Gonzalez-Torres v. Zumper, Inc.

• Court: District Court, N.D. California
• Decided: December 2, 2019
• Docket: 4:19-cv-02183
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA

7 LUIS ARMANDO GONZALEZ- TORRES, Case No. 19-cv-02183-PJH 8 Plaintiff, 9 ORDER COMPELLING ARBITRATION v. AND STAYING ACTION 10 ZUMPER, INC., Re: Dkt. No. 24 11 Defendant. 12

13 14 Defendant Zumper, Inc.’s (“Zumper”) motion to compel arbitration and stay 15 proceedings came on for hearing before this court on October 23, 2019. Plaintiff 16 appeared through his counsel, Erika Heath. Defendant appeared through its counsel, 17 David Goldstein and John Shope. Having read the papers filed by the parties and 18 carefully considered their arguments and the relevant legal authority, and good cause 19 appearing, the court hereby GRANTS the motion, for the following reasons. 20 BACKGROUND 21 On April 23, 2019, plaintiff Luis Armando Gonzalez-Torres filed a class-action 22 complaint against Zumper, originating this action. Compl., Dkt. 1. Zumper operates a 23 website that enables prospective renters to search and apply for apartment rentals, and 24 allows landlords and realtors to evaluate and communicate with prospective tenants. 25 Plaintiff signed up for and used the website as a prospective renter looking for an 26 apartment to rent. 27 The complaint asserts seven causes of action: (1) violation of the Fair Credit 1 to assure the maximum possible accuracy of the information it reported about prospective 2 renters when preparing reports about them; (2) violation of California Consumer Credit 3 Reporting Agencies Act (“CCRAA”), Cal. Civ. Code § 1785.14(b), based on the same 4 conduct; (3) violation of FCRA, 15 U.S.C. § 1681i(a)(1)(A), for failing to conduct a 5 reasonable reinvestigation to determine whether plaintiff’s disputes about inaccuracies in 6 his record were accurate, or delete the disputed item within 30 days; (4) violation of 7 CCRAA, Cal. Civ. Code § 1785.16(a), based on the same conduct; (5) violation of FCRA, 8 15 U.S.C. § 1681j(f), for charging plaintiff more than the maximum allowable amount to 9 disclose all information in plaintiff’s Zumper file; (6) violation of FCRA, 15 U.S.C. 10 § 1681g(a)(2), for failure to disclose to plaintiff the sources of the public record 11 information it includes in the Zumper file; and (7) violation of CCRAA, Cal. Civ. Code 12 § 1785.18(a), for the same conduct. See Compl. 13 On June 17, 2019, Zumper filed the present motion to compel arbitration and stay 14 the action. Dkt. 24. Zumper argues that plaintiff and Zumper entered into an enforceable 15 arbitration agreement encompassing plaintiff’s claims when plaintiff created a Zumper 16 account. 17 Gonzalez-Torres alleges that on or about February 27, 2018, he accessed 18 Zumper’s website and submitted a rental application. Compl. ¶¶ 34–38. Zumper’s 19 records align with that allegation and indicate that an individual with the name Luis 20 Gonzalez created an account on February 27, 2018, and then submitted a rental 21 application, including credit, criminal history, and eviction reports to a realtor. Declaration 22 of Brian Coyne, Dkt. 24-1 (“First Coyne Decl.”) ¶¶ 19–24. 23 Gonzalez-Torres alleges that Zumper published a consumer report that 24 erroneously associated him with criminal offenses of an individual named Luis Raymond 25 Gonzalez. Compl. ¶¶ 40, 43. Gonzalez-Torres alleges that this error was the result of 26 Zumper’s having used “very loose matching criteria” in preparing the report. Id. ¶ 44. 27 Gonzalez-Torres alleges that his rental applications were denied and that the inaccuracy 1 contacted Zumper to dispute the entry on his criminal history report, but that he did not 2 receive an adequate response. Id. {] 48, 52-59. 3 A prospective Zumper user attempting to rent an apartment would begin the 4 || process by creating a Zumper account. Before doing so, the user views a notice 5 || informing him that by creating an account, he accepts Zumper’s “Terms and Conditions.” 6 || That phrase “Terms and Conditions” is a blue hyperlink. Neither party disputes these 7 || facts, nor that plaintiff viewed a screen with these elements before creating his account. 8 || See, e.g., First Coyne Decl. {| 4-17; Reply at 4 (“when a consumer such as 9 || Mr. Gonzalez-Torres creates a Zumper account” he does not agree to the linked-to 10 || document); Declaration of Maria Battle, Dkt. 32-1 (“Battle Decl.”) J 3 (plaintiff's witness 11 describing website functioning after clicking “Create an account”). The screen looked 12 || approximately like this:

13 5 14 Create Account 15

17 18 19 20 21 22 annie 23 24 1 1 sa Tveacy Pol . Already & mania? Sign tin 25 26 || First Coyne Decl. {11-12 (the phrases “Terms and Conditions,” “Privacy Policy,” and 27 || “Sign In” are in blue, and are readily recognizable as hyperlinks). 28 The blue phrase “Terms and Conditions” linked to www.zumper.com/terms-of-use.

1 First Coyne Decl. ¶ 17. That document, as displayed at the relevant time (February 27, 2 2018), presented with a heading entitled “Terms of Use.” Id. ¶¶ 36–39 & Ex. C 3 (Exhibit C, filed at Dkt. 24-4, is the “Agreement”) at ECF p. 2. Following that title, the first 4 paragraph stated in part: “These terms of use are entered into by and between you and 5 Zumper. The following terms and conditions, together with any documents they 6 expressly incorporate by reference (collectively, the ‘Agreement’), govern your access to 7 and use of the Website and the Services, whether as a guest or a registered user.” 8 Agreement at ECF p. 2. 9 The Agreement later included the following provision, at Section 14 (entitled 10 “Arbitration and Dispute Resolution”):

11 All disputes arising out of or relating to this Agreement, the Website or the Services shall be resolved exclusively by 12 binding arbitration before a single arbitrator (the “Arbitrator”) in accordance with the Commercial Arbitration Rules of the 13 American Arbitration Association (the “AAA”) then in effect (for information on the AAA and its rules, see www.adr.org.) and 14 the further procedures set forth herein, except that each party retains the right to seek injunctive or other equitable relief in a 15 court of competent jurisdiction to prevent the actual or threatened infringement, misappropriation or violation of a 16 party’s copyrights, trademarks, trade secrets, patents or other intellectual property rights. The arbitration shall be conducted 17 in San Francisco, California, unless the Arbitrator shall determine that that venue is not reasonably convenient to all 18 parties, in which case the Arbitrator shall determine another venue that is. In the event that the AAA is unavailable or 19 unwilling to administer the arbitration, and the parties are unable to agree to a substitute, a substitute shall be appointed 20 by the court. The Arbitrator shall have authority to issue any and all remedies authorized by law. The arbitration shall be 21 governed by the Federal Arbitration Act, 9 U.S.C. §§ 2 et seq. Notwithstanding any rules of the AAA to the contrary, any 22 claims shall be adjudicated on an individual basis only, and YOU WAIVE ANY RIGHT TO BRING ANY CLAIM AS A 23 REPRESENTATIVE OF A PROPOSED CLASS, ON AN AGGREGATED OR MASS BASIS, OR AS A PRIVATE 24 ATTORNEY GENERAL, OR TO CONSOLIDATE ARBITRATION PROCEEDINGS WITHOUT THE CONSENT 25 OF ALL PARTIES THERETO. Any award rendered by the Arbitrator shall be final, conclusive and binding upon the parties 26 hereto. . . . 27 Id. § 14. 1 the website’s users. For example, the parties agree that to the extent a user was initially 2 directed to Zumper to create an account from a realtor’s referral link, after finishing the 3 account creation process described above he would be presented with a pop-up screen 4 entitled “Terms and Conditions,” which displayed terms and conditions that a user agreed 5 to “[b]y using Zumper[.]” Third Declaration of Brian Coyne, Dkt. 39 (“Third Coyne Decl.”) 6 ¶¶ 10 & 15; Declaration of Luis Armando Gonzalez-Torres, Dkt. 26-2 (“Gonzalez-Torres 7 Decl.”) ¶¶ 2–4. Plaintiff alleges that he was directed to create an account with Zumper 8 through a realtor’s referral link, and as such after creating an account he was presented 9 with that “Terms and Conditions” pop-up screen. Compl. ¶¶ 34–36; Battle Decl. ¶ 3; 10 Third Coyne Decl. ¶ 15. 11 DISCUSSION 12 A. Legal Standard 13 1. Motion to Compel Arbitration 14 Under the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (“FAA”), any party bound 15 to an arbitration agreement that falls within the scope of the FAA may bring a motion in 16 federal district court to compel arbitration and stay the proceeding pending resolution of 17 the arbitration. 9 U.S.C. §§ 3–4; see also Lifescan, Inc. v. Premier Diabetic Servs., Inc., 18 363 F.3d 1010, 1012 (9th Cir. 2004); Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 19 119 (2001) (FAA applies to arbitration agreements in any contract affecting interstate 20 commerce). The FAA requires the court to compel arbitration of issues covered by the 21 arbitration agreement. Dean Witter Reynolds, Inc., v. Byrd, 470 U.S. 213, 218 (1985). 22 In ruling on a motion to compel arbitration under the FAA, the district court’s role is 23 typically limited to determining whether (i) an agreement exists between the parties to 24 arbitrate; (ii) the claims at issue fall within the scope of the agreement; and (iii) the 25 agreement is valid and enforceable. Lifescan., 363 F.3d at 1012; Chiron Corp. v. Ortho 26 Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). If the answers are yes, the 27 court must enforce the agreement. Lifescan, 363 F.3d at 1012. 1 underscores the U.S. Supreme Court’s arbitration decisions is that “[a]rbitration is strictly 2 a matter of consent, and thus is a way to resolve those disputes—but only those 3 disputes—that the parties have agreed to submit to arbitration.” Granite Rock Co. v. Int’l 4 B’hd of Teamsters, 561 U.S. 287, 299 (2010) (quotations and citations omitted); see also 5 First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995). Thus, “a court may 6 order arbitration of a particular dispute only where the court is satisfied that the parties 7 agreed to arbitrate that dispute.” Granite Rock, 561 U.S. at 297. 8 Regarding the validity of the agreement, the FAA provides that arbitration clauses 9 “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in 10 equity for the revocation of any contract.” 9 U.S.C. § 2. Thus, state contract defenses 11 may be applied to invalidate arbitration clauses if those defenses apply to contracts 12 generally. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996); Circuit City 13 Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002) (state law defense, such as 14 unconscionability, that applies to contracts generally may also invalidate an arbitration 15 agreement). “The party seeking arbitration bears the burden of proving the existence of 16 an arbitration agreement, and the party opposing arbitration bears the burden of 17 proving any defense, such as unconscionability.” Pinnacle Museum Tower Assn. v. 18 Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012). 19 Regarding the scope of the agreement, “any doubts concerning the scope of 20 arbitrable issues should be resolved in favor of arbitration.” Moses H. Cone Mem'l Hosp. 21 v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983). Nevertheless, a motion to compel 22 arbitration should be denied if “it may be said with positive assurance that the arbitration 23 clause is not susceptible of an interpretation that covers the asserted dispute.” AT&T 24 Techs., Inc. v. Commc’n Workers, 475 U.S. 643, 650 (1986). 25 2. Motion to Stay 26 “If any suit or proceeding be brought in any of the courts of the United States upon 27 any issue referable to arbitration under an agreement in writing for such arbitration, the 1 suit or proceeding is referable to arbitration under such an agreement, shall on 2 application of one of the parties stay the trial of the action until such arbitration has been 3 had in accordance with the terms of the agreement[.]” 9 U.S.C. § 3 (emphasis added). 4 Therefore, if the court has determined that the arbitration agreement is valid, and that the 5 dispute falls within its terms, the court must stay further proceedings pending arbitration. 6 B. Analysis 7 First, plaintiff disputes that the parties formed an agreement to arbitrate. Second, 8 he argues that if an agreement to arbitrate was formed, it is unconscionable. Third, he 9 argues that if an enforceable arbitration agreement exists, he asserts claims that are not 10 subject to arbitration. The court addresses each issue in turn. 11 1. Whether an Agreement to Arbitrate was Formed 12 “While the FAA requires a writing, it does not require that the writing be signed by 13 the parties.” Nghiem v. NEC Elec., Inc., 25 F.3d 1437, 1439 (9th Cir. 1994) (internal 14 quotation marks omitted). “We ‘apply ordinary state-law principles that govern the 15 formation of contracts’ to decide whether an agreement to arbitrate exists.’” Norcia v. 16 Samsung Telecommunications Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017) (quoting 17 First Options of Chi., Inc., 514 U.S. at 944). Here, the parties agree that California law 18 governs the issue of contract formation. Mot. at 11; Opp. at 3, 5. “In discerning 19 California law, we are bound by the decisions of the California Supreme Court, ‘including 20 reasoned dicta.’” Norcia, 845 F.3d at 1284 (quoting Muniz v. United Parcel Serv., Inc., 21 738 F.3d 214, 219 (9th Cir. 2013)). “We generally will ‘follow a published intermediate 22 state court decision regarding California law unless we are convinced that the California 23 Supreme Court would reject it.’” Id. (quoting Muniz, 738 F.3d at 219). 24 “Under California law, the petitioner bears the burden of proving the existence of 25 an arbitration agreement by the preponderance of the evidence” (Perez v. Maid Brigade, 26 Inc., Case No. 07-cv-3473-SI, 2007 WL 2990368, at *3 (N.D. Cal. Oct. 11, 2007)), “and 27 the party opposing arbitration bears the burden of proving any defense, such as 1 be inferred absent a ‘clear agreement.’” Davis v. Nordstrom, Inc., 755 F.3d 1089, 1092 2 (9th Cir. 2014) (quoting Avery v. Integrated Healthcare Holdings, Inc., 218 Cal. App. 4th 3 50, 59 (2013)). “In California, a ‘clear agreement’ to arbitrate may be either express or 4 implied in fact.” Davis, 755 F.3d at 1093. 5 In California, “mutual consent is gathered from the reasonable meaning of the 6 words and acts of the parties, and not from their unexpressed intentions or 7 understanding.” Reigelsperger v. Siller, 40 Cal. 4th 574, 579 (2007) (citing 1 Witkin, 8 Summary of Cal. Law (10th ed. 2005) Contracts, § 116, p. 155). “[T]he terms of a 9 contract ordinarily are to be determined by an external, not an internal, standard; the 10 outward manifestation or expression of assent is the controlling factor.” Windsor Mills, 11 Inc. v. Collins & Aikman Corp., 25 Cal. App. 3d 987, 992 (1972). “Although mutual 12 consent is a question of fact, whether a certain or undisputed state of facts establishes a 13 contract is a question of law for the court.” Deleon v. Verizon Wireless, LLC, 207 Cal. 14 App. 4th 800, 813 (2012). 15 When an offer is accepted, “[a] party who is bound by a contract is bound by all its 16 terms, whether or not the party was aware of them. A party cannot avoid the terms of a 17 contract on the ground that he or she failed to read it before signing.” Norcia, 845 F.3d at 18 1284 (internal quotation marks omitted); Pinnacle Museum, 55 Cal. 4th at 236 (“An 19 arbitration clause within a contract may be binding on a party even if the party never 20 actually read the clause.”); Windsor Mills, 25 Cal. App. 3d at 992 (“an offeree, knowing 21 that an offer has been made to him but not knowing all of its terms, may be held to have 22 accepted, by his conduct, whatever terms the offer contains”). 23 The parties do not dispute the relevant facts necessary to determine whether an 24 agreement to arbitrate was formed. Because defendant was able to determine that 25 plaintiff used a computer with the Windows 10 operating system to create his account, 26 defendant was able to provide an image of the account creation window, shown above, 27 as it would have appeared to plaintiff. See First Coyne Decl. ¶¶ 11–12 & 23. Plaintiff has 1 Plaintiff does not dispute that, before creating his account, he was presented with 2 a link to “Terms and Conditions.” See, e.g., Reply at 4; Battle Decl. ¶ 3; see also First 3 Coyne Decl. ¶¶ 4–17. The same screen also provided that “By creating a Zumper 4 account you indicate your acceptance of our Terms and Conditions and Privacy Policy.” 5 First Coyne Decl. ¶¶ 11 & 15. The entirety of the account creation window, including that 6 text, was immediately visible and did not require any scrolling to read. Id. ¶¶ 11, 15. The 7 words “Terms and Conditions” and “Privacy Policy” appeared in blue, indicating they 8 were hyperlinks, whereas the rest of the sentence (including the word “and” between the 9 two blue phrases) appeared in black. Id. ¶¶ 11, 16. The text “Terms and Conditions” 10 linked to a document with a heading “Terms of Use” found at www.zumper.com/terms-of- 11 use, where Gonzalez-Torres could have read Zumper’s terms. Id. ¶¶ 17, 37. As they 12 existed at the time plaintiff created his account, the terms included an arbitration 13 agreement. Id. ¶¶ 36–39 & Ex. C. After being presented with that screen, Gonzalez- 14 Torres created an account at 11:36 a.m. Pacific Standard Time, on February 27, 2018. 15 Id. ¶¶ 7, 19, 22; Compl. ¶¶ 34–37. 16 Plaintiff does not dispute that under normal circumstances, the applicable 17 principles of contract law dictate that those linked-to terms would be part of the 18 contractual agreement. But plaintiff argues that defendant pulled a bait-and-switch, 19 based on two features of Zumper’s account-creation process. 20 First, the initial signup page indicated that the user was agreeing to “Terms and 21 Conditions” (which was linked text), but if a user clicked on the link, he would have been 22 brought to a document titled “Terms of Use.” So, plaintiff argues that if someone clicked 23 that link, it would not be clear whether he was agreeing to the terms in the linked-to 24 document because its heading differed from the linked text.1 25 The Agreement’s language here is clear, and the parties’ actions evidence mutual 26

27 1 Plaintiff’s arguments are all asserted with respect to a hypothetical reasonable user, as 1 consent to the linked-to terms. The signup page clearly incorporates the linked-to terms, 2 and although the heading is different from the linked text, a reasonable person reading 3 that document would understand that it contained the terms agreed to when creating an 4 account. To the extent plaintiff argues that a reasonable person would be confused by 5 the Agreement’s heading, it would require reading only to the third sentence to clarify that 6 the document referred to its own contents as “terms and conditions.” See Agreement at 7 ECF p. 2. Plaintiff is not saved by declining to read the incorporated terms, because 8 when an offer is accepted, “[a] party who is bound by a contract is bound by all its terms, 9 whether or not the party was aware of them. A party cannot avoid the terms of a contract 10 on the ground that he or she failed to read it before signing.” Norcia, 845 F.3d at 1284 11 (internal quotation marks omitted). 12 Second, plaintiff argues that there was no mutual assent to the arbitration clause 13 because, after the account creation process was complete, Zumper displayed a pop-up 14 screen with the heading “Terms and Conditions.” See Gonzalez-Torres Decl. ¶¶ 2–5; 15 Battle Decl. ¶¶ 2–5; Third Coyne Decl. ¶¶ 5–6, 10 & 15 (explaining the website 16 functioned this way for users who created an account using an invitation link from a 17 realtor). Given the existence of that pop-up screen, plaintiff argues that it was ambiguous 18 as to which set of terms the user agreed when creating his account. But by the time a 19 user would have been presented with this new pop-up screen, the user would have 20 already created an account and therefore have already entered into the Agreement, 21 which included a provision requiring arbitration of certain disputes. Plaintiff’s argument 22 that these separate terms and conditions were presented simply alleges a separate 23 contractual agreement. But plaintiff has not argued that the terms of this second 24 agreement revoked or superseded the arbitration provision in the Agreement entered into 25 during account creation. 26 For the foregoing reasons, the court finds that defendant has met its burden to 27 establish that the Agreement—containing an arbitration provision—was entered into by 1 2. Whether the Agreement is Unconscionable 2 “Under California law, courts may refuse to enforce any contract found ‘to have 3 been unconscionable at the time it was made,’ or may ‘limit the application of any 4 unconscionable clause.’” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 340 (2011) 5 (quoting Cal. Civ. Code § 1670.5(a)). “The party resisting arbitration bears the burden of 6 proving unconscionability. Both procedural unconscionability and substantive 7 unconscionability must be shown, but they need not be present in the same degree and 8 are evaluated on a sliding scale. The more substantively oppressive the contract term, 9 the less evidence of procedural unconscionability is required to come to the conclusion 10 that the term is unenforceable, and vice versa.” Pinnacle Museum, 55 Cal. 4th at 247 11 (citations and internal quotation marks omitted). 12 “To determine whether the arbitration agreement is procedurally unconscionable 13 the court must examine the manner in which the contract was negotiated and the 14 circumstances of the parties at that time.” Ingle v. Circuit City Stores, Inc., 328 F.3d 15 1165, 1171 (9th Cir. 2003) (internal quotation marks omitted). “[P]rocedural 16 unconscionability requires oppression or surprise. Oppression occurs where a contract 17 involves lack of negotiation and meaningful choice[.]” Pinnacle Museum, 55 Cal. 4th at 18 247 (citations and internal quotation marks omitted). “A contract is oppressive if an 19 inequality of bargaining power between the parties precludes the weaker party from 20 enjoying a meaningful opportunity to negotiate and choose the terms of the contract.” 21 Ingle, 328 F.3d at 1171. “Surprise involves the extent to which the supposedly agreed- 22 upon terms of the bargain are hidden in the prolix printed form drafted by the party 23 seeking to enforce the disputed terms.” Id.; Pinnacle Museum, 55 Cal. 4th at 247. 24 “Substantive unconscionability pertains to the fairness of an agreement's actual 25 terms and to assessments of whether they are overly harsh or one-sided. A contract 26 term is not substantively unconscionable when it merely gives one side a greater benefit; 27 rather, the term must be so one-sided as to ‘shock the conscience.’” Pinnacle Museum, 1 agreement must call for arbitration that “meet[s] certain minimum requirements, including 2 neutrality of the arbitrator, the provision of adequate discovery, a written decision that will 3 permit a limited form of judicial review, and limitations on the costs of arbitration.” Craig 4 v. Brown & Root, Inc., 84 Cal. App. 4th 416, 422 (2000); accord Wherry v. Award, Inc., 5 192 Cal. App. 4th 1242, 1248 (2011) (“To be valid, at minimum the arbitration agreement 6 must require a neutral arbitrator, sufficient discovery, and a written decision adequate 7 enough to allow judicial review.”). 8 The court assumes without deciding that the Agreement was procedurally 9 unconscionable. 10 Regarding substantive unconscionability, plaintiff does not challenge the 11 Agreement based on any defect in the arbitration process that it requires. Specifically, 12 plaintiff does not argue that the mandatory arbitration does not have a neutral arbitrator, 13 adequate discovery, a reviewable written decision, or limitations on costs. See Craig, 84 14 Cal. App. 4th at 422. Instead, plaintiff raises four other challenges. 15 First, plaintiff argues that the Agreement eliminates the availability of public 16 injunctive relief in any forum, in violation of the law. The Agreement does not do that, as 17 discussed below. 18 Second, plaintiff argues the Agreement is not mutual because it allows all parties 19 to litigate in court—rather than arbitrate—intellectual property disputes. Plaintiff 20 concedes that term is facially mutual. But he argues that defendant is more likely than its 21 contracting partners to originate intellectual property disputes, so in practical effect the 22 term is not mutual. Here, it is speculative whether Zumper or those who enter into this 23 Agreement by creating an account (which include realtors and other professionals) are 24 more likely to originate an intellectual property dispute and/or benefit from this provision. 25 Moreover, Zumper has a legitimate interest in protecting its intellectual property, and it is 26 “entitled to an extra ‘margin of safety’ based on legitimate business needs.” Tompkins v. 27 23andMe, Inc., 840 F.3d 1016, 1031 (9th Cir. 2016). As such, the intellectual property 1 carve-out is not substantively unconscionable.2 2 Third, plaintiff argues that the Agreement generally—separate from the arbitration 3 provision—does not allow for punitive or special damages. Defendant responds that the 4 same section of the Agreement provides that “SOME JURISDICTIONS DO NOT ALLOW 5 THE LIMITATION OR EXCLUSION OF WARRANTIES OR OF LIABILITY, SO SOME OF 6 THE ABOVE LIMITATIONS OR EXCLUSIONS MAY NOT APPLY TO YOU.” See 7 Agreement §§ 11(f)–(g). Reading the section in its entirety, it provides for its own 8 inapplicability in jurisdictions where it would limit statutorily-imposed damages and as a 9 result be unconscionable. As such, this provision does not render the Agreement 10 unconscionable. 11 Fourth, plaintiff argues that given the above-argued substantive problems in 12 combination, the entire Agreement should be deemed unenforceable rather than excise 13 any offending provisions. 14 “Civil Code section 1670.5, subdivision (a) provides that ‘[i]f the court as a matter 15 of law finds the contract or any clause of the contract to have been unconscionable at the 16 time it was made the court may refuse to enforce the contract, or it may enforce the 17 remainder of the contract without the unconscionable clause, or it may so limit the 18 application of any unconscionable clause as to avoid any unconscionable result.’” 19 Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 121–22 (2000) 20 (quoting Cal. Civ. Proc. Code. § 1670.5(a)). “Thus, the statute appears to give a trial 21 court some discretion as to whether to sever or restrict the unconscionable provision or 22 whether to refuse to enforce the entire agreement. But it also appears to contemplate the 23 latter course only when an agreement is ‘permeated’ by unconscionability.” Id. at 122. “If 24 the central purpose of the contract is tainted with illegality, then the contract as a whole 25 cannot be enforced. If the illegality is collateral to the main purpose of the contract, and 26 the illegal provision can be extirpated from the contract by means of severance or 27 1 restriction, then such severance and restriction are appropriate.” Id. at 124. 2 Here, to the extent there are unconscionable provisions, they are discrete, easily 3 excisable, and do not concern the central purpose of the Agreement. As such, even if 4 any of the provisions plaintiff has identified were in fact unconscionable (none of which 5 relate to arbitration of this non-intellectual-property-based dispute), the court would 6 excise them rather than render the entire Agreement unenforceable. 7 For the foregoing reasons, the Agreement is not unconscionable. 8 3. Whether Claims for Public Injunctive Relief Can be Arbitrated 9 Plaintiff argues that he asserts claims for public injunctive relief, which the 10 arbitration agreement does not allow to be arbitrated. Defendant argues that the 11 Agreement allows the arbitrator to award public injunctive relief. 12 State contract defenses may invalidate arbitration clauses if those defenses apply 13 to contracts generally. Doctor's Assocs., Inc., 517 U.S. at 687. Contracts that prevent all 14 adjudication of public injunctive relief—in any forum—are impermissible under California 15 law. McGill, 2 Cal. 5th at 961 (“insofar as the arbitration provision here purports to waive 16 McGill's right to request in any forum such public injunctive relief, it is invalid and 17 unenforceable under California law”). That includes contracts that compel all claims to 18 arbitration, yet only allow an arbitrator to award relief affecting the individual who brought 19 the claim. See id.; Dornaus v. Best Buy Co., Case No. 18-cv-04085-PJH, 2019 WL 20 632957, at *4 (N.D. Cal. Feb. 14, 2019) (arbitrator “may award relief only on an individual 21 basis”); Blair v. Rent-A-Ctr., Inc., Case No. 17-cv-02335-WHA, 2017 WL 4805577, at *5 22 (N.D. Cal. Oct. 25, 2017) (“the arbitrator was prohibited from ‘award[ing] relief that would 23 affect RAC account holders other than [the customer]’”). However, a contract compelling 24 arbitration of a claim seeking a remedy of public injunctive relief that allows the arbitrator 25 to award such relief is valid and enforceable under McGill. See Magana v. DoorDash, 26 Inc., 343 F. Supp. 3d 891, 901 (N.D. Cal. 2018). 27 Here, the Agreement requires that “[a]ll disputes arising out of or relating to this 1 arbitration before a single arbitrator[.]” Agreement § 14. That term unambiguously 2 requires that all disputes be resolved exclusively in arbitration (except, as discussed 3 above, intellectual property disputes). 4 Next, the Agreement provides that “The Arbitrator shall have authority to issue any 5 and all remedies authorized by law.” Id. The Agreement also provides that “any claims 6 shall be adjudicated on an individual basis only, and YOU WAIVE ANY RIGHT TO 7 BRING ANY CLAIM AS A REPRESENTATIVE OF A PROPOSED CLASS, ON AN 8 AGGREGATED OR MASS BASIS, OR AS A PRIVATE ATTORNEY GENERAL, OR TO 9 CONSOLIDATE ARBITRATION PROCEEDINGS WITHOUT THE CONSENT OF ALL 10 PARTIES THERETO.” Id. Read together, those terms provide that claims must be 11 brought and arbitrated individually, and the arbitrator may award “any and all remedies 12 authorized by law”—including public injunctive relief—when adjudicating those 13 individually-asserted claims. Although a plaintiff may not assert claims on behalf of a 14 class in arbitration, the Agreement does not prohibit plaintiff from being awarded public 15 injunctive relief as a remedy for his individually-asserted claims in arbitration. As such, 16 the Agreement does not prevent plaintiff from obtaining public injunctive relief in any 17 forum. 18 CONCLUSION 19 For the foregoing reasons, plaintiff is COMPELLED TO ARBITRATE HIS CLAIMS 20 AGAINST ZUMPER in accordance with this order. The entire action is hereby STAYED 21 until such arbitration has been had in accordance with the terms of the Agreement, in 22 accordance with 9 U.S.C. § 3. 23 IT IS SO ORDERED. 24 Dated: December 2, 2019 25 /s/ Phyllis J. Hamilton PHYLLIS J. HAMILTON 26 United States District Judge 27