Kroskey v. Elevate Labs, LLC
5:24-cv-08113
N.D. Cal.May 27, 2025Background
- Jonathan Kroskey, on behalf of himself and a putative class, sued Elevate Labs, LLC and MindSnacks, Inc., alleging unauthorized disclosure of user information from the Balance App, violating privacy laws.
- Kroskey purchased a subscription to the Balance App and, during account creation, encountered an agreement linking to Terms & Conditions, which included a mandatory arbitration clause.
- The Terms & Conditions were accessible via a bold, capitalized hyperlink on an otherwise uncluttered and simple sign-up page; the notice stated creating an account signified acceptance.
- Defendants moved to compel arbitration under the Federal Arbitration Act, arguing the existence of a valid arbitration agreement and its applicability to both Elevate Labs (signatory) and MindSnacks (affiliate).
- The lawsuit's procedural posture is a motion to compel arbitration, fully briefed, with the court considering whether the agreement is enforceable and covers MindSnacks.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of Arbitration Clause | Notice not conspicuous; assent not clear | Notice was clear and assent unambiguous | Valid, enforceable arbitration agreement existed |
| Sufficient Notice of Terms | Placement/appearance not adequate | Landmark design differences make notice sufficient | Notice was reasonably conspicuous in context |
| Assent to Terms | Disputed clear manifestation of assent | Account creation = unambiguous assent | Creating account manifested assent |
| Enforcement by Affiliate (MindSnacks) | Nonsignatory cannot enforce clause | Agency/affiliate principles allow enforcement | MindSnacks can enforce as affiliate under agency law |
| Delegation of Arbitrability | Court should decide arbitrability | JAMS rules delegate to arbitrator | Arbitrability questions delegated to arbitrator |
Key Cases Cited
- Bielski v. Coinbase, Inc., 87 F.4th 1003 (9th Cir. 2023) (arbitration agreements are contracts subject to state law defenses)
- Kilgore v. KeyBank, Nat. Ass'n, 718 F.3d 1052 (9th Cir. 2013) (two-part test for compelling arbitration)
- Knutson v. Sirius XM Radio Inc., 771 F.3d 559 (9th Cir. 2014) (noticing requirement for online contract formation)
- Oberstein v. Live Nation Ent., Inc., 60 F.4th 505 (9th Cir. 2023) (online contracts and mutual assent)
- Comer v. Micor, Inc., 436 F.3d 1098 (9th Cir. 2006) (nonsignatories and arbitration agreements)