Vargison v. Paula's Choice LLC, 2:24-cv-00342

Over 100 plaintiffs filed a class action against Paula’s Choice, alleging false advertising by claiming its skincare products were “cruelty-free” while actually subject to animal testing in China.
Defendants include Paula’s Choice, LLC, and retailers Sephora USA, Inc. and THG Beauty USA LLC.
Paula’s Choice moved to compel arbitration for eight named plaintiffs based on a revised post-March 14, 2023 Terms of Use, which included an arbitration clause and class action waiver.
Plaintiffs argue they never agreed to the arbitration provision or did not receive adequate notice of it when purchasing online.
The court addressed whether these plaintiffs are bound by the arbitration agreement, focusing on website design, notice sufficiency, and timing of their purchases.
For three plaintiffs who made purchases after the arbitration motion was filed, the court found they assented to the Terms of Use; for five others, the question of assent remains unresolved, and discovery/trial is ordered.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Enforceability of arbitration clause—post-motion purchases	Cohen, Froelich, McCartan say no assent/notice to new arbitration terms	Paula’s Choice claims subsequent purchases signaled assent after notice	Arbitration clause enforceable for these three; claims stayed
Enforceability of arbitration for purchases before motion	Plaintiffs (Bartholomew-King et al.) argue no actual, conspicuous notice	Website provided adequate notice during purchase process	Material factual dispute; motion held in abeyance; discovery ordered
Sufficiency of website notice for arbitration clause	Notice was inconspicuous (small text, poor color contrast, vague link)	Notice was evident via hyperlinks and stated agreement by continuing	Court agrees notice was not reasonably conspicuous per Ninth Circuit
Arbitration of claims against non-signatory retailers	No claim against retailers or arbitration clause applies	Arbitration clause does not bind for retailers, only Paula’s Choice	No stay for retailer claims; arbitration order is limited to Paula’s Choice

Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (Federal Arbitration Act applies broadly but exempts only certain employment contracts)
Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440 (Arbitrator typically decides contract validity when entire contract challenged)
Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126 (Gateway inquiry is existence and scope of arbitration agreement)
First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938 (Mutual assent per ordinary contract principles governs arbitration contracts)
Nguyen v. Barnes & Noble, Inc., 763 F.3d 1171 (Conspicuous notice required to enforce online arbitration/browsewrap agreements)