March 7, 2019

On-line purchaser bound by arbitration clause following Second Circuit dismissal of appeal

On March 7, 2019, the United States Court of Appeals for the Second Circuit dismissed a suit brought against Barnes & Noble Booksellers, Inc. (B&N) on the grounds that it did not have jurisdiction to adjudicate the claim. The original complaint was filed in June 2017, and alleged that Barnes & Noble violated the Video Privacy Protection Act, 18 USC § 2710 and New York privacy law by allowing information about the plaintiff’s purchase and status as a Facebook subscriber to be disclosed to Facebook following the plaintiff’s purchase of a DVD from B&N’s mobile website.  B&N filed a motion to compel arbitration pursuant to the Federal Arbitration Act, 9 USC §§ 2-4 and the Terms of Use on its website. According to B&N, the DVD purchase process involved clicking on a button labeled, “Checkout as Guest,” which was followed by the statement, “By checking out as a guest you are agreeing to our Terms of Use.”  The Terms of Use included an arbitration clause requiring that any claim arising out of the B&N mobile website be resolved through binding arbitration.  Following arguments on the defendant’s motion to compel arbitration, the judge held that an agreement to arbitrate did exist between the parties. 

The United States District Court for the Southern District of New York granted the motion to stay the proceedings and compel arbitration.  On appeal, the Second Circuit held that the district court’s order was an interlocutory order, not a final decision, and therefore not appealable under the Federal Arbitration Act, leaving the arbitration reference in place.

Order dismissing appeal | Complaint |

Memorandum in support of motion to compel arbitration