BHS Law LLP v. BMO Bank N.A.

• Court: District Court, N.D. California
• Decided: February 11, 2026
• Docket: 5:25-cv-10368
• Status: Unknown

Opinion

1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9

10 BHS LAW LLP, Case No. 25-cv-10368-NC 11 Plaintiff, ORDER GRANTING 12 DEFENDANT’S MOTION TO v. COMPEL ARBITRATION; 13 DENYING PLAINTIFF’S BMO BANK N.A., MOTION FOR PROTECTIVE 14 ORDER UNDER RULE 23(D); Defendant. GRANTING IN PART AND 15 DENYING IN PART PLAINTIFF’S REQUEST FOR 16 JUDICIAL NOTICE 17 Re: ECF 16, 17, 20

18 19 This class action case against Defendant BMO Bank N.A. brought by Plaintiff BHS 20 Law LLP arises from BMO’s allegedly “systematic practice of charging unauthorized fees 21 for business banking services that customers never requested, never used, never consented 22 to, and often expressly declined.” ECF 4 ¶ 2. Defendant, pointing to the arbitration 23 provision in its Account Agreement, moves the Court to compel this case to arbitration, 24 stay all further proceedings until arbitration is completed, and dismiss all class claims. 25 ECF 17. Plaintiff moves the Court to issue an order under Federal Rule of Civil Procedure 26 23(d) preserving status quo, primarily requesting that the Court prevent the issuance and 27 enforcement of any Account Agreements terms that were or would be implemented after 1 putative class member’s rights. ECF 16. Plaintiff also requests judicial notice of three 2 exhibits to support its arguments. ECF 20. 3 The Court GRANTS Defendant’s motion to compel arbitration, stay further 4 proceedings until arbitration is completed, and dismiss all class claims because it finds that 5 there is a mutually-assented-to Account Agreement with an arbitration provision and class 6 waiver. The Court DENIES Plaintiff’s motion for a protective order under Rule 23(d) 7 because it is rendered moot by the Court dismissing Plaintiff’s class claims. The Court 8 also GRANTS IN PART and DENIES IN PART Plaintiff’s request for judicial notice. 9 I. BACKGROUND 10 A. Factual Background 11 The parties do not dispute the following facts. 12 Defendant BMO Bank N.A. is a national banking association headquartered in 13 Illinois. ECF 4 ¶ 17. Defendant acquired Bank of the West (BOTW) in 2022. ECF 17 at 14 5; ECF 19 at 2. As part of that acquisition, BOTW customers were converted over to 15 Defendant’s systems in September 2023. ECF 17 at 5; ECF 19 at 2. 16 Plaintiff BHS Law LLP opened a small business deposit account with BOTW in 17 May of 2019. ECF 17 at 6; ECF 19 at 2. As part of the account opening process, 18 Plaintiff’s two partners, Brian H. Song (who is counsel for Plaintiff) and Youn S. Lee, 19 signed a signature card. ECF 17-1, Ex. 1; ECF 17 at 6; ECF 19 at 2. 20 The Signature Card itself does not mention arbitration. Ex. 1. However, it states 21 the signees: 22 acknowledge and agree that the deposit account(s) is/are subject to and 23 governed by applicable law and the terms, conditions, rates, and charges 24 provided in the Deposit Account Disclosure For Business, Schedule of 25 Fees and Charges for Business Deposit Accounts, and such other 26 applicable documents and agreements pertaining to the deposit 27 account(s) (collectively, “Disclosures”), as such Disclosures are added 1 with such Disclosures, and acknowledge receipt of such Disclosures[.] 2 Ex. 1 at 2. 3 Song is “unsure if he ever received a physical copy of the Disclosures at the time of 4 the opening of the account.” ECF 19 at 2. Further, Song “has no recollection of ever 5 being given explanation over, being directed at, being asked to read, acknowledge, or 6 consent to, acknowledging, reading, understanding, becoming even aware, conscious, or 7 mindful, or even being cautioned about any arbitration provisions at the time of the 8 opening of the account.” Id. 9 The Disclosures include the Account Agreement, as the Account Agreement 10 governs deposit accounts. ECF 17-1 (Schack Decl.) ¶ 13. The Account Agreement is 11 updated periodically. Id. Generally, “notices about updates to the Account Agreement 12 were made available on the BMO website and more significant changes were also flagged 13 at the top of customer account statements.” ECF 17 at 7. The Account Agreement can 14 only be accessed by scrolling to the bottom of Defendant’s landing page, clicking on a 15 faint grey “Legal” button, and locating the hyperlinked handbook. ECF 19 at 3. There 16 were no pop-ups or notifying emails or texts that alerted Plaintiff to review the Account 17 Agreement changes. ECF 19-1 (Song Decl.) ¶ 6; ECF 16 at 8. 18 The Court outlines the timeline of the updated Account Agreements and their 19 notices below: 20 The December 1, 2018, Account Agreement was in effect at the time Plaintiff’s 21 partners executed the Signature Card in May 2019. Schack Decl. ¶ 16, Ex. 2. 22 Defendant updated the Account Agreement on February 2, 2023, which is after 23 Defendant’s acquisition of BOTW, but prior to conversion to Defendant’s systems. 24 Schack Decl. ¶ 18, Ex. 3. 25 Defendant sent a form letter dated July 4, 2023, along with a Transition Guide, to 26 business banking customers like Plaintiff. Schack Decl. ¶ 20, Ex. 4. The letter and guide 27 explained that customers would be subject to an updated Account Agreement. Id. 1 Ex. 5. Defendant has records that it sent Plaintiff a personalized copy of the letter and its 2 enclosures at its address on record, which is the same address currently reflected for 3 Plaintiff. Id. ¶ 22. 4 Defendant updated the Account Agreement on February 1, 2024. Id. ¶ 24, Ex. 6. 5 Defendant flagged the changes encompassed in this update, noted that Plaintiff could opt 6 out of the changes, and directed Plaintiff to the URL where the new agreement and its 7 changes resided in Plaintiff’s account statement dated December 1, 2023, through 8 December 31, 2023. Id. ¶ 25, Ex. 7. 9 Defendant updated the Account Agreement on March 20, 2025. Id. ¶ 26, Ex. 8. 10 Defendant updated the Account Agreement on June 30, 2025. Id. ¶ 27, Ex. 9. 11 On November 28, 2025, Defendant issued a notice to its customers on its website 12 that the Account Agreement would be updated on February 9, 2026, as to its non-BMO 13 ATM fees and as to overdraft fees. Id. ¶ 34, Ex. 10. The notice attached the June 30, 14 2025, Account Agreement (Ex. 9). This update occurred after Defendant became aware of 15 Plaintiff disputing Defendant’s alleged fees on November 6, 2025. ECF 16 at 7. 16 All the alleged versions of the Account Agreements include an arbitration provision 17 and class action waiver. Schack Decl. ¶ 15. Each arbitration provision also stated that by 18 continuing to maintain the Account, Plaintiff agreed to the terms of the Account 19 Agreement. Id. ¶ 35. Plaintiff’s account has been continuously maintained with 20 Defendant, or its predecessor BOTW, since opening in 2019. Id. 21 Some versions of the Account Agreement contain a 60-day opt-out period for the 22 arbitration provision. See, e.g., Ex. 9 at 21. Defendant maintains a list of customers who 23 provide an opt-out letter pursuant to the opt-out procedures. Schack Decl. ¶ 33. 24 Defendant does not have a record of Plaintiff providing an opt-out letter related to its 25 account. Id. 26 Song sent an email to Defendant’s counsel on December 12, 2025, and mailed a 27 written notice to Defendant on December 30, 2025, both stating that Plaintiff was opting 1 B. Procedural Background 2 Plaintiff brought its complaint individually and on behalf of all others similarly 3 situated against Defendant on December 3, 2025. ECF 1. It filed its first amended 4 complaint (FAC) later on the same day. ECF 4. 5 Plaintiff moved the Court to issue an order under Rule 23(d) to preserve status quo. 6 ECF 16. Defendant opposed. ECF 18. Plaintiff replied. ECF 21. 7 Defendant moved the Court to compel arbitration, stay further proceedings in this 8 matter until arbitration is completed, and dismiss all class claims. ECF 17. Plaintiff 9 opposed. ECF 19. Plaintiff requested judicial notice of three documents to support its 10 opposition. ECF 20. Defendant replied to Plaintiff’s opposition and request for judicial 11 notice. ECF 23. 12 All parties have consented to magistrate judge jurisdiction. ECF 8; ECF 14. 13 II. LEGAL STANDARD 14 The Federal Arbitration Act (FAA) mandates that written agreements to arbitrate 15 disputes “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at 16 law or in equity for the revocation of any contract or as otherwise provided.” 9 U.S.C. § 17 2. 18 After it determines that the FAA applies to an agreement, a court must determine 19 two “gateway” issues in assessing whether to compel arbitration: “(1) whether there is an 20 agreement to arbitrate between the parties; and (2) whether the agreement covers the 21 dispute.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015) (citing Howsam v. 22 Dean Witter Reynolds, Inc., 537 U.S. 79, 84 (2002)). 23 As such, a court must first resolve any challenge that an agreement to arbitrate was 24 never formed. Caremark, LLC v. Chickasaw Nation, 43 F.4th 1021, 1030 (9th Cir. 2022). 25 “Issues of contract formation may not be delegated to an arbitrator.” Suski v. Coinbase, 26 Inc., 55 F.4th 1227, 1229 (9th Cir. 2022). Next, if there is a delegation clause, the Court 27 must assess its enforceability. Caremark, 43 F.4th at 1030. This is because “if the parties 1 arguments going to the scope or enforceability of the arbitration provision are for the 2 arbitrator to decide in the first instance.” Id. at 1021. 3 District courts use the summary judgment standard in Federal Rule of Civil 4 Procedure 56 when ruling on a motion to compel arbitration. Hansen v. LMB Mortg. 5 Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021). As such, a party seeking to compel 6 arbitration has the burden of proving that, drawing all inferences and resolving all doubts 7 in favor of the nonmoving party, there is no genuine dispute as to any material fact. Lopez 8 v. Dave, Inc., No. 22-cv-16915, 2023 WL 8594393, at *1 (9th Cir. Dec. 12, 2023); Fed. R. 9 Civ. P. 56(a). 10 III. DISCUSSION 11 A. Plaintiff’s Request for Judicial Notice 12 Plaintiff requests the Court take judicial notice of three exhibits: (A) the Order 13 Denying Defendant’s Motion to Compel Arbitration in Sanchez v. Maggy London Int’l, 14 Ltd., No. 25-cv-02107-H-JLB (S.D. Cal. Nov. 6, 2025), (B) a Securities and Exchange 15 Commission (SEC) Administrative Order in In the Matter of BMO Cap. Mkts. Corp., 16 Release No. 34-102160, and (C) an Officer of the Comptroller of Currency (OCC) news 17 release from December 10, 2025. ECF 20. The Court grants Plaintiff’s request for judicial 18 notice of Exhibit A, but not for Exhibits B and C. 19 First, the Court takes judicial notice of Exhibit A, a district court decision in 20 Sanchez. Courts can and have taken judicial notice of other opinions but do not take 21 judicial notice of the facts contained in those opinions. Harner v. USAA Gen. Indem. Co., 22 No. 18-cv-01993-LL-MDD, 2022 WL 1271136, at *3 (S.D. Cal. Apr. 28, 2022) 23 (collecting cases). The Court takes judicial notice of the existence and contents of the 24 Sanchez order but notes that it is not bound by its opinion and will give it its due weight. 25 Second, the Court does not take judicial notice of Exhibits B and C because neither 26 exhibit is relevant to its analysis in this case. Exhibit B is an SEC order related to BMO 27 Capital Markets Corporation, not Defendant BMO Bank N.A. Exhibit C is an OCC news 1 Defendant is investigated, the investigation focuses on whether its policies discriminated 2 against customers and does not cover the alleged unauthorized deposit account charges in 3 this case. ECF 20, Ex. C at 1. 4 As such, the Court grants Plaintiff’s request for judicial notice of Exhibit A but 5 denies Plaintiff’s request for judicial notice of Exhibits B and C. 6 B. Plaintiff’s Evidentiary Objections 7 Before addressing the merits of the motions, the Court first address Plaintiff’s 8 evidentiary objections to the Ben Schack Declaration (ECF 17-1), as well as Exhibits 2 9 through 8 attached to it. The Court overrules all of Plaintiff’s objections. 10 When ruling on evidentiary objections at the motion to compel arbitration stage, 11 like at the motion for summary judgment stage, courts “do not focus on the admissibility 12 of the evidence’s form” but rather “the admissibility of its contents.” Sandoval v. Cnty. of 13 San Diego, 985 F.3d 657, 666 (9th Cir. 2021) (citations omitted). As another district court 14 explained, “except in the rare instances in which the objecting party demonstrates with 15 specificity that the subject evidence could not be produced in a proper format at trial, the 16 court does not consider any objections on the grounds that the evidence ‘constitutes 17 hearsay or inadmissible lay opinion, or that there is a lack [of] personal knowledge.’” 18 Pierre v. IEC Corp., No. 22-cv-01280-FWS-JDE, 2023 WL 3551962, at *4 n.1 (C.D. Cal. 19 Mar. 14, 2023) (citations omitted). 20 1. The Court overrules Plaintiff’s objections to the Schack 21 Declaration 22 Plaintiff objects to the Ben Schack Declaration on the grounds of lack of personal 23 knowledge and inadmissible hearsay, arguing that Schack failed to authenticate the legacy 24 BOTW records or establish a trustworthy “mode of preparation” for the Signature Card as 25 required by the business records exception. ECF 19 at 13. 26 Plaintiff’s objections go towards form, not admissibility—they do not dispute the 27 validity of the Declaration, specifically challenge the authenticity of the Declaration, or 1 admissible form at trial. Thus, the Court overrules Plaintiff’s objections to the Schack 2 Declaration. 3 2. The Court overrules Plaintiff’s objections to Exhibits 2 through 8 4 of the Schack Declaration 5 Plaintiff objects to Exhibits 2 through 8 of the Schack Declaration on the grounds 6 that they are irrelevant, unfairly prejudicial, and confusing. ECF 19 at 4. The Court finds 7 these arguments unpersuasive. 8 First, relevance objections are unnecessary at this stage because they are 9 “duplicative” of the motion to compel standard itself. Sandoval, 985 F.3d at 665 (finding 10 the same for the summary judgment standard). Second, Federal Rule of Evidence 403 11 objections regarding prejudice and confusion are also unnecessary at this stage—there is 12 no jury to be misled or confused. See Sernoffsky v. Novak, 773 F. Supp. 3d 988, 1003 13 (S.D. Cal. 2025) (finding the same for the summary judgment standard). Thus, the Court 14 overrules Plaintiff’s objections to Exhibits 2 through 8 of the Schack Declaration. 15 C. Defendant’s Motion to Compel Arbitration 16 The Court now turns to the merits of Defendant’s Motion to Compel Arbitration. 17 Defendant moves the Court to (1) compel Plaintiff to submit the claims for relief asserted 18 against Defendant in Plaintiff’s FAC to binding individual arbitration, (2) stay all further 19 proceedings in this matter until this Motion to Compel Arbitration is decided and/or 20 arbitration is completed, and (3) dismiss all class claims. ECF 17 at 1. In doing so, 21 Defendant argues that it and Plaintiff mutually assented to an Account Agreement 22 containing an arbitration provision and an express waiver of class relief. Id. Plaintiff 23 contends that it never assented to an Account Agreement. ECF 19 at 1. 24 The Court grants Defendant’s motion to compel arbitration, stay the motion until 25 arbitration is completed, and dismiss all class claims because it finds that: (1) the Account 26 Agreement is subject to the FAA, (2) there is an Account Agreement with no formation 27 issues that encompasses an arbitration provision and class action waiver, (3) there is a 1 of the mutually-assented-to arbitration provision, and (4) the Court can assess the 2 mutually assented to class waiver. 3 1. The Account Agreement is subject to the FAA 4 The FAA applies to any contract affecting interstate commerce. Circuit City 5 Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001); 9 U.S.C. § 2. Defendant argues, and 6 Plaintiff does not dispute, that the FAA applies to the Account Agreement. ECF 17 at 10. 7 Indeed, all versions of the Account Agreement affect interstate commerce—it allowed 8 BMO, a “nationally chartered bank with its headquarters in Chicago, Illinois,” to do 9 business with Plaintiff, a California law partnership. ECF 17 at 10. Thus, the Account 10 Agreement is subject to the FAA. 11 2. There is an agreement to arbitrate because there were no 12 formation issues for the February 1, 2024, Account Agreement. 13 The Court first determines whether there is an agreement to arbitrate and finds that 14 there is because Plaintiff assented to the February 1, 2024, Account Agreement and its 15 arbitration provision. 16 As an initial matter, in determining whether there is an agreement to arbitrate, the 17 Court applies California state law. See Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 18 565 (9th Cir. 2014) (“State contract law controls whether the parties have agreed to 19 arbitrate.”). Some Account Agreement versions state the “state laws of [the user’s] 20 Branch of Account” applies, which in this case, is California. See, e.g., Ex. 2 at 7; 21 Schnack Decl. ¶ 21. While some Account Agreement versions state that “Illinois law” 22 applies, both parties appear to agree to apply California state law. See, e.g., Ex. 6 at 3; 23 ECF 17 at 3 (applying California law); ECF 19 at 8 (applying California law). 24 Regardless, California’s and Illinois’s laws are substantively similar with respect to 25 contract formation. Starke v. SquareTrade, Inc., 913 F.3d 279, 291 n.8 (2d Cir. 2019). 26 It is undisputed that to form a contract, “mutual assent is a required element.” 27 Knutson, 771 F.3d at 565. Generally, an offeree cannot actually assent to an offer to form 1 Douglas v. U.S. Dist. Ct. for Cent. Dist. of Cal., 495 F.3d 1062, 1066 (9th Cir. 2007). 2 “Mutual assent may be manifested by written or spoken words, or by conduct.” Binder v. 3 Aetna Life Ins. Co., 75 Cal.App.4th 832, 850 (1999). 4 Plaintiff argues that Defendant cannot show there is mutual assent for any version 5 of the Account Agreements and its arbitration provisions. ECF 19 at 9–10. Defendant 6 argues that Plaintiff assented to all versions of the Account Agreement by signing a 7 Signature Card and maintaining its account for six years. ECF 23 at 5. The Court goes 8 through each version of the Account Agreement finds that Plaintiff assented to the 9 December 1, 2018, Account Agreement by signing the Signature Card and the September 10 5, 2023, and February 1, 2024, Account Agreements by maintaining its account without 11 opting out after receiving proper notice. 12 a. Plaintiff initially assented to the December 1, 2018, 13 Account Agreement by signing the Signature Card 14 It is undisputed that Song and Lee signed a Signature Card on behalf of Plaintiff 15 when they opened Plaintiff’s account. Ex. 1; ECF 17 at 6; ECF 19 at 2. Regardless of 16 whether Song has “no recollection of ever begin given explanation over, being directed at, 17 being asked to read, acknowledge, or consent to, acknowledging, reading, understanding, 18 becoming even aware, conscious, or mindful, or even being cautioned about any 19 arbitration provisions at the time of the opening of the account,” Plaintiff can still know of 20 the existence of the December 1, 2018, Account Agreement, the governing Account 21 Agreement at the time. ECF 19 at 2; see Safadi v. Citibank, N.A., No. 12-cv-1356-PSG, 22 2012 WL 4717875, at *4 (N.D. Cal. Oct. 2, 2012) (rejecting the plaintiff’s argument that 23 he “had no opportunity to review the terms and conditions” contained in the agreement 24 and was “unaware” whether the agreement was included in the given package of 25 documents). Indeed, Plaintiff did not rebut Defendant’s evidence that Song signed the 26 Signature Card and “acknowledge[d] receipt” of the Account Agreement. See Andre. v. 27 U.S. Bank, No. 20-cv-4854-CBM-PJW-X, 2021 WL 3598737, at *2 (C.D. Cal. May 20, 1 signed a signature card wherein she acknowledged receipt of the bank’s terms and agreed 2 to be bound by the terms which contained the arbitration provision). 3 It also did not matter that the Signature Card was “silent to the possibility of 4 arbitration” or that the arbitration terms are hidden away.1 ECF 19 at 3, 8. An offeree 5 who knows “an offer has been made” but “does not know all of its terms” can still be held 6 to have accepted the terms. Windsor Mills, Inc. v. Collins & Aikman Corp., 25 Cal. App. 7 3d 987, 992–93 (1972). Plaintiff knew that a proposal had been made—it was clear that 8 by signing the Signature Card, Plaintiff was entering a contract. Cf. id. at 992 (finding 9 that there is no assent when there are inconspicuous contractual provisions contained in a 10 document “whose contractual nature is not obvious”). Plaintiff’s failure to inform itself of 11 the terms of the contract it entered cannot now excuse it from the commitments under that 12 contract. 13 As such, Plaintiff assented to the December 1, 2018, Account Agreement when 14 Song and Lee signed the Signature Card. 15 b. Plaintiff only assented to the updated Account Agreements 16 it was given sufficient notice of 17 Defendant seems to argue that Plaintiff assented to all the updated Account 18 Agreements by continuing to maintain its account with Defendant. ECF 17 at 4. 19 However, although Plaintiff’s continued use of Defendant’s service could be considered 20 assent, such assent can only be inferred after Plaintiff received proper notice of the 21 proposed changes. Douglas, 495 F.3d at 1066; Ex. 6 at 15 (“If you continue to . . . keep 22 the Account open after the effective date of any such notice [of change] you will be 23 deemed to agree to the amendment or change.”). As such, even if there is a change-of- 24 terms provision, Defendant must show that it provided notice of the updated agreements to 25

26 1 The Court finds that Plaintiff’s citations to Sanchez v. Maggy London Int’l Ltd., No. 25- cv-02107-H-JLB, 2025 WL 3097931 (S.D. Cal. Nov. 6, 2025) for notice are irrelevant for 27 the Account Agreements. Sanchez only concerns formation of an “online agreement.” Id. 1 bind Plaintiff to them. Stover v. Experian Holdings, Inc., 978 F.3d 1082, 1086 (9th Cir. 2 2020). The Court finds that Defendant did so for two updated Account Agreements: the 3 September 5, 2023, Account Agreement, and February 1, 2024, Account Agreement. 4 First, it was sufficient notice for Defendant to mail Plaintiff a disclosure letter 5 flagging that there was an updated Account Agreement and “a copy of the updated 6 [September 5, 2023,] Account Agreement . . . that would apply.” ECF 17 at 7; Schack 7 Decl. ¶ 20–22. The September 5, 2023, Account Agreement also had a section explaining 8 the changes from the previous Account Agreement. Ex. 5 at 2; Schack Decl. ¶ 20. 9 Plaintiff did not dispute these pieces of evidence. Defendant thus provided sufficient 10 notice to Plaintiff, as Plaintiff did not have to independently investigate to determine 11 whether new terms were issued. C.f. Stover, 978 F.3d at 1086 (stating that the plaintiff 12 had no obligation to investigate whether the defendant issued new terms without providing 13 notice to her that it had done so). Plaintiff therefore had sufficient notice of the September 14 5, 2023, Account Agreement and assented to it by maintaining its account. 15 Second, it was sufficient notice for Defendant to flag significant changes found in 16 the February 1, 2024, Account Agreement at the top of Plaintiff’s account statement. ECF 17 17 at 7. The notice not only flagged significant changes to the Account Agreement but 18 also pointed the reader to a website with the updated February 1, 2024, terms and advised 19 the reader they could opt out of the arbitration provision. Ex. 7. Again, this notice spared 20 Plaintiff from having to independently investigate to determine whether new terms were 21 issued. C.f. Stover, 978 F.3d at 1086. Plaintiff therefore had sufficient notice of the 22 February 1, 2024, Account Agreement and assented to it by maintaining its account. 23 The Court finds that Defendant did not give notice for the other updated Account 24 Agreements. While Defendant generally alleges that “significant changes [to the 25 agreement] were also flagged at the top of customer account statements,” it only pointed 26 to evidence that it did so for the February 1, 2024, Account Agreement. ECF 17 at 7. 27 Further, while Defendant also generally alleges that “notices about updates to the Account 1 “notice” for the June 30, 2025, Account Agreement, it is not enough to simply make the 2 Account Agreement and its changes online. ECF 17 at 7; Schnack Decl. ¶ 34; Douglas, 3 495 F.3d at 1066 (finding that it is not enough to have the modified contract available 4 online because “[p]arties to a contract have no obligation to check the terms on a periodic 5 basis to learn whether they have been changed by the other side.”). Indeed, Defendant 6 does not dispute that it did not use a “pop-up or a separate window” that alerted Plaintiff 7 to review the changes. Song Decl. ¶ 7. Thus, because Defendant does not show that it 8 gave Plaintiff any other notice, Plaintiff did not assent to the: February 2, 2023, Account 9 Agreement; March 20, 2025, Account Agreement; June 30, 2025, Account Agreement; or 10 November 28, 2025, Account Agreement. 11 Therefore, of the updated Account Agreements, Plaintiffs only assented to the 12 September 5, 2023, and February 1, 2024, Account Agreements. Because Plaintiff most 13 recently agreed to the February 1, 2024, Account Agreement, it is the governing 14 agreement. 15 c. Plaintiff’s December 10, 2025, rejection email and December 30, 16 2025, Opt-Out Notice did not exempt him from the arbitration 17 provision in the February 1, 2024, Account Agreement 18 Plaintiff argues that his December 10, 2025, email rejecting arbitration and his 19 December 30, 2025, opt-out notice he mailed opted him out of the November 28, 2025, 20 Account Agreement arbitration provision, and thus defeats arbitration and renders 21 Defendant’s Motion to Compel Arbitration moot. ECF 17 at 10. The Court finds this 22 argument irrelevant because Plaintiff was not bound to the November 28, 2025, Account 23 Agreement due to lack of notice.2 Supra Section III.3.b. Plaintiff is bound to the 24 February 1, 2024, Account Agreement. Id. The opt-out notice and email occurred too late 25

26 2 However, even if Plaintiff’s opt-out notice or rejection was valid for the November 28, 2025, Account Agreement, the opt out “has no effect on any previous, other, or future 27 arbitration agreements” that he has with Defendant. Ex. 9 at 21. As such, because Plaintiff 1 for Plaintiff to be able to opt-out of the arbitration provision in the February 1, 2024, 2 Account Agreement. Ex. 6 at 21 (stating that the opt-out notice must be postmarked no 3 later than 60 days after February 1, 2024). Plaintiff did not allege he attempted to opt out 4 at any other time. 5 3. The Court compels arbitration because the arbitration provision 6 in the February 1, 2024, Account Agreement has a valid 7 delegation clause 8 The February 1, 2024, Account Agreement’s arbitration provision contains a valid 9 delegation clause. A delegation clause “is an agreement to arbitrate threshold issues 10 concerning the arbitration agreement.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 11 69–70 (2010). The arbitration provision in the February 1, 2024, Account Agreement 12 states that “[a]ny dispute regarding the interpretation, scope, applicability or enforceability 13 of this Arbitration Provision or any portion thereof, including whether a Claim is 14 arbitrable, shall be decided by the arbitrator.” Ex. 6 at 2. This is a valid delegation clause 15 because it “clearly and unmistakably” “gives the arbitrator exclusive authority to decide” 16 enforceability and scope of the arbitration provision. Rent-A-Center, 561 U.S. at 66. 17 Further, because the Plaintiff only challenges the enforceability of the agreement as a 18 whole and not the enforceability of the delegation provision itself, the enforceability of the 19 arbitration provision remains a challenge for the arbitrator. Id. at 70; ECF 19 at 10 (only 20 contending that the delegation clause cannot apply because “the underlying agreement 21 was never legally formed.”). 22 Because the FAA mandates “that district courts shall direct the parties to proceed to 23 arbitration on issues as to which an agreement has been signed,” the Court compels 24 arbitration so that an arbitrator may decide the outlined “gateway” issues of arbitrability: 25 interpretation, scope, applicability, and enforceability. Dean Witter Reynolds v. Byrd, 470 26 U.S. 213, 218 (1985). These gateway issues include whether public injunctive relief 27 defeats arbitration under McGill v. Citibank, N.A., 2 Cal.5th 945, 966 (2017), because 1 Fargo & Co., 514 F. Supp. 3d 1166, 1176 (N.D. Cal. 2021) (finding that the application of 2 the “McGill rule” is a gateway issue that may be delegated to the arbitrator). 3 Thus, the Court grants Defendant’s request to compel this case to arbitration. 4 4. The Court dismisses all class claims because there is a valid class 5 action waiver 6 Defendant also argues that the Court should enforce the class action waiver in the 7 Account Agreement and dismiss the class action claims from the FAC. ECF 17 at 17. 8 The arbitration provision in the February 1, 2024, Account Agreement state that the Court 9 shall decide “any dispute regarding the subsection entitled ‘Waiver of Class and 10 Representative Actions and Other Non-Individualized Relief,’ including any claim that all 11 or part of [that] subsection . . . is unenforceable, illegal, void or voidable, or has been 12 breached.” Ex. 6 at 19. The “Waiver of Class and Representative Actions and Other 13 Non-Individualized Relief” subsection states in part that the parties “AGREE THAT 14 EACH MAY BRING CLAIMS AGAINST THE OTHER ONLY IN YOUR OR OUR 15 INDIVIDUAL CAPACITY AND NOT AS A PLAINTIFF OR CLASS MEMBER IN 16 ANY PURPORTED CLASS OR REPRESENTATIVE PROCEEDING.” Id. at 20. 17 Because the Court has determined that the arbitration agreement exists, Plaintiff did 18 not contest the existence or enforceability of the class action waiver, and the issue of class 19 waiver is not delegated to an arbitrator, the Court enforces the provision according to its 20 terms—“including terms providing for individualized proceedings.” Davtian v. Uber 21 Techs., Inc., No. 24-cv-5195-CRB, 2024 WL 4681590, at *6 (N.D. Cal. Nov. 4, 2024) 22 (citing Epic Sys. Corp. v. Lewis, 584 U.S. 497, 502, 509–10 (2018)). 23 Thus, the Court dismisses the class action claims from the FAC. 24 5. The Court stays the case pending the completion of arbitration 25 The FAA provides that an action shall be stayed pending completion of the 26 arbitration. 9 U.S.C. § 3. Thus, because this case involves an arbitrable dispute, the Court 27 grants Defendant’s request to stay the proceeding. 1 D. Plaintiff’s Motion for a Protective Order Under Rule 23(d) 2 Plaintiff moves the Court to grant protective relief under Rule 23(d). ECF 16. 3 Specifically, it requested the Court to (1) prohibit Defendant from enforcing any revised 4 account terms, including arbitration clauses, class-action waivers, or dispute-resolution 5 modification issued after Plaintiff first began disputing Defendant’s practices on 6 November 6, 2025; (2) prohibit Defendant from issuing new or modified terms of service 7 to putative class members that affect their legal rights without prior Court approval; (3) 8 require Defendant to issue corrective notice advising customers that any such terms do not 9 affect their rights in this lawsuit; and (4) declare any modification distributed after the 10 filing of the complaint unenforceable as to the putative class. Id. at 4. 11 The Court finds that Plaintiff’s requested relief is moot. Plaintiff’s first request is 12 moot because the Court ruled that Defendant’s February 1, 2024, Account Agreement is 13 the governing agreement, and not an agreement after November 6, 2025, due to lack of 14 notice. Supra Section III.C.2.b. Plaintiff’s second, third, and fourth requests are moot 15 because the Court dismissed all class claims, and the requests are directed towards 16 putative class members. Supra Section III.C.4. 17 Thus, the Court denies Plaintiff’s motion for a protective order under Rule 23(d). 18 IV. CONCLUSION 19 Accordingly, The Court GRANTS Defendant’s Motion to Compel Arbitration—it 20 compels Plaintiff to submit the claims for relief asserted against Defendant in Plaintiff’s 21 FAC to binding individual arbitration, stays all further proceedings in this matter until 22 arbitration is completed, and dismisses all class claims. The Case Management 23 Conference set for March 4, 2026, is vacated. The Court additionally ORDERS the 24 parties to file a joint update and a motion to reopen the case within seven days after 25 completion of arbitration. 26 The Court also DENIES Plaintiff’s Motion for a Protective Order Under Rule 23(d). 27 The Court also GRANTS IN PART and DENIES IN PART Plaintiff’s request for judicial 1 IT IS SO ORDERED. 2 |) Dated: February 11, 2026 he ——~ NATHANAEL M. COUSINS 3 United States Magistrate Judge 4 5 6 7 8 9 10 11 12 E 13 14

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