18th Annual Workplace Class Action Report - 2022 Edition

Annual Workplace Class Action Litigation Report: 2022 Edition 637 rule. Id . at *30-31. For these reasons, the Ninth Circuit determined that the arbitration agreement should have been enforced, and it reversed the District Court’s order denying Defendant’s motion to compel arbitration. In Re NFL ’ s Sunday Ticket Antitrust Litigation, 2021 U.S. Dist. LEXIS 111365 (C.D. Cal. April 20, 2021). Plaintiffs filed a class action alleging that DirecTV’s exclusive agreement with the National Football League ("NFL") to broadcast certain NFL games was anticompetitive in violation of the Sherman Act. DirecTC moved to compel arbitration of Plaintiffs’ claims and the NFL moved to dismiss. The District Court granted NFL’s motion and denied as moot DirecTV’s motion. On appeal, the Ninth Circuit reversed and remanded. Following the Ninth Circuit’s remand, DirecTV renewed its motion to compel arbitration and to stay proceedings. The District Court granted the motion. First, the District Court rejected Plaintiffs’ argument that DirecTV engaged in litigation conduct that waived its right to arbitration. The District Court further determined that pursuant to the customer agreements between the parties, the parties agreed to arbitrate their claims. The District Court also found that the fact that DirecTV changed the arbitration agreement at one point was irrelevant because it changed the provision in all of the customers’ agreements, not just Plaintiffs’ agreement and the agreements all contained prelitigation dispute resolution. The District Court concluded that any changes in the version of Plaintiffs’ agreements did not deprive them of their reasonable expectations under the pre-dispute agreements, and DirecTV did not violate an implied covenant of good faith and fair dealing. Id . at *15. Accordingly, the District Court reasoned that because Plaintiffs did not otherwise challenge that the agreements existed and they encompassed the dispute, DirecTV’s motion to compel arbitration should be granted. J.A., et al. v. Microsoft Corp., 2021 U.S. Dist. LEXIS 175822 (N.D. Ill. Sept. 16, 2021). Plaintiffs, a group of minor consumers, filed a class action alleging that Defendant’s wireless, Microsoft-branded Xbox One controllers had a defect which caused the controllers to register "phantom input or stick drift," thereby preventing accurate gameplay. Plaintiffs brought claims for breach of express warranty, breach of implied warranty of merchantability, unjust enrichment, and violations of state consumer protection laws. Id . at *3. Defendant filed a motion to compel arbitration of Plaintiffs’ claims pursuant to an agreement included as a condition of their use of Xbox services and purchase and use of Xbox controllers. Plaintiffs contended that the arbitration agreements and delegation provisions were unconscionable, and that the agreements were invalid as to California claims in prohibiting public injunctive relief and not enforceable against disaffirming minors. Id . at *4. The Court granted the motion to compel arbitration. Plaintiffs contended that the "click-through" agreement for Xbox Live Services did not apply to Xbox hardware accessories like controllers. Id . at *9. Defendant argued that Plaintiff assented to the click-through master services agreement (“MSA”) requiring individual arbitration of disputes and providing for the arbitrator to rule on any issues of arbitrability. Id . at *10. The Court thus concluded that the issue of whether the agreement applied to claims on controllers was for the arbitrator to decide. Defendant further asserted that the arbitration provision was included in the controller’s product guides and on controller boxes. Plaintiffs contended that the shrink-wrap agreement in the Xbox controller packaging was unenforceable due to the failure to provide sufficient notice of the terms. Id . at *14. The Court noted that the product guides contained specific language warning consumers they must accept Microsoft’s terms of use and that, through the use of the product, agreed to be bound by those terms. Id . Accordingly, the Court found that Defendant produced sufficient evidence to show both click-through and shrinkwrap agreements to arbitrate with Defendant. Plaintiffs also argued that the agreement was unenforceable as to the California claims because they preluded California consumers from pursuing public injunctive relief in any forum. Id . at *18. The Court determined that where a contract delegates arbitrability to an arbitrator, the Court may not override the contract, and therefore, the issue must be decided by the arbitrator. Plaintiff further asserted that the agreements could not be enforced against minor Plaintiffs. The Court explained that the issue of disaffirmance may not be determined by the Court, as it equated to a challenge to the validity of the agreements as a whole and an arbitrability issue that should be decided by the arbitrator. Plaintiffs also challenged the delegation provisions in the agreements as procedurally unconscionable and unenforceable, and a gateway issue for the Court to resolve. The Court held that Plaintiffs failed to show the delegation clauses were unconscionable, and that the delegation of arbitrability issues to the arbitrator was enforceable through the incorporation of AAA rules. Id . at *23. Accordingly, the Court granted Defendant’s motion to compel arbitration. Jackson, et al. v. Amazon.com, Inc., 2021 U.S. Dist. LEXIS 175619 (S.D. Cal. Sept. 15, 2021). Plaintiff, an Amazon Flex delivery driver, filed a class action alleging that Defendant intercepted and disclosed messages