Barnes and Noble Loses Huge Motion in Federal False Advertising Lawsuit

A federal judge in Orange County ruled today against bookselling giant Barnes and Noble in its efforts to force a false advertising lawsuit plaintiff from the public courthouse and into private arbitration.

In a 10-page opinion, U.S. District Court Judge Josephine Staton Tucker sided with Kevin Khoa Nguyen who filed an April 2012 class action suit after he bought a 16GB HP TouchPad Tablet from for the advertised price of $102 in August 2011.

The company sent Nguyen, a California resident, a confirmation of the sale and charged his American Express account, but later reneged on the deal, claimed demand exceeded stock and refunded his money.

According to his lawsuit, the company's tactic “significantly increased
website traffic” as well as boosted advertising exposure,
generated new collections of consumer personal contact information and served as a
bait and switch tool for other items sold on the website.

In their defense, Barnes and Noble officials claimed that neither Nguyen
nor any other allegedly abused online customer is entitled to force the
company to face a jury because customers who purchase online products
at the company's website automatically agree they will submit any
dispute to arbitration, a move that almost always favors the business.

But Judge Tucker determined that Nguyen had not affirmatively consented to arbitration.

business website post a notice that the consumer automatically agrees
with the company's rules when he or she buys a product while other sites
make the consumer click a box specifically acknowledging the company's

In Tucker's view, the issue of “browsewrap” or “clickwrap”
wasn't the key point, but rather “whether [Nguyen] had constructive notice
of the terms of the agreement and therefore agreed to be bound by them .
. . [Barnes and Noble] did not position any notice even of the existence
[her emphasis] of its 'Terms of Use' in a location where website users
would necessarily see it, and certainly did not give notice that those
terms applied.”

Based on her court minutes, Tucker won't be shocked if the company challenges her decision to the Ninth Circuit court of appeals.

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