Matthew Nixon, et al. v. Vegas.com, LLC

Background

Matthew Nixon and Markus Cohn brought a class action against Vegas.com, LLC under California’s Consumer Legal Remedies Act (CLRA), Unfair Competition Law (UCL), and False Advertising Law (FAL). They alleged that Vegas.com used “drip pricing”: advertising a low base price and disclosing mandatory taxes, resort charges, service fees, or processing fees only later in the purchase process. They also alleged that the website used urgency and scarcity messages to influence purchases.

Nixon alleged that he booked a hotel stay on March 31, 2023, at an advertised rate of $119.40 per night but was charged $182.40, including taxes, fees, and a mandatory resort charge that he said had not been disclosed beforehand. Cohn alleged that he booked a hotel and purchased two show tickets on March 31, 2025, and was charged more than the advertised base prices because of mandatory charges that were disclosed later.

The plaintiffs filed in California state court, and Vegas.com removed the case to federal court on July 7, 2025. Vegas.com moved to compel arbitration and, alternatively, to dismiss the complaint for failure to state a claim. The plaintiffs moved to remand their equitable claims to state court.

Arbitration

The court denied Vegas.com’s motion to compel arbitration and also denied its related request to stay Nixon’s claims pending arbitration. The court applied California contract-formation principles and decided whether an arbitration agreement existed because challenges to the existence of a contract are for the court to decide.

Cohn had to click buttons labeled “ADD PAYMENT INFO” and “COMPLETE BOOKING.” Notices above those buttons stated that clicking would indicate acceptance of Vegas.com’s terms, which contained an arbitration agreement and class waiver. The court concluded, however, that the notices and hyperlinks were not reasonably conspicuous. The links appeared in faint purple text on a gray background, were not underlined or bolded, and appeared in a crowded design with larger and more prominent messages. The court also found that the one-time nature of Cohn’s purchase did not put him on notice to look for additional terms. Because there was no reasonably conspicuous notice, the court found that no contract was formed and denied arbitration.

Motion to Dismiss

The court granted Vegas.com’s motion to dismiss in part. It dismissed Nixon’s CLRA claim because the specific CLRA provision addressing advertising prices that exclude mandatory fees was enacted after Nixon’s March 31, 2023 purchase. The court rejected Nixon’s argument that another CLRA provision covering goods or services advertised with an intent not to sell them as advertised independently covered the alleged conduct.

The court denied the motion to dismiss Nixon’s UCL and FAL claims based on lack of reasonable reliance. It held that Nixon sufficiently alleged that he believed the advertised hotel price reflected the cost apart from taxes, relied on the advertised price, and would have acted differently if he had known the true cost. The court treated whether the later disclosure of fees defeated reliance as a factual issue not appropriate for resolution at this stage.

The court also rejected Vegas.com’s argument that Cohn could not seek CLRA damages because Vegas.com had taken corrective action. The court held that merely stopping the challenged conduct was insufficient because corrective action must be given to the consumer and must appropriately correct, repair, replace, or otherwise remedy the harm. The court therefore rejected the argument that Cohn had failed to state a claim for CLRA damages.

Motion to Remand and Equitable Claims

The plaintiffs sought partial remand of their equitable claims under the UCL, FAL, and CLRA. They conceded that they had not alleged that they lacked an adequate remedy at law. The court explained that federal courts may provide equitable relief only when there is no adequate legal remedy. Because the plaintiffs had not made that showing, the court concluded that it lacked equitable jurisdiction over those claims.

The court found it unclear whether it could partially remand only the equitable claims. Instead, it dismissed the plaintiffs’ equitable claims without prejudice so they could be brought appropriately in state court. The court denied the plaintiffs’ motion to partially remand. It stated that, based on the dates alleged, the applicable limitations periods did not then prevent refiling in state court and that the plaintiffs had until March 2026 to refile.

Disposition

The court denied the motion to compel arbitration, denied the request to stay Nixon’s claims pending arbitration, granted in part Vegas.com’s motion to dismiss as to Nixon’s CLRA claim and the plaintiffs’ equitable claims, dismissed the equitable claims without prejudice, and denied the plaintiffs’ motion to remand.