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NOT FOR PUBLICATION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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