In a recent case before the United States District Court, the defendants filed a motion to compel arbitration, or alternatively, to dismiss the amended complaint.

The plaintiff was a licensed attorney and real estate broker who buys, renovates and sells homes to her companies. One of the defendants manufactures and sells home security devices, including a “jobsite security kit,” which is a security system for contractors designed for homes under construction. The other defendant is a retail store where the system was purchased. The final decision for both was essentially the same, so for purposes of this article we will deal with only the defendant who manufactures and sells home security devices.

The plaintiff, on behalf of herself and all others similarly situated, filed a complaint against the defendants in the United States District Court. The defendants filed a motion to compel either arbitration, or to dismiss the complaint.

The plaintiff alleged she purchased her first jobsite kit from the exclusive seller of the jobsite kit’s website. After a series of purchases, the plaintiff installed the jobsite kit at one of her residential jobsite construction locations. The plaintiff alleged one of the “alarms” on the jobsite kit was triggered, which is when she purportedly discovered that the defendant does not automatically call the authorities without her making such request through the mobile application. The plaintiff’s claims were premised on her belief that the defendant falsely represented when she purchased the jobsite kit that defendant would “automatically” call authorities if the jobsite kit “alarm” was triggered.

The defendant provides its product and services to customers pursuant to a contractual “Terms of Service,” which includes a mandatory arbitration agreement. The defendant’s customers must download the defendant’s app and create an account with the defendant to set up and manage the defendant’s devices, including the jobsite kit and a “Protect Pro” subscription.

The court pointed out that when activating the professional monitoring feature through Protect Pro, customers must proceed through a page that specifically states, “Please take a moment to review the terms and conditions. I agree to accept these terms for both professionally monitored and self-monitored defendant’s alarms.” The blue font denotes a hyperlink that navigates the customer to the defendant’s term of service for review. The customer must press the “I agree” button to proceed and enroll. As a result, by clicking the “I agree” button, a customer affirmatively accepts the defendant’s terms of service, including the arbitration agreement.

The court indicated that a written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract. The court went on to indicate that the FAA establishes that, as a matter of federal law, any doubts concerning the scope of arbitriable issues should be resolved in favor of arbitration.

With respect to agreements entered into online, courts have found that “browsewrap” agreements are unenforceable, but that “clickwrap” agreements and “modified clickwrap” or “browsewrap resembles — clickwrap or “sign-up wrap” agreements — are enforceable.

In the case at hand, the plaintiff admitted that she purchased a Protect Pro subscription on the defendant’s website for each of her jobsite kits and activated the monitoring settings using her smartphone application. In addition, the plaintiff admitted that she purchased the jobsite kits. The plaintiff accepted the defendant’s terms of service by clicking the “purchase” button. Immediately to the left of the “purchase” button, the plaintiff was informed that “by continuing, you agree to defendants’ terms of service,” with a hyperlink to defendant’s terms of service for her review.

The court further pointed out that it is well established that “it is of no consequence whether a consumer actually clicks a hyperlink to read the terms containing the arbitration provision.”

Therefore the court concluded that the plaintiff agreed to defendant’s terms of service, which included the arbitration agreements. Therefore the Motion to Compel Arbitration was granted.