Murphy v. Confirm ID, Inc.

[7] 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA [10] 11 RYAN MURPHY, individually and on behalf of all others similarly situated, 12 No. 2:24-cv-00527-TLN-JDP Plaintiff, [13] 14 ORDER v. [15] CONFIRM ID, INC., [16] Defendant. [18] This matter is before the Court on Defendant Confirm ID, Inc.’s (“Defendant”) Motion to [19] Compel Arbitration (ECF No. 14) and Motion to Dismiss (ECF No. 15). Both motions are fully [20] briefed.1 (ECF Nos. 16, 17, 26, 28.) For the reasons set forth below, Defendant’s motion to [21] compel arbitration is GRANTED and Defendant’s motion to dismiss is DENIED as moot. [22] /// [23] /// [24] /// [25] /// [27] 1 The Court is also in receipt of Plaintiff’s Notices of Supplemental Authority. (ECF Nos. 28 32, 33, 34.) 1 I. FACTUAL AND PROCEDURAL BACKGROUND2 2 The instant action arises out of Defendant’s alleged unlawful collection, obtainment, use, 3 store, and disclosure of biometric information in connection with an adult dating website called 4 Adult Friend Finder (“AFF”). (See ECF No. 1.) Plaintiff Ryan Murphy (“Plaintiff”) alleges he 5 opened an account on AFF within the five years immediately preceding the filing of this action 6 and Defendant processed his biometric information as part of the process of signing up for an 7 account. (Id. at 2.) Plaintiff alleges he was required to upload a picture of a valid state-issued 8 identification and a real-time portrait of his face (i.e., a “selfie”) as part of the process of signing 9 up. (Id.) Utilizing Defendant’s services, AFF then scans the “selfie” photograph, creates a 10 biometric template of the user’s face, and compares the user’s facial biometrics to the photograph 11 on the identification document to confirm whether they match. (Id.) 12 AFF invites users to engage in verification (through Defendant’s services) by awarding a 13 “500 point bonus” and a “special check mark icon” to those users who choose to engage in the 14 process, signaling to other users they are verified. (Id.) Plaintiff alleges Defendant, acting as a 15 processor for AFF, collects, stores, possesses, otherwise obtains, uses, and disseminates its users’ 16 facial geometry scans, categorized as biometric data to, among other things, further enhance AFF 17 and its online “app-based” platform. (Id.) Plaintiff further alleges Defendant’s unlawful 18 collection, obtainment, storage, and use of its users’ biometric data exposes them to serious and 19 irreversible privacy risks. (Id.) 20 On February 20, 2024, Plaintiff filed the instant action, alleging claims for violations of 21 Illinois’ Biometric Information Privacy Act (“BIPA”), 740 ILCS 14/1 et seq. (ECF No. 1.) On 22 April 22, 2024, Defendant filed the instant motion to compel arbitration. (ECF No. 14.) 23 II. STANDARD OF LAW 24 In deciding whether to compel arbitration, a district court typically determines two 25 gateway issues: (1) whether a valid agreement to arbitrate exists; and, if it does, (2) whether the 26 agreement encompasses the dispute at issue. Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 [27] 2 The following allegations are taking largely verbatim from Plaintiff’s Complaint. (ECF 28 No. 1.) 1 F.3d 1010, 1012 (9th Cir. 2004). “To evaluate the validity of an arbitration agreement, federal 2 courts ‘should apply ordinary state-law principles that govern the formation of contracts.’” Ingle 3 v. Circuit City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (citing First Options of Chicago, 4 Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). If the court is “satisfied that the making of the 5 arbitration agreement or the failure to comply with the agreement is not in issue, the court shall 6 make an order directing the parties to proceed to arbitration in accordance with the terms of the 7 agreement.” 9 U.S.C. § 4 . “[A]ny doubts concerning the scope of arbitrable issues should be 8 resolved in favor of arbitration.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp. (Moses 9 H. Cone), 460 U.S. 1 , 24–25 (1983). If a court “determines that an arbitration clause is 10 enforceable, it has the discretion to either stay the case pending arbitration, or to dismiss the case 11 if all of the alleged claims are subject to arbitration.” Hoekman v. Tamko Bldg. Prod., Inc., No. 12 2:14-cv-01581-TLN-KJN, 2015 WL 9591471 , at *2 (E.D. Cal. Aug. 26, 2015) (citation omitted). 13 There is an “emphatic federal policy in favor of arbitral dispute resolution.” Mitsubishi 14 Motors Corp. v. Soler Chrysler–Plymouth, 473 U.S. 614, 631 (1985). As such, “‘any doubts 15 concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the 16 problem at hand is the construction of the contract language itself or an allegation of waiver, 17 delay, or a like defense to arbitrability.’” Id. at 626 (quoting Moses H. Cone, 460 U.S. 1 at 24– 18 25). Therefore, an arbitration agreement may only “be invalidated by ‘generally applicable 19 contract defenses, such as fraud, duress, or unconscionability,’ but not by defenses that apply only 20 to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at 21 issue.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333 , 343–44 (2011) (quoting Doctor’s 22 Associates, Inc. v. Casarotto, 517 U.S. 681, 687 (1996)). Courts may not apply traditional 23 contractual defenses, like duress and unconscionability, in a broader or more stringent manner to 24 invalidate arbitration agreements and thereby undermine FAA’s purpose to “ensur[e] that private 25 arbitration agreements are enforced according to their terms.” Id. at 1748 (quoting Volt Info. 26 Scis., Inc. v. Bd. of Trustees of Leland Stanford Junior Univ., 489 U.S. 468, 478 (1989)). 27 With respect to arbitration agreements containing a delegation clause to delegate the 28 arbitrability question to an arbitrator, the Ninth Circuit has set forth the following guiding 1 principles. Caremark, LLC v. Chickasaw Nation, 43 F.4th 1021, 1030 (9th Cir. 2022). First, a 2 district court “must resolve any challenge that an agreement to arbitrate was never formed, even 3 in the presence of a delegation clause.” Id. Second, a district court must “resolve any challenge 4 directed specifically to the enforceability of the delegation clause before compelling arbitration of 5 any remaining gateway issues of arbitrability.” Id. If the district court finds the parties formed an 6 arbitration agreement containing an enforceable delegation clause, “all arguments going to the 7 scope or enforceability of the arbitration provision are for the arbitrator to decide in the first 8 instance.” Id. 9 III. ANALYSIS 10 The parties disagree at the outset about whether AFF’s Arbitration Agreement (the 11 “Agreement”) is enforceable. Defendant argues: (1) it is a party to the Agreement as an affiliated 12 entity; (2) the Agreement delegates all questions, including those on scope and validity of the 13 Agreement, to the arbitrator; and (3) the Agreement is valid and enforceable and encompasses 14 Plaintiff’s claims. (ECF No. 14 at 14–20.) Plaintiff contends: (1) the Court decides whether an 15 arbitration agreement was formed, not the arbitrator; (2) Defendant is not a party to the 16 Agreement; and (3) the sign-up screen did not provide Plaintiff with conspicuous notice of the 17 terms of use (“TOU”). (ECF No. 16 at 11–25.) 18 Even if there is a delegation clause, the Court “must resolve any challenge that an 19 agreement to arbitrate was never formed” and then “resolve any challenge directed specifically to 20 the enforceability of the delegation clause before compelling arbitration of any remaining 21 gateway issues of arbitrability.” Caremark, LLC, 43 F.4th at 1030 . The Court will first evaluate 22 whether an agreement to arbitrate was formed. Next, the Court will consider whether the 23 delegation clause is enforceable. 24 A. Whether a Valid Agreement to Arbitrate Exists 25 The Court will first consider whether a valid agreement to arbitrate exists — namely, 26 whether Defendant is a party to the Agreement and whether Plaintiff can be bound by the 27 Agreement (whether the sign-up screen provided Plaintiff with conspicuous notice of the TOU). 28 /// 1 i. Whether Defendant is a Party to the Agreement 2 Defendant argues it is a wholly owned subsidiary of Various, Inc. (“Various”) and was so 3 at the time Plaintiff agreed to the TOU and the Agreement. (ECF No. 14 at 15.) Defendant 4 asserts it is an affiliate of Various because it is under Various’s direct control. (Id.) Defendant 5 notes that because the Agreement to which Plaintiff agreed compels arbitration “of any claim, 6 dispute, or controversy . . . between [Plaintiff] and [Various] or any of [Various’s] affiliated 7 entities,” it is also a party to the Agreement.3 (Id. (internal citation omitted) (emphasis in 8 original).) 9 In opposition, Plaintiff maintains Defendant is not a party to the TOU. (ECF No. 16 at 10 14.) Plaintiff argues Defendant is not named anywhere in the TOU, Plaintiff could not have 11 reasonably expected he would be forced to arbitrate a privacy claim under the BIPA with 12 Defendant by creating an online dating account with AFF, and Defendant did not produce 13 evidence it was a subsidiary of Various at the time Plaintiff created his account. (Id. at 14–15 14 (citing Revitch v. DIRECTV, LLC, 977 F.3d 713 , 717–18 (9th Cir. 2020).) Plaintiff also argues 15 that Defendant contends “the Court cannot look to the Privacy Policy to determine the intention 16 of the parties as it relates to the TOU and arbitration provision contained therein.” (Id. at 15.) 17 Finally, Plaintiff contends the case Defendant cites, Meeks v. Experian Information Services, No. 18 21-17023, 2022 WL 17958634 (9th Cir. Dec. 27, 2022), is distinguishable.4 (Id. at 15–16.) 19 In reply, Defendant maintains “the uncontroverted evidence demonstrates [Defendant] 20 was an affiliate of Various at the time [Plaintiff] created his AFF account and purchased Gold 21 3 Defendant also argues at this juncture that Plaintiff and Defendant agreed in the Agreement and TOU to resolve disputes through arbitration. (ECF No. 14 at 15–16.) However, [22] because this argument speaks more to the issue of whether Plaintiff agreed to the Agreement and 23 its TOU when he signed up for an account and overlaps with Plaintiff’s arguments on validity and enforceability, the Court will address it later when discussing the validity and enforceability of 24 the Agreement. 25 4 Plaintiff also argues Defendant could have enforced the arbitration provision through an alternative theory such as the third-party beneficiary rule or equitable estoppel, but Defendant has [26] waived any such argument because it did not raise an alternative theory in its motion. (Id. at 16.) 27 Defendant indeed makes a third-party beneficiary argument in its reply. (ECF No. 26.) However, because the Court finds Defendant is a party to the Agreement, the Court declines to consider 28 these arguments. 1 membership.” (ECF No. 26 at 11.) Defendant notes it was explicitly listed in the Privacy Policy, 2 which is expressly incorporated into the TOU. (Id.) Defendant contends Plaintiff’s reliance on 3 Revitch to assert that an unnamed affiliate cannot invoke an arbitration agreement is wrong. (Id. 4 at 12.) 5 State contract law governs whether a valid agreement to arbitrate exists. Revitch, 977 6 F.3d at 716. “A contract must be so interpreted as to give effect to the mutual intention of the 7 parties as it existed at the time of contracting[.]” Cal. Civ. Code § 1636 . The mutual intention of 8 the parties is determined “‘from the written terms [of the contract] alone,’ so long as the ‘contract 9 language is clear and explicit and does not lead to absurd results.’” Revitch, 977 F.3d at 717 10 (quoting Kashmiri v. Regents of Univ. of Cal., 156 Cal. App. 4th 809 (2007)); Cal. Civ. Code §§ 11 1638 (“The language of a contract is to govern its interpretation, if the language is clear and 12 explicit, and does not involve an absurdity.”), 1639 (“When a contract is reduced to writing, the 13 intention of the parties is to be ascertained from the writing alone, if possible . . . .”). 14 Here, the very top of the TOU document contains the following paragraph: 15 ARBITRATION NOTICE: YOU AGREE THAT DISPUTES BETWEEN YOU AND US WILL BE RESOLVED BY BINDING, 16 INDIVIDUAL ARBITRATION AND YOU WAIVE YOUR RIGHT TO PARTICIPATE IN A CLASS-ACTION LAWSUIT OR 17 CLASS-WIDE ARBITRATION. FOR FURTHER INFORMATION, REFER TO SECTIONS 24 AND 25 OF THESE 18 TERMS. 19 (ECF No. 14-1 at 20.) Further, section 24 of the TOU, termed “Arbitration of Disputes,” states in 20 part as follows: [21] ANY CLAIM, DISPUTE, OR CONTROVERSY . . . BETWEEN 22 YOU AND US OR ANY OF OUR AFFILIATED ENTITIES . . . ARISING FROM OR RELATING TO THE USE 23 OF OUR WEBSITE, YOUR ACCOUNT, THESE TERMS, THEIR INTERPRETATION, OR THE BREACH, TERMINATION OR 24 VALIDITY HEREOF . . . OR THE RELATIONSHIPS WHICH RESULT FROM THESE TERMS (INCLUDING, TO THE 25 FULLEST EXTENT PERMITTED BY APPLICABLE LAW, RELATIONSHIPS WITH THIRD PARTIES WHO ARE NOT 26 SIGNATORIES TO THIS AGREEMENT), SHALL BE RESOLVED EXCLUSIVELY AND FINALLY BY BINDING 27 INDIVIDUAL ARBITRATION. [28] 1 (Id. at 24 (emphasis added).) Because the TOU “constitute a binding agreement between 2 [Plaintiff] and [Various] (id. at 20), the first inquiry is whether Defendant qualifies as an 3 “affiliate” of Various such that it can be bound by the Agreement. As “affiliate” or “affiliated 4 entities” is not defined elsewhere in the TOU, the Court must rely on the ordinary definition of 5 “affiliate.” Revitch, 977 F.3d at 717 (citing Cal. Civ. Code § 1644 (“The words of a contract are 6 to be understood in their ordinary and popular sense, rather than according to their strict legal 7 meaning . . . .”)). The Ninth Circuit has stated that the ordinary definition of “affiliate” is “a 8 company effectively controlled by another or associated with others under common ownership or 9 control.” Id. Because Defendant is a wholly owned subsidiary of Various, which means Various 10 effectively controls Defendant, Defendant and Various are affiliates. 11 The second inquiry is whether the contract language “does not lead to absurd results.” Id. 12 In support of their arguments, the parties cite to Revitch and Meeks. (ECF No. 14 at 14–15; ECF 13 No. 16 at 14–16.) In Revitch, Revitch sued DIRECTV for conducting unsolicited telemarketing 14 campaigns and DIRECTV “somehow uncovered the fact” that Revitch was also a customer of 15 AT&T Mobility LLC. 977 F.3d at 715 . DIRECTV contended it was an “affiliate” of AT&T 16 within the meaning of Revitch’s wireless services agreement and attempted to compel arbitration. [17] Id. at 717 . The Ninth Circuit concluded that “absurd results” followed from DIRECTV’s 18 interpretation that it was an affiliate of AT&T, as Revitch would have been “forced to arbitrate 19 any dispute with any corporate entity that happen[ed] to be acquired by AT&T, Inc., even if 20 neither the entity nor the dispute has anything to do with providing wireless services to Revitch 21 — and even if the entity becomes an affiliate years or even decades in the future.” Id. at 717 . 22 The Ninth Circuit concluded that when Revitch signed his agreement with AT&T to obtain cell 23 phone services, “he could not reasonably have expected that he would be forced to arbitrate an 24 unrelated dispute with DIRECTV, a satellite television provider that would not become affiliated 25 with AT&T until years later.” Id. at 718 . In Meeks, the Ninth Circuit concluded Experian was a 26 party to the arbitration agreement Meeks and others similarly situated entered into when they 27 signed up for credit-monitoring services provided by Experian’s sister company, Experian 28 Consumer Services (“ECS”). 2022 WL 17958634 , at *1. The court noted that “[t]he text of the 1 arbitration provision binds plaintiffs to arbitrate with ECS and defines ECS to include ‘affiliate,’ 2 and Experian is an affiliate and was so when the plaintiffs entered into the agreement.” Id. The 3 court distinguished Revitch by noting the fact that Experian “was an affiliate at the time the 4 contract was formed and that it plays a role in the larger agreement provide additional evidence 5 that it assented to be bound and was not a mere third-party beneficiary.” Id. (emphasis added). 6 The Court acknowledges that Defendant was a subsidiary of Various at the time Plaintiff 7 created his account with AFF on July 6, 2023 — the time the contract was formed.5 Defendant 8 submits the declaration of David Bloom, the General Counsel of Various, who avers that Various 9 is a wholly owned subsidiary and affiliate of FriendFinder Networks Inc. and Defendant is a 10 wholly owned subsidiary and affiliate of Various. (ECF No. 14-1 at 2.) However, the Court 11 disagrees with Plaintiff that he “could not have reasonably expected that he would be forced to 12 arbitrate a privacy claim under the BIPA with [Defendant] by creating an online account with 13 AFF.” (ECF No. 16 at 15.) Plaintiff indeed repeatedly alleges in his Complaint that Defendant 14 performs services for AFF. (See ECF No. 1.) In particular, Plaintiff alleges the following: 15 • Defendant “operates as a third-party information ‘processor’ for [AFF]” (ECF No. 1 at ¶ 16 1); 17 • “[AFF] is the controller and [Defendant] is the processor” (id. ¶ 1); 18 • Plaintiff “had his biometric information processed by [Defendant] as part of the process of 19 signing up for the account” (id. ¶ 2); 20 • “[AFF] utilizes the services of [Defendant]” (id. ¶ 4); 21 5 Plaintiff contends Defendant did not provide evidence that it was a subsidiary of Various at the time he opened his account on AFF and is therefore distinguishable from Meeks. (ECF No. [22] 16 at 15–16.) The Ninth Circuit in Meeks simply concluded there was “sufficient evidence that 23 Experian sought to be bound by the arbitration provision” — namely, that “[t]he text of the arbitration provision binds plaintiffs to arbitrate with ECS and defines ECS to include ‘affiliates,’ 24 and Experian is an affiliate and was so when the plaintiffs entered into the agreement.” 2022 WL 17958634 , at *2. The court also notes “[t]hat Experian was an affiliate at the time the contract [25] was formed and that it plays a role in the larger agreement provide additional evidence that it assented to be bound and was not a mere third-party beneficiary.” Id. Therefore, Plaintiff’s [26] assertion that “Experian had produced sufficient evidence that it was an intended party to the 27 arbitration provision” is misleading. (ECF No. 16 at 16.) Further, Plaintiff does not cite to any case law that requires Defendant to provide evidence that it was an affiliate of Various at the time 28 Plaintiff opened his account on AFF. 1 • “[AFF] invites users to engage in verification via [Defendant] by awarding a ‘500 point 2 bonus’ and a ‘special check mark icon’ to those users who choose to engage in the 3 process . . . .” (id. ¶ 5); 4 • “[Defendant], acting as processor for [AFF], collects, stores, possess, otherwise obtains, 5 uses, and disseminates its users’ facial geometry scans, categorized as biometric data to, 6 among other things, further enhance [AFF] and its online ‘app-based’ platform” (id. ¶ 6); 7 • “[Defendant], as a processor for [AFF], then scanned Plaintiff’s ‘selfie’ photograph, 8 creating a biometric template of Plaintiff’s faces and biometric identifiers, and compared 9 Plaintiff’s biometric identifiers to the photograph on his state issued identification 10 document to confirm whether they match” (id. ¶ 23); 11 • “[Defendant], as a processor for [AFF], collected and retained biometric information for 12 the purpose of verifying Plaintiff’s identity prior to opening an [AFF] account in 13 Plaintiff’s name” (id. ¶ 25); and 14 • “Ostensibly, the purpose of [Defendant’s] collection of Plaintiff’s facial geometry was to 15 verify Plaintiff’s identity prior to opening an [AFF] account in Plaintiff’s name” (id. ¶ 27). 16 Based on the foregoing allegations, the Court finds the situation presented in the instant matter is 17 therefore unlike the situation in Revitch. In Revitch, DIRECTV, “who provide[d] services 18 unrelated to cell phone coverage” attempted to enforce an arbitration provision in a wireless 19 services agreement between Revitch and AT&T. 977 F.3d at 717 . Unlike Revitch, Plaintiff 20 implicitly acknowledges that Defendant is an affiliate of Various throughout the Complaint and 21 provides services for Various through AFF. Therefore, Plaintiff could “reasonably have expected 22 that he would be forced to arbitrate” the dispute with Defendant. 977 F.3d at 717–18. Further, 23 the fact that Defendant “plays a role in the larger agreement” with Various and AFF provides 24 additional evidence that it assented to be bound. Meeks, 2022 WL 17958634 , at *2. 25 Finally, the Court recognizes the canon of California contract interpretation that “[t]he 26 whole of a contract is to be taken together, so as to give effect to every part.” Id. (citing Cal. Civ. 27 Code § 1641; Coral Farms, L.P. v. Mahony, 63 Cal. App. 5th 719 , 727 (2021)). The Privacy 28 Policy is a part of the TOU through express incorporation. (ECF No. 14-1 at 20 (The TOU notes 1 that “[a]ny personal information submitted through the Website by you is subject to our Privacy 2 Policy, which is incorporated herein by reference.”).) In reading through the Privacy Policy (the 3 contract as a whole), the Court finds persuasive Defendant’s argument that it was explicitly listed 4 as a subsidiary. Namely, the Privacy Policy states that it applies to “FriendFinder Networks, Inc. 5 and its subsidiaries,” and Defendant is clearly listed under the “Subsidiaries” section. (ECF No. 6 14-1 at 28, 31.) 7 Based on the foregoing, the Court finds that Defendant is a party to the TOU and, by 8 extension, the Agreement. 9 ii. Whether Plaintiff Can Be Bound By the Agreement 10 Defendant argues that Plaintiff “unequivocally agreed to the TOU and AFF Arbitration 11 Agreement by clicking his consent to the registration affirming that he read and agreed to them 12 prior to allegedly using [Defendant] to verify his identity.” (ECF No. 14 at 16.) Defendant 13 maintains that courts have routinely found clickwrap agreements valid and enforceable “because 14 the user must affirmatively acknowledge receipt of the terms of the contract.” (Id. (citing cases).) 15 In opposition, Plaintiff asserts that the sign-up screens for an AFF account and the AFF 16 Gold membership are exactly the type the Ninth Circuit found to be unenforceable “as they do not 17 give reasonably conspicuous notice of the TOU.” (ECF No. 16 at 19–20 (citing Berman v. 18 Freedom Financial Network, LLC, 30 F.4th 849, 857 (9th Cir. 2022).) 19 The Ninth Circuit has indeed set forth rules to determine whether “meaningful assent” has 20 been given to an online agreement. Berman, 30 F.4th at 856 . The court has explained: 21 Unless the website operator can show that a consumer has actual knowledge of the agreement, an enforceable contract will be found 22 based on an inquiry notice theory only if: (1) the website provides reasonably conspicuous notice of the terms to which the consumer 23 will be bound; and (2) the consumer takes some action, such as clicking a button or checking a box, that unambiguously manifests 24 his or her assent to those terms. [25] Id. “Reasonably conspicuous notice” requires that (1) a notice must be displayed in a font size 26 and format such that the court can fairly assume that a reasonably prudent Internet user would 27 have seen it” and (2) “while it is permissible to disclose terms and conditions through a hyperlink, 28 the fact that a hyperlink is present must be readily apparent.” Id. at 856–57. The court clarified 1 that “[s]imply underscoring words or phrases . . . will often be insufficient to alert a reasonably 2 prudent user that a clickable link exists.” Id. at 857 . Another district court succinctly 3 summarized the issues in Berman: 4 In Berman, [p]laintiffs were prompted to access a website by a large green “Continue” button. Below that button, in two lines of gray text 5 against a white background, which were considerably smaller than any other text on the page, the page read “I understand and agree to 6 the Terms & Conditions . . . ” 30 F.4th at 854 . The text was “sandwiched” between large, attention-grabbing buttons prompting 7 the user to take actions. Id. The Court held the agreement unenforceable because the terms themselves were not reasonably 8 conspicuous and the existence of a hyperlink was not readily apparent. Id. at 856–57. Thus, the agreement was unenforceable for 9 want of “any action that unambiguously manifested [plaintiffs’] assent to be bound by the terms and conditions. Id. [10] 11 Lincoln v. MX Techs., Inc., No. 2:23-CV-00806-MCE-CSK, 2024 WL 3274831 , at *2 (E.D. Cal. 12 July 2, 2024). 13 Here, Plaintiff makes several analogies to Berman but the Court finds the two matters are 14 factually dissimilar. With respect to the sign-up screen to create an AFF account, the Court 15 indeed finds Plaintiff’s argument persuasive that “the textual notice is printed in a gray font 16 considerably smaller than the font used in the other sections of the sign-up screen,” and the 17 “‘comparatively larger [and bolded] font used in all of the surrounding text’ and large blue shaded 18 box with large white text ‘naturally directs the user’s attention’ from the textual notice.” (ECF 19 No. 16 at 19 (citing Berman, 30 F.4th at 857 ).) However, from what the Court can ascertain from 20 Plaintiff’s screenshot of the sign-up screen (ECF No. 16 at 8), unlike Berman, the text has not 21 been placed in between larger, attention-grabbing buttons that prompt the user to take action. 30 22 F.4th at 854. 23 Further, in Berman, only two lines of gray text against a white background were used with 24 no different color to offset the links to the terms and conditions. 30 F.4th at 354 . Here, the two 25 links on the AFF sign-up page are contrasted in blue text, while the remainder of the sentence is 26 in gray text. Defendant correctly notes that courts have held the exact color scheme provides 27 reasonably conspicuous notice. (ECF No. 26 at 7–8 (citing Houtchens v. Google LLC, 649 F. 28 Supp. 3d 933, 937 (N.D. Cal. 2023) (website provided conspicuous notice of terms where, as 1 here, links were in blue text next to gray text); Berman, 30 F.4th at 854 (blue is “the color 2 typically used to signify the presence of a hyperlink”); Williams v. DDR Media, LLC, No. 22-CV3 03789, 2023 WL 2314868 , at *5 (N.D. Cal. Feb. 28, 2023) (links are “traditional[ly] blue,” 4 making them “distinguishable from the surrounding text” to “a reasonably prudent user”)).) 5 Finally, the links on the sign-up page are non-italicized while the remainder of the 6 sentence is italicized. Defendant’s Exhibits A and B6 to its reply brief contains YouTube videos 7 that are recordings of the screen an individual would see when becoming an AFF member and the 8 TOU and Privacy Policy that appears when an individual clicks on the blue hyperlinked text. 9 (ECF No. 26-2 at 2.) The Court finds the links are dynamic and display an underline when the 10 user touches them. Defendant also correctly notes courts have held this was sufficient to put a 11 user on notice of a link — even without different colored text — and that placing the links 12 immediately below the button the user must click to complete the sign-up process is the 13 appropriate place to locate links to website terms. (Id. (citing Lincoln, 2024 WL 3274831 , at *2; 14 Oberstein v. Live Nation Ent., Inc., 60 F.4th 505, 516 (9th Cir. 2023); Hooper v. Jerry Ins. [15] 6 Plaintiff objects to the inclusion of the YouTube videos because they were raised for the 16 first time in a reply brief. (ECF No. 30 at 3.) Plaintiff also contends the videos are inadmissible because they lack foundation and are hearsay. (Id. at 4–5.) In response, Defendant contends 17 Plaintiff first raised the arguments that the links to the TOU and Privacy Policy were illegible or dysfunctional in his opposition, and in rebuttal Defendant submitted evidence demonstrating how [18] the links appear when navigating the AFF website on a mobile device. (ECF No. 31 at 3.) 19 Defendant further contends the declarants did not lack foundation to verify the accuracy of the videos, and the videos and screenshots are not hearsay because they visually demonstrate facts. 20 (Id. at 3–6.) First, the Court agrees with Defendant that a movant can present “rebuttal evidence to contravene arguments first raised by the non-moving party in its opposition.” Cal. Open Lands 21 v. Butte Cnty. Dep’t of Public Works, No. 2:20-cv-00123-DJC-DMC, 2024 WL 1660337 , at *5 n.6 (E.D. Cal. Apr. 17, 2024). Second, because “[e]vidence to prove personal knowledge may [22] consist of the witness’s own testimony,” see Fed. R. Evid. 602, the Court finds the Arohnson and 23 Bloom declarations lay a sufficient factual foundation that explains how Arohnson personally observed the creation of each video on a colleague’s mobile device with the same displays 24 Plaintiff would have seen and how Bloom has knowledge about how a prospective user navigates the webpages and that the process and display have not changed since July 2023 when Plaintiff [25] navigated the pages. Finally, Plaintiff fails to explain what out-of-court statements Defendant is attempting to offer in evidence through these videos, given that the videos are demonstrative [26] exhibits—not statements—that are used to demonstrate facts. See Bean v. Costco Wholesale 27 Corp., 561 F. Supp. 3d 915 , 920 (E.D. Cal. 2021) (finding a surveillance video without sound and conveys only conduct is not “communicative” as a statement and not hearsay). Accordingly, 28 Plaintiff’s objection is OVERRULED. 1 Agency, LLC, 675 F. Supp. 3d 1027 , 1032, 1035 (N.D. Cal. 2023)).) In contrast, the court in 2 Berman found that the existence of the hyperlink was not readily apparent. 30 F.4th at 856–57. 3 Based on the foregoing, the Court finds that the TOU and Privacy Policy on the sign-up 4 screen for the AFF membership provides “reasonably conspicuous notice” because the notice is in 5 such a font size and format that “a reasonably prudent Internet user would have seen it” and the 6 hyperlinks are readily apparent. Berman, 30 F.4th at 856–57. Finally, the parties do not dispute 7 that Plaintiff clicked the button to “unambiguously manifest[]” his assent to those terms. (ECF 8 Nos. 14, 16, 26.) Accordingly, the Court finds that Plaintiff was on notice of the TOU and 9 Privacy Policy on AFF’s website and can be bound by the Agreement.7 10 B. Delegation Clause8 11 As previously stated, the Court typically must decide two gateway issues on a motion to 12 compel arbitration: (1) whether there is an agreement to arbitrate between the parties; and (2) 13 whether the agreement covers the dispute. Lifescan, Inc., 363 F.3d at 1012. However, 14 determination of these gateway issues “can be expressly delegated to the arbitrator where the [15] 7 With respect to the sign-up screen for the Gold membership, Plaintiff contends it suffers 16 from the same flaws as the sign-up screen. (ECF No. 16 at 20.) The only argument Defendant makes in defense of this screen is that the links are located immediately below the button a user 17 must click to complete the Gold membership process. (ECF No. 26 at 8.) The Court has reviewed Plaintiff’s screenshot of the Gold membership sign-up screen (ECF No. 16 at 9) as well [18] as Defendant’s YouTube video links of the sign-up pages (ECF No. 26-2 at 2–3). Because these 19 links are not offset by a different color or italicized/non-italicized in comparison to the rest of the text, the links do not provide reasonably conspicuous notice. However, in light of the foregoing 20 analysis on the AFF sign-up screen, this does not change the Court’s conclusion on whether Plaintiff is bound by the TOU and Privacy Policy. The hyperlinks take the user to the exact same 21 documents on the AFF sign-up page and the Gold membership page. [22] 8 Plaintiff also makes several arguments about how the Agreement is procedurally 23 unconscionable. (ECF No. 16 at 21–24.) However, none of Plaintiff’s unconscionability arguments refer to, single out, or even mention the delegation provision. To the contrary, 24 Plaintiff appears to challenge the TOU as a whole, with a special emphasis on several provisions other than the delegation provision. The Court therefore declines to consider Plaintiff’s broad [25] unconscionability arguments. Mohamed, 848 F.3d at 1210 (“When considering an unconscionability challenge to a delegation provision, the court must consider only arguments [26] specific to the delegation provision.” (citation and internal quotation marks omitted)); see also 27 Willis v. Fitbit, Inc., No. 19-CV-01377-DMS-WVG, 2020 WL 417943 , at *4 (S.D. Cal. Jan. 27, 2020). Accordingly, the merits of Plaintiff’s unconscionability arguments must be decided by the 28 arbitrator. 1 parties clearly and unmistakably provide otherwise.” Brennan v. Opus Bank, 796 F.3d 1125 , 2 1130 (9th Cir. 2015). For example, the Supreme Court has “recognized that parties can agree to 3 arbitrate ‘gateway’ questions of ‘arbitrability,’ such as whether the parties have agreed to arbitrate 4 or whether their agreement covers a particular controversy.” Rent-A-Ctr. West, Inc. v. Jackson, [5] 561 U.S. 63 , 68 – 69 (2010); see also Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 6 63, 68 (2019) (“When the parties’ contract delegates the arbitrability question to an arbitrator, a 7 court may not override that contract.”); Mohamed v. Uber Techs., 848 F.3d 1201, 1208 (9th Cir. 8 2016) (“[L]anguage delegating to the arbitrators the authority to determine the validity or 9 application of any of the provisions of the arbitration clause[ ] constitutes an agreement to 10 arbitrate threshold issues concerning the arbitration agreement.”). Put simply, parties can include 11 a delegation provision in an arbitration agreement that requires an arbitrator to decide gateway 12 issues rather than the Court. 13 Defendant argues the Agreement “contains an express delegation clause that manifests 14 ‘clea[r] and unmistakabl[e]’ evidence of the parties’ agreement to delegate the gateway question 15 of arbitrability to the arbitrator.” (ECF No. 14 at 17 (citing First Options of Chicago, Inc. v. 16 Kaplan, 514 U.S. 938, 944 (1995)).) Defendant further argues the Agreement incorporates the 17 JAMS Streamlined Rules, “which independently ‘constitutes clear and unmistakable evidence 18 that contracting parties agreed to arbitrate arbitrability.’” (Id. (citing Flores v. Coinbase, Inc., No. 19 CV 22-8274-MWF (KS), 2023 WL 3564756 , at *5; Harry Schein, 586 U.S. at 66).) 20 In opposition, Plaintiff maintains “it is well-settled in the Ninth Circuit that district courts 21 are tasked with the responsibility of determining whether an agreement to arbitrate exists in the 22 first instance, even in the presence of a delegation clause.” (ECF No. 16 at 11 (citing cases).) 23 Plaintiff contends that when a party opposing arbitration “claims to have never agreed to” the 24 contract requiring arbitration, the district court must first address the threshold issue of the 25 existence of an arbitration agreement. (Id.) Plaintiff also argues that even if an arbitration 26 agreement exists, a delegation clause is enforceable only if the parties “clearly and unmistakably” 27 agreed to delegate arbitrability to the arbitrator, and here the arbitration provision specifically 28 allows courts to determine enforceability of the arbitration agreement and the TOU allow for 1 exclusion of terms a court may deem unenforceable. (Id. at 12–13.) Plaintiff asserts that an 2 agreement’s incorporation of JAMS or AAA rules, in addition to a provision allowing a court to 3 hold provisions unenforceable, creates uncertainty and precludes a funding of “clear and 4 unmistakable delegation to the arbitrator.” (Id. at 13.) 5 Here, the Agreement contains a delegation clause that delegates the question of 6 arbitrability to the arbitrator. The Agreement states, in relevant part: 7 ANY CLAIM, DISPUTE, OR CONTROVERSY . . . ARISING FROM OR RELATING TO YOUR USE OF THE WEBSITE, 8 YOUR ACCOUNT, THESE TERMS, THEIR INTERPRETATION, OR THE BREACH, TERMINATION OR VALIDITY HEREOF 9 (INCLUDING THE SCOPE AND VALIDITY OF THIS ARBITRATION AGREEMENT), OR THE RELATIONSHIPS 10 WHICH RESULT FROM THESE TERMS . . . SHALL BE RESOLVED EXCLUSIVELY AND FINALLY BY BINDING 11 INDIVIDUAL ARBITRATION. 12 (ECF No. 14-1 at 24 (emphasis added).) The Supreme Court, Ninth Circuit, and district courts 13 have found that a delegation clause constitutes clear and unmistakable evidence of an intent to 14 delegate. Henry Schein, 586 U.S. at 66; Momot v. Mastro, 652 F.3d 982, 988 (9th Cir. 2011) 15 (finding the language “the validity or application of any of the provisions of” the arbitration 16 clause constitutes “an agreement to arbitrate threshold issues concerning the arbitration 17 agreement” (quoting Rent-A-Ctr., 561 U.S. at 68)); Flores, 2023 WL 3564756 , at *4; Fridman v. 18 Uber Techs., Inc., No. 18-CV-02815-HSG, 2019 WL 1385887 , at *5 (N.D. Cal. Mar. 27, 2019). 19 In sum, the delegation provision clearly and unmistakably provides that the enforceability 20 of the arbitration agreement is a question for the arbitrator, not the Court. Accordingly, the Court 21 GRANTS Defendant’s motion to compel to allow the arbitrator to decide these gateway issues, 22 and, if permissible, to arbitrate the substantive claims. 23 IV. CONCLUSION 24 For the foregoing reasons, Defendant’s motion to compel and stay the case pending 25 arbitration is GRANTED. (ECF No. 14.) Defendant’s motion to dismiss is DENIED as moot. 26 (ECF No. 15.) The Court STAYS the litigation to permit an arbitrator to decide the gateway 27 issues and then, if permissible, to arbitrate the substantive claims. If it is determined by the 28 arbitrator that certain claims are not subject to arbitration, Plaintiff may file a request to lift the 1 | stay, and the Court will do so immediately. Within fourteen (14) days of the completion of 2 | arbitration proceedings, the parties shall file a joint status report advising the Court of the 3 | outcome of the arbitration and a request to dismiss the case or vacate the stay. 4 IT IS SO ORDERED. 5 | Date: February 24, 2025 [7] Lael Woy [9] 10 TROY L. NUNLEY CHIEF UNITED STATES DISTRICT JUDGE