News

Nova Scotia Barristers’ Society publishes report providing guidance on the ethical use of social media

The Nova Scotia Barristers’ Society recently published a report entitled Conduct Unbecoming: What should the Society do when it comes to gossip, online posts and bad behaviour on social media? The report, written by an NSBS staff lawyer, begins by noting that the Society has seen an upswing in reports, calls and complaints to it regarding social media activity by lawyers. While it is clear that lawyers enjoy freedom of expression under s. 2(b) of the Charter in the same way as all citizens, there are ethical constraints on them which potentially require the regulator to intervene. Not every form of speech was necessarily subject to Society scrutiny and/or discipline, and the report noted that such regulatable speech would fall into one of three categories: 1) Speech that could be considered imprudent, rash, rude, defamatory or even offensive, but does not cross the threshold into being discriminatory or harassing; 2) Speech that involves the justice system: encouraging respect for the administration of justice; and 3) Speech that is discriminatory or harassing.

The report reviews the decisions of the Supreme Court of Canada in Doré and Groia, noting that there is a balance to be struck between the fact that lawyers have voluntarily joined a profession which may require constraining their speech with the desirability of lawyers being able to speak their minds. In conclusion, it offered a set of principles that would be used in evaluating a lawyer’s speech:

First principle: A lawyer has “willingly joined a profession that was subject to rules of discipline that [they] knew would limit [their] freedom of expression”

Second principle: We must take into consideration the importance of the expressive rights in each case, in light of (a) the lawyer’s right to expression and (b) the public’s interest in open discussion.

Third principle: The Society should only limit its members’ freedom of expression in their private lives insofar as it is necessary to do so to “protect the public interest in the practice of law.”

Fourth principle: The Society must consider the unique circumstances in each case: such as what the lawyer said, the context in which they said it and the reason it was said.

Commissioners specifically call for vigilance regarding “scope creep”

On Data Privacy Day, January 28, 2020, the Information and Privacy Commissioners of the four Atlantic Canadian provinces issued a statement intended to highlight the privacy implications of the adoption of facial recognition technology. The statement included a backgrounder on the technology, referring to Investigation PC-010005-1 from the Ontario Office of the Information and Privacy Commissioner (OIPC) and a publication from the Office of the Privacy Commissioner of Canada entitled “Automated Facial Recognition in the Public and Private Sectors.”

The backgrounder, available here, also raised the issue of “scope creep” and pointed to the recent implementation of biometric photos on drivers licenses and provincial ID cards in the region.

The statement came shortly after the New York Times wrote a highly-shared article on facial recognition technology that mined social media accounts and is offered to law enforcement.

Commissioners specifically call for vigilance regarding “scope creep”

On Data Privacy Day, January 28, 2020, the Information and Privacy Commissioners of the four Atlantic Canadian provinces issued a statement intended to highlight the privacy implications of the adoption of facial recognition technology. The statement included a backgrounder on the technology, referring to Investigation PC-010005-1 from the Ontario Office of the Information and Privacy Commissioner (OIPC) and a publication from the Office of the Privacy Commissioner of Canada entitled “Automated Facial Recognition in the Public and Private Sectors.”

The backgrounder, available here, also raised the issue of “scope creep” and pointed to the recent implementation of biometric photos on drivers licenses and provincial ID cards in the region.

The statement came shortly after the New York Times wrote a highly-shared article on facial recognition technology that mined social media accounts and is offered to law enforcement.

The final tort of the “four-tort catalogue” has been recognized in Ontario, and likely will be recognized in other common law provinces

In 2016, in the case of Jones v Tsige, the Ontario Court of Appeal imported into Canada the four American privacy torts as articulated by William L. Prosser in 1960. That list includes:

1. Intrusion upon the plaintiff's seclusion or solitude, or into his private affairs.
2. Public disclosure of embarrassing private facts about the plaintiff.
3. Publicity which places the plaintiff in a false light in the public eye.
4. Appropriation, for the defendant's advantage, of the plaintiff's name or likeness.

The fourth cause of action, commercial appropriation of the plaintiff's image, was already alive and well in Canadian tort law. The Court in Jones applied the “intrusion upon seclusion” tort and subsequent cases have applied “public disclosure of private facts”, particularly in the context of the non-consensual distribution of intimate images.

In December 2019, the Ontario Superior Court of Justice explicitly recognized the “false light” privacy tort, confirming that the full set of Prosser’s torts exist in Ontario. In Yenovkian v. Gulian, Justice Kristjanson was dealing with an unpleasant family law case in which the husband had made wild accusations against his former spouse, particularly related to their two children.

The judge summarized the husband’s misconduct that was at issue:

[2] It is also about a father, Mr. Vem Yenovkian, who has engaged in years of cyberbullying of the mother, Ms. Sonia Gulian on websites, YouTube videos, online petitions and emails. It is about a father who videotapes court-ordered access visits with the children—both in-person and on Skype—and edits and posts those access visits and photographs of the children on the internet, with commentary. It is about a father who publicly posts on YouTube a video of his son cowering under a table while the father harangues him over Skype on a court-ordered access visit. It is about a father who posts videos of him describing his daughter, who suffers from a neurological disorder, as looking drugged, when she used to be “normal,” and posting that his daughter has a “broken” mind.

[3] Despite court orders prohibiting posting, the father continues his cyberbullying campaign abusing Ms. Gulian and her parents. He seeks to undermine the administration of justice through an online campaign to “unseat” a judge of this Honourable Court for rulings made, internet attacks on trial witnesses and the wife’s lawyer, and by flouting court orders and family law disclosure obligations.

The judge noted, with respect to the list of privacy torts:

[170] With these three torts all recognized in Ontario law, the remaining item in the “four-tort catalogue” of causes of action for invasion of privacy is the third, that is, publicity placing the plaintiff in a false light. I hold that this is the case in which this cause of action should be recognized. It is described in § 652E of the Restatement as follows:

Publicity Placing Person in False Light

One who gives publicity to a matter concerning another that places the other before the public in a false light is subject to liability to the other for invasion of his privacy, if

1. the false light in which the other was placed would be highly offensive to a reasonable person, and
2. the actor had knowledge of or acted in reckless disregard as to the falsity of the publicized matter and the false light in which the other would be placed.

The Court noted that the “false light” may often be defamatory per se, the essence of the tort is presenting the subject of the tort as “other than they are”:

[171] I adopt this statement of the elements of the tort. I also note the clarification in the Restatement’s commentary on this passage to the effect that, while the publicity giving rise to this cause of action will often be defamatory, defamation is not required. It is enough for the plaintiff to show that a reasonable person would find it highly offensive to be publicly misrepresented as they have been. The wrong is in publicly representing someone, not as worse than they are, but as other than they are. The value at stake is respect for a person’s privacy right to control the way they present themselves to the world.

The Court in this case did not follow the $20,000 “cap” on non-pecuniary damages set out in Jones v Tsige, but rather followed the divergent train of reasoning for general damages that began with the “Jane Doe” cases (Jane Doe 464533 v N.D., 2017 ONSC 127 and Jane Doe 72511 v. Morgan, 2018 ONSC 6607):

[186] There is no claim for pecuniary damages; the only issue is non-pecuniary damages. The infliction of mental suffering and invasion of privacy are based on many of the same facts.

[187] On damages for intrusion on seclusion, the Court of Appeal in Jones v. Tsige held at paragraphs 87-88 that damages for intrusion upon seclusion in cases where the plaintiff has suffered no pecuniary loss should be modest, in a range up to $20,000. The important distinction with the two invasion of privacy torts in issue here, however, is that intrusion on seclusion does not involve publicity to the outside world: they are damages meant to represent an invasion of the plaintiff’s privacy by the defendant, not the separate and significant harm occasioned by publicity.

[188] The two Jane Doe cases have recognized that the cap on damages for intrusion upon seclusion may not apply to the other forms of invasion of privacy: Jane Doe 2016 at para. 58; Jane Doe 2018 at paras. 127-132. In this case, as is in those, the “modest conventional sum” that might vindicate the “intangible” interest at stake in Jones v. Tsige, para. 71, would not do justice to the harm the plaintiff has suffered.

[189] In Jane Doe 2016, at para. 52, Stinson J. turned to sexual battery cases for guidance in arriving at an award, and Gomery J. in Jane Doe 2018, at paras. 127-128 followed the same approach. In support of this approach, Stinson, J. pointed to the similarly of the psychological and emotional harm the plaintiff had suffered to that experienced by victims of sexual assault.

[190] I likewise adopt the method of looking to the factors applied to decide damage awards for a tort causing harms analogous to those the present plaintiff has suffered for invasion of privacy. The harm arising from the invasion of privacy in the present case is akin to defamation. Accordingly, in arriving at an award of non-pecuniary damages, I am guided by the factors described by Cory J. in Hill v Church of Scientology, at para. 187, which I am adapting to the tort of publicity placing a person a false light:

1. the nature of the false publicity and the circumstances in which it was made,
2. the nature and position of the victim of the false publicity,
3. the possible effects of the false publicity statement upon the life of the plaintiff, and
4. the actions and motivations of the defendant.

[191] In this case, the false publicity is egregious, involving alleged criminal acts including by Ms. Gulian against her children. The false publicity is widely disseminated on the internet, as well as through targeted dissemination to church friends and business associates. Ms. Gulian has suffered damage as a mother, as an employee, in the Armenian community, and in her church community. She is peculiarly vulnerable as the spouse of the disseminator of false publicity. The false publicity has had a detrimental effect on Ms. Gulian’s health and welfare, humiliation, caused her fear, and could be expected as well to affect her social standing and position. Mr. Yenovkian has not apologized, nor has he retracted the outrageous comments despite court orders.

[192] The damages for intentional infliction of mental suffering are intended to be compensatory. I award $50,000 compensatory damages for intentional infliction of mental suffering, relying on Boucher v. Wal-Mart Canada Corp., 2014 ONCA 419.

Personal Apple ID used to de-activate work phone, making evidence unavailable, and termination of employee reversed

In a BC case of interest which recently came to the editors’ attention, District of Houston v. Canadian Union of Public Employees, Local 2086,an employer’s investigation in to allegations of workplace misconduct was partially foiled by its policy (or lack thereof) regarding the use of work phones for personal purposes. The employee, Standbridge, was given a new work iPhone after his previous one malfunctioned. When the phone was set up, the manager who provided the phone used an Apple ID provided by Standbridge, which resulted in personal pictures and other data being downloaded onto the new phone from iCloud. The manager knew this, and thus did not keep a record of the Apple ID or password. Standbridge claimed that he had told the manager that the Apple ID and password belonged to his wife, though the manager denied this.

Later, Standbridge was accused by several female employees of inappropriately following them to worksites and taking pictures of them with his phone. Standbridge denied this and provided his phone to another manager, Glavin, for inspection, along with the password to open it. Glavin looked at some pictures on the phone but then left it on his desk while at meetings, and when he returned the iPhone had been remotely wiped. It emerged that Standbridge’s wife had learned that the phone was being accessed (though it was not clear she understood why), and because her own personal data was accessible on it, she remotely wiped the phone. Standbridge asked her to provide the Apple ID and password but she refused to do so.

Standbridge was terminated for interfering with the investigation, but was reinstated by the labour arbitrator. The employer had prevented him from being present while some of his personal data was accessed, and some accommodation for protection of his personal information should have been provided—particularly where there was no policy forbidding the mixing of work and personal information on devices, and that up until then it had been a common practice of the employer’s. Evidence substantiating the inappropriate photo-taking, if any, had been destroyed, and the allegations could otherwise not be sustained.

“pics or it didn’t happen”

The presumed ubiquity of social media, or perhaps more accurately of constantly-accessible digital photography, formed a small role in a decision by the Immigration and Refugee Appeal Board in Osman v Canada (Citizenship and Immigration). The appellant was appealing a decision which refused to approve a permanent resident application made by her spouse. Her appeal was also unsuccessful, largely on the basis on the conclusion that she had misrepresented facts in her application (most notably, that her spouse was also her first cousin). The Appeal Board also formed the view that the marriage was not a genuine one, but rather one made only for the purposes of facilitating the immigration application. There were a number of reasons supporting that conclusion, one of which was the absence of photographs:

[32] The Appellant and Applicant did not include any post-wedding photos with their application or for the IAD appeal. Given today’s technology, I expect a young couple (in their early 20s) to take many photos together during their honeymoon phase. When asked why they did not present such photos for the appeal, the Applicant testified that they did not take any photos at that time but did not provide a reason for not doing so.

Employer policies and further research called for

In 2017-2018, the Labour Program of Employment and Social Development Canada conducted a comprehensive review of Part III of the Canada Labour Code, sets out minimum labour standards for workplaces in the federally regulated private sector. That review led to a series of amendments, but five key issues were not resolved, and so the Minister of Employment, Workforce Development and Labour appointed an independent Expert Panel on Modern Federal Labour Standards to consult, research, and provide advice to the Minister. The December 2019 report is the culmination of the Expert Panel’s work and contains the results of the consultations, research, and recommendations. Of particular interest is the discussion there of a potential “right to disconnect”. As the Report of the Expert Panel on Modern Federal Labour Standards puts it:

In today’s world of work, mobile technologies and other factors, such as alternative work arrangements, the 24/7 economy, gig work and organizational cultures have blurred the boundaries between what it means to be "at work" and not "at work". In this context, should limits be set on work-related e-communications outside of work hours in the federally regulated private sector? If so, how should this be done and why?

The Expert Panel did not recommend that there be, at this time, a statutory right to disconnect, but did conclude, in Chapter 4: Disconnecting form work-related e-communications outside of work hours, that serious issues were raised and needed to be resolved.

“Part III of the Code does not currently directly address limiting work-related e-communications outside of regular working hours in this way, and no provinces or territories provide such a legal right.” The Expert Panel acknowledges that the concept of what it means to be “at work” has been blurred by mobile technologies and globalization, and that with “the transition from an industrial society to a service-based society, and the increasing accessibility of information and communication technology tools, work is no longer always tied to a physical location.”

There were many consideration that the played into Expert Panel’s recommendation. These included recognition of the necessity of a “flexible workforce that is available around the clock” to remain competitive in some cases, and awareness that some industries and organizations have a workplace culture of constant availability and connectivity. In addition, they took account of the fact that there can be some trade-off involved, in the sense that despite the potential downsides of constant connectivity from the point of view of an employee, it can also accommodate time zone difference, give employees control over their work hours, and facilitate “on-call” work. They noted as well that such connectivity created equity issues, and therefore some scope for tension: women statistically take on more non-work-related activities outside of working hours, which can limit their ability to respond to requests outside of those hours, which in turn could have a negative impact on competitiveness, promotions, and so on.

The Report notes that workers increasingly use technology to set up flexible work arrangements to create a more satisfactory work-life balance, but on the other hand, “engaging in e-communications for work purposes outside of work hours has been associated with poorer employee recovery from work and increased work—life interreference, high levels of burnout and increased health impairments”.

The Expert Panel discusses some of the difficulties with France’s “right to disconnect”, including that it does not have a legal definition of “right to disconnect” which has led to ambiguity in what that right actually entails. Germany adopted a self-regulatory model that leads to more “tailor-made solutions” and provides the example of the German Labour Ministry coming to an agreement with its own works council to ban communication with staff outside work hours, except in emergencies, and protects employees from reprisals for not responding to such communications. Volkswagen implemented a policy that stops Blackberry servers from sending emails to employees covered by a collective bargaining agreement form half an hour after standards hours until half an hour before they begin work.

Three general themes were at the centre of the Expert’s panel: flexibility, compensation, and management. Ultimately, the Expert Panel did not recommend implementing a statutory right to disconnect at this time. They concluded:

The Panel believes that a statutory right to disconnect would currently be difficult to operationalize and enforce. Part III already provides entitlement to overtime for services required by the employer beyond certain hours of work. Part III also provides some restrictions around the duration of work. These provisions, in part, help to provide a framework to address the negative aspects of this issue. Nevertheless, the Code does not define what is deemed work. Given the blurring of boundaries described above, the absence of such a definition generates ambiguity about what work is for employers, employees and labour standards officers responsible for enforcing labour standards.

Nonetheless the Report acknowledged that a real issue arose, and therefore made four recommendations: 1) that the employers subject to Part III consult with their employees or their representatives and issue policy statements on the issue of disconnecting; 2) that a statutory definition of “deemed work” be included in Part III; 3) that Part III provide a right to compensation or time off in lieu for employees required to remain available for potential demands from their employer; and, 4) that further research be done on the issue.

Manitoba Law Reform Commission releases discussion paper examining electronic augmentation for taking of affidavits and other documents

The Manitoba Law Reform Commission has released a discussion paper entitled Bridging the Gap for Remote Communities: Electronic Witnessing of Affidavit Evidence. The Commission’s project originated back in 2017, when members of the Manitoba bar brought to its attention the fact that people living in the province’s more remote communities often have trouble accessing a person who is qualified to take the swearing or affirmation of affidavits. While the Manitoba Evidence Act provides for a fairly broad variety of “authorized individuals” who may take affidavits, the preliminary evidence gathered by the Commission indicates that people living in some communities nonetheless are not able to find an “authorized individual” locally. Such people must incur the time and expense to travel to a more populated/urban area, which both creates delays in all manner of legal proceedings and transactions, and presents as a potentially significant access to justice issue.

The main issue is that the relevant statutory language has been interpreted in Manitoba, as in most provinces and other common law jurisdictions, to require that affidavits be sworn in the presence of the “authorized individual,” and thus the use of electronic means is not permitted. In the only relevant Canadian case to date, First Canadian Title Co v. Law Society of British Columbia, the court decided against a motion to allow the execution of a land title instrument via video link. As the Law Commission report explains:

…the court acknowledged concerns raised by the Ethics Committee of the Law Society of British Columbia about an overly broad interpretation of the presence requirement allowing for witnessing of documents remotely such as, how to ensure the affiant understands the content of the affidavit, ensuring the signature is genuine, proper identification of the affiant and concerns about changes to the document between the signature of the affiant and of the witness.

In a survey of the relevant law and practice in various Canadian and foreign jurisdictions, the Commission took note of Bill 161, currently before the Ontario legislature, which does two things: 1) makes the requirement of physical presence before the authorized individual explicit; but 2) creates the potential for exceptions to this requirement, to be added in regulations after the bill is passed. Remarks by the Attorney General of Ontario indicate that the government’s attention is to authorize electronic commissioning and notarizing. Further, the Law Society of Alberta has created a pilot project called the “TreeFort Platform” which would allow for secure online meetings between lawyers and clients at which documents could be executed and certified. Also, the US state of Virginia has brought in legislation allowing for electronic notarization via video- and tele-conferencing and digital signature technology.

The Commission has identified a number of issues for discussion, on which it is seeking feedback by February 20, 2020, including:

1. Should The Manitoba Evidence Act be amended to remove the physical presence requirement in certain circumstances as is proposed by Ontario’s Bill 161?
2. If the Act is amended to enable electronic notarizing or commissioning of affidavit evidence, should standards be set to regulate those providing such services similar to the “standards of notarization” enacted in Virginia?
3. What safety measures should be required to ensure the privacy and security of documents being witnessed electronically and to respond to the concerns in First Canadian Title Company Ltd. such as the integrity of the document and ability to verify the signatory’s identity?
4. What criteria should be used to determine what software is allowable? Should such criteria be established by regulation?
5. What other issues relating to privacy and security may arise?
6. If the Manitoba Evidence Act should be amended to allow for affidavits to be taken using video-conferencing technology, should it be restricted to certain populations or certain situations?
7. Should a person witnessing the signing of an affidavit using video-conferencing technology be required to be physically present in Manitoba?
8. Should the affiant be required to be physically present in Manitoba when appearing before a witness using video-conferencing technology?

Pseudonymous posters given adequate notice of the claim via email and via website messages

The Ontario Superior Court of Justice has granted summary judgement in a defamation case against a number of unnamed, pseudonymous authors of internet postings. In Theralase Technologies Inc. v. Lanter, the plaintiffs were a pharmaceutical company and two of its senior employees. They alleged that a number of postings made on an online discussion website, Stockhouse.com, were defamatory of them and are summarized by the judge:

[31] Generalizing for introductory purposes, the postings assert that Theralase management are untruthful and unprofessional, the corporation is operating unlawfully and improperly from the investors’ perspectives, and the personal plaintiffs are unprofessional, incompetent managers who have committed criminal acts. Ms. Hachey is also the subject of at least one misogynistic post that is particularly disgusting.

The postings were made by ten different accounts. Prior to commencing the action, the defendants were able to obtain an order requiring Stockhouse to provide information about the individuals behind the pseudonyms. Stockhouse was able to provide email addresses for all but one of them, but said technical problems prevented them from providing further information. The plaintiffs then sent libel notices and requests for identification to each of the email addresses and obtained an order permitting service of the plaintiffs’ claim by email and private message on the Stockhouse platform. A number of the email addresses generated error messages, suggesting the accounts were no longer in operation, and one of the defendants did respond and was identified. The plaintiffs then brought a motion for default judgement against the still unidentified defendants.

The court was then required to consider whether it could grant summary judgement against a currently unidentified person. The caselaw on the point is scant as only one Ontario precedent could be found:

[13] In Manson v John Doe, 2013 ONSC 628, 114 OR (3d) 592, the defendant was an anonymous blogger on a website owned by Google. Google advised the plaintiff that it had sent the plaintiff’s motion seeking the identity of the defendant to the defendant by email and that the defendant had responded indicating that he was seeking legal counsel. Ultimately the plaintiff was provided with the defendant’s email address although it could not determine his name.

[14] Goldstein J. wrote:

[20] There are few things more cowardly and insidious than an anonymous blogger who posts spiteful and defamatory comments about a reputable member of the public and then hides behind the electronic curtain provided by the Internet. The Defendant confuses freedom of speech with freedom of defamation. There are, undoubtedly, legitimate anonymous Internet posts: persons critical of autocratic or repressive regimes, for example, or legitimate whistleblowers. The Defendant is not one of those people. The law will afford his posts all the protection that they deserve, which is to say none.

[15] In the result, Goldstein J. granted judgment against the defendant who was identified only by a user name or pseudonym. There is no discussion in the case report as to whether the lack of the defendant’s actual name was considered to be an impediment to the court’s jurisdiction.

The court then reviewed caselaw from the United Kingdom, another jurisdiction in which most judgements are made in personam. The principal authority for permitting a default judgement against an unnamed defendant was found in Cameron v. Liverpool Victoria Insurance Co Ltd., [2019] UKSC 6, [2019] RTR 15, a UK supreme court decision that held that such an order can issue in certain cases:

[22] In Cameron, the Supreme Court found that it is not enough to refer to a defendant by reference to a past act, such as a hit-and-run accident, because the prior act provided no basis to identify the particular person who is the defendant. However, the court concluded that where a form of service is utilized that can reasonably be expected to bring the proceedings to the attention of the defendant, there was no reason in principle to limit the court’s ability to grant judgment against the unidentified defendant.

[23] I agree with the reasoning in Cameron and adopt the Supreme Court’s framework. Provided that the form of service utilized can reasonably be expected to bring the proceedings to the attention of a specific, identifiable defendant, the court has jurisdiction over that person however he or she may be identified. The test of reasonableness will be influenced by the circumstances of the case. Where, for example, people are hiding behind internet anonymity to make allegedly defamatory comments on a website, service through the website using the coordinates and the identifiers that the users themselves provided to the website operator strikes me as both reasonable and just. If notice does not reach the users, it is because they choose not to access the accounts from which they made their comments or the email addresses that they provided to the website operator. Where there is evidence that a person is actively evading service, such as by shutting down a previously active email address or website account after learning that an action exists, correspondingly less certainty of service may be required as long as it remains conceptually possible. See also: Cameron at para. 25.

The court reviewed the manner in which the plaintiffs’ claim was communicated to the defendants, both through email and through the messaging function of Stockhouse.com. Such communication was likely to bring the claim to the attention of the defendants and they failed to respond or file a defence.

The judge acknowledged that there will likely be significant challenges in enforcing the default judgement, but it did not influence the determination of whether default judgement could be obtained. In the result, the court entered summary judgement against the unnamed defendants, assessed damages against each of them and issued an order for costs on a substantial indemnity basis.

Hard-to-find terms of use unenforceable and arbitration clause was of no effect

A US appeals court summarily dismissed an appeal related to the browsewrap terms of use agreement in a mobile gambling app. In Wilson v. Huuuge, Inc., the app developer was appealing a decision of a district court that refused to enforce an arbitration clause in the terms of use for the app.

The plaintiff brought a suit as an intended class action, alleging that the app and its developer violated Washington state gambling and consumer protection laws. The defendant brought a motion trying to have the action stayed and requiring the plaintiff to arbitrate any dispute. The app's terms of use contained an arbitration clause, but the district court found that these terms (or the terms of use, generally) were not brought to the user's attention either in fact or constructively. The developer did not require users to affirmatively acknowledge or agree to the terms of use before downloading, installing or using the app.

The United States Court of Appeal for the Ninth Circuit colourfully described the positioning of the terms of use:

Once a user has downloaded the app, the user can play games immediately. During gameplay, a user can view the Terms by accessing the settings menu. The settings menu can be accessed by clicking on a three dot “kebob” menu button in the upper right-hand corner of the home page (Figure D).

If a user clicks on the button, a pop-up menu of seven options appears (Figure E). The fifth option is titled “Terms & Policy” and reveals the Terms, including the arbitration agreement.

To enforce an arbitration agreement under US federal law, the person asserting the agreement must prove there exists a valid agreement by reference to ordinary contract law. The court wrote:

As we have acknowledged many times, although online commerce has presented courts with new challenges, traditional principles of contract still apply. A contract is formed when mutual assent exists, which generally consists of offer and acceptance. Like many states, Washington does not allow parties to shirk contract obligations if they had actual or constructive notice of the provisions. In the context of online agreements, the existence of mutual assent turns on whether the consumer had reasonable notice of the terms of service agreement. [references omitted]

The court found that it was a "browsewrap" agreement and amusingly described the adventure that may be required to encounter the terms of use in the app:

… When downloading the app, the Terms are not just submerged—they are buried twenty thousand leagues under the sea. Nowhere in the opening profile page is there a reference to the Terms. To find a reference, a user would need to click on an ambiguous button to see the app’s full profile page and scroll through multiple screen-lengths of similar-looking paragraphs. Once the user unearths the paragraph referencing the Terms, the page does not even inform the user that he will be bound by those terms. There is no box for the user to click to assent to the Terms. Instead, the user is urged to read the Terms—a plea undercut by Huuuge’s failure to hyperlink the Terms. This is the equivalent to admonishing a child to “please eat your peas” only to then hide the peas. A reasonably prudent user cannot be expected to scrutinize the app’s profile page with a fine-tooth comb for the Terms.

Accessing the terms during gameplay is similarly a hide-the-ball exercise. A user can view the Terms through the “Terms & Policy” tab of the settings menu. Again, the user is required to take multiple steps. He must first find and click on the three white dots representing the settings menu, tucked away in the corner and obscured amongst the brightly colored casino games. The “Terms & Policy” tab within the settings is buried among many other links, like FAQs, notifications, and sound and volume. The tab is not bolded, highlighted, or otherwise set apart.

Huuuge argues Wilson’s repeated use of the app places him on constructive notice since it was likely he would stumble upon the Terms during that time period. However, just as “there is no reason to assume that [users] will scroll down to subsequent screens simply because screens are there,” there is no reason to assume the users will click on the settings menu simply because it exists. The user can play the game unencumbered by any of the settings. Nothing points the user to the settings tab and nowhere does the user encounter a click box or other notification before proceeding. Only curiosity or dumb luck might bring a user to discover the Terms.

At the end of the day, Huuuge took a risk and lost:

Instead of requiring a user to affirmatively assent, Huuuge chose to gamble on whether its users would have notice of its Terms. The odds are not in its favor. Wilson did not have constructive notice of the Terms, and thus is not bound by Huuuge’s arbitration clause in the Terms. We affirm the district court’s denial of Huuuge’s motion to compel arbitration.

The appeal was dismissed.