Case 3:21-cv-00009-DWD Document 51 Filed 06/10/21 Page 1 of 6 Page ID #323
`
`K.F.C., a minor, by and though her
`guardian, ERIN CLARK, individually
`and on behalf of all others similarly
`situated,
`
`Plaintiff,
`
`
`vs.
`
`SNAP, INC.,
`
`
`
`
`
`
`Case No. 3:21-cv-9-DWD
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE SOUTHERN DISTRICT OF ILLINOIS
`
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`)
`
`
`CORRECTED MEMORANDUM & ORDER
`
`Defendant.
`
`
`
`DUGAN, District Judge:
`
`
`
`The issue before the Court is whether a minor is bound by the terms of an
`
`arbitration agreement contained in the Terms of Service associated with a mobile
`
`application such that issues of validity and enforceability, and the effectiveness of the
`
`minor’s disaffirmance, of the agreement should be decided by an arbitrator.
`
`I. FACTUAL BACKGROUND
`
`Plaintiff K.F.C. is a thirteen-year-old resident of Illinois. (Doc. 37 at 1) On January
`
`4, 2019, Plaintiff created an account on Snapchat (Doc. 26-1 at 3), which is a camera
`
`application created by Defendant Snap, Inc. (“Snap”) that enables users to communicate
`
`with short videos and images. (Doc. 1-1 at 7) To create the account, it was necessary for
`
`Plaintiff to click on a button to express her assent to Snapchat’s Terms of Service. (Doc.
`
`

`

`Case 3:21-cv-00009-DWD Document 51 Filed 06/10/21 Page 2 of 6 Page ID #324
`
`26-1 at 3) While the parties dispute when Plaintiff stopped using Snapchat,1 the Terms of
`
`Service in effect while Plaintiff was using Snapchat included an arbitration agreement.
`
`(Doc. 26-1 at 2) On November 17, 2020, Plaintiff filed this action against Snap in Illinois
`
`state court, alleging that two Snapchat features, “Lenses” and “Filters,” use scans of facial
`
`geometry and violated her rights under the Illinois Biometric Information Privacy Act,
`
`740 Ill. Comp. Stat. 14/1, et seq. (“BIPA”) (Doc. 1-1 at 7–16) On January 6, 2021, Snap
`
`removed the case to this court. (Doc. 1) On February 12, 2021, Snap filed its Motion to
`
`Compel Arbitration and Dismiss or in the Alternative, Stay Claims, based on the
`
`arbitration clause in Snapchat’s Terms of Service. (Doc. 25) The motion has been fully
`
`briefed and is ripe for decision.2 For the following reasons, the motion will be granted.
`
`II. DISCUSSION
`
`As an initial matter, Plaintiff argues that Illinois law should control here, despite
`
`the choice of California law in the Terms of Service. A federal court exercising diversity
`
`jurisdiction must apply the choice-of-law rules of the state in which it sits. Midwest Grain
`
`Prods. Of Ill., Inc. v. Productization, Inc., 228 F.3d 784, 787 (7th Cir. 2000). Under Illinois
`
`law, a choice-of-law determination is necessary “only when a difference in law will make
`
`a difference in the outcome.” Bridgeview Health Care Ctr., Ltd. v. State Farm Fire & Cas. Co.,
`
`10 N.E.3d 902, 905 (Ill. 2014). As discussed below, there is no conflict between Illinois and
`
`California law on the issues before the court, so no choice-of-law determination is
`
`
`1 Plaintiff claims she stopped using Snapchat in November 2020. (Docs. 1-1 at 4 & 37 at 13) Snap claims
`Plaintiff was last active on Snapchat in January 2021. (Docs. 26 at 13 & 26-1 at 3)
`2 Plaintiff filed an additional affidavit in support of its response brief on May 3, 2021, the same day the court held an
`evidentiary hearing on the motion. (Doc. 46) While the court takes a dim view of such last-minute filings, this affidavit
`does not affect the court’s reasoning.
`
`
`
`2
`
`

`

`Case 3:21-cv-00009-DWD Document 51 Filed 06/10/21 Page 3 of 6 Page ID #325
`
`necessary.
`
`
`
`The Federal Arbitration Act (“FAA”) operates to require arbitration only if there
`
`is a valid contract that contains a provision whereby the parties agree to submit certain
`
`issues to arbitration instead of the courts. Section 2 of the FAA provides in pertinent part:
`
` A written provision in ... a contract evidencing a transaction involving
`commerce to settle by arbitration a controversy thereafter arising out of
`such contract ... shall be valid, irrevocable, and enforceable, save upon such
`grounds as exist at law or in equity for the revocation of any contract.
`
`Section 2 is the “primary substantive provision of the Act,” Moses H. Cone Mem'l
`
`Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983), and “reflects the fundamental
`
`principal that arbitration is a matter of contract.” Rent-A-Center., W., Inc. v. Jackson, 561
`
`U.S. 63, 67 (2010). “The FAA thereby places arbitration agreements on equal footing with
`
`other contracts and requires courts to enforce them according to their terms.” Id. The
`
`Seventh Circuit has stated that “[w]e will compel arbitration under the Federal
`
`Arbitration Act if three elements are present: (1) an enforceable written agreement to
`
`arbitrate, (2) a dispute within the scope of the arbitration agreement, and (3) a refusal to
`
`arbitrate.” A.D. v. Credit One Bank, N.A., 885 F.3d 1054, 1060 (7th Cir. 2018) (internal
`
`quotes omitted). Thus, the initial question to address is whether the Arbitration
`
`Agreement is enforceable under state law. But Snap argues that this question is one to be
`
`determined, not by this court, but by an arbitrator pursuant to the arbitration provisions
`
`contained in the Terms of Service.
`
` “The division of labor between courts and arbitrators is a perennial question in
`
`cases involving arbitration clauses.” Janiga v. Questar Capital Corp., 615 F.3d 735, 741 (7th
`
`
`
`3
`
`

`

`Case 3:21-cv-00009-DWD Document 51 Filed 06/10/21 Page 4 of 6 Page ID #326
`
`Cir. 2010). Generally, an arbitrator should decide a challenge to the validity of the contract
`
`as a whole. Id. (citing Buckeye Check Cashing, Inc. v. Cardenga, 546 U.S. 440, 449 (2006)). “An
`
`agreement to arbitrate a gateway issue is simply an additional, antecedent agreement the
`
`party seeking arbitration asks the federal court to enforce, and the FAA operates on this
`
`additional arbitration agreement just as it does on any other.” Rent-a-Center, 561 U.S. at
`
`70. But, more to the point, unless a party challenges an arbitration agreement’s delegation
`
`provision specifically, the court must treat that provision as valid and leave “any
`
`challenge to the validity of the Agreement as a whole for the arbitrator.” Id at 72.
`
`
`
`Here, Plaintiff challenges both the sufficiency of the delegation provision in the
`
`arbitration agreement, specifically, and the enforceability of all agreements contained in
`
`the Terms of Service, generally. First, Plaintiff argues the delegation provision does not
`
`provide clear and unmistakable evidence that the parties intended to delegate the
`
`question of arbitrability to an arbitrator. See First Options of Chicago, Inc. v. Kaplan, 514 U.S.
`
`938, 944 (1995) (“Courts should not assume that the parties agreed to arbitrate
`
`arbitrability unless there is clear and unmistakable evidence that they did so.”) (quotation
`
`marks and alterations omitted). The Terms of Service provide that “[t]he arbitrator will
`
`decide the jurisdiction of the arbitrator and the rights and liabilities, if any, of you and
`
`Snap Inc.” (Doc. 26-3 at 13) Plaintiff argues that this provision is not the kind of clear
`
`delegation provision approved by courts in the past. (Doc. 37 at 7)
`
`However, Snap points out that the Terms of Service state that the American
`
`Arbitration Association’s (“AAA”) Consumer Arbitration Rules will govern any
`
`arbitration. (Doc. 26-3 at 12) The AAA’s Consumer Arbitration Rules provide that “[t]he
`
`
`
`4
`
`

`

`Case 3:21-cv-00009-DWD Document 51 Filed 06/10/21 Page 5 of 6 Page ID #327
`
`arbitrator shall have the power to rule on his or her own jurisdiction, including any
`
`objections with respect to the existence, scope, or validity of the arbitration agreement or
`
`to the arbitrability of any claim or counterclaim, [and t]he arbitrator shall have the power
`
`to determine the existence or validity of a contract of which an arbitration clause forms a
`
`part.” American Arbitration Association, “Consumer Arbitration Rules,” available at
`
`www.adr.org/sites/default/files/Consumer%20Rules.pdf; see also Henry Schein, Inc. v.
`
`Archer & White Sales, Inc., 139 S. Ct. 524, 528 (2019) (“The rules of the American Arbitration
`
`Association provide that arbitrators have the power to resolve arbitrability questions).
`
`“As courts have repeatedly held, an arbitration provision that incorporates the
`
`rules of the American Arbitration Association demonstrates an intent to submit gateway
`
`issues to arbitration.” Ed’s Pallet Servs., Inc. v. Applied Underwriters, Inc., 2017 WL 9287091,
`
`at *3 (S.D. Ill. Apr. 7, 2017) (citing Oracle America, Inc. v. Myriad Group A.G., 724 F.3d 1069,
`
`1074 (9th Cir. 2013); Cooks v. Hertz Corp., No. 3:15-CV-0652-NJR-PMF, 2016 WL 3022403,
`
`at *4 (S.D. Ill. Apr. 29, 2016) (“By agreeing to have the AAA’s rules govern the parties’
`
`arbitration, they also agreed to leave the issue of whether [Plaintiff’s] claims belong in
`
`arbitration to an arbitrator.”) Thus, Snap’s incorporation of the AAA’s rules provides
`
`clear and unmistakable evidence of intent to delegate threshold issues of the “existence,
`
`scope, or validity of the arbitration agreement or to the arbitrability of any claim” to the
`
`arbitrator.
`
`
`
`Plaintiff goes on to argue that the entire arbitration agreement is unenforceable
`
`because she entered into it as a minor and now disaffirms it. (Doc. 37 at 8–19) In other
`
`words, Plaintiff suggests that the arbitration provision that is part of the Terms of Service
`
`
`
`5
`
`

`

`Case 3:21-cv-00009-DWD Document 51 Filed 06/10/21 Page 6 of 6 Page ID #328
`
`is void as disaffirmed and, therefore, its requirements that the matter be submitted to
`
`arbitration cannot be enforced.3 Nevertheless, the law requires that the court “enforce a
`
`valid delegation clause even if the underlying arbitration agreement is potentially void.”
`
`Kuznik v. Hooters of Am., LLC, 2020 WL 5983879, at *4 (C.D. Ill. Oct. 8, 2020) (citing Rent-a-
`
`Center, 561 U.S. at 71–72). Because the delegation clause contained in the AAA arbitration
`
`rules appears to be valid, the court must refer to the arbitrator the question of the
`
`arbitration agreement’s enforceability—including issues related to Plaintiff’s status as a
`
`minor and the effectiveness of any disavowal on the part of the Plaintiff.
`
`III. CONCLUSION
`
`
`
`For these reasons, it is ORDERED that Defendant’s motion to compel arbitration
`
`(Doc. 25) is GRANTED and this matter is hereby DISMISSED without prejudice. Clerk to
`
`close case.
`
`SO ORDERED.
`
`Dated: June 10, 2021
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`______________________________
`DAVID W. DUGAN
`United States District Judge
`
`3 Section 4 says that a court, in response to a motion by an aggrieved party, must compel arbitration “in
`accordance with the terms of the agreement” when the court is “satisfied that the making of the agreement
`for arbitration or the failure to comply therewith is not in issue.” Henry Schein, Inc. 139 S. Ct. 524, 530 (2019).
`While a contract with a minor is “voidable” under both Illinois and California law, it becomes void only
`upon disaffirmance. Thus, the formation or “making” of the agreement is not at issue in the present matter.
`See Cal. Fam. Code § 6710 (West) (“[A] contract of a minor may be disaffirmed by the minor before majority
`or within a reasonable time afterwards or, in case of the minor's death within that period, by the minor's
`heirs or personal representative.”).
`
`
`
`6
`
`