Case Information
UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA SOFIA MAYNEZ, оn behalf of CV 20-0023 DSF (JPRx) herself and others similarly
situated, Order GRANTING Defendant’s
Plaintiff, Motion to Compel Arbitration and Stay the Proceedings (Dkt. 21) v.
WALMART, INC., et al.,
Defendants.
Defendant Walmart, Inc., moves to compel arbitration of claims brought by Plaintiff Sofia Maynez on an individual basis and to stay these proceedings pending completion of the arbitration. Dkt. 21 (Mot.). Plaintiff opposes. Dkt. 30 (Opp’n). The Court deems this matter appropriate for decision without oral argument. See Fed. R. Civ. P. 78; Local Rule 7-15. Fоr the reasons stated below, the motion is GRANTED.
I. Background On April 8, 2019, Plaintiff used Defendant’s e-commerce app on her mobile phone (Walmart app) to purchase a Baby Trend Hybrid LX 3-in- 1 Car Seat. Dkt. 21-3 (Catania Decl.) ¶ 2; Dkt. 21-4 (Ex. 1). To purchase this item through the Walmart app, Plaintiff clicked the “Place Order” button on the checkout page, which provided: “By clicking Place Order, you agree to Walmart’s Updated Privacy Policy and Terms of Use .” Dkt. 21-2 (Deverkonda Decl.) ¶¶ 5-6. The boldеd and underlined phrases are hyperlinks which take the customer to a separate page containing the named policy. Id. ¶ 6; Dkt. 21-6 (Catania Decl., Ex. 3) (Terms of Use). The Terms of Use “govern [the user’s] access to and use of all Walmart Sites,” including the Walmart app. Terms of Use § 1.
The Terms of Use inform the consumer that “ THIS AGREEMENT CONTAINS A MANDATORY ARBITRATION PROVISION THAT, AS FURTHER SET FORTH IN SECTION 20 BELOW, REQUIRES THE USE OF ARBITRATION ON AN INDIVIDUAL BASIS TO RESOLVE DISPUTES. ” Id. (emphasis in original). Section 20 of the Terms of Use, titled “ Disputes & Arbitration; Applicable Law,” provides:
EXCEPT FOR DISPUTES THAT QUALIFY FOR SMALL CLAIMS COURT, ALL DISPUTES ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND WALMART, WHETHER BASED IN CONTRACT, TORT, STATUTE, FRAUD, MISREPRESENTATION, OR ANY OTHER LEGAL THEORY, WILL BE RESOLVED THROUGH FINAL AND BINDING ARBITRATION BEFORE A NEUTRAL ARBITRATOR INSTEAD OF IN A COURT BY A JUDGE OR JURY, AND YOU AGREE THAT WALMART AND YOU ARE EACH WAIVING THE RIGHT TO SUE IN COURT AND TO HAVE A TRIAL BY A JURY. YOU AGREE THAT ANY ARBITRATION WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED AND YOU ARE AGREEING TO GIVE UP THE ABILITY TO PARTICIPATE IN A CLASS ACTION.
Id. § 20 (Arbitration Provision). “The arbitrator will have authority to award temporary, interim, or permanеnt injunctive relief or relief providing for specific performance of these Terms of Use, but only to the extent necessary to provide relief warranted by the individual claim before the arbitrator.” Id.
On May 7, 2019, Plaintiff again used the Walmart app to search for the price and availability of baby items at her local Walmart store in Torrance, California. Dkt. 14 (FAC) ¶¶ 9-10. The Walmart app indicated that a box of 576 Huggies baby wipes was available for $5.44 and an 84-pack of Huggies Pull-Ups was available for $8.97. Id. ¶¶ 11- 12. Both items were listed as “in stock” at the Torrance Walmart store. Id. Plaintiff visited the store to purchase the Huggies products but found the prices “substantially higher than what was listed . . . in the Walmart app.” Id. ¶ 13. In store, the baby wipes cost $12.54 and the Pull-Ups $31.84. Id. ¶¶ 14-15. Plaintiff “nevertheless bought the products” at the store. Id. ¶ 16. Plaintiff filed a putative class action against Walmart for violatiоn of California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200, Consumer Legal Remedies Act (CLRA), Cal. Civ. Code § 1750, and False Advertising Law, Cal. Bus. & Prof. Code § 17500, stemming from the incorrect pricing information on the Walmart app. FAC ¶¶ 26-46. She seeks “an order enjoining Defendant from continuing to engage in the unlawful, unfair and fraudulent business practices,” but otherwise seeks no damages or retrospective relief. Id., Prayer for Relief ¶¶ 1-5.
II. Legal Standard
“[T]he Federal Arbitration Act (FAA) makes agreements to arbitrate
‘valid, irrevocable, and enforceable, save upon such grounds as exist at
law or in equity for the revocation of any contract.’” AT&T Mobility
LLC v. Concepcion,
Generally, a court’s role under the FAA is limited to determining
“two ‘gateway’ issues: (1) whether there is an agreement to arbitrate
between the parties; and (2) whether the agreement covers the
dispute.” Brennan v. Opus Bank,
III. Discussion
Defendant moves to compel arbitration on the grounds that Plaintiff
agreed to submit any claims against Walmart to binding arbitration
under the Terms of Use of the Walmart app. Plaintiff objects and
argues thаt (1) Defendant has failed to establish a valid agreement to
arbitrate between the parties and (2) the Arbitration Provision is
unenforceable under California law because it requires Plaintiff to
waive her right to seek public injunctive relief in any forum.
A. Existence of a Valid Arbitration Agreement
When deciding whether there is an agreement to arbitrate, courts
generally “apply ordinary state-law principles that govern the
formation of contracts.” First Options of Chicago, Inc. v. Kaplan, 514
U.S. 938, 944 (1995).
[1]
Where “the parties contest the of an
existence
arbitration agreement, the presumption in favor of arbitrability does
not apply.” Goldman, Sachs & Co. v. City of Reno,
Plaintiff argues (1) the evidence submitted by Defendant is “insufficient to establish Plaintiff had the requisite notice of the purported arbitration agreement” and (2) there was no “mutual assent” to arbitrate because “Plaintiff was never aware of the arbitration provision in the [Terms of Use] document, and she never understood Walmart was seeking to obtain her agreement to arbitrаte any disputes between herself and Walmart.” Opp’n at 5-9. Both arguments fail.
1. Plaintiff had notice of the Arbitration Provision To meet its burden of proving that an agreement to arbitrate exists, Defendant provides the declaration of Madhav Deverkonda, a Director of Engineering who has worked for Walmart since November 2015 and is “responsible for the cart and checkout process on the Walmart mobile application.” Deverkonda Decl. ¶ 1. The declаration describes the “checkout process” that customers complete in order to make a purchase through the Walmart app. Id. ¶¶ 2-6. “At the final stage of the Check Out Process, the customer is presented with a page that contains order details and the following sentence: ‘By clicking Place Order, you agree to Walmart’s Updated Privacy Policy and Terms of Use.’” Id. ¶ 5. “The words ‘Privacy Policy’ and ‘Terms of Use’ . . . are hyperlinks to Walmart’s Privacy Policy and Walmart’s Terms of Use.” Id. “To complete the order, the customer must click a blue ‘Place Order’ button” that is situated immediately below the “Privacy Policy” and “Terms of Use” agreement. Id. ¶ 6. [2] “The customer cannot complete the order without clicking the ‘Place Order’ button. Id. Defendant also shows that Plaintiff purchased a car seat through the Walmart app on April 8, 2019. Catania Decl. ¶ 2. This evidence sufficiently shows that the Terms of Use were presented to Plaintiff on the Walmart app and she assented to them when she clicked the “Place Order” button to purchase the car seat.
Plaintiff contends that the Deverkonda Declaration is insufficient because it describes the Walmart app checkout process today , but is “irrelevant to what Plaintiff may have actually seen when she used it in 2019.” Opp’n at 5-6. Plaintiff focuses on the statement in the declaration that the Walmart app “may be updated from time to time,” Deverkonda Decl. ¶ 7, which purportedly “leaves unclear what was actually different when Plaintiff used the Walmart app,” Opp’n at 6. However, in the same sentence, Deverkonda declares that “the Check Out Process in the Walmart App described in this declaration was in a substantially identical format in April and May 2019,” when Plaintiff made her purchasе. Deverkonda Decl. ¶ 7 (emphasis added). Plaintiff’s nitpicking interpretation of this statement is unreasonable. The Court is satisfied that the checkout process for the Walmart app described in the Deverkonda Declaration accurately reflects the process that Plaintiff encountered in April of 2019.
2. Plaintiff agreed to arbitrate her disputes with Defendant when she placed an order through the Walmart app
Plaintiff next argues that there was no mutual assent to arbitrate because “Plaintiff was not required to review the TOU [Terms of Use] document[,] . . . Plaintiff was never aware of the arbitration provision in the TOU document, and she never understood Walmart was seeking to obtain her agreement to arbitrate any disputes between herself and Walmart.” Opp’n at 7. These arguments fall short.
As the Ninth Circuit has explained, “[c]ontracts formed on the Internet сome primarily in two flavors”:
“[C]lickwrap” (or “click-through”) agreements, in which website users are required to click on an “I agree” box after being presented with a list of terms and conditions of use; and “browsewrap” agreements, where a website’s terms and conditions of use are generally posted on the website via a hyperlink at the bottom of the screen.
Nguyen v. Barnes & Noble Inc.,
The Walmart app required Plaintiff to affirmatively acknowledge
and agree to the Terms of Use when she placed an order. Deverkonda
Decl. ¶ 5. In a recent unpublished opinion, the Ninth Circuit found the
same language and structure used by Walmart “provided sufficient
notice for constructive assent” and created “a binding arbitration
agreement between” the customer and the app provider. Lee v.
Ticketmaster L.L.C., No. 19-15673,
The Walmart app similаrly required Plaintiff to “affirmatively
acknowledge the Terms of Use before completing h[er] online
purchase.” Nguyen,
Plaintiff contends there is “no showing of mutual assent here”
because she “would not have even known Walmart was attempting to
obtain an agreement to arbitrate disputes” based on Defendant’s
description of thе Walmart app. Opp’n at 8-9 (citing Schnabel v.
Trilegiant Corp.,
Id. at 123. The circumstances here are different in every way. Plaintiff was provided with notice of the Terms of Use at the time of her purchase, she was informed that “[b]y clicking ‘Place Order’” she would be agreeing to those terms, and she then placed her order, affirmatively consenting to the Tеrms of Use and Arbitration Provision. Deverkonda Decl. ¶¶ 2-6.
It is no help to Plaintiff that she “was not required to review the
[Terms of Use]” and “was never aware of the arbitration provision in
the TOU document.” Opp’n at 7; Dkt. 31-1 (Maynez Decl.) ¶¶ 3-4.
Under California law, “[a] party who is bound by a contract is bound by
all its terms, whether or not the party was aware of them.” Norcia, 845
F.3d at 1284; Lee,
The Court therefore concludes that Plaintiff assented to Walmart’s
Terms of Use and Arbitration Provision. The Court also finds that the
Arbitration Provision – which extends broadly to “ ALL DISPUTES
ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR
ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND
WALMART,” Terms оf Use § 20 – “covers the dispute” at issue in this
action. Brennan,
B. Validity of the Arbitration Provision
Plaintiff next argues that the Arbitration Provision is “void and
unenforceable” under California law because “it purports to waive
Plaintiff’s right to seek public injunctive relief in any forum.” Opp’n at
10 (citing McGill v. Citibank,
“[P]ublic injunctive relief under the UCL, the CLRA, and the false
advertising law is relief that has ‘the primary purpose and effect of’
prohibiting unlawful acts that threaten future injury to the general
public.” McGill,
Plaintiff identifies three sections of the Walmart app’s Arbitration Provision that, read together, allegedly prohibit her from seeking public injunctive relief “in any forum” and render the Arbitration Provision unenforceable:
• (1) “ALL DISPUTES ARISING OUT OF OR RELATED TO THESE TERMS OF USE OR ANY ASPECT OF THE RELATIONSHIP BETWEEN YOU AND WALMART . . . WILL BE RESOLVED THROUGH FINAL AND BINDING ARBITRATION,” Terms of Use § 20; • (2) “YOU AGREE THAT ANY ARBITRATION WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED AND YOU ARE AGREEING TO GIVE UP THE ABILITY TO PARTICIPATE IN A CLASS ACTION,” id.; and
• (3) “The arbitrator will have authority to award temporary, interim, or рermanent injunctive relief or relief providing for specific performance of these Terms of Use, but only to the extent necessary to provide relief warranted by the individual claim before the arbitrator ,” id. (emphasis added).
The third section, in particular, might be read as a waiver of Plaintiff’s
right to seek public injunctive relief in arbitration – that is, “relief
intended to benefit those other than the individual bringing the claim.”
Dornaus v. Best Buy Co., No. 18-CV-04085-PJH,
The Ninth Circuit has held that an arbitration agreement that
“prohibits the arbitrator from awarding ‘relief that would affect
[customers] other than you,’ and eliminates any ‘right or authority for
any dispute to be brought, heard, or arbitrated as a class, collective,
mass, private attorney general, or representative action’ . . . precludes
the arbitrator from awarding public injunctive relief” and is
unenforceable under McGill. Blair,
In its Supplemental Brief, “Walmart concedes that the Arbitration Provision allows the arbitrator . . . to issue an injunction requiring Walmart to correct the issues in the Walmart App alleged in Plaintiff’s FAC.” Dkt. 34 (D’s Suppl.) at 2. “[T]he arbitrator is not limited to fashioning injunctive relief that would somehow apply solely to Plaintiff alone and not to other Walmart App users.” Id. Based on these representations, the Court is satisfied that the Arbitration Provision allows Plaintiff to obtain the relief she seeks in arbitration. See Dicarlo v. Moneylion, Inc., No. EDCV 19-1374 PSG (SHKx), 2019 WL 8108731, at *3 (C.D. Cal. Dec. 20, 2019) (provision that preserved the plaintiff’s right to obtain in arbitration “all remedies available in an individual lawsuit” did not bar public injunctive relief and was valid under McGill). [6] Because the Arbitration Provision does not waive Plaintiff’s right to seek public injunctive relief in any forum, it is valid and enforceable under California law. [7]
IV. Conclusion Defendant’s Motion to Compel Arbitration of Plaintiff’s individual claims is GRANTED and Plaintiff is ORDERED to submit to arbitration pursuant to the terms of the Arbitration Provision, see 9 U.S.C. § 5, if she wishes to pursue her individual claims.
The action is STAYED pending resolution of the arbitration. See 9 U.S.C. § 3.
The parties are to file a joint status report every 120 days, with the first report due December 18, 2020. Each report must state on the cover page the date the next report is due. The рarties must advise the Court within 30 days of issuance of the final arbitration decision
IT IS SO ORDERED. Date: August 14, 2020 ___________________________
Dale S. Fischer United States District Judge
Notes
[1] The parties agree that California law applies here. Mot. at 13; Opp’n at 7.
[2] Deverkonda attaches the following screenshot of the order page showing the “Terms of Use” hyperlink and agreement, Devekonda Decl. ¶ 6:
[3] The Terms of Use provide that “[u]sing or accessing the ‘Walmart Sites’” – which includes the Walmart app – “constitutes . . . acceptance of this Arbitration provision.” Terms of Use § 20. Defendant argues that Plaintiff “again accepted” the Arbitration Provision by using the Walmart app in May 2019 to price-shop for baby products. Mot. at 9. Plaintiff does not dispute that any agreement to arbitrate created by her April 2019 Walmart app purchase would also apply to her use of the Walmart app in May 2019. See Opp’n at 9 n.4.
[4] Plaintiff also argues – without citation – that there is no evidence of an
agreement to arbitrate because she never physically signed the Terms of Use.
Opp’n at 7-8 (“Walmart has produced no signed or even initialed document
showing Plaintiff agreed to arbitrate her claims, and Plaintiff did not put her
signature on any arbitration agreement proposed by Walmart.”). Neither
California law nor the FAA require a “wet” signature on an arbitration
agreement tо show assent. See Nguyen,
[5] Plaintiff does not dispute this point .
[6] Plaintiff nitpicks Walmart’s statement and contends “Walmart’s position appears to be that any injunctive relief the arbitrator may order can address only correcting pricing misrepresentations for the two in-store items Plaintiff alreаdy saw,” rather than all pricing misrepresentations on the Walmart app. Dkt. 35 (P’s Suppl.) at 2-3. The Court disagrees with this narrow reading of Walmart’s Supplemental Brief. In any event, the Court retains jurisdiction over this action and Plaintiff may seek appropriate relief from the Court in the event Walmart attempts to improperly limit the scope of Plaintiff’s relief in arbitration.
[7] Because the Arbitration Provision is valid and does not bar Plaintiff from seeking public injunctive relief, the Court does not address the parties’ arguments about whether Plaintiff in fact seeks a public injunction.