Shultz v. TTAC Publishing, LLC

Background

TTAC Publishing, LLC moved to stay, or pause, further proceedings while it appealed the court’s earlier order denying its motion to compel arbitration of Michelle Shultz’s claims. The earlier order concerned claims under the Telephone Consumer Protection Act, as reflected in the opinion’s reference to 47 U.S.C. §§ 227 and following. TTAC filed its appeal with the Ninth Circuit.

The court considered the four factors governing a stay pending appeal: whether the moving party has a substantial likelihood of success or a substantial case for relief; whether it will suffer irreparable harm without a stay; whether a stay would substantially harm other interested parties; and where the public interest lies.

Arguments and Analysis

TTAC argued that Shultz had not disputed that she agreed to the website’s terms and conditions. The court rejected that argument, explaining that Shultz had expressly argued that TTAC failed to provide adequate notice of the website’s arbitration terms and that she therefore did not manifest assent to an enforceable arbitration agreement.

TTAC also argued that the court had treated it differently from parties in other cases and had required an unusually demanding level of notice for the website’s terms. The court disagreed that TTAC had shown a substantial case for relief or a serious legal question. It explained that its earlier decision examined the checkout page and the website’s hyperlink in their entirety and concluded that they were not conspicuous enough to put Shultz on inquiry notice. The court stated that fact-specific analysis of website agreements is not unworkable.

TTAC further argued that it would suffer irreparable harm from litigation costs and from broader discovery than would be available if Shultz were required to pursue only individual claims in arbitration. The court recognized the efficiencies that arbitration can provide but held that neither the Federal Arbitration Act nor Ninth Circuit authority required an automatic stay whenever a motion to compel arbitration is denied. The court also found that TTAC had minimized the possible harm to Shultz, who alleged that unsolicited text messages began after her purchase and sought an order stopping those messages.

The court found the public-interest factor neutral because both enforcing valid arbitration agreements and protecting consumer rights are important interests. After weighing all four factors and the circumstances as a whole, it declined to stay the case.

Disposition

The court DENIED TTAC’s motion to stay pending appeal. It also set a further case-management conference for March 23, 2021, required the parties to file a joint case-management statement by March 16, 2021, and stated that it was inclined to allow reasonable individual discovery while the appeal was pending. The parties were directed to discuss that discovery issue at the conference without relitigating the denial of the stay of the case in its entirety.