Kaplan v. The Athletic Media Company

District Court, N.D. California·Decided December 8, 2023·No. 4:23-cv-00229·Unknown

Opinion

REBECCA KAPLAN, et al., Case No. 23-cv-00229-JST

Plaintiffs, ORDER GRANTING DEFENDANT'S v. MOTION TO COMPEL ARBITRATION Re: ECF No. 26 Defendant.

Before the Court is Defendant The Athletic Media Company’s (“The Athletic”) motion to compel arbitration. ECF No. 26. The Court will grant the motion. Plaintiffs Rebecca Kaplan, John Murphy, Johnny Pappas, Michael Tisa, Charlene Egizi, and Jeff Tibayan purchased subscriptions to The Athletic—“a subscription based-online sports news outlet.” ECF No. 27 ¶ 3; see ECF No. 21 ¶¶ 49, 55, 61, 67, 73, 79; see also ECF No. 27 ¶ 5. The Athletic automatically renews a user’s subscription on a monthly or annual basis depending on whether the subscriber purchased a monthlong or yearlong subscription in the first instance. See ECF No. 21 ¶ 2. The Athletic updated its Terms of Service on August 5, 2021 (“2021 Terms of Service”), as well as its Privacy Policy. ECF No. 27 ¶ 44. Subscribers, including Plaintiffs, were notified of this update through an overlay on The Athletic’s mobile application and website that appeared on top of the content being viewed. Id. An image of the overlay appears below: 1 ; ix 3 4 Updated Policies 5 We have made some changes to our Terms of Service 6 and Privacy Policy. By clicking the button below, you acknowledge and consent to our updated policies. For 7 more details and to see the full policies, click here. 8

10 11 12 27-22 at 2. An identical overlay appeared on The Athletic’s website. Id. at 3.

13 Subscribers could not access any content without clicking on the “I Accept” button. ECF No. 27

14 || 944. Each Plaintiff clicked the button. Id. {| 47.

15 The 2021 Terms of Service contains an arbitration agreement that provides, in relevant Q 16 || part,

The parties shall use their best efforts to settle any dispute, claim, question, or disagreement arising out of or relating to the subject Z 18 matter of these Terms directly through good-faith negotiations, which shall be a precondition to either party initiating arbitration. If 19 such negotiations do not resolve the dispute, it shall be finally settled by binding arbitration in San Francisco, California. The 20 arbitration will proceed in the English language, in accordance with the JAMS Streamlined Arbitration Rules and Procedures (the 21 “Rules”) then in effect, by one commercial arbitrator with substantial experience in resolving intellectual property and 22 commercial contract disputes. 23 ECF No. 27-20 at 11. In turn, the JAMS Streamlined Arbitration Rules and Procedures provide, 24 in relevant part, “Jurisdictional and arbitrability disputes . . . shall be submitted to and ruled on by 25 the Arbitrator. The Arbitrator has the authority to determine jurisdiction and arbitrability issues as 26 a preliminary matter.” ECF No. 26-2 at 8. 27 Plaintiffs subsequently filed suit, alleging that The Athletic’s “automatic renewal scheme” 28

fails to comply with California’s Automatic Renewal Law (“ARL”), Cal. Bus. & Prof. Code § 17600 et seq. ECF No. 21 ¶¶ 2–3 (internal quotation marks omitted). As individuals and on behalf of a putative class, Plaintiffs bring claims for (1) violations of California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq.; (2) conversion; (3) violations of California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq.; (4) violations of California’s Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq.; (5) unjust enrichment; (6) negligent misrepresentation; and (7) fraud. Plaintiffs filed the instant motion on May 19, 2023. ECF No. 26. The Court took the motion under submission without a hearing on August 4, 2023. ECF No. 37. The Court has jurisdiction under 28 U.S.C. § 1332(d). The Federal Arbitration Act (“FAA”) applies to written contracts “evidencing a transaction involving commerce.” 9 U.S.C. § 2. The parties agree that the FAA governs the contract at issue in this case. Under the FAA, arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” Id. This provision reflects “both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (quotation marks and citations omitted). On a motion to compel arbitration, the Court’s role under the FAA is “limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). In determining whether an arbitration agreement exists, “district courts rely on the summary judgment standard of Rule 56 of the Federal Rules of Civil Procedure.” Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021). Thus: In considering a motion to compel arbitration which is opposed on the ground that no agreement to arbitrate was made, a district court should give to the opposing party the benefit of all reasonable agreement should a court decide as a matter of law that the parties did or did not enter into such an agreement. Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004) (citations omitted) (cited with approval in Hansen, 1 F.4th at 670). If the court “concludes that there are genuine disputes of material fact as to whether the parties formed an arbitration agreement, the court must proceed without delay to a trial on arbitrability and hold any motion to compel arbitration in abeyance until the factual issues have been resolved.” Hansen, 1 F.4th at 672. If a valid arbitration agreement exists, “the party resisting arbitration bears the burden of proving that the claims at issue are unsuitable for arbitration.” Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000). If the court is “satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4. Where the claims alleged in a complaint are subject to arbitration, the Court “shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.” Id. § 3. “[N]otwithstanding the language of § 3, a district court may either stay the action or dismiss it outright when . . . all of the claims raised in the action are subject to arbitration.” Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014). The parties lar

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