District Court (Cal.) Grants Petition to Compel Arbitration of TCPA Class Action Plaintiff’s Case

In Pizarro v. Quinstreet, Inc., No. 22-cv-02803-MMC, 2022 U.S. Dist. LEXIS 145556, at *1-2 (N.D. Cal. Aug. 15, 2022), Judge Chesney ordered a TCPA Class-action Plaintiff’s case to arbitration.

In her Complaint, Pizarro alleges QuinStreet is a “marketing company” that “sells consumer contact information to lenders” in exchange for referral fees. (See Compl. ¶ 4.) Specifically, Pizarro alleges, QuinStreet “harvests consumer lead information and telephone numbers” through the following form on its website, www.amone.com. . . Pizarro further alleges that, on or around November 13, 2021, QuinStreet “caused a prerecorded voice message to be transmitted to [her] cellular telephone,” and that the voice, identifying itself as “AmOne,” stated “the caller would like to ‘help’ with [Pizarro’s] ‘financial situation'” and “asked [Pizarro] to call . . . back” at a particular telephone number. (See Compl. ¶¶ 20-21, 25.) According to Pizarro, the “unsolicited prerecorded message . . . inva[ded] [her] privacy” and caused “aggravation,” “annoyance,” “inconvenience[,]” and “disruption to [her] daily life.” (See Compl. ¶ 38.) Based on the above allegations, Pizarro asserts, on behalf of herself and a putative class, a claim for violation of the Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. §§ 227(b) and 64.1200(a).

Judge Chesney found the Arbitration Clause to be conspicuous, and enforced it.

Pursuant to the Federal Arbitration Act (“FAA”), contractual arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” See 9 U.S.C. § 2. “By its terms, the [FAA] leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed.” See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis in original). Thus, a district court’s role under the FAA is “limited to determining (1) whether the agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” See Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “If the response is affirmative on both counts,” the court must “enforce the arbitration agreement in accordance with its terms.” Id. Here, the subject arbitration clause is contained in QuinStreet’s “Terms of Use” and provides, in relevant part, that “all disputes between you and [QuinStreet] . . . with regard to your relationship with the Site, including disputes related to this Agreement, your use of the Site, and/or rights of privacy and/or publicity, will be resolved by binding, individual arbitration under the American Arbitration Association’s rules for arbitration of consumer-related disputes . . . .” (See Decl. of Alex Yunerman in Supp. of QuinStreet, Inc.’s Mot. to Compel Arbitration (“Yunerman Decl.”), Ex. B ¶ 17.) The American Arbitration Association’s rules, in turn, provide that “[t]he arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or the arbitrability of any claim or counterclaim.” (See Decl. of Becca J. Wahlquist in Supp. of QuinStreet, Inc.’s Mot. to Compel Arbitration (“Wahlquist Decl.”), Ex. H at 17.)  QuinStreet argues that, under the terms of the above-quoted arbitration clause, Pizarro must be compelled to arbitrate her TCPA claim and “any issues of scope and enforceability are for the arbitrator to decide.” (See Mot. at 11:13-19.) In response, Pizarro does not dispute that the arbitration clause, on its face, encompasses her TCPA claim or that it contains a provision delegating questions of arbitrability to the arbitrator. (See Opp. at 5:3-7.) Rather, Pizarro argues arbitration should not be compelled because, according to Pizarro, “no arbitration agreement was formed.” (See Opp. at 1:21-23.)  “It is well-established that some ‘gateway’ issues pertaining to an arbitration agreement, such as issues of validity and arbitrability, can be delegated to an arbitrator by agreement.” Ahlstrom v. DHI Mortg. Co., 21 F.4th 631, 634 (9th Cir. 2021). Where, as here, a party challenges “the very existence of” that agreement, however, such challenge must be resolved by the court. See Kum Tat Ltd. v. Linden Ox Pasture, LLC, 845 F.3d 979, 983 (9th Cir. 2017); see also Caremark, LLC v. Chickasaw Nation, F.4th , 2022 WL 3206683, *7 (9th Cir. Aug. 9, 2022) (holding, “even in the presence of a delegation clause,” court “must resolve any challenge that an agreement to arbitrate was never formed”). The Ninth Circuit has held this rule to apply “not only [to] challenges to the arbitration clause itself, but also [to] challenges to the making of the contract containing the arbitration clause.” See Sanford v. MemberWorks, Inc., 483 F.3d 956, 962 (9th Cir. 2007).  In determining whether an arbitration agreement was formed, “federal courts apply ordinary state-law principles that govern the formation of contracts.” Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014) (internal quotation and citation omitted).3 “To form a contract under . . . California law, the parties must manifest their mutual assent to the terms of the agreement,” either “by written or spoken word” or “through conduct.” Berman, 30 F.4th at 855.  Here, QuinStreet argues, Pizarro manifested her assent by clicking the “See My Rates” button on the above-referenced web form. (See Mot. at 1:21-2:1; see also Yunerman Decl. ¶¶ 10-14; Compl. ¶ 27 (“By clicking See My Rates, you agree to . . . AmOne’s . . . Terms of Use . . . .”).) Pizarro argues that, nevertheless, no arbitration agreement was formed because QuinStreet assertedly “failed to provide [her] with conspicuous notice of its Terms of Use.” (See Opp. at 1:21-23.) Pizarro further argues that, even if QuinStreet’s Terms of Use were sufficiently conspicuous, her manifestation of assent to those terms was not effective because it was “procured . . . through misrepresentations” by QuinStreet. (See Opp. at 2:6-9, 15:1-6.) The Court considers each of Pizarro’s argument in turn. . . . “[A]n offeree, regardless of apparent manifestation of his consent, is not bound by inconspicuous contractual provisions of which he was unaware, contained in a document whose contractual nature is not obvious.” Windsor Mills, Inc. v. Collins & Aikman Corp., 25 Cal. App. 3d 987, 993 (1972). “[W]here, as here, there is no evidence that [a] website user had actual knowledge of [an online] agreement,” such as the website operator’s “terms of use,” the occurrence of meaningful assent ordinarily “turns on whether the website puts a reasonably prudent user on inquiry notice of the terms of the contract.” See Nguyen, 763 F.3d at 1177. “Whether a [reasonably prudent] user has inquiry notice of [the] . . . agreement, in turn, depends on the design and content of the website and the agreement’s webpage,” i.e., “the conspicuousness and placement of the ‘Terms of Use’ hyperlink, other notices given to users of the terms of use, and the website’s general design.” See id.  In her opposition, Pizarro, relying on Berman, contends QuinStreet’s Terms of Use were “the antithesis of conspicuous.” (See Opp. at 9:9-10.) As QuinStreet points out, however, Berman is distinguishable on its facts. In particular, the textual notice containing the “Terms & Conditions” hyperlink in Berman was displayed “in a tiny gray font . . . so small that it [was] barely legible to the naked eye,” surrounded by “comparatively larger” text that “naturally direct[ed] the user’s attention everywhere else,” and “sandwiched” between a “large green button with text that stated, in easy-to-read white letters, ‘Continue>>,'” and two other large buttons that allowed the user to “select [a] gender.” See 30 F.4th at 854, 856-57, App. B. In addition, “the textual notice [was] further deemphasized by the overall design of the webpage, in which other visual elements,” including a bright blue border and “several fields” requiring the user to input information, “dr[ew] the user’s attention away from the barely readable critical text.” See id. at 854, 857, App. B.  Here, by contrast, the Court finds QuinStreet’s textual notice and Terms of Use hyperlink, when viewed in the context of the overall design and content of the webpage, are “reasonably conspicuous.” See id. at 856. In particular, the notice and hyperlink appear directly below the “See My Rates” button, are set off by ample white spacing, and are primarily surrounded by text no larger than the notice itself. Further, the general design of the webpage, which is comprised of only two data fields, is relatively uncluttered and has a muted, and essentially uniform, color scheme. See Dohrmann v. Intuit, Inc., 823 Fed. App’x 482, 854 (9th Cir. 2020) (finding contract was formed where terms-of-use hyperlink was “the only text on the webpage in italics” and “located directly below the sign-in button,” and where overall webpage design was “relatively uncluttered”); Peter v. DoorDash, Inc., 445 F. Supp. 3d 580, 586 (N.D. Cal. 2020) (finding contract was formed where terms-of-use hyperlink appeared “directly below” the “sign-up button,” its text “contrast[ed] clearly with the background” and was “plainly readable,” and overall webpage design was “uncluttered”).4 Moreover, the instant hyperlink, although the same color as the rest of the textual notice, is underlined5 and adequately contrasted with the white background, such that a user would not “be required to hover their mouse over otherwise plain-looking text or aimlessly click on words on a page in an effort to ferret out hyperlinks.” See Berman, 30 F.4th at 857 (internal quotation and citation omitted).