In Stover v. Experian Holdings, the Ninth Circuit decided an issue of first impression for the circuit, holding that a party’s single visit to a website four years after her original visit—when she agreed to an online contract containing a change-of-terms provision—is not enough to bind her to an arbitration provision that she wasn’t aware of and that appeared in a later version of the contract.
The panel held “a mere website visit after the end of a business relationship” is not enough “to bind parties to changed terms in a contract pursuant to a change-of-terms provision in the original contract.”
In something of a departure from the typical case involving modification of an online contract, the plaintiff in the case, Rachel Stover, asserted that the updated arbitration provision did apply, while the defendant website operator, Experian, argued that the parties remained subject to the original terms.
Ms. Stover is a consumer who bought a credit score service from Experian’s website in 2014. At that time, she agreed via a click acceptance to the website’s then-current terms of service, which stated that claims arising out of the transaction were subject to arbitration and contained a class action waiver.
Stover cancelled the agreement a month later.
Four years after that, in 2018, Stover visited Experian’s website just one time. At that point the website’s terms and conditions had been updated to exclude from the arbitration provision cases “arising out of or relating to the Fair Credit Reporting Act (FCRA) or other state or federal laws relating to the information contained in your consumer disclosure or report, including but not limited to claims for alleged inaccuracies in your credit report or the information in your credit file.”
The next day Stover brought a putative class action against Experian alleging—among other things—that the company violated the FCRA. Experian moved to compel arbitration of Stover’s claims.
The Central District of California granted Experian’s motion to compel arbitration, but it did so based on the 2018 arbitration provision that contained the carve-out for FCRA claims rather than on the original 2014 provision that did not include the carve-out. The district court held that the 2018 terms applied because “the plain language of the 2014 terms . . . assumed assent” to the updated terms based on Stover’s subsequent use of Experian’s website, but that her claims were not within the FCRA carve-out in the updated arbitration provision because the claims did not arise out of “information contained in [her] consumer disclosure or report.”
The district court also rejected Stover’s argument that the arbitration provision was unenforceable under McGill v. Citibank, which held that a contract that waives a person’s right to seek public injunctive relief in court is invalid under California law. According to the court, McGill did not apply because Stover was not seeking public injunctive relief.
Stover, on the other hand, argued that the district court was correct in applying the website’s 2018 terms, but mistaken when it failed to enforce the McGill rule because Stover was, in fact, seeking injunctive relief.
The Ninth Circuit panel held that the 2014 arbitration provision, which did not include the FCRA carve out, applied. In order to bind parties to new terms pursuant to a change-of-terms provision consistent with basic principles of contract law, the panel held, both parties must have notice that the terms have changed and have had an opportunity to review the changes. Stover did not have such notice or opportunity to review the 2018 terms, so the updated terms did not apply to her.
The panel then went on to hold that the 2014 arbitration provision was not unenforceable under McGill, because “the arbitration agreement does not flatly prohibit a plaintiff seeking public injunctive relief in court” and that Stover did not allege the requisite “Article III standing to bring such a claim.”
Accordingly, the Ninth Circuit panel affirmed the district court’s holding that Stover was required to arbitrate her claims against Experian.