Keller v. Chegg, Inc.

Background

Joshua Keller sued Chegg, Inc. on behalf of himself and a proposed class of people whose data was affected or compromised. Keller alleged that Chegg did not adequately protect customer data after four data breaches between 2017 and 2020. He sought damages, declaratory relief, and injunctive relief under various California statutory and common-law claims.

Chegg asked the court to compel arbitration under the Federal Arbitration Act and an arbitration provision in Chegg’s Terms of Use. Arbitration is a private process for resolving a dispute outside court. Keller’s main argument was that he had not agreed to arbitration.

Agreement to Arbitrate

The court found that Chegg routinely updated its Terms of Use and notified customers through pop-up screens. Customers who logged in after an update saw the changes, could view the full Terms, and were required to click “I accept” to access and use Chegg. Chegg also maintained records showing that a user named “Josh Keller,” associated with the email username “joshuakeller99,” accepted updated Terms of Use on May 17, 2019, and April 15, 2021. Keller did not deny that the username was his or that he used Chegg on those dates, and he presented no evidence contradicting Chegg’s records.

The court concluded that the parties formed a valid agreement to arbitrate under California contract law. It described Chegg’s process as a “clickwrap agreement,” meaning an online agreement in which a user is shown contractual terms and must affirmatively click an acceptance button. The court also rejected Keller’s argument that his initial signup as a minor prevented arbitration. The court noted that the record showed he accepted updated Terms of Use after reaching the age of majority and that California law treats minority as a defense to contract enforcement rather than contract formation.

Delegation Clause

The Terms of Use contained a delegation clause, which is a provision assigning the decision about whether a dispute must be arbitrated to the arbitrator rather than the court. The clause covered disputes about the Terms’ enforcement, interpretation, or validity, and the Terms incorporated the American Arbitration Association’s rules. The court found that this language clearly and unmistakably assigned arbitrability questions to the arbitrator.

Because Keller did not specifically challenge the validity of the delegation clause itself, the court ruled that the arbitrator—not the court—must decide whether the arbitration clause covers Keller’s claims.

Class-Action Waiver

The court separately considered the enforceability of the class-action waiver because the Terms reserved that issue for the court. Keller argued that the waiver was unenforceable under McGill v. Citibank, N.A. The court rejected that argument, explaining that the cited decision did not prohibit class-action waivers generally. The court found that Chegg’s waiver did not bar public injunctive relief and therefore concluded that the waiver remained effective.

Disposition

The court ordered the case to arbitration on an individual basis. It stayed the case and administratively closed it pending completion of arbitration.