Houtchens v. Google LLC

Background

Jenny Houtchens and Samantha Ramirez brought the action individually and on behalf of similarly situated people. They alleged that Google violated multiple state consumer-protection statutes, California’s Business and Professions Code, California’s Consumers Legal Remedies Act, Pennsylvania’s Unfair Trade Practices and Consumer Protection Law, and the Magnuson-Moss Warranty Act. They also alleged breach of implied warranties and unjust enrichment.

The claims concerned Fitbit smartwatches and activity trackers. Google acquired Fitbit in January 2021. To use certain Fitbit smartwatch features, users had to create Fitbit accounts. The account-registration process required users to check a box stating that they agreed to Fitbit’s Terms of Service, which included an arbitration provision. Houtchens purchased a Fitbit Versa Light in December 2020 and later created an account for her daughter. Ramirez purchased a Fitbit Versa 2 in November 2021 and later created an account. Neither plaintiff remembered seeing the Terms of Service when creating an account.

The arbitration provision stated that disputes between the user and Fitbit arising from or relating to the Terms of Service, the Fitbit service, or Fitbit products or services would be governed by the arbitration procedures in the agreement. It incorporated the American Arbitration Association’s Commercial Arbitration Rules and Consumer Arbitration Rules. It also allowed a user to opt out by contacting Fitbit within 30 days after first accepting the Terms of Service.

Google’s Motions and the Parties’ Arguments

Google moved to compel arbitration and to dismiss for lack of subject-matter jurisdiction or, alternatively, to stay the case while arbitration proceeded. Google also moved to dismiss for failure to state a claim.

The plaintiffs argued that they had not agreed to the Terms of Service, that the arbitration provision was unenforceable, and that Google had waived its right to require arbitration. They said they did not remember reading or agreeing to the Terms of Service, did not believe they would have recognized the hyperlinks, and did not recall seeing arbitration language on the product packaging. They also argued that the arbitration language was ambiguous and that the Terms of Service focused on subjects other than their dispute.

Formation of the Arbitration Agreement

The court treated the account-registration process as a “clickwrap” agreement—an online contract accepted by clicking or checking an agreement box when a link to the terms is provided. The court found that the Terms of Service hyperlinks were reasonably conspicuous because they appeared near the required checkbox on relatively uncluttered screens and were distinguished by blue text or bold, underlined text.

The court held that the plaintiffs’ failure to remember the registration process or to read the Terms of Service did not defeat assent. It also held that the absence of the Terms of Service from the Fitbit product packaging did not negate the notice provided during account creation.

The court rejected the plaintiffs’ argument that the words “certain” and “any” made the arbitration provision ambiguous. It also treated the plaintiffs’ argument about the subjects emphasized in the Terms of Service as a dispute about the provision’s scope. Because the agreement incorporated the American Arbitration Association’s rules, the court held that the parties had delegated scope questions to the arbitrator. The court therefore found that the parties agreed to arbitrate.

Enforceability

The plaintiffs argued that the arbitration provision was unconscionable. Under California law, a provision must be both procedurally and substantively unconscionable to be unenforceable. The court found no procedural unconscionability because the provision gave users a meaningful opportunity to opt out within 30 days. Because procedural unconscionability was absent, the court did not decide whether the provision was substantively unconscionable and concluded that the provision was not unenforceable on unconscionability grounds.

The plaintiffs also argued that California’s “McGill rule” made the provision unenforceable because it allegedly limited the right to seek public injunctive relief. The court held that the agreement delegated that validity question to the arbitrator and declined to decide whether the provision was invalid under the McGill rule.

Waiver

The court rejected the plaintiffs’ argument that Google waived arbitration through its conduct. The court noted that the plaintiffs had not identified cases finding waiver based on actions toward people or entities that were not parties to the dispute. It also found that Google sought arbitration soon after the lawsuit was filed, before substantially using the court’s litigation procedures, and that the plaintiffs experienced little or no prejudice from the timing.

Disposition

The court granted Google’s motion to compel arbitration and stayed the action pending the outcome of arbitration. It did not dismiss the claims because it was not certain that the claims would remain in arbitration. The court terminated Google’s motion to dismiss filed with the arbitration motion and stated that Google could re-notice that motion if the case returned to court. The parties were ordered to provide a status update about starting arbitration within 60 days and another update within 10 days after arbitration concluded.

Judge Beth Labson Freeman signed the order.