Arbitration denied again in TCPA lawsuit
- Peter Schneider
- Nov 26
- 7 min read
Updated: Dec 4
Telemarketers often like to play a game - make a bunch of consumer unfriendly terms they are ashamed to show, so they hide them where consumers won't see them.
But then when sued, they try to enforce the terms. Many courts can't stomach it, the latest being Ferrell v. Snapcommerce Holdings, Inc. 2025 WL 3280992 (N.D. Cal. Nov. 25, 2025).
First, the background. Multiple plaintiffs sued Snapcommerce for unwanted text messages, and Snapcommerce moved to compel them into arbitration. Supposedly these multiple plaintiffs went to a website and entered the phone phone number into something like this.
Each of the plaintiffs denied ever visiting the website under oath, and apparently there was no name, signature, email address, mailing address, or IP address linking Plaintiffs to the alleged website and app interactions provided by Snapcommerce.
Depending on the circumstances, it might be better to go with an "I didn't do it" defense, and others it might be better to go with a "the arbitration language isn't binding", or a combination of both.
These plaintiffs did a combination of both, but with a heavy emphasis on the arbitration language not being binding. I've written about this topic previously here. The take away is that websites should not trick visitors into arbitration agreements.
For example, in the image above the terms and conditions link is in small gray text and physically disconnected from Send Code button. And as the plaintiffs pointed out, in the app, once the phone number box is clicked, the keypad blocks view of the text down below.
The plaintiffs argued that the arbitration terms were not conspicuously disclosed and thus were not binding. In my opinion, when you clients didn't opt in, leaning so hard on the "but if they did the terms aren't binding" is a play with its own risks, but one that paid off here.
For an online notice to be reasonably conspicuous, it “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.” Oberstein, 60 F.4th at 515 (quoting Berman, 30 F.4th at 856). “[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.” Nguyen, 763 F.3d at 1179. Thus, if there is a hyperlink, “the fact that a hyperlink is present must be readily apparent.” Berman, 30 F.4th at 857 . . . The Court agrees that the notice provided by Super’s website and app is insufficient . . . “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.” . . . Super, simply put, did not “do more than simply underscore the hyperlinked text.” Berman, 30 F.4th at 857. A link to its terms of use appears in very small, gray font on a white background at the bottom of a page on which it requires users to enter a phone number. The font of this notice is smaller than any other font on the page . . . And the hyperlink to the terms of use is underlined but is not distinguished in any other way. This is insufficient to constitute reasonably conspicuous notice
These are still dangerous waters.
On the more obvious side, and in a lawsuit where the plaintiff did "opt in", the terms and conditions in the image to the left was held to not be binding at the trial court level (opinion below) but that was reversed on appeal in Morrison v. Yippee Ent., Inc., No. 24-7235, 2025 LX 356980 (9th Cir. Aug. 18, 2025).
The appeals court found the hyperlink appeared in bright blue font against a clean white background that stood out from the surrounding text to indicate it was clickable. The hyperlink was also located directly above the "Start subscription" button—precisely where a user would expect it within the natural visual path of completing the subscription process—and alongside the statement that, "[b]y clicking below, you agree to our Terms of Service." The format of Yippee's webpage was also not so visually cluttered that it distracted from the hyperlink, and the presence of other hyperlinks or placement within a multi-line paragraph did not negate its conspicuousness . . . Because we "can fairly assume that a reasonably prudent Internet user would have seen [the hyperlink]" based on these features, there was reasonable notice.
In addition to these visual features, the "context of the transaction" further demonstrates that the Terms were reasonably conspicuous . . . A reasonable user subscribing to Yippee's recurring streaming service would have "contemplate[d] some sort of continuing relationship" that prompted scrutiny of the website for any contractual obligations or terms . . . Even the district court recognized as much. Thus, under the "totality of the circumstances," Yippee's notice was reasonably conspicuous.
But also see Sarhadi v. Pear Health Labs, Inc., No. 24-cv-07921-TLT, 2025 WL 1350033 (N.D. Cal. Apr. 18, 2025). This is another lawsuit where the plaintiff used the website.
Directly underneath the four boxes is a button labeled "Join Aaptiv" that must be clicked to proceed. Id. At the bottom of the page, in small black text on a white background, the notice reads "By joining Aaptiv, you agree to our Terms of Service." Id. The words "Terms of Service" are capitalized and set off with blue, underlined text to indicate they are hyperlinked. Id. The page is uncluttered with a white screen gap between the "Join Aaptiv" button and the notice. The screen does not include any other graphics, hyperlinks, notices.
Here is a warning about minding your language: Plaintiff's arguments would be persuasive if they were not drenched in hyperbole.
The district court upheld this example because it said the page was uncluttered, the link to the terms was conspicuous through black text, underlined, and reasonable font size. This court didn't care about all the white space between the Join button and the terms at the bottom.
Here, while there is some distance between the "Join Aaptiv" button and the notice, this is offset by the fact that there is no intervening text or buttons in between such that the eyes of the user flow to the notice. [I don't know if the plaintiff made the keyboard blocking view of the terms argument that helped in Ferrel]
And then see Kroskey v. Elevate Labs, LLC, No. 5:24-cv-08113-EJD, 2024 WL 1507091 (N.D. Cal. May 27, 2025).
In this next case (also where it was undisputed the plaintiff signed up for services) the sign up screen looked like this.
The Sign Up Page here differs from those in Berman and other similar cases for several reasons. Most notably, unlike the examples depicted above, the page here is free from clutter. Instead, there are four simple boxes where users can choose how to set up an account, separated by significant white space surrounding the Terms & Conditions notice. The hyperlinks are also not buried in text or otherwise placed in a confusing location—the sentence containing the Terms & Conditions notice is the only text in the white space of the Sign Up Page. Further, though the font is grey, it appears clearly against the white background [oddly the background looks gray to me]. Finally, while the hyperlinks are not marked in blue or underlined, they are in bold with the first letters capitalized, making them stand apart from the other text in the sentence. In the context of the clean and simple format of the page, the Court finds that a reasonably prudent internet user would see the notice and understand that the phrase "Terms & Conditions" was a hyperlink to the Terms of Service containing the Arbitration Clause.
*** Update
In case Smith v. Built USA LLC, No. 8:25-cv-01288-MSS-LSG, 2025 LX 576117 (M.D. Fla. Dec. 1, 2025), the an arbitration agreement was found to not be binding as presented.
the Website Terms and Conditions are hyperlinked in a miniscule light gray font on a similar color background . . . The font here is "so small it is barely legible to the naked eye." . . . More so, like Farsian, there is no statement that informs the user that clicking the Sign Up Now button binds them to the terms . . . And while the Terms and Conditions at issue are above [*12] the bright red button, this is not sufficient to shift the analysis in favor of providing inquiry notice . . . The placement, color, and font size of the hyperlinks in the Website Terms and Conditions also indicate a possible intent to camouflage the terms, which "militates strongly against finding the existence of an agreement to arbitrate." . . . In sum, Defendant did not provide sufficient inquiry notice due to the size and color of the font, the placement of the text, and the lack of indication that the Sign Up Now button bound the Plaintiff to the Website Terms and Conditions.
As these court cases show, defeating arbitration agreements isn't an exact science but can be done.
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Note: The opinions in this blog are mine (Peter Schneider) and do not constitute legal advice. If you're considering suing over illegal robocalls or Do Not Call list violations, contact me for a legal consultation.
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