Adams v. Am's Test Kitchen, L.P.
| Docket Number | Civil Action 22-CV-11309-AK |
| Decision Date | 30 June 2023 |
| Parties | ANCA ADAMS, individually and on behalf of all others similarly situated, Plaintiff, v. AMERICA'S TEST KITCHEN, LP, AMERICA'S TEST KITCHEN, INC., and JACKIE FORD, Defendants. |
| Court | U.S. District Court — District of Massachusetts |
MEMORANDUM AND ORDER ON DEFENDANTS' MOTION TO COMPEL ARBITRATION OR, IN THE ALTERNATIVE, DISMISS THE COMPLAINT
Plaintiff Anca Adams (“Adams”) brings this one-count putative class action on behalf of herself and all others similarly situated, alleging America's Test Kitchen, LP America's Test Kitchen, Inc., and Jackie Ford (collectively, “Defendants”) have violated the Video Privacy Protection Act, 18 U.S.C. § 2710, by sharing her video viewing activities with a third party. [See generally Dkt. 26]. Defendants have filed a motion to compel arbitration and dismiss the proceedings or in the alternative, to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). [Dkt 31]. Adams opposes the motion. [Dkt. 36]. For the following reasons, Defendants' motion to compel arbitration or, in the alternative, dismiss the complaint [Dkt. 31] is DENIED.
Because Defendants' motion to compel arbitration is made in connection with a motion to dismiss or stay, the Court draws the relevant facts from the operative complaint [Dkt. 26] and the documents submitted to the Court in support of the motion to compel arbitration [Dkt. 31; Dkt. 32; Dkt. 33; Dkt. 34] unless otherwise noted. See Cullinane v. Uber Techs., Inc., 893 F.3d 53, 55 (1st Cir. 2018). The Court recites here only those facts necessary to understand what has led to this action. Further details relevant to the Court's analysis will be discussed as needed.
Defendants operate a website, www.americastestkitchen.com, which offers a variety of video content related to cooking. [Dkt. 26 at ¶ 20]. Consumers may subscribe to view the website's content by providing their name, email, billing address, and credit or debit card information. [Id. at ¶ 22]. Adams has been a paying subscriber since 2016. [Id. at ¶ 40]. To become a subscriber, a user must register, which is a two-step process. [See Dkt. 34 at ¶¶ 1012]. On the first screen, the user must provide an email address, first and last name, and a password, and then must click a red button marked “CONTINUE.” [Id. at ¶ 11; see Dkt. 34-1 at 2]. The user is then taken to a second page, where the user must provide a billing address and credit card information. [Dkt. 34 at ¶ 11]. Immediately beneath the boxes for the user to enter the requested information is a large red button labeled “START FREE TRIAL.” [Id.; see Dkt. 34-2 at 2]. Beneath the “START FREE TRIAL” button are at least six paragraphs of text in small font. [See Dkt. 34-2 at 2]. The third paragraph begins with the word “TERMS” in bold, capitalized letters, which is followed by an instruction: [Id.]. Two paragraphs below that, users are notified that their “participation in this membership is subject to our corporate terms and conditions which can be found here.” [Id.]. The word “here” is in red, while the rest of the paragraphs are in black, and “here” is a hyperlink that directs users to the Defendants' terms and conditions of service. [See id.; Dkt. 34 at ¶ 12]. Those terms include an arbitration provision that provides that “[a]ll claims and disputes . . . shall be resolved by binding arbitration on an individual basis under the terms of this Arbitration Agreement.” [Dkt. 33-1 at 7-10].
At some point, Defendants installed “Pixel” on the website, which shares information about consumers' activities with Meta Platforms, Inc., formerly known as Facebook, Inc. (“Facebook”). [Dkt. 26 at 1, ¶ 4]. Pixel allows businesses to “collect information about how users interact with the business's website,” including purchases made, items viewed, and content requested. [Id. at ¶ 24]. In essence, it allows the website to track consumers' actions and report those actions to Facebook. [Id. at ¶ 25]. Here, Pixel shares the consumer's Facebook ID (“FID”), which is a unique sequence of numbers linked to that user's Facebook profile, and the title and URL of any video the consumer views on Defendants' website with Facebook. [Id. at ¶¶ 6, 23, 29, 43].
Adams filed this one-count putative class action in state court on behalf of herself and others similarly situated for violations of the Video Privacy Protection Act (“VPPA”), 18 U.S.C. § 2710, alleging that Defendants' use of Pixel disclosed to a third party “personally identifiable information” about the videos Adams and similarly situated subscribers requested or obtained from Defendants' website without their written consent. [Id. at ¶ 1, 3-4, 55-66]. Adams also claims that such disclosure was made knowingly. [E.g., id. at ¶ 63]. Defendants removed the suit to the District of Massachusetts. [Dkt. 1]. After Adams filed an amended complaint, Defendants filed the present motion to compel arbitration and dismiss the proceedings or, in the alternative, to dismiss the complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). [Dkt. 31]. Plaintiff opposes the motion. [Dkt. 36]. The Court heard oral argument on June 12, 2023. [See Dkt. 41; Dkt. 42].
Defendants first argue that Adams agreed to arbitrate her claims on an individualized basis, and the Court must enforce that agreement pursuant to the Federal Arbitration Act. [Dkt. 32 at 11-18]. Adams counters that the arbitration agreement is neither valid nor enforceable. [Dkt. 36 at 4-15]. Defendants next contend that Adams has failed to allege a “concrete injury” and therefore has not established constitutional standing to bring a suit in federal court. [Dkt. 32 at 18-22]. Adams responds that the complaint alleges facts sufficient to demonstrate a concrete injury. [Dkt. 36 at 15-20]. Finally, Defendants claim that the action must be dismissed because the complaint does not adequately allege the elements of a VPPA claim. [Dkt. 32 at 22-29]. Adams replies that the well-pleaded allegations in the complaint are sufficient to survive a motion to dismiss. [Dkt. 36 at 20-29].
The Federal Arbitration Act (“FAA”) provides that a “written provision” in a “contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. It established a “liberal federal policy favoring arbitration,” requiring courts to “place arbitration agreements on an equal footing with other contracts” and “enforce them according to their terms.” Cunningham v. Lyft, Inc., 17 F.4th 244, 249 (1st Cir. 2021) (citing AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)). The party seeking to compel arbitration must show that (1) a valid agreement to arbitrate exists; (2) the movant is entitled to invoke the arbitration clause; (3) the other party is bound by that clause; and (4) the claims asserted come within the clause's scope. Ouadani v. TF Final Mile LLC, 876 F.3d 31, 36 (1st Cir. 2017) (citation omitted).
Defendants argue that Adams agreed to arbitration when she subscribed to the Defendants' website, as there is an arbitration clause in the website's terms and conditions that governs the claim at issue. [Dkt. 32 at 11-18]. Adams counters that Defendants have not established that she entered a contract with an arbitration clause, that such contract is not enforceable, and that her claim does not fall within the arbitration clause.[1] [Dkt. 36 at 4-15]. The FAA “does not require parties to arbitrate when they have not agreed to do so,” and the first step in deciding a motion to compel arbitration is to determine whether a “written agreement to arbitrate” exists. Cullinane, 893 F.3d at 60 (citations omitted). In other words, the threshold question is whether the parties entered into a valid agreement to arbitrate.
Arbitration is a “matter of contract,” and courts generally apply “state-law principles that govern the formation of contract.” Id. at 61 (citation omitted). There is no dispute that Massachusetts law applies here and that the contact at issue was formed online. The “fundamentals of online contract formation should not be different from ordinary contract formation,” and an online contract is enforceable when the “contract provisions at issue” are “reasonably communicated and accepted.” Kauders v. Uber Techs., Inc., 159 N.E.3d 1033, 1048 (Mass. 2021) (citations omitted). That is, “there must be both reasonable notice of the terms and a reasonable manifestation of assent to those terms” for the contract to be enforceable. Id. at 1049.
Notice may be actual or constructive. Small Justice LLC v Xcentric Ventures LLC, 99 F.Supp.3d 190, 196 (D. Mass. 2015). “Actual notice will exist where the user has reviewed the terms” and will “generally be found where the user must somehow interact with the terms before agreeing to them.” Kauders, 159 N.E.3d at 1049. Such is not the case here. The Court therefore must determine whether “reasonable notice has been given of the terms and conditions,” which is a “fact-intensive inquiry” requiring the Court to evaluate “the totality of the circumstances.” Id. (citations omitted). “In determining whether the notice is reasonable, the court should [] consider the nature, including the size, of the transaction, whether the notice...
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