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Court of Appeal:
Text on Website Deterred Clicking Through to ‘Terms of Use,’ Voiding Arbitration Provision
By a MetNews Staff Writer
Div. One of the Fourth District Court of Appeal, in a 2-1 decision, yesterday countermanded an order compelling arbitration in each of five consolidated cases, holding that the marketer of an app with a medical purpose affirmatively misrepresented the nature of the “terms of use,” thus deterring users from clicking on a link to the agreement and invalidating an arbitration provision contained in it.
The opinion by Justice Truc T. Do, concurred in by Justice Julia C. Kelety, directs the issuance of a writ of mandate ordering the San Diego Superior Court to vacate its orders by Judge Timothy Taylor sending the cases to arbitration. Acting Presiding Justice Joan K. Irion dissented.
In each of the cases, it is alleged that the Dexcom G6 Continuous Glucose Monitoring System, which includes a subcutaneous sensor patch that is designed to measure a person’s blood glucose level, malfunctioned, resulting in injury to four diabetes sufferers and the death of a fifth one. Each user downloaded a “G6 App” that enables seeing the data on a device such as an iPhone.
Hyperlink Provided
Downloading requires checking a box that says: “I agree to Terms of Use.” A hyperlink is provided to a page containing the agreement.
Under the heading, “Legal” and above the box is this message:
“You understand and agree that your use of this website or any DexCom Inc. mobile application or software platform for your DexCom continuous glucose monitor is subject to the Terms of Use, Privacy Policy and any other acknowledgements listed below. By ticking the boxes below you understand that your personal information, including your sensitive health information, will be collected, used and shared consistently with the Privacy Policy and Terms of Use. You further understand that personal information and sensitive personal information will be stored and processed by DexCom, Inc., and/or its affiliate, SweetSpot Diabetes Care, Inc. in the United States, which may have different data protection laws than the country in which you reside.”
Do’s Opinion
Do wrote:
“We cannot conclude that a reasonably prudent user in the position of the plaintiffs would understand after reading this text that the Terms of Use were intended to govern any matters other than the scope of the user’s waiver of privacy rights and the management of the user’s personal information.”
She added:
“Because privacy rights and the collection, use, and sharing of personal information were the very matters implicated by the launch of the G6 App—an app that facilitated the transmission of the user’s glucose data to a personal mobile device—the user would have no reason to suspect the agreement, as proposed on the screen, was unduly limited….
“A user unconcerned about others’ possession of their personal information—as was likely to be the case, given the nature of the app—would have no reason to inquire further.”
Generally Enforceable
The jurist declared:
“Although a clickwrap agreement—one in which an internet user accepts a website’s terms of use by clicking an ‘I agree’ or ‘I accept’ button, with a link to the agreement readily available—is generally enforceable, Dexcom’s G6 App clickwrap agreement is not. We find that Dexcom undid whatever notice it might have provided of the contractual terms by explicitly telling the user that clicking the box constituted authorization for Dexcom to collect and store the user’s sensitive, personal health information. For this reason, Dexcom cannot meet its burden of demonstrating that the same click constituted unambiguous acceptance of the Terms of Use, including the arbitration provision. Consequently, arbitration agreements were not formed with any of the plaintiffs.”
She also observed that a user would not be apt to appreciate that the agreement extended to the entire monitoring system not only the optional app.
Irion’s Dissent
Irion said in her dissent:
“An enforceable agreement is formed online when a website provides reasonably conspicuous notice of the terms to which a consumer will be bound and the consumer takes some action, such as clicking a button or ticking a box, that unambiguously manifests assent to the terms….I… conclude that by using the G6 App, which required ticking the box next to ‘I agree to Terms of Use,’ plaintiffs unambiguously manifested their assent to the Terms of Use, including the agreement to arbitrate disputes with Dexcom.”
Disputing the majority’s view that Dexcom “undid” the notice, she wrote:
“That notification contained no words of limitation (e.g., exclusively, limited to, only, solely) that would restrict the subject matter to which the Terms of Use applied to anything narrower than the uses mentioned in the first sentence….Rather, it provided as an example of what was subject to the Term of Use a topic likely to be of concern to a user of software to receive data from a continuous glucose monitoring device, namely, collection and sharing of ‘sensitive health information.’ ”
Irion added that the majority’s conclusion “runs afoul of the rule that we should, if possible, interpret language to give effect to a contract rather than to make it void” and contravenes “the strong public policy in favor of arbitration as an expeditious and cost-effective form of dispute resolution.”
The case is Herzog v. Superior Court (Dexcom), 2024 S.O.S. 1636.
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