Ninth Circuit Rejects Rugs.com’s Bid to Force Shoppers Into Arbitration

Berger Montague, a leading national plaintiff law firm, had a Ninth Circuit appeals court win when the court rejected Rugs.com’s efforts to force consumers into arbitration using a browsewrap. Browsewrap is an online contract where users are deemed to accept the terms simply by using a website, without needing to click “I agree.”

“A click doesn’t sign away your rights unless the company tells you that’s what the click means,” said attorney James Hannaway. “Rugs.com relied on a browsewrap—terms tucked behind a link that no ordinary shopper would ever guess they were agreeing to—and the Ninth Circuit, following a strong line of its own precedent, readily concluded that no arbitration agreement was ever formed.”

The U.S. Court of Appeals for the Ninth Circuit affirmed that online retailer Rugs.com, LLC cannot force consumers into individual arbitration, holding that the company failed to prove its customers ever agreed to the arbitration clause buried in its website’s Terms of Use.

Courts are more likely to enforce “clickwrap” agreements, in which a consumer checks a box or clicks a button next to a clear statement that doing so means accepting the company’s terms. Rugs.com argued that customers agreed to its Terms of Use by entering an email address and clicking “Join Now,” and alternatively that simply using the website was enough, but its sign-up page never told users that either action would bind them. Relying on its decisions in Berman v. Freedom Financial Network, Nguyen v. Barnes & Noble, and Godun v. JustAnswer, the panel held that a click counts as assent only when the user is explicitly told it does, and noted that courts “consistently decline to enforce” browsewrap agreements.

Additional Information

• Perkins v. Rugs.com, LLC, No. 25-4155 (9th Cir.), on appeal from No. 2:25-cv-00019-JHC (W.D. Wash.) (Chun, J.)
• Read more about Berger Montague’s Appeals and Complex Briefing Department at www.bergermontague.com/appeals.  
• The plaintiffs’ appellate brief was authored by James Hannaway, Paul Bland,  Sophia Rios, and co-counsel Blythe Chandler.
• Co-counsel is Blythe Chandler, Jennifer Murray, Beth Terrell, and Eden Nordby of Terrell Marshall.

Berger Montague is one of the nation’s preeminent law firms focusing on complex civil litigation, class actions, and mass torts in federal and state courts throughout the United States. With more than $2.4 billion in 2025 post-trial judgments alone, the Firm is a leader in the fields of complex litigation, antitrust, consumer protection, defective products, environmental law, employment law, securities, and whistleblower cases, among many other practice areas. For over 55 years, Berger Montague has played leading roles in precedent-setting cases and has recovered over $50 billion for its clients and the classes they have represented. Berger Montague is headquartered in Philadelphia and has offices in Chicago; Malvern, PA; Minneapolis; San Diego; San Francisco; Toronto, Canada; Washington, DC; and Wilmington, DE.

Media Contact:

Amy Wall-Monte
215.875.3021
awallmonte@bergermontague.com

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James Hannaway

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