Quamina v. JustAnswer LLC ( 2023 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JESSICA QUAMINA, et al., Case No. 22-cv-06051-JD 8 Plaintiffs, ORDER RE ARBITRATION v. 9 10 JUSTANSWER LLC, Defendant. 11 12 13 In this putative class action, named plaintiffs Jessica Quamina, Tasha Davis, Kristie 14 Nelson, Kseniya Godun, Moya McDowell, Renee Pettit, and Latoya Foust, allege that they were 15 enrolled without their consent in recurring paid subscriptions for a website and mobile app 16 operated by defendant JustAnswer, LLC. Dkt. No. 1. JustAnswer asks to send the case to 17 arbitration pursuant to the Federal Arbitration Act (FAA) and an arbitration clause in 18 JustAnswer’s Terms of Service (TOS). Dkt. No. 26. Plaintiffs oppose arbitration primarily on 19 formation grounds, with additional objections about unconscionability and fraud. Dkt. No. 31. 20 The background of this litigation is straightforward. As alleged in the complaint, 21 JustAnswer operates a website and mobile app where users can pay a fee to ask questions of 22 “experts” about legal, medical, financial, technical, and other topics. Dkt. No. 1 ¶ 1. Plaintiffs say 23 they agreed to pay $1.00 to $5.00 to pose a question but that JustAnswer surreptitiously enrolled 24 them in a recurring monthly subscription program that billed their credit cards $46.00 to $60.00 25 per month. Id. ¶¶ 60-75. This conduct is said to violate the Electronic Funds Transfer Act, 15 26 U.S.C. § 1693, and the consumer protection laws of California, New York, North Carolina, and 27 Florida, which are the states where the named plaintiffs allege citizenship. Plaintiffs sue on behalf 1 Plaintiffs anticipated a dispute over the arbitration clause and a class action waiver in the 2 JustAnswer TOS based on events in a prior California state court case. The complaint details the 3 sign-up process that plaintiffs went through and provides screen shots said to represent what 4 plaintiffs saw when signing up. Dkt. No. 1 ¶¶ 10-25. 5 True to form, JustAnswer asks to compel arbitration of plaintiffs’ claims on an individual 6 basis pursuant to the TOS. Dkt. No. 26. Its main contention is that plaintiffs “had actual 7 knowledge (or at least inquiry notice) of the TOS,” and so entered into binding and enforceable 8 arbitration agreements and class action waivers. Id. at 1. Plaintiffs’ primary objection is that an 9 agreement was never formed because the TOS is a browsewrap agreement, and “arbitration 10 clauses in browsewrap agreements are unenforceable against individuals.” Dkt. No. 31 at 8. 11 From this starting point, the parties launched into a rather convoluted dispute about 12 JustAnswer’s user sign-up and TOS disclosure practices, and whether plaintiffs were given fair 13 notice of the arbitration and class action waiver provisions before using the service. Both sides 14 sought to bolster their positions with declarations, screen shots, and other evidence. 15 The problem is that neither side adequately presented the arbitration question for a decision 16 by the Court. To start, there is a choice of law question that was not well-briefed. JustAnswer 17 proffered three user agreements covering different time periods, each of which identifies the laws 18 of Idaho as governing the agreement and any disputes about it. Dkt. Nos. 27-1 at ECF p. 29; 27-2 19 at 8; 27-3 at 21. The named plaintiffs are from four different states. Even so, JustAnswer elected 20 to apply California law to the formation dispute. See Dkt. No. 26 at 6. This was based on a few 21 case citations for the general principle that California federal courts typically apply California 22 choice of law rules in diversity and supplemental jurisdiction cases. That may be so, but 23 JustAnswer did not take the essential next step of arguing which jurisdiction those choice of law 24 principles lead to. Id. at 5. For their part, plaintiffs simply said there is “no dispute” that 25 California law applies. Dkt. No. 31 at 3. 26 This is an incomplete discussion. It may be that the California choice of law rules apply to 27 the formation question, but a cogent choice of law analysis is missing. Arguments can be made 1 diverse state citizenship of most of the named plaintiffs. The parties also did not squarely address 2 || the implications of the fact that the Court has federal question jurisdiction over this case because 3 || plaintiffs alleged a federal claim, which JustAnswer glossed over. Dkt. No. 26 at 5. 4 With respect to the formation dispute itself, Section 4 of the FAA states that when the 5 “making of the arbitration agreement ... [1s] in issue, the court shall proceed summarily to the trial 6 thereof.” 9 U.S.C. § 4; see also Quiroz v. ADS-Myers, Inc., No. 20-cv-0155-JD, 2021 WL 7 4453579, at *1 (N.D. Cal. Sept. 29, 2021). Although the question of whether an online agreement 8 is enforceable does not necessarily require a trial, see Motley v. ContextLogic, Inc., No. 3:18-CV- 9 02117-JD, 2018 WL 5906079, at *1 n.1 (N.D. Cal. Nov. 9, 2018), the record here features 10 || disagreements about the facts of formation. The parties did not expressly address a trial, but it is 11 not obvious that the arbitration dispute may be decided without one. 12 Another concern involves the settlement of the prior California state court case. The 5 13 description of that litigation in the complaint suggests that it overlaps with the facts and claims 14 here. Whether that is true, and if so to what degree, is not clear in the record. 3 15 Consequently, the Court declines to resolve the question of arbitration on the record as it a 16 || presently stands. The parties are directed to meet and confer about the Court’s concerns, and to 3 17 || file a joint statement stating: (1) their positions on choice of law, namely which law applies and 18 why; (2) should a trial be held on the question of formation under Section 4 of the FAA, and if 19 not, why not; and (3) whether and how the California state court settlement affects the claims in 20 || this case. The statement may not exceed 22 pages and must be filed by November 6, 2023. 21 IT IS SO ORDERED. 22 Dated: October 2, 2023 23 24 25 JAMES#/ONATO- United States District Judge 26 27 28