Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 1 of 11
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`IN RE: STUBHUB REFUND
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`LITIGATION
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`This Document Relates to All Cases
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`Case No. 20-md-02951-HSG
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`ORDER DENYING MOTION TO
`COMPEL ARBITRATION AND
`MOTION TO DISMISS
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`Re: Dkt. No. 71
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`Pending before the Court is Defendant StubHub, Inc.’s renewed motion to compel
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`arbitration and motion to dismiss. Dkt. No. 71. The Court finds this matter appropriate for
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`disposition without oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b). For
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`the reasons detailed below, the Court DENIES the motion.
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`I. BACKGROUND
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`The parties are familiar with the facts of this case, and the Court only briefly summarizes
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`them here as relevant to the pending motion. This putative nationwide class action concerns
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`StubHub’s refund policy for events affected by the COVID-19 pandemic. See Dkt. No. 36
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`(“CAC”) at ¶¶ 1, 98–111. Plaintiffs allege that StubHub wrongfully changed its policies for
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`refunds for cancelled or rescheduled events as a result of COVID-19. See id. at ¶¶ 1, 4.
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`In November 2021 the Court granted in part and denied in part StubHub’s first motion to
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`compel arbitration. See Dkt. No. 62 (the “Arbitration Order”). In the order, the Court granted the
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`motion as to the named Plaintiffs who purchased tickets on the StubHub website. See id. at 6–11.
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`The Court reasoned that the checkout process on the website put Plaintiffs on constructive notice
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`of the arbitration agreement. Id. However, the Court found that StubHub had failed to meet its
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`burden to establish that the eight Plaintiffs who purchased their tickets on the mobile application
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 2 of 11
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`had entered into an agreement to arbitrate. See id. at 12–14. StubHub did not provide sufficient
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`information that the “sign in” and “checkout” processes on the mobile application contained an
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`adequate disclosure of any arbitration agreement. See id. at 12. The Court also rejected
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`StubHub’s argument that the Plaintiffs agreed to an arbitration provision in the User Agreement
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`when they registered for a StubHub account because StubHub did not provide information about
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`(1) whether the Plaintiffs registered through the website or mobile application; (2) what the sign-
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`up screen on the mobile application looked like at the time these Plaintiffs signed up; and (3) what
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`version of the User Agreement was in place at the time each Plaintiff registered. Id. at 12–14.
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`StubHub has renewed its motion to compel arbitration, arguing that the Court should also
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`compel arbitration as to the eight remaining Plaintiffs who purchased their tickets using the mobile
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`application. See Dkt. No. 71. In the same motion, and to the extent any claims remain before this
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`Court, StubHub moves to dismiss the majority of Plaintiffs’ causes of action as deficiently pled
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`under Federal Rule of Civil Procedure 12(b)(6).1 See id.
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`II. MOTION TO COMPEL
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`A. Legal Standard
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`The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., sets forth a policy favoring
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`arbitration agreements and establishes that a written arbitration agreement is “valid, irrevocable,
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`and enforceable.” 9 U.S.C. § 2; Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (noting
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`federal policy favoring arbitration); Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
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`U.S. 1, 24 (1983) (same). The FAA allows that a party “aggrieved by the alleged failure, neglect,
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`or refusal of another to arbitrate under a written agreement for arbitration may petition any United
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`States district court . . . for an order directing that . . . arbitration proceed in the manner provided
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`for in such agreement.” 9 U.S.C. § 4. This federal policy is “simply to ensure the enforceability,
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`according to their terms, of private agreements to arbitrate.” Volt Info. Sciences, Inc. v. Bd. of
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`1 In a recent order, the Court clarified that under McGill v. Citibank, N.A., 2 Cal. 5th 945 (Cal.
`2017), Plaintiffs’ entire UCL, CLRA, and FAL claims must be severed for judicial determination,
`and not just the request for public injunctive relief. See Dkt. No. 90. These California statutory
`claims therefore have not been compelled to arbitration, even as to the Plaintiffs who purchased
`tickets on the StubHub website.
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 3 of 11
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`Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 476 (1989). Courts must resolve any
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`“ambiguities as to the scope of the arbitration clause itself . . . in favor of arbitration.” Id.
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`When a party moves to compel arbitration, the court must determine (1) “whether a valid
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`arbitration agreement exists” and (2) “whether the agreement encompasses the dispute at issue.”
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`Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). The
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`agreement may also delegate gateway issues to an arbitrator, in which case the court’s role is
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`limited to determining whether there is clear and unmistakable evidence that the parties agreed to
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`arbitrate arbitrability. See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). In either
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`instance, “before referring a dispute to an arbitrator, the court determines whether a valid
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`arbitration agreement exists.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524,
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`530 (2019) (citing 9 U.S.C. § 2).
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`B. Discussion
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`In support of its renewed motion to compel arbitration, StubHub contends that the eight
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`named Plaintiffs who purchased their tickets through StubHub’s mobile application—like the
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`other Plaintiffs—agreed to StubHub’s User Agreement, which contained an arbitration provision.
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`See Dkt. No. 71 at 3–9. StubHub thus urges that their claims should also be compelled to
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`arbitration. Id. StubHub does not offer evidence that these Plaintiffs assented to the arbitration
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`agreement at the time they purchased tickets on the mobile application. See generally id. at 1–7.
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`Rather, StubHub argues that they assented to the arbitration agreement when they visited the
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`StubHub website at various points before and after they purchased their tickets on the mobile
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`application. See id. As before, the Court finds StubHub’s evidence deficient.
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`First, StubHub suggests that some Plaintiffs agreed to the User Agreement after they
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`purchased their tickets. See id. at 4–5. Plaintiff Mignault, for example, purchased tickets on
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`December 20, 2019. See Dkt. No. 70-1 (“Northcutt Decl.”) at ¶ 17. According to StubHub’s
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`records, he then signed into his account through the website five days later, on December 25,
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`2019. Id. StubHub states that this sign-in screen contained a notice that “[b]y purchasing or
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`signing in, you agree to our user agreement and acknowledge our privacy notice.” See id. In the
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`prior Arbitration Order, the Court rejected StubHub’s theory that parties could manifest assent
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 4 of 11
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`retroactively, pointing out that StubHub had cited no authority. See Dkt. No. 62 at 14, n.8
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`(rejecting argument that ex post email notice sufficient to compel arbitration). Now, in its reply
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`brief, StubHub cites two district court cases. See Dkt. No. 89 at 4. The Court is not persuaded by
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`either case.
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`In Galgon v. Epson America, Inc., No. CV211794CBMMRWX, 2021 WL 4513638, at *1–
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`5 (C.D. Cal. June 16, 2021), the plaintiff purchased a printer and print cartridges. See id. at *1.
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`Before the plaintiff could use the printer, however, he had to view and agree to the defendant’s
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`software license. Id. at *1–2. The software license contained an arbitration agreement. Id. The
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`plaintiff also periodically installed software updates for the printer. Id. at *2. As part of this
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`process, the plaintiff had to again view and click a checkbox to agree to the agreement. Id.
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`Critically, the plaintiff in Galgon did not dispute that he agreed to the software license agreement
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`or the arbitration provision. Id. at *3. The court therefore did not address whether it was
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`sufficient to provide notice of the arbitration agreement only after purchase.
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`In Bischoff v. DirecTV, Inc., 180 F. Supp. 2d 1097, 1103–06 (C.D. Cal. 2002), the plaintiff
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`subscribed to DirecTV’s satellite television services over the phone, and he received the customer
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`agreement in the mail along with the first billing statement. The district court found that the
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`timing of the customer agreement was not problematic because “of the ongoing contractual
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`relationship between DirecTV and its subscribers.” See id. at 1104. The court also noted the
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`practical difficulty of providing the terms of the entire customer agreement to someone who
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`subscribes to the services over the phone. See id. at 1101, 1105–06. In upholding the arbitration
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`agreement, the court relied heavily on the Supreme Court’s opinion in Carnival Cruise Lines, Inc.
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`v. Shute, 499 U.S. 585, 592–95 (1991), in which the Court upheld a forum-selection clause that
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`appeared on the back of cruise tickets. The front of the ticket conspicuously stated that it was
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`subject to contractual terms. See id. at 587. But as in Galgon, the Supreme Court in Carnival did
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`not have an opportunity to address whether this was sufficient to provide actual or constructive
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`notice of the forum-selection clause. As the Supreme Court explained, the plaintiffs had
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`“conceded that they were given notice of the forum provision and, therefore, presumably retained
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`the option of rejecting the contract with impunity.” Id. at 595.
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`Even putting that aside, the facts of Galgon, Bischoff, and Carnival are unlike those here.
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`The contractual terms in those cases, sent to each plaintiff after purchase, were conspicuously
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`related to the plaintiff’s specific purchase and use of the printer, satellite TV services, and cruise
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`ticket. Here, in contrast, StubHub is not arguing that it sent Plaintiff Mignault additional
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`information about his tickets—including the User Agreement—after he made his purchase.
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`Rather, StubHub argues that Plaintiff Mignault signed in to his online account five days after his
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`purchase, and should have known that doing so would subject his earlier ticket purchase to the
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`terms of the User Agreement. StubHub has simply failed to provide any authority to support this
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`argument.
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`Second, StubHub suggests that some Plaintiffs agreed to the User Agreement days or
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`months before they purchased their tickets on the mobile application. See Dkt. No. 71 at 5–8.
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`Plaintiff Williams, for example, signed into her account through the website approximately six
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`months before she purchased tickets on the mobile application. See Northcutt Decl. at ¶¶ 18–19.
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`StubHub states that the website’s sign-in screen contained a notice that “[b]y purchasing or
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`signing in, you agree to our user agreement and acknowledge our privacy notice.” See id. at ¶ 18.
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`Although Plaintiffs may have signed into their accounts and been on notice that they were subject
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`to a User Agreement at that time, StubHub fails to explain why Plaintiffs would be on notice that
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`they were bound by the User Agreement for all future purchases. At the time they signed into
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`their accounts on the website, they were not purchasing tickets. StubHub appears to concede that
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`they did so later on the mobile application, which did not contain any disclosure of the User
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`Agreement.
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`StubHub does not address this issue directly. And the only case StubHub cites, Lee v.
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`Ticketmaster L.L.C., 817 Fed. App’x 393, 394–95 (9th Cir. 2020), is inapposite. See Dkt. No. 71
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`at 6. In the unpublished decision in Lee, the Ninth Circuit reasoned that the plaintiff had
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`“indicated his assent to Ticketmaster’s Terms of Use roughly twenty times during the relevant
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`period,” each time he signed in or clicked “place order” on the Ticketmaster website. Lee, 817
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`Fed. App’x at 395. Here in contrast, StubHub is asking the Court to find assent based on a single
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`sign-in, sometimes months before the actual ticket purchase.
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 6 of 11
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`At this point, StubHub has had several opportunities to provide sufficient evidence that the
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`eight Plaintiffs who purchased their tickets on the mobile application had notice of the arbitration
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`provision in the User Agreement. But again, it has failed to do so.2 The Court therefore DENIES
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`the motion to compel arbitration. The claims brought by Plaintiffs Dahl, Glaspey, Koble,
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`Matlock, McDaniel, Mignault, Williams, and Wutz therefore remain before this Court.
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`III. MOTION TO DISMISS
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`A. Legal Standard
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`To survive a Rule 12(b)(6) motion to dismiss, a plaintiff must plead “enough facts to state
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`a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570
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`(2007). A claim is facially plausible when a plaintiff pleads “factual content that allows the court
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`to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft
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`v. Iqbal, 556 U.S. 662, 678 (2009). In reviewing the plausibility of a complaint, courts “accept
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`factual allegations in the complaint as true and construe the pleadings in the light most favorable
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`to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th
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`Cir. 2008). Nevertheless, courts do not “accept as true allegations that are merely conclusory,
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`unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536
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`F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988
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`(9th Cir. 2001)).
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`Rule 9(b) imposes a heightened pleading standard where fraud is an essential element of a
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`claim. See Fed. R. Civ. P. 9(b) (“In alleging fraud or mistake, a party must state with particularity
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`the circumstances constituting fraud or mistake.”); see also Vess v. Ciba–Geigy Corp. USA, 317
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`F.3d 1097, 1107 (9th Cir. 2003). A plaintiff must identify “the who, what, when, where, and how”
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`of the alleged conduct, so as to provide defendants with sufficient information to defend against
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`the charge. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). However, “[m]alice, intent,
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`knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P.
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`Rule 9(b).
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`2 To the extent StubHub also raises an equitable estoppel argument, the Court has already
`considered and rejected this argument in its prior Arbitration Order.
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 7 of 11
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`B. Discussion
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`As an initial matter, Plaintiffs challenge StubHub’s attempt to file an “amended” version of
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`its renewed motion to compel arbitration without first seeking leave from the Court. See Dkt. No.
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`78 at 1, n.1. StubHub first filed its renewed motion to compel on January 24. See Dkt. No. 70.
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`Four days later, on January 28, StubHub amended the motion. See Dkt. No. 71. StubHub
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`suggests that it did so simply to “clarif[y]” the scope of its motion. See id. at 2. To that end,
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`StubHub added a footnote in its amended motion stating: “All challenges to the sufficiency of the
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`pleading of the California statutory claims in this Motion apply equally to all named Plaintiffs in
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`this case.” See id. at 11, n.5. In short, StubHub has filed a motion to dismiss all causes of action
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`in this case approximately a year after Plaintiffs filed their consolidated amended complaint.
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`The scheduling order set January 24 as the deadline to file any renewed motion to compel
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`and motion to dismiss. See Dkt. No. 69. StubHub did not seek leave to file this second—and
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`belated—motion. StubHub’s amended motion also considerably expands the nature of the motion.
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`Rather than limiting the motion to the Plaintiffs who purchased their tickets on the mobile
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`application, StubHub seeks to challenge the claims brought by all Plaintiffs in this case. StubHub
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`does not offer any explanation for the delay.
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`The Court notes that the parties have engaged in such serial briefing before. For example,
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`Plaintiffs requested leave to file a surreply in response to the first motion to compel arbitration.
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`See Dkt. Nos. 50, 51. StubHub then filed a sur-surreply brief. See Dkt. No. 52. Plaintiffs also
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`filed an administrative motion to introduce additional materials during the hearing on the motion
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`to compel. See Dkt. No. 54. The Court denied this request, Dkt. No. 55, but ultimately requested
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`supplemental briefing on the distinction between the user experience on the website and mobile
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`application to ensure a complete record. See Dkt. No. 58. Months after the Court’s initial
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`Arbitration Order, StubHub also questioned the scope of the order, raising new arguments about
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`the import of McGill. See Dkt. No. 90. StubHub’s amended motion appears to be yet another
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`example of the parties crystallizing their arguments only after they have filed their briefs.
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`The Court cannot continue to countenance these inefficient tactics. The Court will
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`therefore only consider the arguments that StubHub raised in the initial renewed motion. See Dkt.
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 8 of 11
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`No. 70. For the avoidance of doubt, the Court will only consider arguments as to the eight named
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`Plaintiffs who purchased their tickets through the mobile application. The parties are cautioned
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`that the Court expects—and will continue to enforce—strict compliance with all its orders, the
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`Federal Rules of Civil Procedure, and the Local Rules.
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`The Court further notes its dismay that years after this case was filed, it remains mired in
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`litigation regarding the pleadings. StubHub could have—and should have—raised the arguments
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`about the sufficiency of the complaint much earlier. The motion to compel did not automatically
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`extend or stay the time for StubHub to file a responsive pleading. See Fed. R. Civ. P. 12(b). The
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`Court nevertheless briefly addresses StubHub’s arguments below.
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`A.
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`Standing
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`i.
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`Injury
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`StubHub first argues that Plaintiffs Koble and Wutz lack standing to sue StubHub because
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`they have not alleged an injury. See Dkt. No. 71 at 9–11. StubHub argues that at the time
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`Plaintiff Koble purchased tickets to an NFL game using StubHub, the User Agreement—and the
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`FanProtect Guarantee—had been updated to provide for either a refund or a credit in the amount
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`of 120% the cost of the original purchase price. See Dkt. No. 71 at 9–10; see also CAC at ¶¶ 32,
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`83. Although Plaintiffs allege that Plaintiff Koble did not receive a refund, see CAC at ¶ 32,
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`StubHub argues that he actually received a credit for his tickets as required by the User
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`Agreement. See Dkt. No. 71 at 9; see also Northcutt Decl. at ¶ 12. StubHub thus argues that he
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`did not suffer any injury. See Dkt. No. 71 at 9–10; CAC at ¶ 32.
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`As already discussed in Section II.B above, StubHub has not provided sufficient evidence
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`that Plaintiff Koble actually saw—let alone agreed to—the User Agreement at the time he
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`purchased his tickets. Even if he had, StubHub appears to misapprehend Plaintiffs’ theory of
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`liability. Plaintiffs do not contend that StubHub violated the terms of the User Agreement.
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`Rather, they argue that StubHub has advertised its FanProtect Guarantee as providing a full
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`money-back refund for canceled events. See, e.g., CAC at ¶¶ 1, 3–6, 13–14. However, the
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`complaint alleges that during the COVID-19 pandemic, StubHub surreptitiously changed the
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`terms of the FanProtect Guarantee “on the backpages of its website,” and merely provided credits
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 9 of 11
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`for canceled events. See id. at ¶ 83. Consistent with these allegations, Plaintiffs contend that
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`Plaintiff Koble never received a refund for his tickets. See id. at ¶ 32 (“StubHub has failed to
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`refund Plaintiff Koble for [his] ticket purchase.”). The Court understands that StubHub may
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`dispute the facts as alleged in this case, and it will have an opportunity to address such factual
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`challenges at the dispositive motion or trial stage. But at this stage, the Court accepts Plaintiffs’
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`allegations as true, as it must. See Manzarek, 519 F.3d at 1031.
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`Similarly, StubHub argues that Plaintiff Wutz purchased tickets for two events that were
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`postponed rather than canceled. See Dkt. No. 71 at 10; see also Northcutt Decl. at ¶ 21. StubHub
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`urges that he is therefore not entitled to a refund under any version of the FanProtect Guarantee.
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`Dkt. No. 71 at 10. But again, Plaintiffs allege that Plaintiff Wutz “purchased tickets through
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`StubHub were postponed, and then canceled.” See CAC at ¶ 55. This is sufficient at the motion
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`to dismiss stage. The Court DENIES the motion on this basis.
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`ii. Reliance
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`StubHub also argues that all eight Plaintiffs lack statutory standing to bring their California
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`statutory causes of action because they did not plead actual reliance on any misrepresentation
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`about the FanProtect Guarantee. See Dkt. No. 71 at 11–12. However, Plaintiffs allege that they
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`relied on and were misled by StubHub’s prior representations—and actual policy—that they
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`would receive a cash refund for canceled events. See, e.g., CAC at ¶¶ 6, 146, 155, 183, 187.
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`Plaintiffs specifically assert that they “believe[d] that they would receive refunds if the events they
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`purchased tickets for were canceled.” See id. at ¶ 155. Plaintiffs further allege that StubHub
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`changed the terms of its refund policy without an email or any other conspicuous notification to
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`users. See id. at ¶ 8. Plaintiffs cite examples from StubHub’s website, which continued to tout
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`that “[e]very order is 100% guaranteed” and users can “[b]uy and sell with confidence” because
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`StubHub “back[s] every order.” See id. at ¶¶ 90–91. Plaintiffs even include a screenshot of this
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`representation from StubHub’s homepage. See id. at ¶ 13. The Court finds that when read in their
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`totality, such allegations are sufficient under the circumstances, and the Court DENIES the
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`motion on this basis.
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`//
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 10 of 11
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`B. CLRA
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`Next, StubHub argues that Plaintiffs fail to state a CLRA cause of action because there are
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`no allegations that StubHub knew, or had reason to know, that its statements about the FanProtect
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`Guarantee were false at the time Plaintiffs purchased their tickets. See Dkt. No. 71 at 12–14.
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`StubHub suggests that to succeed on its claim, Plaintiffs must establish that StubHub knew at the
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`time Plaintiffs purchased their tickets that StubHub would not honor a full money-back refund due
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`to the COVID-19 pandemic. Id. StubHub points out the virtual impossibility of pleading this
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`because “most [] Plaintiffs purchased their tickets months before any reasonable person was aware
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`of COVID-19 and its potential for devastating impact on live events.” See id. at 13.
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`The parties appear to agree that the CLRA does not apply to unfair or deceptive practices
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`that occur after the sale . . . has occurred.” See Dkt. No. 78 at 20 (citing Moore v. Apple, Inc., 73
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`F. Supp. 3d 1191, 1201 (N.D. Cal. 2014)); see also Dkt. No. 89 at 9–10 (collecting cases). But
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`Plaintiffs’ case turns on StubHub changing the terms of the User Agreement after Plaintiffs
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`purchased their tickets. See, e.g., CAC at ¶¶ 1, 3–6, 13–14. Only Plaintiff Koble appears to have
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`purchased tickets after StubHub changed its FanProtect Guarantee due to COVID-19. See id. at
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`¶ 8. With the exception of Plaintiff Koble, therefore, Plaintiffs do not allege that StubHub knew
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`that it would change its refund policy as a result of the COVID-19 pandemic at the time they
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`purchased their tickets.
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`Plaintiff suggests that this type of knowledge is not necessary, and it is enough for the
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`remaining Plaintiffs’ claims that StubHub knew at the time that it could unilaterally change the
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`terms of the FanProtect Guarantee, but never explained this directly to users or in its advertising.
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`See id.; see also CAC at ¶¶ 3, 92, 97, 156, 175. StubHub’s ability to unilaterally change the terms
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`of any refund undermines the idea that the FanProtect Guarantee actually “guaranteed” or
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`promised users any protection for their ticket purchases. Although relatively thin, the Court finds
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`this theory sufficient to survive the motion to dismiss, and DENIES the motion on this basis.
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`C. Negligent Misrepresentation
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`StubHub argues that Plaintiffs’ negligent misrepresentation claims similarly fail because
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`Plaintiffs did not allege (1) any misrepresentations at the time Plaintiffs purchased their tickets; or
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`Case 4:20-md-02951-HSG Document 106 Filed 05/13/22 Page 11 of 11
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`(2) that Plaintiffs relied on any such statement(s) when they purchased their tickets. See Dkt. No.
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`71 at 14. Because the Court already rejected these arguments above, the Court DENIES the
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`motion on this basis as well.
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`D.
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`Non-California Statutory Claims
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`Lastly, StubHub argues that the Court should dismiss Plaintiffs’ non-California statutory
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`claims because they have agreed that California law should apply. See Dkt. No. 71 at 15.
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`Plaintiffs respond that they have simply pled these claims in the alternative to the California
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`claims. See Dkt. No. 78 at 25. The Court agrees that it need not decide any choice of law issues at
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`this stage, and therefore DENIES the motion on this basis.
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`IV.
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`CONCLUSION
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`Accordingly, the Court DENIES the motion. The case schedule remains in place, and the
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`Court expects the parties to work together efficiently and cooperatively to move this case forward.
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`IT IS SO ORDERED.
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`Dated:
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`5/13/2022
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`______________________________________
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`HAYWOOD S. GILLIAM, JR.
`United States District Judge
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