Robbins v. mscripts, LLC

Background

The plaintiff filed a proposed class action against mscripts, a mobile-pharmacy vendor. He alleged that a misconfigured cloud-storage environment exposed patient-health information from September 30, 2016, through November 18, 2022. His claims included negligence, breach of contract, invasion of privacy, and violations of California’s Unfair Competition Law and Consumer Legal Remedies Act. He sought declaratory relief, an injunction, damages, fees, and costs.

Mscripts moved to compel arbitration under the Federal Arbitration Act, a federal law requiring courts to enforce valid arbitration agreements according to their terms. Mscripts argued that the plaintiff accepted terms of service requiring binding arbitration and that the terms assigned the question of whether a dispute must be arbitrated to the arbitrator.

Acceptance of the Terms

The court considered three possible points when the plaintiff accepted the terms: signing up for text alerts at a pharmacy counter in April 2018, creating an account through the mobile app in October 2019, and responding “Y” to a text message in November 2022.

The court found the April 2018 evidence too unclear because mscripts did not describe how the terms were presented and did not provide screenshots. The court found the October 2019 process sufficient. The plaintiff entered information into an electronic form and clicked a “create account” button directly below a statement saying that signing up meant agreeing to the terms and conditions and privacy policies. The terms and policies were available through bright-blue hyperlinks. Although this was not a traditional check-the-box agreement, the court held that the notice was reasonably visible and that clicking the button clearly showed agreement.

The court also found that the plaintiff accepted the terms in November 2022. He received a text directing him to the terms, was told to reply “Y” to accept them, and did so. The court noted that the link was not hyperlinked but concluded that the message was short and clear about the meaning of replying “Y.”

Delegation of Questions About Arbitration

The court held that the agreement clearly assigned questions about the interpretation and enforceability of the arbitration provision to the arbitrator. The clause required arbitration of disputes relating to the agreement or use of the service, including disputes about the agreement’s enforcement, interpretation, or validity. The court also noted that the agreement incorporated American Arbitration Association rules, which give the arbitrator authority to decide jurisdictional questions.

Timing and Scope

The plaintiff argued that the arbitration agreement could not cover claims based on earlier exposure of his data. The court observed that the plaintiff accepted the terms in October 2019 before he provided the prescription information allegedly exposed in September 2022. The court therefore said it did not need to decide whether the agreement could apply to claims arising before acceptance. It indicated that supplemental briefing could be filed if the plaintiff asserted such a claim.

The plaintiff also argued that his claims concerned a separate privacy policy outside the arbitration clause. The court rejected that argument because the terms of service expressly incorporated the privacy policies and required disputes to be arbitrated.

Disposition

The court granted mscripts’s motion to compel arbitration and stayed the case pending arbitration. The court also allowed mscripts to supplement the record with screenshots and related briefing, and allowed supplemental briefing concerning any claim that preceded the plaintiff’s October 15, 2019 acceptance of the terms. The order resolved ECF No. 26.