In Nghiem v Dick’s Sporting Goods, Inc., No. 16-00097 (C.D. Cal. July 5, 2016), the Central District of California held browsewrap terms to be unenforceable because the hyperlink to the terms was “sandwiched” between two links near the bottom of the third column of links in a website footer. Website developers – and their lawyers – should take note of this case, part of an emerging trend of judicial scrutiny over how browsewrap terms are presented. Courts have, in many instances, refused to enforce browsewraps due to a finding of a lack of user notice and assent. In this case, the most recent example of a court’s specific analysis of website design, a court suggests that what has become a fairly standard approach to browsewrap presentment fails to achieve the intended purpose.
The district court noted that browsewrap agreements are enforced with “reluctance,” and only when a consumer has “actual or constructive knowledge of a website’s terms and conditions.” Interestingly, DSG argued that because the plaintiff was an attorney whose former firm handled TCPA cases (including litigation against DSG), he should be charged with knowledge of the terms and arbitration clause. The court rejected the argument that the plaintiff should be deemed to have actual knowledge of its terms based upon his vocation:
The court performed a detailed review of the website design to determine whether the plaintiff gained constructive knowledge of the website terms based upon, among other considerations, the placement of the link to the terms. The court noted that DSG’s terms appeared at the bottom in the website footer of the home page (and on the page about its mobile alerts), and within a grouping of 27 other hyperlinks arranged in four columns that covered a variety of diverse topics (e.g., careers, gift cards, find a store, etc.). The court noted that the hyperlink to the terms was “sandwiched between ‘Only at DICK’s’ and ‘California Disclosures’, near the bottom of the third column of links.” As such, the court ruled that the placement was not conspicuous enough alone to put consumers on inquiry notice of the terms.
© 2016 Proskauer Rose LLP.