Henson v. United States District Court for the Northern District of California
2017 U.S. App. LEXIS 17104
9th Cir.
2017

Background

  • Plaintiffs Anthony Henson and William Cintron are Verizon wireless subscribers subject to a "My Verizon Wireless Customer Agreement" containing an arbitration clause.
  • Turn, Inc. contracted separately with Verizon under a "Turn Audience Platform Agreement" (TAP) to deliver targeted mobile ads using data tied to Verizon Unique Identifier Headers (UIDHs).
  • Plaintiffs allege Turn surreptitiously attached persistent "zombie" cookies to subscribers' UIDHs, recreated deleted cookies, collected browsing data, created Turn IDs, profiled users, and sold access for targeted advertising — asserting NY GBL § 349 deceptive-practices and trespass-to-chattels claims.
  • Turn is not a signatory to the Verizon Customer Agreement; it sought to compel arbitration under that agreement via equitable estoppel.
  • The district court applied New York equitable-estoppel law and compelled arbitration; plaintiffs petitioned the Ninth Circuit for a writ of mandamus to vacate that order.
  • The Ninth Circuit held California choice-of-law principles governed, applied California equitable-estoppel law, found the district court committed clear error in compelling arbitration, and granted the mandamus petition vacating the stay/order to arbitrate.

Issues

Issue Plaintiff's Argument Defendant's Argument Held
Whether Turn (nonsignatory) can compel arbitration under the Verizon Customer Agreement via equitable estoppel Henson: claims arise from Turn's independent wrongful conduct and do not rely on or seek to enforce terms of the Customer Agreement; no interdependent misconduct with Verizon Turn: may invoke the Customer Agreement's arbitration clause because its conduct was closely connected to Verizon service and the TAP/Customer Agreement reflects joint action Held: No. Under California law, equitable estoppel does not apply because (1) Henson's claims do not rely on Customer Agreement terms and (2) plaintiffs did not allege interdependent/concerted misconduct founded in the Customer Agreement; arbitration improperly compelled
Whether the district court properly applied New York law to determine equitable estoppel Henson: New York clause cannot be invoked by a nonsignatory; apply forum state's choice-of-law rules (California) Turn: Customer Agreement’s choice-of-law clause requires New York law Held: District court erred. Choice-of-law clause is contractual and not binding on nonsignatory; apply California choice-of-law rules and California substantive law
Whether mandamus is appropriate to review the arbitration order Henson: ordinary appeal inadequate because arbitration stay is not immediately appealable and arbitration could moot class claims; mandamus warranted Turn: normal standards for mandamus should not be met Held: Mandamus granted — Bauman factors (lack of adequate alternative remedy; prejudice to class representation; clear legal error) favor relief
Whether allegations of statutory consumer-protection claims allow circumventing the arbitration clause Henson: statutory claims against Turn stand independently of the Customer Agreement and thus are not subject to arbitration Turn: Plaintiffs' claims are sufficiently intertwined with Verizon relationship to trigger estoppel Held: Plaintiffs' statutory claims are independent; equitable estoppel cannot be used to force arbitration here

Key Cases Cited

  • Ex parte Fahey, 332 U.S. 258 (U.S. 1947) (mandamus is drastic, extraordinary relief)
  • Van Dusen, 654 F.3d 838 (9th Cir. 2011) (Bauman factors govern mandamus review)
  • Bauman v. U.S. Dist. Court, 557 F.2d 650 (9th Cir. 1977) (mandamus factors framework)
  • Douglas v. U.S. Dist. Court, 495 F.3d 1062 (9th Cir. 2007) (mandamus factor application)
  • AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643 (U.S. 1986) (arbitration is a matter of contract)
  • United Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574 (U.S. 1960) (parties cannot be compelled to arbitrate absent agreement)
  • Kramer v. Toyota Motor Corp., 705 F.3d 1122 (9th Cir. 2013) (non‑signatory invocation of arbitration governed by state contract law)
  • Arthur Andersen LLP v. Carlisle, 556 U.S. 624 (U.S. 2009) (state law controls family of principles allowing nonsignatory enforcement)
  • Murphy v. DirecTV, 724 F.3d 1218 (9th Cir. 2013) (California equitable estoppel standards for nonsignatories)
  • Goldman v. KPMG LLP, 173 Cal.App.4th 209 (Cal. Ct. App. 2009) (equitable estoppel requires reliance on contractual obligations or interdependent misconduct)
  • Johnson v. Consumerinfo.com, Inc., 745 F.3d 1019 (9th Cir. 2014) (orders compelling arbitration and stays not immediately appealable)
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