Case Alleging That Barnes & Noble Wrongfully Shared Customer Information With Facebook Ordered To Arbitration

Carlton Fields

Plaintiff filed a class action against Barnes & Noble in the Southern District of New York, alleging that it violated her privacy by sharing information about her purchases with Facebook. Barnes & Noble moved to compel arbitration based on an agreement to arbitrate contained in its Terms of Use. Plaintiff denied agreeing to the Terms of Use and argued that the arbitration provision was unconscionable.

In a report and recommendation, a magistrate judge found that the Terms of Use were an example of a “sign-in-wrap” agreement, in which a website notifies users of the existence and applicability of its terms of use “when proceeding through the website’s sign-in or login process.” Under Second Circuit precedent, arbitration clauses in such sign-in-wrap agreements may be enforced “where the notice of the arbitration provision was reasonably conspicuous and manifestation of assent unambiguous as a matter of law.” The magistrate examined evidence regarding the appearance and functioning of the website in detail, including evidence that, at the time plaintiff placed her DVD order, users of the website “had to click on a ‘Submit Order’ button with the language ‘[b]y making this purchase you are agreeing to our Terms of Use and Privacy Policy’ immediately below it” in order to make purchases, and that the actual Terms of Use could be accessed by clicking on those words. The magistrate found that this evidence, countered only by plaintiff’s testimony that she did not recall seeing the Terms of Use notice, was sufficient for Barnes & Noble to show “by a preponderance of credible evidence” that the notice was “reasonably conspicuous” and that plaintiff had unambiguously manifested her assent, such that an agreement to arbitrate existed. The magistrate also found that the arbitration agreement was not procedurally or substantively unconscionable.

In considering plaintiff’s objections to the magistrate report and recommendation, the district judge found that the magistrate was wrong to describe Barnes & Noble’s burden as making a showing “by a preponderance of credible evidence,” finding instead that it had to show that “no trier of fact reasonably could have found that an agreement to arbitrate did not exist between the parties.” This court found this error to be harmless, however, as the evidence was sufficient to meet the correct standard, and it granted Barnes & Noble’s motion to compel arbitration.

Bernardino v. Barnes & Noble Booksellers, Inc., Case No. 1:17-cv-04570 (S.D.N.Y. Jan. 31, 2018)


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