Atkins v. Amplitude, Inc.

Background

Kyle Atkins and Michael Luo brought a class action against Amplitude, Inc. They alleged that Amplitude provided software development kits for embedding in the DoorDash food-delivery app and that the software collected and disseminated sensitive information, including timestamped location information, device identifiers, device-fingerprint data, information about other apps, search terms, shopping-cart contents, and viewed restaurants and products. They asserted claims under the federal Wiretap Act, the California Invasion of Privacy Act, the California Comprehensive Computer Data Access and Fraud Act, and the California Wiretap Act.

Amplitude moved to compel arbitration based on arbitration agreements between the plaintiffs and DoorDash, even though Amplitude was not a signatory to those agreements. Amplitude also moved in the alternative to dismiss the case.

Standing and Motion to Dismiss

The court held that the plaintiffs adequately alleged an injury sufficient for Article III standing. It found that the alleged disclosure of information that could reveal matters such as religious affiliation, sexual orientation, or medical condition was a concrete privacy harm comparable to harms recognized in traditional privacy lawsuits. The court also found that, even assuming consent was relevant to standing, the plaintiffs plausibly alleged that they did not consent to Amplitude’s use of their information for its own purposes.

The court therefore denied the motion to dismiss for lack of standing. Because it granted the motion to compel arbitration, it denied the remainder of the motion to dismiss without prejudice pending arbitration.

Motion to Compel Arbitration

The court applied equitable estoppel, a doctrine that can prevent a person from relying on part of a contract while avoiding another part, such as an arbitration clause. Under California law, the court found that both relevant circumstances for enforcing an arbitration clause against a nonsignatory were present.

First, the plaintiffs’ claims were intertwined with the DoorDash agreement because consent was an element of each claim, and DoorDash’s Privacy Policy addressed disclosure of personal information to third parties. Determining whether the plaintiffs consented would therefore require examining that policy, which was incorporated into DoorDash’s broader Terms & Conditions containing the arbitration provision.

Second, the plaintiffs alleged interdependent and coordinated misconduct by DoorDash and Amplitude. The court reasoned that the alleged collection by Amplitude was facilitated by DoorDash’s agreement to embed the software in its app and by the alleged failure to inform users about the software or obtain consent for Amplitude’s collection. The court concluded that it would be unfair to allow the plaintiffs to avoid their arbitration agreement with DoorDash by suing only Amplitude over conduct tied to that agreement.

Unconscionability

The plaintiffs argued that the delegation provision—which assigns disputes about the arbitration agreement’s enforceability to the arbitrator—and the arbitration agreement itself were unconscionable, meaning unfairly oppressive or unfairly imposed. The court ruled that the plaintiffs did not meet their burden of proving unconscionability.

The court found only minimal procedural unconscionability. Although the agreement was standardized and drafted by a party with greater bargaining power, users had an opportunity to opt out. The court also found insufficient evidence of surprise or oppressive repeated changes to the agreement.

The court likewise found no high degree of substantive unconscionability. It rejected the argument that Amplitude’s enforcement of the agreement as a nonsignatory was unfair because the claims fell within the arbitration agreement’s scope. It also found the batch-arbitration provision permissible because it coordinated similar cases while preserving each party’s opportunity to be heard and stating that rulings would bind only the parties involved. Finally, the court found that allegedly one-sided appeal provisions were insufficient to establish unconscionability without a lack of justification.

Disposition

Judge Rita F. Lin granted the motion to compel arbitration. The court denied the motion to dismiss for lack of Article III standing and denied the remainder of that motion without prejudice pending arbitration. The case was stayed pending arbitration. The parties must file a joint status report every 120 days until the arbitration ends and another report within 14 days after the proceeding concludes.