After-the-Fact Email Notification of Online Contract Terms Insufficient

Trilegiant Corp. markets and sells online membership fee programs offering discounts on goods and services.  Brian Schnabel became enrolled in Great Fun, one of Trilegiant’s services, when he made a purchase through Priceline.com, an online travel site.  Edward Schnabel, Brian’s father, became enrolled in Great Fun when he made a purchase through Beckett.com, a sports memorabilia site.  Both Brian and Edward discovered that their credit cards were being billed a monthly fee from Great Fun.  They sought refunds from Trilegiant for every month that they were charged for Great Fun, a service which neither used.  When Trilegiant failed to issue full refunds, Brian and Edward brought suit against Trilegiant on behalf of a class of themselves and similarly situated plaintiffs.

Trilegiant moved to compel arbitration under the Federal Arbitration Act (FAA), asserting that Brian and Edward agreed to an arbitration provision.  The district court denied Trilegiant’s motion.  The Second Circuit Court of Appeals affirmed.  The Second Circuit ruled that Brian and Edward did not assent to an arbitration provision in an email Trilegiant sent to them after they enrolled in the Great Fun program.

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