SAN DIEGO (Legal Newsline) - A manufacturer of glucose monitors can’t enforce “clickwrap” arbitration agreements because they were combined with privacy waivers, a California appeals court ruled, clearing the way for lawsuits by patients who clam they were injured when the devices failed to warn them of dangerous glucose levels.
A dissenting justice said the majority struck down the arbitration clauses based on a legal argument the plaintiffs never made. One plaintiff acknowledged she clicked on the agreement without ever reading it or knowing what arbitration meant.
Lara Herzog and other patients sued Dexcom over its G6 Continuous Glucose Monitoring System, claiming it was defective. Four of the patients claim injuries and another patient died after they said the devices denied them a “golden window” of time to react to rising glucose levels.
A trial court compelled arbitration, citing “Terms of Use” each of the plaintiffs clicked on in order to install a glucose monitoring app on their phones. The Terms of Use included both an acknowledgment that Dexcom would use some of their sensitive personal health data and a mandatory arbitration agreement.
The plaintiffs mostly argued the arbitration agreements were unconscionable, although Brenda Bottiglier said she never even read the agreement and if she had, wouldn’t have known what arbitration was or how it affected her legal rights. When the trial court ordered them to arbitrate, they asked California’s Fourth District Court of Appeal to intervene.
The appeals court did just that, reversing the order to arbitrate based on a new argument that the agreement was confusingly combined with the privacy waiver.
Dexcom argued it was a “classic ‘clickwrap’ agreement, valid and routinely enforced under California law.” But “categorizing the purported agreement as a clickwrap does not resolve the formation question before us,” the appeals court said in a May 16 opinion by Justice Truc T. Do. Mutual assent is required under California law, the court said, meaning both sides agree “upon the same thing in the same sense.”
“A user unconcerned about others’ possession of their personal information—as was likely to be the case, given the nature of the app—would have no reason to inquire further,” the court said. Dexcom “could have, but did not, tell users the same click would also commit the user to binding arbitration.”
Justice Joan K. Irion dissented, saying none of the plaintiffs presented the theory that the appeals court used to deny arbitration.
“This court went beyond its proper role of neutral decisionmaker by suggesting a new ground on which plaintiffs could challenge the trial court’s orders compelling arbitration and then adopting that ground as the basis for its decision to overturn those orders,” she wrote.
The majority said it exercised the court’s discretion to seek supplemental briefing on the argument it ultimately adopted.