1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 MONICA SANCHEZ, on behalf of Case No.: 3:25-cv-02107-H-JLB herself and all others similarly situated, 11 ORDER DENYING DEFENDANT’S Plaintiff, 12 MOTION TO COMPEL v. ARBITRATION 13
MAGGY LONDON INTERNATIONAL 14 [Doc. No. 12] LTD., a New York Corporation d/b/a 15 WWW.MAGGYLONDON.COM, 16 Defendant. 17 18 On August 7, 2025, Plaintiff filed a first amended class action complaint (“FAC”) 19 against Defendant Maggy London International Ltd. (“Maggy London”) in the Superior 20 Court of California, County of San Diego. (Doc. No. 1-2, FAC.) Plaintiff asserts 21 Defendant violated California false advertising and unfair competition laws by its allegedly 22 fraudulent online strikethrough pricing. (Doc. No. 1-2, FAC.) On September 30, 2025, 23 Defendant filed a motion to compel arbitration. (Doc. No. 12.) On November 3, 2025, the 24 parties appeared telephonically before the Court for a hearing on the motion. (Doc. No. 25 18.) For the reasons set forth below, the Court DENIES Defendant’s motion. 26 / / / 27 / / / 28 / / / 1 Background 2 As alleged in the FAC and Answer, Plaintiff is a citizen of California and 3 || Defendant is a New York-based online retailer whose e-commerce website is accessible 4 ||nationwide. (Doc. No. 1-2, 4-5; Doc. No. 8, 9 6.) On May 13, 2025, Plaintiff 5 || purchased “Adina by Maggy London Dress” (“Product”) from Defendant for $138.00. 6 ||(Doc. No. 1-2, § 8.) Defendant listed this sales price next to a strikethrough price of 7 ||$168.00, which Plaintiff alleges was not the “prevailing market price” in the 90 days 8 || preceding the purchase. (Doc. No. 1-2, J] 8-9.) Plaintiff alleges that in the 90 days 9 || before her purchase, Defendant “was offering the exact same Product with a similar 10 || ‘phantom discount.’” (Doc. No. 1-2, 4 10.) Plaintiff further alleges that phantom 11 || discounts like that of the Product are used on many of Defendant’s other products. (Doc. 12 1-2, ff 11-15.) 13 Plaintiff navigated through Defendant’s check-out process to complete her 14 purchase. (Doc. No. 12-1, Lefkowitz Decl., 4 5.) Defendant’s website displayed the 15 || following to Plaintiff on the final step of check-out:
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1 (Doc. No. 12-2, Lefkowitz Decl., Ex. A.) Plaintiff filled in her “contact 2 information, shipping address, and shipping method.” (Doc. No. 12-1, ¶ 6.) The Maggy 3 London website presented Plaintiff with a “Pay now” button with the words “Refund 4 policy,” “Privacy policy,” and “Terms of service” beneath in blue, underlined font. (Doc. 5 No. 12-2.) The three phrases were hyperlinks that link to each of the three policies. 6 (Doc. No. 12-1, ¶ 8.) But nothing in or around the “Pay now” button compelled Plaintiff 7 to adopt and review the terms of service. The terms of service included an arbitration 8 clause in Section 19, which appeared on the date Plaintiff purchased the Product as: 9 By using or purchasing Maggy London products or services, you agree that any controversy, claim, action, or dispute between you and Maggy London 10 arising out of or relating to: (a) these Terms, or the breach thereof; or (b) your 11 access to or use of Maggy London’s website or the services or the materials; or (c) any alleged violation of any federal or state or local law, statute or 12 ordinance (each such controversy or claim, a “Claim”), shall be resolved 13 exclusively through binding individual arbitration administered by the American Arbitration Association in accordance with its applicable rules. 14
15 (Doc. No. 12-3, Lefkowitz Decl., Ex. B.) The terms of service also outline the 16 procedures by which arbitration will be governed: 17 Claims shall be heard by a single arbitrator. Arbitrations shall be held in [County, State, USA], but the parties may choose whether to appear in person, 18 by phone, or through the submission of documents. The arbitration shall be 19 governed by the Federal Arbitration Act (“FAA”) and by the internal laws of the [State], without regard to conflicts of laws principles. Any disputes in this 20 regard shall be resolved exclusively by the arbitrator. If, but only if, the 21 arbitrator determines the FAA does not apply, New York law governing arbitration agreements will apply. All disputes with respect to whether the 22 foregoing mutual arbitration provisions are unenforceable, unconscionable, 23 applicable, valid, void or voidable shall be determined exclusively by an arbitrator, and not by any court. 24
25 (Doc. No. 12-3, Lefkowitz Decl., Ex. B.) Finally, Section 19 of the terms of service 26 concludes with a class action waiver provision: 27 You and Maggy London agree that you may bring or participate in Claims against Maggy London only in your respective individual capacity, and not as 28 1 a plaintiff or class member in any purported class, consolidated, or representative proceeding. Unless both you and Maggy London agree 2 otherwise in writing, the arbitrator may not consolidate or join the claims of 3 other persons or parties who may be similarly situated and may not otherwise preside over any form of a representative or class proceeding. 4 Notwithstanding any other clause contained in this Agreement, any Claim that 5 all or part of this Class Action Waiver is unenforceable, unconscionable, void or voidable may be determined only by a court of competent jurisdiction and 6 not by an arbitrator. 7 8 On July 7, 2025, Plaintiff commenced this action against Defendant in the Superior 9 Court of California, County of San Diego, asserting violations of California false 10 advertising and unfair competition laws. (Doc. No. 1.) On August 7, 2025, Plaintiff filed 11 a FAC against Defendant. (Doc. No. 1-2, FAC.) On August 15, 2025, Defendant 12 removed the action to federal court to proceed on diversity jurisdiction. (Doc. No. 1; 13 Doc. No. 10.) 14 On September 30, 2025, Defendant filed a motion to compel arbitration on all 15 claims in the complaint. (Doc. No. 12.) Defendant argues that Plaintiff’s claims are 16 subject to the arbitration and class action waiver provisions located in the terms of service 17 link displayed at check-out. (Doc. No. 12.) Defendant also argues that the threshold 18 issues of arbitrability should be decided by the arbitrator. (Doc. No. 12.) On October 6, 19 2025, Plaintiff filed a response in opposition to the motion, arguing that Defendant failed 20 to meet its burden of demonstrating that Plaintiff had inquiry notice of the arbitration 21 provision and unambiguously manifested her assent. (Doc. No. 13.) On December 13, 22 2025, Defendant filed its reply to Plaintiff’s opposition, contending that the terms of 23 service link displayed at check-out provided inquiry notice because it was sufficiently 24 conspicuous. (Doc. No. 14.) 25 On November 3, 2025, the parties appeared telephonically before the Court for a 26 hearing on the motion. (Doc. No. 18.) Scott J. Ferrell appeared on behalf of Plaintiff and 27 Paul Hubschman Aloe and Jacob Reichman appeared on behalf of Defendant. (Doc. No. 28 18.) For the reasons set forth below, the Court DENIES Defendant’s motion. 1 Discussion 2 I. Legal Standard 3 The Federal Arbitration Act (“FAA”) “requires district courts to compel arbitration 4 of claims covered by an enforceable arbitration agreement.” Berman v. Freedom Fin. 5 Network, LLC, 30 F.4th 849, 855 (9th Cir. 2022); see 9 U.S.C. § 3. To determine 6 whether the arbitration agreement is enforceable, the FAA requires the moving party to 7 show “(1) the existence of a valid, written agreement to arbitrate; and, if it exists, (2) that 8 the agreement to arbitrate encompasses the dispute at issue.” Ashbey v. Archstone Prop.
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 MONICA SANCHEZ, on behalf of Case No.: 3:25-cv-02107-H-JLB herself and all others similarly situated, 11 ORDER DENYING DEFENDANT’S Plaintiff, 12 MOTION TO COMPEL v. ARBITRATION 13
MAGGY LONDON INTERNATIONAL 14 [Doc. No. 12] LTD., a New York Corporation d/b/a 15 WWW.MAGGYLONDON.COM, 16 Defendant. 17 18 On August 7, 2025, Plaintiff filed a first amended class action complaint (“FAC”) 19 against Defendant Maggy London International Ltd. (“Maggy London”) in the Superior 20 Court of California, County of San Diego. (Doc. No. 1-2, FAC.) Plaintiff asserts 21 Defendant violated California false advertising and unfair competition laws by its allegedly 22 fraudulent online strikethrough pricing. (Doc. No. 1-2, FAC.) On September 30, 2025, 23 Defendant filed a motion to compel arbitration. (Doc. No. 12.) On November 3, 2025, the 24 parties appeared telephonically before the Court for a hearing on the motion. (Doc. No. 25 18.) For the reasons set forth below, the Court DENIES Defendant’s motion. 26 / / / 27 / / / 28 / / / 1 Background 2 As alleged in the FAC and Answer, Plaintiff is a citizen of California and 3 || Defendant is a New York-based online retailer whose e-commerce website is accessible 4 ||nationwide. (Doc. No. 1-2, 4-5; Doc. No. 8, 9 6.) On May 13, 2025, Plaintiff 5 || purchased “Adina by Maggy London Dress” (“Product”) from Defendant for $138.00. 6 ||(Doc. No. 1-2, § 8.) Defendant listed this sales price next to a strikethrough price of 7 ||$168.00, which Plaintiff alleges was not the “prevailing market price” in the 90 days 8 || preceding the purchase. (Doc. No. 1-2, J] 8-9.) Plaintiff alleges that in the 90 days 9 || before her purchase, Defendant “was offering the exact same Product with a similar 10 || ‘phantom discount.’” (Doc. No. 1-2, 4 10.) Plaintiff further alleges that phantom 11 || discounts like that of the Product are used on many of Defendant’s other products. (Doc. 12 1-2, ff 11-15.) 13 Plaintiff navigated through Defendant’s check-out process to complete her 14 purchase. (Doc. No. 12-1, Lefkowitz Decl., 4 5.) Defendant’s website displayed the 15 || following to Plaintiff on the final step of check-out:
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1 (Doc. No. 12-2, Lefkowitz Decl., Ex. A.) Plaintiff filled in her “contact 2 information, shipping address, and shipping method.” (Doc. No. 12-1, ¶ 6.) The Maggy 3 London website presented Plaintiff with a “Pay now” button with the words “Refund 4 policy,” “Privacy policy,” and “Terms of service” beneath in blue, underlined font. (Doc. 5 No. 12-2.) The three phrases were hyperlinks that link to each of the three policies. 6 (Doc. No. 12-1, ¶ 8.) But nothing in or around the “Pay now” button compelled Plaintiff 7 to adopt and review the terms of service. The terms of service included an arbitration 8 clause in Section 19, which appeared on the date Plaintiff purchased the Product as: 9 By using or purchasing Maggy London products or services, you agree that any controversy, claim, action, or dispute between you and Maggy London 10 arising out of or relating to: (a) these Terms, or the breach thereof; or (b) your 11 access to or use of Maggy London’s website or the services or the materials; or (c) any alleged violation of any federal or state or local law, statute or 12 ordinance (each such controversy or claim, a “Claim”), shall be resolved 13 exclusively through binding individual arbitration administered by the American Arbitration Association in accordance with its applicable rules. 14
15 (Doc. No. 12-3, Lefkowitz Decl., Ex. B.) The terms of service also outline the 16 procedures by which arbitration will be governed: 17 Claims shall be heard by a single arbitrator. Arbitrations shall be held in [County, State, USA], but the parties may choose whether to appear in person, 18 by phone, or through the submission of documents. The arbitration shall be 19 governed by the Federal Arbitration Act (“FAA”) and by the internal laws of the [State], without regard to conflicts of laws principles. Any disputes in this 20 regard shall be resolved exclusively by the arbitrator. If, but only if, the 21 arbitrator determines the FAA does not apply, New York law governing arbitration agreements will apply. All disputes with respect to whether the 22 foregoing mutual arbitration provisions are unenforceable, unconscionable, 23 applicable, valid, void or voidable shall be determined exclusively by an arbitrator, and not by any court. 24
25 (Doc. No. 12-3, Lefkowitz Decl., Ex. B.) Finally, Section 19 of the terms of service 26 concludes with a class action waiver provision: 27 You and Maggy London agree that you may bring or participate in Claims against Maggy London only in your respective individual capacity, and not as 28 1 a plaintiff or class member in any purported class, consolidated, or representative proceeding. Unless both you and Maggy London agree 2 otherwise in writing, the arbitrator may not consolidate or join the claims of 3 other persons or parties who may be similarly situated and may not otherwise preside over any form of a representative or class proceeding. 4 Notwithstanding any other clause contained in this Agreement, any Claim that 5 all or part of this Class Action Waiver is unenforceable, unconscionable, void or voidable may be determined only by a court of competent jurisdiction and 6 not by an arbitrator. 7 8 On July 7, 2025, Plaintiff commenced this action against Defendant in the Superior 9 Court of California, County of San Diego, asserting violations of California false 10 advertising and unfair competition laws. (Doc. No. 1.) On August 7, 2025, Plaintiff filed 11 a FAC against Defendant. (Doc. No. 1-2, FAC.) On August 15, 2025, Defendant 12 removed the action to federal court to proceed on diversity jurisdiction. (Doc. No. 1; 13 Doc. No. 10.) 14 On September 30, 2025, Defendant filed a motion to compel arbitration on all 15 claims in the complaint. (Doc. No. 12.) Defendant argues that Plaintiff’s claims are 16 subject to the arbitration and class action waiver provisions located in the terms of service 17 link displayed at check-out. (Doc. No. 12.) Defendant also argues that the threshold 18 issues of arbitrability should be decided by the arbitrator. (Doc. No. 12.) On October 6, 19 2025, Plaintiff filed a response in opposition to the motion, arguing that Defendant failed 20 to meet its burden of demonstrating that Plaintiff had inquiry notice of the arbitration 21 provision and unambiguously manifested her assent. (Doc. No. 13.) On December 13, 22 2025, Defendant filed its reply to Plaintiff’s opposition, contending that the terms of 23 service link displayed at check-out provided inquiry notice because it was sufficiently 24 conspicuous. (Doc. No. 14.) 25 On November 3, 2025, the parties appeared telephonically before the Court for a 26 hearing on the motion. (Doc. No. 18.) Scott J. Ferrell appeared on behalf of Plaintiff and 27 Paul Hubschman Aloe and Jacob Reichman appeared on behalf of Defendant. (Doc. No. 28 18.) For the reasons set forth below, the Court DENIES Defendant’s motion. 1 Discussion 2 I. Legal Standard 3 The Federal Arbitration Act (“FAA”) “requires district courts to compel arbitration 4 of claims covered by an enforceable arbitration agreement.” Berman v. Freedom Fin. 5 Network, LLC, 30 F.4th 849, 855 (9th Cir. 2022); see 9 U.S.C. § 3. To determine 6 whether the arbitration agreement is enforceable, the FAA requires the moving party to 7 show “(1) the existence of a valid, written agreement to arbitrate; and, if it exists, (2) that 8 the agreement to arbitrate encompasses the dispute at issue.” Ashbey v. Archstone Prop. 9 Mgmt., Inc., 785 F.3d 1320, 1323 (9th Cir. 2015); see Berman, 30 F.4th at 855. The 10 standard on a motion to compel arbitration is akin to that of a motion for summary 11 judgment. See Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021). As 12 such, the Court must draw all reasonable inferences in favor of the non-movant. See 13 Lopez v. Dave, Inc., 2023 WL 8594393, at *1 (9th Cir. Dec. 12, 2023). 14 Courts apply state-law principles of contract formation to determine whether an 15 arbitration agreement is valid. Berman, 30 F.4th at 855 (citing First Options of Chicago, 16 Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). The Ninth Circuit has made clear that federal 17 courts sitting in diversity look to the law of the forum state when making choice of law 18 determinations. Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014) 19 (citing Hoffman v. Citibank (S.D.), N.A., 546 F.3d 1078, 1082 (9th Cir. 2008) (per 20 curiam)). California law dictates that the parties’ choice of law governs unless Section 21 187(2) of the Restatement (Second) of Conflict of Laws dictates a different result. 22 Hoffman, 546 F.3d at 1082–83 (citing Discover Bank v. Superior Court, 36 Cal.4th 148, 23 173 (2005)). Because the parties agree that California law governs, the Court applies 24 California law to assess whether the arbitration agreement is valid. 25 II. The Arbitration Agreement’s Validity 26 “To form a contract under [] California law, the parties must manifest their mutual 27 assent to the terms of the agreement.” Berman, 30 F.4th at 855 (citing Nguyen, 763 F.3d 28 at 1175); Specht v. Netscape Communications Corp., 306 F.3d 17, 29 (2d Cir. 2002) 1 || (applying California law)). With respect to online agreements, “[uJnless the website 2 || operator can show that a consumer has actual knowledge of the agreement, an 3 || enforceable contract will be found based on an inquiry notice theory only if: (1) the 4 || website provides reasonably conspicuous notice of the terms to which the consumer will 5 || be bound; and (2) the consumer takes some action, such as clicking a button or checking 6 ||a box, that unambiguously manifests his or her assent to those terms.” Berman, 30 F.4th 7 || at 856 (citing Neuyen, 763 F.3d at 1173). 8 A. Reasonably Conspicuous Notice 9 Defendant is correct in its briefing that the font, color, placement, and underline of 10 || “Terms of service” is reasonably conspicuous in this context. Defendant submitted a 11 declaration that displays the final page of the checkout process as it would have appeared 12 || to Plaintiff on the date of her order: 13
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25 (Doc. No. 12-3, Lefkowitz Decl., Ex. A.) The terms of service hyperlink was 26 reasonably conspicuous such that a court “can fairly assume that a reasonably prudent 27 || Internet user would have seen it. Berman, 30 F.4th at 856 (citing Neuyen, 763 F.3d at 28 1177). The font size, light blue color on a white background, underlining, and placement
1 immediately below the “Pay now” button make the terms of service both “clearly ‘legible 2 to the naked eye’” and indicative of a hyperlink. Patrick v. Running Warehouse, LLC, 3 2022 WL 10584136, at *5 (C.D. Cal. Oct. 18, 2022), aff’d, 93 F.4th 468 (9th Cir. 2024); 4 see Dohrmann v. Intuit, Inc., 823 Fed.Appx. 482, 854 (9th Cir. 2020) (finding terms of 5 use hyperlink to be conspicuous in part because it was “located directly below the sign-in 6 button” and where overall webpage was “relatively uncluttered”). 7 B. Unambiguous Manifestation of Assent 8 Defendant must demonstrate that Plaintiff took some action to unambiguously 9 manifest her assent. The Ninth Circuit has made clear that a “user’s click of a button can 10 be construed as an unambiguous manifestation of assent only if the user is explicitly 11 advised that the act of clicking will constitute assent to the terms and conditions of an 12 agreement.” Berman, 30 F.4th at 857 (citing Specht, 306 F.3d at 29–30). Further, “the 13 notice must explicitly notify a user of the legal significance of the action she must take to 14 enter into a contractual agreement.” Id. at 858. The facts here resemble that of Nguyen, 15 in which the Ninth Circuit explicitly noted that “even close proximity of the hyperlink to 16 relevant buttons users must click on—without more—is insufficient to give rise to 17 constructive notice.” Nguyen, 763 F.3d at 1179. In this case, the “Pay now” button was 18 not accompanied with a prompt or advisal that Plaintiff’s purchase would legally bind 19 her. Defendant’s checkout process was therefore, under Ninth Circuit case law, 20 insufficient. Defendant’s lack of advisal language meant Plaintiff did not have the 21 inquiry notice required to subsequently manifest assent by clicking “Pay now.” While 22 Plaintiff acted in placing the order, that action cannot reasonably be construed to have 23 manifested assent to the terms of service located below. 24 Defendant’s points regarding Plaintiff’s actual notice are well taken. A reasonable 25 person in a similar position to that of Plaintiff would likely have actual notice with a “Pay 26 27 28 1 now” button followed by a terms of service hyperlink. But Plaintiff’s role as a tester 2 does not alone establish actual notice. And for inquiry notice, Ninth Circuit case law 3 demands more than a conspicuous hyperlink to terms of service. See Nguyen, 763 F.3d at 4 1178–79 (finding user had no inquiry notice because the website lacked a sufficient 5 advisal); Berman, 30 F.4th at 858–59 (same); Godun v. JustAnswer LLC, 135 F.4th 699, 6 712–13 (9th Cir. 2025) (same); Chabolla v. ClassPass Inc., 129 F.4th 1147, 1159 (9th 7 Cir. 2025) (same); Wilson v. Huuuge, Inc., 944 F.3d 1212, 1221 (9th Cir. 2019) (same); 8 see also Patrick, 93 F.4th at 477 (finding user had inquiry notice because of website’s 9 explicit advisal that proceeding would bind user to terms of service); Keebaugh v. 10 Warner Bros. Entertainment Inc., 100 F.4th 1005, 1018 (9th Cir. 2024) (same); Oberstein 11 v. Live Nation Entertainment, Inc., 60 F.4th 505, 516–17 (9th Cir. 2023) (same); 12 Dohrmann, 823 Fed.Appx. at 484 (same); Lee v. Ticketmaster L.L.C., 817 Fed.Appx. 13 393, 394–95 (9th Cir. 2020) (same). 14 Binding precedent requires that an advisal accompany the terms of service link 15 such that a user knows that the user is manifesting assent to legal terms. Such “‘explicit 16 textual notice that continued use will act as a manifestation of the user’s intent to be 17 bound’ is critical to the enforceability of any browsewrap-type agreement.” Berman, 30 18 F.4th at 857–58 (quoting Nguyen, 763 F.3d at 1177). A link to the terms of service, 19 absent more, is not enough. 20 / / / 21 / / / 22 / / / 23
24 1 Defendant asserts that Plaintiff is a serial litigant with a history of bringing identical and similar 25 claims. (Doc. No. 12 (citing Sanchez v. Delta Galil USA, Inc., No. 3:25-cv-01963 (S.D. Cal.); Sanchez v. Marriott Int’l, Inc., 2024 WL 3598821 (C.D. Cal. July 31, 2024); Sanchez v. Glasscanopy, Inc., 2025 26 WL 1213283 (Cal.Super. Feb. 28, 2025); Sanchez v. Cars.com Inc., 2025 WL 487194 (Cal.Super. Jan. 27, 2025); Sanchez v. Brinker International, Inc., No. 2:24-cv-05572 (C.D. Cal.); Sanchez v. The 27 Travelers Indemnity Co., No. 2:25-cv-00063 (C.D. Cal.); Sanchez v. Organifi, LLC, et al., No. 2:25-cv- 28 04912 (C.D. Cal.); Sanchez v. National Instruments Corp. (ni.com), No. 23STCV31160 (L.A. Super. 1 Conclusion 2 Because Defendant has failed to meet its burden of establishing the validity of the 3 || arbitration agreement, the Court DENIES Defendant’s motion to compel arbitration. The 4 || Early Neutral Evaluation and Case Management Conference remain set for December 3, 5 2025, before the magistrate judge. 6 IT IS SO ORDERED. 7 || DATED: November 6, 2025 | aL \ | I ke 8 MARILYN L. MUFF, District J 9 UNITED STATES DISTRICT COURT 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28