KIANA JONES, Plaintiff-Appellant, v. STARZ ENTERTAINMENT, LLC, Defendant-Appellee.
No. 24-1645
D.C. No. 5:24-cv-00206-KK-DTB
UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT
Filed February 28, 2025
Opinion by Judge Clifton
Argued and Submitted December 4, 2024 Pasadena, California
SUMMARY*
Arbitration
The panel affirmed the district court‘s decision denying Kiana Jones‘s petition under the Federal Arbitration Act to compel individual arbitration against Starz Entertainment, LLC, a video streaming provider, pursuant to the Starz Terms of Use.
Jones, along with thousands of other claimants represented by the same law firm, initiated dispute-resolution proceedings against Starz, alleging violations of federal and state privacy laws. The arbitration provider, Judicial Arbitration and Mediation Services, or JAMS, ordered consolidation of these filings to be presided over by a single arbitrator.
The panel held that Jones was not a “party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate,” as required by
The panel held that
COUNSEL
Kiran N. Bhat (argued), Keller Postman LLC, Coral Gables, Florida; Nicole Berg and Patrick A. Huber, Keller Postman LLC, Chicago, Illinois; Warren D. Postman and Albert Y. Pak, Keller Postman LLC, Washington, D.C.; Jae K. Kim, Lynch Carpenter LLP, Pasadena, California; for Plaintiff-Appellant.
Jeffrey E. Tsai (argued), DLA Piper LLP, San Francisco, California; Angela C. Agrusa, DLA Piper LLP, Los Angeles, California; David Horniak, DLA Piper LLP, Washington, D.C.; for Defendant-Appellee.
Robert E. Dunn, Collin J. Vierra, and Isaac J. Weitzhandler, Eimer Stahl LLP, Campbell, California; Jonathan D. Urick, United States Chamber Litigation Center, Washington, D.C.; for Amicus Curiae the Chamber of Commerce of the United States of America.
OPINION
CLIFTON, Circuit Judge:
Plaintiff-Appellant Kiana Jones appeals the district court‘s denial of her motion to compel arbitration against Defendant-Appellee, Starz Entertainment, LLC (“Starz“). Jones, along with thousands of other claimants represented by the same law firm, initiated dispute-resolution proceedings against Starz pursuant to the Starz Terms of Use (“Terms“), alleging violations of federal and state privacy laws. The arbitration provider designated by the Terms, Judicial Arbitration and Mediation Services (“JAMS“), ordered consolidation of these filings to be presided over by a single arbitrator. The arbitration has since remained stalled in an apparent procedural stalemate, after a substantial number of the claimants repeatedly disqualified arbitrators appointed by JAMS. Jones petitioned the district court to compel individual arbitration. The district court denied
The FAA provides that a “party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate” may petition a federal district court to compel arbitration.
We affirm the decision of the district court. We agree with the district court that Starz has not failed, neglected, or refused to arbitrate and that the alternative requests presented by Jones are not justified or authorized under
I. Background and Procedural History
Starz is a media and entertainment company that offers an online video streaming service. Jones created a Starz account and used the Starz platform to stream video content. By signing up for this service, she agreed to Starz‘s Terms of Use, which contained a mandatory arbitration clause: “All controversies, disputes or claims arising out of or relating to these Terms of Use will be determined pursuant to the mediation and arbitration procedures of JAMS . . . in accordance with the comprehensive rules and procedures . . . of JAMS (‘JAMS Rules‘), as modified by these Terms of Use.” The Terms further stated: “You and Starz agree that each may bring claims against the other only in your or its individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.”
Jones initiated the dispute-resolution process in January 2023 by submitting a Demand for Arbitration Form to JAMS, alleging that Starz violated the Video Privacy Protection Act and
Keller subsequently sought to initiate 7,300 individual arbitrations, including one for Jones, to resolve that disagreement as well as the underlying dispute concerning Starz‘s alleged data breach. Each arbitration requires a filing fee of $2,000, with the arbitration-initiating consumer party‘s payment capped at $250 by the JAMS Consumer Minimum Standards. This arrangement of 7,300 separate arbitrations would have resulted in charges to Starz totaling $12,775,000 ($1,750 multiplied by 7,300 filings) in initiation fees alone.
JAMS, acting through its National Arbitration Committee, requested briefs from the parties on whether the “matters should be consolidated pursuant to JAMS Comprehensive Rule 6(e).” JAMS Rule 6(e) provides: “Unless the Parties’ Agreement or applicable law provides otherwise, JAMS, if it determines that the Arbitrations so filed have common issues of fact or
JAMS appointed the Honorable Gail Andler1 as the arbitrator after the parties went through the standard striking-and-ranking process. Fifteen days later, Keller sent a single email to JAMS serving notices of disqualification on behalf of 7,213 claimants, not including Jones. JAMS treated the notices as disqualifying Judge Andler as to the entire consolidated proceeding. This process repeated itself each time JAMS appointed an arbitrator, preventing the arbitration from going forward. At no point did Starz disqualify an appointed arbitrator.
JAMS then suggested that Keller petition the California Superior Court to appoint an arbitrator. That route would appear to prevent repeated sequential disqualifications. Relevant state law grants a party a single peremptory challenge against a court-appointed arbitrator, after which a subsequent appointee can be disqualified only upon a showing of cause.
Instead, Jones petitioned the district court to compel arbitration under
II. Discussion
We review de novo the denial of a motion to compel arbitration. Holley-Gallegly v. TA Operating, LLC, 74 F.4th 997, 1000 (9th Cir. 2023). We review for clear error any factual findings underlying the district court‘s order. Id. Jones claims that she is a party aggrieved within the meaning of the FAA due to Starz‘s failure to engage in individual arbitration with her. According to Jones, the mass consolidation generated an endless procedural loop in which any one of the thousands of claimants could exercise the statutory right to disqualify the appointed arbitrator as to the entire proceeding, thus depriving her of the individual arbitration allegedly mandated by the Terms. Jones also argues in the alternative that the Terms are unconscionable under California law to the extent that they permit pre-arbitration consolidation.
We conclude that Jones is not aggrieved under the statute because Starz never failed, neglected, or refused to arbitrate. An arbitration provider‘s consolidation of numerous identical filings pursuant to its own rules as incorporated by the parties’ agreement does not present a gateway question of arbitrability demanding our attention. We do not reach the issue of unconscionability because the FAA does not allow Jones to raise that argument as the party seeking arbitration.
Section 4 of the FAA provides: “A party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration may petition any United States district court . . . for an order directing that such arbitration proceed in the manner provided for in such agreement.”
The district court held that Jones failed to demonstrate she is “aggrieved” within the meaning of
We agree. Jones‘s opening brief does not point to any conduct by Starz that triggers
Jones‘s position appears to boil down to the assertion that by urging JAMS to consolidate these claims and attempting to participate in the consolidated proceeding, Starz refused to arbitrate individually with Jones as mandated by the Terms. But it was JAMS, not Starz, that made the decision to consolidate, so it is not clear how that decision can be characterized as a refusal by Starz to arbitrate.
More broadly, the premise of Jones‘s argument is incorrect. The Terms do not, on their face, preclude consolidation of the 7,300 arbitrations demanded by Jones and the other claimants represented by Keller.
The Terms never used the phrase “individual arbitration” or expressly prohibited consolidation. See, e.g., Heckman v. Live Nation Ent., Inc., 120 F.4th 670, 683 (9th Cir. 2024) (noting that arbitration clause specifically required resolution of claims by “individual arbitration“). Rather than prohibit consolidation, the agreement between Starz and Jones plainly contemplated its possibility by incorporating the JAMS Rules, including the Rule that authorizes JAMS to consolidate filings that share common issues of fact or law.
Consolidation is not the same as class or representative arbitration.2 Some similarities exist in that both procedures encompass multiple disputes and heighten the commercial stakes. There is a critical difference, however. In a class or representative arbitration, an individual brings claims on behalf of others, whereas a claimant in a consolidated arbitration brings the claim in her individual capacity. It is that representative feature, not the mere numerosity of parties, that forms the critical element of the “fundamental changes brought about by the shift from bilateral arbitration to class-action arbitration.” Stolt-Nielsen S.A. v. AnimalFeeds Int‘l Corp., 559 U.S. 662, 686 (2010). The Supreme Court cautioned that “a proceeding in which two and only two parties arbitrate exclusively in their individual capacities is not the only thing one might mean by ‘bilateral arbitration,‘” explaining that the problems “identified in mandatory class arbitration arise from procedures characteristic of multiparty representative actions.” Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 657–58 (2022); see also AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 348 (2011) (“Classwide arbitration includes absent parties, necessitating additional and different procedures and involving higher stakes.“). Those procedures 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. See id. at 348–49. The consolidation here implicates none of those concerns: no claimant is at the mercy of another claimant‘s representation of her.
Our recent decision in Heckman offers helpful contrast. That case concerned novel arbitration procedures used by New Era ADR (“New Era“). Heckman, 120 F.4th at 676–80. We held the arbitration agreement substantively unconscionable based on, among other reasons, serious misgivings about New Era‘s use of bellwether cases in its mass arbitration protocol. Id. at 684–85. There, after New Era compiled similar cases into a batch, three bellwether cases were selected to serve as precedents for all cases in the same batch. Id. at 678. Claimants in non-bellwether cases had no right to participate in the bellwether cases, no access to the bellwether decision until it was invoked against them, no notice of the bellwether cases, no opportunity to be heard, and no right to opt out of the batch. Id. at 684. In short, New Era‘s protocol contained all the red flags associated with classwide arbitration.
Indeed, from a practical standpoint, we are unconvinced that Jones is aggrieved at all. Contrary to her grievance that she is being prevented from a hearing on the merits of her claim, there remain avenues of relief available to Jones.
First, to the extent Jones believes that the consolidation violated her contractual right to individual arbitration, she can make that argument to the arbitrator selected to preside over the consolidated proceeding. That arbitrator presumably has the authority to revisit the National Arbitration Committee‘s consolidation order. JAMS Rule 11(a) plainly allows that path: “Once appointed, the Arbitrator shall resolve disputes about the interpretation and applicability of these Rules and conduct of the Arbitration Hearing.” The letter from JAMS requesting briefs on the question of consolidation said as much, stating that objections could be raised to the arbitrator upon appointment.
Second, to the extent Jones claims injury from the repeated disqualification of arbitrators, there is a solution available to her: she can petition a California Superior Court to appoint an arbitrator, as suggested by JAMS. The California Code of Civil Procedure grants a party a single peremptory challenge against a court-appointed arbitrator and requires any subsequent disqualification to be based upon a showing of cause.
disqualification statements to date, and absent a showing of cause, an arbitrator will be selected through a court-appointed process. There is thus a limit to the delay that can be caused by disqualifying arbitrators. Had Jones genuinely wanted to obtain a resolution on the merits, she could have availed herself of the California Superior Court.
The fact that Jones has not pursued this path casts serious doubt over the true motivation underlying the mass-arbitration tactic deployed here, which appears to be geared more toward racking up procedural costs to the point of forcing Starz to capitulate to a settlement than proving the allegations of data breach to seek appropriate redress on the merits. We appreciate that claimants in some circumstances may feel disfavored by arbitration clauses included within form contracts. The Terms in this instance are clear, however, and arbitration is available to resolve the claims asserted by Jones and others.
B. Gateway Question of Arbitrability
Unable to make the threshold showing required under
authorize consolidation and describe the court-appointment process as a final backstop where parties fail to agree on an arbitrator. See
“JAMS administrators,” rather than an appointed arbitrator.4 The order was based on JAMS Rule 6(e), which authorizes JAMS to consolidate filings that share common issues of fact or law “[u]nless the Parties’ Agreement or applicable law provides otherwise.” Jones would interpret that dependent clause as requiring an arbitrator to decide consolidation whenever an ostensible contractual dispute arises. Because the Terms incorporate JAMS rules, the Terms delegate the authority to consolidate not to an administrator but to an arbitrator, and therefore, Jones argues, the district court had a duty to intervene.
It strains credulity to believe that it is the business of a federal court to second-guess an independent arbitration provider‘s application of its own rule—a rule incorporated into the parties’ agreement—to consolidate thousands of identical arbitration demands. As Jones‘s counsel acknowledged during oral argument, no court would tolerate having to try 7,300 identical cases separately. No arbitration provider should have to, either.
Jones‘s argument about the district court‘s responsibility is a non sequitur, because she cannot circumvent the problem
of demonstrating Starz‘s refusal to arbitrate. Our “limited” role under the FAA no doubt encompasses adjudicating gateway questions of arbitrability. Chiron, 207 F.3d at 1130. These questions usually concern the validity and scope of the agreement to arbitrate. Id. Our need to address such gateway questions, however, stems in the first place from the parties’ disagreement about whether to arbitrate at all. The question of validity arises when one party characterizes the arbitration agreement as invalid; the question of scope arises when one party denies that the arbitration agreement covers the controversy at issue.
Shivkov v. Artex Risk Solutions, Inc., 974 F.3d 1051 (9th Cir. 2020), illustrates this point. The defendants in that case were insurance management companies that moved to compel arbitration in response to a class action brought by plaintiffs who had retained the defendants’ services to manage captive insurance companies. Id. at 1056–58. After concluding that the arbitration agreements were enforceable, we went on to hold that the availability of class arbitration is presumptively a gateway issue for judicial determination. Id. at 1065–66. We explained why the question of class arbitration implicates validity and scope, the dual cores of arbitrability. As for validity, class arbitration “raises the question whether any of those possible class members have actually agreed to arbitration in the first place.” Id. at 1066. Similarly, “the question whether [defendants] agreed to arbitrate particular disputes not only with the Plaintiffs, but also with possible
By contrast, nobody here is denying that Starz‘s Terms contain a valid arbitration agreement or that the agreement covers the dispute at issue. Jones may be dissatisfied with JAMS‘s interpretation of its own rules, but the JAMS Rules are what she agreed to and she can seek recourse within those Rules. We cannot be made to do the bidding of every unhappy arbitration claimant, and especially not one who is already in arbitration. Jones‘s invocation of the courts’ responsibility under the FAA rings hollow where the circumstances simply present no dispute about arbitrability. We therefore need not reach the question of whom the Terms authorized to order consolidation as between an arbitrator or an administrator.
C. Unconscionability
Jones argues in the alternative that if the Terms permit pre-arbitration consolidation, they are unconscionable. She then requests that we sever the unconscionable provision—the Terms’ incorporation of JAMS Rule 6(e)—and enforce the remainder of the arbitration agreement, meaning compel Starz to arbitrate one-on-one with Jones and 7,300 other claimants.
We are aware of no precedent where the party petitioning to compel arbitration under
Statutory text dictates the outcome here. Section 4 authorizes a district court to issue an “order directing the parties to proceed to arbitration in accordance with the terms of the agreement.”
This is not a mere technicality. Selectively enforcing an arbitration agreement while nullifying its key provision by fiat of judicial power contravenes the “fundamental principle that arbitration is a matter of contract.” Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010); see Stolt-Nielsen, 559 U.S. at 684 (“[A]rbitration is a matter of consent.“). It is true that
Jones may not turn the shield of unconscionability into a sword to compel a type
III. Conclusion
Jones cannot petition for an order to compel arbitration because she failed to allege that she is aggrieved by Starz‘s failure, neglect, or refusal to arbitrate. Whether JAMS properly ordered consolidation is not a gateway question of arbitrability fit for judicial determination.
AFFIRMED.