A U.S. federal judge has revived a proposed class action lawsuit against software giant Adobe Inc., ruling that the company waived its right to force customers into arbitration and allowing claims of fraud and unjust enrichment to proceed over what plaintiffs describe as deceptive auto-renewal practices.

In a 29-page order  U.S. Magistrate Judge Nathanael Cousins overturned his own March 31 dismissal of the case, determining that Adobe had acted inconsistently by litigating key issues in court rather than deferring them to an arbitrator, effectively forfeiting its arbitration clause.

“After reconsideration, the court finds that defendant waived its right to compel arbitration as a whole and the opt-out provision did not prevent procedural unconscionability,” Cousins wrote.

The ruling permits the plaintiffs to move forward with claims for conversion, negligent misrepresentation, and unjust enrichment. However, the court denied the class’s requests for injunctive relief and disgorgement.

At the center of the dispute is Adobe’s subscription billing structure, specifically its “annual, billed monthly” plan. According to court documents, users who select this option are led to believe they are committing to a one-year contract but are not clearly informed of early termination penalties during the initial sign-up process.

Customers who cancel after the 14-day grace period are charged a lump sum equal to 50% of the remaining contract value, while service terminates at the end of that month. Judge Cousins noted that the only disclosure of this fee appears via a hyperlink at the final checkout screen—a placement he described as insufficient.

“This is the first and only instance where the early termination fee is explicitly linked to the total contract value,” Cousins wrote. “The process for cancellation is designed to be confusing and frustrating.”

The plaintiffs allege they suffered financial harm through unauthorized charges, unintended subscription renewals, and premature termination fees, with many reporting they were unable to effectively cancel their plans.

In his March 31 order, Cousins had granted Adobe’s motion to dismiss, citing the plaintiffs’ failure to adequately plead compliance with the terms of service’s pre-litigation requirements. In his latest ruling, however, he concluded that Adobe—which “held the power and knowledge” to invoke arbitration—instead chose to have the court adjudicate those procedural questions, thereby waiving its right to enforce the arbitration provision.

Attorneys for both Adobe and the proposed class did not immediately respond to requests for comment.

The case is one of several recent legal challenges targeting software companies over recurring billing practices, as federal and state regulators increasingly scrutinize so-called “subscription traps.”