In the Courts: Zappos and Prop 35

Zappos Browsewrap Agreement Unenforceable

Zappos had sought to block a class action lawsuit stemming from its data breach earlier this year by reliance on terms and conditions requiring arbitration of such claims and prohibiting class actions.  The problem is, however, is that Zappos’ terms and conditions are what is known as a “Browsewrap Agreement” in that the user is never required to indicate assent to the terms but is supposed to be bound based on browsing on the site alone.    A Nevada federal judge found the agreement to be unenforceable explaining

we cannot conclude that Plaintiffs ever viewed, let alone manifested assent to, the Terms of Use. The Terms of Use is inconspicuous, buried in the middle to bottom of every webpage among many other links, and the website never directs a user to the Terms of Use. No reasonable user would have reason to click on the Terms of Use. . . .  [The] advent of the Internet has not changed the basic requirements of a contract, and there is no agreement where there is no acceptance, no meeting of the minds, and no manifestation of assent. A party cannot assent to terms of which it has no knowledge or constructive notice, and a highly inconspicuous hyperlink buried among a sea of links does not provide such notice. Because Plaintiffs did not assent to the terms, no contract exists, and they cannot be compelled to arbitrate.

Court Blocks Prop 35 Requirement that Sex Offenders Register Online Identities

Proposition 35 which increases penalties for sex trafficking was overwhelmingly approved by 81 percent of California voters.  Prop 35 is the brainchild of  former Facebook CEO Chris Kelly.  A federal judge, however, has temporarily blocked application of provisions requiring that sex offenders reveal their online identities, noting that “Plaintiffs have raised serious questions about whether the challenged sections of [Proposition 35] violate their First Amendment right to free speech and other constitutional rights.”    Courts in Louisiana and Nebraska have found restrictions on access to social media by sex offenders to be unconstitutional, but an Indiana court has upheld restrictions.

More Info:  How Zappos’ User Agreement Failed In Court and Left Zappos Legally Naked, Forbes’ Tertium Quid Blog; Eric Goldman discussing Zappos ruling on Cyber Law & Business Report;   Judge blocks California’s new ban on anonymity for sex offenders; ; Ars Technica; Courts Split on Social Media Bans for Sex Offenders, BNA Social Media Blog