Lee v. Plex, Inc.

CourtDistrict Court, N.D. California
DecidedMarch 28, 2025
Docket5:24-cv-02386
StatusUnknown

This text of Lee v. Plex, Inc. (Lee v. Plex, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lee v. Plex, Inc., (N.D. Cal. 2025).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 RICHARD LEE, Case No. 24-cv-02386-EKL

8 Plaintiff, ORDER GRANTING MOTION TO 9 v. DISMISS IN PART

10 PLEX, INC., et al., Re: Dkt. No. 22 Defendants. 11

12 13 This action arises from Plaintiff’s use of Defendants’ online video streaming service, Plex. 14 First Am. Compl. ¶ 1, ECF No. 21 (“Compl.”). Plaintiff alleges that Defendants surreptitiously 15 tracked his viewing activities and shared them with Meta without his consent. Id. ¶ 2. Defendants 16 filed an omnibus motion to compel arbitration, to dismiss the complaint for lack of personal 17 jurisdiction and for failure to state a claim, to strike class allegations, and to transfer the case to 18 Delaware. Mot. to Dismiss, ECF No. 22 (“Mot.”). For the following reasons, the Court GRANTS 19 the motion to dismiss for lack of personal jurisdiction, but otherwise DENIES the motion. 20 I. BACKGROUND1 21 Defendants are Plex GmbH and Plex, Inc. Plex GmbH is “a Swiss corporation with its 22 principal place of business” in Berlin, Germany. Id. ¶ 8. Plex, Inc. is “a Delaware corporation 23 with its principal place of business” in Los Gatos, California. Id. ¶ 7. The complaint refers to 24 Plex GmbH and Plex, Inc. collectively as “Defendants” or “Plex,” without attributing conduct to 25 one Plex entity or the other. Compl. at 1; see also infra Section III.B. Accordingly, the Court will 26 refer to Defendants collectively as “Plex,” except when necessary to distinguish them. 27 1 Plex offers “TV, video, and movie streaming” through its streaming service, which is also 2 called “Plex.” Compl. ¶ 1. Plaintiff “subscribed to Plex’s streaming service in 2020 and 3 continued to watch videos on the service until as recently as April 2024.” Id. ¶ 6. Plaintiff claims 4 that Plex uses the Meta Tracking Pixel to “secretly and surreptitiously send[] consumers’ viewing 5 activities to third-party providers like . . . [Meta] without consent.” Id. ¶ 2. “The Meta Tracking 6 Pixel is a piece of code that businesses, like [Plex], can integrate into their website.” Id. ¶ 24. 7 The Meta Tracking Pixel works by “attach[ing] to the browser that the user uses to access their 8 Facebook account” and then “follows the user’s web activity occurring within that same browser.” 9 Id. ¶ 27. 10 Relevant here, “[w]hen a consumer watches a video on Plex on the same browser they 11 access their Facebook account,” Plex allows the Meta Tracking Pixel to share the user’s viewing 12 activity with Meta. Id. ¶ 34. Plaintiff alleges that he visits the Plex website to “watch videos 13 using the same web browser he uses to access his facebook.com account,” id. ¶ 6, thus Plex has 14 shared his viewing activity with Meta. Plex allegedly sends Meta “the name of the video” that the 15 user watched or requested along with “the user’s unique, identifying Facebook ID” and email 16 address. Id. ¶¶ 36, 43-44, 66, 82. Meta allegedly uses “video consumption habits to build profiles 17 on consumers and deliver targeted advertisements to them[.]” Id. ¶ 5. 18 Plaintiff claims that Plex’s conduct violates the Video Privacy Protection Act (“VPPA”), 19 18 U.S.C. §§ 2710 et seq., and California Civil Code § 1799.3. See Compl. ¶¶ 78-96. Plex filed a 20 multi-part motion seeking several forms of relief. Many of Plex’s arguments turn on the threshold 21 question of whether Plaintiff agreed to Plex’s terms of use and privacy policy by creating an 22 account on the Plex website. The Court addresses this question in resolving Plex’s motion to 23 compel arbitration, then addresses Plex’s other motions in turn. 24 25 26 27 1 II. MOTION TO COMPEL ARBITRATION 2 A. Legal Standard 3 In deciding whether to compel arbitration, a court must determine: “(1) whether there is an 4 agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute.” 5 Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). State contract law governs the 6 contract formation question. Berman v. Freedom Fin. Network, LLC, 30 F.4th 849, 855 (9th Cir. 7 2022). The parties agree that California law applies. See Mot. at 7; Opp. at 3. The burden is on 8 Plex to demonstrate that there was mutual assent to the agreement to arbitrate. Jackson v. 9 Amazon.com, Inc., 65 F.4th 1093, 1099 (9th Cir. 2023). 10 B. Discussion 11 Here, the existence of an agreement to arbitrate depends on whether Plaintiff agreed to 12 Plex’s terms of service by signing up for a Plex account on Plex’s website in April 2020. 13 See Compl. ¶¶ 6, 64. “In California, internet contracts are classified ‘by the way in which the user 14 purportedly gives their assent to be bound by the associated terms: browsewraps, clickwraps, 15 scrollwraps, and sign-in wraps.’” Keebaugh v. Warner Bros. Ent. Co., 100 F.4th 1005, 1014 16 (9th Cir. 2024) (quoting Sellers v. JustAnswer LLC, 73 Cal. App. 5th 444, 463 (2021)). This case 17 involves a sign-in wrap agreement: “[T]he website provides a link to terms of use and indicates 18 that some action may bind the user but does not require that the user actually review those terms.” 19 Chabolla v. ClassPass Inc., 129 F.4th 1147, 1154 (9th Cir. 2025).2 Absent proof that a consumer 20 has actual knowledge of the agreement,3 a sign-in wrap agreement will be enforced only if “(1) the 21 website provides reasonably conspicuous notice of the terms to which the consumer will be 22 bound; and (2) the consumer takes some action, such as clicking a button or checking a box, that 23 unambiguously manifests his or her assent to those terms.” Berman, 30 F.4th at 856. 24 25 2 The Ninth Circuit issued its Chabolla opinion after briefing closed and after the Court heard 26 argument on Plex’s motion. The Court invited Plaintiff and Plex to file supplemental briefs addressing the significance of Chabolla to Plex’s motion. See ECF No. 44. The Court reviewed 27 and considered the parties’ supplemental briefs. See ECF Nos. 45, 46. 1 The Court begins by describing the sign-in wrap agreement on Plex’s website, and then 2 turns to the issues of notice and assent. 3 1. Plex’s sign-in wrap agreement 4 A Plex user encounters two pages when creating a Plex account: a sign-up page (“Sign-Up 5 Page”), followed by a “Userflow” page that depends on whether the user creates an account 6 directly with Plex or through a third-party application. These pages are depicted in Figures 1 and 7 2, included in the Appendix to this Order. 8 The Sign-Up Page has a white background with prominent black text at the top that 9 instructs the user to “Create your free account.” Directly beneath this text, the user encounters 10 three interactive buttons, and each button allows the user to create an account through a third-party 11 application. The first button is white and allows the user to “Continue with Google”; the second is 12 blue and allows the user to “Continue with Facebook”; the third is black and allows the user to 13 “Continue with Apple.” Each button also bears the third-party application’s logo. See Fig. 1. If a 14 user creates an account by clicking one of these buttons, the user is “automatically presented” with 15 the next page of the account creation process. See Castro Decl. ¶ 11, ECF No. 22-2. The user 16 does not need to read or interact with any other part of the Sign-Up Page. If the user chooses not 17 to use one of the third-party applications, the user can create an account by entering an email 18 address in one field and creating a password in another field. Directly beneath the email and 19 password fields, there is an orange button labeled “Create an Account.” The “Create an Account” 20 button cannot be clicked until the user enters an email address and a password.

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Lee v. Plex, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/lee-v-plex-inc-cand-2025.