Houtchens v. Google LLC
| Decision Date | 06 January 2023 |
| Docket Number | 22-cv-02638-BLF |
| Parties | JENNY HOUTCHENS, et al., Plaintiffs, v. GOOGLE LLC, Defendant. |
| Court | U.S. District Court — Northern District of California |
CORRECTED ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION AND STAYING CASE [RE: ECF NO. 21]
Plaintiffs Jenny Houtchens and Samantha Ramirez bring this action individually and on behalf of those similarly situated alleging that Defendant Google LLC (“Google”) violated multiple states' consumer protection statutes California's Business and Professions Code California's Consumers Legal Remedies Act Pennsylvania's Unfair Trade Practices and Consumer Protection Law, and The Magnuson-Moss Warranty Act. Plaintiffs also allege that Google breached implied warranties and has been unjustly enriched. This matter comes before the Court on Google's motion to compel arbitration and dismiss for lack of subject matter jurisdiction, or in the alternative, stay proceedings pending resolution of arbitration. See Mot. 6-14, ECF No. 21. Google also moves to dismiss for failure to state a claim. Id. 15-31. Defendants oppose. Opp'n, ECF No. 31. Plaintiffs filed a reply in support of their motion. Reply, ECF No. 40.
For the following reasons, the Court GRANTS the motion to compel arbitration and STAYS this action pending the outcome of the arbitration.
Fitbit manufactures smartwatches and activity trackers. Krems Decl. ¶ 2, ECF No. 21-1. Google acquired Fitbit in January 2021 and now manufactures, distributes, and sells Fitbit products. Complaint ¶¶ 23-24, ECF No. 1.
To use certain features of a Fitbit smartwatch, a person must create a Fitbit account. See Krems Decl. ¶ 4; Gustafson Decl. ¶¶ 3-6; Opp'n 2. The person can create a Fitbit account by registering (1) online at Fitbit.com; (2) through the Fitbit desktop application or a similar application; and (3) through the Fitbit mobile application. Id. ¶¶ 6-7. No matter which of these methods the person uses to create an account, he or she will be presented with a blue hyperlink to Fitbit's Terms of Service and will be required to check a box indicating that he or she “agree[s] to the Fitbit Terms of Service.” Id. ¶ 7.
Plaintiffs purchased Fitbit smartwatches and created Fitbit accounts. Houtchens purchased a Fitbit Versa Light in December 2020. Houtchens Decl. ¶ 2, ECF No. 31-1. Shortly thereafter, Houtchens created a Fitbit account for her daughter. Id. ¶ 5. Ramirez purchased a Fitbit Versa 2 in November 2021 and created a Fitbit account shortly after her purchase. Ramirez Dec. ¶¶ 2, 5, ECF No 31-2. Neither Houtchens nor Ramirez recalls seeing any disclosure of Fitbit's Terms of Service when creating her Fitbit account. See Houtchens Decl. ¶ 5; Ramirez Decl. ¶ 5. But since at least December 2020 all users who signed up for a Fitbit account were required to agree to Fitbit's Terms of Service during the sign-up process. See Krems Decl. ¶¶ 8-12.
Houtchens and Ramirez agreed to different versions of Fitbit's Terms of Service, see Id. ¶¶ 13-14, but the arbitration provisions within these two versions is substantively identical, compare Krems Decl. Ex. A § 23 (“Current TOS”), ECF No. 21-3, with Krems Decl. Ex. B § 23 (“Former TOS”), ECF No. 21-4. It begins as follows:
Current TOS § 23; Former TOS § 23.
The provision notes that the arbitration is governed by the American Arbitration Associates (“AAA”) Commercial Rules:
Arbitration Procedures: The American Arbitration Association (AAA) will administer the arbitration under its Commercial Arbitration Rules and the Supplementary Procedures for Consumer Related Disputes. The arbitration will be held in the United States county where you live or work, San Francisco, California, or any other location we agree to.
The Federal Arbitration Act (“FAA”) embodies a “national policy favoring arbitration and a liberal federal policy favoring arbitration agreements, notwithstanding any state substantive or procedural policies to the contrary.” AT&T Mobility, LLC v. Concepcion, 563 U.S. 333, 345-46 (2011) (internal quotations and citations omitted). The 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 . . . 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. The FAA “requires federal district courts to stay judicial proceedings and compel arbitration of claims covered by a written and enforceable arbitration agreement.” Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014) (citing 9 U.S.C. § 3).
In deciding whether to compel arbitration, a district court determines 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, 796 F.3d 1125, 1130 (9th Cir. 2015) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002)). “However, these gateway issues can be expressly delegated to the arbitrator where the parties clearly and unmistakably provide otherwise.” Id. (citing AT&T Techs., Inc. v. Commc'ns Workers of Am., 475 U.S. 643, 649 (1986)). “When the parties' contract delegates the arbitrability question to an arbitrator, a court may not override the contract.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S.Ct. 524, 526 (2019). Incorporation of arbitration rules constitutes clear and unmistakable evidence that contracting parties agreed to arbitrate arbitrability. Brennan, 796 F.3d at 1130.
Parties cannot, however, delegate issues of formation to the arbitrator. See Ahlstrom v. DHI Mortg. Co., Ltd., L.P., 21 F.4th 631, 635 (9th Cir. 2021). “In determining whether a valid arbitration agreement exists, federal courts ‘apply ordinary state law principles that govern the formation of contracts.'” Nguyen, 763 F.3d at 1175 (quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). The party seeking to compel arbitration bears the burden of proving by a preponderance of the evidence that an agreement to arbitrate exists. Norcia v. Samsung Telecommunications Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017).
Google contends that the arbitration provision in Fitbit's Terms of Service requires that the Court compel arbitration. Plaintiffs dispute Google's contention, arguing that they did not assent to the Terms of Service, the arbitration provision is unenforceable, and Google waived its right to compel arbitration. The Court addresses each argument in turn.
The Court must first determine whether the parties agreed to arbitrate. See Ahlstrom v. DHI Mortg. Co., Ltd., L.P., 21 F.4th at 635. Google argues that Plaintiffs agreed to arbitrate because they agreed to Fitbit's Terms of Service, Mot. 2-4 which contain the relevant arbitration provision, Krems Decl. ¶¶ 13-14. Plaintiffs admit that they created Fitbit accounts but dispute that they agreed to arbitrate the present dispute. Houtchens Decl. ¶ 5; Ramirez Decl. ¶ 5; Opp'n 4-10.
“Courts in the Ninth Circuit and other circuits acknowledge that mutual assent manifests when internet users accept ‘clickwrap' agreements.” Adibzadeh v. Best Buy, Co. Inc., No. 20-CV-06257-JSW, 2021 WL 4440313, at *5 (N.D. Cal. Mar. 2, 2021) (collecting cases). “A ‘clickwrap' agreement is one in which an internet user accepts a website's terms of use by clicking an ‘I agree' or ‘I accept' button, with a link to the agreement readily available.” Sellers v. JustAnswer LLC, 73 Cal.App. 5th 444, 464 (2021).
The agreement at issue here is a clickwrap agreement. Google explains in a declaration that a person must “affirmatively check a box that indicates, ‘I agree to the Fitbit Terms of Service'” when he or she creates a Fitbit account. Krems Decl. ¶ 7. Google confirms that this was the case when Plaintiffs created their Fitbit accounts. Id. ¶ 8-12 (); Houtchens Decl. ¶ 5 (); Ramirez Decl. ¶ 5 ().
Plaintiffs dispute that they assented to Fitbit's Terms of service because: (1) they “do not believe [they] would have recognized” the hyperlinks to the Terms of Service (Houtchens Decl. ¶ 5; Ramirez Decl. ¶ 5); (2) they do not recall reading or agreeing to Fitbit's Terms of Service when they signed up for their Fitbit accounts (Houtchens Decl. ¶¶ 5, 7; Ramirez Decl ¶¶ 5, 7); (3) they do not recall seeing Fitbit's Terms of Service or text concerning arbitration on or in their packaging (Opp'n 2; Houtchens Decl. ¶¶ 2-4, 6; Ramirez Decl. ¶¶ 2-4, 6); (4) the terms “CERTAIN” in the first sentence of the arbitration provision and “any” in the second renders the provision ambiguous and precludes mutual assent (Opp'n 3, 5); and (5) the Terms of Service “focus[] the consumer exclusively on privacy, information accuracy, software, data service, and intellectual property issues” (Opp'n 4). The Court finds none of Plaintiffs' arguments convincing and...
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