The Ninth Circuit recently issued a decision finding that the arbitration clause on Barnes & Noble’s (B&N) website was not binding on a plaintiff. Nguyen v. Barnes & Noble, Inc., No. 12-56628 (9th Cir. Aug. 18, 2014) (click here for a copy of the decision).
The plaintiff in this case attempted to purchase a heavily-discounted tablet computer through B&N’s website. However, because of high, unexpected demand, B&N ran out of the product and cancelled the plaintiff’s order, and the plaintiff then filed a class action against B&N for deceptive business practices. B&N tried to end the class action by moving to compel arbitration pursuant to an arbitration clause found in the terms of use on B&N’s website (the arbitration clause contained a class action waiver).
Relying on the differences between a “clickwrap” agreement and a “browsewrap” agreement, the Ninth Circuit found the arbitration clause to be unenforceable. With clickwrap, a website user who desires to complete a transaction generally must click on an “I agree” box after being presented with terms and conditions. Thus, with clickwrap, the user takes some additional action showing assent. On the other hand, with browsewrap, although terms and conditions may be generally available through a website, a website user can complete a transaction without necessarily viewing the terms or clicking an “I agree” button. Browsewrap agreements can be enforced if the user has actual notice of the terms, or if the design of the website would put a reasonably prudent user on constructive notice of the terms. Here, the Ninth Circuit found that, although the hyperlink to the terms was conspicuous and in close proximity to other buttons a user must click on to complete a transaction, there was no further admonition or notice to capture the user’s attention. The Ninth Circuit found there was no constructive notice, despite the conspicuousness and proximity of the terms. The Ninth Circuit suggested that B&N should have added an explicit warning to review the terms before finalizing the purchase, or perhaps an explicit warning that one agrees to the terms by making a purchase.