Court Opinion

ID: 4374578
Source: CourtListenerOpinion
Date Created: 2019-03-06 23:00:26.800891+00
Date Added: 2024-06-11T09:40:39.963380
License: Public Domain

FILED
                            NOT FOR PUBLICATION
                                                                              MAR 06 2019
                     UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

GERALD McGHEE, an individual, on                  No.    17-56248
behalf of himself and all others similarly
situated,                                         DC No. CV 17-0586 AJB

              Plaintiff-Appellee,
                                                  MEMORANDUM*
 v.

NORTH AMERICAN BANCARD, LLC,

              Defendant-Appellant.

                   Appeal from the United States District Court
                      for the Southern District of California
                   Anthony J. Battaglia, District Judge, Presiding

                      Argued and Submitted December 6, 2018
                               Pasadena, California

Before:      TASHIMA and WARDLAW, Circuit Judges, and PRATT,** District
             Judge.

      Defendant-Appellant North American Bancard, LLC (“NAB”), appeals the

district court’s order denying its motion to compel arbitration in a putative class

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
      **
            The Honorable Robert W. Pratt, United States District Judge for the
Southern District of Iowa, sitting by designation.
action filed by Plaintiff-Appellee Gerald McGhee (“McGhee”), a merchant who

signed up for NAB’s credit card processing service. We have jurisdiction under 9

U.S.C. § 16(a)(1)(B), and we review de novo the denial of a motion to compel

arbitration. Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014).

We affirm.

      McGhee did not assent to the arbitration clause on the User Agreement

webpage. Although McGhee assented to the Terms and Conditions when filling

out the online application by clicking on the button next to the “I have read and

agree to the Terms and Conditions” hyperlink, the Terms and Conditions webpage

did not provide constructive notice to a reasonably prudent user that the User

Agreement was a part of the contract between NAB and its customers. See id. at

1178–79 (“[W]here 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.”). Here, the link to the

User Agreement webpage on the Terms and Conditions webpage did not require

any affirmative action to demonstrate assent; the text simply stated, “View the

User Agreement here” and did not indicate that the User Agreement was

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incorporated into the Terms and Conditions. Further, the Terms and Conditions

webpage contained documents and links to more document that were exclusive to

each other.

      Moreover, the twenty-fourth paragraph on the Terms and Conditions

webpage contained a merger clause that stated, “[t]he Agreement, including these

Terms and Conditions and the Merchant Application, constitutes the entire

Agreement between Merchant, Global Direct, and Member and supersedes all prior

memoranda or agreements relating thereto, whether oral or in writing.” Based on

the layout of the Terms and Conditions webpage and this merger clause, a

reasonably prudent user would not expect to need to look for hyperlinks to

webpages other than the Terms and Conditions webpage or the webpage that

contained the application for the credit card processing service. The onus fell on

NAB to put its customers on notice of the binding terms of the contract in a clear

and straightforward way. See id. at 1179. NAB failed to do so, instead causing

confusion through the convoluted placement of contradictory documents on its

website. Therefore, McGhee did not assent to the arbitration clause on the User

Agreement webpage when assenting to the Terms and Conditions.

      Nevertheless, NAB argues that the district court’s order should be reversed

because McGhee failed to provide a declaration or other similar evidence to rebut

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NAB’s alleged “prima facie” showing that McGhee assented to the User

Agreement. But, for the reasons listed above, NAB did not make a “prima facie”

showing that McGhee assented to the User Agreement and the arbitration clause;

therefore, it was unnecessary for McGhee to provide rebutting evidence. See id. at

1177 (“[W]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 the contract.”).

      AFFIRMED.

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