California Crane School, Inc. v. Google LLC

District Court, N.D. California·Decided August 12, 2022·No. 5:21-cv-10001·Unknown

Opinion

1 2 3 6 7 CALIFORNIA CRANE SCHOOL, INC., Case No. 21-cv-10001-HSG 8 Plaintiff, ORDER GRANTING MOTION TO COMPEL ARBITRATION AND 9 v. DENYING MOTION TO STAY PENDING ARBITRATION 10 GOOGLE LLC, et al., Re: Dkt. Nos. 32, 34 11 Defendants. 12 13 This is an antitrust lawsuit that alleges that Google LLC and Apple Inc. have entered into 14 an anticompetitive agreement not to compete in the internet search business. See Dkt. No. 39 15 (“FAC”) ¶ 2. Before the Court is Google LLC’s, Alphabet Inc.’s, XXVI Holdings Inc.’s, Sundar 16 Pichai’s, and Eric Schmidt’s (collectively, “Google” or “Google Defendants”) motion for an order 17 compelling arbitration and dismissing or staying Plaintiff California Crane School, Inc.’s 18 (“Plaintiff”) claims against the Google Defendants. Dkt. No. 32. (“Mot.”). That motion is fully 19 briefed. See Dkt. Nos. 43 (“Opp.”), 48 (“Reply”), 81 (“Sur-Reply”). Also pending is Apple Inc.’s 20 and Tim Cook’s (collectively, “Apple” or “Apple Defendants”) motion to stay this action in its 21 entirety pending resolution of any arbitration between Plaintiff and the Google Defendants. Dkt. 22 No. 34. The Court held a hearing on both motions on August 11, 2022. For the reasons provided 23 below, the Court GRANTS Google’s motion and DENIES Apple’s motion. 25 The operative Complaint alleges that Google and Apple violated Sections 1 and 2 of the 26 Sherman Act by engaging in an unlawful conspiracy to restrain trade in and monopolize the 27 internet search market. See FAC. Specifically, it alleges that Google and Apple entered into an 1 alleges that Plaintiff, a crane operator certification company, bought search advertisements on 2 Google and in so doing paid prices that were inflated by the allegedly illegal agreement between 3 Apple and Google. Id. ¶ 45. Plaintiff asserts the same claims against Google and Apple, and they 4 arise out of the same underlying facts. See id. ¶¶ 135-42. 5 The following facts have not been contested. When advertisers sign up to use Google’s 6 advertising platforms in the United States, they are shown Google’s Advertising Program Terms 7 (“TOS”) and are asked to expressly agree to the TOS. See Dkt. No. 32-1, Declaration of Courtney 8 Shadd ISO Google’s Motion to Compel Arbitration (“Shadd Decl.”) ¶ 3.1 An advertiser will not 9 be able to use Google’s services until after the TOS have been agreed to. Id. Plaintiff accepted 10 the TOS in 2017 and 2018. Id. ¶¶ 13-16. 11 The TOS states in its very first paragraph that it “require[s] the use of binding individual 12 arbitration to resolve disputes rather than jury trials or class actions.” Id., Exs. A & D. 13 Specifically, the TOS’s arbitration clause states that the parties “agree to arbitrate all disputes and 14 claims . . . that arise out of or relate in any way to” Plaintiff’s participation in Google’s advertising 15 programs and services. Id. § 13(A). The provision further states that the agreement to arbitrate “is 16 intended to be broadly interpreted and includes, for example . . . claims brought under any legal 17 theory.” Id. And the provision also expressly states that it applies to claims brought against 18 “Google,” “Google parent companies, and the respective officers [and] directors” of those entities. 19 Id. Google’s records do not reflect any attempts by Plaintiff to opt out of the arbitration provision 20 pursuant to Section 13(F) of the TOS. Shadd Decl. ¶¶ 10, 12, 15-16; see also id., Exs. A & D, § 21

22 1 The Google Defendants ask the Court take judicial notice of the TOS and related documents, including the opt-out website, and the website at which advertisers accepted or 23 declined the TOS. Mot. at 2. Plaintiff has not opposed this request. The Court agrees to take judicial notice of the existence of these documents, as they are not the subject of reasonable 24 dispute and their authenticity is not in question. See Fed. R. Evid. 201; Trudeau v. Google LLC, 349 F. Supp. 3d 869, 876 (N.D. Cal. 2018) (taking judicial notice of the “TOS, the opt-out 25 website, and the website at which advertisers accepted or declined the TOS,” because, inter alia, “they are not the subject of reasonable dispute and their authenticity is not in question” (citing 26 FED. R. EVID. 201)), aff’d, 816 F. App’x 68 (9th Cir. 2020). That said, the Court only takes judicial notice of the existence of the documents and is not bound by any specific fact findings and 27 legal conclusions set forth in them. 1 13(F) (explaining opt out process). 3 The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., sets forth a policy favoring 4 arbitration agreements and establishes that a written arbitration agreement is “valid, irrevocable, 5 and enforceable.” 9 U.S.C. § 2; Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (noting 6 federal policy favoring arbitration); Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 7 U.S. 1, 24 (1983) (same). The FAA allows that a party “aggrieved by the alleged failure, neglect, 8 or refusal of another to arbitrate under a written agreement for arbitration may petition any United 9 States district court . . . for an order directing that . . . arbitration proceed in the manner provided 10 for in such agreement.” 9 U.S.C. § 4. This federal policy is “simply to ensure the enforceability, 11 according to their terms, of private agreements to arbitrate.” Volt Info. Sciences, Inc. v. Bd. of 12 Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 476 (1989). Courts must resolve any 13 “ambiguities as to the scope of the arbitration clause itself . . . in favor of arbitration.” Id. 14 When a party moves to compel arbitration, the court must determine (1) “whether a valid 15 arbitration agreement exists” and (2) “whether the agreement encompasses the dispute at issue.” 16 Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). The 17 agreement may also delegate gateway issues to an arbitrator, in which case the court’s role is 18 limited to determining whether there is clear and unmistakable evidence that the parties agreed to 19 arbitrate arbitrability. See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). In either 20 instance, “before referring a dispute to an arbitrator, the court determines whether a valid 21 arbitration agreement exists.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 22 530 (2019) (citing 9 U.S.C. § 2). 24 A. Google’s Motion to Compel Arbitration 25 Google moves to compel arbitration of Plaintiff’s claims against it pursuant to an agreed- 26 upon arbitration clause in Google’s terms of service. On a motion to compel arbitration, this 27 Court’s role is simply to determine (1) whether a valid agreement to arbitrate exists and, if it does, 1 F.3d 1052, 1058 (9th Cir. 2013). Plaintiff’s primary argument in response to Google’s motion to 2 compel arbitration is that the so-called “McGill rule” renders the parties’ arbitration agreement 3 unenforceable.

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