93 F.4th 468
9th Cir.2024Background
- Plaintiffs purchased sporting goods online from defendants' websites.
- In October 2021, hackers breached defendants’ sites and stole consumers’ personally identifiable information.
- Plaintiffs filed six putative class actions alleging negligence, breach of contract, and quasi-contract claims based on the data breach.
- Defendants moved to compel arbitration pursuant to the websites’ terms of use, which contain an arbitration agreement accessible via hyperlink during checkout.
- The district court granted defendants’ motions to compel arbitration and dismissed the cases without prejudice; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Sufficient Notice of Arbitration Clause | Plaintiffs lacked sufficient notice of the arbitration provision | Notice was conspicuous; plaintiffs manifested assent by placing orders | Plaintiffs had inquiry notice; agreement formed |
| Validity under McGill v. Citibank | Arbitration provision unlawfully bars public injunctive relief | Arbitration does not bar all public injunctive relief; McGill inapplicable | Provision is not invalid under McGill; arbitrator can award public injunctive relief |
| Unconscionability of Clause | Clause is procedurally/substantively unconscionable due to unilateral modification provision | Unilateral modification provision does not make arbitration clause unconscionable | Arbitration clause is not unconscionable |
| Delegation of Arbitrability | Reference to JAMS rules as delegation is insufficient for unsophisticated consumers | Incorporating JAMS rules constitutes clear delegation to arbitrator | Reference to JAMS rules clearly and unmistakably delegates arbitrability |
Key Cases Cited
- Berman v. Freedom Fin. Network, 30 F.4th 849 (9th Cir. 2022) (standard for formation and notice of online contracts)
- McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017) (arbitration agreements that prohibit public injunctive relief are unenforceable)
- Blair v. Rent-A-Ctr., Inc., 928 F.3d 819 (9th Cir. 2019) (distinguishing between class action waivers and public injunctive relief)
- Meyer v. Uber Techs., Inc., 868 F.3d 66 (2d Cir. 2017) (browsewrap/enforceability standard)
- Nguyen v. Barnes & Noble Inc., 763 F.3d 1171 (9th Cir. 2014) (online contract formation and notice)
- Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63 (2010) (agreement to arbitrate enforceable even if other contract provisions are challenged)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state law obstacles to arbitration)
- Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069 (9th Cir. 2013) (incorporation of arbitration rules delegates arbitrability)
- Vandenberg v. Sup. Ct., 982 P.2d 229 (Cal. 1999) (arbitration awards and collateral estoppel)