The Court of Appeals for the Eleventh Circuit has overturned a lower court’s denial to compel arbitration in a Fair Credit Reporting Act case, ruling the “clickwrap” process under which the plaintiff signed up for was clear and explicit. The decision reinforces the enforceability of clickwrap agreements and clarifies that disputes about waiver, when properly delegated, must be decided by an arbitrator.
The background: The plaintiff sued the defendant, a credit reporting agency, in the Middle District of Florida, claiming violations of the FCRA. After discovering a $26,922 auto loan on her credit report, one she claimed was fraudulently opened, the plaintiff disputed the account. Despite eventually having the loan removed, she filed suit, alleging the defendant failed to implement reasonable procedures to ensure report accuracy and to conduct a proper reinvestigation.
- The defendant responded by moving to compel arbitration, citing a “clickwrap” agreement accepted by the plaintiff when enrolling in its CreditCheck Total service in 2020.
- A district court judge denied the motion, ruling that the company had not sufficiently proven the existence of an agreement and, even if it had, had waived arbitration by participating in the litigation.
The ruling: The Eleventh Circuit reversed on both grounds.
- On the issue of contract formation, the appellate court found the defendant’s evidence sufficient. A declaration from a corporate officer explained the enrollment process, supported by screenshots and the Terms of Use, which included both an arbitration and delegation clause. The court held that “a declaration that sets forth specific facts based on personal knowledge, describes the enrollment process, and appends the operative contract is competent evidence sufficient” to meet the burden of proof.
- On the waiver issue, the court concluded that it was not for the district court to decide. Because the Terms of Use explicitly stated that all issues were to be decided by an arbitrator, the court ruled the lower court had overstepped.
- The case has been remanded back to the district court with instructions to grant the motion to compel arbitration.
