Even Judge Easterbrook Won't Enforce Ancestry.com's Arbitration Agreement Against Minors

Plaintiffs in this case are children. Their guardians registered on Ancenstry.com and in so doing agreed to arbitration.  While the plaintiffs' guardians sent in the plaintiffs' saliva samples to Ancestry.com, plaintiffs did not read Ancestry.com's terms, nor were they required to do so.  Plaintiffs allege that they never created their own Ancestry.com accounts, did not access their guardians accounts, did not receive their DNA test results, or interact with Ancestry’s website in any way before filing suit. 

Ancestry.com was then acquired by Blackstone, Inc. (Blackstone), and plaintiffs allege that Ancsetry.com violated their privacy rights by disclosing private genetic information to Blackstone. Ancestry.com moved to compel arbitration. The district court denied the motion, and in Coatney v. Ancestry.com DNA, LLC, the Seventh Circuit affirmed. The opinion is by Judge Brennan, but in fairness to Judge Easterbrook, I note that he joined the opinion, causing me to further revise my view that his position is "arbitration for all."

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On appeal, Ancestry.com first argued that plaintiffs were bound by its terms through the conduct of sharing their DNA. The Seventh Circuit rejected that argument because the terms of Ancestry.com's agreement with plaintiffs' guardians unambiguously binds only the guardians. Ancestry.com cited only one unpublished district court opinion in support of its consent-through-conduct argument, but the Seventh Circuit found the case distinguishable, based on the very different language in the relevant agreements.

Ancestry.com next tried to argue that plaintiffs were bound as closely-related or third-party beneficiaries. This section of the opinion is very lengthy, but the Seventh Circuit states right from the start that Illinois law has a strong presumption against biding third-parties to contractual obligations. To make matters worse, Ancestry.com's terms exclude third parties.

Ancestry.com's final argument is that plaintiff's directly benefitted form the guardians' accounts and thus are estopped from challenging the motion to compel arbitration.  This section of the opinion is also very long, in part because there is scant authority for the doctrine of direct-benefits estoppel under Illinois law.  I wonder why courts don't more often certify questions to the state supreme court in such instances.  Instead, the Seventh Circuit plows ahead.

The fact that the plaintiffs in this case never accessed Ancestry.com themselves or saw any of the genetic information that their guardians gathered makes this case much easier.  It also likely makes the ruling very narrow.  My instinct, based on zero experience with Ancestry.com, is that it would be rare that parents would gather their children's genetic material and send it in to Ancestry.com for analysis and then that the family would never discuss the results.  If my instincts are correct, this rare victory for the foes of mandatory arbitration may be limited to its unique facts.