Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 1 of 8
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`KELLY WHALEN, et al.,
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`Case No. 20-cv-06361-JST
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`Plaintiffs,
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`v.
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`FACEBOOK, INC.,
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`ORDER GRANTING DEFENDANT’S
`MOTION TO COMPEL
`ARBITRATION AND
`ADMINISTRATIVELY CLOSING
`CASE
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`Defendant.
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`Re: ECF No. 45
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`Before the Court is Defendant Facebook, Inc.’s motion to compel arbitration. ECF No. 45.
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`The Court will grant the motion.
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`I.
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`BACKGROUND
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`Plaintiffs Kelly Whalen and S.M., a minor by and through her guardian, bring this putative
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`class action against Facebook for alleged violations of the Illinois Biometric Information Privacy
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`Act, 740 Ill. Comp. Stat. 14/1 et seq.1 They contend that Facebook used facial recognition
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`technology to “illegally harvest[] the protected biometrics of users of its Instagram application.”
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`ECF No. 37 ¶ 6.
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`Facebook has now moved to compel arbitration of Plaintiffs’ claims, the merits of which
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`are not currently before the Court. The parties do not dispute that, since 2013, Instagram’s terms
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`of use have contained an arbitration clause that, if valid, would encompass Plaintiffs’ claims.
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`However, Plaintiffs contend that the parties never formed an agreement to arbitrate.
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`II.
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`JURISDICTION
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`The Court has jurisdiction pursuant to 28 U.S.C. § 1332(d)(2).
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`1 A third plaintiff, Victoria Edelstein, voluntarily dismissed her claims while the motion to compel
`arbitration was pending. ECF No. 55.
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`Northern District of California
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`United States District Court
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 2 of 8
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`III.
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`LEGAL STANDARD
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`The parties agree that the Federal Arbitration Act (“FAA”) applies to the arbitration clause
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`at issue in this case. Under the FAA, agreements to arbitrate “shall be valid, irrevocable, and
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`enforceable, save upon such grounds as exist at law or in equity for the revocation of any
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`contract.” 9 U.S.C. § 2. This provision reflects “both a liberal federal policy favoring arbitration,
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`and the fundamental principle that arbitration is a matter of contract.” AT&T Mobility LLC v.
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`Concepcion, 563 U.S. 333, 339 (2011) (quotation marks and citations omitted).
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`On a motion to compel arbitration, the court’s role under the FAA is “limited to
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`determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the
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`agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207
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`F.3d 1126, 1130 (9th Cir. 2000). The court must “hear the parties,” and if it is “satisfied that the
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`making of the agreement for arbitration or the failure to comply therewith is not in issue, the court
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`shall make an order directing the parties to proceed to arbitration in accordance with the terms of
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`the agreement.” 9 U.S.C. § 4.
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`In making this determination, “district courts rely on the summary judgment standard of
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`Rule 56 of the Federal Rules of Civil Procedure.” Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667,
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`670 (9th Cir. 2021). Thus:
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`In considering a motion to compel arbitration which is opposed on
`the ground that no agreement to arbitrate was made, a district court
`should give to the opposing party the benefit of all reasonable
`doubts and inferences that may arise. Only when there is no genuine
`issue of material fact concerning the formation of an arbitration
`agreement should a court decide as a matter of law that the parties
`did or did not enter into such an agreement.
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`Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004) (citations omitted) (cited
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`with approval in Hansen, 1 F.4th at 670). If the court “concludes that there are genuine disputes
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`of material fact as to whether the parties formed an arbitration agreement, the court must proceed
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`without delay to a trial on arbitrability and hold any motion to compel arbitration in abeyance until
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`the factual issues have been resolved.” Hansen, 1 F.4th at 672.
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`IV.
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`DISCUSSION
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`When deciding whether a valid arbitration agreement exists, federal courts “apply ordinary
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`Northern District of California
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`United States District Court
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 3 of 8
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`state-law principles that govern the formation of contracts.” First Options of Chi., Inc. v. Kaplan,
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`514 U.S. 938, 944 (1995). Although the parties dispute whether California or Illinois law applies,
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`they agree that the two states’ laws are consistent on the question of contract formation. The
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`Court therefore need not make a choice-of-law determination. See Nguyen v. Barnes & Noble
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`Inc., 763 F.3d 1171, 1175 (9th Cir. 2014) (declining to decide whether California or New York
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`law applied because the laws of both states “dictate the same outcome”).
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`As this Court has previously explained: “In California, a party petitioning the court to
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`compel arbitration bears the burden of proving by a preponderance of evidence the existence of an
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`arbitration agreement. An essential element of a contract is consent. Assent is evaluated by an
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`objective standard.” Peter v. DoorDash, Inc., 445 F. Supp. 3d 580, 585 (N.D. Cal. 2020)
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`(quotation marks, alteration marks, and citations omitted).
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`Facebook argues that Plaintiffs assented to arbitration multiple times: Whalen in 2013,
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`S.M. in 2014 and 2017, and both Plaintiffs in 2018 and 2020. As discussed below, the Court
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`concludes that Plaintiffs assented to Instagram’s terms of use, including the arbitration clause, by
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`continuing to use the app after being notified of revised terms of use via an in-app notification in
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`November 2020. The Court does not address the other asserted instances of assent because
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`Plaintiffs do not dispute that assent based on the 2020 in-app notification would be sufficient to
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`compel arbitration.
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`Instagram users received the 2020 in-app notice “at the top of their ‘Activity’ feed”
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`beginning on November 19, 2020. ECF No. 45-1 at 4 (¶ 15).
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`Users could respond to the Activity feed notice in one of three ways.
`Users could press the button at the bottom of the notice that read,
`“Learn More,” which, if pressed, directed the user to a copy of the
`2020 Terms of Use. Users could also dismiss the notice by pressing
`the “X” located at the top-right corner of the notice. Alternatively,
`users could decline to interact with the Activity feed notice, in
`which case the notice would appear at the top of the user’s Activity
`feed three times before it was taken down.
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`Id. at 5 (¶ 16). A screenshot of the notice appears below:
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`Northern District of California
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 4 of 8
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`Id. at 55.
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`Facebook has introduced evidence, in the form of a
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`. ECF No.
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`86-22 at 2; see also ECF No. 89-4 at 42 (“The document provides information about actions taken
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`as part of the terms of use update notification that was sent via the activity feed, I believe, and it
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`shows the Instagram ID number and the time stamp. . . . In column D, the longer number would
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`be the SM plaintiff. The shorter number would be Ms. Whalen.”). Plaintiffs object to this
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`evidence on grounds that it is hearsay and that Facebook’s witness lacks personal knowledge. The
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 5 of 8
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`Court overrules these objections. First, Michael Duffey, Facebook’s eDiscovery and litigation
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`case manager, has sufficient personal knowledge. He declared under penalty of perjury that he has
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`personal knowledge of the Instagram terms of use and “of the records pertaining to Instagram
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`users’ accounts and account activity that are maintained in the ordinary course of business.” ECF
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`No. 45-1 at 2 (¶ 1); see also ECF No. 87-14 ¶ 3 (“I am also generally familiar with Facebook’s
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`record-keeping systems and the business records created and maintained by Facebook in the
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`ordinary course of business, including . . . records pertaining to Instagram user’s accounts and
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`account activity. . . .”). He also testified at his deposition about
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`. E.g., ECF No. 89-4 at 34-37, 41-
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`43.
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`Second, a business record is an exception to the rule against hearsay if:
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`(A) the record was made at or near the time by – or from
`information transmitted by – someone with knowledge;
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`(B) the record was kept in the course of a regularly conducted
`activity of a business, organization, occupation, or calling,
`whether or not for profit;
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`(C) making the record was a regular practice of that activity;
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`(D) all these conditions are shown by the testimony of the custodian
`or another qualified witness, or by a certification that complies
`with Rule 902(11) or (12) or with a statute permitting
`certification; and
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`(E) the opponent does not show that the source of information or the
`method or circumstances of preparation indicate a lack of
`trustworthiness.
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`Fed. R. Evid. 803(6). Duffey’s testimony establishes the first three requirements. Although
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`Duffey did not himself generate the structured data tables and relied on others to extract the data
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`presented in the spreadsheet, “[t]he foundation requirement for Rule 803(6) may be satisfied by
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`the testimony of anyone who is familiar with the manner in which the document was prepared,
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`even if he lacks firsthand knowledge of the matter reported, and even if he did not himself either
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`prepare the record or even observe its preparation.” Miller v. Fairchild Indus., Inc., 885 F.2d 498,
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`514 (9th Cir. 1989) (quotation marks and citation omitted). In addition, that the spreadsheet was
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`Northern District of California
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 6 of 8
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`prepared for litigation does not render it inadmissible where, as here, the information was
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`extracted from records kept in the ordinary course of business. U-Haul Int’l, Inc. v. Lumbermens
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`Mut. Cas. Co., 576 F3d. 1040, 1043-44 (9th Cir. 2009). “[P]rintouts prepared specifically for
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`litigation from databases that were compiled in the ordinary course of business are admissible as
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`business records to the same extent as if the printouts were, themselves, prepared in the ordinary
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`course of business.” Id. at 1044 (quotation marks and citation omitted). Plaintiffs have presented
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`no evidence to indicate a lack of trustworthiness, and the Court finds the spreadsheet to be an
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`admissible business record.
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`Plaintiffs contend that whether they saw the notification is a disputed factual question
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`because both Plaintiffs initially testified at their depositions that they did not see the notification.
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`ECF No. 82-10 at 43; ECF No. 82-12 at 27-28. However, upon further questioning, including by
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`reference to the spreadsheet, Plaintiffs’ testimony was more equivocal. S.M. testified, “I don’t
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`recall,” when asked whether it was her testimony that Facebook’s records showing that she viewed
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`the 2020 in-app notification and clicked on the “X” were incorrect. ECF No. 82-12 at 29.
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`Similarly, Whalen twice answered, “It’s possible, but I don’t remember,” when asked whether it
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`was possible that she saw the notice but did not remember, and she also testified that she does not
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`remember everything that she saw on Instagram over six months ago (the time between the
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`November 2020 in-app notification and her deposition). ECF No. 82-10 at 43-45. The only
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`inference that can be drawn from Plaintiffs’ testimony is that they are both uncertain whether they
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`saw the in-app notification. This is not sufficient to create a disputed fact. “Plaintiffs’ statements
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`that they ‘do not recall’ seeing the terms of service at the time they agreed do not rise to the level
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`of unequivocal denials of having agreed to those terms. If a party could get out of a contract by
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`arguing that he did not recall making it, contracts would be meaningless.” Blau v. AT & T
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`Mobility, No. C 11-00541 CRB, 2012 WL 10546, at *4 (N.D. Cal. Jan. 3, 2012) (citations
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`omitted); see also Perez v. Maid Brigade, Inc., No. C 07-3473 SI, 2007 WL 2990368, at *3-4
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`(N.D. Cal. Oct. 11, 2007) (finding, on a motion to compel arbitration, “that plaintiff has not met
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`her burden to prove that she did not sign the agreement” where the plaintiff did “not unequivocally
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`deny signing the document” and instead stated in a declaration that she did “not recall signing
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 7 of 8
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`these documents”).
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`Plaintiffs also argue that the in-app notification was insufficient to demonstrate assent.
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`They correctly describe the notice as browsewrap because it “does not require the user to manifest
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`assent to the terms and conditions expressly,” and parties instead give assent “simply by using”
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`the app. Nguyen, 763 F.3d at 1176 (quotation marks and citation omitted). “Because no
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`affirmative action is required by the . . . user to agree to the terms of a contract other than his or
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`her use of the [app], the determination of the validity of the browsewrap contract depends on
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`whether the user has actual or constructive knowledge of [the app’s] terms and conditions.” Id.
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`(quoting Van Tassell v. United Mktg. Grp., LLC, 795 F. Supp. 2d 770, 790 ((N.D. Ill. 2011)).
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`Facebook does not present evidence that either Plaintiff had actual knowledge of the arbitration
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`clause in the terms of use, but “[a]n arbitration clause within a contract may be binding on a party
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`even if the party never actually read the clause.” Pinnacle Museum Tower Ass’n v. Pinnacle Mkt.
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`Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012). The question is “whether the [in-app notice] puts a
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`reasonably prudent user on inquiry notice of the terms of the contract” – i.e., whether Plaintiffs
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`had constructive or inquiry notice. Nguyen, 763 F.3d at 1177. “[T]he conspicuousness and
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`placement of the ‘Terms of Use’ hyperlink, other notices given to users of the terms of use, and
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`the website’s general design all contribute to whether a reasonably prudent user would have
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`inquiry notice of a browsewrap agreement.” Id.
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`The 2020 in-app notification provides such notice. While it did not specifically reference
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`an arbitration agreement, it is not disputed that clicking on the “Learn More” button would have
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`taken Plaintiffs to the terms of use, which included an arbitration clause. As shown in the
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`screenshot, the notification consumed roughly one-third of the screen, and the “Learn More”
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`button is prominently placed, appears in reasonably sized type and in a different color, and is
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`viewable without any scrolling. These facts are materially different from the cases relied on by
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`Plaintiffs, where courts have found insufficient notice. For example, the link to the terms of use
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`was not located in a place that “would have become visible to plaintiffs only if they had scrolled
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`down to the next screen.” Specht v. Netscape Commc’ns Corp., 306 F.3d 17, 23 (2d Cir. 2002). It
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`also was not “inconspicuous, buried in the middle to bottom of every . . . webpage among many
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`Case 4:20-cv-06361-JST Document 103 Filed 04/11/22 Page 8 of 8
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`other links.” In re Zappos.com, Inc., Customer Data Sec. Breach Litig., 893 F. Supp. 2d 1058,
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`1064 (D. Nev. 2012). Nor did the notification involve a “multi-step process” that required a user
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`to scroll to the bottom of one page, click a “Customer Service” link, and then scroll to the bottom
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`of that page or find and click on another link, contained in a list of several links, to find the
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`conditions of use. Van Tassell, 795 F. Supp. 2d at 792-93. Additionally, the in-app notification
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`clearly stated, “Continuing to use the app means you accept these updates.” ECF No. 45-1 at 55.
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`As the Ninth Circuit has explained, “where the website contains an explicit textual notice that
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`continued use will act as a manifestation of the user’s intent to be bound, courts have been more
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`amenable to enforcing browsewrap agreements.” Nguyen, 763 F.3d at 1177. Moreover, although
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`Plaintiffs contend that they did not take any affirmative steps to manifest assent, the evidence
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`demonstrates that they interacted with the notification by clicking on the “X” to close it. Plaintiffs
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`do not dispute that they continued to use Instagram, nor do they dispute that they did not opt out of
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`arbitration as allowed by the terms of the arbitration clause.
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`For all of the above reasons, Facebook has met its burden of demonstrating that Plaintiffs
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`agreed to Instagram’s terms of use, which include an agreement to arbitrate. Other than arguing
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`that no agreement was formed, Plaintiffs do not contest the enforceability of the arbitration clause.
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`Nor do Plaintiffs contest that the claims in this case fall within the scope of that clause.
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`CONCLUSION
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`Accordingly, the Court grants Facebook’s motion to compel arbitration and stays these
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`proceedings. The Clerk shall administratively close the file. This order shall not be considered a
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`dismissal or disposition of this action against any party. If further proceedings become necessary,
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`any party may initiate them in the same manner as if this case had not been administratively
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`closed.
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`IT IS SO ORDERED.
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`Dated: March 21, 2022
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`______________________________________
`JON S. TIGAR
`United States District Judge
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