Jack v. Ring LLC
91 Cal.App.5th 1186
Cal. Ct. App.2023Background
- Ring sells smart-home devices; plaintiffs Jack and Alda sued alleging Ring failed to disclose that core features require a paid "Protect Plan," bringing CLRA, false advertising, and UCL claims and seeking a public injunction requiring clearer disclosures.
- Ring moved to compel arbitration under its online Terms of Service; it submitted multiple versions of the TOS and relied on arbitration clauses that (a) delegate arbitrability to the arbitrator, (b) reference JAMS rules, and (c) limit arbitration to individual (non-class, non-private-attorney-general) actions and limit injunctive relief to individual relief.
- The TOS also contained a severability/"poison pill" subsection stating that if a court finds the subsection’s limitations unenforceable as to a particular claim, that claim must be severed from arbitration and may be brought in court.
- Plaintiffs argued the arbitration clause violates McGill v. Citibank because it waives the right to seek public injunctive relief; the trial court denied Ring’s motion to compel arbitration and refused late-filed supplemental materials. Ring appealed.
- The Court of Appeal affirmed: it held there was no "clear and unmistakable" delegation of arbitrability to the arbitrator (the severability language created ambiguity), the arbitration clause purports to waive public injunctive relief and thus falls under McGill, and the severability/poison-pill requires the affected claims to be litigated in court rather than arbitrated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Delegation of arbitrability: who decides enforceability/McGill challenges? | Plaintiffs: severability/poison-pill and other language mean a court must decide McGill issues. | Ring: delegation clause + JAMS rules clearly and unmistakably delegate arbitrability to the arbitrator. | No clear-and-unmistakable delegation; severability language creates ambiguity, so court may decide enforceability. |
| Whether the arbitration clause waives right to seek public injunctive relief (McGill) | Plaintiffs: clause bars private-attorney-general/class/representative actions and limits injunctions to individual relief, so it waives public injunctive relief and is invalid under McGill. | Ring: arbitration allows injunctions and "the same remedies as a court," so public injunctive relief is available in arbitration (or at least severable). | Clause, read as a whole, precludes public injunctive relief in arbitration and thus purports to waive the statutory right; that waiver is invalid under McGill. |
| Effect of severability/"poison pill": severe remedy vs. sever claim | Plaintiffs: the provision severs the entire claim (cause of action) from arbitration if a court finds the subsection unenforceable. | Ring: only the remedial request (public injunction) should be severed; liability and other remedies can be arbitrated. | The clause is best read to sever the whole claim/cause of action; affected claims must be litigated in court. |
| Procedural: denial of leave to file late materials and motion for reconsideration jurisdiction; which TOS version controls | Plaintiffs: trial court properly denied late filings; Exhibit J governs. | Ring: court abused discretion by refusing late supplementation; December 2020 (Ex. K) should control. | Denial of late submissions was not an abuse of discretion; trial court lacked jurisdiction to decide reconsideration after appeal; appellate court will not resolve which TOS version governs (fact issue). |
Key Cases Cited
- McGill v. Citibank, N.A., 2 Cal.5th 945 (Cal. 2017) (predispute arbitration clause that waives statutory right to seek public injunctive relief under UCL/CLRA/FAL is invalid to that extent)
- Ajamian v. CantorCO2e, L.P., 203 Cal.App.4th 771 (Cal. Ct. App. 2012) (parties must clearly and unmistakably delegate threshold arbitrability issues to arbitrator)
- Baker v. Osborne Development Corp., 159 Cal.App.4th 884 (Cal. Ct. App. 2008) (severability language can create ambiguity that defeats a clear-and-unmistakable delegation)
- Blair v. Rent-A-Center, Inc., 928 F.3d 819 (9th Cir. 2019) (clause severing a claim if limitations are unenforceable was read to require severance of the entire claim)
- DiCarlo v. MoneyLion, Inc., 988 F.3d 1148 (9th Cir. 2021) (interpreting whether "individual lawsuit" language permits public injunctive relief in arbitration; distinguishable and not followed here)
- Varian Medical Systems, Inc. v. Delfino, 35 Cal.4th 180 (Cal. 2005) (appeal from denial of motion to compel arbitration stays further trial-court proceedings on matters embraced by the order)
- Mejia v. DACM Inc., 54 Cal.App.5th 691 (Cal. Ct. App. 2020) (arbitration clause barring private-attorney-general and representative actions violates McGill)
- Maldonado v. Fast Auto Loans, Inc., 60 Cal.App.5th 710 (Cal. Ct. App. 2021) (arbitration on an individual basis that bars representative relief is invalid under McGill)