompanied by clear notice to the user, and how this is presented to the user on a mobile device will end up being important.
Case citation: King v. Bumble Trading, 2019 U.S. Dist. LEXIS 112916 (N.D. Cal. Jul. 8, 2019)