Preview
1 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
P. CRAIG CARDON, Cal. Bar No. 168646
2 JAY T. RAMSEY, Cal. Bar No. 273160 ELECTRONICALLY
ALYSSA M. SHAUER, Cal. Bar No. 318359
3 Four Embarcadero Center, 17th Floor F I L E D
Superior Court of California,
San Francisco, California 94111-4109 County of San Francisco
4 Telephone: 415.434.9100
Facsimile: 415.434.3947 01/10/2020
Clerk of the Court
5 Email: ccardon@sheppardmullin.com BY: JUDITH NUNEZ
jramsey@sheppardmullin.com Deputy Clerk
6 ashauer@sheppardmullin.com
7 Attorneys for Defendant
WILLIAMS-SONOMA, INC.
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9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF SAN FRANCISCO
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12 JENNIVINE LEE SIMON, Case No. CGC-19-576923
13 Plaintiff, MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF
14 v. DEFENDANT’S MOTION TO
COMPEL ARBITRATION AND TO
15 WILLIAMS-SONOMA, INC., DISMISS THE FIRST AMENDED
COMPLAINT
16 Defendant.
Date: February 6, 2020
17 Time: 9:00 a.m.
Dept.: 613
18 The Honorable Andrew Y.S. Cheng
19 Complaint Filed: June 24, 2019
FAC Filed: September 17, 2019
20 Trial Date: None set
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Case No. CGC-19-576923
SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 I. INTRODUCTION
2 Plaintiff Jennivine Lee Simon (“Plaintiff”) brings this putative national class action
3 against Defendant Williams-Sonoma, Inc. (“WSI”), asserting a variety of California-only
4 state law claims arising out of an online purchase she made on June 25, 2016 through
5 WSI’s website, www.williams-sonoma.com (the “Website”). Plaintiff’s use of the
6 Website, including her June 25, 2016 purchase on the Website, was governed by WSI’s
7 Terms & Conditions 1 (the “Terms”), which Plaintiff expressly agreed to when she
8 completed her purchase. The Terms contain a section titled “Arbitration Agreement &
9 Waiver of Certain Rights” that provides: “All controversies, claims, counterclaims, or
10 other disputes arising between you and Williams-Sonoma, Inc. relating to these Terms and
11 Conditions or the Web Site or our mobile applications (each a ‘Claim’) shall be submitted
12 for binding arbitration in accordance with the Rules of the American Arbitration
13 Association (‘AAA Rules’).” Accordingly, the Court must compel Plaintiff to arbitration
14 and dismiss the First Amended Complaint (“FAC”).
15 II. FACTS
16 A. Plaintiff’s Allegations In The FAC
17 Plaintiff alleges that WSI engages in a false pricing scheme whereby the company
18 sells items advertised as “exclusive” at a discounted price in comparison to a higher
19 Suggested Price, yet WSI “has never, or almost never” offered the item at that higher
20 Suggested price, leading customers to “pay more than they otherwise would have paid and
21 to buy more than they otherwise would have bought.” FAC ¶¶ 1-8. Plaintiff made a single
22 online purchase on June 25, 2016 for an item with a Suggested Price of $450, and a selling
23 price of $199.95. Id. ¶¶ 16-18. She further alleges that WSI never actually offered the
24 item at $450, or any other price over $199.95. Id. ¶¶ 22-23.
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Last updated March, 2016 (3 months prior to Plaintiff’s purchase) and available at
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https://www.williams-sonoma.com/customer-service/legal-statement.html#terms.
-2- Case No. CGC-19-576923
SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 Based on this online transaction, Plaintiff alleges a nationwide class and brings four
2 causes of action: Violation of the California Consumer Legal Remedies Act (“CLRA”),
3 Cal. Civ. Code § 1750 et seq.; Violation of the False Advertising Law (“FAL”), Cal. Bus.
4 & Prof. Code § 17500 et seq.; Violation of the Unfair Competition Law (“UCL”), Cal.
5 Bus. & Prof. Code § 17200 et seq.; and “Permanent Public” Injunctive Relief.
6 B. Plaintiff Agreed To Arbitrate Her Claim On An Individual Basis
7 Plaintiff admits that, in connection with her June 25, 2016 online purchase, she
8 proceeded through the online check-out process on WSI’s Website. FAC ¶ 19. As part of
9 that process, after selecting items for purchase, customers must proceed to their shopping
10 carts. An exemplar of the shopping cart page, as it would have appeared on June 26, 2016
11 (the date of Plaintiff’s purchase), is attached as Exhibit A to the Declaration of Nicole
12 Zagar. On it, consumers are told that “[b]y continuing with your purchase you agree to our
13 terms and conditions and privacy policy.” The underlined phrase “terms and conditions” is
14 a hyperlink that, if clicked, causes a pop-up window to appear with the applicable Terms
15 and Conditions. There are then three buttons available to proceed with the purchase –
16 checkout, express checkout, and PayPal Checkout. The relevant portion is reproduced
17 here:
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
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21 Then, after entering shipping and billing information, customers must confirm their
22 purchase by pressing the “PLACE ORDER” button. Immediately above the “PLACE
23 ORDER” button is the phrase: “By continuing with your purchase you agree to our terms
24 and conditions and privacy policy.” Zagar Declaration, Ex. B. The underlined phrase
25 “terms and conditions” is a hyperlink that, if clicked, causes a pop-up window to appear
26 with the applicable Terms and Conditions. An exemplar of the final page of the check-out
27 flow process, as it would have appeared on June 26, 2016 (the date of Plaintiff’s purchase),
28 is attached as Exhibit B to the Zagar Declaration. The relevant portion is reproduced here:
-5- Case No. CGC-19-576923
SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
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The Terms & Conditions provide, in relevant part, as follows:
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Arbitration Agreement & Waiver of Certain Rights
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 You and Williams-Sonoma, Inc. agree that we will resolve any disputes
between us through binding and final arbitration instead of through court
2 proceedings. You and Williams-Sonoma, Inc. hereby waive any right to a
jury trial of any Claim. All controversies, claims, counterclaims, or other
3 disputes arising between you and Williams-Sonoma, Inc. relating to these
Terms and Conditions or the Web Site or our mobile applications (each a
4 "Claim") shall be submitted for binding arbitration in accordance with the
Rules of the American Arbitration Association ("AAA Rules").
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…
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Neither you nor Williams-Sonoma, Inc. may act as a class representative or
7 private attorney general, nor participate as a member of a class of claimants,
with respect to any Claim. Claims may not be arbitrated on a class or
8 representative basis. The arbitrator can decide only your and/or Williams-
Sonoma, Inc.'s individual Claims. The arbitrator may not consolidate or join
9 the claims of other persons or parties who may be similarly situated.
10 …
11 THIS SECTION LIMITS CERTAIN RIGHTS, INCLUDING THE RIGHT
TO MAINTAIN A COURT ACTION, THE RIGHT TO A JURY TRIAL,
12 THE RIGHT TO PARTICIPATE IN ANY FORM OF CLASS OR
REPRESENTATIVE CLAIM, THE RIGHT TO ENGAGE IN
13 DISCOVERY EXCEPT AS PROVIDED IN AAA RULES, AND THE
RIGHT TO CERTAIN REMEDIES AND FORMS OF RELIEF. OTHER
14 RIGHTS THAT YOU OR WILLIAMS-SONOMA, INC. WOULD HAVE
IN COURT ALSO MAY NOT BE AVAILABLE IN ARBITRATION.
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Zagar Decl., Ex. C (larger font size and caps in original).
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III. THE COURT SHOULD COMPEL ARBITRATION
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A. Legal Standard
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The California Arbitration Act (“CAA”) provides that “[a] written agreement to
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submit to arbitration an existing controversy or a controversy thereafter arising is valid,
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enforceable and irrevocable . . . .” Cal. Code of Civil Proc. § 1281. Upon request of a
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party to such an arbitration agreement, the court must order arbitration of the controversy if
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it determines that: (1) “an agreement to arbitrate the controversy exists”; and (2) “a party
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thereto refuses to arbitrate such controversy . . . .” Id. at § 1281.2. If a claim must be
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arbitrated, a court may not consider its merits. Id.; Cal. Corr. Peace Officers Ass’n v. State
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of Cal., 142 Cal. App. 4th 198, 205 (2006).
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Similarly, the Federal Arbitration Act (the “FAA”) provides that a “written
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provision in any … contract evidencing a transaction involving commerce to settle by
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 arbitration a controversy thereafter arising out of such contract or transaction … shall be
2 valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for
3 the revocation of any contract.” 9 U.S.C. § 2. 2 The FAA requires courts to compel
4 arbitration if (1) a valid agreement to arbitrate exists, and (2) the dispute falls within the
5 scope of that agreement (i.e. “arbitrability”). Knutson v. Sirius XM Radio Inc., 771 F.3d
6 559, 564-65 (9th Cir. 2014). See also 9 U.S.C. § 4 (“upon being satisfied that the making
7 of the agreement for arbitration or the failure to comply therewith is not in issue, the court
8 shall make an order directing the parties to proceed to arbitration in accordance with the
9 terms of the agreement.”). “Unless a party specifically challenges the validity of the
10 agreement to arbitrate, both sides may be required to take all their disputes – including
11 disputes about the validity of their broader contract – to arbitration.” New Prime Inc. v.
12 Oliveira (2019) 139 S. Ct. 532, 538.
13 B. A Valid Agreement To Arbitrate Exists
14 Under both federal and California law, “the threshold question presented by a
15 petition to compel arbitration is whether there is an agreement to arbitrate.” Cruise v.
16 Kroger Co., 233 Cal.App.4th 390, 396 (2015) (italics omitted); Serafin v. Balco Properties
17 Ltd., LLC, 235 Cal. App. 4th 165, 173 (2015) (in California, general principles of contract
18 law determine whether the parties have entered a binding arbitration agreement); Dream
19 Theater, Inc. v. Dream Theater, 124 Cal. App. 4th 547, 552 (2004) (California courts often
20 look to federal law when deciding arbitration issues under state law).
21 The Terms in this case are a type of hybrid “clickwrap” / “browsewrap” online
22 agreement whereby a website user gives assent to be bound to a set of terms and conditions
23 not listed on the page itself, but available by clicking a hyperlink. Nguyen v. Barnes &
24 Noble Inc., 763 F.3d 1171, 1176-77 (9th Cir. 2014)); see also Long v. Provide Commerce,
25 Inc., 245 Cal. App. 4th 855, 867 (2016) (applying Nguyen standard under a different set of
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The substantive law created by the FAA applies in both federal and state courts
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alike. Southland Corp. v. Keating, 465 U.S. 1, 12 (1987).
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 facts). Courts hold that a valid contract exists where, as here, (a) a consumer is expressly
2 told that by clicking a button, completing a purchase, or taking some other action, they are
3 agreeing to be bound by a set of terms and conditions; and (b) the website contains a link
4 to the terms and conditions conspicuously and in proximity to the call to action (e.g., the
5 purchase button). See, e.g., DeVries v. Experian Info. Sols., Inc., 2017 U.S. Dist. LEXIS
6 26471, at **4, 18 (N.D. Cal. Feb. 24, 2017) (holding contract enforceable under California
7 law where user clicked “Submit Secure Order,” and directly above the button, the page
8 stated: “Click ‘Submit Secure Order’ to accept the Terms and Conditions above…,” and
9 the terms and conditions were hyperlinked); Moule v. United Parcel Serv. Co., 2016 WL
10 3648961, at **4, 12 (E.D. Cal. Jul. 7, 2016) (same under California law where user clicked
11 “Yes,” and above the button the page stated: “By clicking the Yes button, you agree to the
12 UPS Tariff/Terms and Conditions,” and the terms and conditions were hyperlinked);
13 Crawford v. Beachbody, LLC, 2014 U.S. Dist. LEXIS 156658, at **4, 8-9 (S.D. Cal. Nov.
14 5, 2014) (same under California law where user clicked “Place Order,” and directly above
15 the button the page stated: “By clicking Place Order below, you are agreeing that you have
16 read and understand the … Terms and Conditions,” and the terms and conditions were
17 hyperlinked); see also Temple v. Best Rate Hldgs. LLC, 360 F. Supp. 3d 1289, 1304-05
18 (M.D. Fla. Dec. 27, 2018) (same where user clicked “Get a Quote” button and directly
19 above the button stated: “By clicking ‘Get a Quote’ you are accepting our Privacy Policy
20 and Terms and Conditions,” and the terms and conditions were hyperlinked); Hale v.
21 Heath, 2016 U.S. Dist. LEXIS 92382, at **2, 11-13 (S.D. Cal. Jul. 14, 2016) (holding
22 contract enforceable as a matter of California law where user clicked “Get Your Free
23 Consultation,” and directly above the button the page was a hyperlink to the terms of use,
24 and ordering jury trial on dispute as to whether user clicked the button).
25 There is no distinction between the check-out flow on the Website in this case from
26 the cases cited above. Thus, there can be no dispute that (a) Plaintiff was expressly
27 informed that, by clicking the button to complete her purchase, she was agreeing to be
28 bound by the Terms, which contains the arbitration provision, and (b) a link to the Terms
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 was provided conspicuously and in proximity to the “Place Order” button for her to easily
2 access and review the Terms. In an online transaction, these facts together give rise to a
3 valid agreement to arbitrate.
4 C. Whether The Dispute Falls Within The Scope Of The Arbitration
5 Agreement (i.e., Arbitrability) Must Be Decided By The Arbitrator, Not
6 The Court
7 While the general rule is that the court decides whether the dispute falls within the
8 scope of the arbitration agreement (i.e., the second issue of “arbitrability”), arbitrability
9 “can be expressly delegated to the arbitrator where the [contracting] parties clearly and
10 unmistakably provide otherwise.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir.
11 2015) (internal citations omitted). See also Henry Schein, Inc. v. Archer & White Sales,
12 Inc. (2019) 139 S. Ct. 524, 529 (contracting parties “may agree to have an arbitrator decide
13 … gateway questions of arbitrability” and when they have done so, “a court may not
14 override the contract.”). “In those circumstances, a court possesses no power to decide the
15 arbitrability issue … even if the court things that the argument that the arbitration
16 agreement applies to a particular dispute is wholly groundless.” Id.
17 In this regard, courts hold that an arbitration provision incorporating a set of
18 arbitration rules, which themselves designate the issue of arbitrability to the arbitrator, is
19 sufficient to designate to the arbitrator the issue of arbitrability. See Brennan, 796 F.3d at
20 1130.; Aanderud v. Superior Court (2017) 13 Cal. App. 5th 880, 893 (incorporation of
21 JAMS Rules evidences parties’ clear and unmistakable intent to submit issues of
22 arbitrability to the arbitrator). Relevant here, an arbitration agreement that “incorporat[es]
23 … the AAA rules constitutes clear and unmistakable evidence that contracting parties
24 agreed to arbitrate arbitrability.” Brennan, 796 F.3d at 1130-31; see also Aguilar v.
25 Carters, Inc., 2019 U.S. Dist. LEXIS 224271, at *11, n. 1 (E.D. Wa. Oct. 4, 2019)
26 (incorporation of AAA rules constitutes clear and unmistakable evidence that parties
27 delegated arbitrability).
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 Here, the arbitration provision of the Terms provide that any arbitration is to be
2 governed by AAA rules: “All controversies, claims, counterclaims, or other disputes
3 arising between you and Williams-Sonoma, Inc. relating to these Terms and Conditions or
4 the Web Site … (each a ‘Claim’) shall be submitted for binding arbitration in accordance
5 with the Rules of the American Arbitration Association (‘AAA Rules’).” Zagar Decl., Ex.
6 C. Both the Consumer Rules and the Commercial Rules of the AAA provide that “The
7 arbitrator shall have the power to rule on his or her own jurisdiction, including any
8 objections with respect to the existence, scope, or validity of the arbitration agreement or
9 to the arbitrability of any claim or counterclaim.” Consumer Arbitration Rules, American
10 Arbitration Association, at 17 (effective Sept. 1, 2014); Commercial Arbitration Rules,
11 American Arbitration Association, at 13 (effective Oct. 1, 2013). Accordingly, the Court’s
12 inquiry ends here, and this case must be compelled to arbitration in the first instance,
13 where the arbitrator will decide arbitrability.
14 D. Even If This Court Were To Decide Arbitrability Despite The Parties’
15 Designation To The Arbitrator, The FAC Falls Within The Scope Of
16 The Arbitration Agreement
17 California law requires courts to read arbitration clauses broadly, and doubts as to
18 the scope of an arbitration clause should “be resolved in favor of sending the parties to
19 arbitration.” United Transportation Union, AFL/CIO v. Southern Cal. Rapid Transit Dist.,
20 7 Cal. App. 4th 804, 808 (1992). The presumption of arbitrability grows even stronger
21 when the arbitration clause is broad, sweeping in “any claims arising from or relating to”
22 an agreement or “any claims” between the parties. See Wolitarsky v. Blue Cross of Cal.,
23 53 Cal. App. 4th 342, 348 (1997); Serafin v. Balco Properties Ltd., 235 Cal. App. 4th 165,
24 182 (2015) (parties obliged to submit their claims to arbitration where provision includes
25 expansive language covering “all” disputes, even including the threshold issue of
26 arbitrability). Agreements calling for the arbitration of “all claims” or “all controversies”
27 require arbitration not only of contract claims, but also tort claims. See, e.g., EFund
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 Capital Partners v. Pless, 150 Cal. App. 4th 1311, 1322 (2007); Izzi v. Mesquite Country
2 Club, 186 Cal. App. 3d 1309, 1315 (1986) superseded by statute on other grounds. 3
3 There can be no question that Plaintiff’s June 25, 2016 online transaction that gives
4 rise to the FAC falls within the scope of the provision. The provision applies to “[a]ll
5 controversies, claims, counterclaims, or other disputes arising between you and Williams-
6 Sonoma, Inc. relating to these Terms and Conditions or the Web Site or our mobile
7 applications,” and further applies that the parties agree that they “will resolve any disputes
8 between us through binding and final arbitration.”
9 IV. CONCLUSION
10 For the foregoing reasons, WSI respectfully requests that the Court grant this
11 motion, compel arbitration of Plaintiff’s claims, and dismiss the action. In the alternative,
12 the Court should compel arbitration of the entire case and stay this proceeding pending the
13 arbitrator’s ruling on whether Plaintiff’s claims are arbitrable (i.e., within the scope of the
14 Terms’ arbitration provision).
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21 The FAA similarly “embodies a clear federal policy in favor of arbitration.” Simula,
Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999). See also AT&T Mobility LLC v.
22 Concepcion, 563 U.S. 333, 339 (2011); Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63,
67-68 (2010). As a result, when determining whether a claim falls within the scope of an
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arbitration agreement, courts must indulge every presumption “in favor of arbitration.”
24 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983). And
arbitration provisions that govern “all” claims, disputes, and controversies between the
25 parties, without exception, cover all claims. AT&T Mobility LLC v. Concepcion, 563 U.S.
26 333 (2011) (enforcing arbitration agreement governing “all” disputes that included class
action waiver); Morales v. Lexxiom, Inc., 2010 U.S. Dist. LEXIS 151809, * 18-19 (C.D.
27 Cal. Jan. 29, 2010) (enforcing arbitration agreement governing “any” dispute because the
language is “all encompassing” and jury trial waiver set forth in all caps “could not be
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clearer”).
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SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION
1 Dated: January 10, 2020 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
2
3 By /s/ P. Craig Cardon
4 P. CRAIG CARDON
JAY T. RAMSEY
5 ALYSSA M. SHAUER
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Attorneys for Defendant
7 WILLIAMS-SONOMA, INC.
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Preview
1 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP P. CRAIG CARDON, Cal. Bar No. 168646 2 JAY T. RAMSEY, Cal. Bar No. 273160 ELECTRONICALLY ALYSSA M. SHAUER, Cal. Bar No. 318359 3 Four Embarcadero Center, 17th Floor F I L E D Superior Court of California, San Francisco, California 94111-4109 County of San Francisco 4 Telephone: 415.434.9100 Facsimile: 415.434.3947 01/10/2020 Clerk of the Court 5 Email: ccardon@sheppardmullin.com BY: JUDITH NUNEZ jramsey@sheppardmullin.com Deputy Clerk 6 ashauer@sheppardmullin.com 7 Attorneys for Defendant WILLIAMS-SONOMA, INC. 8 9 SUPERIOR COURT OF THE STATE OF CALIFORNIA 10 COUNTY OF SAN FRANCISCO 11 12 JENNIVINE LEE SIMON, Case No. CGC-19-576923 13 Plaintiff, MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF 14 v. DEFENDANT’S MOTION TO COMPEL ARBITRATION AND TO 15 WILLIAMS-SONOMA, INC., DISMISS THE FIRST AMENDED COMPLAINT 16 Defendant. Date: February 6, 2020 17 Time: 9:00 a.m. Dept.: 613 18 The Honorable Andrew Y.S. Cheng 19 Complaint Filed: June 24, 2019 FAC Filed: September 17, 2019 20 Trial Date: None set 21 22 23 24 25 26 27 28 Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 I. INTRODUCTION 2 Plaintiff Jennivine Lee Simon (“Plaintiff”) brings this putative national class action 3 against Defendant Williams-Sonoma, Inc. (“WSI”), asserting a variety of California-only 4 state law claims arising out of an online purchase she made on June 25, 2016 through 5 WSI’s website, www.williams-sonoma.com (the “Website”). Plaintiff’s use of the 6 Website, including her June 25, 2016 purchase on the Website, was governed by WSI’s 7 Terms & Conditions 1 (the “Terms”), which Plaintiff expressly agreed to when she 8 completed her purchase. The Terms contain a section titled “Arbitration Agreement & 9 Waiver of Certain Rights” that provides: “All controversies, claims, counterclaims, or 10 other disputes arising between you and Williams-Sonoma, Inc. relating to these Terms and 11 Conditions or the Web Site or our mobile applications (each a ‘Claim’) shall be submitted 12 for binding arbitration in accordance with the Rules of the American Arbitration 13 Association (‘AAA Rules’).” Accordingly, the Court must compel Plaintiff to arbitration 14 and dismiss the First Amended Complaint (“FAC”). 15 II. FACTS 16 A. Plaintiff’s Allegations In The FAC 17 Plaintiff alleges that WSI engages in a false pricing scheme whereby the company 18 sells items advertised as “exclusive” at a discounted price in comparison to a higher 19 Suggested Price, yet WSI “has never, or almost never” offered the item at that higher 20 Suggested price, leading customers to “pay more than they otherwise would have paid and 21 to buy more than they otherwise would have bought.” FAC ¶¶ 1-8. Plaintiff made a single 22 online purchase on June 25, 2016 for an item with a Suggested Price of $450, and a selling 23 price of $199.95. Id. ¶¶ 16-18. She further alleges that WSI never actually offered the 24 item at $450, or any other price over $199.95. Id. ¶¶ 22-23. 25 26 27 1 Last updated March, 2016 (3 months prior to Plaintiff’s purchase) and available at 28 https://www.williams-sonoma.com/customer-service/legal-statement.html#terms. -2- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 Based on this online transaction, Plaintiff alleges a nationwide class and brings four 2 causes of action: Violation of the California Consumer Legal Remedies Act (“CLRA”), 3 Cal. Civ. Code § 1750 et seq.; Violation of the False Advertising Law (“FAL”), Cal. Bus. 4 & Prof. Code § 17500 et seq.; Violation of the Unfair Competition Law (“UCL”), Cal. 5 Bus. & Prof. Code § 17200 et seq.; and “Permanent Public” Injunctive Relief. 6 B. Plaintiff Agreed To Arbitrate Her Claim On An Individual Basis 7 Plaintiff admits that, in connection with her June 25, 2016 online purchase, she 8 proceeded through the online check-out process on WSI’s Website. FAC ¶ 19. As part of 9 that process, after selecting items for purchase, customers must proceed to their shopping 10 carts. An exemplar of the shopping cart page, as it would have appeared on June 26, 2016 11 (the date of Plaintiff’s purchase), is attached as Exhibit A to the Declaration of Nicole 12 Zagar. On it, consumers are told that “[b]y continuing with your purchase you agree to our 13 terms and conditions and privacy policy.” The underlined phrase “terms and conditions” is 14 a hyperlink that, if clicked, causes a pop-up window to appear with the applicable Terms 15 and Conditions. There are then three buttons available to proceed with the purchase – 16 checkout, express checkout, and PayPal Checkout. The relevant portion is reproduced 17 here: 18 19 20 21 22 23 24 25 26 27 28 -3- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 Web Page Viewed on Laptop or Desktop Computer 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 Web Page Viewed on Mobile Device 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Then, after entering shipping and billing information, customers must confirm their 22 purchase by pressing the “PLACE ORDER” button. Immediately above the “PLACE 23 ORDER” button is the phrase: “By continuing with your purchase you agree to our terms 24 and conditions and privacy policy.” Zagar Declaration, Ex. B. The underlined phrase 25 “terms and conditions” is a hyperlink that, if clicked, causes a pop-up window to appear 26 with the applicable Terms and Conditions. An exemplar of the final page of the check-out 27 flow process, as it would have appeared on June 26, 2016 (the date of Plaintiff’s purchase), 28 is attached as Exhibit B to the Zagar Declaration. The relevant portion is reproduced here: -5- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 The Terms & Conditions provide, in relevant part, as follows: 27 Arbitration Agreement & Waiver of Certain Rights 28 -6- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 You and Williams-Sonoma, Inc. agree that we will resolve any disputes between us through binding and final arbitration instead of through court 2 proceedings. You and Williams-Sonoma, Inc. hereby waive any right to a jury trial of any Claim. All controversies, claims, counterclaims, or other 3 disputes arising between you and Williams-Sonoma, Inc. relating to these Terms and Conditions or the Web Site or our mobile applications (each a 4 "Claim") shall be submitted for binding arbitration in accordance with the Rules of the American Arbitration Association ("AAA Rules"). 5 … 6 Neither you nor Williams-Sonoma, Inc. may act as a class representative or 7 private attorney general, nor participate as a member of a class of claimants, with respect to any Claim. Claims may not be arbitrated on a class or 8 representative basis. The arbitrator can decide only your and/or Williams- Sonoma, Inc.'s individual Claims. The arbitrator may not consolidate or join 9 the claims of other persons or parties who may be similarly situated. 10 … 11 THIS SECTION LIMITS CERTAIN RIGHTS, INCLUDING THE RIGHT TO MAINTAIN A COURT ACTION, THE RIGHT TO A JURY TRIAL, 12 THE RIGHT TO PARTICIPATE IN ANY FORM OF CLASS OR REPRESENTATIVE CLAIM, THE RIGHT TO ENGAGE IN 13 DISCOVERY EXCEPT AS PROVIDED IN AAA RULES, AND THE RIGHT TO CERTAIN REMEDIES AND FORMS OF RELIEF. OTHER 14 RIGHTS THAT YOU OR WILLIAMS-SONOMA, INC. WOULD HAVE IN COURT ALSO MAY NOT BE AVAILABLE IN ARBITRATION. 15 Zagar Decl., Ex. C (larger font size and caps in original). 16 III. THE COURT SHOULD COMPEL ARBITRATION 17 A. Legal Standard 18 The California Arbitration Act (“CAA”) provides that “[a] written agreement to 19 submit to arbitration an existing controversy or a controversy thereafter arising is valid, 20 enforceable and irrevocable . . . .” Cal. Code of Civil Proc. § 1281. Upon request of a 21 party to such an arbitration agreement, the court must order arbitration of the controversy if 22 it determines that: (1) “an agreement to arbitrate the controversy exists”; and (2) “a party 23 thereto refuses to arbitrate such controversy . . . .” Id. at § 1281.2. If a claim must be 24 arbitrated, a court may not consider its merits. Id.; Cal. Corr. Peace Officers Ass’n v. State 25 of Cal., 142 Cal. App. 4th 198, 205 (2006). 26 Similarly, the Federal Arbitration Act (the “FAA”) provides that a “written 27 provision in any … contract evidencing a transaction involving commerce to settle by 28 -7- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 arbitration a controversy thereafter arising out of such contract or transaction … shall be 2 valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for 3 the revocation of any contract.” 9 U.S.C. § 2. 2 The FAA requires courts to compel 4 arbitration if (1) a valid agreement to arbitrate exists, and (2) the dispute falls within the 5 scope of that agreement (i.e. “arbitrability”). Knutson v. Sirius XM Radio Inc., 771 F.3d 6 559, 564-65 (9th Cir. 2014). See also 9 U.S.C. § 4 (“upon being satisfied that the making 7 of the agreement for arbitration or the failure to comply therewith is not in issue, the court 8 shall make an order directing the parties to proceed to arbitration in accordance with the 9 terms of the agreement.”). “Unless a party specifically challenges the validity of the 10 agreement to arbitrate, both sides may be required to take all their disputes – including 11 disputes about the validity of their broader contract – to arbitration.” New Prime Inc. v. 12 Oliveira (2019) 139 S. Ct. 532, 538. 13 B. A Valid Agreement To Arbitrate Exists 14 Under both federal and California law, “the threshold question presented by a 15 petition to compel arbitration is whether there is an agreement to arbitrate.” Cruise v. 16 Kroger Co., 233 Cal.App.4th 390, 396 (2015) (italics omitted); Serafin v. Balco Properties 17 Ltd., LLC, 235 Cal. App. 4th 165, 173 (2015) (in California, general principles of contract 18 law determine whether the parties have entered a binding arbitration agreement); Dream 19 Theater, Inc. v. Dream Theater, 124 Cal. App. 4th 547, 552 (2004) (California courts often 20 look to federal law when deciding arbitration issues under state law). 21 The Terms in this case are a type of hybrid “clickwrap” / “browsewrap” online 22 agreement whereby a website user gives assent to be bound to a set of terms and conditions 23 not listed on the page itself, but available by clicking a hyperlink. Nguyen v. Barnes & 24 Noble Inc., 763 F.3d 1171, 1176-77 (9th Cir. 2014)); see also Long v. Provide Commerce, 25 Inc., 245 Cal. App. 4th 855, 867 (2016) (applying Nguyen standard under a different set of 26 27 2 The substantive law created by the FAA applies in both federal and state courts 28 alike. Southland Corp. v. Keating, 465 U.S. 1, 12 (1987). -8- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 facts). Courts hold that a valid contract exists where, as here, (a) a consumer is expressly 2 told that by clicking a button, completing a purchase, or taking some other action, they are 3 agreeing to be bound by a set of terms and conditions; and (b) the website contains a link 4 to the terms and conditions conspicuously and in proximity to the call to action (e.g., the 5 purchase button). See, e.g., DeVries v. Experian Info. Sols., Inc., 2017 U.S. Dist. LEXIS 6 26471, at **4, 18 (N.D. Cal. Feb. 24, 2017) (holding contract enforceable under California 7 law where user clicked “Submit Secure Order,” and directly above the button, the page 8 stated: “Click ‘Submit Secure Order’ to accept the Terms and Conditions above…,” and 9 the terms and conditions were hyperlinked); Moule v. United Parcel Serv. Co., 2016 WL 10 3648961, at **4, 12 (E.D. Cal. Jul. 7, 2016) (same under California law where user clicked 11 “Yes,” and above the button the page stated: “By clicking the Yes button, you agree to the 12 UPS Tariff/Terms and Conditions,” and the terms and conditions were hyperlinked); 13 Crawford v. Beachbody, LLC, 2014 U.S. Dist. LEXIS 156658, at **4, 8-9 (S.D. Cal. Nov. 14 5, 2014) (same under California law where user clicked “Place Order,” and directly above 15 the button the page stated: “By clicking Place Order below, you are agreeing that you have 16 read and understand the … Terms and Conditions,” and the terms and conditions were 17 hyperlinked); see also Temple v. Best Rate Hldgs. LLC, 360 F. Supp. 3d 1289, 1304-05 18 (M.D. Fla. Dec. 27, 2018) (same where user clicked “Get a Quote” button and directly 19 above the button stated: “By clicking ‘Get a Quote’ you are accepting our Privacy Policy 20 and Terms and Conditions,” and the terms and conditions were hyperlinked); Hale v. 21 Heath, 2016 U.S. Dist. LEXIS 92382, at **2, 11-13 (S.D. Cal. Jul. 14, 2016) (holding 22 contract enforceable as a matter of California law where user clicked “Get Your Free 23 Consultation,” and directly above the button the page was a hyperlink to the terms of use, 24 and ordering jury trial on dispute as to whether user clicked the button). 25 There is no distinction between the check-out flow on the Website in this case from 26 the cases cited above. Thus, there can be no dispute that (a) Plaintiff was expressly 27 informed that, by clicking the button to complete her purchase, she was agreeing to be 28 bound by the Terms, which contains the arbitration provision, and (b) a link to the Terms -9- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 was provided conspicuously and in proximity to the “Place Order” button for her to easily 2 access and review the Terms. In an online transaction, these facts together give rise to a 3 valid agreement to arbitrate. 4 C. Whether The Dispute Falls Within The Scope Of The Arbitration 5 Agreement (i.e., Arbitrability) Must Be Decided By The Arbitrator, Not 6 The Court 7 While the general rule is that the court decides whether the dispute falls within the 8 scope of the arbitration agreement (i.e., the second issue of “arbitrability”), arbitrability 9 “can be expressly delegated to the arbitrator where the [contracting] parties clearly and 10 unmistakably provide otherwise.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 11 2015) (internal citations omitted). See also Henry Schein, Inc. v. Archer & White Sales, 12 Inc. (2019) 139 S. Ct. 524, 529 (contracting parties “may agree to have an arbitrator decide 13 … gateway questions of arbitrability” and when they have done so, “a court may not 14 override the contract.”). “In those circumstances, a court possesses no power to decide the 15 arbitrability issue … even if the court things that the argument that the arbitration 16 agreement applies to a particular dispute is wholly groundless.” Id. 17 In this regard, courts hold that an arbitration provision incorporating a set of 18 arbitration rules, which themselves designate the issue of arbitrability to the arbitrator, is 19 sufficient to designate to the arbitrator the issue of arbitrability. See Brennan, 796 F.3d at 20 1130.; Aanderud v. Superior Court (2017) 13 Cal. App. 5th 880, 893 (incorporation of 21 JAMS Rules evidences parties’ clear and unmistakable intent to submit issues of 22 arbitrability to the arbitrator). Relevant here, an arbitration agreement that “incorporat[es] 23 … the AAA rules constitutes clear and unmistakable evidence that contracting parties 24 agreed to arbitrate arbitrability.” Brennan, 796 F.3d at 1130-31; see also Aguilar v. 25 Carters, Inc., 2019 U.S. Dist. LEXIS 224271, at *11, n. 1 (E.D. Wa. Oct. 4, 2019) 26 (incorporation of AAA rules constitutes clear and unmistakable evidence that parties 27 delegated arbitrability). 28 -10- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 Here, the arbitration provision of the Terms provide that any arbitration is to be 2 governed by AAA rules: “All controversies, claims, counterclaims, or other disputes 3 arising between you and Williams-Sonoma, Inc. relating to these Terms and Conditions or 4 the Web Site … (each a ‘Claim’) shall be submitted for binding arbitration in accordance 5 with the Rules of the American Arbitration Association (‘AAA Rules’).” Zagar Decl., Ex. 6 C. Both the Consumer Rules and the Commercial Rules of the AAA provide that “The 7 arbitrator shall have the power to rule on his or her own jurisdiction, including any 8 objections with respect to the existence, scope, or validity of the arbitration agreement or 9 to the arbitrability of any claim or counterclaim.” Consumer Arbitration Rules, American 10 Arbitration Association, at 17 (effective Sept. 1, 2014); Commercial Arbitration Rules, 11 American Arbitration Association, at 13 (effective Oct. 1, 2013). Accordingly, the Court’s 12 inquiry ends here, and this case must be compelled to arbitration in the first instance, 13 where the arbitrator will decide arbitrability. 14 D. Even If This Court Were To Decide Arbitrability Despite The Parties’ 15 Designation To The Arbitrator, The FAC Falls Within The Scope Of 16 The Arbitration Agreement 17 California law requires courts to read arbitration clauses broadly, and doubts as to 18 the scope of an arbitration clause should “be resolved in favor of sending the parties to 19 arbitration.” United Transportation Union, AFL/CIO v. Southern Cal. Rapid Transit Dist., 20 7 Cal. App. 4th 804, 808 (1992). The presumption of arbitrability grows even stronger 21 when the arbitration clause is broad, sweeping in “any claims arising from or relating to” 22 an agreement or “any claims” between the parties. See Wolitarsky v. Blue Cross of Cal., 23 53 Cal. App. 4th 342, 348 (1997); Serafin v. Balco Properties Ltd., 235 Cal. App. 4th 165, 24 182 (2015) (parties obliged to submit their claims to arbitration where provision includes 25 expansive language covering “all” disputes, even including the threshold issue of 26 arbitrability). Agreements calling for the arbitration of “all claims” or “all controversies” 27 require arbitration not only of contract claims, but also tort claims. See, e.g., EFund 28 -11- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 Capital Partners v. Pless, 150 Cal. App. 4th 1311, 1322 (2007); Izzi v. Mesquite Country 2 Club, 186 Cal. App. 3d 1309, 1315 (1986) superseded by statute on other grounds. 3 3 There can be no question that Plaintiff’s June 25, 2016 online transaction that gives 4 rise to the FAC falls within the scope of the provision. The provision applies to “[a]ll 5 controversies, claims, counterclaims, or other disputes arising between you and Williams- 6 Sonoma, Inc. relating to these Terms and Conditions or the Web Site or our mobile 7 applications,” and further applies that the parties agree that they “will resolve any disputes 8 between us through binding and final arbitration.” 9 IV. CONCLUSION 10 For the foregoing reasons, WSI respectfully requests that the Court grant this 11 motion, compel arbitration of Plaintiff’s claims, and dismiss the action. In the alternative, 12 the Court should compel arbitration of the entire case and stay this proceeding pending the 13 arbitrator’s ruling on whether Plaintiff’s claims are arbitrable (i.e., within the scope of the 14 Terms’ arbitration provision). 15 16 17 18 19 20 3 21 The FAA similarly “embodies a clear federal policy in favor of arbitration.” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 719 (9th Cir. 1999). See also AT&T Mobility LLC v. 22 Concepcion, 563 U.S. 333, 339 (2011); Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67-68 (2010). As a result, when determining whether a claim falls within the scope of an 23 arbitration agreement, courts must indulge every presumption “in favor of arbitration.” 24 Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 25 (1983). And arbitration provisions that govern “all” claims, disputes, and controversies between the 25 parties, without exception, cover all claims. AT&T Mobility LLC v. Concepcion, 563 U.S. 26 333 (2011) (enforcing arbitration agreement governing “all” disputes that included class action waiver); Morales v. Lexxiom, Inc., 2010 U.S. Dist. LEXIS 151809, * 18-19 (C.D. 27 Cal. Jan. 29, 2010) (enforcing arbitration agreement governing “any” dispute because the language is “all encompassing” and jury trial waiver set forth in all caps “could not be 28 clearer”). -12- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION 1 Dated: January 10, 2020 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 2 3 By /s/ P. Craig Cardon 4 P. CRAIG CARDON JAY T. RAMSEY 5 ALYSSA M. SHAUER 6 Attorneys for Defendant 7 WILLIAMS-SONOMA, INC. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13- Case No. CGC-19-576923 SMRH:4831-6106-4091.2 MEMORANDUM IN SUPPORT OF MOTION TO COMPEL ARBITRATION