Jonathan Lopez v. Chase Herro

Summary

The United States District Court for the Southern District of Florida considers Defendant Chase Herro’s motion to compel arbitration or, alternatively, to dismiss Jonathan Lopez’s complaint. The court denies arbitration, holding that the “OUR POLICY” hyperlink on the Dough Finance website did not provide actual or constructive notice of the browsewrap arbitration provision. The court grants the motion to dismiss, finding that the complaint inadequately pleaded negligent misrepresentation, fraud, breach of fiduciary duty, and violations of the Florida Securities and Investor Protection Act.

Holdings

1. The arbitration provision was unenforceable because the 'OUR POLICY' hyperlink did not give Lopez actual knowledge or place a reasonably prudent user on inquiry notice of terms governing the parties' relationship.
2. Counts I and III failed to satisfy Rule 9(b) and failed to state claims because the complaint did not sufficiently identify the actionable statements, reliance, intent to induce reliance, or facts showing that Herro knew or should have known the statements were false.
3. Although Lopez adequately alleged facts supporting the existence of a fiduciary relationship, Count II failed because the complaint did not adequately plead proximate causation between the alleged breach and Lopez's damages.
4. Count IV failed because the complaint did not identify with sufficient clarity the security or investment contract at issue and did not plead facts satisfying the common-enterprise and reliance-on-the-efforts-of-others elements of the Howey test.

Questions Presented

1. Whether Lopez was bound by an arbitration provision available through an inconspicuous 'OUR POLICY' hyperlink on the Dough Finance website.
2. Whether the complaint pleaded negligent misrepresentation and fraud with the particularity required by Federal Rule of Civil Procedure 9(b).
3. Whether the complaint adequately pleaded a breach of fiduciary duty, including proximate causation.
4. Whether the complaint adequately pleaded a violation of the Florida Securities and Investor Protection Act, including that the transaction was a security or investment contract under the Howey test.

Disposition

other