Burzdak v. Universal Screen Arts, Inc.

CourtDistrict Court, N.D. California
DecidedAugust 16, 2021
Docket3:21-cv-02148
StatusUnknown

This text of Burzdak v. Universal Screen Arts, Inc. (Burzdak v. Universal Screen Arts, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Burzdak v. Universal Screen Arts, Inc., (N.D. Cal. 2021).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 KAREN BURZDAK, Case No. 21-cv-02148-EMC

8 Plaintiff, ORDER DENYING DEFENDANT’S 9 v. MOTION TO COMPEL ARBITRATION 10 UNIVERSAL SCREEN ARTS, INC., Docket No. 20 11 Defendant.

12 13 14 Plaintiff Karen Burzdak has filed a class action against Defendant Universal Screen Arts, 15 Inc. (“USA”), asserting that it has a “practice of deceptively enrolling consumers into a paid and 16 automatically renewing membership program.” Compl. at 1. She has pled violations of California 17 Business & Professions Code §§ 17600 and 17200. Currently pending before the Court is USA’s 18 motion to compel arbitration. Having considered the parties’ briefs and accompanying 19 submissions, the Court hereby DENIES the motion to compel. 20 I. FACTUAL & PROCEDURAL BACKGROUND 21 A. Complaint 22 In her complaint, Ms. Burzdak alleges as follows. 23 USA is a “multi-company retailer that owns and operates myriad e-commerce websites and 24 brands including Acorn, Bas Bleu, Daedalus Books, Signals, Support Plus, and What on Earth.” 25 Compl. ¶ 1. After a consumer places and finalizes an order from one of USA’s websites, she is 26 presented with a free shipping option in a pop-up box. See Compl. ¶¶ 2, 16. For example: 27 1 . Signals VIP INSIDER 2 THANK YOU FOR YOUR ORDER! 3 Claim Your Free Shipping Refund Now! 4 US CAME URE Tm et) EO) eee) 18) 2: To claim your free shipping provide your information below 5 and click SUBMIT to join Signals VIP Insider today! 6 Signals iP Weider prograrsnd the Ten of Use Unless you cancel duting your tal, we'll matommatically cominue your membership benefits for $14.95 a month, plus taxes, if amy charged to the same card ending in 4726 that you used for today's purchase. Cancel 2tytime online of by calling BS8-70¢- 767 3 7 Frail Addrece

? As A VIP Insider Member, Discover All The Ways You Can Save! 10 11 10% CASH BACK & SHIPPING REBATES AT SIGNALS AND OUR FAMILY OF BRANDS a Signals = ACORN = BASBEEW pidahasfiocks SMtroth Sapportra

. . . . 14 || Compl. 16. “[S]electing the free shipping option automatically enrolls [consumers] into a 7-day

15 free trial to [USA’s] VIP Insider membership program that renews every month for $14.95.” Sam A 16 || Compl. § 2. Although there is text in the pop-up box that mentions the VIP Insider membership

3 17 program, the free trial, the automatic renewal, and the cost thereafter, Ms. Burzdak asserts that the

18 information is not clear and conspicuous. See Compl. § 19. 19 In addition, Ms. Burzdak maintains that cancelling the VIP Insider membership is difficult. 290 || A consumer cannot “simply visit [the] website [where she made the purchase] and cancel the 71 membership.” Compl. § 21. Instead, a consumer can cancel the membership online only if she 22 || first creates an account with a different website (e.g., signalsvipinsider.com). See Compl. 4 □□□□□□□ 23 Also, although consumers can call a toll-free number to request cancellation, “[s]ome consumers 24 || have reported issues reaching [a] representative and some complain about being charged despite 25 || requesting to cancel.” Compl. § 21(i). See, e.g., Compl. §] 23 (discussing a complaint made about 26 || trying to cancel by phone). Because USA “does not offer a timely and easy-to-use mechanism for 27 cancelling the membership,” consumers have suffered “repeat and ongoing unauthorized charges.” 28 Compl. § 4.

1 With respect to Ms. Burzdak specifically, she made a purchase through Bas Bleu (one of 2 USA’s e-commerce websites) in October 2020. See Compl. ¶ 26. After she made the purchase, 3 she responded to the pop-up box and enrolled in the VIP Insider membership program. She did 4 not intend to enroll in the program and was not aware that she was enrolled “as part of her 5 purchase process.” Compl. ¶ 27. Seven days after her purchase, USA charged Ms. Burzdak’s 6 debt card $14.95 for the program. The deduction was automatically made for three months – 7 November 2020, December 2020, and January 2021. See Compl. ¶ 28. Ms. Burzdak did not see 8 the charges for about three months. When she discovered them, she called USA immediately to 9 cancel the membership. See Compl. ¶ 30. 10 Based on, inter alia, the above allegations, Ms. Burzdak alleges a violation of California’s 11 Automatic Renewal Law, codified at California Business & Professions Code § 17600 et seq. See, 12 e.g., Cal. Bus. & Prof. Code § 17602(a) (providing that “[i]t shall be unlawful for any business 13 that makes an automatic renewal offer . . . to a consumer” to, e.g., “[f]ail to present the automatic 14 renewal offer terms . . . in a clear and conspicuous manner before the subscription or purchasing 15 agreement is fulfilled and in visual proximity . . . to the request for consent to the offer”). She also 16 alleges a violation of § 17200. She seeks to represent a class defined as follows: “All persons in 17 the State of California who were charged for a VIP Insider membership.” Compl. ¶ 31. 18 B. Arbitration Agreement 19 USA contends that the claims asserted by Ms. Burzdak must be compelled to arbitration 20 based on an agreement between the parties. In support of its motion to compel arbitration, USA 21 has provided evidence related to the arbitration agreement and the surrounding circumstances. 22 According to USA, “Ms. Burzdak enrolled in the VIP Insider membership program by Bas Bleu 23 on or about October 25, 2020.” Radigan Decl. ¶ 3. An offer related to the program was presented 24 to Ms. Burzdak as part of a post-purchase process. The offer was presented “with the option of 25 receiving a free shipping refund on her order.” Radigan Decl. ¶ 5. Below is a part of “the offer 26 and blank enrollment form in substantially the same form as it would have been presented to Ms. 27 Burzdak on or about October 25, 2020.” Radigan Decl. ¶ 5. 1 2 VIP INSI DE R BAS | 3 THANK YOU FOR YOUR ORDER! 1 Claim Your Free Shipping Refund Now! Lee), keV aome) ha To claim your free shipping, provide your information below and click SUBMIT to join 6 VIP Insider by Bas Bleu today! Offer and Billing Details: By submitting your email address , you agree to enroll in a free 7 day trial of the VIP 7 Insider by Bas Bleu program and the Terms of Use. Unless you cancel during your trial, we'll automatically continue your membership benefits for $14.95 a month, plus taxes, if any, charged to the same card that you used for today's purchase. Cancel anytime online or by calling 866-221-2476. 8 Email Address

10 i As A VIP Insider Member, Discover All The Ways You Can Save!

(%)

& 13 10% CASH BACK & SHIPPING REBATES AT BAS BLEU AND OUR FAMILY OF BRANDS

Signals = ACORN BAS BLE péedatus Books —“Iatwearth 9 Support Phas 5 14

IS Radigan Decl., Ex. | (offer). After Ms. Burzdak entered her email address and clicked the

a 16 “Submit” button, “she would have been informed on a new webpage, ‘Welcome to VIP Insider by

= Bas Bleu.” Radigan Decl. § 9; see also Radigan Decl., Ex. 2 (welcome page).

Z 1 Lo: . . 8 As indicated above, the paragraph in the middle refers to the Terms of Use for the VIP 19 Insider membership program: “By submitting your email address, you agree to enroll in a free 7 2 . . 0 day trial of the VIP Insider by Bas Bleu program and the Terms of Use.” “The phrase “Terms of 71 Use’ is underlined to indicate it is a hyperlink.” Radigan Decl. §/ 7. However, the phrase is not 22 ‘ highlighted through, e.g., the use of a different color for the font. 23 “[A] ‘Terms of Use’ hyperlink was also included at the bottom of the enrollment 24 webpage.” Radigan Decl. § 11. (Although not entirely clear, USA seems to be referring to the 29 “Helpful Links” at the bottom of the enrollment webpage, one of which is the Terms of Use. See 2 .

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Bluebook (online)
Burzdak v. Universal Screen Arts, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/burzdak-v-universal-screen-arts-inc-cand-2021.