Ninth Circuit Affirms District Court’s Order Denying Motion to Compel Arbitration in Putative Class Action Where Defendant Failed To Prove Plaintiffs Assented to Arbitration Clause

The Ninth Circuit affirmed the district court’s order denying Double Down Interactive, LLC, and International Game Technology’s (collectively, “Double Down”) motion to compel arbitration in a putative class action filed by Mary Simonson and Adrienne Benson, finding that Double Down failed to carry its burden to prove, under Washington law, that either plaintiff assented to the arbitration clause in Double Down’s terms of use.

Noting “in the absence of actual notice, a browsewrap agreement like the Terms of Use at issue here, is enforceable only if a reasonably prudent user would have constructive notice of those terms,” the Ninth Circuit found that neither Simonson nor Benson received actual notice or constructive notice of Double Down’s terms of use.

The court reasoned “a user would have to closely scrutinize Double Down’s page on the Apple App Store in order to find the Terms of Use during the downloading process. There is no reference to them on the opening screen of Double Down’s page, but rather they are buried at the bottom of the page and accessibly only after scrolling past multiple screens and images that a user need not view to download the platform.” Similarly, the court stated the terms of use during gameplay on Double Down’s mobile platform is just as much of a “hide-the-ball exercise” where a user must first locate a small settings menu in a corner of the screen that is obscured amongst the brightly colored casino games, and then fine the terms of use heading in the pop-up settings menu, which is not bolded, highlighted, or otherwise set apart from the four other headings in that menu.

The court also found that plaintiffs did not receive constructive notice of the terms of use when first connecting to the Facebook platform as “the terms of use are accessible through a gray ‘App Terms’ hyperlink on a pop-up screen that is below and smaller than all other text on the screen” and “does not inform users that they are bound by the terms of use.” Nor do the terms of use hyperlink and accompanying notification that are accessible during gameplay on the Facebook platform cure the notice problem, as the hyperlink and notification become visible only after the user scrolls to the bottom of the platform, and are obscured amongst the brightly colored icons on the Facebook platform, and are set out in typeface that is substantially smaller than all other text on the screen.

The court also rejected Double Down’s other arguments, as repeated use of a website or mobile application does not contribute to constructive notice, nor do the terms and conditions that govern all transactions on the Apple App Store place a reasonably prudent user of the mobile platform on constructive notice of Double Down’s terms of use.

Accordingly, the district court’s order denying Double Down’s motion to compel arbitration was affirmed.

Benson v. Double Down Interactive, LLC, No. 18-36015 (9th Cir. Jan. 29, 2020)