Kevin Nguyen v. Barnes & Noble Inc.
Filing
FILED OPINION (JOHN T. NOONAN, KIM MCLANE WARDLAW and ROSLYN O. SILVER) AFFIRMED. Judge: JTN Authoring. FILED AND ENTERED JUDGMENT. [9207670]
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
KEVIN KHOA NGUYEN, an
individual, on behalf of himself and
all others similarly situated,
Plaintiff-Appellee,
No. 12-56628
D.C. No.
8:12-cv-00812JST-RNB
v.
BARNES & NOBLE INC.,
Defendant-Appellant.
OPINION
Appeal from the United States District Court
for the Central District of California
Josephine L. Staton, District Judge, Presiding
Argued and Submitted
May 16, 2014—Pasadena, California
Filed August 18, 2014
Before: John T. Noonan and Kim McLane Wardlaw,
Circuit Judges, and Roslyn O. Silver, Senior District
Judge.*
Opinion by Judge Noonan
*
The Honorable Roslyn O. Silver, Senior District Judge for the U.S.
District Court for the District of Arizona, sitting by designation.
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NGUYEN V. BARNES & NOBLE, INC.
SUMMARY**
Arbitration
The panel affirmed the district court’s denial of Barnes &
Noble, Inc.’s motion to compel arbitration and to stay court
proceedings pursuant to an arbitration agreement contained
in Barnes & Noble’s website’s Terms of Use, arising from a
putative class action brought by a plaintiff whose order on the
Barnes & Noble website for a Hewlett-Packard Touchpad
was cancelled.
The Terms of Use on the Barnes & Noble website was
part of a “browsewrap” agreement, where the website’s terms
and conditions of use were generally posted on the website
via a hyperlink at the bottom of the screen.
The panel held that the plaintiff website user had
insufficient notice of Barnes & Noble’s Terms of Use, and
thus did not enter into an agreement with Barnes & Noble to
arbitrate his claims. The panel held that there was no
evidence that the website user had actual knowledge of the
agreement. The panel further held that where a website
makes its terms of use available via a conspicuous hyperlink
on every page of the website but otherwise provides no notice
to users nor prompts them to take any affirmative action to
demonstrate assent, even close proximity of the hyperlink to
relevant buttons users must click on - without more - is
insufficient to give rise to constructive notice. The panel also
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
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held that the district court did not abuse its discretion in
rejecting Barnes & Noble’s estoppel argument.
COUNSEL
Michelle C. Doolin (argued), Leo P. Norton, and Erin E.
Goodsell, Cooley LLP, San Diego, California, for DefendantAppellant.
Gretchen Carpenter (argued), and Brian R. Strange, Strange
& Carpenter, Los Angeles, California, for Plaintiff-Appellee.
OPINION
NOONAN, Circuit Judge:
Barnes & Noble, Inc. (“Barnes & Noble”) appeals the
district court’s denial of its motion to compel arbitration
against Kevin Khoa Nguyen (“Nguyen”) pursuant to the
arbitration agreement contained in its website’s Terms of
Use. In order to resolve the issue of arbitrability, we must
address whether Nguyen, by merely using Barnes & Noble’s
website, agreed to be bound by the Terms of Use, even
though Nguyen was never prompted to assent to the Terms of
Use and never in fact read them. We agree with the district
court that Barnes & Noble did not provide reasonable notice
of its Terms of Use, and that Nguyen therefore did not
unambiguously manifest assent to the arbitration provision
contained therein.
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We also agree with the district court that Nguyen is not
equitably estopped from avoiding arbitration because he
relied on the Terms of Use’s choice of law provision.
We therefore affirm the district court’s denial of Barnes
& Noble’s motion to compel arbitration and to stay court
proceedings.
I. Background
A.
The underlying facts are not in dispute. Barnes &
Noble is a national bookseller that owns and operates
hundreds of bookstores as well as the website
. In August 2011, Barnes &
Noble, along with other retailers across the country,
liquidated its inventory of discontinued Hewlett-Packard
Touchpads (“Touchpads”), an unsuccessful competitor to
Apple’s iPad, by advertising a “fire sale” of Touchpads at a
heavily discounted price. Acting quickly on the nationwide
liquidation of Touchpads, Nguyen purchased two units on
Barnes & Noble’s website on August 21, 2011, and received
an email confirming the transaction. The following day,
Nguyen received another email informing him that his order
had been cancelled due to unexpectedly high demand.
Nguyen alleges that, as a result of “Barnes & Noble’s
representations, as well as the delay in informing him it
would not honor the sale,” he was “unable to obtain an HP
Tablet during the liquidation period for the discounted price,”
and was “forced to rely on substitute tablet technology, which
he subsequently purchased . . . [at] considerable expense.”
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B.
In April 2012, Nguyen filed this lawsuit in California
Superior Court on behalf of himself and a putative class of
consumers whose Touchpad orders had been cancelled,
alleging that Barnes & Noble had engaged in deceptive
business practices and false advertising in violation of both
California and New York law. Barnes & Noble removed the
action to federal court and moved to compel arbitration under
the Federal Arbitration Act (“FAA”), arguing that Nguyen
was bound by the arbitration agreement in the website’s
Terms of Use.
The website’s Terms of Use are available via a “Terms of
Use” hyperlink located in the bottom left-hand corner of
every page on the Barnes & Noble website, which appears
alongside other hyperlinks labeled “NOOK Store Terms,”
“Copyright,” and “Privacy Policy.” These hyperlinks also
appear underlined and set in green typeface in the lower lefthand corner of every page in the online checkout process.
Nguyen neither clicked on the “Terms of Use” hyperlink
nor actually read the Terms of Use. Had he clicked on the
hyperlink, he would have been taken to a page containing the
full text of Barnes & Noble’s Terms of Use, which state, in
relevant part: “By visiting any area in the Barnes &
Noble.com Site, creating an account, [or] making a purchase
via the Barnes & Noble.com Site . . . a User is deemed to
have accepted the Terms of Use.” Nguyen also would have
come across an arbitration provision, which states:
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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, arbitration shall be
administered by the American Arbitration
Association under its Commercial Arbitration
Rules (including without limitation the
Supplementary Procedures for ConsumerRelated 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 Claim of
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
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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 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.
Nguyen contends that he cannot be bound to the
arbitration provision because he neither had notice of nor
assented to the website’s Terms of Use. Barnes & Noble, for
its part, asserts that the placement of the “Terms of Use”
hyperlink on its website put Nguyen on constructive notice of
the arbitration agreement. Barnes & Noble contends that this
notice, combined with Nguyen’s subsequent use of the
website, was enough to bind him to the Terms of Use. The
district court disagreed, and Barnes & Noble now appeals.
II. Standard of Review
“We review the denial of a motion to compel arbitration
de novo.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114,
1119 (9th Cir. 2008). Underlying factual findings are
reviewed for clear error, Balen v. Holland Am. Line Inc.,
583 F.3d 647, 652 (9th Cir. 2009), while “[t]he interpretation
and meaning of contract provisions” are reviewed de novo,
Milenbach v. Comm’r, 318 F.3d 924, 930 (9th Cir. 2003).
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III. Discussion
A.
The FAA, 9 U.S.C. § 1 et seq., requires federal district
courts to stay judicial proceedings and compel arbitration of
claims covered by a written and enforceable arbitration
agreement. Id. § 3. The FAA limits the district court’s role to
determining whether a valid arbitration agreement exists, and
whether the agreement encompasses the disputes at issue. See
Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126,
1130 (9th Cir. 2000). The parties do not quarrel that Barnes
& Noble’s arbitration agreement, should it be found
enforceable, encompasses Nguyen’s claims. The only issue
is whether a valid arbitration agreement exists.
In determining whether a valid arbitration agreement
exists, federal courts “apply ordinary state-law principles that
govern the formation of contracts.” First Options of Chicago,
Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Federal courts
sitting in diversity look to the law of the forum state—here,
California—when making choice of law determinations.
Hoffman v. Citibank (S.D.), N.A., 546 F.3d 1078, 1082 (9th
Cir. 2008) (per curiam). Under California law, the parties’
choice of law will govern unless section 187(2) of the
Restatement (Second) of Conflict of Laws dictates a different
result. Id.
Here, the parties agree that the validity of the arbitration
agreement is governed by New York law, as specified by the
Terms of Use’s choice of law provision. But whether the
choice of law provision applies depends on whether the
parties agreed to be bound by Barnes & Noble’s Terms of
Use in the first place. As the district court acknowledged in
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its order, we need not engage in this circular inquiry because
both California and New York law dictate the same outcome.
Thus, in evaluating the validity of Barnes & Noble’s
arbitration agreement, we apply New York law, to the extent
possible.
For the reasons that follow, we hold that Nguyen did not
enter into Barnes & Noble’s agreement to arbitrate.
B.
“While new commerce on the Internet has exposed courts
to many new situations, it has not fundamentally changed the
principles of contract.” Register.com, Inc. v. Verio, Inc.,
356 F.3d 393, 403 (2d Cir. 2004). One such principle is the
requirement that “[m]utual manifestation of assent, whether
by written or spoken word or by conduct, is the touchstone of
contract.” Specht v. Netscape Commc’ns Corp., 306 F.3d 17,
29 (2d Cir. 2002) (applying California law).
Contracts formed on the Internet come primarily in two
flavors: “clickwrap” (or “click-through”) agreements, in
which website users are required to click on an “I agree” box
after being presented with a list of terms and conditions of
use; and “browsewrap” agreements, where a website’s terms
and conditions of use are generally posted on the website via
a hyperlink at the bottom of the screen. See Register.com,
356 F.3d at 428–30. Barnes & Noble’s Terms of Use fall in
the latter category.
“Unlike a clickwrap agreement, a browsewrap agreement
does not require the user to manifest assent to the terms and
conditions expressly . . . [a] party instead gives his assent
simply by using the website.” Hines v. Overstock.com, Inc.,
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668 F. Supp. 2d 362, 366–67 (E.D.N.Y. 2009) (citation and
quotation marks omitted) (alteration in original). Indeed, “in
a pure-form browsewrap agreement, ‘the website will contain
a notice that—by merely using the services of, obtaining
information from, or initiating applications within the
website—the user is agreeing to and is bound by the site’s
terms of service.’” Fteja v. Facebook, Inc., 841 F. Supp. 2d
829, 837 (S.D.N.Y. 2012) (quoting United States v. Drew,
259 F.R.D. 449, 462 n.22 (C.D. Cal. 2009)). Thus, “by
visiting the website—something that the user has already
done—the user agrees to the Terms of Use not listed on the
site itself but available only by clicking a hyperlink.” Id. “The
defining feature of browsewrap agreements is that the user
can continue to use the website or its services without visiting
the page hosting the browsewrap agreement or even knowing
that such a webpage exists.” Be In, Inc. v. Google Inc., No.
12-CV-03373-LHK, 2013 WL 5568706, at *6 (N.D. Cal. Oct.
9, 2013). “Because no affirmative action is required by the
website user to agree to the terms of a contract other than his
or her use of the website, the determination of the validity of
the browsewrap contract depends on whether the user has
actual or constructive knowledge of a website’s terms and
conditions.” Van Tassell v. United Mktg. Grp., LLC, 795 F.
Supp. 2d 770, 790 (N.D. Ill. 2011) (citing Sw. Airlines Co. v.
BoardFirst, LLC, No. 06-CV-0891-B, 2007 WL 4823761, at
*4 (N.D. Tex. Sept. 12, 2007)); see also Mark A. Lemley,
Terms of Use, 91 Minn. L. Rev. 459, 477 (2006) (“Courts
may be willing to overlook the utter absence of assent only
when there are reasons to believe that the [website user] is
aware of the [website owner’s] terms.”).
Were there any evidence in the record that Nguyen had
actual notice of the Terms of Use or was required to
affirmatively acknowledge the Terms of Use before
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completing his online purchase, the outcome of this case
might be different. Indeed, courts have consistently enforced
browsewrap agreements where the user had actual notice of
the agreement. See, e.g., Register.com, 356 F.3d at 401–04
(finding likelihood of success on the merits in a breach of
browsewrap claim where the defendant “admitted that . . . it
was fully aware of the terms” of the offer); Sw. Airlines Co.,
2007 WL 4823761, at *4–6 (finding proper contract
formation where defendant continued its breach after being
notified of the terms in a cease and desist letter); Ticketmaster
Corp. v. Tickets.com, Inc., No. CV-997654, 2003 WL
21406289, at *2 (C.D. Cal. Mar. 7, 2003) (denying
defendants’ summary judgment motion on browsewrap
contract claim where defendants continued breaching contract
after receiving letter quoting the browsewrap contract terms).
Courts have also been more willing to find the requisite
notice for constructive assent where the browsewrap
agreement resembles a clickwrap agreement—that is, where
the user is required to affirmatively acknowledge the
agreement before proceeding with use of the website. See,
e.g., Zaltz v. JDATE, 952 F. Supp. 2d 439, 451–52 (E.D.N.Y.
2013) (enforcing forum selection clause where prospective
members had to check box confirming that they both read and
agreed to the website’s Terms and Conditions of Service to
obtain account); Fteja, 841 F. Supp. 2d at 838–40 (enforcing
forum selection clause in website’s terms of service where a
notice below the “Sign Up” button stated, “By clicking Sign
Up, you are indicating that you have read and agree to the
Terms of Service,” and user had clicked “Sign Up”).
But where, as here, there is no evidence that the website
user had actual knowledge of the agreement, the validity of
the browsewrap agreement turns on whether the website puts
a reasonably prudent user on inquiry notice of the terms of
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the contract. Specht, 306 F.3d at 30–31; see also In re
Zappos.com, Inc. Customer Data Sec. Breach Litig., 893 F.
Supp. 2d 1058, 1064 (D. Nev. 2012). Whether a user has
inquiry notice of a browsewrap agreement, in turn, depends
on the design and content of the website and the agreement’s
webpage. Google, 2013 WL 5568406, at *6. Where the link
to a website’s terms of use is buried at the bottom of the page
or tucked away in obscure corners of the website where users
are unlikely to see it, courts have refused to enforce the
browsewrap agreement. See, e.g., Specht, 306 F.3d at 23
(refusing to enforce terms of use that “would have become
visible to plaintiffs only if they had scrolled down to the next
screen”); In re Zappos.com, 893 F. Supp. 2d at 1064 (“The
Terms of Use is inconspicuous, buried in the middle to
bottom of every Zappos.com webpage among many other
links, and the website never directs a user to the Terms of
Use.”); Van Tassell, 795 F. Supp. 2d 792–93 (refusing to
enforce arbitration clause in browsewrap agreement that was
only noticeable after a “multi-step process” of clicking
through non-obvious links); Hines, 668 F. Supp. 2d at 367
(plaintiff “could not even see the link to [the terms and
conditions] without scrolling down to the bottom of the
screen—an action that was not required to effectuate her
purchase”). On the other hand, where the website contains an
explicit textual notice that continued use will act as a
manifestation of the user’s intent to be bound, courts have
been more amenable to enforcing browsewrap agreements.
See, e.g., Cairo, Inc. v. Crossmedia Servs., Inc., No. 0404825, 2005 WL 756610, at *2, *4–5 (N.D. Cal. Apr. 1,
2005) (enforcing forum selection clause in website’s terms of
use where every page on the website had a textual notice that
read: “By continuing past this page and/or using this site, you
agree to abide by the Terms of Use for this site, which
prohibit commercial use of any information on this site”). But
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see Pollstar v. Gigmania, Ltd., 170 F. Supp. 2d 974, 981
(E.D. Cal. 2000) (refusing to enforce browsewrap agreement
where textual notice appeared in small gray print against a
gray background). In short, the conspicuousness and
placement of the “Terms of Use” hyperlink, other notices
given to users of the terms of use, and the website’s general
design all contribute to whether a reasonably prudent user
would have inquiry notice of a browsewrap agreement.
Barnes & Noble argues that the placement of the “Terms
of Use” hyperlink in the bottom left-hand corner of every
page on the Barnes & Noble website, and its close proximity
to the buttons a user must click on to complete an online
purchase, is enough to place a reasonably prudent user on
constructive notice. It is true that the location of the hyperlink
on Barnes & Noble’s website distinguishes this case from
Specht, the leading authority on the enforceability of
browsewrap terms under New York law. There, the Second
Circuit refused to enforce an arbitration provision in a
website’s licensing terms where the hyperlink to the terms
was located at the bottom of the page, hidden below the
“Download” button that users had to click to initiate the
software download. See Specht, 306 F.3d at 30. Then–Second
Circuit Judge Sotomayor, writing for the panel, held that “a
reference to the existence of license terms on a submerged
screen is not sufficient to place consumers on inquiry or
constructive notice of those terms.” Id. at 32. By contrast,
here the “Terms of Use” link appears either directly below the
relevant button a user must click on to proceed in the
checkout process or just a few inches away. On some pages,
the content of the webpage is compact enough that a user can
view the link without scrolling. On the remaining pages, the
hyperlink is close enough to the “Proceed with Checkout”
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button that a user would have to bring the link within his field
of vision in order to complete his order.
But the proximity or conspicuousness of the hyperlink
alone is not enough to give rise to constructive notice, and
Barnes & Noble directs us to no case law that supports this
proposition.1 The most analogous case the court was able to
locate is PDC Labs., Inc. v. Hach Co., an unpublished district
court order cited by neither party. No. 09-1110, 2009 WL
2605270 (C.D. Ill. Aug. 25, 2009). There, the “Terms [and
Conditions of Sale] were hyperlinked on three separate pages
of the online . . . order process in underlined, blue, contrasting
text.” Id. at *3. The court held that “[t]his contrasting text is
sufficient to be considered conspicuous,” thereby placing a
reasonable user on notice that the terms applied. Id. It also
observed, however, that the terms’ conspicuousness was
reinforced by the language of the final checkout screen,
which read, “‘STEP 4 of 4: Review terms, add any comments,
and submit order,’” and was followed by a hyperlink to the
Terms. Id. (emphasis added).
1
Indeed, in cases where courts have relied on the proximity of the
hyperlink to enforce a browsewrap agreement, the websites at issue have
also included something more to capture the user’s attention and secure
her assent. See, e.g., 5381 Partners LLC v. Sharesale.com, Inc., No. 12CV-4263 JFB AKT, 2013 WL 5328324, at *7 (E.D.N.Y. Sept. 23, 2013)
(in addition to hyperlink that appeared adjacent to the activation button
users had to click on, website also contained a text warning near the
button that stated “By clicking and making a request to Activate, you
agree to the terms and conditions in the [agreement]”); Zaltz, 952 F. Supp.
2d at 451–52 (users required to check box confirming that they had
reviewed and agreed to website’s Terms and Conditions, even though
hyperlink to Terms and Conditions was located on the same screen as the
button users had to click on to complete registration).
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As in PDC, the checkout screens here contained “Terms
of Use” hyperlinks in underlined, color-contrasting text. But
PDC is dissimilar in that the final screen on that website
contained the phrase “Review terms.” PDC Labs, 2009 WL
2605270, at *3. This admonition makes PDC distinguishable,
despite the court’s explanation that the blue contrasting
hyperlinks were sufficiently conspicuous on their own. That
the PDC decision couched its holding in terms of procedural
unconscionability rather than contract formation further
distinguishes it from our case. See id.
In light of the lack of controlling authority on point, and
in keeping with courts’ traditional reluctance to enforce
browsewrap agreements against individual consumers,2 we
therefore hold that where a website makes its terms of use
available via a conspicuous hyperlink on every page of the
website but otherwise provides no notice to users nor prompts
them to take any affirmative action to demonstrate assent,
even close proximity of the hyperlink to relevant buttons
users must click on—without more—is insufficient to give
rise to constructive notice. While failure to read a contract
before agreeing to its terms does not relieve a party of its
obligations under the contract, Gillman v. Chase Manhattan
Bank, N.A., 73 N.Y.2d 1, 11 (1988), the onus must be on
website owners to put users on notice of the terms to which
they wish to bind consumers. Given the breadth of the range
of technological savvy of online purchasers, consumers
2
See Woodrow Hartzog, Website Design as Contract, 60 Am. U. L.
Rev. 1635, 1644 (2011) (observing that courts “tend to shy away from
enforcing browsewrap agreements that require no outward manifestation
of assent”); Lemley, 91 Minn. L. Rev. at 472–77 (“An examination of the
cases that have considered browsewraps in the last five years demonstrates
that the courts have been willing to enforce terms of use against
corporations, but have not been willing to do so against individuals.”).
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cannot be expected to ferret out hyperlinks to terms and
conditions to which they have no reason to suspect they will
be bound.
Barnes & Noble’s argument that Nguyen’s familiarity
with other websites governed by similar browsewrap terms,
including his personal website , gives
rise to an inference of constructive notice is also of no
moment. Whether Nguyen has experience with the
browsewrap agreements found on other websites such as
Facebook, LinkedIn, MySpace, or Twitter, has no bearing on
whether he had constructive notice of Barnes & Noble’s
Terms of Use. There is nothing in the record to suggest that
those browsewrap terms are enforceable by or against
Nguyen, much less why they should give rise to constructive
notice of Barnes & Noble’s browsewrap terms.
C.
Barnes & Noble argues in the alternative that the district
court erroneously rejected its argument that Nguyen should
be equitably estopped from avoiding arbitration because he
ratified the Terms of Use by relying on its choice of law
provision in his complaint and asserting class claims under
New York law. Reviewing the district court’s decision for
abuse of discretion, Kingman Reef Atoll Invs., LLC v. United
States, 541 F.3d 1189, 1195 (9th Cir. 2008), we reject Barnes
& Noble’s argument for two reasons.
First, the doctrine of direct benefits estoppel does not
apply to the facts at hand. Federal courts have recognized that
the obligation to arbitrate under the FAA does not attach only
to one who has personally signed the arbitration provision.
Thomson-CSF, S.A. v. Am. Arbitration Ass’n, 64 F.3d 773,
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776 (2d Cir. 1995). Instead, a non-signatory to an arbitration
agreement may be compelled to arbitrate where the nonsignatory “knowingly exploits” the benefits of the agreement
and receives benefits flowing directly from the agreement.
See MAG Portfolio Consultant, GMBH v. Merlin Biomed
Grp. LLC, 268 F.3d 58, 61 (2d Cir. 2001); see also Belzberg
v. Verus Invs. Holdings Inc., 999 N.E.2d 1130, 1134 (N.Y.
2013). But Nguyen is not the type of non-signatory
contemplated by the rule. Equitable estoppel typically applies
to third parties who benefit from an agreement made between
two primary parties. See, e.g., Wash. Mut. Fin. Grp., LLC v.
Bailey, 364 F.3d 260, 267–68 (5th Cir. 2004) (estopping nonsignatory wife of borrower from avoiding arbitration clause
of loan agreement made between her husband and lender);
Parillo v. Nataro, 229 N.Y.S.2d 492, 493–94 (Sup. Ct. 1962)
(applying equitable estoppel to third-party beneficiary of
insurance contract). Here, Nguyen is not a third-party
beneficiary to Barnes & Noble’s Terms of Use, and whether
he is a primary party to the Terms of Use lies at the heart of
this dispute.
Second, we are unable to find any case law holding that
reliance on a contract’s choice of law provision in itself
constitutes a “direct benefit.” The closest case is HD Brous &
Co., Inc. v. Mrzyglocki, an unpublished district court decision,
in which the court compelled arbitration against a nonsignatory petitioner in part because the non-signatory had
sought to limit the respondent’s choice of substantive law by
relying on the agreement’s choice of law provision. No. 03
Civ.8385(CSH), 2004 WL 376555, at *8 (S.D.N.Y. Feb. 26,
2004). But HD Brous is distinguishable because the
agreement there served as the foundational document for the
business relationship between the parties and explicitly
named the petitioner as the intended beneficiary. Id. It can
Case: 12-56628
18
08/18/2014
ID: 9207670
DktEntry: 31-1
NGUYEN V. BARNES & NOBLE, INC.
hardly be said here that the choice of New York law—chosen
unilaterally by Barnes & Noble—was intended to benefit
Nguyen. Any benefit derived by Nguyen under New York
law—whether it be the possibility of statutory or treble
damages on Nguyen’s nationwide class claims—is merely
incidental.
In light of these distinguishing facts, the district court did
not abuse its considerable discretion in rejecting Barnes &
Noble’s estoppel argument.
***
We hold that Nguyen had insufficient notice of Barnes &
Noble’s Terms of Use, and thus did not enter into an
agreement with Barnes & Noble to arbitrate his claims.
AFFIRMED.
Page: 18 of 18
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