Advent Environmental Consulting, LLC v. Jotform Inc.

Background

Advent alleged that Jotform falsely promised to fix problems with its product, advertised misleadingly, and breached its contract with Advent. Jotform moved to compel arbitration based on an arbitration provision in its Terms of Service. Jotform also requested attorney’s fees for the costs of bringing the motion to compel arbitration.

Arbitration ruling

The court granted Jotform’s motion to compel arbitration. It explained that compelling arbitration required both an agreement to arbitrate and an agreement broad enough to cover the dispute.

The court found that Advent agreed to Jotform’s Terms of Service when Advent created its account. The signup form stated, directly beneath the account-creation button, that clicking the button meant agreeing to the Terms of Service and Privacy Policy. The Terms included a provision requiring disputes to be resolved through individual arbitration rather than jury trials or class actions.

The court held that the arbitration provision covered Advent’s claims because it applied to disputes generally. The court also rejected Advent’s arguments that it had not seen the provision and that the provision was unfair under California law. The court noted that the provision appeared in bold text near the top of the Terms of Service and concluded that Advent could not claim unfair surprise. The court also found Advent’s arguments about the provision’s terms without merit.

Attorney’s-fee request

The court denied Jotform’s motion for attorney’s fees without prejudice. Jotform relied on a contract provision requiring Advent to indemnify Jotform for fees arising from a violation of the Terms of Service. The court identified three problems with the request.

First, the request was not ready for decision because local rules required the parties’ lawyers to meet and discuss disputed fee issues before filing a fee motion. Second, the court was not persuaded that the contract clearly entitled Jotform to fees for bringing a motion to compel arbitration. The court said it was unclear whether filing a lawsuit to test whether arbitration applied amounted to a contract violation, particularly because Advent’s arguments, although weak, were not shown to be wholly frivolous or made in bad faith. Third, the court said the arbitrator might have authority to decide whether Advent breached the contract by filing suit instead of beginning arbitration.

Disposition

The court granted the motion to compel arbitration and dismissed the case without prejudice. It denied Jotform’s fee request without prejudice to Jotform’s seeking fees from the arbitrator or filing a renewed fee motion in court within 14 days that addressed the concerns identified in the ruling.