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9th Cir. Holds Single Website Visit Not Enough To Activate Change in Terms

credit reportThe U.S. Court of Appeals for the Ninth Circuit recently affirmed a trial court’s order compelling arbitration, holding that a single website visit by a consumer long after she entered into a contract with a credit reporting agency (CRA) that contained a change-of-terms provision did not bind the parties to changed terms in the updated contract, including exempting some claims from binding arbitration, because the consumer did not allege that she was aware of the changed terms as required to assent to the new terms.  

A copy of the opinion in Stover v. Experian Holdings, Inc. is available at:  Link to Opinion.

In June 2014, a consumer bought a credit score service from the CRA that provided her with a credit score.  In July 2014, the consumer cancelled the agreement. 

The consumer next visited the CRA’s website in 2018. When the consumer accessed the CRA’s website in 2018, the CRA changed the arbitration provision of the terms to carve-out disputes “arising out of or relating to the” 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 terms provided that all other potential claims were subject to binding arbitration “to the fullest extent permitted by law.”

The day after accessing the CRA’s website in 2018, the consumer filed her putative class action complaint in the federal trial court for the Central District of California seeking damages and injunctive relief for an alleged violation of the federal Fair Credit Reporting Act (FCRA) provision that requires consumer reporting agencies that provide credit scores to “supply the consumer with a credit score that . . . assists the consumer in understanding the credit scoring assessment of the credit behavior of the consumer[.]” 15 U.S.C. § 1681g(f)(7)(A).  The complaint also alleged that the CRA violated California and Florida Unfair Competition Laws due to allegedly unfair and deceptive practices in marketing the credit score service.

In response to the complaint, the CRA moved to compel arbitration of the consumer’s claims. 

The trial court granted the motion to compel arbitration, but held that the 2018 contract terms applied because the 2014 contract “assumed assent to new terms based on the consumer’s use of the” CRA’s website. 

The trial court also concluded that the consumer’s claims did not fall within the contract’s arbitration carve-out because her claims did not arise out of the “information contained in [her] consumer disclosure or report,” as defined by FCRA.

The trial court also determined that the consumer’s claims were not exempt from arbitration under McGill v. Citibank, N.A., 393 P.3d 85, 94 (Cal. 2017), which held that  “a provision in any contract . . . that purports to waive, in all fora, the statutory right to seek public injunctive relief under the [California Unfair Competition Law (UCL)] . . . is invalid and unenforceable under California law,” because the consumer did not seek “public injunctive relief.”

This appeal followed.

Initially, the CRA disagreed that the 2018 terms controlled arguing that a “mere website visit” after the consumer ended their business relationship did not “activate” a change to the prior agreed terms because the consumer did not review and assent to the new terms.

The consumer argued that the trial court correctly applied the 2018 terms, but erred in compelling arbitration despite the McGill rule, because the contract prohibits public injunctive relief and because she sought public injunctive relief.

The Ninth Circuit began its analysis by noting that the consumer agreed to the initial contract terms, but never agreed to the terms that the CRA later modified without notifying her.  The “basic rule of contract law” provides that “[a] contract exists where the parties assent to the same thing in the same sense, so that their minds meet.” 17A Am. Jur. 2d Contracts § 30 (August 2020 Update).

As such, the Ninth Circuit held that “for changes in terms to be binding pursuant to a change-of-terms provision in the original contract, both parties to the contract — not just the drafting party — must have notice of the change in contract terms.”

As the party seeking to enforce the contract, the consumer has the burden to prove that all the elements of a valid contract are present — including mutual assent.  The Ninth Circuit noted that the record did not contain any allegations or evidence that the consumer had notice of the changed terms.  Thus, the Ninth Circuit held that the consumer failed to meet her burden to demonstrate “that the 2018 terms constituted a valid contract between the parties, so the 2014 terms apply.”

The 2014 contract terms required the parties to submit all disputes “to arbitration to the fullest extent allowed by law.”  Under McGill, a contract that waives a party’s right to public injunctive relief in court is not enforceable under California law so the Ninth Circuit analyzed whether the 2014 terms wrongly prohibited judicial resolution of claims seeking public injunctive relief, or prohibited judicial access to the consumer’s claim.

The Ninth Circuit determined that the 2014 agreement does not prohibit judicial resolution of claims seeking public injunctive relief because it only subjects claims to arbitration “to the fullest extent allowed by law — which would presumably exclude claims for public injunctive relief in California.”  This comports with the law and does not render the arbitration provision facially unenforceable.

Moreover, the consumer must allege that she has Article III standing before she may seek public injunctive relief in federal court.  The complaint here fails to allege the threat of future harm that is required for Article III standing when seeking public injunctive relief in federal court. Thus, the McGill rule does not preclude arbitrating the consumer’s California UCL claim.

Therefore, the Ninth Circuit held that the consumer’s claims may be arbitrated under the 2014 contract terms.  The new change-of-terms provision did not bind the parties because both parties did not “have notice that the terms have changed and an opportunity to review the changes.”  Because the consumer did not allege that she reviewed the 2018 changed terms, the changed terms did not create a valid contract between the parties. 

Finally, the 2014 contract allowed courts to resolve public injunctive relief claims, but the consumer lacked Article III standing to maintain this claim. 

Thus, the Ninth Circuit affirmed the trial court’s judgment.

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Ernest Wagner practices in Maurice Wutscher's Commercial Litigation and Consumer Litigation groups, and leads the firm’s Insurance Recovery and Advisory group. Based in Chicago, he also supports the firm’s litigation matters in its Florida office. Ernest has substantial experience in various types of commercial and insurance recovery litigation. He has conducted more than 35 jury trials, and more than 150 arbitrations for plaintiffs and defendants. He has also successfully represented clients in numerous appeals, in various jurisdictions. Ernest earned his Juris Doctor from Emory University School of Law in Atlanta, Georgia, and his Bachelor of the Arts from the University of Iowa. For more information, see

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