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Barnes & Noble Loses Bid for Arbitration in Class Action

Monday, August, 25, 2014

A class-action lawsuit being organized again bookseller and online retailer Barnes & Noble over canceled tablet computer orders can proceed in the courts, as the Ninth Circuit Court of Appeals has denied the company’s petition for arbitration in the matter.


The lawsuit alleges that Barnes & Noble tried to mislead consumers with falsely low prices on HP-branded tablet computers and knowingly sold more than it had in stock at the time, and then simply canceled all the orders.  The suit alleges Barnes & Noble profited from these transactions by gaining customer information including credit card data.


Barnes & Noble asserted that all customers clicked through a binding arbitration agreement, and stated that the proximity of the arbitration information link near the “buy” buttons on the website was sufficient to establish that consumers were aware of the arbitration agreement.  The Court of Appeals, however, has rejected this argument and found that it is impossible to prove consumers were aware of a binding agreement simply because a link to that agreement was visible on the page.  The court also stated that the wide range of experience and technical expertise found in Internet users precluded any assumptions about their ability to be aware of the importance of specific hyperlinks.


The ruling does not necessarily mean Barnes & Noble will lose in arguments over the actual issues of the lawsuit, but it is a victory for consumer advocates who believe “click-through” and “browserwrap” binding agreements are unfair to consumers.