Second Circuit applies California law in declining to enforce arbitration provision: Schnabel v. Trilegiant Corp.

This case has been on the "to-blog" list for a few weeks.

In Schnabel v. Trilegiant Corp., ___ F.3d ___, 2012 WL 3871366 (2d Cir. Sept. 7, 2012), the defendant sent an email to the plaintiffs after they had signed up for the defendant's service.  The email contained a link to the company's terms of service, which included an arbitration clause with a class action ban. The Second Circuit, applying California contract law, held that the plaintiffs had not agreed to be bound by the clause:

As regards the email, under the contract law of Connecticut or California –- either of which may apply to this dispute –- the email did not provide sufficient notice to the plaintiffs of the arbitration provision, and the plaintiffs therefore could not have assented to it solely as a result of their failure to cancel their enrollment in the defendants' service.

Slip op. at 3.