Pemberton v. Restaurant Brands International, Inc., 3:25-cv-03647

Background

Plaintiff Daniel Pemberton (California resident) alleges that after opting out via Burger King website cookie settings in March 2023, Third-Party tracking cookies and user-data transfers nevertheless occurred, and he brings a California class action for invasion of privacy, wiretapping, fraud, unjust enrichment, and related claims.
Defendants asserted the website’s Terms of Service (TOS) contained an arbitration clause and moved to compel arbitration; Plaintiff countered he never saw or assented to the TOS.
Plaintiff filed an arbitration demand (challenging arbitrability) and attached the TOS; the arbitrator held a court must decide whether an arbitration agreement existed and administratively stayed the arbitration.
On the record, Plaintiff testified he did not know the website use was subject to arbitration, did not see a TOS link during the cookie opt-out flow, never used the app or rewards program, and that the TOS link was buried in a small menu.
Defendants conceded the record did not show actual assent to the TOS and sought (1) an order compelling arbitration and (2) limited discovery into Plaintiff’s knowledge of the TOS prior to resolving arbitrability.
The court denied both the motion to compel arbitration and the request for limited discovery, holding no reasonable trier of fact could find formation, waiver, or estoppel based on the present record.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether a valid arbitration agreement was formed	Pemberton: he neither saw nor assented to the TOS; cookie flow had no TOS notice	RB: TOS (browsewrap) applies and binds users who continue to use site	Held: No agreement as a matter of law — TOS was a non-conspicuous browsewrap and Plaintiff lacked actual/constructive notice
Whether Plaintiff waived right to challenge arbitrability by initiating arbitration	Pemberton: he immediately challenged arbitrability and never proceeded to merits	RB: initiating arbitration and filing documents constitutes waiver	Held: No waiver — Plaintiff consistently contested arbitrability and did not litigate merits in arbitration
Whether equitable estoppel requires arbitration despite nonsignatory/status	Pemberton: he sought to avoid enforcement of the arbitration clause, not exploit it	RB: Plaintiff sought to exploit the TOS by invoking arbitration procedures	Held: No estoppel — Plaintiff did not seek to enforce the TOS and thus cannot be estopped
Whether limited discovery into Plaintiff’s knowledge is warranted before ruling on arbitrability	Pemberton: his declaration is sufficient to show lack of assent; discovery would improperly probe merits	RB: suspicion that Plaintiff or counsel manufactured knowledge justifies targeted discovery	Held: Denied — Defendants failed to identify facts narrowly relevant to formation; their suspicions relate to merits, not arbitrability

Key Cases Cited

Lim v. TForce Logistics, LLC, 8 F.4th 992 (9th Cir.) (two-step FAA gateway inquiry: formation and scope)
Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667 (9th Cir.) (summary-judgment standard applies when formation is at issue)
Knutson v. Sirius XM Radio Inc., 771 F.3d 559 (9th Cir.) (existence of arbitration agreement is for the court)
Johnson v. Walmart Inc., 57 F.4th 677 (9th Cir.) (burden on party seeking to compel arbitration)
Oberstein v. Live Nation Ent., Inc., 60 F.4th 505 (9th Cir.) (distinguishing clickwrap and browsewrap; notice inquiry)
Berman v. Freedom Fin. Network, LLC, 30 F.4th 849 (9th Cir.) (reasonable conspicuousness standard for browsewrap)
Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (9th Cir.) (browsewrap enforceability and conspicuous hyperlinking)
Nagrampa v. MailCoups, Inc., 469 F.3d 1257 (9th Cir.) (when participation in arbitration waives objection to arbitrability)
Armstrong v. Michaels Stores, Inc., 59 F.4th 1011 (9th Cir.) (elements and burden for waiver by conduct)
Teleflex Med. Inc. v. Nat’l Union Fire Ins. Co. of Pittsburgh, PA, 851 F.3d 976 (9th Cir.) (clear-and-convincing standard to prove contractual waiver)
Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63 (Sup. Ct.) (parties can agree to arbitrate gateway arbitrability questions)
Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042 (9th Cir.) (equitable estoppel of nonsignatories is narrowly confined)
Murphy v. DirecTV, Inc., 724 F.3d 1218 (9th Cir.) (limitations on estopping nonsignatories)
Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir.) (discovery may be appropriate when formation is disputed)
Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (9th Cir.) (discovery on arbitrability is limited and cannot probe merits)