Nugent v. Secretlab US, Inc.
- Vince Chhabria
- 3:22-cv-08944
- U.S. District Court · Northern District of California
- 3
In Nugent v. Secretlab, Judge Chhabria denied dismissal, ruling website terms did not bind Nugent and California was the proper forum.
Sean Nugent and Secretlab US, Inc.; the case remains in the Northern District of California, and Secretlab must file an answer within 14 days of the order.
What happened
In Nugent v. Secretlab US, Inc., Secretlab asked the court to dismiss the case so it could be litigated in Singapore under the website’s terms of use. Those terms said Singapore courts had exclusive jurisdiction.
The court said the terms did not bind Nugent because Secretlab did not show that he had notice of them or clearly agreed to them. A link in the website footer was not reasonably conspicuous, and Secretlab did not identify an action by Nugent that unambiguously showed agreement. The court also found that Singapore was an available alternative forum, but the relevant factors favored keeping the case in California because it involved California consumers and California law.
Judge Vince Chhabria denied Secretlab’s motion to dismiss. The court ordered Secretlab to file an answer within 14 days of the order.
The detailed version
- Nugent v. Secretlab US, Inc. · No. 3:22-cv-08944
- Vince Chhabria
- May 3, 2023
Background
Secretlab US, Inc. moved to dismiss Sean Nugent’s case so that it could be litigated in Singapore. Secretlab relied on website terms of use stating that Singapore courts had exclusive jurisdiction. The court explained that this forum-selection clause would strongly support dismissal if it applied to Nugent.
Whether the Website Terms Bound Nugent
Applying California law, the court said website terms bind a user only when the user had actual notice or inquiry notice. Inquiry notice requires both reasonably conspicuous notice of the terms and an action—such as clicking a button or checking a box—that unambiguously shows assent.
Secretlab argued that Nugent accepted the terms but did not explain how those requirements were met. The evidence showed that a “Terms of Use” or “Terms” link appeared in the website footer. The court held that this placement was not reasonably conspicuous. It rejected Secretlab’s argument that a consumer buying a chair for several hundred dollars would be expected to search the website for applicable terms. The court also found that Nugent had not taken an action clearly showing agreement. Secretlab did not identify when, between Nugent’s arrival at the website and his purchase, he supposedly accepted the terms.
Forum Analysis
Because Nugent was not bound by the forum-selection clause, the court applied the ordinary forum non conveniens analysis. This analysis asks whether there is an adequate alternative forum and, if so, whether public and private-interest factors favor moving the case.
The court found that Singapore’s courts were an adequate alternative because Secretlab could be required to appear there and Singapore courts offered some remedy. The absence of class actions in Singapore did not change that conclusion. But the court found no good reason to send the case to Singapore. Many factors were neutral, including access to evidence because most evidence would be digital. Two factors weighed heavily against dismissal: California’s interest in resolving a case involving California consumers and the benefit of using a forum familiar with California law. The court also noted that Nugent chose California and never agreed to litigate elsewhere.
Disposition
Judge Vince Chhabria denied the motion to dismiss. The order states that Secretlab’s answer was due within 14 days.
Read the full 3-page opinion on CourtListener, the free public archive maintained by the Free Law Project.