Last month, the Ninth Circuit affirmed a Washington district court’s decision to deny Huuuge’s bid to arbitrate a proposed class action based on a browsewrap agreement.
In early 2017, Sean Wilson downloaded the Huuuge Casino smartphone app, which allows users to gamble with chips to play casino games. Users can gamble either with a limited number of free chips or with chips purchased through the app. Wilson played for more than a year until he filed suit against Huuuge, alleging the app violated Washington gambling and consumer protection laws by charging users for chips.
Huuuge countered with a motion to compel arbitration, alleging that Wilson was on notice of its terms, which include a binding arbitration provision that prohibits class actions. Users can access Huuuge’s terms by reading them before downloading the app (although users are not required to do so) or by viewing the terms during game play (also not required in order to play). Wilson argued that he was unaware of the arbitration provision and did not affirmatively acknowledge or agree to the terms. The district court agreed, denying the motion to compel arbitration, and the Ninth Circuit affirmed.
While playing the game, it is not necessary for a user to open the settings menu while playing; nor is there a requirement to acknowledge or agree to the terms when opening the app, creating an account, playing the game—or at any other point, the court added.
With this system, Wilson had neither actual notice nor constructive notice, the Ninth Circuit ruled. “Wilson was not required to assent to Huuuge’s terms before downloading or using the app—–or at any point at all,” the panel wrote. “Huuuge did not notify users that the app had terms and conditions, let alone put them in a place the user would necessarily see. Instead, a user would need to seek out or stumble upon Huuuge’s terms, either by scrolling through multiple screens of text before downloading the app or clicking the settings menu within the app during gameplay.”
The court rejected the defendant’s argument that Wilson’s repeated use of the app placed him on constructive notice, finding no reason to assume that users will click on the settings menu simply because it exists, particularly when users can play the game unencumbered by any of the settings.
“Nothing points the user to the settings tab and nowhere does the user encounter a click box or other notification before proceeding,” the panel said. “Only curiosity or dumb luck might bring a user to discover the terms.”
Instead of requiring that users affirmatively assent to the app’s terms, “Huuuge chose to gamble on whether its users would have notice of its terms,” the Ninth Circuit wrote. “The odds are not in its favor. Wilson did not have constructive notice of the terms and thus is not bound by Huuuge’s arbitration clause in the terms.”
To read the opinion in Wilson v. Huuuge, click here.