Flores-Mendez v. Zoosk, Inc.

Opinion

1 2 3 5 NORTHERN DISTRICT OF CALIFORNIA 6

8 JUAN FLORES-MENDEZ, an individual, and TRACEY GREENAMYER, an 9 individual, and on behalf of classes of No. C 20-04929 WHA similarly situated individuals, 10

Plaintiffs,

11 ORDER RE MOTION FOR CLASS v. CERTIFICATION 12

13 ZOOSK, INC., 14 Defendant. 15

16 17 In this putative class action by data-breach victims, plaintiffs move for class certification. 18 For the reason stated herein, the motion is DENIED. 19 A prior order detailed the underlying facts (Dkt. No. 93). In brief, plaintiffs Juan Flores- 20 Mendez and Tracy Greenamyer used defendant Zoosk, Inc.’s online dating platform. Zoosk 21 offered a free service and a premium subscription service for a fee, and customers provided their 22 personal information to Zoosk upon joining. Plaintiffs claim injury stemming from a massive data 23 24 breach in January 2020 by the “ShinyHunters,” which occurred because Zoosk allegedly failed to 25 adequately protect plaintiffs’ personal information (Dkt. No. 191). Plaintiffs now move for class 26 certification with Tracy Greenamyer as the sole representative (Dkt. No. 200). Zoosk opposes 27 class certification on numerous grounds. This order follows full briefing and an in-person hearing. 1 Zoosk argues that Ms. Greenamyer waived any right to represent the class or subclass 2 because she signed Zoosk’s Terms of Use, which contained a valid class action waiver (Dkt. 3 No. 207-8). In response, Plaintiffs argued that Zoosk effectively waived enforcement of its 4 class action waiver by participating in litigation for nearly two years and never once raising the 5 issue (Dkt. No. 217 at 5). Zoosk, however, raised this affirmative defense in its answer to 6 plaintiffs’ first amended complaint dated February 16, 2021, and in its answer to the operative 7 complaint (Dkt. No. 67; Dkt. No. 197). Consequently, this order finds Zoosk has not waived 8 the defense. We now address the terms themselves. 9 Zoosk’s Terms of Use then-stated: 10 “Class Action and Jury Trial Waiver. You and Zoosk 11 agree that any and all claims must be brought in the parties’ 12 individual capacity, and not as a plaintiff or class member in any purported class action, collective action, private 13 attorney general action or other representative proceeding. This waiver applies to class arbitration, and, unless we 14 agree otherwise, the arbitrator may not consolidate more than one person’s claims. You agree that, by entering into 15 this agreement, you and Zoosk are each waiving the right 16 to a trial by jury or to participate in a class action, collective action, private attorney general action or other 17 representative proceeding.”

18 (Dkt. No. 206). Inquiries into the enforceability of contractual clauses are decided under state 19 law. Under California law, a contractual clause is unenforceable if it is both procedurally and 20 substantively unconscionable. Davis v. O’Melveny & Meyers, 485 F.3d 1066, 1077 (9th Cir. 21 2007). In interpreting the two forms of unconscionability “the former focus[es] on oppression 22 or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” 23 George v. eBay, Inc., 71 Cal. App. 5th 620, 629 (2021) (cleaned up). While a prior California 24 judicial rule deemed class action waivers in consumer contracts unconscionable, the United 25 States Supreme Court in AT&T Mobility LLC v. Concepcion held that the Federal Arbitration 26 Act (“FAA”) preempted this determination. 563 U.S. 333, 352 (2011) (overturning Discover 27 Bank v. Superior Ct., 36 Cal. 4th (2005). In doing so, the Court upheld the enforceability of 1 AT&T’s class-action waiver and opened the door for courts to broadly carry out the mandate 2 of the FAA and enforce employer arbitration provisions. Id. at 336. We consider both types of 3 unconscionability in turn. 4 First, Zoosk’s contract was not procedurally unconscionable. Contracts of adhesion are 5 often procedurally unconscionable, but not always, especially when reasonable market 6 alternatives exist. See Adkins v. Facebook, Inc. 2019 WL 3767455, at *2 (N.D. Cal. Aug. 9, 7 2011) (Judge Alsup); eBay, 71 Cal. App. 5th at 632. In eBay, appellants argued that eBay’s 8 user agreement was a take-it-or-leave-it contract of adhesion and that its “oppression [] arose 9 from the inequality of the bargaining power between eBay on the one hand and the plaintiffs 10 and members of the plaintiff class on the other.” eBay, 71 Cal. App. 5th at 631. The court 11 rejected this argument, reasoning that despite demonstrating adhesion, appellants failed to 12 show procedural unconscionability as “[o]pression refers not only to an absence of power to 13 negotiate the terms of a contract, but also to the absence of reasonable market alternatives.” Id. 14 at 632. Similarly, in Adkins, we determined that where “the challenged term is in a contract 15 concerning a nonessential recreational activity,” plaintiffs “always ha[ve] the option of simply 16 forgoing the activity.” Adkins, 2019 WL 3767455 at *2. Here, Greenamyer had meaningful 17 market alternatives to Zoosk, as there are many other dating apps available to consumers today. 18 Greenamyer could have avoided Zoosk’s alleged unconscionable policies by simply opting out 19 of its dating service, a “nonessential recreational activity.” Ibid. Plaintiffs do not substantively 20 address this point argued by Zoosk, and have thus not made an adequate showing of procedural 21 unconscionability. 22 Second, Zoosk’s contract is also not substantively unconscionable under California law. 23 See Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 246 24 (2012). In Pinnacle, the court analyzes substantive unconscionability as it “pertains to the 25 fairness of an agreement’s actual terms and to assessments of whether they are overly harsh or 26 one-sided.” While Zoosk’s Terms of Use require claims to be brought in an individual 27 capacity, a proper showing of substantive unconscionability requires the provision in question 1 Concepcion, the Court upheld the enforceability of AT&T’s class-action waiver which 2 provided for arbitration of all disputes between the parties but required that the claims be 3 brought in an “individual capacity, and not as a plaintiff or class member in any purported 4 class or representative proceeding.” 563 U.S. at 336. In doing so, the Court rejected the 5 argument that a contractual provision is substantively unconscionable for making an individual 6 action less financially attractive than a class action. See Concepcion, 563 U.S. at 347. Further, 7 our court of appeals has held that it is not a legally cognizable issue that a provision requiring 8 individual action deters litigants from bringing claims. See Coneff v. AT&T Corp., 673 F.3d 9 1155, 1159 (9th Cir. 2012). Zoosk’s Terms of Use mirror almost exactly those upheld in 10 Concepcion, and are valid for similar reason. Accordingly, this order does not find Zoosk’s 11 Terms of Use to be substantively unconscionable. 12 Due to the valid class-action waiver that Ms. Greenamyer agreed to in Zoosk’s Terms of 5 13 Use, Plaintiffs’ motion for class certification is DENIED. 14 IT IS SO ORDERED. 16

= 17 Dated: July 27, 2022. 18 Pee 19 AN LLIAM ALSUP 20 UNITED STATES DISTRICT JUDGE 21 22 23 24 25 26 27 28