Moyer v. Chegg, Inc.

CourtDistrict Court, N.D. California
DecidedJuly 25, 2023
Docket4:22-cv-09123
StatusUnknown

This text of Moyer v. Chegg, Inc. (Moyer v. Chegg, 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
Moyer v. Chegg, Inc., (N.D. Cal. 2023).

Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 NORTHERN DISTRICT OF CALIFORNIA 11 SHERI MOYER, individually and on behalf Case No. 22-cv-09123-JSW 12 of all others similarly situated, ORDER GRANTING MOTION TO 13 Plaintiff, COMPEL ARBITRATION AND STAYING CASE 14 v. Re: Dkt. No. 16 15 CHEGG, INC., a Delaware corporation; and 16 DOES 1 to 10, inclusive,

17 Defendants.

18 19 Now before the Court for consideration is the motion to compel arbitration filed by Chegg, 20 Inc. (“Chegg”). Having reviewed the parties’ papers, relevant legal authority, and record in this 21 case, the Court hereby GRANTS the motion to compel arbitration and STAYS all further litigation 22 pending the completion of arbitration. 23 BACKGROUND 24 Defendant Chegg is a leading online learning platform that provides students with 25 educational materials, including textbooks for sale or rent. (Dkt. No. 16-2, Declaration of Wentao 26 Xu (“Xu Decl.”) ¶ 2.) Since 2016, to use Chegg’s services, a user must create a Chegg account 27 and agree to Chegg’s Terms of Use (“TOUs”) by clicking the “Create account” button. (Id. ¶¶ 3, 1 2 Create an account 3 4 5 Password 6 ay 7 a o Faceboot G □□

10 Biready hawt an account? Sign in 11 12 || dd. 994, 9.)

13 On this screen, a user must click the “Create account” button to create a Chegg account.

v 14 || Ud. 49.) Immediately below the “Create account” button is a notice that states: “We respect your

15 || privacy. By clicking “Create account” you agree to the Terms of use and Privacy Policy.” (/d.) 16 || The notice appears in black font against a white background with the phrases, “Terms of Use” and

= 17 “Privacy Policy,” appearing in blue, hyperlinked text. (/d. §/[ 5, 9.) A user who clicks the

18 hyperlinked TOUs on the “Create an account” pop-up screen is given access to those terms. (/d. □ 19 5.) A disclaimer appears in bold and all-caps towards the top of the TOUs that states: 20 || “IMPORTANT! PLEASE CAREFULLY READ THESE TERMS OF USE, AS THEY 21 || AFFECT YOUR LEGAL RIGHTS AND OBLIGATIONS.” (/d., Ex. A at 006.) Relevant 22 || here is the thirty-first section labeled “Dispute Resolution,” which is also referred to as the 23 “Arbitration Agreement.” The agreement states, in relevant part, that: 24 Accordingly, you and Chegg agree that any dispute, claim or controversy between us arising out of or related to the Terms of Use 25 or the breach, termination, enforcement, interpretation or validity thereof, of the Services or your use of the Services (collectively, 26 “Disputes”) will be finally settled by individual binding arbitration in accordance with this “Dispute Resolution” section, and not in a court 27 of law. This “Dispute Resolution” section shall also be referred to as 38 the “Arbitration Agreement.”

1 (Id. at 020.) 2 The first page of Chegg’s TOUs also contains an “ARBITRATION NOTICE.” (Id. at 3 006.) The notice contains a class action waiver in bold and all-caps, stating “YOU AGREE 4 THAT DISPUTES BETWEEN YOU AND CHEGG WILL BE RESOLVED BY BINDING, 5 INDIVIDUAL ARBITRATION AND YOU WAIVE YOUR RIGHT TO PARTICIPATE IN 6 A CLASS ACTION LAWSUIT OR CLASSWIDE ARBITRATION.” (Id.) 7 Chegg allows users to “opt out of arbitration” by providing written notice to Chegg within 8 30 days of first receiving the TOUs. (Id. at 020.) The “Dispute Resolution” section of the TOUs 9 states, “If you do not provide Chegg with an Arbitration Opt-out Notice within this thirty (30) day 10 period, you will be deemed to have knowingly and intentionally waived your right to litigate any 11 Dispute in court except as expressly set forth with respect to individual actions in small claims 12 courts.” (Id.) 13 The American Arbitration Association’s (“AAA”) rules, including the AAA’s 14 “Commercial Arbitration Rules,” are incorporated into the Arbitration Agreement. (Id. at 021.) 15 Those rules state: the “arbitrator shall have the power to rule on his or her own jurisdiction, 16 including any objections with respect to the existence, scope, validity of the arbitration agreement 17 or to the arbitrability of any claim or counterclaims” and the “arbitrator shall have the power to 18 determine the existence or validity of a contract of which an arbitration clause forms a part.” 19 AAA Commercial Arbitration Rules, R-14(a), (b). The AAA rules are not provided in the 20 arbitration agreement but are accessible on the AAA’s website, www.adr.org. (Id.) 21 On or about August 29, 2022, Plaintiff Sheri Moyer purchased an “e-textbook” from 22 Chegg’s website, www.chegg.com. (Dkt. No. 1, Compl. ¶ 13.) Plaintiff alleges after her “e- 23 textbook” purchase, Chegg enrolled her into an automatic renewal subscription that charged her 24 $19.99 on October 17, 2022. (Id.) Plaintiff alleges she was unknowingly enrolled in Chegg’s “e- 25 textbook” automatic renewal and continuous service offer in violation of California Consumer 26 Legal Remedies Act, California Civil Code section 1750 et seq., and California’s Unfair 27 Competition Law, California Business and Professions Code section 17200, et seq. (Id. ¶¶ 1-4.) 1 seeks certification of the following class, “All persons in the United States who purchased a 2 product or service from Chegg as part of an automatic renewal plan or continuous service offer 3 within the four years prior to the filing of this Complaint.” (Id.) 4 Chegg now moves the Court to compel Plaintiff to arbitrate her claims. The Court will 5 address additional facts as necessary in the analysis. 6 ANALYSIS 7 A. Applicable Legal Standard. 8 Pursuant to the Federal Arbitration Act (“FAA”), arbitration agreements “shall be valid, 9 irrevocable, and enforceable, save upon such grounds that exist at law or in equity for the 10 revocation of any contract.” 9 U.S.C. § 2. A court must “stay judicial proceedings and compel 11 arbitration of claims covered by a written and enforceable arbitration agreement.” Nguyen v. 12 Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014) (citing 9 U.S.C. § 3). “By its terms, the 13 [FAA] leaves no place for the exercise of discretion by a district court[.]” Dean Witter Reynolds, 14 Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. §§ 3, 4). The FAA reflects a “liberal 15 federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of 16 contract.” AT & T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (internal quotation 17 marks and citations omitted). A court’s role is thus limited to determining two issues: “whether a 18 valid arbitration agreement exists, and whether the agreement encompasses the disputes at issue.” 19 Nguyen, 763 F.3d at 1175. “If the response is affirmative on both counts, then the [FAA] requires 20 the court to enforce the arbitration agreement in accordance with its terms.” Chiron Corp. v. 21 Ortho Diagnostic Sys., 207 F.3d 1126, 1130 (9th Cir. 2000). 22 Here, the parties do not dispute that Chegg’s arbitration agreement, should it be found 23 enforceable, encompasses Plaintiff’s claims. The issue is whether a valid arbitration agreement 24 exists. 25 B. An Arbitration Agreement Exists Between Plaintiff and Chegg.

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