944 F.3d 1212
9th Cir.2019Background
- Huuuge Inc. operates the Huuuge Casino smartphone app, where users play casino games with free or purchased chips.
- Sean Wilson downloaded the app in early 2017, used it for over a year, and filed a putative class action in April 2018 alleging unlawful charges and consumer-protection violations.
- Huuuge moved to compel arbitration based on Terms of Use that include a class-action waiver and arbitration clause. Users are never required to affirmatively accept the Terms.
- The Terms were accessible only via obscure steps: (1) clicking “more” on the App Store profile, scrolling through many screens, then copying a URL; or (2) tapping a small three-dot settings menu in-app and selecting a buried “Terms & Policy” link.
- The district court found no evidence of Wilson’s actual knowledge and that the Terms were not conspicuous enough to provide constructive notice; it denied the motion to compel arbitration. The Ninth Circuit affirmed.
Issues
| Issue | Plaintiff's Argument (Wilson) | Defendant's Argument (Huuuge) | Held |
|---|---|---|---|
| Whether download/use of the app gave constructive notice of Terms (including arbitration) | Terms were not conspicuous; user would not reasonably discover them | Constructive notice existed via App Store profile and in-app settings over repeated use | No constructive notice; Terms were buried and not reasonably discoverable |
| Whether there was evidence of actual notice or whether discovery was required to show it | No evidence of actual knowledge presented by Huuuge | Huuuge sought limited discovery to prove actual notice | No evidence of actual notice; Huuuge waived/forfeited discovery request (too late and raised in a footnote) |
| Whether the agreement was a valid browsewrap versus enforceable clickwrap | Agreement is browsewrap and requires conspicuous notice to bind users | Argued users were on notice via app design and access points | Agreement is browsewrap and not reasonably conspicuous or manifestly agreed to by user |
| Whether the FAA requires staying proceedings and compelling arbitration | Arbitration clause is unenforceable because no mutual assent | FAA requires stay if a valid arbitration agreement exists | FAA does not compel arbitration because no valid agreement existed; motion to compel denied |
Key Cases Cited
- Nguyen v. Barnes & Noble, 763 F.3d 1171 (9th Cir. 2014) (browsewrap enforceability depends on conspicuous notice; onus on website/app owners)
- Specht v. Netscape Commc'ns Corp., 306 F.3d 17 (2d Cir. 2002) (terms buried or off-screen do not provide constructive notice)
- Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279 (9th Cir. 2017) (party seeking arbitration must prove agreement by preponderance)
- First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (U.S. 1995) (federal courts apply ordinary state-law contract principles to arbitration agreements)
- In re Holl, 925 F.3d 1076 (9th Cir. 2019) (traditional contract principles apply to online agreements)
- Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir. 2000) (two-step FAA inquiry: existence and scope of arbitration agreement)
- Starke v. SquareTrade, Inc., 913 F.3d 279 (2d Cir. 2019) (courts consider overall design and distracting content when assessing notice)