Wilson v. Huuuge, Inc.
Wilson v. Huuuge, Inc.
Opinion of the Court
INTRODUCTION
THIS MATTER is before the Court on Defendant Huuuge, Inc.'s Motion to Compel Arbitration. Dkt. # 31. The underlying dispute is a class action to recover money lost playing electronic gambling games available through a mobile app. Huuuge's Terms of Use, which include an arbitration provision, are made available when a user initially downloads the app and in the menu of the game itself.
Huuuge argues that the configuration of its app page and settings menu put a reasonable user on inquiry notice that playing Huuuge Casino entails agreeing to the Terms of Use. Wilson responds that he is not bound by Huuuge's Terms because the notice and URL were not sufficiently conspicuous.
BACKGROUND
Plaintiff filed this Complaint against Huuuge on April 6, 2018, alleging that Huuuge Casino constitutes illegal gambling in violation of RCW § 4.24.070. Dkt. # 1, at 11-13. Huuuge Casino is a game available as a mobile app and allows users to play gambling games with virtual "chips" that may be purchased in the app after users run out of the initial free allotment. Id. at 6-7. Despite the fact that these chips cannot be redeemed for actual money, Wilson alleges that they are nonetheless valuable because they can be used to continue playing.
*1311Id. at 12-13. Therefore, Wilson alleges that Huuuge's game amounts to gambling as defined by statute and that he is entitled to recover the money he lost playing. Id. at 13.
Wilson downloaded Huuuge Casino from the Apple App Store. Motion, Dkt. # 31, at 2. When a user searches for the Huuuge Casino app, they first encounter a list of apps that match their search query. Dkt. # 37, Ex. A (video of user searching for, downloading, and playing Huuuge Casino). Each item on the list contains the name of the app, the developer, the app's user rating, a large picture showing the gameplay experience, and a blue "GET" button on the right that initiates downloading. Id. If a user wants to learn more about the app before downloading it, they can click to visit the app's page, which includes more information and another place to download. Id. At the bottom of the app page, a user can click an icon that says "more," which reveals details about the game. Id. After scrolling through several screens' worth of text, a user eventually encounters the statement "Read our Terms of Use," followed by a URL that a user can copy and paste into their web browser to access the Terms. Opp'n, Dkt. # 35, at 6-9. The following images depict the app page when a user first visits it, after clicking the "more" icon, and finally after scrolling down to the Terms of Use. Id.
Once a user downloads the game, they can view another link to the Terms of Use by visiting the settings menu. Motion, Dkt. # 31, at 4. This menu is accessible via a button in the upper corner of the game screen. Opp'n, Dkt. # 35, at 13. The game screen and settings menu are depicted below. Dkt. # 31, at 4; Dkt. # 35, at 13.
*1312DISCUSSION
1. Legal Standard
The Federal Arbitration Act provides for the enforceability of valid arbitration agreements and "permits a party 'aggrieved by the alleged ... refusal of another to arbitrate' to petition any federal district court for an order compelling arbitration in the manner provided for in the agreement." Chiron Corp. v. Ortho Diagnostic Sys., Inc. ,
However, a court may "submit to arbitration only those disputes ... that the parties have agreed to submit." Goldman, Sachs & Co. v. City of Reno ,
2. Formation of an Agreement to Arbitrate
Whether or not this dispute falls within the scope of the arbitration provision in Huuuge's Terms of Use, Huuuge cannot compel arbitration if Wilson never agreed to be bound by those Terms. When a user visits a website or downloads an app, they may be bound by the accompanying terms either through a "clickwrap" agreement or a "browsewrap" agreement. Nguyen v. Barnes & Noble Inc. ,
The Ninth Circuit has stated that "the validity of [a] browsewrap contract depends on whether the user has actual or constructive knowledge of a website's terms and conditions." Nguyen v. Barnes & Noble Inc. ,
In Nguyen , the Ninth Circuit held that a browsewrap agreement was not formed despite the fact that the hyperlinks to the website's terms of use were either visible without scrolling or located so close to the "checkout" button that a user would necessarily see them. Id. at 1178. The court distinguished PDC Labs., Inc. v. Hach Co. , where the website's hyperlinks were similarly conspicuous but users were also *1314prompted to "review terms" before placing their final order. Id. (quoting No. 09-1110,
In contrast, in Meyer v. Uber Technologies, Inc. , the Second Circuit held that a browsewrap agreement was formed where the notification and hyperlink regarding terms of use were "spatially ... [and] temporally coupled" with the mechanism for manifesting assent.
Courts have also recognized that the labels of "clickwrap" and "browsewrap" do not encompass every type of online consumer contract. The defining features that makes clickwrap agreements regularly valid are the forced confrontation with the terms and the forced decision to accept or reject them by clicking a button. Fteja v. Facebook, Inc. ,
Because actual knowledge is not at issue here,
Beyond this fatal inadequacy, there are other problems with the configuration of Huuuge Casino's app page. Perhaps most importantly, a user can download the app before ever even visiting the full app page because the "GET" button also shows up next to each app listed in the search results. In addition, the notification to "Read our Terms of Use" and the following URL are in generic black font and blend into the surrounding text such that a user would have no reason to notice them unless they were specifically hunting for them. See Berkson v. Gogo LLC ,
The in-game link to the Terms of Use is no better. Although the link to "Terms and Policy" is prominent enough within the settings menu, a user must first click a small box with three dots in the upper corner of the game screen to bring that menu up at all. While some users may have a desire to edit their profile or alter the sound settings, visiting this menu is not essential or even helpful for playing the game. Furthermore, if a user did happen to visit the settings menu, Nguyen held that even a prominent hyperlink to a website's terms is insufficient to put a user on inquiry notice without some additional notification. See
Nonetheless, Huuuge insists that, because Wilson played their game many times, insufficient notice is somehow made sufficient through shear repetition. Huuuge bases this theory primarily on the reasoning from Register.com, Inc. v. Verio, Inc. and Cairo, Inc. v. Crossmedia Services, Inc. In Register.com , a user was charged with actual knowledge of website terms because, after each automated search on the website, they received the terms attached to each response.
The holdings in Register.com and Cairo are simply inapplicable in a case like this where there is no actual knowledge or prominent notification. Register.com rested on the user's admission of actual knowledge, but Wilson does not make such an admission. To the extent that the reference to "imputing knowledge" in Cairo may be compared to putting a user on inquiry notice, the website in Cairo contained an "explicit textual notice" that informed users that they would be bound by the terms. See Nguyen ,
Instead, Huuuge repeatedly conflates the consistent availability of the Terms of Use with actual or constructive knowledge of them. See Motion, DKt. # 31, at 15. However, a hyperlink may be tucked away in a corner of a website or buried beneath a mountain of text and still be theoretically "available" to a user.
Having failed to prove that its app can measure up to the standard set by other browsewrap cases, Huuuge argues in its Reply that "[t]he Court should take judicial notice of ubiquitous online agreements when weighing the objective standard for reasonable prudence and inquiry notice." Dkt. # 39, at 4. In essence, Huuuge would like the Court to ignore all of the cases rejecting inconspicuous browsewrap and apply a blanket presumption that users these days just assume that every app they download is riddled with binding terms and provisions, many of which remove or limit important rights, and it is their duty to ferret out these terms wherever they may be. According to Huuuge, such an approach would avoid "repercussions to the commercial paradigm that technology companies and consumers have embraced in an app-driven world." Id. at 5.
The Court declines to adopt Huuuge's suggestion. While online users today are savvier than in the past, this does not *1317mean that the rules of contract law no longer apply. If an app developer wishes to bind a user to their copious terms, the onus is on the developer to at least provide reasonable notice and easy access. This is not a difficult thing to do when designing an app, despite Huuuge's protestations that the Court should devise some special rule for app store purchases. See Meyer ,
CONCLUSION
For the reasons stated above, Huuuge's Motion to Compel Arbitration (Dkt. # 31) is DENIED .
IT IS SO ORDERED.
Although Huuuge suggests in its Reply that Wilson was "likely" to have viewed the Terms at some point because he played the game many times, Huuuge does not present any evidence of Wilson's actual knowledge. Reply, Dkt. # 39, at 6. Given that the party seeking to compel arbitration bears the burden of proving that a contract was formed, this sort of speculation is not enough to prove actual knowledge.
Huuuge is fond of the fruit stand metaphor employed in Register.com , and attempts to apply it to this situation. Reply, Dkt. # 39, at 11-12. In Register.com , the court explained that if a customer at a fruit stand saw a sign reading "Apples - 50 cents apiece" as he exited the stand with a half-eaten apple, he could not claim to be unbound by those terms in future dealings with the stand.
Reference
- Full Case Name
- Sean WILSON, Individually and on Behalf of all Others Similarly Situated v. HUUUGE, INC., a Delaware Corporation
- Cited By
- 4 cases
- Status
- Published