Marggieh Dicarlo v. Moneylion, Inc.
988 F.3d 1148
9th Cir.2021Background
- MoneyLion’s app offers a "Plus" credit‑builder product; members sign a Membership Agreement containing an arbitration clause and a prohibition on acting as a "private attorney general."
- Marggieh DiCarlo took a $500 credit‑builder loan, fell behind on fees/payments, and MoneyLion refused to cancel her membership until fees/loan were paid.
- DiCarlo sued (putative class) alleging violations of California UCL, FAL, and CLRA and seeking public injunctive relief; MoneyLion moved to compel arbitration and the district court granted the motion and dismissed.
- Central dispute on appeal: whether the Agreement unlawfully prohibits public injunctive relief (thus void under McGill) or allows such relief in arbitration.
- The Ninth Circuit reviewed the contract interpretation de novo and construed ambiguous terms in favor of arbitration and a lawful, enforceable agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the arbitration provision is invalid under McGill because it bars public injunctive relief | DiCarlo: the Agreement prohibits acting as a "private attorney general," so public injunctive relief is unavailable in arbitration, making the clause void | MoneyLion: the all‑remedies clause authorizes an arbitrator to award any remedies available in an "individual lawsuit," including public injunctive relief | The court held public injunctive relief is available in an individual lawsuit and thus the arbitration clause does not violate McGill; arbitration compelled |
| Meaning of "individual lawsuit" in the Agreement | DiCarlo: joinder prohibition means an individual suit cannot seek public relief that substantially impacts others | MoneyLion: "individual lawsuit" means a suit brought by a single plaintiff who represents only herself; joinder clause merely forbids combining different plaintiffs' claims | The court held "individual lawsuit" means a single‑plaintiff action; relief that affects others can still be sought by that individual without converting the suit into a joined action |
| Whether seeking public injunctive relief necessarily makes a plaintiff a "private attorney general" (and thus barred) | DiCarlo: public injunctions are effectively private‑attorney‑general actions, so the Agreement's bar prevents the relief | MoneyLion: California law (post‑Proposition 64 and McGill) permits individuals to seek public injunctions on their own behalf; fee‑shifting concept is distinct and not implicated here | The court distinguished standing‑to‑sue and fee‑shifting concepts, held seeking public injunctive relief does not automatically make the plaintiff a private attorney general barred by the Agreement |
Key Cases Cited
- McGill v. Citibank, N.A., 393 P.3d 85 (Cal. 2017) (contracts cannot waive the ability to seek public injunctive relief)
- Mitsubishi Motors Corp. v. Soler Chrysler‑Plymouth, Inc., 473 U.S. 614 (1985) (federal policy favors arbitration and courts should enforce arbitration agreements)
- Broughton v. Cigna Healthplans of Cal., 988 P.2d 67 (Cal. 1999) (discussed characterization of public injunction plaintiffs as private attorneys general)
- Cruz v. PacifiCare Health Sys., Inc., 66 P.3d 1157 (Cal. 2003) (similar treatment of public‑injunctive plaintiffs)
- Poublon v. C.H. Robinson Co., 846 F.3d 1251 (9th Cir. 2017) (de novo review for contractual interpretation issues in arbitration context)
- Blair v. Rent‑A‑Ctr., Inc., 928 F.3d 819 (9th Cir. 2019) (FAA does not preempt McGill rule)
- Ferguson v. Corinthian Colls., Inc., 733 F.3d 928 (9th Cir. 2013) (discussion of FAA preemption issues)
- In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009) (standing and class/representative action post‑Proposition 64)