White v. PayPal Holdings Inc et al

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United States District Court
Northern District of California
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
LEAH WHITE, et al.,
Plaintiffs,
v.
PAYPAL HOLDINGS INC, et al.,
Defendants.
Case No. 25-cv-04884-PCP
ORDER GRANTING IN PART AND
DENYING IN PART MOTION TO
COMPEL ARBITRATION
Re: Dkt. No. 41, 51
Defendants PayPal Holdings, Inc. and The Honey Science Corporation move to compel
arbitration of consumer protection claims alleged by twelve plaintiffs on behalf of a putative
nationwide class. For the reasons below, the Court grants in part and denies in part the motion.
BACKGROUND
Honey is a free browser extension developed by The Honey Science Corporation that finds
and applies promotional codes for online purchases and provides rewards for qualifying purchases.
Dkt. 41-1, Declaration of Owen Sperling in Support of Defendants’ Motion to Compel Arbitration
(“Sperling Decl.”) ¶ 4. PayPal acquired Honey in 2020.
Plaintiffs each allege that they “used the Honey browser extension to find discount codes
for [their] online purchases and/or to earn rewards through.” Dkt. 40 ¶¶ 13–24. At various times,
Honey gave users the option to create an account via the user’s email, Google, PayPal, Facebook,
and/or Apple account. The year that each plaintiff began using Honey and the method by which
they signed up for Honey are as follows:
Plaintiff Sign-up Year Sign-up Method
1. Abigail Roskind 2015 Google
2. Michael Amenti 2016 Email
3. Jordan Leturgez 2017 Email
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Plaintiff Sign-up Year Sign-up Method
4. Leah White 2019
5. Lily Fitzgerald 2019 Google
6. Ian Crowley 2019 PayPal
7. Annabelle Cruz 2020 Google
8. Caleb Brackney 2021 Email
9. Annabelle Regan 2022 Google
10. Antonio Minichiello 2023
11. Alicia Freeman 2023 Email
12. Nicholas McDonald 2024 PayPal
Plaintiffs allege that Honey “misrepresents its ability to find the ‘best discount codes’ for
consumers” and instead “prioritizes coupon codes from Honey’s partner merchants,” giving users
“inferior discounts, or no discounts at all, while Honey and its merchant partners profit.” Dkt. 40
¶¶ 34, 36–37. Plaintiffs bring claims for unjust enrichment and violations of state consumer
protection laws on behalf of a putative nationwide class of persons “who downloaded the Honey
browser extension onto their browsers and used the Honey browser extension when completing an
online purchase.” Id. ¶ 73.
Defendants move to compel arbitration of each named plaintiff’s claims. They contend that
plaintiffs agreed to Honey’s terms of service, which included an agreement to arbitrate, when
signing up for a Honey account.
LEGAL STANDARD
The Federal Arbitration Act (FAA) provides that a “written provision in … a contract
evidencing a transaction involving commerce to settle by arbitration a controversy thereafter
arising out of such contract or transaction … shall be valid, irrevocable, and enforceable, save
upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. A
party may petition a federal court to compel arbitration, which the court “shall” order under the
terms of the agreement “upon being satisfied that the making of the agreement for arbitration or
the failure to comply therewith is not in issue.” 9 U.S.C. § 4.
Under the FAA, courts resolve disputes over whether parties formed a contract with an
agreement to arbitrate in the first instance. Granite Rock Co. v. Int’l Brotherhood of Teamsters et
al., 561 U.S. 287, 296 (2010). Like any other contract, an arbitration agreement must be valid and
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enforceable and is subject to “generally applicable contract defenses” like “fraud, duress, or
unconscionability.” Lim v. TForce Logs., LLC, 8 F.4th 992, 999 (9th Cir. 2021); Bielski v.
Coinbase, Inc., 87 F.4th 1003, 1009 (9th Cir. 2023). If a contract was formed, courts typically
determine two “gateway” arbitrability issues in deciding whether to compel arbitration: first,
whether the agreement to arbitrate between the parties is valid and enforceable; and second,
whether the dispute is covered by the agreement. Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th
Cir. 2015). But parties to an agreement can delegate these gateway questions to an arbitrator if
they clearly and unmistakably evidence their intent to do so. Id.; Rent-A-Center, West, Inc. v.
Jackson, 561 U.S. 63, 70 (2010).
The “party seeking to compel arbitration[] must prove by a preponderance of the evidence
that the parties formed an agreement to arbitrate.” Reichert v. Rapid Invs., Inc., 56 F.4th 1220,
1227 (9th Cir. 2022). The “party resisting arbitration bears the burden of proving that the claims at
issue are unsuitable for arbitration” under the same standards applicable to summary judgment.
Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 91 (2000); Hansen v. LMB Mortg. Servs., Inc., 1
F.4th 667, 670 (9th Cir. 2021). Court must “give to the opposing party the benefit of all reasonable
doubts and inferences.” Sanford v. MemberWorks, Inc., 483 F.3d 956, 963 (9th Cir. 2007). “[I]f a
court ‘concludes that there are genuine disputes of material fact as to whether the parties formed
an arbitration agreement, the court must proceed without delay to a trial on arbitrability and hold
any motion to compel arbitration in abeyance until the factual issues have been resolved.’” Knapke
v. PeopleConnect, Inc., 38 F.4th 824, 831 (9th Cir. 2022) (quoting Hansen, 1 F.4th at 672).
ANALYSIS
“In determining whether the parties have agreed to arbitrate a particular dispute, federal
courts apply state-law principles of contract formation.” Berman v. Freedom Fin. Network, LLC,
30 F.4th 849, 855 (9th Cir. 2022). “To form a contract under California … law, there must be
actual or constructive notice of the agreement and the parties must manifest mutual assent” in
writing, orally, or through conduct. Chabolla v. ClassPass Inc., 129 F.4th 1147, 1154 (9th Cir.
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2025).1 “[T]he conduct of a party is not effective as a manifestation of his assent unless he intends
to engage in the conduct and knows or has reason to know that the other party may infer from his
conduct that he assents.” Berman, 30 F.4th at 855.
In the online context, “if a website offers contractual terms to those who use the site, and a
user engages in conduct that manifests her acceptance of those terms, an enforceable agreement
can be formed.” Id. at 856. “Unless the website operator can show that a consumer has actual
knowledge of the agreement, an enforceable contract will be found based on an inquiry notice
theory only if: (1) the website provides reasonably conspicuous notice of the terms to which the
consumer will be bound; and (2) the consumer takes some action, such as clicking a button or
checking a box, that unambiguously manifests his or her assent to those terms.” Id. This test
applies equally to clickwrap and sign-in wrap agreements. Chabolla, 129 F.4th at 1154–55. In a
clickwrap agreement, “a website presents users with specified contractual terms on a pop-up
screen and users must check a box explicitly stating ‘I agree’ in order to proceed.” Berman, 30
F.4th at 856. In a sign-in wrap agreement, a user is “notified of the existence of the website’s
terms of use and advise[d] that by making some type of affirmative act, often by clicking a button,
she is agreeing to the terms of service.” Ghazizadeh v. Coursera, Inc., 737 F. Supp. 3d 911, 923
(N.D. Cal. 2024) (citation omitted).
For notice to be reasonably conspicuous, it “must be displayed in a font size and format
such that the court can fairly assume that a reasonably prudent Internet user would have seen it.”
Berman, 30 F.4th at 856. Courts also consider text placement and the overall screen design to
determine conspicuousness. Chabolla, 129 F.4th at 1154. Hyperlinks that disclose terms and
conditions must be “readily apparent” to put the “reasonably prudent Internet user … on notice of
their existence.” Berman, 30 F.4th at 857. In addition to the visual aspects of the notice that courts
must evaluate, “the context of the transaction is a non-dispositive factor under California law.”
Keebaugh v. Warner Bros. Ent. Inc., 100 F.4th 1005, 1019 (9th Cir. 2024). Where the nature of
the transaction or agreement anticipates “some sort of continuing relationship … that would
1 The parties agree that California law governs.
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require some terms and conditions,” a “user should expect that certain relationships are bound by
terms, even if not explicitly told.” Chabolla, 129 F.4th at 1155 (citations omitted). “Conversely,
when a user simply purchases goods or avails herself of a one-time discount offer, there is less
reason for her to expect a continued relationship beyond the purchase.” Id.
An online user unambiguously manifests assent to terms “only if the user is explicitly
advised that the act of clicking will constitute assent to the terms and conditions of an agreement.”
Berman, 30 F.4th at 857. “[T]he notice must explicitly notify a user of the legal significance of the
action she must take to enter into a contractual agreement.” Id. at 858.
I. Defendants’ evidence is insufficient to show that the plaintiffs who signed up for
Honey in 2015, 2019, 2021 and 2022, entered into a contract.
Defendants fail to meet their evidentiary burden to establish that certain plaintiffs entered
into a contract that compels arbitration. The only evidence before the Court is defendants’
declaration, but its evidence regarding what plaintiffs who signed up for Honey in 2015, 2019,
2021, and 2022 saw on Honey’s sign-up page is inadequate to show that these plaintiffs formed a
contract with Honey.
Plaintiffs allege that Roskind signed up for Honey in 2015 via Google. Although a footnote
in defendants’ motion states that the “Wayback Machine does not display registration by Google
as an option until 2019,” defendants offer no evidence in support of this contention. See United
States v. Zermeno, 66 F.3d 1058, 1062 (9th Cir. 1995). Defendants’ declaration does not provide
any affirmative attestation or screenshot as to what the Honey sign-up page said or looked like in
2015, or the methods through which users could sign up at that time. Nor do defendants attest to
an alternate method through which Roskind might have signed up. As a result, defendants fail to
establish that Roskind was given notice of any contractual terms at all when registering for Honey
in 2015, let alone that Roskind manifested assent to those terms.
Plaintiffs White, Fitzgerald, and Crowley allegedly signed up for Honey in 2019 via
Google, PayPal, or an unknown method.2 Although defendants declare that users could only sign
2 Plaintiffs allege that White “utilized the Honey browser extension” but not that she created an
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up for Honey via email, Google, or Facebook in 2019, the point is immaterial because defendants’
declaration only provides a screenshot from the Wayback Machine showing the sign-up flow for
email. Sperling Decl. ¶ 6, Figure 2. Plaintiffs do not allege, and defendants do not provide
evidence of, any plaintiff registering for Honey via email in 2019.
Specifically, defendants declare that the “sign up flow reflected on the Wayback Machine
for 2019 shows that, in order to create an account by email, potential users are required to click a
‘Join with Email’ button. Directly underneath that button is one line of text stating ‘By joining, I
agree to Honey’s TOS & Privacy Policy.’” Id. ¶ 6 (emphasis added). Separate from this flow, the
screenshot for the 2019 sign up page shows two buttons at the top of the page to “Join Honey
with” Google or Facebook. Defendants offer no evidence as to what users were shown if they
clicked either of those buttons. Because none of the 2019 plaintiffs purportedly registered for
Honey via email, defendants fail to present any evidence as to what these plaintiffs saw when
signing up for Honey.
Plaintiffs allege that Brackney and Regan signed up for Honey in 2021 and 2022 via
Google and email. Defendants’ declaration provides a screenshot from the Wayback Machine of
the sign-up flow that a user would have seen during this period. Id. ¶ 9. The screenshot only shows
five boxes with options for how users would like to join Honey—e.g., “Join with Google” or “Join
with Email.” Id. ¶ 9, Figure 4. The screenshot does not show any language notifying users about
terms of service or show what users would have seen after selecting the button for how they would
like to join. Defendants’ declaration concedes that the Wayback Machine does not show what the
subsequent screens would have shown users, but states that “PayPal’s engineering team confirmed
the check box” present on the website for an earlier sign-up flow in 2020 “was present on the
website sign up flow between February 2021 and 2022.” Id. ¶ 10.
This proffer is insufficient. First, neither plaintiffs nor defendants say whether Brackney
and Regan signed up for Honey “between February 2021 and 2022.” Second, as explained above,
account. Although defendants present evidence that “PayPal’s records indicate that Plaintiff Leah
White created a Honey account on July 3, 2019,” they do not identify the method by which she did
so. Sperling Decl. ¶ 25.
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the Court must assess the visual appearance of a website to determine whether it “provides
reasonably conspicuous notice of the terms to which the consumer will be bound.” See Berman, 30
F.4th at 856. The Court cannot consider whether notice of any terms was reasonably conspicuous,
let alone legible, without knowing what the website looked like. Defendants thus fail to meet their
burden to produce competent evidence that Brackney and Regan received notice (whether
reasonably conspicuous or otherwise) of any contract terms and agreed to those terms in 2021 and
2022.
In contrast, defendants’ declaration provides sufficient evidence as to what all but one
remaining plaintiff saw when signing up for Honey in 2016–2018, 2020, and 2023–2024. Amenti
and Leturgez, who signed up for Honey between 2016 and 2018, allegedly did so via email.
Defendants provide a screenshot from the Wayback Machine showing the registration page to sign
up via email during this period. Sperling Decl. ¶¶ 5, Figure 1. Cruz, who signed up for Honey in
2020, allegedly did so via Google, and defendants’ declaration provides a screenshot from the
Wayback Machine showing the registration page to sign up via any method, including Google, in
2020. Id. ¶ 8, Figure 3. Two of the plaintiffs who signed up in 2023 and 2024—Freeman and
McDonald—allegedly did so via email and PayPal. Defendants’ declaration provides screenshots
from the Wayback Machine showing the registration pages to sign up via these methods during
this period. Id. ¶¶ 11–13, Figures 5–7.
Defendants do not, however, provide sufficient evidence as to plaintiff Minichiello, who
also began using Honey in 2023. Plaintiffs allege that Minichiello “utilized the Honey browser
extension,” but not that he created a Honey account. Although defendants’ declaration avers that
“[a] Honey user cannot redeem rewards unless he or she has created a Honey account,” it is not
clear whether that has always been the case. Sperling Decl. ¶ 26. Defendants do not offer any
evidence that Minichiello created an account or by what method he did so. Defendants therefore
do not meet their burden to provide competent evidence that Minichiello was given notice of and
agreed to any contract terms.
Plaintiffs argue that defendants’ evidence is insufficient to establish what the plaintiffs
who signed up during 2016–2018, 2020, and 2023–2024, excluding Minichiello, saw on Honey’s
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registration page because defendants do not provide the “specific account sign-in screens” each
plaintiff was shown and instead rely on Wayback Machine screenshots rather than internal
records. Dkt. 45, at 8–10. Plaintiffs contend that they “do not recall ever agreeing to any such”
terms of service. Dkt. 45, at 1.
Where plaintiffs do not offer any testimony or evidence to rebut a defendant’s evidence,
however, courts generally reject such challenges to the sufficiency of a defendant’s evidence. In
Cordas v. Uber Technologies, Inc., for example, another court in this district concluded that there
was no genuine dispute of material fact as to whether the plaintiff encountered a screen requiring
agreement to terms and conditions when signing up for an Uber account because an Uber engineer
submitted a declaration that the page was required to create an account and included a screenshot
of what the screen looked like around the time the plaintiff had signed up. 228 F. Supp. 3d 985,
989–90 (N.D. Cal. 2017). The plaintiff, on the other hand, had submitted a declaration with only
“his own conclusory allegations that he never received notice of the terms and conditions” on the
screen and that Uber’s declaration was “false and inadequate.” Id. Like the court in Cordas, this
Court concludes that plaintiffs’ failure to provide competent evidence directly rebutting
defendants’ evidence fails to create a genuine issue as to the sign-up process that was presented to
those plaintiffs when they created their accounts. See id.; see also Robbins v. Mscripts, LLC, No.
23-cv-01381-LB, 2023 WL 5723220, *5 (N.D. Cal. Sept. 5, 2023) (explaining that “without any
contradicting evidence about what the plaintiff saw, the court is not precluded from concluding as
a matter of law that the plaintiff was on notice of mscripts’s terms and conditions when he created
his account”).3
In short, defendants fail to meet their burden to provide evidence of what plaintiffs
Roskind, White, Fitzgerald, Crowley, Brackney, Regan, and Minichiello saw when signing up for
3 Defendants’ use of screenshots from the Wayback Machine also does not undermine the
declaration’s reliability. See In re Juul Labs, Inc., Antitrust Litig., 555 F. Supp. 3d 932, 948 (N.D.
Cal. 2021) (rejecting an attack on the sufficiency of screenshots from the Wayback Machine
showing what a page looked like “immediately around those dates” that plaintiffs signed up);
Saeedy v. Microsoft Corp., 757 F. Supp. 3d 1172, 1192–1195 (W.D. Wash. 2024) (“A party
seeking to compel arbitration is not, moreover, required to provide an original screenshot of the
account creation process at the precise time a plaintiff created an account.”).
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Honey. They therefore fail to establish that these plaintiffs received notice of and agreed to any
contract terms. For that reason, the motion to compel arbitration is denied as to these plaintiffs.
As to the remaining plaintiffs, the evidence is sufficient for the Court to move to the
second step of the analysis—determining whether the sign-up screens encountered by plaintiffs
Amenti, Leturgez, Cruz, Freeman, and McDonald in 2016–2018, 2020, and 2023–2024 provided
those plaintiffs with reasonably conspicuous notice of contract terms to which they manifested
assent. See Berman, 30 F.4th at 855.
II. Defendants meet their burden to establish that the two plaintiffs who signed up for
Honey in 2023 and 2024 agreed to arbitrate.
A. 2016–2018
Amenti and Leturgez, who signed up for Honey via email in 2016 and 2017, respectively,
encountered a registration page with a sign-in wrap agreement. The top of the page included a
dark blue button that said, “Join with Facebook.” Below the button were fields for users to instead
enter their email addresses and create a password, followed by an orange button that said, “Join
with Email.” Sperling Decl. ¶ 5, Figure 1. Below the orange button, in significantly smaller font,
the page included text reading, “By joining, I agree to Honey’s TOS & Privacy Policy.” Further
below that statement, in a larger font comparable to the earlier fields, was a statement reading,
“Already a Honey member? Log In.” The “Log In” was in a blue color, unlike the black or gray
font used on the rest of the screen.
The context of the transaction does not weigh heavily one way or another as to whether the
sign-up page gave plaintiffs reasonably conspicuous notice. See Chabolla, 129 F.4th at 1156
(“Viewed as a whole, the ‘context of the transaction’ at issue here neither weighs in favor of nor
against the notice requirement.”). On the one hand, the transaction prompted users to create an
account so that Honey could offer users discounts on an ongoing basis. This might indicate that a
user “should expect” to be “bound by terms” based on a “continuing relationship” with Honey. See
id. at 1155. On the other hand, because Honey was a “free browser extension,” users might think
that they were registering for a one-time download, after which Honey would provide notifications
on users’ check-out screens without users having to specifically seek out and visit a Honey
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website or app or otherwise maintain an ongoing relationship with Honey itself. See Lee v. Plex,
Inc., 773 F. Supp. 3d 755, 765–66 (N.D. Cal. 2025) (finding the relationship did not put a user on
notice to look for additional terms where a user could sign up for services “by clicking just one
button and continuing through [a] Facebook account,” the service was free and could be cancelled
anytime, and the service “did not contemplate any future purchases that would be bound by
terms”).
Whether or not the context of the transaction might have suggested that users would expect
to agree to terms of service, multiple visual aspects of the sign-up page undermine any conclusion
that plaintiffs received reasonably conspicuous notice of Honey’s terms of service, or “TOS.” The
text stating “By joining, I agree to Honey’s TOS & Privacy Policy” was of a size sufficiently
smaller than the text on the rest of the screen that many users would likely have had to squint to
read it. The small font size was exacerbated by the color of the text, which was light gray against a
white background and in contrast to the two large and colorful buttons on the screen. See Lee, 773
F. Supp. 3d at 766 (“[T]he notice is presented in small gray font…. Although it is legible, it is far
less prominent than the colorful buttons that the user must click to create an account.”).
Moreover, the sign-up page told users that by joining, they agreed to Honey’s “TOS.” TOS
purportedly stood for “terms of service,” although that was not made clear anywhere on the page
itself. Although defendants argue that the Court can surmise, in this technological age, that a
reasonable user would understand TOS to mean terms of service, the Court cannot conclude that a
reasonable user in 2016 or 2017 would have known what TOS meant. Honey’s use of the acronym
TOS undermined any intent by Honey “to capture the [reasonable] user’s attention and secure her
assent.” See Berman, 30 F.4th at 857 (citation omitted); cf. Ghazizadeh, 737 F. Supp. 3d at 926
(discussing the court’s conclusion in Sellers v. JustAnswer LLC, 73 Cal. App. 5th 444 (Cal. Ct.
App. 2021) “that unless the user was particularly savvy, it was unlikely they would recognize the
notice statement”). Even if a reasonable user might have understood TOS to mean terms of
service, Honey’s use of the acronym required an extra mental step for a user moving quickly
through the sign-up page. As a result, even if on notice, a reasonable user might not have
immediately understood the import of what they were agreeing to so as to unambiguously
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manifest assent to the terms. See Berman, 30 F.4th at 856.
To be certain, various aspects of the page support Honey’s contention that Amenti and
Leturgez received reasonably conspicuous notice. In particular, the screen was visually
uncluttered, the text containing notice of the terms was directly below the “Join” button, and the
terms “TOS” and “Privacy Policy” were underlined to seemingly indicate hyperlinks. See
Chabolla, 129 F.4th at 1157 (considering “the notice’s distance from relevant action items” and
“its placement outside of the user’s natural flow”); Colgate v. JUUL Labs, Inc., 402 F. Supp. 3d
728, 764–66 (N.D. Cal. 2019) (considering whether hyperlinks were differentiated by underlining
or color). Nonetheless, the very small and faded nature of the text did not render the hyperlinks
“readily apparent.” See Berman, 30 F.4th at 856–57 (concluding notice was not conspicuous
where text was “printed in a tiny gray font considerably smaller than the font used in the
surrounding website elements, and indeed in a font so small that it is barely legible to the naked
eye”). The aspects favoring Honey thus do not outweigh the many other features of the page that
preclude the Court from finding that Amenti and Leturgez received reasonably conspicuous notice
of Honey’s terms of service. Because they did not receive such notice, they did not agree to the
terms and enter a contract with Honey upon the creation of their accounts. Defendants’ motion to
compel arbitration of their claims is therefore denied.
B. 2020
Cruz, who signed up for Honey via Google in 2020, encountered a registration page with a
click-wrap agreement. The page included a stack of buttons listing different methods to join,
including “Join with Google.” Sperling Decl. ¶ 8, Figure 3. Above the stack of buttons were two
statements with check boxes next to them. The first statement read, “By joining, I agree to
Honey’s TOS and Privacy. Protected by reCAPTCHA and Google’s Privacy and Terms.” The
second statement read, “Receive news and offers from Honey by email. You can change your
communication preferences in your Honey account at any time.”
Whether or not this page provided users with reasonably conspicuous notice of Honey’s
terms of service, defendants fail to meet their burden to establish that users encountering this
screen unambiguously manifested their assent to the terms. See Berman, 30 F.4th at 856.
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Defendants’ declaration states, “The Wayback Machine reflects that in 2020, a user would
affirmatively check a box to agree to the Terms of Service.” Sperling Decl. ¶ 8. Nowhere does the
declaration aver that a user had to check the box to continue signing up for Honey. Defendants ask
the Court to recognize that it is “self-evident” that a user would have had to check the box. But
where the Court must draw all inferences in favor of the non-moving party, it cannot conclude that
a user was required to check the box and indicate their agreement to Honey’s terms rather than
that it was merely optional for a user to do so. See Sanford, 483 F.3d at 963. This is particularly
true given that the box next to the second statement, through which users could choose to
“[r]eceive news and offers from Honey by email,” was most likely optional. Nothing in the text of
the page states that checking one of the boxes is mandatory while checking the other is not, and in
the absence of evidence specifically establishing that users were required to check the first box,
the Court cannot conclude that defendants have satisfied their burden to produce evidence of
Cruz’s unambiguous assent to Honey’s terms of service.
Defendants’ motion to compel arbitration of Cruz’s claims is therefore denied.4
C. 2023–2024
Plaintiffs Freeman and McDonald, who signed up for Honey in 2023 and 2024 via email
and PayPal, respectively, encountered registration pages with a clickwrap agreement. Sperling
Decl. ¶¶ 12–13, Figures 6–7. At least half of each of the pages was visually dedicated to a notice
that included a checkbox and a button below that said “Agree & Complete Sign Up”:
4 Defendants’ motion for leave to file supplemental declaration, Dkt. 51, is denied. The proposed
supplemental declaration only addresses whether users were required to check a box on the sign-
up page after February 2021 and thus would not change the Court’s analysis of Cruz’s assent. Nor
does it remedy defendants’ failure to provide competent evidence of the sign-up process that was
presented to Brackney and Regan when they created their accounts in 2021 and 2022.
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These pages provided users with reasonably conspicuous notice of Honey’s terms of
service. First, the notice was placed above the button to sign up and in the “user’s natural flow.”
See Chabolla, 129 F.4th at 1157. Second, although the text was relatively small and gray against a
white background, the surrounding text was not much larger and was the same gray or black. The
pages thus did not distract or draw the user’s eye away from the notice. See id. Third, the
hyperlinks are in a slightly different color than the rest of the notice and are underlined to indicate
their presence to a reasonable user. See Singh, 797 F. Supp. 3d at 1048. Although the terms of
service are mentioned in the fourth line of the notice, its placement is not fatal to its otherwise
conspicuous disclosure; the first line of the notice indicates that users “agree to the following
terms,” and the button to complete sign-up says, “Agree.” As discussed above, the context of the
transaction does not weigh heavily for or against the conspicuousness of the terms of service.
Taken together, then, the Court finds the terms of service were reasonably conspicuous at the time
Freeman and McDonald signed up for Honey.
Freeman and McDonald also unambiguously assented to the terms of service when they
moved through the sign-up flow. The pages “explicitly advised” users “that the act of clicking will
constitute assent to the terms and conditions.” See Berman, 30 F.4th at 857. Although defendants’
declaration again fails to state whether users had to click the checkbox next to the notice to
proceed, the omission is not dispositive here; the button to complete sign-up itself indicated that
the user “Agree[d]” to the text above. Although plaintiffs argue that a reasonable user would not
have known what they were agreeing to because the pages confusingly provided only one
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checkbox to agree to multiple statements and a user might have thought they were only checking
the box to agree that they were over the age of 18, that is not the most natural interpretation of the
notice’s language. Again, the first line of the notice states that users agree to the “following
terms,” signaling that multiple terms are included in the notice and correspond to the checkbox.
And even if a user might not have understood that the checkbox referred to all of the terms within
the notice, the “Agree” in the text of the button provided a further backstop.
Accordingly, Freeman and McDonald received reasonably conspicuous notice of Honey’s
terms of service when signing up for accounts, and they manifested their assent to those terms.
Defendants thus meet their burden of establishing that Freeman and McDonald entered into a
contract governed by those terms, including the agreement to arbitrate.
III. The agreement’s delegation clause requires the arbitrator to determine whether
Freeman and McDonald’s claims are arbitrable.
Plaintiffs argue that even if Freeman and McDonald entered into an arbitration agreement,
that agreement is void and unconscionable. Defendants contend, however, that the arbitrator must
decide validity and unconscionability because the arbitration provision includes a delegation
clause.
When plaintiffs Freeman and McDonald signed up for Honey accounts and agreed to the
terms of service, the terms included an arbitration provision that read, in relevant part, “You agree
that all disputes between you and us … with regard to your relationship with us, including without
limitation disputes related to these terms of service … will be resolved by binding, individual
arbitration under the American Arbitration Association’s rules for arbitration of consumer-related
disputes … .” Sperling Decl., Ex. 2 at 4 & Ex. 3 at 11. Plaintiffs do not dispute that the
incorporation of the AAA consumer disputes rules in the arbitration provision through the
language above was a clear and unmistakable agreement to delegate questions of arbitrability—
including validity and enforceability—to the arbitrator. They concede, as a result, that the
arbitrator must decide whether the terms of service and arbitration provision are void or
unconscionable. The Court must enforce that delegation agreement and permit Freeman and
McDonald to present their arbitrability arguments to the arbitrator rather than the Court.
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CONCLUSION
For the foregoing reasons, Defendants’ motion to compel arbitration is denied as to
plaintiffs Roskind, White, Fitzgerald, Crowley, Brackney, Regan, Minichiello, Amenti, Leturgez,
and Cruz, and granted as to plaintiffs Freeman and McDonald.
IT IS SO ORDERED.
Dated: February 23, 2026
P. Casey Pitts
United States District Judge
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