Nature of the Case
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Facts
D is the owner and operator of the smartphone app Huuuge Casino, which allows smartphone 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. P downloaded the app from Apple's App Store in early 2017 and played Huuuge Casino for over a year. In April 2018, P filed this class action lawsuit alleging a violation of Washington gambling and consumer protection laws by charging users for chips in its app. D moved to compel arbitration. D does not require users to affirmatively acknowledge or agree to its Terms before downloading or while using the app. Once a user has downloaded the app, the user can play games immediately. The user would have to scroll through several screen-lengths of text to encounter a paragraph that starts with 'Read our Terms of Use,' and includes the text of a link to the Terms. When a user accesses the Terms, the following arbitration provision appears:
EXCEPT AS SPECIFICALLY STATED HEREIN, ANY DISPUTE OR CLAIM BETWEEN YOU AND HUUUGE ARISING OUT OF, OR RELATING IN ANY WAY TO, THE TERMS, THE SERVICE OR YOUR USE OF THE SERVICE, OR ANY PRODUCTS OR SERVICES OFFERED OR DISTRIBUTED THROUGH THE SERVICE ('DISPUTES') SHALL BE RESOLVED EXCLUSIVELY BY FINAL, BINDING ARBITRATION. . . .
YOU AGREE THAT YOU MAY BRING CLAIMS AGAINST HUUUGE ONLY IN YOUR INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING. IN ADDITION, YOU AGREE THAT DISPUTES SHALL BE ARBITRATED ONLY ON AN INDIVIDUAL BASIS AND NOT IN A CLASS, CONSOLIDATED OR REPRESENTATIVE ACTION. THE ARBITRATOR DOES NOT HAVE THE POWER TO VARY THESE PROVISIONS.
D claims P is bound by the arbitration provision because P had constructive notice both when he downloaded the app and during its use. P argues the app's Terms were not conspicuous at any time. The district court denied D's motion to compel arbitration. D appealed.
Holding and Decision
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Legal Analysis
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