38 F.4th 824
9th Cir.2022Background:
- Plaintiff Barbara Knapke (Ohio) sued PeopleConnect/ Classmates.com alleging unauthorized use of her name/likeness in its yearbook database under Ohio right-of-publicity law; complaint included screenshots only accessible to logged-in users.
- Attorney Christopher Reilly created a Classmates.com account and purchased a subscription; PeopleConnect’s records show Reilly created the account and screenshots in the complaint show a user named “Christopher” logged in.
- Classmates.com requires assent to hyperlinked Terms of Service (which include a broad arbitration clause and a 30-day opt-out) before accessing certain site content; Reilly necessarily agreed to those Terms when creating the account.
- PeopleConnect moved to compel arbitration arguing Reilly acted as Knapke’s agent and bound her to the arbitration clause; it alternatively sought limited discovery on agency, knowledge, and who took the screenshots.
- The district court applied Ohio law, denied the motion to compel and denied discovery, finding no evidence Reilly had authority to bind Knapke and that Reilly acted to satisfy Rule 11; PeopleConnect appealed.
- The Ninth Circuit vacated and remanded: Washington law governs choice-of-law; material factual disputes (existence/timing/scope of agency, implied authority, ratification, knowledge) preclude deciding arbitrability now; PeopleConnect may take discovery on those issues.
Issues:
| Issue | Knapke's Argument | PeopleConnect's Argument | Held |
|---|---|---|---|
| Choice of law for agency/arbitrability | Ohio law should apply (plaintiff domicile) | Washington law (forum) should apply | Washington law applies (no shown conflict with Ohio law) |
| Was there an agreement to arbitrate binding Knapke because counsel assented? | Reilly’s assent cannot bind nonsignatory Knapke; she never saw the clause and counsel lacked authority | Reilly acted as Knapke’s agent/attorney when he agreed and thus bound her | Not resolved on current record — genuine factual dispute; PeopleConnect must prove agency by preponderance; remand for fact development |
| Scope of counsel’s authority / implied actual or apparent authority | Counsel created account for investigation/Rule 11, not to assent to Terms; Terms prohibit creating accounts for others | Counsel’s litigation-related acts can imply authority to perform necessary acts (including site access); counsel’s assent can bind principal | Factual question whether implied authority existed; discovery required to determine scope of authority and any privilege/waiver issues |
| Ratification / knowledge of counsel’s assent | Knapke did not know and did not ratify assent; privileged communications may prevent inquiry | Knapke used material obtained via counsel and did not repudiate; silence can imply ratification once she knew | Insufficient record to find ratification; discovery warranted on knowledge, silence, and use of benefits |
| Discovery on arbitrability-related facts | District court erred in allowing discovery into privileged communications; plaintiff has already disclosed position | PeopleConnect requested conditional, limited discovery on agency and identity of screenshot-taker | Ninth Circuit: discovery is permitted on arbitrability issues; district court erred in denying it; privilege and waiver questions to be resolved on remand |
Key Cases Cited
- O’Connor v. Uber Techs., Inc., 904 F.3d 1087 (2018) (standard of review for arbitration-denial and treatment of factual findings)
- Moses H. Cone Memorial Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (1983) (federal policy favoring arbitration)
- Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79 (2002) (arbitrability is for courts unless parties clearly provide otherwise)
- Preston v. Ferrer, 552 U.S. 346 (2008) (FAA supplies substantive federal law governing arbitration enforcement)
- Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (2009) (state contract law governs who is bound by arbitration agreements)
- Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667 (9th Cir. 2021) (procedure for resolving factual disputes about making of arbitration agreement)
- Wilson v. Huuuge, Inc., 944 F.3d 1212 (9th Cir. 2019) (party seeking to compel arbitration must substantiate discovery requests; burden to prove agreement)
- Tompkins v. 23andMe, Inc., 840 F.3d 1016 (9th Cir. 2016) (access to parts of a website requiring assent can be evidence of assent to site Terms of Service)