Case 1:19-cv-04357-NGG-RER Document 24 Filed 08/24/20 Page 1 of 9 PageID #: 414
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`ALAN ARKIN, on behalf of himself and all others
`similarly situated,
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`Plaintiff(s),
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`-against-
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`DOORDASH, INC.,
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`Defendant(s).
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`MEMORANDUM & ORDER
`19-CV-4357 (NGG) (RER)
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`NICHOLAS G. GARAUFIS, United States District Judge.
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`Plaintiff Alan Arkin brings this putative class action against Door-
`Dash, Inc. (“DoorDash”). (Compl. (Dkt. 1).) Plaintiff alleges that
`DoorDash misled him and other customers into believing that
`workers who delivered food ordered through the DoorDash mo-
`bile app would receive tips entered by the customers on the app.
`Instead, the tips subsidized DoorDash’s labor costs. (Id. ¶ 1.) Plain-
`tiff brings claims pursuant to New York General Business Law
`§ 349 and similar consumer protection statutes of other states, as
`well as for common law fraud and unjust enrichment. (Id.) Before
`the court is Defendant’s motion to compel arbitration of Plaintiff’s
`claims and to stay this action pending the completion of arbitra-
`tion. (Def.’s Mot. to Compel Arbitration (“Mot.”) (Dkt. 19); Mem. in
`Supp. of Mot. to Compel Arbitration (“Mem.”) (Dkt. 19-1); Mem. in
`Opp. to Mot. to Compel Arbitration (“Opp.”) (Dkt. 19-5); Reply (Dkt.
`19-8).) For the reasons stated below, Defendant’s motion is
`GRANTED.
`
` BACKGROUND
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`A. Facts
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`Plaintiff Alan Arkin is a resident of Brooklyn, New York who made
`approximately 38 purchases through DoorDash’s food delivery
`app over a period spanning June 2015 to February 2019. (Compl.
`¶¶ 2-3; Transaction Log (Dkt. 19-4) at ECF p. 250.) The app allows
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`the customer to submit a tip, and Plaintiff “believe[d] that the tip
`amount entered on the DoorDash app would be received as a tip
`by the DoorDash delivery workers for their service.” (Id. ¶ 1.) How-
`ever, tips entered on the app subsidized DoorDash’s labor costs
`and were not given to the delivery workers. (Id. ¶ 12.) Plaintiff as-
`serts that if he had known this, he “would not have agreed to enter
`and pay a tip” via the DoorDash app. (Id. ¶ 18.) He was made aware
`of Defendant’s policy after the New York Times published an article
`on the subject on July 21, 2019.1 (Id. ¶ 10.) Three days after the ar-
`ticle’s publication, DoorDash announced that it would end its
`“widely criticized” tipping policy. (Id. ¶ 15.) Plaintiff seeks damages
`on behalf of himself and “[a]ll consumers who used DoorDash and
`paid a tip through the DoorDash app within the statutory period.”
`(Id. ¶ 19.)
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`B. Arbitration Provisions at Issue
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`Plaintiff signed up for a DoorDash account on June 30, 2015. (Decl.
`of Stanley Tang (“Tang Decl.”) (Dkt. 19-4) ¶ 5.) In order to complete
`the sign-up process, Plaintiff entered his name, email address, and
`phone number. (Id. ¶ 6.) Directly above the “Sign Up” button, there
`was a sentence stating that “[b]y signing up, you agree to our Terms
`and Conditions Agreement and consent to receive emails, calls and
`text messages.” (Id.) The phrase “Terms and Conditions Agree-
`ment” included a hyperlink, highlighted in red, to the terms and
`conditions, which Plaintiff had an opportunity to read before sign-
`ing up. (Id. ¶ 7.) Those terms and conditions contained the
`following arbitration clause:
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`The parties shall first attempt to resolve any dispute related to
`this Agreement in an amicable manner by mediation with a
`mutually acceptable mediator . . . . Any disputes remaining un-
`resolved after mediation shall be settled by binding arbitration
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`1 See Andy Newman, What Our Reporter Learned Delivering Burritos to New
`Yorkers,
`N.Y.
`Times
`(July
`21,
`2019),
`https://www.ny-
`times.com/2019/07/21/reader-center/insider-reporter-food-
`deliveryman.html.
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`conducted in San Francisco, California utilizing a mutually
`agreed arbitrator or arbitration service.
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`(Original Terms and Conditions (Dkt. 19-4) at ECF p. 230.)
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`DoorDash updated its terms and conditions in June 2016. (Tang
`Decl. ¶ 11.) When DoorDash customers opened the app for the first
`time after the new terms took effect, they were “shown a pop-up
`screen notifying them” of the updated terms which stated: “[w]e
`have updated our Terms and Conditions Agreement (‘Terms’). Im-
`portant changes include an updated arbitration clause that could
`affect your rights to participate in current or future class action lit-
`igation if you do not opt out of the clause as described in the
`Terms.” (Id.) The pop-up screen provided a link to the updated
`terms. In order to continue using the app, a user had to check a box
`corresponding to the statement “I agree to the updated Terms” and
`then click a button reading “Accept.” (Id. ¶ 13) The terms provided,
`with exceptions inapplicable here, that:
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`You agree that any dispute or claim relating in any way to your
`access or use of the Website or Software, to any products or
`services sold or distributed through the Software or the Web-
`site (including the Services), or to any other aspect of your
`relationship with [the] Company will be resolved by binding
`arbitration, rather than in court.
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`(2016 Terms & Conditions (“2016 T&C”) (Dkt. 19-4) at ECF p. 239-
`40.)
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`The 2016 T&C also included a class action waiver stating that “[a]ll
`claims and disputes within the scope of this arbitration agreement
`must be arbitrated on an individual basis and not on a class basis.”
`(Id. at 241.) The 2016 T&C allowed users to opt out of the arbitra-
`tion agreement within 30 days of becoming subject to it. (See id.)
`The fourth paragraph of the 2016 T&C, in bolded and capitalized
`text, warned that that the agreement included an arbitration agree-
`ment and class action waiver, as well a reference to the user's right
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`to opt out. (See id. at 232). Plaintiff did not opt out. (Tang Decl. ¶
`14.)2
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`Finally, the 2016 T&C included a broad delegation provision that
`stated:
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`The arbitrator, and not any federal, state, or local court or
`agency, shall have exclusive authority to resolve any dis-
`pute relating to the interpretation, applicability,
`enforceability or formation of this Arbitration Agree-
`ment including, but not limited to any claim that all or
`any part of this Arbitration Agreement is void or voida-
`ble.
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`(2016 T&C at ECF p. 240.)
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` LEGAL STANDARD
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`The Federal Arbitration Act (“FAA”) provides that written agree-
`ments to arbitrate are “valid, irrevocable, and enforceable, save
`upon such grounds as exist at law or in equity for the revocation of
`any contract.” 9 U.S.C. § 2. The FAA “is a congressional declaration
`of a liberal federal policy favoring arbitration agreements, notwith-
`standing any state substantive or procedural policies to the
`contrary.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460
`U.S. 1, 24 (1983). “This policy is founded upon ‘a desire to preserve
`
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`2 DoorDash updated its Term & Conditions again in 2018 and posted the up-
`dated terms on its website. (See Tang Decl. ¶ 15). DoorDash alleges that
`Plaintiff accepted the 2018 T&C by continuing to use the app after the update
`was posted on its website. It is not clear that Plaintiff’s mere continued use
`of the DoorDash app under these circumstances constituted an agreement
`to abide by the 2018 T&C. See Hines v. Overstock.com, Inc., 380 F. App’x 22,
`24-25 (2d Cir. 2010) (finding that a defendant’s “initial showing of the exist-
`ence of an agreement to arbitrate was deficient” where it alleged that “users
`of [its] website ‘accept[ed]’ the Terms and Conditions merely by using the
`website” and “did not allege any facts tending to show that a user would have
`had actual or constructive knowledge of the Terms and Conditions”). Be-
`cause Plaintiff accepted the 2016 T&C, which were materially identical to the
`2018 T&C, the court declines to decide whether Plaintiff also accepted the
`2018 T&C.
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`parties’ ability to agree to arbitrate, rather than litigate, their dis-
`putes.’” Starke v. SquareTrade, Inc., 913 F.3d 279, 288 (2d Cir. 2019)
`(quoting Schnabel v. Trilegiant Corp., 697 F.3d 110, 118 (2d Cir.
`2012) (alteration adopted)). Under Section 4 of the FAA, a party
`“aggrieved by the alleged failure, neglect, or refusal of another to
`arbitrate under a written agreement for arbitration” may file a mo-
`tion to compel, which a court must grant “upon being satisfied that
`the making of the agreement for arbitration or the failure to com-
`ply therewith is not in issue.” 9 U.S.C. § 4; see also AT&T Mobility
`LLC v. Concepcion, 563 U.S. 333, 354-55 (2011).
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`A motion to compel arbitration requires the court to address two
`issues: (1) whether the parties have entered into a valid agreement
`to arbitrate, and (2) if so, whether the dispute at issue falls within
`the scope of the parties’ agreement to arbitrate. See In re Am. Ex-
`press Fin. Advisors Sec. Litig., 672 F.3d 113, 128 (2d Cir. 2011); see
`also Granite Rock Co. v. Int’l Brotherhood of Teamsters, 561 U.S. 287,
`299 (2010) (“[C]ourts should order arbitration of a dispute only
`where the court is satisfied that neither the formation of the par-
`ties’ arbitration agreement nor (absent a valid provision
`specifically committing such disputes to an arbitrator) its enforce-
`ability or applicability to the dispute is in issue.” (emphasis in
`original)). The first question—whether the parties have agreed to
`arbitrate —“is one only a court can answer, since in the absence of
`any arbitration agreement at all, questions of arbitrability could
`hardly have been clearly and unmistakably given over to an arbi-
`trator.”
` VRG Linhas Aereas S.A. v. MatlinPatterson Global
`Opportunities Partners II L.P., 717 F.3d 322, 325 n.2 (2d Cir. 2013)
`(quotation marks omitted). In evaluating the second question—
`whether the scope of the agreement to arbitrate covers the dispute
`at issue—“courts presume that the parties intend courts, not arbi-
`trators, to decide . . . disputes about ‘arbitrability.’” BG Grp., PLC v.
`Republic of Argentina, 572 U.S. 25, 34 (2014). Thus, unless the par-
`ties have “clearly and unmistakably” delegated to an arbitrator the
`authority to resolve issues of arbitrability, Howsam v. Dean Witter
`Reynolds, 537 U.S. 79, 83 (2002), “the question of whether or not a
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`dispute is arbitrable is [also] one for the court.” Citigroup Global
`Mkts. Inc. v. Abbar, 761 F.3d 268, 274 (2d Cir. 2014) (quotation
`marks and citation omitted). Where courts have the authority to
`make that determination, the federal policy in favor of arbitration
`“requires that any doubts concerning the scope of arbitrable issues
`be resolved in favor of arbitration.” Telenor Mobile Commc’ns AS v.
`Storm LLC, 584 F.3d 396, 406 (2d Cir. 2009) (quotation marks and
`citation omitted).
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`In deciding a motion to compel arbitration, “the court applies a
`standard similar to that applicable for a motion for summary judg-
`ment.” Bensadoun v. Jobe-Riat, 316 F.3d 171, 175 (2d Cir. 2003). As
`a result, allegations related to arbitrability are evaluated to deter-
`mine “whether they raise a genuine issue of material fact that must
`be resolved by a fact-finder at trial.” Schnabel, 697 F.3d at 113. In
`addition, “the party resisting arbitration bears the burden of prov-
`ing that the claims at issue are unsuitable for arbitration.” Green
`Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 91 (2000). The court
`may consider “all relevant, admissible evidence submitted by the
`parties and contained in pleadings, depositions, answers to inter-
`rogatories, and admissions on file, together with affidavits.” Meyer
`v. Uber Techs., Inc., 868 F.3d 66, 74 (2d Cir. 2017) (quotation marks
`and citation omitted) (alteration adopted).
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` DISCUSSION
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`The parties do not dispute that the FAA applies, that an agreement
`to arbitrate exists as per the 2016 T&C,3 or that the dispute at issue
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`3 Defendant’s exhibit purporting to show that Plaintiff agreed to the 2016
`T&C contains a User ID that does not match the User ID affiliated with Plain-
`tiff’s account in other exhibits. (Compare 2016 T&C Confirmation (Dkt. 19-4)
`at ECF p. 248 with Sign-Up Confirmation (Dkt. 19-4) at ECF p. 223.) Notwith-
`standing that discrepancy, which casts some doubt on whether this record is
`from Plaintiff’s account or another user’s account, all available evidence sug-
`gests that Plaintiff agreed to the 2016 T&C. Defendant asserts, and Plaintiff
`does not dispute, that once users were notified of the 2016 T&C, they could
`not continue using the app without first checking the box that read “I agree
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`falls within the scope of the 2016 T&C. Plaintiff’s sole argument
`against Defendant’s motion is that the arbitration clause contained
`therein—which includes a class action waiver—is unconscionable
`due to the fees he would be required to bear in an arbitration pro-
`ceeding, and thus it should not be enforced. (See Opp. at 5-9.)
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`Under the FAA, parties can agree to delegate threshold questions
`of arbitrability to an arbitrator in addition to underlying merits dis-
`putes. See Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct.
`524, 529 (2019). These agreements are to be enforced unless a
`party specifically contests such a delegation. See Rent-A-Center, W.,
`Inc. v. Jackson, 561 U.S. 63, 72 (2010).
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`The Second Circuit has found even broad language regarding the
`scope of an arbitration agreement to be a clear and unmistakable
`agreement to delegate questions of enforceability to an arbitrator.
`See PaineWebber Inc. v. Bybyk, 81 F.3d 1193, 1199 (2d Cir. 1996)
`(“The words ‘any and all’ are elastic enough to encompass disputes
`over whether a claim is timely and whether a claim is within the
`scope of arbitration.”); see also NASDAQ OMX Grp., Inc. v. UBS Sec.,
`LLC, 770 F.3d 1010, 1031 (2d Cir. 2014). Additionally, courts regu-
`larly uphold specific clauses that delegate enforceability issues to
`an arbitrator if they are not contested. See, e.g., Vargas v. Bay Ter-
`race Plaza LLC, 378 F. Supp. 3d 190, 196 (E.D.N.Y. 2019) (“[T]he law
`is clear that absent a specific challenge, the delegation of the ques-
`tions of unconscionability and enforceability of an arbitration
`agreement to an arbitrator must be upheld.”); Kuehn v. Citibank,
`N.A., No. 12-CV-3287 (DLC), 2012 WL 6057941, at *3 (S.D.N.Y. Dec.
`6, 2012) (“[I]n light of a delegation agreement, a party's challenge
`to the arbitration agreement on unconscionability grounds is a dis-
`pute that must be resolved by arbitration unless the party
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`to the updated Terms” and then clicking the button that read “Accept.” (Tang
`Decl. ¶ 13.) The parties agree that Plaintiff placed orders using the app sub-
`sequent to June 2016, when users were notified of the 2016 T&C, and a
`record of Plaintiff’s transaction history supports that understanding of the
`facts. (See Transaction Log at ECF p. 250.) It is therefore clear that Plaintiff
`agreed to the 2016 T&C, and Plaintiff does not argue otherwise.
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`opposing arbitration demonstrates that the delegation agreement
`itself is unenforceable.”).
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`Here, the court may not reach Plaintiff’s unconscionability argu-
`ment because the parties have clearly and unmistakably agreed to
`delegate issues of enforceability of the arbitration agreement to the
`arbitrator. The 2016 T&C broadly describes the scope of the arbi-
`tration. The agreement provides that “any dispute or claim relating
`. . . to any products or services sold or distributed through the Soft-
`ware or the Website (including the Services), or to any other aspect
`of your relationship with [the] Company will be resolved by bind-
`ing arbitration, rather than in court.” (2016 T&C at ECF p. 232.)
`That language—requiring arbitration of disputes related to any as-
`pect of the relationship between the parties, which includes the
`agreement to arbitrate itself—is sufficient to delegate questions of
`arbitrability to the arbitrator. See NASDAQ OMX Grp., 770 F.3d at
`1031. Even if it were not, the 2016 T&C also includes an explicit
`delegation clause: “The arbitrator . . . shall have exclusive authority
`to resolve any dispute relating to the interpretation, applicability,
`enforceability or formation of this Arbitration Agreement.” (2016
`T&C at ECF p. 240.) Plaintiff argues only that the fees he will have
`to pay under the arbitration agreement render the entire agree-
`ment unconscionable; he makes no mention of the delegation
`clause. (Opp. at 5-9.) However, because unconscionability is a ques-
`tion of enforceability, the court may not contravene the expressed
`intent of the parties to delegate questions of enforceability to the
`arbitrator. See Vargas, 378 F. Supp. 3d at 196.
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`Defendant requests that this proceeding be stayed pending the
`outcome of arbitration. The FAA provides that a court, “upon being
`satisfied that the issue involved in such suit or proceeding is refer-
`able to arbitration under such an agreement, shall on application
`of one of the parties stay the trial of the action until such arbitration
`has been had in accordance with the terms of the agreement.” 9
`U.S.C. § 3; see also Bynum v. Maplebear Inc., 160 F. Supp. 3d 527, 534
`(E.D.N.Y. 2016). Because all of Plaintiff’s claims are arbitrable, the
`court stays the entire action pending the result of arbitration.
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` CONCLUSION
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`For the reasons stated above, Defendant’s (Dkt. 19) motion to com-
`pel arbitration is GRANTED and the case is STAYED pursuant to 9
`U.S.C. § 3.
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`SO ORDERED.
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`Dated:
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`Brooklyn, New York
`August 24, 2020
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`_/s/ Nicholas G. Garaufis_
`NICHOLAS G. GARAUFIS
`United States District Judge
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