DZ RESERVE and CAIN MAXWELL v. PLATFORMS

Background

The court had certified a class of United States residents who purchased one or more advertisements on Meta’s platforms from August 15, 2014, to the present. The class alleges that Meta intentionally misrepresented the “Potential Reach” of advertisements when selling them. The Ninth Circuit affirmed certification of the damages class. The order states that the case was headed toward a jury trial.

On August 21, 2025, shortly before a jury trial scheduled for October 14, 2025, Meta moved to compel arbitration for unnamed class members who purchased advertisements through Meta between May 25, 2018, and October 27, 2021, inclusive. Meta asked the court to send those class members to arbitration and redefine the class to exclude them from trial.

Arbitration Agreement and Who Decides Waiver

Meta relied on the Federal Arbitration Act. The parties did not dispute that Facebook’s Commercial Terms, implemented on May 25, 2018, contained a valid and binding arbitration agreement covering the affected class members’ claims. The agreement stated that most disputes would be resolved by binding arbitration on an individual basis.

The court ruled that it, rather than an arbitrator, had to decide whether Meta waived arbitration through its litigation conduct. The agreement stated that only a court could decide issues concerning the arbitration provision’s scope or enforceability. The court found that this language assigned gateway arbitrability issues—including waiver—to the court. It rejected Meta’s argument that the issue should be sent to an arbitrator.

The court also granted the plaintiffs’ request to file a sur-reply because Meta had not addressed waiver in its opening motion and raised its position about waiver and delegation only in its reply.

Waiver

The court applied a two-part test: whether Meta knew of its right to compel arbitration and whether it intentionally acted inconsistently with that right. The court stated that prejudice to the opposing party was no longer required under the governing law.

The court found that the plaintiffs established both elements. Meta did not dispute that it knew about its asserted arbitration right. The court also found that Meta acted inconsistently with that right by litigating extensively in federal court beginning in 2018. Before seeking arbitration, Meta filed three motions to dismiss, a motion for judgment on the pleadings, an opposition to class certification, an appeal of class certification, a summary-judgment motion, motions concerning expert witnesses, and other filings. The plaintiffs also stated without objection that Meta engaged in substantial discovery.

Meta had mentioned arbitration only once in the litigation before filing its motion: in an opposition to class certification. The court found that Meta’s statement that it had not waived arbitration was not an assertion that it would actually seek to enforce arbitration. The court rejected Meta’s argument that it could not have moved earlier because unnamed class members did not become parties until later in the class process. Considering the totality of Meta’s conduct, the court found a clear waiver of the contractual arbitration provision as to the absent class members. The order also notes that Meta conceded it had waived the right to compel the named plaintiffs to arbitrate.

Disposition

The court denied Meta’s request to compel arbitration. The order states that denial of arbitration is immediately appealable under 9 U.S.C. § 16(a) and notes that Meta might file an interlocutory appeal.