This case is fodder for Nancy Kim’s work on wrap contracts.

In 2008, Donovan Lee purchased an Internet background check and report from a company called Intelius.  Lee confirmed this purchase when he clicked “yes” on Itelius’s webpage, where its name was the only company name to appear.  In fine print on that page, he was informed that by clicking yes and looking at the report he was seeking he was also agreeing to a seven-day free trial of a “Family Safety Report” for which he would be billed $19.95/month after the seven-day trial lapsed. Lee noticed the monthly charges, from a company called Adaptive Marketing, after the company had been charging his credit card $19.95 for about a year.   Lee and other named plaintiffs brought a state-law class action against Intelius, which impleaded Adaptive Marketing as a third-party defendant.

Claiming that Lee had agreed to arbitrate any claims he would have against Adaptive Marketing when he clicked “agree” on Intelius’s website, Adaptive Marketing moved to compel arbitration.  The District Court denied that motion, and on December 1th, the Ninth Circuit affirmed in Lee v. Intelius, Inc.

The Court’s description of the Intelius webpage’s architecture is quite elaborate.  It seems that Lee was lured into his trial membership with Adaptive Marketing when he took a two-question survey in return for $10 cash back (which he claims he never received) should he try “Family Safety Report.”  After taking the survey, it appears that Lee had the option of just seeing the background check that he was interested in or also getting the Family Safety Report on terms provided through another link.  The “yes” button was large and orange.  The “no” button was smaller and featured a smaller font.  Lee testified that he did not read the text of the smaller button, as his eye was drawn to the large orange button.  He also did not read Intelius’s terms and conditions, which included an arbitration clause.

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