1 2 3 4 7 8 AJA BECKFORD, et al., Case No. 24-cv-06468-CRB
9 Plaintiffs,
ORDER DENYING MOTION FOR 10 v. RECONSIDERATION
12 Defendant.
13 Defendant The Children’s Group (known as TCP) moves for reconsideration of the 14 Court’s order denying its motion to dismiss in light of the Ninth Circuit’s recent opinion in 15 Jones v. Starz Entertainment, LLC, 129 F.4th 1176 (9th Cir. 2025). Mot. (dkt. 46). For 16 the following reasons, the Court DENIES TCP’s motion. 18 The Court has authority to reconsider and vacate its prior orders. See Fed. R. Civ. 19 P. 54(b); Civ. L.R. 7-9. Reconsideration is proper if (1) despite reasonable diligence on 20 behalf of the party moving for reconsideration, material facts or law were not presented to 21 the Court before entry of the order on which reconsideration is sought; (2) new material 22 facts arose or the relevant law changed after the order was entered; or (3) the Court 23 manifestly failed to consider material facts or dispositive legal arguments presented to it. 24 Civ. L.R. 7-9. Here, the Ninth Circuit issued Jones—which TCP contends “calls into 25 question” the Court’s legal analysis—on the same day the Court issued its order denying 26 TCP’s motion to dismiss. See MTD Order (dkt. 38). The Court did not consider Jones in 27 its order, so reconsideration is appropriate under Local Rule 7-9. That said, the Court 2 In Jones the plaintiff, along with thousands of other claimants, filed arbitration 3 claims against Starz in which she alleged violations of federal and state privacy laws. 129 4 F.4th at 1178. JAMS, the arbitrator, consolidated the arbitration proceedings, which then 5 stalled after Jones’s co-claimants repeatedly disqualified arbitrators. Id. So Jones—much 6 like the plaintiffs in several cases that the Court did address in its earlier order—moved to 7 compel arbitration under the Federal Arbitration Act. Id.; 9 U.S.C. § 4; see also Wallrich 8 v. Samsung Elecs. Am., Inc., 106 F.4th 609, 613 (7th Cir. 2024); Lifescan, Inc. v. Premier 9 Diabetic Servs., Inc., 363 F.3d 1010, 1013 (9th Cir. 2004); Bernal v. Kohl’s Corp., No. 23- 10 cv-1542, 2024 WL 4337452, at *4 (E.D. Wisc. Sept. 13, 2024). She argued that she was 11 “aggrieved” by the consolidation of arbitration filings and that the consolidation provision 12 of the arbitration agreement was unconscionable and should be read out of the agreement. 13 Jones, 129 F.4th at 1179. 14 The Ninth Circuit rejected Jones’s arguments. First, the court found that Starz had 15 not failed, neglected, or refused to arbitrate as required for a motion to compel under the 16 FAA. Id. at 1181; 9 U.S.C. § 4. Second, the court rejected Jones’s unconscionability 17 argument, explaining that Jones effectively wanted to rewrite the arbitration agreement to 18 delete provisions that she did not like. Jones, 129 F.4th at 1185. As the court put it, it 19 would not “use unconscionability doctrine to chisel an arbitration agreement into a version 20 that suits her preferred contractual interpretations and then order the other party to comply 21 with those modified terms.” Id. 23 Nothing in Jones conflicts with the Court’s reasoning in its order denying TCP’s 24 motion to dismiss. As the Court already explained, this is not a case in which Plaintiffs 25 seek to compel arbitration or to enforce any iteration of the arbitration agreement they and 26 TCP entered. Rather, Plaintiffs seek damages under the Consumer Legal Remedies Act. 27 That procedural distinction undermines TCP’s attempted reliance on Jones. See MTD 1 compel arbitration—are not necessarily instructive for a damages suit under the CLRA). 2 TCP’s various arguments based on Jones are therefore unavailing. 3 A. Unconscionability 4 TCP first contends that the Ninth Circuit in Jones “declined to recognize a new style 5 of unconscionability claims that reverse ‘the commonsensical posture in which 6 unconscionability is always invoked by the party seeking to avoid enforcement.’ Instead, 7 it held that ‘the FAA does not allow’ a court to ‘reach the issue of unconscionability’ when 8 that issue is raised by a party seeking arbitration, rather than one avoiding it.” Mot. at 6–7 9 (citations omitted). In other words, TCP suggests that Jones set forth a new rule that 10 plaintiffs cannot allege that individual provisions of an arbitration agreement were 11 unconscionable if those same plaintiffs wanted arbitration on lawful terms. 12 That is not what Jones held. In the following passages from Jones—all cited by 13 TCP in its motion for reconsideration, see id.—the Ninth Circuit refused to use 14 unconscionability doctrine as a vehicle to compel arbitration: 15 • “[AT&T Mobility LLC v. ]Concepcion never said that courts can modify the 16 terms of an arbitration agreement at the request of the enforcing party.” Jones, 17 129 F.4th at 1185 (emphasis added) (citing AT&T Mobility LLC v. Concepcion, 18 563 U.S. 333 (2011)). 19 • “Jones makes the novel request that we use unconscionability doctrine to chisel 20 an arbitration agreement into a version that suits her preferred contractual 21 interpretations and then order the other party to comply with those modified 22 terms. This we cannot do.” Id. (emphasis added). 23 • “Jones may not turn the shield of unconscionability into a sword to compel a 24 type of arbitration that Starz never agreed to.” Id. at 1185–86 (emphasis added). 25 In none of these passages does the court suggest that the CLRA might not provide a 26 remedy for a plaintiff injured by an unconscionable provision in an arbitration agreement. 27 Nor would that be consistent with California law. See Bardin v. DaimlerChrysler Corp., 1 of the use or employment by any person of a method, act or practice declared to be 2 unlawful by Civil Code section 1770 may bring an action against that person.”). TCP’s 3 implication that arbitration agreements must either be wholly lawful or wholly 4 unconscionable is also unsound. See Armendariz v. Found. Health Psychcare Servs., Inc., 5 24 Cal. 4th 83, 115, 121–27 (2000) (evaluating remedies available, including severability, 6 for arbitration agreements that contain certain unconscionable provisions). 7 Instead of changing the law, the Ninth Circuit in Jones “decline[d] to reach the issue 8 of unconscionability” altogether. 129 F.4th at 1186. So Jones does not affect, much less 9 foreclose, a CLRA suit for damages arising from an unconscionable arbitration agreement. 10 B. Harm 11 TCP also argues that the Ninth Circuit’s holding in Jones means that Plaintiffs 12 suffered no cognizable harm in this case, and therefore lack statutory standing under the 13 CLRA. As they put it, “the arbitration venue remains ‘available to resolve the claims 14 asserted by Plaintiffs and others’ if Plaintiffs follow the path outlined by JAMS.” Mot. at 15 8 (cleaned up) (citing Jones, 129 F.4th at 1183). But Jones does not affect the harm 16 analysis for CLRA claims. 17 Indeed, TCP overlooks fundamental differences between a motion to compel under 18 the FAA and a suit for damages under the CLRA. A motion to compel under the FAA 19 requires that the party moving to compel be “aggrieved by the alleged failure, neglect, or 20 refusal of another to arbitrate under a written agreement for arbitration.” 9 U.S.C. § 4
Free access — add to your briefcase to read the full text and ask questions with AI
1 2 3 4 7 8 AJA BECKFORD, et al., Case No. 24-cv-06468-CRB
9 Plaintiffs,
ORDER DENYING MOTION FOR 10 v. RECONSIDERATION
12 Defendant.
13 Defendant The Children’s Group (known as TCP) moves for reconsideration of the 14 Court’s order denying its motion to dismiss in light of the Ninth Circuit’s recent opinion in 15 Jones v. Starz Entertainment, LLC, 129 F.4th 1176 (9th Cir. 2025). Mot. (dkt. 46). For 16 the following reasons, the Court DENIES TCP’s motion. 18 The Court has authority to reconsider and vacate its prior orders. See Fed. R. Civ. 19 P. 54(b); Civ. L.R. 7-9. Reconsideration is proper if (1) despite reasonable diligence on 20 behalf of the party moving for reconsideration, material facts or law were not presented to 21 the Court before entry of the order on which reconsideration is sought; (2) new material 22 facts arose or the relevant law changed after the order was entered; or (3) the Court 23 manifestly failed to consider material facts or dispositive legal arguments presented to it. 24 Civ. L.R. 7-9. Here, the Ninth Circuit issued Jones—which TCP contends “calls into 25 question” the Court’s legal analysis—on the same day the Court issued its order denying 26 TCP’s motion to dismiss. See MTD Order (dkt. 38). The Court did not consider Jones in 27 its order, so reconsideration is appropriate under Local Rule 7-9. That said, the Court 2 In Jones the plaintiff, along with thousands of other claimants, filed arbitration 3 claims against Starz in which she alleged violations of federal and state privacy laws. 129 4 F.4th at 1178. JAMS, the arbitrator, consolidated the arbitration proceedings, which then 5 stalled after Jones’s co-claimants repeatedly disqualified arbitrators. Id. So Jones—much 6 like the plaintiffs in several cases that the Court did address in its earlier order—moved to 7 compel arbitration under the Federal Arbitration Act. Id.; 9 U.S.C. § 4; see also Wallrich 8 v. Samsung Elecs. Am., Inc., 106 F.4th 609, 613 (7th Cir. 2024); Lifescan, Inc. v. Premier 9 Diabetic Servs., Inc., 363 F.3d 1010, 1013 (9th Cir. 2004); Bernal v. Kohl’s Corp., No. 23- 10 cv-1542, 2024 WL 4337452, at *4 (E.D. Wisc. Sept. 13, 2024). She argued that she was 11 “aggrieved” by the consolidation of arbitration filings and that the consolidation provision 12 of the arbitration agreement was unconscionable and should be read out of the agreement. 13 Jones, 129 F.4th at 1179. 14 The Ninth Circuit rejected Jones’s arguments. First, the court found that Starz had 15 not failed, neglected, or refused to arbitrate as required for a motion to compel under the 16 FAA. Id. at 1181; 9 U.S.C. § 4. Second, the court rejected Jones’s unconscionability 17 argument, explaining that Jones effectively wanted to rewrite the arbitration agreement to 18 delete provisions that she did not like. Jones, 129 F.4th at 1185. As the court put it, it 19 would not “use unconscionability doctrine to chisel an arbitration agreement into a version 20 that suits her preferred contractual interpretations and then order the other party to comply 21 with those modified terms.” Id. 23 Nothing in Jones conflicts with the Court’s reasoning in its order denying TCP’s 24 motion to dismiss. As the Court already explained, this is not a case in which Plaintiffs 25 seek to compel arbitration or to enforce any iteration of the arbitration agreement they and 26 TCP entered. Rather, Plaintiffs seek damages under the Consumer Legal Remedies Act. 27 That procedural distinction undermines TCP’s attempted reliance on Jones. See MTD 1 compel arbitration—are not necessarily instructive for a damages suit under the CLRA). 2 TCP’s various arguments based on Jones are therefore unavailing. 3 A. Unconscionability 4 TCP first contends that the Ninth Circuit in Jones “declined to recognize a new style 5 of unconscionability claims that reverse ‘the commonsensical posture in which 6 unconscionability is always invoked by the party seeking to avoid enforcement.’ Instead, 7 it held that ‘the FAA does not allow’ a court to ‘reach the issue of unconscionability’ when 8 that issue is raised by a party seeking arbitration, rather than one avoiding it.” Mot. at 6–7 9 (citations omitted). In other words, TCP suggests that Jones set forth a new rule that 10 plaintiffs cannot allege that individual provisions of an arbitration agreement were 11 unconscionable if those same plaintiffs wanted arbitration on lawful terms. 12 That is not what Jones held. In the following passages from Jones—all cited by 13 TCP in its motion for reconsideration, see id.—the Ninth Circuit refused to use 14 unconscionability doctrine as a vehicle to compel arbitration: 15 • “[AT&T Mobility LLC v. ]Concepcion never said that courts can modify the 16 terms of an arbitration agreement at the request of the enforcing party.” Jones, 17 129 F.4th at 1185 (emphasis added) (citing AT&T Mobility LLC v. Concepcion, 18 563 U.S. 333 (2011)). 19 • “Jones makes the novel request that we use unconscionability doctrine to chisel 20 an arbitration agreement into a version that suits her preferred contractual 21 interpretations and then order the other party to comply with those modified 22 terms. This we cannot do.” Id. (emphasis added). 23 • “Jones may not turn the shield of unconscionability into a sword to compel a 24 type of arbitration that Starz never agreed to.” Id. at 1185–86 (emphasis added). 25 In none of these passages does the court suggest that the CLRA might not provide a 26 remedy for a plaintiff injured by an unconscionable provision in an arbitration agreement. 27 Nor would that be consistent with California law. See Bardin v. DaimlerChrysler Corp., 1 of the use or employment by any person of a method, act or practice declared to be 2 unlawful by Civil Code section 1770 may bring an action against that person.”). TCP’s 3 implication that arbitration agreements must either be wholly lawful or wholly 4 unconscionable is also unsound. See Armendariz v. Found. Health Psychcare Servs., Inc., 5 24 Cal. 4th 83, 115, 121–27 (2000) (evaluating remedies available, including severability, 6 for arbitration agreements that contain certain unconscionable provisions). 7 Instead of changing the law, the Ninth Circuit in Jones “decline[d] to reach the issue 8 of unconscionability” altogether. 129 F.4th at 1186. So Jones does not affect, much less 9 foreclose, a CLRA suit for damages arising from an unconscionable arbitration agreement. 10 B. Harm 11 TCP also argues that the Ninth Circuit’s holding in Jones means that Plaintiffs 12 suffered no cognizable harm in this case, and therefore lack statutory standing under the 13 CLRA. As they put it, “the arbitration venue remains ‘available to resolve the claims 14 asserted by Plaintiffs and others’ if Plaintiffs follow the path outlined by JAMS.” Mot. at 15 8 (cleaned up) (citing Jones, 129 F.4th at 1183). But Jones does not affect the harm 16 analysis for CLRA claims. 17 Indeed, TCP overlooks fundamental differences between a motion to compel under 18 the FAA and a suit for damages under the CLRA. A motion to compel under the FAA 19 requires that the party moving to compel be “aggrieved by the alleged failure, neglect, or 20 refusal of another to arbitrate under a written agreement for arbitration.” 9 U.S.C. § 4 21 (emphasis added); see also Jones, 129 F.4th at 1181 (“By its plain terms, [the FAA] 22 conditions a district court’s authority to compel arbitration upon a showing that a party has 23 failed, neglected, or refused to arbitrate.”). A suit for damages under the CLRA, by 24 contrast, requires that the plaintiff have “suffer[ed] any damage as a result of the use or 25 employment by any person of a method, act or practice declared to be unlawful by Civil 26 Code section 1770.” Bardin, 136 Cal. App. 4th at 1275 (emphasis added). Damages under 27 the CLRA can include “transaction costs” incurred “in order to avoid [an] unconscionable 1 The Court has already explained how Plaintiffs have adequately alleged harm under 2 the CLRA, including that they have alleged transaction costs related to challenging an 3 unconscionable provision. MTD Order at 9–11. Nothing in Jones changes that. In fact, 4 the Jones court expressed that it “may have been more sympathetic” to Jones’s argument 5 that she had been aggrieved by the consolidation of thousands of arbitration claims had she 6 been able to show that “she was denied the kind of arbitration she signed up for.” 129 7 F.4th at 1183. She could not show that, but Plaintiffs have alleged as much: that they were 8 deprived of a legal remedy (arbitration in an accessible venue pursuant to JAMS rules) that 9 they had been contractually promised (in the 2022 Terms) when TCP unilaterally modified 10 its arbitration agreement by inserting a purportedly unconscionable venue provision that 11 materially changed the procedural rules for Plaintiffs’ arbitration claims. That constitutes 12 harm, MTD Order at 10–11, as do the transaction costs that Plaintiffs incurred to dispute 13 the venue provision, id. at 9. 14 C. Modification Provision 15 As a final point, TCP asserts that the Court failed to consider a provision in the 16 2022 Terms that purportedly authorized TCP to unilaterally modify the terms and 17 conditions at any time. Mot. at 11. That provision would not change any of the Court’s 18 analysis. Unilateral modification provisions are subject to the implied covenant of good 19 faith and fair dealing and cannot be exercised in a way that is unconscionable. Tompkins 20 v. 23andMe, Inc., 804 F.3d 1016, 1033 (9th Cir. 2016) (citing Casas v. Carmax Auto 21 Superstores Cal. LLC, 224 Cal. App. 4th 1233, 1237 (2014)). (Unilateral modification 22 provisions can also be unconscionable in and of themselves, though their unconscionability 23 does not render the entire arbitration agreement or contract unenforceable. Id.) And if one 24 party exercises its unilateral modification rights in violation of the implied covenant of 25 good faith and fair dealing to add an unconscionable provision, and the other party is 26 harmed as a result—for instance, by incurring transaction costs to contest the provision— 27 that harm is redressable under the CLRA even if the newly added provision is ultimately 1 || IV. CONCLUSION 2 For the foregoing reasons, the Court DENIES TCP’s motion for reconsideration. 4 Dated: April 25, 2025 CHARLES R. BREYER 5 United States District Judge 6 7 8 9 10 11 12 € 13
16 £ © 17
Z. 19 20 21 22 23 24 25 26 27 28