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Court of Appeal of California, Fourth Appellate District, Division One
March 29, 2022, Opinion Filed
[**51] HALLER, J.—Blizzard Entertainment, Inc. (Blizzard), appeals from an order denying its motion to compel arbitration. B.D., a minor, played Blizzard's online videogame “Overwatch,” and used “real money” to make in-game purchases of “Loot Boxes”—items that offer “randomized chances … to obtain desirable or helpful ‘loot’ in the game.” B.D. and his father (together, Plaintiffs) sued Blizzard, alleging the sale of loot boxes with randomized values constitutes unlawful gambling, and, thus, violates the unfair competition law (UCL) (Bus. & Prof. Code, § 17200). Plaintiffs [**52] seek only prospective injunctive relief, plus attorney fees and costs.
Blizzard moved to compel arbitration based on the dispute resolution policy incorporated [***2] into various iterations of the online license agreement that Blizzard presented to users when they signed up for, downloaded, and used Blizzard's service. The trial court denied the motion, finding a “reasonably prudent user would not have inquiry notice of the agreement” to arbitrate because “there was no conspicuous notice of an arbitration” provision in any of the license agreements. We disagree.
As we will explain, the operative version of Blizzard's license agreement—the most recent version presented in 2018 before Plaintiffs filed suit—was presented to users in an online popup window that contained the entire agreement within a scrollable text box. We present a screenshot here and as an appendix to this opinion:1
As the screenshot shows, the portion of the license agreement immediately visible [**53] in the text box displayed two significant notices. First, that users may not use Blizzard's service if they do not agree to all of the terms in the license agreement. And second, that users should read the section of the [*936] license agreement “below” titled “dispute resolution” because it contains an arbitration agreement and class action waiver that affect users' legal rights. That section [***3] stated that disputes under the license agreement would be resolved in accordance with Blizzard's dispute resolution policy, to which the section connected via hyperlink. The dispute resolution policy contained a comprehensive arbitration agreement. The popup window admonished users that by clicking the “Continue” button (immediately below the admonishment) the user “acknowledge[d] that [he or she has] read and understood the [license agreement].” B.D. could not have continued to use Blizzard's service if he did not click the “Continue” button, and Blizzard's records indicate B.D. did, in fact, continue to use the service. In the context of the transaction at issue, we conclude Blizzard's popup notice provided sufficiently conspicuous notice of the arbitration agreement such that Plaintiffs are bound by it.
Alternatively, Plaintiffs contend that if we conclude the parties formed an arbitration agreement, it is unenforceable because the agreement, together with its class and collective action waiver provision, run afoul of the rule announced in McGill v. Citibank, N.A. (2017) 2 Cal.5th 945 [216 Cal. Rptr. 3d 627, 393 P.3d 85] (McGill) that “a provision in any contract … that purports to waive, in all fora, the statutory [***4] right to seek public injunctive relief … is invalid and unenforceable.” (Id. at p. 962.) For reasons we will explain, we conclude the arbitration agreement clearly and unmistakably delegated the resolution of this type of gateway issue to the arbitrator, not the courts.
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76 Cal. App. 5th 931 *; 292 Cal. Rptr. 3d 47 **; 2022 Cal. App. LEXIS 259 ***
B.D., a Minor, etc., et al., Plaintiffs and Respondents, v. BLIZZARD ENTERTAINMENT, INC., Defendant and Appellant.
Prior History: [***1] APPEAL from an order of the Superior Court of San Diego County, No. 37-2020-00020000-CU-BT-CTL, John S. Meyer, Judge.
Disposition: Reversed with directions.
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Business & Corporate Compliance, Alternative Dispute Resolution, Arbitration, Arbitrability, Pretrial Matters, Validity of ADR Methods, Contracts Law, Contract Conditions & Provisions, Arbitration Clauses, Computer & Internet Law, Contracts, Electronic Contracts, Formation, Contract Formation, Acceptance, Meeting of Minds, Apparent Acceptance, Overt Acts, Types of Transactions, Clickwrap Licenses, Civil Procedure, Appeals, Standards of Review, De Novo Review, Evidence, Burdens of Proof, Allocation, Questions of Fact & Law, Preponderance of Evidence, Integration Clauses, Federal Arbitration Act, Arbitration Agreements, Contracts Law, Defenses, Unconscionability, Waiver