Lee v. Intelius Inc.

A plaintiff has not entered into a contract to arbitrate with a third party when the third party is insufficiently identified as a contracting party; even if the plaintiff has entered into a contract to purchase, under the Federal Arbitration Act the plaintiff has not entered into a contract to arbitrate.

Donovan Lee made an internet purchase from Intelius of a background check and report. After making the purchase, Lee was sent to a webpage indicating that he had received a free seven-day trial of a “Family Safety Report,” along with an obligation to pay $19.95 per month after his free trial. Approximately a year later, Lee learned that Adaptive Marketing (“Adaptive”), a company separate company from Intelius, had been charging his credit card for the Family Safety Report. Lee, along with other plaintiffs, filed a class action against Intelius, who then “filed a third-party complaint against Adaptive.” Adaptive sought to compel Lee to arbitrate his claims, but the district court denied Adaptive’s motion to compel. Adaptive appealed. The Ninth Circuit noted that the two issues before it were whether Lee had contracted to purchase the Family Safety Report from Adaptive and whether he had agreed to arbitrate with Adaptive. The panel noted that, under Washington Law, a contract must identify the parties to the contract. The webpage that Lee was directed to for the Family Safety Report never identified Adaptive as the party with which Lee was contracting. Thus, Adaptive was not sufficiently identified “as a contracting party to support a conclusion that Lee entered into a contract with Adaptive to purchase the Family Safety Report.” For whether or not Lee had contracted to arbitrate with Adaptive, the panel reasoned that from the information provided on the webpage, a consumer would have assumed that he was consenting to Intelius’s terms and conditions and not Adaptive’s. Therefore, the panel held that Lee never entered into an agreement to arbitrate with Adaptive. AFFIRMED and REMANDED.