CD Cal. Court Declines to Compel “Browsewrap” Arbitration

In April, we wrote about a California Court of Appeal opinion in which the court decline to compel arbitration based on a “browsewrap” agreement (i.e., where a website’s terms and conditions of use posted via a hyperlink, often at the bottom of the screen).  A recent opinion from U.S. District Judge Cormac J. Carney reflects a similar outcome based on federal precedent.

In Nghiem v. Dick’s Sporting Goods Inc., a TCPA case, defendant argued that the plaintiff was on notice of the arbitration agreement posted on its website.  The plaintiff responded that he had been unaware of the clause’s presence.

Citing the Ninth Circuit’s Nguyen v. Barnes & Noble, Inc., decision, Judge Carney began by noting that “courts enforce browsewrap agreements with ‘reluctance,’ and will generally only do so when a consumer has ‘actual or constructive knowledge of a website’s terms and conditions.”

Then, after rejecting the argument that plaintiff had actual knowledge of the contract, Judge Carney also found a lack of constructive knowledge.  The reasoning tracked closely to the Ninth Circuit’s Nguyen holding that “close proximity of the [arbitration clause] hyperlink to relevant buttons users must click on—without more—is insufficient to give rise to constructive notice”:

[Defendant] does not point to any “notice to users” of the Terms of Use, nor does it allege that users of [its] website were affirmatively required to accept the Terms of Use before completing certain functions. Accordingly, Nguyen controls, and [defendant’s] website did not put consumers on inquiry notice of its Terms of Use.