Cheng v. Nordstrom

Background

Joanna Cheng purchased a Little Mermaid nightgown from Nordstrom Rack’s website on January 20, 2026. The product displayed a “Comparable Value” of $42.00, crossed out next to a sale price of $20.87. Cheng alleges that the nightgown did not actually sell for $42.00 and that Nordstrom’s reference-pricing representations caused her to pay more than the item’s actual market value.

Cheng filed a proposed class action asserting claims under California’s False Advertising Law, Unfair Competition Law, and Consumer Legal Remedies Act. She sought restitution and injunctive relief on all claims, as well as additional damages and remedies on some claims.

Nordstrom moved to compel arbitration based on arbitration language in its website and app Terms and Conditions. The agreement covered disputes arising from the Terms, use of Nordstrom’s website, and products or services purchased from Nordstrom. It also specifically included advertising-related claims and required individual arbitration.

Court’s Analysis

The Federal Arbitration Act requires a court to compel arbitration when a valid arbitration agreement exists and applies to the dispute, unless a generally applicable contract defense makes the agreement invalid.

Agreement to the Terms. Cheng argued that she did not assent to the arbitration agreement because the app screen she used to place her purchase displayed the Terms notice near one “Place Order” button but not another. The court did not decide whether the Terms were sufficiently noticeable during that purchase. Instead, it concluded that Cheng agreed to the Terms repeatedly when she signed into her account.

The sign-in pages stated that tapping “Next” meant the user agreed to Nordstrom’s Privacy Policy and Terms and Conditions, with those documents presented as hyperlinks. The court found the notice reasonably conspicuous and relied on evidence that the sign-in pages had remained unchanged since February 2024 and that Cheng signed into her account at least 14 times between February 2024 and January 20, 2026. The court concluded that Cheng’s sign-ins manifested agreement to the Terms and therefore to the arbitration agreement.

The court denied Cheng’s objection to Nordstrom’s reply evidence. It reasoned that Nordstrom had submitted the evidence in response to images Cheng included with her opposition.

Arbitrability and Public Injunctive Relief. Cheng argued that the arbitration agreement could not prevent her from seeking public injunctive relief under California law. The court stated that Cheng did not appear to have standing to seek that relief because she had not alleged a threat of future harm. It also held that the arbitration agreement addressed the issue by providing that, if a prohibition on non-individualized injunctive relief were found unenforceable, the particular request would be decided by a court after the other claims were arbitrated.

The court therefore concluded that Cheng’s request for public injunctive relief did not prevent it from compelling arbitration. It stated that it could retain jurisdiction over that request while the other claims proceeded to arbitration.

Unconscionability and Illusory Agreement. Under California law, a party opposing arbitration must show both procedural and substantive unconscionability. Procedural unconscionability concerns how an agreement was presented; substantive unconscionability concerns whether its terms are excessively harsh or one-sided.

The court found that the agreement was likely a take-it-or-leave-it contract but that this created only minimal procedural unconscionability. Cheng did not identify oppression or surprise. The court rejected her substantive-unconscionability arguments concerning class-wide settlements, public injunctive relief, the agreement’s negotiation period before arbitration, its cost provisions, and Nordstrom’s ability to modify the agreement. The court concluded that Cheng had not shown that the agreement was unconscionable or illusory.

Disposition

The court GRANTED Nordstrom’s motion to compel arbitration and STAYS the case pending arbitration. The opinion does not decide whether Nordstrom’s pricing practices violated California law or whether Cheng is entitled to any requested relief.