Resorb Networks, Inc. v YouNow.comAnnotate this Case
Decided on April 8, 2016
Supreme Court, New York County
Resorb Networks, Inc. and ROBERT J. IANUALE, Plaintiffs,
YouNow.com, YOUNOW, INC., BNOW, INC., ADI SIDEMAN, and JOHN/JANE DOES 1-3, Defendants.
250 West 57th Street, Suite 901
New York, NY 10107
By: Tristan C. Loanzon, Esq.
Robert J. Ianuale, Pro Se
Robert R. Reed, J.
By order to show cause, defendants move to compel arbitration and stay the pending action.
Defendants, the YouNow companies, provide "self-promotion live-video social entertainment platform that allows users to broadcast their live video via webcam or mobile device to be viewed in real-time by an online audience" (Sideman aff, ¶ 2). Plaintiff Robert J. Ianuale was allegedly a user and a partner broadcaster until defendants deactivated his account and cut off his access to YouNow. Ianuale and his company Resorb Networks, Inc. bring claims for defamation, commercial disparagement, trade libel, and breach of contract, and seek punitive damages in addition to compensation. Defendants claim that Ianuale entered into an online agreement to arbitrate all claims related to YouNow's services, while plaintiffs contend that they did not agree to arbitrate and that, if they did, another agreement supersedes the agreement with the arbitration provision.
Next to the screen shot of the sign-in page, there is a screen shot of the start of a document titled "License Agreement." Sideman's affidavit does not mention this agreement.
As stated, users can put live videos on the YouNow website. A person whose videos attract "a significant number of followers" can become a partner broadcaster with YouNow via the Partner Program and receive payment from YouNow (Sideman aff, ¶ 12). To apply to the Partner Program, a user goes to the YouNow partner page, which states that "we look for: . . . Content that conforms to our Terms of Service . . . Once you're a Partner, we ask that you follow our Partner guidelines" (underlined in original). A button at the bottom of the partner page reads "Apply Now." Upon clicking that button, users are taken to the partner broadcast application form. After completing the application, a user clicks "Submit" to send the application to YouNow.
The partner broadcaster "has to check" the white box (Sideman aff, ¶ 21). Under the white box is a blue box reading "Yes, I agree," which the partner broadcaster "must click in order to proceed" (id., ¶ 23). "Once the user checks off the [white] checkbox and taps the "Yes, I Agree" button, he officially becomes" a partner (id., ¶ 24). The user is next presented with a screen stating "You're In!." The court gathers that a user who becomes a partner need only go through this process once and that, once someone becomes a partner, he or she follows the same sign-in process as other users.
Sideman and Ianuale both state that Ianuale signed up as a user in July 2014 and applied to become a partner on November 22, 2014 and December 11, 2014. After being rejected on January 13, 2015, he was accepted on January 19, 2015. Allegedly on May 3, 2015, during a [*3]live broadcast, Ianuale spoke abusively to his girlfriend. On May 5, 2015, YouNow revoked his access to the service and terminated his partner status. In his opposing affidavit, Ianuale denies being abusive or engaging in any wrongful conduct.
With their motion, defendants produce a copy of a redacted Partner Agreement. During oral argument, defendants produced a printed whole copy of the Partner Agreement. The printed copy of the Partner Agreement is about one and half pages long. It states that the partner broadcaster will perform creative broadcasts, and that YouNow and the partner are not employer and employee, but independent contractors. The Partner Agreement contains confidentiality and non-disparagement clauses. It contains a section about how YouNow pays the partner broadcasters. A section titled "Entire Agreement" states that the agreement is the parties' entire agreement, and that it "supersedes any and all prior or contemporaneous agreements of the parties with respect to the subject matter contained herein." The agreement states that it will be governed by New York law and that the parties consent to the sole and exclusive jurisdiction of the New York courts, "over any actions, suits or proceedings arising out of or relating to this Agreement." The Partner Agreement further states that either party may terminate the agreement at any time and for any reason. Sideman does not clearly state whether a partner is able to view this agreement online.
There is another Partner Agreement. Defendants provide a screen shot of this one, which can be seen online, above the white box that the partner must check. It is not the same as the Partner Agreement produced in printed form and discussed above. This Partner Agreement is a very short statement providing, among other things, that YouNow reserves the right to review the partner's broadcasts and revoke earnings if partners "violate our Partner Agreement or Partner Guidelines" (underlined in original). Defendants do not say that the underlined phrases are links to documents.
A party is not obligated to arbitrate unless he or she consented to do so (Matter of Robert Stigwood Org. [Atlantic Recording Corp.], 83 AD2d 123, 126 [1st Dept 1981]). When one party seeks to compel the other to arbitrate their disputes, the court first determines whether the parties made a valid arbitration agreement (Harriman Group v Napolitano, 213 AD2d 159, 162 [1st Dept 1995]). The party seeking arbitration has the burden of establishing an agreement to arbitrate (Matter of Allstate Ins. Co. v Roseboro, 247 AD2d 379, 380 [2d Dept 1998]; see Seneca Ins. Co. v Secure-Southwest Brokerage, 294 AD2d 211, 212 [1st Dept 2002]).
The creation of online contracts "has not fundamentally changed the principles of contract" (Register.com, Inc. v Verio, Inc., 356 F3d 393, 403 [2d Cir 2004]). "To create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms" (Matter of Express Indus. & Term. Corp. v New York State Dept. of Transp., 93 NY2d 584, 589 ). There must be an offer followed by an acceptance (id.). In regard to online contracts, courts look for evidence that a website user had actual or constructive notice of the terms of using the website (Schnabel v Trilegiant Corp., 697 F3d 110, 120 [2d Cir 2012]). Where the supposed assent to terms is mostly passive, as it usually is online, courts seek to know "whether a reasonably prudent offeree would be on notice of the term at issue" (id.), and whether the terms of the agreement were "reasonably communicated" to the user (Fteja v Facebook, Inc., 841 F Supp 2d 829, 833, 835 [SD NY 2012]; Starke v Gilt Groupe, Inc., 2014 WL 1652225, *2, *3, 2014 US Dist LEXIS 58006, *6-7 [SD NY 2014]; Jerez v JD Closeouts, LLC, 36 Misc 3d 161, 168 [Nassau Dist Ct 2012]).
Courts have determined that the primary means of contracting on the internet are clickwrap agreements and browsewrap agreements (Edme v Internet Brands, Inc., 968 F Supp 2d 519, 525 [ED NY 2013]), and the variations on those (Berkson, 97 F Supp 3d at 401)."Browsewrap exists where the online host dictates that assent is given merely by using the site. Clickwrap refers to the assent process by which a user must click 'I agree,' but not necessarily view the contract to which she is assenting. Scrollwrap requires users to physically scroll through an internet agreement and click on a separate 'I agree' button in order to assent to the terms and conditions of the host website. Sign-in-wrap couples assent to the terms of a website with signing up for use of the site's services; . . ."
(Berkson, 97 F Supp 3d at 394-395).
Accordingly, it is
ORDERED that defendants' motion to compel arbitration is denied; and it is further
ORDERED that defendants shall serve an answer to the complaint or otherwise respond thereto within 30 days of entry of this order; and it is further
ORDERED that counsel for the parties shall appear for a preliminary conference in Part 43, at 111 Centre Street, Room 581, New York, New York on May 26, 2016, at 9:30 a.m.
Dated: April 8, 2016