A fact of business today is that customers – both consumers and other businesses – and employees expect to transact digitally. To remain competitive, companies find themselves increasing their efforts to digitally transform their businesses.

Successfully implementing this transformation requires careful planning to ensure regulatory compliance, a smooth integration with existing business technology and a positive customer experience.

Each issue will feature in-depth insight on a timely and important current topic.

In this issue, for our Insights piece, we analyze how legislators and regulators are continuing to move forward with digital transformation policies and bills. In addition, this edition includes reports on other recently enacted federal and state laws, federal and state regulatory activities, fresh judicial precedent and other important news.

For related information regarding blockchain and digital assets, please see our monthly bulletin Blockchain and Digital Assets News and Trends.


Legislators and regulators continue to support digital transformation

In 2020, many state legislatures and state and federal regulators took proactive steps to encourage the use of digital technologies, whether that was through providing more detailed guidance on the regulatory side or by enacting new legislation. This Insight will focus, at a high level, on how legislatures and regulators endorsed the movement towards digital transformation in 2020 in various sectors and technologies, including cryptocurrencies, blockchain, and distributed ledger technologies, the use of electronic records and signatures, and remote online notarization. Read more.



Electronic records and signatures

NCUA reaffirms that “membership cards” or “account signature cards” may be signed electronically: On February 24, 2021, the National Credit Union Administration (NCUA) finalized a rule that amends its share insurance regulation governing the requirements for a share account to be separately insured as a joint account by the National Credit Union Share Insurance Fund. As part of the final rule, the NCUA reiterated that, consistent with ESIGN, the signature requirement for a “membership card” or “account signature card” can be satisfied electronically.


Remote online notarization

Wyoming adopts RON: On February 10, 2021, Wyoming became the 29th state to enact RON. The Governor signed SF0029 which adopted RULONA in the state, including provisions on RON, remote ink notarization (RIN) and in-person electronic notarization (IPEN). The bill becomes effective on July 1, 2021, and it is expected that the Secretary of State will adopt supporting regulations prior to that date.



Electronic signatures and general online contract formation

Court upholds arbitration agreement: In Burrows v. Brinker Restaurant Corp., 2021 WL 638271 (N.D. NY Feb. 18, 2021), the court concluded that the plaintiff signed the arbitration agreement because the circumstantial evidence produced by the defendant was sufficient to support the validity of the plaintiff’s signature. Specifically, the court found that the defendant demonstrated that its online contracting method, which included use of a unique username and password that are not visible to managers or other employees, supported a finding that the plaintiff’s signature was valid and that the plaintiff’s denial – unaccompanied by evidence to substantiate the denials – did not present a genuine issue of material fact.

Courts deny motions to compel arbitration

  • In Hazlett v. Family Dollar Stores of Tenn., Inc., 2021 WL 663665 (M.D. Tenn., Feb. 19, 2021), the court denied the defendant’s motion to compel arbitration because the plaintiff established a material factual dispute regarding whether a “meeting of the minds” occurred with regard to the arbitration agreement. While the defendant produced an electronically signed arbitration agreement and the plaintiff was required to use the last four digits of her social security number at various steps throughout the signing process, the plaintiff alleged that the store manager maintained control over the screen and mouse throughout the entire onboarding process, did not explain what documents the plaintiff was agreeing to, and only paused long enough to allow the plaintiff to enter the last four digits of her social security number. The court stated that if the plaintiff’s declaration was true, then she would have had no reason to know she was signing an arbitration agreement.
  • In Stanfield v. Tawkify, Inc., 2021 WL 391309 (N.D. Cal., Feb. 3, 2021), the court held that the arbitration agreement was “highly procedurally unconscionable.” The court did so, in part, because while the terms of service were contained in a hyperlink next to a checkbox, nothing drew the user’s notice to the arbitration agreement. For example, the word “arbitration” appeared twice in the document, was not bolded, and was in a section titled “Governing Law.”
  • In Maree v. Deutsche Lufthansa AG, 2021 WL 267853 (C.D. Cal., Jan. 26, 2021), the court denied the motion to compel arbitration because the defendant’s website did not sufficiently put the plaintiff on inquiry notice that she must be compelled to arbitrate her claims. In reaching this decision, the court reviewed a screenshot of the defendant’s website, compared that screenshot to other decisions in which the terms of service were not adequately displayed to put the user on “inquiry notice,” and stated that the defendant’s terms of use appeared on a cluttered page, nestled between extraneous text, and was not highlighted, underlined, or displayed in a conspicuous or clickable box.

Court finds that genuine issue of material fact exists over whether plaintiffs were provided with legally required copies of commission plans: California requires that where an employee is paid commissions, “the employer shall give a signed copy of the [commission plan] to every employee who is a party thereto and shall obtain a signed receipt for the contract from each employee.” In Harper v. Charter Communications, LLC, 2021 WL 603724 (E.D. Cal. Feb. 16, 2021), the court found deficient the defendant’s evidence demonstrating that it had both provided the plaintiffs a signed copy and received a signed receipt. Specifically, the defendant claimed that it had complied with the law by providing plaintiffs with their commission plans through an online portal and by requiring them to check a box acknowledging receipt. The plaintiffs disputed this by stating that they were never presented with copies of their commission plans. The defendant’s only evidence consisted of a representative’s statement regarding how the system operated; the defendant did not provide electronic evidence showing the acknowledgment or any commission plans signed by the plaintiff. Based on this, the court found that a material fact exists regarding whether the defendant provided signed copies of the commission plans and whether the defendant obtained a signed receipt from each plaintiff.


Electronic signatures and general online contract formation

Court denies motion to compel arbitration: In Cabatit v. Sunnova Energy Corporation, 2020 WL 8365909 (Cal. Ct. App., 3rd Dist. Dec. 31, 2020), the court held that the process of signing the agreement and initialing the arbitration agreement “indicates suppression and surprise” and supports a finding of procedural unconscionability. The court stated that while it was uncontroverted that the plaintiffs signed the agreement, the agreement was presented on an electronic device to the plaintiffs, the salesperson scrolled through the agreement indicating where to sign, and evidence existed that the salesperson did not explain anything about the arbitration clause.


In the 2021 edition of Chambers Fintech, Chambers and Partners identified DLA Piper as “one of the foremost firms in the country for transactional FinTech matters.” Partners Margo H. K. Tank and David Whitaker were recognized individually for their work in FinTech.

ESRA Digital 2020 Education Series, which included webinars from the authors of this newsletter among others on topics relating to digital transformation, such as webinars on mortgage eclosings, remote online notarization, and digital transformation in automotive selling and lending.

On January 20, 2021, Liz Caires and Andrew Grant presented at the New York State Bar Association’s Business Law Annual Meeting on the use of electronic records and signatures.

On January 28, 2021, David Whitaker presented at ACI’s Prepaid Card Compliance Conference on “Prepaid Accounts vs. DDAs: Weighing the Business and Compliance Issues When Deciding Which Product to Offer.”

The Financial Times has ranked DLA Piper second on its lists of Most Innovative Law Firm and Most Digital Law Firm in the FT North America Innovative Lawyers 2020 report. The Financial Times particularly noted our pro bono legal work on behalf of the UN’s World Food Programme, which the authors of this publication assisted with.


The Law of Electronic Signatures, 2020 - 2021 Edition (Thomson Reuters) is an essential guide to electronic signatures and records laws, including the context in which the laws were adopted and the ways in which the authors believe the drafters intended them to be interpreted. The publication is prepared by authors, including Margo Tank and David Whitaker, with more than 30 years combined experience that includes involvement with the drafting and passage of Electronic Signatures in Global and National Commerce Act (ESIGN), the preparation of the Uniform Electronic Transactions Act (UETA), the creation of SPeRS™ (the Standards and Procedures for electronic Records and Signatures), and serving as counsel to the Electronic Signatures and Records Association. The insights they provide will be indispensable to anyone seeking to understand the impact of, and the liability associated with, using electronic signatures and electronic records.

These insights include:

  • Details on the legal requirements for using electronic signatures and records, including delivery, presentation, signing, and record retention
  • Comprehensive tables itemizing the state variations to the uniform UETA language
  • Special considerations for using electronic signatures and records in connection with emerging and evolving technology
  • Using electronic records and signatures in specialized transactions and documents, such as securities, chattel paper, and mortgages
  • Analysis of the interplay between ESIGN, UETA, and many other key laws and regulations
  • Identification and summaries of recent legal developments and court cases impacting electronic signatures and records

The MBA Compliance Essentials Remote Online Notarization State Surveys, developed by DLA Piper, provides a comprehensive look at RON requirements in each state that has enacted RON legislation. These fully editable surveys are organized by category of requirements, including registration, technology, seal and signature, certificates of RON acts, journal, authentication, session, recording, and additional requirements. Companies can purchase the full package which includes surveys for all states that have enacted RON legislation along with a matrix summarizing state requirements, or companies can purchase information about individual states as needed. Read more.