District Court Denies Education Technology Company’s Motion to Compel Arbitration
IXL Learning Inc. (IXL) provides technology that was used in Kansas public schools. Plaintiffs, representing a putative class of the parents of the children who attend those schools, allege that IXL mined their children’s data and then monetized it in violation of federal and state law. IXL responded with a motion to compel arbitration. The basis for the motion is perhaps the slenderest tendril of a link between the children’s use of the technology and consent to IXL’s terms. IXL first and outlandishly argues that the schools agreed to arbitration, and therefore the parents agreed to arbitration. It next proposes that by consenting to allow their children to use the technology in public schools, the parents agreed to be bound by IXL’s terms.
True enough, IXL did have a clear and conspicuous arbitration clause in its agreement with the schools, and the agreement with the schools warned that users should not access IXL’s services if they did not agree to its terms. There are two problems. First, IXL has presented no evidence that those terms were shared with plaintiffs or with parents more generally. Second, the “users” at issues are schoolchildren. Honestly, what is the matter with these vendors? Schools are not agents of parents or students. Parents cannot waive statutory rights for their children by sending them to public school.
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And in Shanahan v. IXL Learning, Inc., the District Court for the Northern District of California wastes no time rejecting IXL’s various agency theories. IXL first claimed that the Children’s Online Privacy Protection Act (COPPA) created an agency relationship between schools and the parents of schoolchildren. The Court pointed out that that, just because the Federal Trade Commission (FTC) once said that schools can act as agents for the parents of schoolchildren under COPPA, that does not make the schools plaintiffs’ agents here. Even if the schools were agents for the purposes of allowing IXL to collect students’ data, that would not make them agents for the purpose of agreeing to binding arbitration. Addressing an argument waived because raised only in oral argument, the District Court also found that the schools lacked apparent authority to bind the parents for either purpose.
After the FTC filed an amicus brief, IXL sought to introduce a common-law agency argument in its reply brief. While the Court did not have to address that untimely argument, it rejected it both because IXL had not established an agency relationship and because the schools would not have had authority to surrender parents’ and students’ rights to a jury trial, even if they had some limited common-law agency relationship with them.
Finally, for good measure, IXL tried to claim that parents had assented to IXL’s terms by allowing their children to use IXL’s software. The parents had no notice of IXL’s terms before their children starting using the software. The software is a mandatory part of the school curriculum, so parents who objected to IXL’s terms would have had to pull their children out of school in protest. Their failure to do so cannot be construed as a voluntary acceptance of terms. Nor did the parents assent to IXL’s terms because there is a browsewrap agreement on IXL’s website. It is not clear why parents would have had any reason to use the website.
IXL’s decision to appeal this decision shows just how fare arbitration-clause bootstrapping has gone. We have seen cases in which companies seek to bind consumers with an arbitration provisions relating to one transaction to arbitration with respect to all future interactions with the company. We have seen arbitration clauses in which companies seek to bind consumers with arbitration provisions relation to one transaction to arbitration with respect to all future interactions with all related entities. Here, IXL seeks to bind people who never agreed to arbitrate with them about anything based on their children’s enrollment in attendance at public schools. Shameless.
Unfortunately, there is a simple solution, and this is our future and the future of our children. The schools can, at IXL’s direction, send home forms with the schoolchildren, which the parents will sign without reading. Those forms will inform the parents that their children will be using exciting new software to enhance their learning experience. That software will collect important information about their children’s educational experiences, which will be used for whatever purposes IXL wishes, including monetization. If they do not sign, the form will caution, their children cannot participate in the standard public school curriculum. If they do sign, they waive their right to a jury trial and agree that any disputes will be subject to individual arbitration. It’s so easy, the biggest surprise in this case is that IXL was so inattentive in failing to take that simple step that would likely have met no resistance.