In granting a writ of mandamus, the Ninth Circuit Court held that where a customer had no occasion to check for revised terms of service on a web site, a revised contract posted only to that web site did not effect a change in the contract terms. Petitioner and class action plaintiff Joe Douglas originally contracted for long distance telephone service with America Online, which then sold the service to Respondent and defendant below Talk America. Talk America posted a revised contract on its website, but did not notify customers of the changes. The revisions included additional charges, a class action waiver, an arbitration clause, and a provision for New York choice of law. Douglas continued using the service unaware of the revised contract. When he became aware of the additional charges to his account, he filed a class action lawsuit in the Central District of California against Talk America for violations of the Federal Communications Act, breach of contract and violations of California consumer protection statutes. Talk America moved to compel arbitration based on the arbitration clause in the revised contract, and the district court granted the motion. Joe Douglas petitioned for a writ of mandamus on the district court’s order, and the Ninth Circuit granted mandamus relief, holding that the revised contract provisions were not binding on Douglas because “a revised contract is merely an offer and does not bind the parties until it is accepted,” and “an offeree cannot actually assent to an offer unless he knows of its existence.” Douglas v. U.S. District Court for Cent. Dist. Of California, 495 F.3d 1062, 1066 (July 18, 2007) (internal citations omitted). The Ninth Circuit also suggested that certain of the new provisions, including the arbitration and no-class-action clauses, were probably unconscionable under California law.
http://www.ca9.uscourts.gov/ca9/newopinions.nsf/1665312C85BA50868825731C00781F5D/$file/0675424.pdf?openelement