Kevin Nguyen v. Barnes & Noble Inc.
2014 U.S. App. LEXIS 15868
| 9th Cir. | 2014Background
- Barnes & Noble sold discounted HP Touchpads online in Aug. 2011; Nguyen ordered two but his order was later cancelled.
- Nguyen sued on behalf of a putative class alleging deceptive practices under California and New York law; Barnes & Noble removed to federal court and moved to compel arbitration under the website Terms of Use.
- Barnes & Noble’s Terms of Use (including an arbitration clause and a New York choice‑of‑law provision) were accessible by a “Terms of Use” hyperlink in the bottom left of every website page and checkout screen; Nguyen never clicked the link or read the terms.
- The Terms stated users “are deemed to have accepted the Terms of Use” by visiting, creating an account, or making a purchase; the arbitration clause required individual arbitration and waived class actions and jury trials.
- The district court denied Barnes & Noble’s motion to compel arbitration, finding no reasonable notice or manifestation of assent; Barnes & Noble appealed.
Issues
| Issue | Plaintiff's Argument (Nguyen) | Defendant's Argument (Barnes & Noble) | Held |
|---|---|---|---|
| Whether Nguyen agreed to arbitrate via website Terms of Use | Nguyen never had notice or assented; he did not click or read the Terms | Placement of conspicuous hyperlink on every page (near checkout) provided constructive notice; use of site manifested assent | Held: No binding agreement — constructive notice insufficient where link alone, without more, did not put a reasonably prudent user on inquiry notice |
| Whether browsewrap terms can bind users who do not affirmatively accept | Browsewraps require actual or constructive notice; Nguyen lacked both | Mere presence and proximity of link to checkout suffices | Held: Proximity alone is insufficient; website owners must provide more affirmative notice |
| Whether New York choice‑of‑law clause in Terms binds Nguyen | Choice‑of‑law reliance in complaint does not show assent to Terms | Nguyen invoked New York law in complaint and thus should be estopped from denying Terms | Held: Nguyen not equitably estopped; reliance on choice of law is not a direct benefit sufficient to bind a non‑signatory |
| Whether FAA compels arbitration | If valid arbitration agreement exists, FAA requires stay/compel | Same | Held: FAA does not apply because no valid, enforceable arbitration agreement was formed |
Key Cases Cited
- Specht v. Netscape Commc’ns Corp., 306 F.3d 17 (2d Cir. 2002) (browsewrap link submerged below download button insufficient for notice)
- Register.com, Inc. v. Verio, Inc., 356 F.3d 393 (2d Cir. 2004) (internet contract principles and enforcement of browsewrap where user had actual notice)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (courts apply ordinary state‑law contract principles to arbitrability)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (district court’s role under the FAA limited to validity and scope of arbitration agreement)
- Gillman v. Chase Manhattan Bank, N.A., 73 N.Y.2d 1 (N.Y. 1988) (failure to read contract does not relieve obligations; but notice requirements remain)
- Zaltz v. JDATE, 952 F. Supp. 2d 439 (E.D.N.Y. 2013) (enforcing terms where user required to check a box affirming review and agreement)
- Fteja v. Facebook, Inc., 841 F. Supp. 2d 829 (S.D.N.Y. 2012) (enforcing forum‑selection clause where sign‑up button expressly warned that clicking sign up indicated assent)
- In re Zappos.com, Inc. Customer Data Sec. Breach Litig., 893 F. Supp. 2d 1058 (D. Nev. 2012) (refusing to enforce browsewrap that was inconspicuous and buried)