Unreported / Non-Citable
Background
Consumers Travis Schlueter-Beckner and Zach Babka brought proposed class claims against SimpliSafe after buying home-security equipment and enrolling in the company’s monitoring service. SimpliSafe moved to compel arbitration, relying on terms presented both during the hardware purchase and during enrollment in a monitoring trial.
The district court treated the two online transactions differently and compelled only part of the dispute to arbitration. SimpliSafe appealed, arguing that the consumers had agreed to arbitrate all claims and had also agreed to let the arbitrator decide disputes about the arbitration clause’s scope.
The Court’s Holding
The Ninth Circuit agreed that the original hardware checkout did not form an arbitration agreement. Under California law, an online sign-in-wrap agreement is enforceable only when the site gives reasonably conspicuous notice of the terms and the user takes an action that unambiguously signals assent. The checkout presentation did not satisfy that standard.
The later monitoring-service enrollment did. The enrollment screen gave adequate notice, and clicking through manifested assent to the linked terms. Those terms incorporated the American Arbitration Association rules and contained a delegation provision—an agreement assigning threshold questions about arbitrability to the arbitrator. Because that delegation was clear and unmistakable and the consumers did not preserve an unconscionability challenge, the court directed arbitration of all claims, leaving scope disputes to the arbitrator.
Key Takeaways
- California online contracts remain highly screen-specific: a company may lose on one transaction flow and prevail on another.
- Links, surrounding text, button labels, and the action required of the user determine whether notice and assent are adequate.
- Incorporating arbitration rules can provide clear evidence that the parties delegated arbitrability questions to the arbitrator.
- A party opposing arbitration should separately challenge the delegation clause and preserve any unconscionability theory.
- The memorandum is unpublished and generally nonprecedential, but it illustrates how the Ninth Circuit applies California online-contract rules.
Why It Matters
Businesses using clickwrap or sign-in-wrap terms should audit every customer journey, not merely the wording of their terms. A sound arbitration clause cannot cure a screen that fails to provide conspicuous notice, while a properly designed enrollment step may create an enforceable agreement even when an earlier checkout did not.
For litigators, the decision underscores that contract formation and delegation are distinct issues. Evidence should preserve the precise screens shown to the user, and briefing should address assent, unconscionability, and delegation separately.