Jack v. Ring LLC

CourtCalifornia Court of Appeal
DecidedMay 25, 2023
DocketA165103
StatusPublished

This text of Jack v. Ring LLC (Jack v. Ring LLC) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Jack v. Ring LLC, (Cal. Ct. App. 2023).

Opinion

Filed 5/25/23 CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION TWO

BRANDON JACK, et al., Plaintiffs and Respondents, A165103, A165386 v. RING LLC, (San Francisco County Super. Ct. No. CGC-20-588258) Defendant and Appellant.

Ring LLC (Ring) manufactures and sells home security and smart home devices including video doorbells, security cameras, and alarms. Brandon Jack and Jean Alda (together, plaintiffs) purchased video doorbell and security camera products from Ring and subsequently filed a class action complaint against Ring asserting claims under various consumer protection statutes. In their lawsuit, plaintiffs seek injunctive relief requiring Ring to prominently disclose to consumers certain information about its products and services. Ring moved to compel arbitration based on an arbitration provision in its terms of service. Opposing the motion, plaintiffs did not dispute that they agreed to Ring’s terms of service, but they argued the applicable arbitration provision violates the California Supreme Court’s holding in McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 961 (McGill) that a predispute arbitration agreement is invalid and unenforceable under state law insofar as

1 it purports to waive a party’s statutory right to seek public injunctive relief. The trial court denied the motion to compel arbitration, and Ring appeals. We affirm. FACTUAL AND PROCEDURAL BACKGROUND Plaintiffs’ Lawsuit Plaintiffs filed their lawsuit on November 19, 2020. They alleged Ring did not inform them “at the time of purchase that the video recording, playback, and snapshot features[,] which were key components of these products[,] would only operate if Plaintiffs paid an additional fee of $3 per month (or $30 per year) per device for a . . . ‘Protect Plan.’ ” They alleged Ring’s failure to clearly disclose the necessity of the Protect Plan before purchase constitutes a deceptive and misleading practice, and brought three causes of action under (1) the Consumers Legal Remedies Act (Civ. Code, § 1750 et seq.; CLRA), (2) the false advertising law (Bus. & Prof. Code, § 17500 et seq.), and (3) the Unfair Competition Law (id., § 17200 et seq.; UCL). Plaintiffs sought “a public injunction” requiring Ring to disclose on its website and on the packaging for its products that many features are not available unless the purchaser also buys a plan from Ring for an additional fee of $3 per month or $30 per year, per device. Ring’s Motion to Compel Arbitration Ring filed a motion to compel arbitration and stay the action. Ring submitted 10 versions of its terms of service—attached as Exhibits B through K to John Modestine’s supporting declaration—without identifying which version or versions it believed controlled. However, in describing the arbitration provision, Ring cited two versions of its terms of service: (1) Exhibit C to Modestine’s declaration, which appeared on Ring’s website August 18 to October 2, 2017, and was, according to Ring, in effect “[a]t the

2 time of Mr. Alda’s purchase” and (2) Exhibit G, which appeared on Ring’s website August 1, 2018, to October 23, 2019, and was in effect “at the time of purchase for Mr. Jack.” These versions of Ring’s terms of service provide, “You and Ring agree that any dispute, controversy, or claim arising out of, or relating to your use of the services and or products, to this agreement, or to the content, any relationship between us and/or any recording on the services and/or products shall be resolved only by final and binding, bilateral arbitration” except that (1) “you” [i.e., customers] may bring claims that qualify for its jurisdiction in small claims court and (2) either party may seek injunctive or other equitable relief in state or federal court in Los Angeles County to protect that party’s intellectual property rights. (Capitalization omitted.) 1 Ring asserted the arbitration provision includes an express delegation clause delegating issues of arbitrability to the arbitrator, again citing Exhibits C and G. These versions of the arbitration provision specify that “the arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve all disputes arising out of or relating to the interpretation, applicability, enforceability or formation of these Terms, including, but not limited to any claim that all or any part of these Terms are void or voidable, or whether a claim is subject to arbitration.” 2

1Ring noted that its terms of service had been “updated since the relevant time period, but the quoted language concerning arbitration has not materially changed during this time period,” citing all 10 versions of the terms of service attached to Modestine’s declaration. We further observe that the two most recent versions of the terms of service provided by Ring, Exhibits J and K, contain the same language except that “and or” has been replaced by “and/or.” 2 The same language is found in Exhibits J and K.

3 Opposing the motion, plaintiffs pointed out that Ring never identified which version of the terms of service it was attempting to enforce, and they urged that Ring’s vagueness “waived its right and obligation to identify which version governs.” In any event, plaintiffs argued that each of the 10 versions “(1) specifies that a court decides the enforceability of the prohibition of public injunctive relief, (2) violates McGill due to the prohibition of public injunctive relief; and (3) contains a poison pill which states that, in the event of a McGill violation, the entire claim or set of claims is to be tried in a court.” (Bolding and italics omitted.) Plaintiffs took the position that the terms of service in effect at the time their lawsuit was filed, Exhibit J to Modestine’s Declaration, governed. 3 Plaintiffs argued that, despite the delegation clause relied on by Ring, the trial court could decide whether the arbitration provision was enforceable under McGill because the provision includes “a carve-out” from the delegation clause “for McGill-style issues.” They quoted the following language (citing Exhibit J): “We each agree that any dispute resolution

3 Plaintiffs argued the version of the terms of service shown in Exhibit J applies to their current dispute with Ring because, “[w]ith each new version of the Terms, Ring purported to effect a novation that extinguished the prior version” (citing Civ. Code, § 1530), and, thus, “Exhibit J superseded Exhibit I, which superseded Exhibit H, etc.” But they posited Exhibit K (which appeared on Ring’s website starting on December 8, 2020) could not apply to their current dispute because Ring could not unilaterally alter the terms of the arbitration provision after plaintiffs filed their lawsuit in November 2020, citing In re Currency Conversion Fee Antitrust Litigation (S.D.N.Y. 2005) 361 F.Supp.2d 237, 253 [“when a defendant contacts putative class members for the purpose of altering the status of a pending litigation, such communication is improper without judicial authorization”] and Balasanyan v. Nordstrom, Inc. (S.D.Cal. Mar. 8, 2012) 2012 WL 760566, * 4 [invalidating a new arbitration agreement because it was an “improper attempt to alter the pre- existing arbitration agreement with putative class members during litigation”].)

4 proceedings will be conducted only on an individual basis and not in a class, representative or private attorney general action. Further, unless both you and Ring expressly agree otherwise, the arbitrator may not consolidate more than one person’s claims and may not otherwise preside over any form of a representative or class proceeding.

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Jack v. Ring LLC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/jack-v-ring-llc-calctapp-2023.