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Hello Fresh Can’t Halt TCPA Suit Pending First Circuit Appeal

May 20, 2020, 4:39 PM

A district court judge won’t grant what he already told Hello Fresh is a borderline frivolous motion to compel arbitration of claims that it violated the Telephone Consumer Protection Act.

Judge William G. Young isn’t going to halt proceedings pending Hello Fresh’s appeal to the First Circuit, either.

Young’s Tuesday decision opened with a bolded statement lamenting Hello Fresh’s effort to enforce an arbitration clause that wasn’t even in effect the only time named plaintiff Grace Murray used its meal-kit delivery service.

“A majority of the Supreme Court exalts arbitration above all other forms of dispute resolution,” the statement read in part. “Corporations use arbitration to deny consumers the rights Congress has authorized, sometimes with the slimmest pretense of an agreement to arbitrate.”

Murray signed up for a Hello Fresh trial subscription in late 2015, ordered one meal kit, and then canceled the subscription in January 2016.

When she clicked the check box to agree to the website’s terms and conditions, they didn’t contain an arbitration clause. One wasn’t added until 2017, more than a year after her last order.

The 2015 terms and conditions included a unilateral modification provision, which the court interpreted it as requiring both notice and acceptance. Hello Fresh’s terms and conditions also stated that users would be bound “by the agreement ‘in force at the time that you order products from us.’”

Even if “a time-traveling arbitration clause” were enforceable, promotional emails, sent after Murray canceled her subscription, with terms and conditions inconspicuously hyperlinked in small font “was no notice at all,” Young wrote for the U.S. District Court for the District of Massachusetts. The court added that a different district court recently reached the same conclusion with respect to nearly identical Hello Fresh emails, applying New York law instead.

Young questioned whether the unilateral modification provision would have rendered the contract unconscionable under Massachusetts precedent absent notice and acceptance but didn’t reach the issue.

Murray is represented by Paronich Law PC, Turke & Strauss LLP, and Robbins Kaplan LLP. Hello Fresh is represented by Sheppard, Mullin, Richter & Hampton LLP and Harrington Law PC.

The case is Murray v. Grocery Delivery E-Servs. USA Inc., 2020 BL 187037, D. Mass., No. 1:19-cv-12608, 5/19/20

To contact the reporter on this story: Holly Barker in Washington at hbarker@bloombergindustry.com

To contact the editor responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com

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