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Wilson v. Huuuge, Inc.

United States Court of Appeals, Ninth Circuit

December 20, 2019

Sean Wilson, individually and on behalf of all others similarly situated, Plaintiff-Appellee,
v.
Huuuge, Inc., a Delaware corporation, Defendant-Appellant.

          Argued and Submitted August 29, 2019 Seattle, Washington

          Appeal from the United States District Court for the Western District of Washington Ronald B. Leighton, District Judge, Presiding D.C. No. 3:18-cv-05276-RBL

          Jaime Drozd Allen (argued), Stuart R. Dunwoody, Cyrus E. Ansari, and Benjamin J. Robbins, Davis Wright Tremaine LLP, Seattle, Washington, for Defendant-Appellant.

          Ryan D. Andrews, Roger Perlstadt (argued), and Alexander G. Tievsky, Edelson PC, Chicago, Illinois, for Plaintiff-Appellee.

          Before: M. Margaret McKeown and Jay S. Bybee, Circuit Judges, and Fernando J. Gaitan, Jr., [*] District Judge.

         SUMMARY [**]

         Notice / Washington Law

         The panel affirmed the district court's denial of HUUUGE Inc.'s motion to compel arbitration against a smartphone app user.

         Under Washington law, the panel held that because Huuuge did not provide reasonable notice of its Terms of Use, the app user did not unambiguously manifest assent to the terms and conditions or the imbedded arbitration provision. The panel held that the app user had neither actual notice nor constructive notice of the Terms of Use, and thus was not bound by Huuuge's arbitration clause in the Terms.

          OPINION

          McKeown Circuit Judge.

         Smartphone applications have a ubiquitous presence in our everyday lives. The question of first impression for our court is under what circumstances does the download or use of a mobile application ("app") by a smartphone user establish constructive notice of the app's terms and conditions?

         HUUUGE Inc. ("Huuuge") appeals the district court's denial of its motion to compel arbitration against Sean Wilson, a smartphone app user. Because Huuuge did not provide reasonable notice of its Terms of Use ("Terms"), Wilson did not unambiguously manifest assent to the terms and conditions or the imbedded arbitration provision. We affirm the district court's denial of Huuuge's motion to compel arbitration and to stay proceedings.

         BACKGROUND

         Huuuge 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. Wilson downloaded the app from Apple's App Store in early 2017 and played Huuuge Casino for over a year.

         In April 2018, Wilson filed this class action lawsuit, alleging Huuuge violated Washington gambling and consumer protection laws by charging users for chips in its app. Huuuge moved to compel arbitration under the Federal Arbitration Act ("FAA"), alleging that Wilson was on inquiry notice of its ...


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