On August 18, 2014, the 9th Cir. Court of Appeals issued its opinion in Nguyen v. Barnes & Noble. The Plaintiff, Nguyen, filed a lawsuit in California Superior Court on behalf of himself and a putative class of consumers whose HP Touchpad orders had been cancelled, alleging that Barnes & Noble had engaged in deceptive business practices and false advertising in violation of both California and New York law. Barnes & Noble removed the action to federal court and moved to compel arbitration under the Federal Arbitration Act (“FAA”), arguing that Plaintiff was bound by the arbitration agreement on the Barnes & Noble website’s Terms of Use. The issue before the 9th Cir. was whether Nguyen, by merely using Barnes & Noble’s website, agreed to be bound by the Terms of Use, even though Nguyen was never prompted to agree to the Terms of Use and never in fact read them.
Held:
•Plaintiff had insufficient notice of Barnes & Noble’s Terms of Use, and thus did not enter into an agreement with Barnes & Noble to arbitrate his claims.
•There was no evidence that the website user had actual knowledge of the agreement.
•Where a website makes its terms of use available via a conspicuous hyperlink on every page of the website but otherwise provides no notice to users nor prompts them to take any affirmative action to demonstrate assent, even close proximity of the hyperlink to relevant buttons users must click on – without more – is insufficient to give rise to constructive notice
http://cdn.ca9.uscourts.gov/datastore/opinions/2014/08/18/12-56628.pdf