California Court of Appeals Rules that Lack of Consent Voids Arbitration in Toyota Online Prank

Via the ABA Journal, we learned of a bizarre case involving an internet advertising campaign by Toyota Motor Sales USA, Inc. (“Toyota”) and Saatchi & Saatchi North America, Inc. (“Saatchi”) See Duick v Toyota Motor Sales, U.S.A., Inc. Case No. B224839 (CA Dist. 2 Ct. App., Aug. 31, 2011) Here is some background:

The campaign, which was targeted at young men, encouraged them to provide Toyota with the name of a friend or acquaintance. That individual would then receive an online invitation to a personality evaluation, as part of a so-called “interactive experience” in a program called “Your Other You,” according to the Threat Level blog of Wired.

Those who followed through on the personality evaluation invitation were told to scroll down through an online list of terms and conditions, after which they confirmed, with a click or two, that they had read and agreed to them.

In the case of Amber Duick, the young woman allegedly began to receive emails from a seeming stranger who told her he was traveling cross country, about to descend upon her home with “Trigger,” an ill-behaved pit bull—if he could stay a few steps ahead of the law and avoid excess alcohol consumption. (“Trigger don’t throw up much anymore, but put some newspaper down in case,” one email suggests.)

Duick filed suit against Toyota and Saatchi alleging eight causes of action including intentional infliction of emotional distress, negligence, and false advertising, and seeking “compensatory damages of not less than $10,000,000” as well as other forms of relief. Defendants moved to compel arbitration pursuant to the arbitration provision in the terms and conditions. The trial court denied defendants’ motion and defendants appealed.

The terms and conditions contain the following arbitration provision: “You agree that . . . any and all disputes, claims, and causes of action arising out of, or connected with, Your Other You . . . shall be resolved individually, without resort to any form of class action, and exclusively by arbitration to be held solely in Los Angeles, California under the auspices of the American Arbitration Association and pursuant to its Commercial Dispute Resolution Rules and Procedures.”

The appellate court reasoned that the boilerplate language in the online agreement stating that Duick might receive emails in connection with the personality evaluation did not adequately inform Duick of the true nature of those emails, so she could either consent or reject the terms. Therefore, the court concluded that “defendants deprived Duick of a reasonable opportunity to know the character of the proposed contract. The contract is consequently void because of fraud in the inception, and every part of it is therefore unenforceable, including the arbitration provision. “

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