Justia Arbitration & Mediation Opinion Summaries

Kiana Jones, along with thousands of other claimants, initiated dispute-resolution proceedings against Starz Entertainment, LLC, alleging violations of federal and state privacy laws. The arbitration provider, Judicial Arbitration and Mediation Services (JAMS), ordered the consolidation of these filings to be presided over by a single arbitrator. Jones petitioned the district court to compel individual arbitration, arguing that the consolidation violated the Starz Terms of Use, which she claimed required individual arbitration.The United States District Court for the Central District of California denied Jones's petition, holding that she was not "aggrieved" within the meaning of the Federal Arbitration Act (FAA) because Starz had not failed, neglected, or refused to arbitrate. The court also held that the consolidation did not present a gateway question of arbitrability for the courts to address.The United States Court of Appeals for the Ninth Circuit affirmed the district court's decision. The panel held that Jones was not a "party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate," as required by 9 U.S.C. § 4, because Starz never failed, neglected, or refused to arbitrate. The court distinguished this case from Heckman v. Live Nation Ent., Inc., noting that the consolidation by JAMS did not present a gateway question of arbitrability. The panel also held that the FAA did not allow Jones, as the party seeking arbitration, to raise the argument that the Terms of Use were unconscionable to the extent that they allowed pre-arbitration consolidation by JAMS. The decision of the district court was affirmed. View "JONES V. STARZ ENTERTAINMENT, LLC" on Justia Law

The plaintiff, Katherine Chabolla, purchased a one-month subscription from ClassPass, a company offering access to gyms and fitness classes, in January 2020. Due to the COVID-19 pandemic, ClassPass paused charges but resumed them when gyms reopened. Chabolla filed a lawsuit alleging that ClassPass violated California’s Automatic Renewal Law, Unfair Competition Law, and Consumers Legal Remedies Act by resuming charges without proper notice.The United States District Court for the Northern District of California denied ClassPass’s motion to compel arbitration, which argued that Chabolla had agreed to arbitrate any claims by using their website. The district court found that the website did not provide reasonably conspicuous notice of the Terms of Use, which included the arbitration clause, and that Chabolla did not unambiguously manifest assent to those terms.The United States Court of Appeals for the Ninth Circuit reviewed the case and affirmed the district court’s decision. The court held that ClassPass’s website, which resembled a sign-in wrap agreement, did not provide reasonably conspicuous notice of the Terms of Use on the landing page or the first screen. Even if the second and third screens provided such notice, Chabolla did not unambiguously manifest her assent to the Terms of Use on those screens. The court concluded that Chabolla’s use of the website did not amount to an unambiguous manifestation of assent to the Terms of Use, and therefore, she was not bound by the arbitration clause within those terms. The court affirmed the district court’s order denying ClassPass’s motion to compel arbitration. View "CHABOLLA V. CLASSPASS, INC." on Justia Law

Plaintiff filed a class action against C.H. Robinson, alleging misclassification claims regarding overtime pay requirements. On appeal, C.H. Robinson challenged the district court's denial of its motion to compel arbitration. The court rejected plaintiff's argument that the Incentive Bonus Agreement at issue was procedurally and substantively unconscionable. In regards to procedural unconscionability, the court concluded that, under California law, the degree of procedural unconscionability of such an adhesion agreement is low. In regard to substantive unconscionability, the court concluded that any argument that the judicial carve-out was not substantively unconscionable has been waived; the waiver of representative claims was not substantively unconscionable where the unenforceability of the waiver of a Private Attorneys General Act (PAGA), Cal. Labor Code 2698-2699.5, representative action does not make this provision substantively unconscionable; and the venue provision, confidentiality provision, sanctions provision, unilateral modification provision, and discovery limitations are not substantively unconscionable. Therefore, the court concluded that the dispute resolution provision is valid and enforceable once the judicial carve-out clause is extirpated and the waiver of representative claims is limited to non-PAGA claims, and the district court erred in holding otherwise. The court reversed and remanded. View "Poublon v. C.H. Robinson Co." on Justia Law

Plaintiff filed a class action against Samsung, alleging that it made misrepresentations as to the performance of the Galaxy S4 phone. The district court denied Samsung's motion to compel arbitration based on an arbitration provision contained in a warranty brochure included in the Galaxy S4 box. Determining that its analysis is governed by California contract, rather than warranty, law, the court concluded plaintiff did not assent to any agreement in the brochure, nor did he sign or otherwise act in a manner that showed he accepted the arbitration agreement. The court concluded that Samsung failed to demonstrate the applicability of any exception to the general California rule that an offeree’s silence does not constitute consent. Therefore, in the absence of an applicable exception, California’s general rule for contract formation applies. The court also concluded that, under the circumstances of this case, Samsung's inclusion of a brochure in the Galaxy S4 box, and plaintiff's failure to opt out, does not make the arbitration provision enforceable against plaintiff. Finally, the court concluded that Samsung's argument that plaintiff agreed to arbitrate his claims by signing the Customer Agreement with Verizon Wireless is meritless. The court explained that Samsung is not a signatory to the Customer Agreement between Verizon Wireless and its customer. Furthermore, Samsung is not a third-party beneficiary to the Customer Agreement. Accordingly, the court affirmed the judgment. View "Norcia v. Samsung Telecommunications" on Justia Law

In connection with an attempted purchase of a California residence, Kum Tat filed a motion to compel arbitration of a claim against Linden Ox. The district court denied the motion and Kum Tat filed this interlocutory appeal. The court held that the order denying the motion to compel arbitration was not an order from which section 16(a)(1) of the Federal Arbitration Act (FAA), 9 U.S.C. 16(a)(1), permits an interlocutory appeal. In this case, Kum Tat's motion was neither under section 3 nor 4 of the FAA, and the motion expressly urged application only of California arbitration law and contained no citation to the FAA. Significantly, Kum Tat later emphasized that the motion was not made under the FAA. In the alternative, the court concluded that the district court's order was not clearly erroneous and did not warrant mandamus relief. Here, the district court did not clearly err in reserving for itself the question whether the parties agreed to arbitrate, nor did the district court clearly err in concluding the parties did not form a contract. Accordingly, the court dismissed the appeal for lack of jurisdiction. View "Kum Tat Limited v. Linden Ox Pasture, LLC" on Justia Law

Move commenced arbitration proceedings alleging that Citigroup mismanaged $131 million of Move’s funds by investing in speculative auction rate securities. FINRA provided the parties with a list of thirty proposed arbitrators and their employment histories, including ten proposed arbitrators from FINRA’s chairperson roster. Move ranked “James H. Frank” first who, according to the FINRA Arbitrator Disclosure Report (ADR), received a law degree from Southwestern University in 1975 and was licensed to practice law in California, New York, and Florida. Mr. Frank subsequently served as the chairperson of the panel along with Arthur T. Berggren, a licensed attorney, and Daniel R. Brush, a Certified Public Accountant and Certified Financial Planner. After Move subsequently discovered that Mr. Frank lied about his qualifications, Move filed a complaint arguing that vacatur was warranted because of Mr. Frank's misrepresentations. On appeal, Move challenges the district court's dismissal of its action and denial of its motion to vacate the arbitration award under the Federal Arbitration Act (FAA), 9 U.S.C. 1 et seq. The court held that Move’s motion was not untimely because the FAA is subject to equitable tolling. The court also held that Move’s right to a fundamentally fair hearing was prejudiced by the fraudulent misrepresentations of the arbitration panel’s chairperson, resulting in proceedings led by an arbitrator who should have been disqualified from the dispute under the rules and regulations of FINRA. Accordingly, the court reversed and remanded. View "Move, Inc. v. Citigroup Global Markets, Inc." on Justia Law

Plaintiff filed suit against his employer, alleging violations of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA), 38 U.S.C. 4301-4334. Plaintiff claimed that he was fired from his job after providing notice of his deployment to Afghanistan in the United States Navy Reserve. The court joined its sister circuits and held that the plain text of USERRA does not preclude the compelled arbitration of disputes arising under its provisions. Furthermore, plaintiff has failed to establish that the legislative history evinces Congress’s intent to prevent the enforcement of the arbitration agreement he signed. Accordingly, the court affirmed the district court's order compelling arbitration and dismissing the complaint. View "Ziober v. BLB Resources" on Justia Law

Plaintiffs Mohamed and Gillette, former Uber drivers, filed suit alleging on behalf of themselves and a proposed class of other drivers that Uber violated the Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681 et seq., and various state statutes. Gillette has also brought a representative claim against Uber under California’s Private Attorneys General Act of 2004 (PAGA) alleging that he was misclassified as an independent contractor rather than an employee. The district court denied Uber’s motion to compel arbitration of the claims. The court concluded that the district court improperly assumed the authority to decide whether the arbitration agreements were enforceable. The question of arbitrability as to all but Gillette’s PAGA claims was delegated to the arbitrator. Under the terms of the agreement Gillette signed, the PAGA waiver should be severed from the arbitration agreement and Gillette’s PAGA claims may proceed in court on a representative basis. All of plaintiffs’ remaining arguments, including both Mohamed’s challenge to the PAGA waiver in the agreement he signed and the challenge by both plaintiffs to the validity of the arbitration agreement itself, are subject to resolution via arbitration. Finally, the court affirmed the district court’s order denying Hirease’s joinder in the motion to compel. View "Mohamed v. Uber Technologies" on Justia Law

Multiple plaintiffs filed different class actions against 23andMe relating to the company’s health claims. 23andMe, a direct-to-consumer provider of genetic testing service, claimed that its service could be used to help customers manage health risks, as well as prevent or mitigate diseases such as diabetes, heart disease, and breast cancer. The district court granted 23andMe's motion to compel all plaintiffs to arbitrate their claims. After reviewing the mandatory arbitration provision in the Terms of Service, the district court concluded that the arbitration provision at issue was enforceable. The court concluded that under principles established by recent California Supreme Court decisions, California’s common law rule of unconscionability does not provide a basis to revoke the arbitration agreement in the Terms of Service. In this case, the court concluded that plaintiffs failed to carry their burden of demonstrating the substantive unconscionability of the bilateral prevailing party clause; that the forum selection clause is unconscionable; that the intellectual property exemption is unconscionable under current California law; and that the unilateral modification provision renders the arbitration clause, set forth in a separate provision, unconscionable. Therefore, the arbitration agreement is valid, irrevocable, and enforceable. The court affirmed the judgment. View "Tompkins v. 23andMe, Inc." on Justia Law

In this companion case to Van Dusen v. Swift, No. 15-15257 (“Van Dusen III”), Swift seeks a writ of mandamus ordering the district court to vacate its case management order and decide the petition to compel arbitration without discovery or trial. The court concluded that the Bauman factors weigh against the grant of mandamus relief; Swift has a remedy in urging its position before the district court in dispositive motions and, if the district court is adverse to Swift, in the form of direct appeal following the issuance of a final order; normal litigation expense does not constitute sufficient prejudice to warrant relief, and the discovery cost has already been incurred; and most crucially, in the absence of controlling precedent, the district court order was not clearly erroneous. Accordingly, the court concluded that Swift is not entitled to the extraordinary relief of the issuance of a writ of mandamus. View "In re Swift Transportation" on Justia Law