DARRYL DAVIS, еt al., Plaintiffs, v. EXPERIAN INFORMATION SOLUTIONS, INC., Defendant.
Case No. 25-cv-04819-HSG
UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA
October 24, 2025
HAYWOOD S. GILLIAM, JR., United States District Judge
ORDER GRANTING MOTION TO COMPEL ARBITRATION. Re: Dkt. No. 9
I. BACKGROUND
In June 2025, Plaintiff Darryl Davis filed a class action complaint against Defendant Experian Information Solutions, Inc. (“Experian“) based on Defendant‘s alleged sale and disclosure of class members’ telephone numbers in violation of the Fair Credit Reporting Act (“FRCA“). See Dkt. No. 1 (“Compl.“) ¶ 1. Plaintiff alleges that Defendant improperly disclosed class members’ telephone numbers to third party lenders when class members completed loan applications. Id. ¶ 4. Plaintiff brings claims for willful noncompliance and negligent noncompliance with the FRCA. Id. ¶¶ 51–71. Defendant moved to compel arbitration and stay the action pending arbitration. See Dkt. No. 9.
II. LEGAL STANDARD
The Federal Arbitration Act (“FAA“),
When a party moves to compel arbitration, the court must determine (1) “whether a valid arbitration agreement exists” and (2) “whether the agreement encompasses the dispute at issue.” Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). The agreement may also delegate gateway issues to an arbitrator, in which case the court‘s role is limited to determining whether there is clear and unmistakable evidence that the parties agreed to arbitrate arbitrability. See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). In either instance, “before referring a dispute to an arbitrator, the court determines whеther a valid arbitration agreement exists.” Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 69 (2019) (citing
III. DISCUSSION
Defendant contends that when Plaintiff Davis signed the Terms of Use Agreement to join the service CreditWorks, he agreed to arbitrate this dispute with Defendant and delegate threshold questions of arbitrability to an arbitrator. Mot. at 9–10. Plaintiff argues that the delegation clause and the arbitration agreement are unconscionable. Opp. at 5. The Court agrees with Defendant that Plaintiff formed an agreement to arbitrate related claims and that the threshold question of arbitrability has been delegated to the аrbitrator. Because the Court finds the delegation clause is not unconscionable, the Court leaves the question of whether the arbitration agreement is unconscionable for the arbitrator to decide.
The party seeking to compel arbitration bears the burden of proving the existence of the agreement by a preponderance of the evidence. See Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017). In determining whether an agreement was formed, the Court applies “general state-law principles of contract interpretation,” without a presumption in favor of arbitrability. See Goldman, Sachs & Co. v. City of Reno, 747 F.3d 733, 742 (9th Cir. 2014) (quotation omitted). Under California law, a viable contract requires: (1) parties capable of contracting; (2) their consent; (3) a lawful object; and (4) sufficient cause or consideration. United States ex rel. Oliver v. Parsons Co., 195 F.3d 457, 462 (9th Cir. 1999). “[I]f a website offers contractual terms to those who use the site, and a user engages in conduct that manifests her acceptance of those terms, an enforceable agreement can be formed.” Berman v. Freedom Fin. Network, LLC, 30 F.4th 849, 856 (9th Cir. 2022).
Defendant argues that Plaintiff Davis entered into a contract with Experian Consumer Services (“ECS“) and its affiliates—including Defendant Experian Information Solutions—when he enrolled in CreditWorks in July 2016 and agreed to the “Terms of Use Agreement.” Mot. at 9–10. That contract contained an arbitration agreement under which Plaintiff agreed to arbitrate all disputes and claims against ECS and its affiliates arising out of or relating to the CreditWorks agreement:
ECS and you agree to arbitrate all disputes and claims between us arising out of this Agreement directly related to the Services or Websites, except any disputes or claims which under governing law are not subject to arbitration.
See, e.g., Dkt. No. 9-2, at 12–13 (2016 language).1 The agreement defines “ECS” to include its
Defendant introduces evidence that Plaintiff Davis had to click through two webpages when he enrolled in CreditWorks, at which time he was presented with a disclosure that “[b]y clicking ‘Submit Secure Order‘: I accept and agree to your Terms of Use Agreement” and an offset blue hyperlink to the agreement. Smith Decl. ¶ 4. Defendant argues that this was sufficient to provide clear notice of the terms of use, and that by clicking the submission button, Plaintiff manifested his assent. Mot. at 14. Defendant cites a long line of cases from this circuit finding a valid agreement to arbitrate after analyzing similarly situated plaintiffs, nearly identical terms, and nearly identical webpage designs. See id. at 7–9. Plaintiff does not dispute any of these facts.
The Court finds that Defendant has met its burden of proving the existence of an agreement to arbitrate. Here, the Terms of Use Agreement hyperlink was “conspicuously distinguished from the surrounding text in bright blue font, making its presence readily apparent,” Oberstein v. Live Nation Ent., Inc., 60 F.4th 505, 516 (9th Cir. 2023), and the notice warning users that clicking “Create Your Account” manifested assent was directly next to the button, cf. In re Tesla Advanced Driver Assistance Sys. Litig., No. 22-CV-05240-HSG, 2023 WL 6391477, at *4 (N.D. Cal. Sept. 30, 2023) (finding “hybrid browsewrap agreements where the terms of the agreement [were] hyperlinked above the [submission] button” were enforceable contracts). Courts confronting similar facts about CreditWorks and Experian have routinely found that “the website design provides constructive notice of the Terms of Use, including the arbitration provision” and that clicking the “Create Your Account” button constitutes an “unambiguous manifestation of assent.” Driskill v. Experian Info. Sols., Inc., 753 F. Supp. 3d 839, 845 (N.D. Cal. 2024); see also Aguiar v. Experian Info. Sols., Inc., No. 2:24-CV-02403-TLN-CSK, 2025 WL 1531433, at *6 (E.D. Cal. May 29, 2025) (finding a valid enforceable contract in nearly identical factual circumstances).
B. Delegation Clause
Plaintiff argues that the arbitration agreement is unconscionable and cannot be enforced.
a. Agreement to Delegate
Parties to an arbitration agreement “can agree to arbitratе ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68–69 (2010). “[W]hether the court or the arbitrator decides arbitrability is ‘an issue for judicial determination unless the parties clearly and unmistakably provide otherwise.‘” Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069, 1072 (9th Cir. 2013) (quoting Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002)). The Supreme Court has clarified:
When the parties’ contract delegates the arbitrability question to an arbitrator, a court may not override the contract. In those circumstances, a court possesses no power to decide the arbitrаbility issue. That is true even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is wholly groundless.
The Court agrees that there is clear and unmistakable evidence of an agreement to arbitrate arbitrability. The arbitration agreement states that “the arbitrator shall have exclusive authority to resolve any dispute relating to the scope and enforceability of this arbitration provision or any other term of this Agreement including, but not limited to any claim that all or any part of this arbitration provisiоn or Agreement is void or voidable.” Dkt. No. 9-2 at 13; see also Dkt. No. 9-2 at 30 (2024 amended agreement similarly stating that “[a]ll issues are for the arbitrator to decide including, but not limited to, (i) all issues regarding arbitrability” and “(iv) whether all or any part of this arbitration provision or Agreement is unenforceable, void or voidable including, but not limited to, on grounds of unconscionability“). Even if this language was not clear enough on its own to delegate issues of arbitrability, the agreement also states that the arbitration is governed by the rules of the AAA. Smith Decl. ¶ 6. The AAA Commercial Arbitration Rules, in turn, prоvide that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any
b. Enforceability of Delegation Clause
“Because a court must enforce an agreement that, as here, clearly and unmistakably delegates arbitrability questions to the arbitrator, the only remaining question is whether the particular agreement to delegate arbitrability—the Delegation Provision—is itself unconscionable.” Brennan, 796 F.3d at 1132 (emphasis in original); see also Rent-A-Center, 561 U.S. at 72 (“Accordingly, unless [plaintiff] challenged the delegation provision specifically, we must treat it as valid under § 2, and must enforce it under §§ 3 and 4, leaving any challenge to the validity of the Agreement as a whole for the arbitrator.“) (emphasis added).3 Under California law, an agreement is enforceable unless it is both procedurally and substantively unconscionable. See Armendariz v. Foundation Health Psychcare Servs. Inc., 24 Cal. 4th 83, 114 (2000). Procedural and substantive unconscionability need not be present in equal amounts. Id. Rather,
i. Procedural Unconscionability
Procedural unconscionability “focus[es] on ‘oppression’ or ‘surprise’ due to unequal bargaining power.” Armendariz, 24 Cal. 4th at 114 (quotation omitted). Plaintiff argues that the delegation clause is procedurally unconscionable because (1) it is contained within a contract of adhesion; (2) there is a significant power imbalance between Defendant and its customers because it is one of three major consumer reporting agencies in the U.S. and is specifically recommended by the federal government; (3) a person is bound to the delegation clausе merely by browsing or accessing Defendant‘s website; (4) Defendant has unilateral authority to amend the delegation clause under an amendment provision; (5) the agreement is affirmatively misleading because it states that class arbitrations and class actions are not permitted but batches claims under a mass arbitration clause; and (6) the agreement is confusing and vague because it broadly applies to the websites and services of a non-exhaustive list of affiliates. Opp. at 10–13.
In arguing that these factors constitute extreme procedural unconscionability, Plaintiff primarily relies upon the Ninth Circuit‘s recent decision in Heckman v. Live Nation Ent., Inc., 120 F.4th 670 (9th Cir. 2024), cert. denied sub nom. Live Nation v. Heckman, No. 24-1145, 2025 WL 2823733 (U.S. Oct. 6, 2025). In Heckman, the Ninth Circuit affirmed the lower court‘s finding that the delegation clause in an arbitration agreement was procedurally unconscionable “to an extreme degree.” Id. at 681. The court found the arbitration agreement to be “much more than a
The Court agrees that there are significant differences between this case and Heckman and that there is a much lower degree of procedural unconscionability in this agreement. First, while there is an amendment provision that allows Experian to modify the terms of the agreement at any time, the agreement allows users to opt out of the amendments and does not contain language applying changes rеtroactively. The relevant provision states that “if ECS makes any changes to the arbitration provision . . . [the user] may reject any such change and require ECS to adhere to the language in this provision as written at the time of . . . enrollment or purchase if a dispute between us arises regarding such Service.” Dkt. No. 9-2 at 13.4 Second, the Court does not find the rules to be “internally contradictory” here, since the batched proceedings discussed in the mass arbitration clause—discussed further below—still involve individual resolutions and serve only to consolidate filing fees. Id. at 31. As a result, there is no surprise or contradiction between these batch proceedings and the statement that “class arbitrations and class actions are not permitted.” Compare Heckman, 120 F.4th at 683, with Dkt. No. 9-2 at 28, 31. And while “take-it-or-leave-it adhesion contracts always contain some degree of procedural unconscionability,” Bielski, 87 F.4th at 1014 (quotation omitted), “the adhesive nature of a contract, without more, would give rise to a
ii. Substantive Unconscionability
“Substantive unconscionability pertains to the fairness of an agreement‘s actual terms and to assessments of whether they are overly harsh or one-sided.” OTO, L.L.C. v. Kho, 8 Cal. 5th 111, 125 (2019) (quotation omitted). The doctrine “is concerned with terms that are unreasonably favorable to the more powerful party, not just a simple old-fashioned bad bargain.” Lim v. TForce Logistics, LLC, 8 F.4th 992, 1001–02 (9th Cir. 2021) (quotation omitted). Plaintiff argues that the agreement‘s mass arbitration clause, limitation on liability, and notice requirements render the delegation clause substantively unconscionable. Opp. at 14.
First, Plaintiff argues that the mass arbitration clause deters users from vindicating their rights, as in Heckman. Opp. at 14. The relevant mass arbitration clause applies when at least 25 arbitration demands are filed within 180 days of each other, allege similar or identical claims, and are filed by the same or coordinating counsel. Dkt. No. 9-2 at 31. In such a case, the arbitration provider shall “group the arbitration demands into batches” and “provide for resolution of each group or batch as a single arbitration with one set of filing and administrative fees and a single arbitrator assignеd per group or batch.” Id. “All Mass Arbitration shall be subject to all other substantive and procedural terms contained within this Agreement.” Id.
Plaintiff argues that batched proceedings “will necessarily require some sort of class action procedure or bellwether mechanism to resolve issues” and may bind subsequent plaintiffs to previous rulings they were not a part of; otherwise, these batches will result in “unconscionable delays.” Opp. at 14–16. Defendant argues that the mass arbitration clause does not contain a bellwether provision and is a cоnsolidation device that is “confined to the appointment of an arbitrator and applying a single set of fees to each batch.” Reply at 11–12. Defendant notes that this agreement also does not impose any limit on the number of arbitrations that may proceed at one time or on the number of claimants per attorney, and one arbitration does not have a precedential effect on any other. Id. at 12.
The Court finds that “[t]he consolidation here implicates none of [Heckman‘s] concerns” since “no claimant is at the mercy of another claimant‘s representation of her.” Jones v. Starz Ent., LLC, 129 F.4th 1176, 1182 (9th Cir. 2025). The parties’ agreement does not contain any bellwether provision and does not bind later plaintiffs to previously adjudicated decisions. Cf. id. (similarly distinguishing Heckman in case where 7,300 individual demands were consolidated before a single JAMS arbitrator). Instead, the mass arbitration clause here appeаrs to primarily reduce fees for Defendant when confronting many similar claims. This mechanism does not “pertain to the special risks posed by the binding effect of a resolution upon absent class members, who must be afforded sufficient notice, opportunity to be heard, and adequate representation by the lead parties.” Id. And contrary to Plaintiff‘s argument—and unlike in Heckman—the purpose of avoiding mass fees would not require the arbitrator to read in a bellwether procedure that the
Second, Plaintiff argues that the agreement‘s limited liability clause—which reduces Defendant‘s liability to the amount the consumer paid for Experian‘s services in the twelve months prior to the event giving rise to the liability—is one-sided and unjustified. Opp. at 17–18. Defendant argues that this unconscionability challenge does not relate to the delegation clause. Reply at 15. The Court agrees, since the “limitation on liability will not apply to arbitration proceedings deciding whether the dispute is arbitrable, including whether the Arbitration Agreement is unconscionable.” In re BAM Trading Servs. Inc. Sec. Litig., 733 F. Supp. 3d 854, 873 (N.D. Cal. 2024); see also Bielski, 87 F.4th at 1011 (noting a party must “articulate[] why the argument invalidates” the delegation clause).
Third, Plaintiff argues that the noticе provision is substantively unconscionable because “only the consumer is required to describe the nature and basis of their claim and set forth the
Having rejected these three arguments—and noting that many of the other substantively unconscionable features from Heckman, such as the lack of discovery, arе not present here—the Court determines that Plaintiff has not carried his burden of showing that the delegation clause is substantively unconscionable. Cf. 120 F. 4th at 683–84. As such, the Court does not consider Plaintiff‘s argument that the arbitration agreement is unconscionable, since that issue has been delegated to the arbitrator.
C. Discover Bank
In the alternative, Plaintiff argues that the agreement is unconscionable under the rule announced in Discover Bank v. Superior Court, 36 Cal. 4th 148 (2005). Opp. at 21. In Discover Bank, the California Supreme Court held that class action waivers are unconscionable under California state law in consumer contracts of adhesion involving small damages awards. Id. at 162. The U.S. Supreme Court later held that the FAA preempts the Discover Bank rule, which poses an obstacle to the FAA‘s objectives. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 352 (2011). But, as the Ninth Circuit recently held in Heckman, the FAA does not protect certain mass arbitration models. Heckman, 120 F.4th at 690. As a result, the Heckman court held that the Discover Bank rule was not preempted in the case of Ticketmaster‘s mass arbitration models. Id. Plaintiff argues that the mass arbitration clause in CreditWork‘s Terms of Use Agreement
Because the mass arbitration provision at issue in this agreement serves primarily to consolidate proceedings under a single set of fees and does not eliminate the bilatеral nature of arbitration proceedings, the Court does not apply the Discover Bank rule. Courts confronted with similar consolidation provisions have rejected this same argument. See, e.g., Cordero v. Coinbase, Inc., No. 25-CV-04024-CRB, 2025 WL 2223495, at *4–*5 (N.D. Cal. Aug. 5, 2025) (noting that the provision at issue involved consolidation rather than binding bellwether procedures, and declining to adopt a version of Heckman that “would exclude all non-individualized arbitration from the FAA‘s protection“).
IV. CONCLUSION
The Court GRANTS Defendant‘s motion to compel arbitration. Dkt. No. 9. The Court STAYS proceedings with respect to Plaintiff Davis only.9
IT IS SO ORDERED.
Dated: 10/24/2025
HAYWOOD S. GILLIAM, JR.
United States District Judge