18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 633 Crawford, et al. v. Sony Interactive Entertainment LLC, 2021 U.S. Dist. LEXIS 61134 (N.D. Cal. March 30, 2021). Plaintiff filed a class action on behalf of any parents whose children spent money on Defendant’s videos games without permission and alleged that Defendant induced children to make unauthorized video game purchases and then refused to refund their parents. Specifically, Plaintiff’s son spent over $1,000 on in-game Fortnite purchases through Defendant’s online network, which automatically deducted funds from the credit or debit card on file. Plaintiff subsequently sought a refund of these unauthorized purchases, but Defendant refused to provide her with a refund. According to Plaintiff, Defendant got minors addicted to free “bait apps” and then enticed them to make in-game purchases that were non-refundable. Id. at *3. Plaintiff’s complaint asserted violations of the California Consumers Legal Remedies Act and Business and Professions Code, in addition to a claim for unjust enrichment. Defendant filed a motion to compel arbitration. The Court granted the motion. In support of its motion, Defendant pointed to its software licensing agreement and its terms of service, both of which contained a mandatory arbitration clause and a class action waiver. Plaintiff acknowledged that her son executed these binding agreements and that she was bound by such provisions. Plaintiff’s only argument in response to the motion was that her minor son could not be bound by a contract under California law. The Court recognized that this may be true, but opined that “it is beside the point . . . because the complaint alleges a dispute entirely between Plaintiff and Defendant.” Id. at *3. The Court reasoned that Plaintiff could not challenge Defendant’s arbitration clauses on this basis because she was the only named Plaintiff and because the only alleged injury concerned the money that Plaintiff personally lost after seeking a refund from Defendant. Id. For this reason, the Court granted Defendant’s motion to compel arbitration. Crosby, et al. v. Amazon.com Inc., 2021 U.S. Dist. LEXIS 145425 (C.D. Cal. April 19, 2021). Plaintiffs, a group of consumers, filed a class action alleging that Defendant advertised and sold 18650 lithium-ion batteries despite knowing that they were "defective, fraudulent, and dangerous" in violation of California’s False Advertising Law, Consumer Legal Remedies Act, and Unfair Competition Law, and if Washington law applied, Washington’s Consumer Protection Act (“WCPA”). Id . at *2. Defendant filed a motion to compel arbitration of Plaintiffs’ claims, and the Court granted the motion. Plaintiffs created their accounts on Defendant’s website in order to purchase items online. At the account creation stage, and at the point of purchase for any item, Plaintiffs assented to Defendant’s conditions of use (“COU”). The COU contained an arbitration agreement requiring users to submit to arbitration any dispute or claim relating to use of Defendant’s services. Plaintiffs argued that the dispute was outside the scope of the agreement because their claims sought public injunctive relief, and that relief would be unavailable in individual arbitration. Under the choice-of-law provision in the agreement, the Court applied Washington law to the analysis. Plaintiffs asserted a claim under the WCPA, which allows consumers to seek injunctive relief "to enjoin further violations." Id . at *9. Accordingly, the Court held that under the WCPA, Plaintiffs were able to seek relief that would benefit the public in an individual arbitration. Accordingly, Plaintiffs could not plausibly argue that their claims fell outside the scope the arbitration agreement by virtue of the remedies they sought. Id . Plaintiffs further asserted that Defendant waived its right to compel arbitration because it failed to respond to Plaintiffs’ various letters in a timely manner. However, the Court determined that Defendant did not ever act inconsistently with the intent to exercise its right to arbitrate, and Plaintiffs failed to establish any prejudice from Defendant’s conduct. For these reasons, the Court granted Defendant’s motion to compel arbitration of Plaintiffs’ claims. Cuenco, et al. v. Clubcorp United States , 2021 U.S. Dist. LEXIS 38933 (S.D. Cal. March 2, 2021). Plaintiffs, a group of members of one of Defendant’s members-only clubs, filed a class action alleging violations of the California Consumer Legal Remedies Act, the Unfair Competition Law, and the False Advertising Law, as well as breach of contract, unjust enrichment, and money had and received in connection with the club’s closure due to the COVID-19 pandemic. Defendant filed a motion to compel arbitration of Plaintiffs’ claims, and the Court denied the motion. Defendant argued that arbitration should be compelled pursuant to a reference in the membership application stating that members would be bound by Defendant’s by-laws if they became members. In the by-laws, there was an arbitration agreement requiring mandatory individual arbitration of all claims. Plaintiffs argued that the terms of the by-laws were neither known nor easily available to them when they submitted their applications. Id . at *9. Defendant contended that the by-laws were available, and that one Plaintiff acknowledged receipt of the by-laws. Id . The Court found that a factual dispute existed as to whether the by-laws were available to Plaintiffs. The Court further determined that although Defendant asserted that the by-laws were available on the website, Defendant failed to provide any direct evidence that it provided the by-