517 F.Supp.3d 1002
N.D. Cal.2021Background:
- Plaintiff Jeremy Stanfield paid $3,700 to Tawkify for six dates, canceled, received a partial refund, sued under California’s Dating Services Contract Act, and later obtained a full refund.
- Stanfield clicked a checkbox acknowledging Tawkify’s ten‑page Terms of Service (TOS) at signup; the arbitration clause was buried on the last page under the heading “Governing Law.”
- The TOS stated users must resolve “any and all disputes” by arbitration in San Francisco, barred class actions, and imposed a one‑year limitations period; it did not identify an arbitrator, arbitration rules, fee allocation, or mutuality of the arbitration obligation.
- Tawkify moved to compel arbitration; Stanfield argued the arbitration clause was unconscionable.
- The court found the clause both procedurally and substantively unconscionable and denied the motion to compel arbitration.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Procedural unconscionability (notice/assent) | TOS buried, checkbox gave minimal notice; take‑it‑or‑leave‑it adhesion | Hyperlink + checkbox is sufficient (analogous to Tompkins/23andMe) | Clause was highly procedurally unconscionable (hidden, obscure, oppressive) |
| Mutuality (one‑sided arbitration) | Clause binds only users; Tawkify reserved judicial remedies elsewhere | Provision should be read as mutual or reasonably applied to both parties | Substantively unconscionable for lack of bilaterality; one‑way obligation invalidates clause |
| Indefiniteness (no arbitrator/rules/fees specified) | Omission leaves major terms to future dispute, creating prohibitive uncertainty and expense | Details can be supplied later or by a court; not fatal to enforcement | Substantively unconscionable: leaving arbitrator/rules unspecified unreasonably burdens users |
| Class‑action waiver / 1‑year limitations | Waiver and short statute limit relief and are oppressive | Similar waivers have been upheld; not dispositive here | Court relied on combined procedural and substantive defects to deny enforcement (waiver/limit contribute to oppressive scheme) |
Key Cases Cited
- Tompkins v. 23andMe, Inc., 840 F.3d 1016 (9th Cir. 2016) (frames consumer arbitration unconscionability analysis and is the primary comparison case)
- Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal.4th 83 (Cal. 2000) (addresses unilateral arbitration clauses and need for bilaterality)
- Ting v. AT&T, 319 F.3d 1126 (9th Cir. 2003) (requires a modicum of bilaterality in arbitration remedies)
- Pokorny v. Quixtar, Inc., 601 F.3d 987 (9th Cir. 2010) (discusses lack of mutuality as relevant to substantive unconscionability)
- Bigler v. Harker Sch., 213 Cal. App. 4th 727 (Cal. Ct. App. 2013) (construes "any dispute involving" language in arbitration clauses)