Daniel Berman v. Freedom Financial Network LLC

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DANIEL BERMAN; STEPHANIE No. 20-16900
HERNANDEZ; ERICA RUSSELL,
Plaintiffs-Appellees, D.C. No.
4:18-cv-01060-
v. YGR

FREEDOM FINANCIAL NETWORK,
LLC; FREEDOM DEBT RELIEF, LLC; OPINION
FLUENT, INC.; LEAD SCIENCE, LLC,
Defendants-Appellants.

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.

I

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. 1 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

1
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).

II

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. 2

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

2
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
TERMS OF SERVICE & PRIVACY POLICY”).

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.

I

“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.

A

“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
statute—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, 1 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),

1
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.

B

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). 2 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

2
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

II

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), 3
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

3
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
register for the service, and whether the notice’s hyperlinks
are readily identifiable. A court must “[c]onsider[ ] all of
these factors” together. Sellers, 289 Cal. Rptr. 3d at 29. 4

Given the present state of California law, website designers who
4

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.

A

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. 5

Although the notices here are relatively more
conspicuous than the one at issue in Sellers—to say nothing

5
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. 6

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

6
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.

B

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
Privacy Policy,” or even “By continuing with this
transaction, I agree . . .” See Beland v. Expedia, Inc., No.
C086061, 2021 WL 3046742, at **6–7 (Cal. App. July 20,
2021) (in unpublished decision 7 finding sign-in wrap 8
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.

* * *

7
“[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).
8
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.