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NGUYEN v. BARNES & NOBLE, INC.
United States District Court, C.D. California.
August 28, 2012.
Id. At 367. Likewise, Defendant cannot show that Plaintiff had notice of the Terms of Use or that he affirmatively assented to those terms, therefore, Defendant cannot show that Plaintiff entered into an agreement to arbitrate his claims. The cases cited by Defendant are readily distinguishable. In Register.com, Inc. v. Verio, Inc., the court enforced the provisions of a browsewrap agreement citing crucial differences from Specht in its reasoning. 356 F.3d 393, 402 (2nd Cir. 2004). The court upheld the district court's grant of a preliminary injunction finding that plaintiff Register was likely to succeed on the merits of its breach of contract claim. The court concluded that Verio was a daily repeat user that received notice of Register's terms with each transaction. Id. The court stated that, "Verio visited Register's computers daily . . . and each day saw the terms of Register's offer." Id. In addition, "Verio admitted that, in entering Register's computers . . . it was fully aware of the terms on which Register offered the access." Id. The facts in Register.com are clearly distinguishable from our own in that, unlike the Plaintiff in the case at hand, defendant Verio was well aware of the contract terms. In Ticketmaster L.L.C. v. RMG Technologies, Inc., the Ticketmaster.com website specifically warned users that, "[u]se of this website is subject to express Terms of Use which prohibit commercial use of this site. By continuing past this page, you agree to abide by these terms." 507 F.Supp.2d 1096, 1107 (C.D. Cal. 2007) (emphasis omitted). Users of ticketmaster.com had to affirmatively agree to the Terms of Use to set up an Case 8:12-cv-00812-JST-RNB Document 33 Filed 08/28/12 Page 9 of 10 Page ID #:657 account and purchase a ticket. Id. Indeed, in Ticketmaster, the defendant did not even contest whether it was on notice of the Terms of Use, arguing instead that the Terms of Use were too uncertain to be enforceable. Id. In Hubbert v. Dell Corp., the court held that the plaintiffs were bound by the Terms and Conditions of Sale which included an arbitration agreement. 359 Ill.App.3d 976, 984 (Ill. App. Ct. 2005). Again, however, at least three of the online forms the plaintiffs were required to complete to make their purchases stated that "[a]ll sales are subject to Dell's Term[s] and Conditions of Sale." Id. The Hubbert court reasoned that "[t]his statement would place a reasonable person on notice that there were terms and conditions attached to the purchase." Id. In other words, there was no doubt that plaintiffs were placed on notice that there were specific Terms of Use that would apply. Defendant also cites Molnar v. 1-800-Flowers.com, Inc., No. CV 08-0542, 2008 WL 4772125 (C.D. Cal. Sept. 29, 2008), as supportive of the enforcement of Terms of Use in a browsewrap agreement. However, the Molnar court decided the narrow issue of whether the defendants' counterclaim could survive plaintiff's 12(b)(6) motion arguing that a forum selection clause in a browsewrap agreement was unenforceable as a matter of law. The court simply held that evidence that plaintiff had used the defendants' website numerous times before was sufficient to withstand a motion to dismiss pursuant to Rule 12(b)(6). While the court declined to dismiss the case as a matter of law, it did not go so far as to find the existence of a binding agreement. IV. CONCLUSION For the foregoing reasons, the Court DENIES Defendant's Motion to Compel Arbitration. The Court also DENIES AS MOOT Defendant's Motion to Stay litigation. Defendant may renew its motion if and when it files an appeal from this decision.
1. The relevant section states:
XVIII. DISPUTE RESOLUTION
Any claim or controversy at law or equity that arises out of the Terms of Use, the Barnes & Noble.com Site or any Barnes & Noble.com Service (each a "Claim"), shall be resolved through binding arbitration conducted by telephone, online or based solely upon written submissions where no in-person appearance is required. In such cases, the arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules (including without limitation the Supplementary Procedures for Consumer-Related Disputes, if applicable), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
. . . .
Any Claim shall be arbitrated or litigated, as the case may be, on an individual basis and shall not be consolidated with any other party whether through class action proceedings, class arbitration proceedings or otherwise.
. . . .
Each of the parties hereby knowingly, voluntarily and intentionally waives any right it may have to a trial by jury in respect of any litigation (including but not limited to any claims, counterclaims, cross-claims, or third party claims) arising out of, under or in connection with these Terms of Use. Further, each party hereto certifies that no representative or agent of either party has represented, expressly or otherwise, that such a party would not in the event of such litigation, seek to enforce this waiver of a right to jury trial provision. Each of the parties acknowledges that this section is a material inducement for the other party entering into these Terms of Use.
(Rowland Decl., Exh. 1, at p. 8.)
2. Indeed, Defendant uses as a "binding judicial admission" Plaintiff's allegation in the Complaint that his breach of contract claim is governed by New York's UCC. (Reply at 8 (citing Compl. at ¶ 34).) Specifically, Defendant states that because Plaintiff seeks to benefit from the Terms of Use "by asserting the choice of law provision contained therein" (Reply at 11), he should be required to arbitrate his claims under the doctrine of equitable estoppel. (Reply at 10-11.) Defendant cites Washington Mut. Fin. Group, LLC v. Bailey, 364 F.3d 260, 268 (5th Cir. 2004) for the proposition that a plaintiff cannot claim the benefit of an agreement and simultaneously avoid its burdens. (Mot. at 9; Reply at 11). Washington and the instant case are inapposite, however, because Washington involved a third party, namely the wife of one of the defendants, claiming the benefits of an agreement without the requisite obligation. Further, there was no dispute that an agreement had been made between the primary parties, but involved the issue of whether that agreement would apply to the third party. The Court therefore declines to extend the holding of Washington to the facts of this case and finds that Plaintiff is not equitably estopped from arguing that he is not bound by the arbitration agreement at issue.
3. "Federal courts sitting in diversity look to the law of the forum state when making choice of law determinations." Hoffman v. Citibank (S.D.), N.A., 546 F.3d 1078, 1082 (9th Cir. 2008) (per curiam). "When an agreement contains a choice of law provision, California courts apply the parties' choice of law unless the analytical approach articulated in § 187(2) of the Restatement (Second) of Conflict of Laws . . . dictates a different result." Id. Using the Restatement approach, the Court concludes that there is no fundamental conflict between California and New York law. Compare Nayal v. HIP Network Services IPA, Inc., 620 F.Supp.2d 566, 569 (S.D.N.Y. 2009) with Larian v. Larian, 123 Cal.App.4th 751, 759-60.
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