3:24-cv-02798
N.D. Cal.Sep 1, 2025Background
- Choose Your Horizon (CYH), a Delaware corp. with headquarters in Texas, sells prescription oral ketamine treatment packages via its website; purchase requires an online health questionnaire and a mandatory telehealth consultation with a clinician, after which medication is shipped and the patient self-administers under remote supervision.
- Plaintiffs Karen Martinez and Eli Silva (California residents) completed CYH’s online intake; Martinez purchased treatment and both later received targeted ads on Meta allegedly resulting from unauthorized interception/disclosure of their PII/PHI.
- Plaintiffs filed a putative California class action under Cal. Penal Code § 631, Cal. Civ. Code § 56.10, and the California Constitution for privacy invasions and PHI/PII disclosure.
- CYH moved to dismiss for lack of personal jurisdiction (it does business nationally and derives ~13% revenue from California) and alternatively moved to compel arbitration of Martinez’s claims under its online Terms of Use, which included a class-action waiver and mandatory arbitration clause; Martinez had checked assent boxes during purchase and scheduling.
- The court held that California has specific personal jurisdiction over CYH (following Briskin v. Shopify), found the arbitration clause enforceable (not procedurally or substantively unconscionable), ruled the clause covers the privacy claims (including those tied to the transaction), compelled arbitration as to Martinez, and denied dismissal for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Personal jurisdiction (specific) | Shipping products, facilitating telehealth with California clinicians, and intercepting PII to known California customers establishes purposeful direction at California | CYH’s website is not California-specific; 13% revenue from CA and national operations insufficient to establish forum-specific focus | Jurisdiction exists: CYH knowingly did business with CA customers, required CA clinician contact, and intercepted PII; Briskin governs and exercising jurisdiction is reasonable |
| Procedural unconscionability of arbitration clause | Clause is a contract of adhesion — required to buy product and buried in terms, so assent was coerced or surprised | Martinez did expressly assent via conspicuous hyperlinks and checkboxes on purchase and scheduling pages | Not procedurally unconscionable: assent was conspicuous and routine; clause enforceable |
| Substantive unconscionability / fees | Arbitration could impose excessive AAA/admin fees (up to $15,000) and does not allocate fees, making it one-sided | CYH disavowed intent to require excessive fees; plaintiff offered no concrete evidence she would bear more than court filing-equivalent fees | Not shown: no substantive unconscionability demonstrated; court noted remedies (severance or fee-shifting) if concrete harm alleged |
| Scope and retroactivity of arbitration clause | Privacy harms before assent are not covered; privacy claims are distinct from ketamine-treatment disputes | Clause covers "any controversy . . . arising out of, or relating in any way to these Terms or your use of the Site or Service" and lacks temporal limit | Clause applies: privacy claims arise out of the transaction/use of site and are within clause scope, including claims touching pre-assent disclosures where clause has no temporal limitation |
Key Cases Cited
- Briskin v. Shopify, Inc., 135 F.4th 739 (9th Cir. 2025) (e‑commerce tracking/interception supports specific jurisdiction when defendant knew of forum customers)
- Herbal Brands, Inc. v. Photoplaza, Inc., 72 F.4th 1085 (9th Cir. 2023) (sales as part of regular course of business and control over distribution support jurisdiction)
- Ford Motor Co. v. Mont. Eighth Judicial District Court, 592 U.S. 351 (U.S. 2021) (nationwide commercial activity can constitute purposeful availment of forum markets)
- Mavrix Photo, Inc. v. Brand Techs., Inc., 647 F.3d 1218 (9th Cir. 2011) (Calder effects test and limits on relying solely on pleadings where contradicted by affidavits)
- Calder v. Jones, 465 U.S. 783 (U.S. 1984) (intentional acts expressly aimed at the forum causing forum injury support jurisdiction)
- Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63 (U.S. 2019) (courts must enforce arbitration agreements according to their terms)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (U.S. 2011) (FAA preempts state rules that interfere with arbitration agreements)
- Armendariz v. Foundation Health Psychcare Servs., Inc., 24 Cal.4th 83 (Cal. 2000) (California’s procedural/substantive unconscionability framework for arbitration clauses)
- Jackson v. Amazon.com, Inc., 65 F.4th 1093 (9th Cir. 2023) (scope test: allegations must touch matters covered by the contract to fall within arbitration clause)