Applebaum v. Lyft, Inc.

Filing 53

OPINION AND ORDER: The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the parties arguments are either moot or without merit. For the foregoing reasons, Lyft's motion to compel arbitr ation pursuant to the FAA is granted. The Clerk of Court is directed to close all pending motions. The parties should submit a proposed order to the Court by July 10, 2017, in accordance with this decision that directs the parties to arbitrate the ir dispute. If the parties cannot agree to a jointly proposed order, each party may submit a proposed order to the Court by July 10, 2017, and any objections to the other sides order by July 12, 2017. The action is stayed pending the resolution of the arbitration. See Katz v. Cellco P'ship, 794 F.3d 341, 343 (2d Cir. 2015) (The FAA "requires a stay of proceedings when all claims are referred to arbitration and a stay [is] requested."). (Signed by Judge John G. Koeltl on 6/26/2017) (js)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
────────────────────────────────────
APPLEBAUM, on Behalf of Himself and
All Other Persons Similarly
Situated,

16-cv-07062 (JGK)
OPINION AND ORDER

Plaintiff,
- against LYFT, INC.,
Defendant.
────────────────────────────────────
JOHN G. KOELTL, District Judge:
The defendant, Lyft, Inc. (“Lyft”), is a transportation
company that connects consumers to drivers through its mobile
application (the “Lyft App”). The plaintiff, Josh Applebaum, on
behalf of a purported class alleges that Lyft overcharges its
New York City metropolitan area consumers by charging them the
non-discounted cash price for tolls, as opposed to the
discounted rate that Lyft’s drivers may receive by using “E-Z
Pass.” The plaintiff has asserted claims for violation of N.Y.
Gen. Bus. L. § 349 and unjust enrichment. Lyft has moved to
dismiss or, in the alternative, stay the action, and to compel
arbitration pursuant to the Federal Arbitration Act (“FAA”), 9
U.S.C. § 1 et seq.
The plaintiff alleges diversity of citizenship jurisdiction
pursuant to 28 U.S.C. § 1332(d)(2). Am. Compl. ¶ 9.

1

I.
The following facts are taken from the parties’
submissions.
Lyft is a Delaware company with its principal place of
business in California. Am. Compl. ¶¶ 1, 8. Lyft “facilitates
peer-to-peer ridesharing by connecting passengers who need a
ride with available Lyft drivers” through the Lyft App, which is
available for download on smartphones. Am. Compl. ¶¶ 2, 13. Lyft
charges consumers for rides “using Lyft’s rates plus additional
rates, if applicable, such as surcharges and tolls.” Am. Compl.
¶ 17.
The plaintiff is a citizen of New York. Am. Compl. ¶ 7. The
plaintiff alleges that bridges and tunnels in the New York City
metropolitan area charge tolls at two rates, a non-discounted
cash rate and a discounted rate for drivers that use the “E-Z
Pass electronic toll collection system,” which automatically
charges drivers each time they drive through a tunnel or bridge.
Am. Compl. ¶¶ 19-20.
The plaintiff alleges that, on May 30, 2016, he used the
Lyft App to arrange a ride from New York City to New Jersey. Am.
Compl. ¶ 24. The plaintiff alleges that Lyft overcharged him by
$2.50 because he was charged the non-discounted cash rate of
$15.00 for the “Holland Tunnel toll,” instead of the discounted
“E-Z Pass rate” of $12.50 that his driver actually paid. Am.
2

Compl. ¶ 25. The plaintiff claims that Lyft misled consumers --including the plaintiff himself --- into believing that they
would be charged the discounted rate. Am. Compl. ¶ 32.
To connect to a driver through Lyft, the plaintiff had to
first download the Lyft App and register with Lyft, including by
creating a registered profile. Lauzier Decl. ¶¶ 2, 4. The Lyft
App is free to download; a consumer will not be charged until
after the consumer creates a registered profile and connects to
a driver through the Lyft App.
On or around April 6, 2016 --- before the alleged
overcharge --- the plaintiff created his registered profile.
Ajmani Decl. ¶ 4. At the time, the registration process required
the plaintiff to input certain information into a series of
screens presented on his smartphone. Applebaum Decl. ¶ 3. The
plaintiff was asked to provide Lyft with certain information,
such as his name and e-mail address. Lauzier Decl. ¶ 4. The
plaintiff was also asked to supply payment information (for
example, a credit card number); however, the plaintiff had the
option of temporarily bypassing this step until he first
requested a ride. Lauzier Decl. ¶ 4. Eventually, the plaintiff
was presented with the following screen 1:

1

The screens in this Opinion and Order are not reproduced to
scale. The appearance of any screen might differ for a consumer
in certain irrelevant respects depending upon certain factors,
3

Lauzier Decl. ¶ 6. The plaintiff could not click the pink
“Next” bar (which was necessary to create a registered profile)
until he entered his phone number into the “Phone” field and
clicked the box (the “Box”) adjacent to the phrase “I agree to
Lyft’s Terms of Services.” Lauzier Decl. ¶¶ 4, 6. The plaintiff
entered his phone number and clicked the Box as part of the
registration process. Ajmani Decl. ¶ 4.
The light blue-texted “Terms of Services” hyperlinked to a
separate scrollable page containing Lyft’s “February 8, 2016
Terms of Services.” Ajmani Decl. ¶ 4; Ajmani Decl., Ex. 2 (The
February 8, 2016 Terms of Services); Lauzier Decl. ¶ 6. Clicking
the hyperlink was not required to create the registered profile;
such as the type of smartphone the consumer used and the
consumer’s mobile service provider.
4

indeed, the plaintiff swears that he did not read the February
8, 2016 Terms of Services, and that he did not at the time
knowingly agree to any arbitration agreement. Applebaum Decl. ¶¶
5-6.
The February 8, 2016 Terms of Services provided that: “THIS
FOLLOWING USER AGREEMENT DESCRIBES THE TERMS AND CONDITIONS ON
WHICH LYFT, INC. OFFERS YOU ACCESS TO THE LYFT PLATFORM.” Ajmani
Decl., Ex. 2 at 1. The contract defined the “Lyft Platform” as
the “Lyft application, website, and technology platform.” Ajmani
Decl., Ex. 2 at 1.
Paragraph 17 of the contract entitled “Agreement to
Arbitrate All Disputes and Legal Claims” provided:
You and We agree that any legal disputes or claims
arising out of or related to the Agreement (including
but not limited to the use of the Lyft Platform and/or
the Services, or the interpretation, enforceability,
revocability, or validity of the Agreement, or the
arbitrability of any dispute), that cannot be resolved
informally shall be submitted to binding arbitration
in the state in which the Agreement was performed. The
arbitration
shall be
conducted
by
the
American
Arbitration
Association
under
its
Commercial
Arbitration Rules (a copy of which can be obtained
here), or as otherwise mutually agreed by you and we.
Any judgment on the award rendered by the arbitrator
may be entered in any court having jurisdiction
thereof. Claims shall be brought within the time
required by applicable law. You and we agree that any
claim, action or proceeding arising out of or related
to the Agreement must be brought in your individual
capacity, and not as a plaintiff or class member in
any purported class, collective, or representative
proceeding. The arbitrator may not consolidate more
than one person’s claims, and may not otherwise

5

preside over any form of a representative, collective,
or class proceeding.
YOU ACKNOWLEDGE AND AGREE THAT YOU AND LYFT ARE EACH
WAIVING THE RIGHT TO A TRIAL BY JURY OR TO PARTICIPATE
AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS
ACTION OR REPRESENTATIVE PROCEEDING.
Ajmani Decl. ¶ 8. The pink-texted “here” hyperlinked to the
American Arbitration Association’s Commercial Arbitration Rules.
Ajmani Decl., Ex. 2 ¶ 17.
The screen that the plaintiff saw on April 6, 2016 with the
header “Add phone number” and the hyperlink to the February 8,
2016 Terms of Service represented a marked departure from the
previous ways in which Lyft presented its contracts to
consumers. For example, a consumer registering with Lyft in 2014
would have been presented at some point during that registration
process with the following screen containing Lyft’s July 28,
2014 Terms of Service:

6

Weiss Decl. ¶ 2; Weiss Decl., Ex. A at 4 (noting the date
of the applicable Terms of Service). This screen contained the
entire July 28, 2014 Terms of Service and was scrollable,
meaning that a consumer could read the entire contract without
clicking any hyperlinks. Weiss Decl. ¶ 2. A consumer could not
register with Lyft without clicking the teal “I accept” bar.
Weiss Decl. ¶ 2.
The plaintiff initiated this action on September 9, 2016.
Weiss Decl. ¶ 2.
Lyft updated its Terms of Service on September 30, 2016.
Ajmani Decl., Ex. 3 (The September 30, 2016 Terms of Service).
Any existing Lyft customer (such as the plaintiff) that accessed
the Lyft App after the update was automatically presented with

7

the following screen containing Lyft’s September 30, 2016 Terms
of Service:

Laufer-Edel Reply Decl. ¶ 2. Lyft’s method of presenting
the September 30, 2016 Terms of Service to its existing
customers who had already registered with Lyft resembles Lyft’s
2014 method for presenting its contracts to new customers during
the initial 2014 registration process. The screen contained the
entire September 30, 2016 Terms of Service and was scrollable.
Laufer-Edel Reply Decl. ¶ 3. An existing Lyft customer could not
book a ride after September 30, 2016 unless the customer clicked
the pink “I accept” bar. Laufer-Edel Reply Decl. ¶ 3.
8

As reflected in the above image, the screen that a customer
saw after the update (in other words, without any scrolling)
stated in its header: “Before you can proceed you must read &
accept the latest Terms of Service.” The screen also stated the
following regarding arbitration:
PLEASE BE ADVISED: THIS AGREEMENT CONTAINS PROVISIONS
THAT GOVERN HOW CLAIMS YOU AND LYFT HAVE AGAINST EACH
OTHER CAN BE BROUGHT (SEE SECTION 17 BELOW). THESE
PROVISIONS WILL, WITH LIMITED EXCEPTION, REQUIRE YOU
TO SUBMIT CLAIMS YOU HAVE AGAINST LYFT TO BINDING AND
FINAL ARBITRATION ON AN INDIVIDUAL BASIS, NOT AS A
PLAINTIFF OR CLASS MEMBER IN ANY CLASS, GROUP OR
REPRESENTATIVE ACTION OR PROCEEDING. AS A DRIVER, YOU
HAVE AN OPPORTUNITY TO OPT OUT OF ARBITRATION WITH
RESPECT TO CERTAIN CLAIMS AS PROVIDED IN SECTION 17.
A customer could click the light blue-texted “SEE SECTION
17 BELOW” to jump to paragraph 17 of the September 30, 2016
Terms of Service entitled “DISPUTE RESOLUTION AND ARBITRATION
AGREEMENT” (alternatively, the customer could scroll through the
contract to read that paragraph). Ajmani Decl., Ex. 3 at 1.
Paragraph 17 set forth extensive information related to the
arbitrability of any claims involving Lyft. Paragraph 17(a),
which was sub-titled “Agreement to Binding Arbitration Between
You and Lyft,” provided:
YOU AND LYFT MUTUALLY AGREE TO WAIVE OUR RESPECTIVE
RIGHTS TO RESOLUTION OF DISPUTES IN A COURT OF LAW BY
A JUDGE OR JURY AND AGREE TO RESOLVE ANY DISPUTE BY
ARBITRATION, as set forth below. This agreement to
arbitrate (“Arbitration Agreement”) is governed by the
Federal
Arbitration Act
and
survives
after
the
Agreement terminates or your relationship with Lyft
ends. ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE
9

PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND
CLASS ACTIONS ARE NOT PERMITTED. Except as expressly
provided below, this Arbitration Agreement applies to
all Claims (defined below) between you and Lyft,
including
our
affiliates,
subsidiaries,
parents,
successors and assigns, and each of our respective
officers,
directors,
employees,
agents,
or
shareholders.
Except as expressly provided below, ALL DISPUTES AND
CLAIMS BETWEEN US (EACH A “CLAIM” AND COLLECTIVELY,
“CLAIMS”) SHALL BE EXCLUSIVELY RESOLVED BY BINDING
ARBITRATION SOLELY BETWEEN YOU AND LYFT. These Claims
include, but are not limited to, any dispute, claim or
controversy, whether based on past, present, or future
events, arising out of or relating to: this Agreement
and prior versions thereof (including the breach,
termination, enforcement, interpretation or validity
thereof), the Lyft Platform, the Services . . . your
relationship with Lyft . . . payments made by you
. . . unfair competition . . ., claims arising under
federal or state consumer protection laws . . . and
state statutes, if any, addressing the same or similar
subject matters, and all other federal and state
statutory
and
common
law
claims.
All
disputes
concerning the arbitrability of a Claim (including
disputes
about
the
scope,
applicability,
enforceability,
revocability
or
validity
of
the
Arbitration
Agreement)
shall
be
decided
by
the
arbitrator, except as expressly provided below.
BY AGREEING TO ARBITRATION, YOU UNDERSTAND THAT YOU
AND LYFT ARE WAIVING THE RIGHT TO SUE IN COURT OR HAVE
A JURY TRIAL FOR ALL CLAIMS, EXCEPT AS EXPRESSLY
OTHERWISE PROVIDED IN THIS ARBITRATION AGREEMENT. This
Arbitration
Agreement
is
intended
to
require
arbitration of every claim or dispute that can
lawfully be arbitrated, except for those claims and
disputes which by the terms of this Arbitration
Agreement are expressly excluded from the requirement
to arbitrate.
Ajmani Decl., Ex. 3 ¶ 17(a). Paragraph 17 set forth other
information related to the resolution of disputes with Lyft,
such as the “Prohibition of Class Actions and Non-Individualized
10

Relief,” “Rules Governing the Arbitration,” “Arbitration Fees
and Awards,” “Location and Manner of Arbitration,” and “Optional
Pre-Arbitration Negotiation Process.” See Ajmani Decl., Ex. 3 ¶
17(b-i).
The plaintiff accessed the Lyft App on November 22, 2016,
and clicked “I accept” when he was presented with the screen
containing the September 30, 2016 Terms of Service. Ajmani Reply
Decl. ¶ 3.
Lyft initially moved to compel arbitration based on the
February 8, 2016 Terms of Service. In their briefing on that
motion, Lyft argued for the first time in its reply papers that
the plaintiff’s acceptance of the September 30, 2016 Terms of
Service showed that the plaintiff had no opposition to
arbitrating his claims pursuant to the February 8, 2016 Terms of
Service. Lyft Reply Mem. at 10. On March 17, 2017, this Court
ordered supplemental briefing on whether the plaintiff had
agreed to arbitrate his claims pursuant to his alleged
acceptance of the September 30, 2016 Terms of Service. See Dkt.
42.
This case thus presents two issues: First, whether the
plaintiff agreed to arbitrate his claims pursuant to the
February 8, 2016 Terms of Service; and second, whether the
plaintiff agreed to arbitrate his claims pursuant to the
September 30, 2016 Terms of Service.
11

II.
Under 9 U.S.C. § 4, “a district court must enter an order
to arbitrate upon being satisfied that the making of the
agreement for arbitration or the failure to comply therewith is
not in issue.” Moses H. Cone Mem’l Hosp. v. Mercury Constr.
Corp., 460 U.S. 1, 22 n.27 (1983) (internal quotation marks
omitted). Pursuant to the FAA, “a court asked to stay
proceedings pending arbitration in a case covered by the Act has
essentially four tasks: first, it must determine whether the
parties agreed to arbitrate; second, it must determine the scope
of that agreement; third, if federal statutory claims are
asserted, it must consider whether Congress intended those
claims to be nonarbitrable; and fourth, if the court concludes
that some, but not all, of the claims in the case are
arbitrable, it must then determine whether to stay the balance
of the proceedings pending arbitration.” Genesco, Inc. v. T.
Kakiuchi & Co., Ltd., 815 F.2d 840, 844 (2d Cir. 1987)
(citations omitted). The first two tasks are at issue here.
“The determination of whether parties have contractually
bound themselves to arbitrate a dispute --- a determination
involving interpretation of a state law --- is a legal
conclusion.” Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 26
(2d Cir. 2002) (Sotomayor, J.). In answering that question, “the
court applies a standard similar to that applicable for a motion
12

for summary judgment. If there is any issue of fact as to the
making of the agreement for arbitration, then a trial is
necessary.” Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir.
2003) (citing 9 U.S.C. § 4).
“Arbitration clauses are a matter of contract law and, if
valid, should be enforced.” DuBois v. Macy’s East Inc., 338 F.
App’x 32, 33 (2d Cir. 2009) (summary order). “[T]he ultimate
question of whether the parties agreed to arbitrate is
determined by state law.” Bell v. Cendant Corp., 293 F.3d 563,
566 (2d Cir. 2002). Thus, “[w]hen deciding whether the parties
agreed to arbitrate a certain matter,” courts generally “should
apply ordinary state-law principles that govern the formation of
contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S.
938, 944 (1995). Under New York law, which the parties agree
applies in this case, “A party to an agreement may not be
compelled to arbitrate its dispute with another unless the
evidence establishes the parties’ clear, explicit and
unequivocal agreement to arbitrate.” God’s Battalion of Prayer
Pentecostal Church, Inc. v. Miele Assocs., LLP, 845 N.E.2d 1265,
1267 (N.Y. 2006) (internal quotation marks omitted). Although
the arbitration agreement must be in writing, “There is no
requirement that the writing be signed so long as there is other
proof that the parties actually agreed on it.” Crawford v.

13

Merrill Lynch, Pierce, Fenner & Smith, Inc., 319 N.E.2d 408, 412
(N.Y. 1974) (internal quotation marks omitted); see also
Rightnour v. Tiffany & Co., No. 16-CV-3527 (JGK), 2017 WL
878448, at *4 (S.D.N.Y. Mar. 6, 2017).
It is common ground that a court rather than an arbitrator
should decide whether a valid agreement to arbitrate existed.
See Republic of Ecuador v. Chevron Corp., 638 F.3d 384, 392 (2d
Cir. 2011). Lyft bears the initial burden of showing the
existence of an agreement to arbitrate. See Crawley v. Macy's
Retail Holdings, Inc., No. 15 CIV. 2228 (KPF), 2017 WL 2297018,
at *4 (S.D.N.Y. May 25, 2017). Conversely, the plaintiff, as the
party “to an arbitration agreement seeking to avoid
arbitration[,] . . . [would] bear[] the burden of showing the
agreement to be inapplicable or invalid.” Harrington v. Atl.
Sounding Co., 602 F.3d 113, 124 (2d Cir. 2010). “If a party
refuses to arbitrate, arbitrability of the dispute hinges only
on whether there is an agreement to arbitrate and, if so,
whether the dispute falls within that agreement.” U.S. Fire Ins.
Co. v. Nat’l Gypsum Co., 101 F.3d 813, 816 (2d Cir. 1996).
A.
Lyft argues that the defendant assented to the February 8,
2016 Terms of Service, including its arbitration provisions, by
clicking the Box adjacent to “I agree to Lyft’s Terms of
Service” and then the pink “Next” bar.
14

“While new commerce on the Internet has exposed courts to
many new situations, it has not fundamentally changed the
principles of contract.” Register.com, Inc. v. Verio, Inc., 356
F.3d 393, 403 (2d Cir. 2004). Regardless of whether the parties
transacted through the Internet, “Mutual manifestation of
assent, whether by written or spoken word or by conduct, is the
touchstone of contract.” Specht, 306 F.3d at 29. “[C]ourts look
to the basic elements of the offer and the acceptance to
determine whether there is an objective meeting of the minds
sufficient to give rise to a binding and enforceable contract.”
Express Indus. & Terminal Corp. v. N.Y. State Dep't of Transp.,
715 N.E.2d 1050, 1053 (N.Y. 1999) (Wesley, J.). 2
The plaintiff swears that he never read any portion of the
February 8, 2016 Terms of Service, and that he never knowingly
agreed to its provisions. Applebaum Decl. ¶¶ 5-6. There was no
requirement that the plaintiff click on the hyperlink to view
2

The Court of Appeals in Specht, 306 F.3d at 29, applied
California law. Other decisions cited by the parties applied the
laws of other states, in particular, Illinois. See, e.g.,
Sgouros v. TransUnion Corp., 817 F.3d 1029, 1034 (7th Cir. 2016)
(applying Illinois law). The parties do not argue that there is
a relevant distinction between New York law and the laws of any
of these other states with respect to contract formation that
would alter the mode of analysis. See id. (“Formation of a
contract requires mutual assent in virtually all jurisdictions;
Illinois courts use an objective approach to that question.”);
Berkson v. Gogo LLC, 97 F. Supp. 3d 359, 388 (E.D.N.Y. 2015)
(noting that the laws of “New York, California, and Illinois
. . . are substantively similar with respect to the issue of
contract formation”). It is accordingly unnecessary to
distinguish which state’s law is being applied in these cases.
15

the Terms of Service before proceeding. Thus, “where, as here,
there is no evidence that the [mobile application] user had
actual knowledge of the agreement, the validity of the . . .
agreement turns on whether the [application] puts a reasonably
prudent user on inquiry notice of the terms of the contract.”
Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1177 (9th Cir.
2014). Determining whether a consumer was on inquiry notice is a
“fact-intensive inquiry.” Sgouros v. TransUnion Corp., 817 F.3d
1029, 1034–35 (7th Cir. 2016); see also Corwin v. NYC Bike
Share, LLC, No. 14-CV-1285 (SN), 2017 WL 816134, at *7 (S.D.N.Y.
Mar. 1, 2017), reconsideration denied, 2017 WL 1318010 (S.D.N.Y.
Apr. 7, 2017).
What it takes for consumers to assent to contractual terms
for transactions completed over the Internet, including through
mobile applications, has been the subject of frequent litigation
across the country over the past decade. Judge Weinstein
recently surveyed this extensive case law in Berkson v. Gogo
LLC, 97 F. Supp. 3d 359, 394-403 (E.D.N.Y. 2015), and identified
four “general types of online consumer contracts . . . (a)
browsewrap; (b) clickwrap; (c) scrollwrap; and (d) sign-inwrap.” Id. at 394. According to Judge Weinstein:
Browsewrap exists where the online host dictates that
assent is given merely by using the site. Clickwrap
refers to the assent process by which a user must
click “I agree,” but not necessarily view the contract
to which she is assenting. Scrollwrap requires users
16

to physically scroll through an internet agreement and
click on a separate “I agree” button in order to
assent to the terms and conditions of the host
website. Sign-in-wrap couples assent to the terms of a
website with signing up for use of the site’s services
. . . . Id. at 394-95.
As relevant to this case, courts have consistently found
scrollwrap agreements enforceable because they present the
consumer with a “realistic opportunity” to review the terms of
the contract and they require a physical manifestation of
assent. Id. at 398-99 (collecting cases). By comparison, courts
scrutinize the circumstances surrounding an alleged assent to a
clickwrap agreement, which does not require the user to review
the terms of the proposed agreement; nevertheless, courts have
generally found clickwrap agreements enforceable because “[b]y
requiring a physical manifestation of assent, a user is said to
be put on inquiry notice of the terms assented to.” Id. at 397.
However, courts have not been consistent in distinguishing
between scrollwrap and clickwrap agreements. See id. at 398
(noting that “[s]ome court decisions that use the term
‘clickwrap’ are in fact dealing with ‘scrollwrap’ agreements”).
For example, the Court of Appeals for the Second Circuit
recently blended Judge Weinstein’s categories by describing
clickwrap agreements as “typically requir[ing] users to click an
‘I agree’ box after being presented with a list of terms or

17

conditions of use.” Nicosia v. Amazon.com, Inc., 834 F.3d 220,
233 (2d Cir. 2016).
Regardless of the nomenclature, the classification of an
online agreement does not conclude the inquiry, nor does the
fact a consumer may have clicked a box. A court “cannot presume
that a person who clicks on a box that appears on a . . . screen
has notice of all contents not only of that page but of other
content that requires further action (scrolling, following a
link, etc.).” Sgouros, 817 F.3d at 1035. The presentation of the
online agreement matters: “Whether there was notice of the
existence of additional contract terms presented on a webpage
depends heavily on whether the design and content of that
webpage rendered the existence of terms reasonably conspicuous.”
Nicosia, 834 F.3d at 233. “Clarity and conspicuousness of
arbitration terms are important in securing informed assent.”
Id. (quoting Specht, 306 F.3d at 30).
In this case, the alleged agreement is plainly a clickwrap
agreement as classified by Judge Weinstein in Berkson: the
clickable Box is adjacent to a hyperlink that contained the
February 8, 2016 Terms of Service. 3 Only by clicking on the

3

Several of the cases cited by Lyft are distinguishable because
they involved scrollwrap agreements. See, e.g., Bar-Ayal v. Time
Warner Cable, Inc., No. 03-cv-9905 (KMW), 2006 WL 2990032, at *9
(S.D.N.Y. Oct. 16, 2006); Moore v. Microsoft Corp., 741 N.Y.S.2d
91, 92 (App. Div. 2002). Lyft’s reliance on Starkey v. G
Adventures, Inc., 796 F.3d 193, 197 n.3 (2d Cir. 2015) --- which
18

hyperlink would the user see the Terms of Service, and the user
could proceed without clicking on the hyperlink. The issue is
whether the mobile application screen adequately communicated
all of the terms and conditions of the purported agreement and
whether the purchaser received reasonable notice of those terms.
Sgouros, 817 F.3d at 1034.
Evaluating the totality of the circumstances, a reasonably
prudent consumer would not have been on inquiry notice of the
terms of the February 8, 2016 Terms of Service. Lyft’s
registration process, as it existed when the plaintiff accessed
it in April 2016, did not alert reasonable consumers to the
gravity of the “clicks,” namely, that clicking the Box and then
the pink “Next” bar at the bottom of the screen constituted
acceptance of a contract, including an arbitration agreement,
governing the parties’ obligations going forward. Instead, the
design and content of the registration process --- especially
compared to the respective processes that existed for the July
28, 2014 Terms of Services and the September 30, 2016 Terms of
Service (the latter of which is discussed below) --- discouraged

cited Register.com, 356 F.3d at 429, for the proposition that a
“clickwrap mechanism” can provide a reasonable means of
providing notice and assent --- is likewise unavailing because
the Court of Appeals was referring to scrollwrap agreements. See
id. (“Essentially, under a clickwrap arrangement, potential
licensees are presented with the proposed license terms and
forced to expressly and unambiguously manifest either assent or
rejection prior to being given access to the product.”).
19

recognition of the existence of lengthier contractual terms that
should be reviewed.
Initially, the text is difficult to read: “I agree to
Lyft’s Terms of Service” is in the smallest font on the screen,
dwarfed by the jumbo-sized pink “Next” bar at the bottom of the
screen and the bold header “Add Phone Number” at the top. The
“Terms of Service” are colored in light blue superimposed on a
bright white background, making those “Terms of Service” --which Lyft argues are the operative words that would alert a
reasonable consumer to inquire about a contract --- even more
difficult to read.
A reasonable consumer would not have understood that the
light blue “Terms of Service” hyperlinked to a contract for
review. Lyft argues that coloring words signals “hyperlink” to
the reasonable consumer, but the tech company assumes too much.
Coloring can be for aesthetic purposes. Courts have required
more than mere coloring to indicate the existence of a hyperlink
to a contract. See Sgouros, 817 F.3d at 1035 (“Where the terms
are not displayed but must be brought up by using a hyperlink,
courts . . . have looked for a clear prompt directing the user
to read them.”). Beyond the coloring, there were no familiar
indicia to inform consumers that there was in fact a hyperlink
that should be clicked and that a contract should be reviewed,
such as words to that effect, underlining, bolding,
20

capitalization, italicization, or large font. Compare Berkson,
97 F. Supp. 3d at 404 (finding that “terms of use” were not made
“readily and obviously available to [the consumer]” where the
“hyperlink to the ‘terms of use’ was not in large font, all
caps, or in bold” and noting “[b]y contrast, the ‘SIGN IN’
button is very user-friendly and obvious, appearing in all caps,
in a clearly delineated box in both the upper right hand and the
lower left hand corners of the homepage”), with Whitt v. Prosper
Funding LLC, No. 1:15-CV-136-(GHW), 2015 WL 4254062, at *1
(S.D.N.Y. July 14, 2015) (finding agreement to arbitrate where
the term “borrower registration agreement,” was underlined and
shaded blue to signify a hyperlink), and Fteja v. Facebook,
Inc., 841 F. Supp. 2d 829, 835 (S.D.N.Y. 2012) (hyperlink was
underlined and near words to the effect that by clicking on the
sign up button, the consumer is indicating that the consumer has
read and agrees to the Terms of Service).
Contrast Lyft’s presentation of the hyperlinked “Terms of
Service” with its treatment of hyperlinks in the February 8,
2016 Terms of Service itself, where Lyft knew how to be clear
that it was providing hyperlinks to other information. For
example, the February 8, 2016 Terms of Service provided that,
“The arbitration shall be conducted by the American Arbitration
Association under its Commercial Arbitration Rules (a copy of
which can be obtained here) . . . .” Ajmani Decl., Ex. 2 ¶ 17.
21

Rather than providing notice to consumers that they were
agreeing to the terms of a contract, the screen with the Box to
be checked for “Lyft’s Terms of Service” was misleading. The
screen was titled in bold terms “Add Phone Number.” The entire
screen was structured as part of a process to verify a phone
number, not to enter a detailed contractual agreement. A
reasonable consumer would have thought that the consumer had
agreed to be contacted by Lyft, specifically, to receive a text
message from the company. A consumer would have arrived at this
screen after entering personal information on several similar
screens; there was nothing to denote that this screen was
special or distinguishable from the rest. The “Add phone number”
screen called upon the consumer to input the consumer’s
telephone number, with the proviso: “We’ll send a text [message]
to verify your phone.” Only then would the consumer click the
Box next to “I agree to Lyft’s Terms of Services,” which was
immediately below Lyft’s statement that it was going to contact
the consumer. The reasonable inference for the reasonable
consumer was that the Terms of Service related only to the text
verification because the consumer had just agreed to receive a
text message. This conclusion would have been reinforced by the
design of the screen, including the inconspicuousness of the
hyperlink and the absence of cautionary language to indicate
that there were contractual terms for review, let alone
22

important contract terms. A reasonable consumer may have
understood that the consumer had agreed to something, but not to
the lengthy February 8, 2016 Terms of Service. See Sgouros, 817
F.3d at 1035-36 (“[W]here a website specifically states that
clicking means one thing, that click does not bind users to
something else.” (citing Lee v. Intelius Inc., 737 F.3d 1254
(9th Cir. 2013)).
Lyft also contends that the fact that a consumer could not
click the “Next” bar until after clicking the Box put reasonable
consumers on inquiry notice that the screen had added
significance in the registration process. That ignores that a
consumer could not click “Next” until the consumer had entered
his or her phone information for text verification. As Lyft
conceded at oral argument, this was true for every screen in the
registration process: each screen contained a “Next” bar (or
similar prompt), and a consumer could not proceed to the next
screen until completing the required fields on each screen.
Thus, this limitation would not have alerted a consumer to the
significance of the Box, especially given that the word “Next”
implied that there were additional steps in the registration
process.
There is also no reason to believe that “Terms of Service”
is self-defining for reasonable consumers as equivalent to
“Binding Contract” or “Final Contract.” Judge Weinstein made
23

this point persuasively in Berkson, 97 F. Supp. 3d at 377-83,
noting that similar phrases, such as “terms of use” and “terms
and conditions,” “especially when presented in lowercase . . .
[do] not clearly inform a user that she is subjecting herself to
a one-sided contract that purports to modify her basic legal
rights and remedies.” Id. at 380.
Likewise, Judge Rakoff reasoned in Meyer v. Kalanick, 200
F. Supp. 3d 408 (S.D.N.Y. 2016), appeal docketed, No. 16-2750
(2d Cir. Aug. 5, 2016) --- a case involving a company that also
provided transportation services through a mobile application
--- that a court “cannot simply assume that the reasonable (nonlawyer) smartphone user is aware of the likely contents of
‘Terms of Service’ . . . . The reasonable user might be forgiven
for assuming that ‘Terms of Service’ refers to a description of
the types of services that [the company] intends to provide . .
. .” Id. at 421.
Stripped of the import ascribed by Lyft, it is apparent
that a reasonable consumer would not be on reasonable inquiry
notice to search for the terms of a contract on the “Add phone
number” screen when the consumer clicked the Box. 4

4

Other cases cited by Lyft are distinguishable on the basis of
the prominence of the hyperlinks to the contracts at issue in
those cases, with any ambiguity as to their significance cured
by other factors, such as the location of the hyperlinks. See,
e.g., Starke v. Gilt Groupe, Inc., No. 13 CIV. 5497 (LLS), 2014
WL 1652225, at *1 (S.D.N.Y. Apr. 24, 2014); Saizhang Guan v.
24

Accordingly, the notice of the proposed contract terms was
insufficient to bind the plaintiff to the terms of that
agreement, including the arbitration provisions, simply because
the plaintiff checked the Box agreeing to Lyft’s Terms of
Service. See Specht, 306 F.3d at 35 (“Reasonably conspicuous
notice of the existence of contract terms and unambiguous
manifestation of assent to those terms by consumers are
essential if electronic bargaining is to have integrity and
credibility.”). Because a reasonable consumer would not have
been on reasonable inquiry notice as to the terms of the
February 8, 2016 Terms of Service, the plaintiff cannot be bound
by the arbitration provisions in that contract.
B.
Lyft argues that the plaintiff assented to the September
30, 2016 Terms of Service, including its arbitration provisions.
Here, Lyft is more successful: the plaintiff does not dispute
that he agreed to the September 30, 2016 Terms of Service, which
were presented to him as a scrollwrap agreement.

Uber Techs., Inc., No. 16-cv-598 (PKC), 2017 WL 744564, at *4
(E.D.N.Y. Feb. 23, 2017); Salameno v. Gogo Inc., No. 16-CV-0487,
2016 WL 4005783, at *3 (E.D.N.Y. July 25, 2016); Selden v.
Airbnb, Inc., No. 16-CV-00933 (CRC), 2016 WL 6476934, at *9
(D.D.C. Nov. 1, 2016); Tompkins v. 23andMe, Inc., No. 5:13-CV05682 (LHK), 2014 WL 2903752, at *3 (N.D. Cal. June 25, 2014),
aff’d, 840 F.3d 1016 (9th Cir. 2016); Swift v. Zynga Game
Network, Inc., 805 F. Supp. 2d 904, 912 (N.D. Cal. 2011).
25

Lyft’s method for presenting existing customers with the
September 30, 2016 Terms of Service is very similar to the
initial registration processes (such as the 2014 registration
process) that Lyft used to present new customers with previous
versions of its Terms of Service, before the company implemented
the scaled-down and more opaque registration process for the
February 8, 2016 Terms of Service. 5 Courts have routinely found
that consumers assented to Lyft’s contracts that used the
previous registration processes. 6 See, e.g., Bekele v. Lyft, 199
F. Supp. 3d 284, 288, 290 (D. Mass. 2016); Loewen v. Lyft, Inc.,
129 F. Supp. 3d 945, 948-49 (N.D. Cal. 2015); Frazier v. Lyft,
37-2015-00019783-CU-BT-CTL (S.D. Super. Ct. 2016) (attached as
Ajmani Decl., Ex. 4); see also Weiss Decl. ¶¶ 2-3 (describing
the registration process at issue in Frazier). The plaintiff
offers no basis to distinguish these cases.
The method for presenting the September 30, 2016 Terms of
Service to existing customers who had already registered
5

At oral argument, Lyft made clear that its current registration
process for new customers still resembles the clickwrap
registration process in place for the February 8, 2016 Terms of
Service. Thus, Lyft only uses a more informative scrollwrap
format to present new versions of its Terms of Services to
existing customers, like the plaintiff, who have already
registered with Lyft.
6
Lyft cited these cases --- which analyzed scrollwrap agreements
--- for the proposition that courts have approved the
registration process for the February 8, 2016 Terms of Service.
That was misleading because that registration process did not
resemble the previous registration processes addressed by those
courts, which had employed scrollwrap agreements.
26

conspicuously cured the defects in the notice for the February
8, 2016 Terms of Service. Rather than a screen headed “Add Phone
Number,” the September 30, 2016 Terms of Service were presented
on a screen titled “Terms of Service,” where, given the content
and design of the screen, there could be no doubt as to what
that phrase signified. The screen explicitly stated: “Before you
can proceed you must read & accept the latest Terms of Service.”
The Terms of Service were set out on the screen to be scrolled
through. No subtle hyperlink was needed. The Terms of Service
begin with the warning: “These Terms of Service constitute a
legally binding agreement . . . between you and Lyft, Inc.”
Before proceeding, the user was required to click on a
conspicuous bar that said: “I accept.”
Accordingly, the plaintiff assented to the terms of the
September 30, 2016 Terms of Service when he clicked “I accept”
on November 22, 2016. 7

7

Lyft’s argument that the plaintiff’s assent to the September
30, 2016 Terms of Service showed that he also assented to the
February 8, 2016 Terms of Service is unpersuasive. The plaintiff
assented to the September 30, 2016 Terms of Service after he had
already become aware of the February 8, 2016 Terms of Service,
including its arbitration provisions, through this litigation.
See Compl. ¶¶ 65-85. Moreover, the September 30, 2016 Terms of
Service is a different agreement, with different arbitration
provisions, that was presented to him in a completely different
manner, namely, as a scrollwrap agreement. The plaintiff’s
acceptance of a different agreement after he had already become
aware of the February 8, 2016 Terms of Service sheds no light on
the plaintiff’s knowledge at the time he clicked the Box for the
February 8, 2016 Terms of Service.
27

While the plaintiff concedes that he assented to the
arbitration provisions in the September 30, 2016 Terms of
Service, the plaintiff argues that his claims are outside the
scope of that arbitration agreement because the arbitration
agreement did not cover disputes that were already subject to
litigation. However, the arbitration agreement contained a very
broad arbitration clause together with a delegation clause that
gave the arbitrators the power to decide issues of
arbitrability. Parties may delegate issues of arbitrability,
such as the scope of the arbitration, to arbitrators so long as
that delegation is clear and unmistakable. Rent-A-Ctr., W., Inc.
v. Jackson, 561 U.S. 63, 79 (2010); Contec Corp. v. Remote Sol.,
Co., 398 F.3d 205, 211 (2d Cir. 2005).
Here, the delegation is clear and unmistakable; the
plaintiff does not argue otherwise. The September 30, 2016 Terms
of Service provides: “All disputes concerning the arbitrability
of a Claim (including disputes about the scope, applicability,
enforceability, revocability or validity of the Arbitration
Agreement) shall be decided by the arbitrator . . . .” Although
the plaintiff disputes whether his claims are in fact
arbitrable, any question about the arbitrability of the
plaintiff’s claims must be addressed in the first instance by
the arbitrators. See Loewen, 129 F. Supp. 3d at 954 (holding

28

that similar language in an earlier version of Lyft’s terms of
service delegated issues of arbitrability to the arbitrator).
Accordingly, Lyft’s motion to compel arbitration pursuant
to the FAA is granted.

29

CONCLUSION
The Court has considered all of the arguments of the
parties. To the extent not specifically addressed above, the
parties’ arguments are either moot or without merit. For the
foregoing reasons, Lyft’s motion to compel arbitration pursuant
to the FAA is granted.
The Clerk of Court is directed to close all pending
motions.
The parties should submit a proposed order to the Court by
July 10, 2017, in accordance with this decision that directs the
parties to arbitrate their dispute. If the parties cannot agree
to a jointly proposed order, each party may submit a proposed
order to the Court by July 10, 2017, and any objections to the
other side’s order by July 12, 2017.
The action is stayed pending the resolution of the
arbitration. See Katz v. Cellco P’ship, 794 F.3d 341, 343 (2d
Cir. 2015) (The FAA “requires a stay of proceedings when all
claims are referred to arbitration and a stay [is] requested.”).
SO ORDERED.
Dated:

New York, New York
June 26, 2017
____________/s/______________
John G. Koeltl
United States District Judge

30