ARBITRATION DENIED: The Court Denies Arbitration Even After Selection Including Terms of Use.

Hi TCPAWorld!

We all know that arbitration provisions are a good way to protect against class action lawsuits. Well, the Northern District of Texas gave us a bit of guidance on how to ensure that provision is enforceable in Horton v. LeafFilter N. LLC, No. 3:25-CV-2318-X-BN, 2025 WL 2638665, at *1 (N.D. Tex. Sept. 12, 2025) (“LeafFilter”).

The court found that after a multi-screen submission process, the Plaintiff had not agreed to an arbitration provision, stating that a contract was not formed between the parties due to concerns as to whether “LeafFilter has shown that Horton himself interacted with its website,” since it was “unclear that an IP address associated with a device belonging to Horton interacted with the website.”

Here’s how the court got there:

While filling out personal information in a submission for services on LeafFilter’s website, the Plaintiff in LeafFilter had to click through several screens with various questions, on each occasion agreeing to the Terms of Use.  On the final screen, the Plaintiff provided his phone number and selected a hyperlinked option stating “Text me reminders and updates,” which further stated that “[b]y providing your phone number above and checking this box, you agree to receive automated text messages from LeafFilter and also agree to our Terms of [U]se and Privacy Policy.” These hyperlinks included arbitration provisions.

The Plaintiff argued that since he never requested the appointment for services from LeafFilter, he never agreed to the arbitration provisions in the Terms of Use. However, LeafFilter responded that Plaintiff’s engagement on the website visit is the essence of the dispute. In its discussion of the dispute, the court applied ordinary state-law principles governing contract formation. In this case, Texas contract law applied.

When contemplating the characterization of the agreement as either a clickwrap agreement or sign-in wrap agreement, the court found that the online agreement is a hybrid sign-in agreement since the agreement included affirmative “Next” buttons and no definitive “I Accept” or “I Agree” buttons. The court then looked to prior case law showing that plaintiffs offered adamant denials of signing arbitration agreements, providing evidence containing more than just “hollow, bald assertions.”  In the present case, the court considered whether the plaintiff’s sworn statements were “too conclusory – or not unequivocal enough – to get the job done.” The plaintiff alleged that he “never went to [LeafFilter’s] website” nor did he ever request an appointment with LeafFilter, causing him to never have agreed to the arbitration provisions. However, the court found that this evidence alone was insufficient due to LeafFilter’s evidence showing that “requesting an appointment was not the only way to submit to its terms of use and its arbitration provisions.” Despite this, the court was not convinced that LeafFilter had overcome the burden of showing that the plaintiff “himself interacted with [LeafFilter’s] website,” and it was still “unclear that an IP address associated with a device belonging to Horton interacted with the website,” concluding there was insufficient evidence to show a contract formed between the parties.

This decision shows just how important it is to prove a plaintiff is the actual internet user who is accepting the Terms of Use. Here, the court found that the plaintiff failing to request an appointment while still checking boxes with hyperlinks to arbitration provisions was alone insufficient to show the user did not agree to the terms of use and arbitration provisions. Better evidence showing the plaintiff as the actual internet user would have most likely resulted in the court finding that a contract was formed and the arbitration provisions enforceable.