Studio 1220, Inc. v. Intralinks, Inc.
3:20-cv-02892
| N.D. Cal. | Jan 25, 2021Background
- PPP loans were processed by private lenders; plaintiffs Informatech and Studio 1220 applied through Bank of America and allege their applications were delayed in favor of larger applicants.
- Plaintiffs sued Bank of America North America (BANA), Bank of America Corporation (parent), and Intralinks (software vendor) for mishandling/priority decisions in PPP processing.
- BANA moved to compel arbitration based on an arbitration + delegation clause in its deposit agreement; Informatech disputed whether it ever agreed to that deposit agreement.
- BANA submitted a bank officer declaration and account records showing routine business practice of providing deposit agreements and a signature associated with Informatech’s account; court found this sufficient to show Informatech signed the agreement.
- The deposit agreement contains a delegation clause assigning arbitrability questions to the arbitrator; the court held this delegation clause valid and therefore deferred arbitrability to the arbitrator, granting BANA’s motion to compel arbitration.
- The motion to compel as to Bank of America Corporation was denied without prejudice (non‑signatory not shown to be able to invoke arbitration), and claims against Bank of America Corporation and Intralinks were dismissed for failure to plead plausible involvement (leave to amend for those two defendants).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Informatech entered into the deposit agreement | Informatech says it never agreed to or received the deposit agreement | BANA says routine business practice and signature evidence show Informatech received and signed the agreement | Court: BANA’s evidence admissible under Fed. R. Evid. 406; contract formation shown |
| Whether arbitrability is for the court or an arbitrator | Plaintiffs argue delegation clause is ambiguous (excepting certain class/jury-waiver challenges) so court should decide | BANA points to clear delegation language assigning arbitrability to arbitrator | Court: Delegation clause is clear; arbitrator decides arbitrability |
| Whether the arbitration clause covers the PPP dispute | Plaintiffs contend PPP processing claims are unrelated to the deposit agreement and likely beyond arbitration’s scope | BANA contends the deposit agreement governs disputes and delegations cover scope questions | Court: Even if coverage seems doubtful, delegation clause requires arbitrator to decide scope |
| Whether Bank of America Corporation and Intralinks are properly pleaded/entitled to arbitration | Plaintiffs assert parent and vendor are liable and should be included; seek relief against all defendants | BANA parent and Intralinks argue lack of contractual privity and insufficient factual allegations tying them to misconduct | Court: Motion to compel denied as to parent (non‑signatory insufficiently shown); claims against parent and Intralinks dismissed for failure to plead plausible involvement (leave to amend) |
Key Cases Cited
- Galilea, LLC v. AGCS Marine Insurance Co., 879 F.3d 1052 (9th Cir. 2018) (arbitrability threshold and related precedent)
- Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524 (2019) (courts must enforce a clear delegation clause)
- Momot v. Mastro, 652 F.3d 982 (9th Cir. 2011) (language delegating arbitrability to arbitrators constitutes clear and unmistakable delegation)
- Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir. 2015) (distinguishing who decides arbitrability absent delegation)
- AT&T Techs., Inc. v. Communications Workers, 475 U.S. 643 (1986) (default rule on who decides arbitrability)
- Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir. 1999) (test for whether dispute "relates to" a contract for arbitration scope)
- Tompkins v. 23andMe, Inc., 840 F.3d 1016 (9th Cir. 2016) (unilateral modification clauses and implied covenant limits)
- Kramer v. Toyota Motor Corp., 705 F.3d 1122 (9th Cir. 2013) (non‑signatory estoppel principles for arbitration)
- Williams v. Yamaha Motor Co. Ltd., 851 F.3d 1015 (9th Cir. 2017) (pleading required to hold parent company liable)
- Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072 (9th Cir. 2014) (dismissal without prejudice where arbitration compelled)