United States v. 2020-10-21 | 19-55204 | RACHEL STOVER V. EXPERIAN HOLDINGS, INC. | precedential | opinion |

FOR PUBLICATION

UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

RACHEL STOVER, on behalf of
herself and others similarly situated,
Plaintiff-Appellant,

v.

EXPERIAN HOLDINGS, INC.;
EXPERIAN INFORMATION SOLUTIONS,
INC.; CONSUMERINFO.COM, INC.,
DBA Experian Services,
Defendants-Appellees.
No. 19-55204

D.C. No.
8:18-cv-00826-
CJC-DFM

OPINION

Appeal from the United States District Court
for the Central District of California
Cormac J. Carney, District Judge, Presiding

Argued and Submitted October 9, 2020
Pasadena, California

Filed October 21, 2020

Before: MILAN D. SMITH, JR. and JOHN B. OWENS,
Circuit Judges, and KATHLEEN CARDONE,
*

District Judge.

Opinion by Judge Milan D. Smith, Jr.

*
The Honorable Kathleen Cardone, United States District Judge for
the Western District of Texas, sitting by designation.

2 STOVER V. EXPERIAN HOLDINGS

SUMMARY
**

Arbitration

The panel affirmed the district court’s order compelling
arbitration in an action seeking damages and injunctive relief
under the Fair Credit Reporting Act and state law based on
plaintiff’s purchase of the Experian Credit Score
subscription service in 2014.

Plaintiff expressly agreed in 2014 to the Experian terms
of use, which included an arbitration provision and a
“change-of-terms” provision, specifying that she would be
bound to future versions of the contract by continuing to use
Experian products, which, under the terms of the contract,
included accessing Experian’s website. The 2018 version of
the terms of use exempted some types of claims from
binding arbitration. In 2018, plaintiff accessed Experian’s
website, but she did not allege that she received notice of the
terms then in effect.

The panel held that plaintiff’s claims were arbitrable
under the 2014 terms of the contract to which she assented.
It held that in order to bind parties to new terms pursuant to
a change-of-terms provision, consistent with basic principles
of contract law, both parties must have notice that the terms
have changed and an opportunity to review the changes.
Because plaintiff did not allege facts sufficient to conclude
that the 2018 terms formed a valid contract, the 2018 terms
did not form a valid contract.

**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.

STOVER V. EXPERIAN HOLDINGS 3

The panel further held that the parties’ contract permitted
judicial resolution of claims for public injunctive relief, but
the plaintiff did not allege Article III standing to bring such
a claim. Accordingly, the McGill rule, providing that a
contract that purports to waive a person’s right to seek public
injunctive relief in court is unenforceable under California
law, did not excuse her from binding arbitration of her
claims against Experian.

COUNSEL

Joseph C. Bourne (argued) and Melissa S. Weiner, Pearson
Simon & Warshaw LLP, Minneapolis, Minnesota; Sue J.
Nam and Michael R. Reese, Reese LLP, New York, New
York; George V. Granade, Reese LLP, Los Angeles,
California; Matthew D. Schultz, Levin Papantonio, Thomas,
Mitchell, Rafferty & Proctor P.A., Pensacola, Florida; for
Plaintiff-Appellant.

Meir Feder (argued), Jones Day, New York, New York;
Richard Grabowski and Edward Chang, Jones Day, Irvine,
California; for Defendants-Appellees.

4 STOVER V. EXPERIAN HOLDINGS

OPINION
M. SMITH, Circuit Judge:
Rachel Stover appeals the district court’s order
compelling arbitration of her claims based on her purchase
of the Experian Credit Score subscription service in 2014.
Two versions of the Experian terms of use are at issue here:
the version to which Stover expressly agreed in 2014, and
the 2018 version, which exempted some types of claims
from binding arbitration. The 2014 terms included a
“change-of-terms” provision, specifying that Stover would
be bound to future versions of the contract by continuing to
access Experian products. In 2018, Stover accessed
Experian’s website, but does not allege that she received
notice of the terms then in effect. This case therefore
requires us to address whether a mere website visit after the
end of a business relationship is enough to bind parties to
changed terms in a contract pursuant to a change-of-terms
provision in the original contract. We hold that it is not.
FACTUAL AND PROCEDURAL BACKGROUND
In June 2014, Rachel Stover purchased a service called
“Experian Credit Score,” which provides subscribers with a
credit score. She alleges that Experian fraudulently
marketed this credit score as information that lenders review
when determining consumers’ creditworthiness. Stover
claims that the score was based on a formula that few, if any,
lenders used, rendering it essentially useless for a consumer
seeking to monitor their credit or determine their own
creditworthiness. When Stover purchased the Experian
credit score subscription, she assented to the terms and
conditions (the 2014 terms). The 2014 terms stated that all
claims arising out of the transaction were subject to
arbitration “to the fullest extent permitted by law,” and that

STOVER V. EXPERIAN HOLDINGS 5

Stover was waiving her right to be part of a class action. The
2014 terms also contained a change-of-terms provision
stating that “[e]ach time” Stover “accessed . . . the . . .
Product Website,” she would be manifesting assent to “the
then current” terms of the agreement.
Stover cancelled her subscription to the Experian credit
score service in July 2014. She accessed the Experian
website again in 2018, the day before she filed her complaint
in this case. At the time Stover accessed the Experian
website in 2018, the arbitration provision of the terms had
changed to accommodate a carve-out for disputes “arising
out of or relating to the Fair Credit Reporting Act (FCRA)
or other state or federal laws relating to the information
contained in your consumer disclosure or report, including
but not limited to claims for alleged inaccuracies in your
credit report or the information in your credit file.” All other
claims remained subject to arbitration “to the fullest extent
permitted by law.”
Stover brought a putative class action complaint in the
federal district court for the Central District of California
seeking damages and injunctive relief. Her complaint
alleged violation of 15 U.S.C. § 1681g(f)(7)(A), the Fair
Credit Reporting Act provision requiring consumer
reporting agencies that provide credit scores to “supply the
consumer with a credit score that . . . assists the consumer in
understanding the credit scoring assessment of the credit
behavior of the consumer[.]” 15 U.S.C. § 1681g(f)(7)(A).
Stover’s complaint also alleged a violation of the California
and Florida Unfair Competition Laws based on Experian’s
allegedly unfair and deceptive practices in marketing the
Experian Credit Score. Experian moved to compel
arbitration of Stover’s claims.

6 STOVER V. EXPERIAN HOLDINGS

The district court granted the motion. In doing so, the
court held that the 2018 terms applied because of the plain
language of the 2014 terms that assumed assent to new terms
based on the consumer’s use of the “Product Website.” The
district court further held that Stover’s claims were not
within the carve-out from arbitration because the claims did
not arise out of “information contained in [her] consumer
disclosure or report” using the definition of those terms
found in the FCRA. Finally, the district court concluded that
Stover’s claims were not exempt from arbitration based on
McGill v. Citibank, N.A., 393 P.3d 85, 94 (Cal. 2017). Under
McGill, “a provision in any contract . . . that purports to
waive, in all fora, the statutory right to seek public injunctive
relief under the [California Unfair Competition Law (UCL)]
. . . is invalid and unenforceable under California law.”
393 P.3d at 94. The district court reasoned that McGill did
not render the contract unenforceable because Stover was
not seeking public injunctive relief.
On appeal, Experian disagrees with the district court’s
decision to enforce the 2018 terms. Experian argues that a
“mere website visit” after the parties terminated their
business relationship is not enough to “activate” a change in
terms. This is because Stover had no opportunity to review
the new terms before visiting the website and becoming
bound by them.
For her part, Stover contends that the district court did
not err by holding that the 2018 terms governed the dispute.
In Stover’s view, though, the district court’s error was in
compelling arbitration in spite of the McGill rule, both
because the agreement purports to prohibit public injunctive
relief (and is therefore facially unenforceable), and because
Stover specifically seeks public injunctive relief.

STOVER V. EXPERIAN HOLDINGS 7

STANDARD OF REVIEW
“The district court’s decision to grant or deny a motion
to compel arbitration is reviewed de novo.” Bushley v.
Credit Suisse First Boston, 360 F.3d 1149, 1152 (9th Cir.
2004). “This court also reviews the validity and scope of an
arbitration clause de novo and the factual findings
underlying the district court’s decision for clear error.”
Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 564 (9th Cir.
2014) (internal quotation marks and alteration omitted).
ANALYSIS
A.
As an issue of first impression in our circuit, we are
asked whether a single website visit four years after assent
to a contract containing a change-of-terms provision is
enough to bind the parties to terms in the then-current
version of the contract of which the visitor is unaware. We
answer in the negative.
First, by way of background:
Contracts formed on the Internet come
primarily in two flavors: “clickwrap” (or
“click-through”) agreements, in which
website users are required to click on an “I
agree” box after being presented with a list of
terms and conditions of use; and
“browsewrap” agreements, where a website’s
terms and conditions of use are generally
posted on the website via a hyperlink at the
bottom of the screen.

8 STOVER V. EXPERIAN HOLDINGS

Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175–76
(9th Cir. 2014). The contract at issue in this case is a hybrid:
in 2014, Stover assented to a clickwrap agreement; in 2018,
the new terms allegedly altered the 2014 contract as a
browsewrap agreement.
In Douglas v. United States District Court for the
Central District of California, we held that changed terms
were unenforceable due to lack of notice: even if the plaintiff
had visited the website where the new contract was posted,
“he would have had no reason to look at the contract posted
there,” because “[p]arties to a contract have no obligation to
check the terms on a periodic basis to learn whether they
have been changed by the other side.” 495 F.3d 1062, 1066
(9th Cir. 2007) (per curiam).
Although the 2014 terms contained a change-of-terms
provision, nothing in Douglas suggests that mere inquiry
notice of changed terms is enough to bind the parties to them.
Stover assented only once to the terms of a single contract
that Experian later modified without providing notice. Just
as in Douglas, Stover had no obligation to investigate
whether Experian issued new terms without providing notice
to her that it had done so. Indeed, the opposite rule would
lead to absurd results: contract drafters who included a
change-of-terms provision would be permitted to bind
individuals daily, or even hourly, to subsequent changes in
the terms. The absence of limits on the frequency or
substance of changes in terms subverts the basic rule of
contract law that “[a] contract exists where the parties assent
to the same thing in the same sense, so that their minds
meet.” 17A Am. Jur. 2d Contracts § 30 (August 2020
Update) (footnotes omitted). We therefore hold that in order
for changes in terms to be binding pursuant to a change-of-
terms provision in the original contract, both parties to the

STOVER V. EXPERIAN HOLDINGS 9

contract—not just the drafting party—must have notice of
the change in contract terms.
As the party alleging the existence of a contract, Stover
has the burden to prove each element of a valid contract—
including mutual assent. See 81A C.J.S. Specific
Performance § 132 (September 2020 update). Douglas and
Nguyen dictate that notice—actual, inquiry, or
constructive—is the touchstone for assent to a contract, and
the resulting enforceability of changed terms in an
agreement. See Douglas, 495 F.3d at 1066; Nguyen,
763 F.3d at 1177. The record does not indicate whether
Stover had notice of the changed terms when she visited
Experian’s website in 2018, nor does Stover’s complaint
include any allegations related to notice. Stover therefore
has not met her burden to prove that the 2018 terms
constituted a valid contract between the parties, so the 2014
terms apply.
B.
The 2014 terms dictate that all disputes between the
parties must be submitted to arbitration to the fullest extent
allowed by law. A contract that purports to waive a person’s
right to seek public injunctive relief in court is unenforceable
under California law. McGill, 393 P.3d at 93–94.
Consequently, we must consider whether the 2014 terms are
unenforceable, either because they prohibit judicial
resolution of all claims for public injunctive relief, or
because they would close the courthouse doors to Stover’s
specific claim of this nature.
“[P]ublic injunctions benefit the public directly by the
eli mination of deceptive practices, but do not otherwise
benefit the plaintiff, who has already been injured, allegedly,
by such practices and is aware of them.” Blair v. Rent-A-

10 STOVER V. EXPERIAN HOLDINGS

Center, Inc., 928 F.3d 819, 824 (9th Cir. 2019) (internal
quotation marks and alteration omitted). In Blair, after
concluding that the contract purported to “waive [the
plaintiff’s] right to seek a public injunction ‘in any forum,’”
we—without an individualized assessment of the plaintiff’s
claims—held that the contract was unenforceable. Id. at 831
(quoting McGill, 393 P.3d at 87). Stover characterizes Blair
as standing for the proposition that no other analysis is
necessary in order to exempt a plaintiff from binding
arbitration once a court has determined that the contract
would prohibit judicial resolution of a claim for public
injunctive relief.
However, to seek public injunctive relief in federal court,
Stover must also allege that she has Article III standing.
“[A] previously deceived consumer may have standing to
seek an injunction against false advertising or labeling, even
though the consumer now knows or suspects that the
advertising was false at the time of the original purchase[.]”
Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 969 (9th
Cir. 2018). Davidson further states:
Knowledge that the advertisement or label
was false in the past does not equate to
knowledge that it will remain false in the
future. In some cases, the threat of future
harm may be the consumer’s plausible
allegations that she will be unable to rely on
the product’s advertising or labeling in the
future, and so will not purchase the product
although she would like to. In other cases,
the threat of future harm may be the
consumer’s plausible allegations that she
might purchase the product in the future,
despite the fact it was once marred by false

STOVER V. EXPERIAN HOLDINGS 11

advertising or labeling, as she may
reasonably, but incorrectly, assume the
product was improved.
Id. at 969–70 (citation and footnote omitted).
Stover’s arguments that the agreement is unenforceable
on its face and as applied to the specific relief she seeks are
meritless. First, the arbitration agreement does not flatly
prohibit a plaintiff seeking public injunctive relief in court.
Instead, the agreement subjects to arbitration all disputes to
the fullest extent allowed by law—which would presumably
exclude claims for public injunctive relief in California.
This means that the arbitration provision is not facially
unenforceable under Blair. Furthermore, Stover’s complaint
does not allege the threat of future harm that Davidson held
is required for Article III standing in a case seeking public
injunctive relief. Because Stover has not done so, the McGill
rule does not preclude arbitration of her California UCL
claim.
Stover’s reply brief raises, for the first time, a request to
amend her complaint to include allegations sufficient for
Article III standing. Because Stover did not request leave to
amend her complaint in the district court, it would not be
appropriate for this court to grant it. Alaska v. United States,
201 F.3d 1154, 1163–64 (9th Cir. 2000) (“Where a party
does not ask the district court for leave to amend, the request
on appeal to remand with instructions to permit amendment
comes too late.” (internal quotation marks and alteration
omitted)). In any event, even counsel’s representations in
the reply brief as to what Stover could allege in an amended
complaint would not be sufficient to meet the requirements
set forth in Davidson. Stover’s brief says only that she will
be unable “to purchase Experian credit scores in the future

12 STOVER V. EXPERIAN HOLDINGS

because she will not know whether they are or are not
derived from a credit scoring model that is widely used by
lenders.” But Davidson also requires that the plaintiff desire
to purchase the product—even Stover’s belated request for
amendment in the reply brief does not indicate that she could
amend the complaint to allege the necessary facts. The
contract between the parties is not unenforceable on McGill
grounds.
CONCLUSION
We hold that Stover’s claims are arbitrable under the
2014 terms of the contract to which she assented. In order
to bind parties to new terms pursuant to a change-of-terms
provision, consistent with basic principles of contract law,
both parties must have notice that the terms have changed
and an opportunity to review the changes. Because Stover
has not alleged that she had such an opportunity, the 2018
terms did not form a valid contract. Furthermore, the
contract permits judicial resolution of claims for public
injunctive relief, but Stover has not alleged Article III
standing for such a claim. Thus, the McGill rule does not
excuse Stover from binding arbitration of her claims against
Experian. The judgment of the district court is
AFFIRMED.