Sarhadi v. Pear Health Labs, Inc., 3:24-cv-07921

Plaintiff Kasra Sarhadi brought a class action against Pear Health Labs, Inc. (dba Aaptiv), alleging violations of the Video Privacy Protection Act (VPPA) and the California Information Privacy Act (CIPA).
Plaintiff claimed that Aaptiv disclosed personal information, including video viewing history, to third parties via its fitness app.
Defendant moved both to dismiss the complaint and to compel arbitration based on an arbitration clause in the app's End User License Agreement (EULA) that Plaintiff agreed to during account creation.
The arbitration provision required all disputes related to use of the app to be resolved via individual, binding arbitration.
Plaintiff argued that the arbitration agreement was not enforceable because it was not conspicuously disclosed, did not bind Pear Health Labs as successor, and/or was unconscionable.
The Court reviewed whether the arbitration provision was enforceable under federal and California law, and whether Defendant had waived its right to arbitrate by first moving to dismiss.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Waiver of Right to Compel Arbitration	Defendant waived by litigating in court and filing motion to dismiss	They always reserved right to arbitrate and timely moved to compel	No waiver; Defendant consistently indicated intent to arbitrate
Notice and Assent to Arbitration (Sign-in Wrap Agreement)	No reasonable/conspicuous notice; assent to terms not clear	Sign-in page was clear, uncluttered; hyperlink conspicuous; assent clear	Agreement provided reasonably conspicuous notice and assent
Successor Enforcement of Arbitration Clause	EULA was between Plaintiff and Aaptiv, Inc., not Pear Health Labs	Plaintiff continued using app post-acquisition; EULA binds successors	Pear Health Labs may enforce as successor to Aaptiv, Inc.
Unconscionability of Arbitration Agreement	Agreement's location in EULA and form were unconscionable	EULA referenced arbitration on page 1; not procedurally unconscionable	No unconscionability; agreement enforceable

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (liberal federal policy favoring arbitration agreements)
Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1 (doubts resolved in favor of arbitration; federal policy favors enforcement)
Baltazar v. Forever 21, Inc., 62 Cal.4th 1237 (burden on party opposing arbitration to show unconscionability)
Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal.4th 223 (party opposing arbitration must prove unconscionability)
Ashcroft v. Iqbal, 556 U.S. 662 (standard for plausibility on motions to dismiss under Rule 12(b)(6))