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`Case 3:20-cv-02365-WQH-BGS Document 39 Filed 11/30/21 PageID.536 Page 1 of 5
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`UNITED STATES DISTRICT COURT
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`SOUTHERN DISTRICT OF CALIFORNIA
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` Case No.: 20-cv-2365-WQH-BGS
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`ORDER
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`DRICKEY JACKSON, individually and
`on behalf of all others similarly situated,
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`Plaintiff,
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`Defendant.
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`v.
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`AMAZON.COM, INC.,
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`HAYES, Judge:
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`The matter before the Court is the Motion to Stay Pending Appeal filed by Defendant
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`Amazon.com, Inc. (ECF No. 30).
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`I. BACKGROUND
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`On February 19, 2021, Plaintiff Drickey Jackson filed a First Amended Class Action
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`Complaint (“FAC”) against Defendant Amazon.com, Inc. (“Amazon”). (ECF No. 11).
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`Plaintiff brings individual and class claims against Amazon for violations of federal and
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`California law, arising from Amazon’s alleged interception of communications by
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`members of the Amazon Flex program in a closed Facebook group.
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`On March 16, 2021, Defendant Amazon filed a Motion to Compel Arbitration. (ECF
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`No. 15). On August 3, 2021, the Court held oral argument on the Motion to Compel
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`Arbitration. (ECF No. 25). On September 15, 2021, the Court issued an Order denying the
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`Motion Compel Arbitration. (ECF No. 26). The Court stated that Amazon “fail[ed] to meet
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`Case 3:20-cv-02365-WQH-BGS Document 39 Filed 11/30/21 PageID.537 Page 2 of 5
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`its burden to demonstrate mutual assent to the 2019 [Terms of Service (‘TOS’)]” and
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`concluded that “the 2016 TOS applies in this case.” (Id. at 10). The Court applied California
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`state law to interpret the terms of the 2016 TOS and concluded that “Plaintiff has met his
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`burden to demonstrate that the claims alleged [in the FAC] do not fall within the scope of
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`the arbitration provision.” (Id. at 18).
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`On October 12, 2021, Amazon filed a Notice of Appeal of the Order denying the
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`Motion to Compel Arbitration (ECF No. 31) and a Motion to Stay Pending Appeal (ECF
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`No. 30). Amazon asserts that the Court should exercise its discretion and stay this action
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`pending appeal, because the arbitration issues in this case present “serious legal questions
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`worthy of Ninth Circuit review.” (ECF No. 30-1 at 6). Amazon contends that it is likely to
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`succeed on appeal, because “[t]here is a dearth of Ninth Circuit authority on the evidentiary
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`burden for establishing email notice of a modification of an existing arbitration agreement,”
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`and “neither the Court nor the parties have identified cases that are factually on point”
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`regarding the scope of the arbitration provision. (Id. at 6-7). Amazon contends that Amazon
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`would be denied the benefits of individual arbitration if a stay is not granted. Amazon
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`further contends that any delay caused by a stay would not substantially harm Plaintiff, and
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`a stay is in the interest of the public policy favoring arbitration agreements.
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`On November 1, 2021, Plaintiff filed an Opposition to the Motion to Stay Pending
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`Appeal. (ECF No. 35). Plaintiff contends that the appeal does not present serious questions
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`for the Ninth Circuit, because the arbitration issues in this case involve “routine issues of
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`state law involving contract interpretation.” (ECF No. 35 at 7). Plaintiff contends that a
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`stay is not warranted, because Plaintiff’s claims are not subject to arbitration, and any
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`success by Amazon on appeal would require this Court to consider Plaintiff’s arguments
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`as to why the arbitration agreement is unenforceable. Plaintiff contends that requiring
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`Amazon to defend this suit does not constitute clear hardship or inequity. Plaintiff contends
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`that a stay could result in significant delay, and Plaintiff and the proposed class have an
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`interest in expeditious resolution of this litigation. Plaintiff further contends that the public
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`Case 3:20-cv-02365-WQH-BGS Document 39 Filed 11/30/21 PageID.538 Page 3 of 5
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`interest would be served by continuing this litigation, because Plaintiff has not agreed to
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`arbitrate, and a stay could result in the loss of evidence.
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`On November 8, 2021, Amazon filed a Reply. (ECF No. 36).
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`II. LEGAL STANDARD
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`Where “the issue of arbitrability [i]s the only substantive issue presented in [an]
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`appeal, the district court [i]s not divested of jurisdiction to proceed with the case on the
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`merits.” Britton v. Co-op Banking Grp., 916 F.2d 1405, 1412 (9th Cir. 1990). The district
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`court has the discretion to “evaluate the merits of the movant’s claim and if, for instance,
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`the court finds that the motion presents a substantial question, to stay the proceedings
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`pending an appeal from its refusal to compel arbitration.” Id. “[T]he factors regulating the
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`issuance of a stay” are:
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`(1) whether the stay applicant has made a strong showing that he is likely to
`succeed on the merits; (2) whether the applicant will be irreparably injured
`absent a stay; (3) whether issuance of the stay will substantially injure the
`other parties interested in the proceeding; and (4) where the public interest
`lies.
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`Hilton v. Braunskill, 481 U.S. 770, 776 (1987). The Court of Appeals for the Ninth Circuit
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`applies the Hilton factors by requiring the party seeking a stay to show either: (1) “a strong
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`likelihood of success on the merits [of its appeal]” Golden Gate Rest. Ass’n v. City of San
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`Francisco, 512 F.3d 1112, 1115 (9th Cir. 2008), and “that irreparable harm is probable if
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`the stay is not granted,” Leiva-Perez v. Holder, 640 F.3d 962, 968 (9th Cir. 2011); or (2)
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`“a substantial case on the merits and that the balance of hardships tips sharply in favor of
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`a stay,” Leiva-Perez, 640 F.3d at 971. “A strong showing on some factors may lessen the
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`requisite showing on others.” Hernandez-Galand v. Garland, 996 F.3d 1030, 1037 (9th
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`Cir. 2021).
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`III. RULING OF THE COURT
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`Amazon has appealed this Court’s denial of Amazon’s Motion to Compel
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`Arbitration. In the Order denying the Motion to Compel Arbitration, the Court concluded
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`that the 2016 TOS applies, because Amazon “fail[ed] to meet its burden to demonstrate
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`Case 3:20-cv-02365-WQH-BGS Document 39 Filed 11/30/21 PageID.539 Page 4 of 5
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`mutual assent to the 2019 TOS.” (ECF No. 26 at 10). The Court further concluded that
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`Plaintiff “met his burden to demonstrate that the claims alleged do not fall within the scope
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`of the arbitration provision,” because the alleged wrongs “do not arise out of or relate to
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`the 2016 TOS, Plaintiff’s participation in the Flex program, or Plaintiff’s performance of
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`services.” (Id. at 18). The Court reached these conclusions after hearing oral argument and
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`considering the matter for a significant amount of time. There are few cases applying
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`California mutual assent law to the modification of terms in an internet agreement, and
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`there are even fewer factually similar cases applying California law to determine whether
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`certain tort claims fall within the scope of an employee arbitration agreement. The
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`arbitration issues in this case present questions that have not been considered by the Ninth
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`Circuit. The Court concludes that Amazon’s appeal raises a substantial case on the merits
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`that weighs in favor of granting a stay pending appeal.
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`There is a probability that Amazon will be irreparably harmed absent a stay. Amazon
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`asserts that Plaintiff agreed to arbitrate his claims on an individual basis. The difference in
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`litigation expenses between a two-party case and a class action is substantial. In addition,
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`arbitration offers the benefits of “speed and economy” which may be “lost forever” if
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`Amazon is required to engage in formal discovery prior to the resolution of its
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`appeal. Alascom, Inc. v. ITT N. Elec. Co., 727 F.2d 1419, 1422 (9th Cir. 1984). Although
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`a stay pending appeal will likely cause some delay in this case, the Court concludes that
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`the potential harm to Amazon in being required to continue to litigate a class action, which
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`could possibly be ordered to individual arbitration, outweighs any harm caused by a delay.
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`Further, a stay pending the outcome of the appeal will serve the public interest by
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`preserving judicial resources and promoting the “strong federal policy encouraging
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`arbitration as a prompt, economical and adequate method of dispute resolution for those
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`who agree to it.” A.G. Edwards & Sons, Inc. v. McCollough, 967 F.2d 1401, 1404 n.2 (9th
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`Cir. 1992). The Court concludes that the balance of hardships tips sharply in Amazon’s
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`favor, and the public interest is served by staying this action pending appeal.
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`Case 3:20-cv-02365-WQH-BGS Document 39 Filed 11/30/21 PageID.540 Page 5 of 5
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`IT IS HEREBY ORDERED that the Motion to Stay Pending Appeal (ECF No. 30)
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`is granted. This action is stayed pending the resolution of Amazon’s appeal to the Court of
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`Appeals for the Ninth Circuit. The stay will be lifted upon further order of the Court.
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`Dated: November 30, 2021
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