FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`BARBARA KNAPKE,
`Plaintiff-Appellee,
`
`
`
`
`
`v.
`
`
`PEOPLECONNECT, INC.,
`Defendant-Appellant.
`
`Appeal from the United States District Court
`for the Western District of Washington
`Marsha J. Pechman, District Judge, Presiding
`
`Argued and Submitted May 18, 2022
`Seattle, Washington
`
`Filed June 29, 2022
`
`Before: Kim McLane Wardlaw, Ronald M. Gould, and
`Mark J. Bennett, Circuit Judges.
`
`Opinion by Judge Bennett
`
`
`No. 21-35690
`
`D.C. No.
`2:21-cv-00262-MJP
`
`
`OPINION
`
`
`
`
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`
`BARBARA KNAPKE,
`Plaintiff-Appellee,
`
`
`
`
`
`v.
`
`
`PEOPLECONNECT, INC.,
`Defendant-Appellant.
`
`Appeal from the United States District Court
`for the Western District of Washington
`Marsha J. Pechman, District Judge, Presiding
`
`Argued and Submitted May 18, 2022
`Seattle, Washington
`
`Filed June 29, 2022
`
`Before: Kim McLane Wardlaw, Ronald M. Gould, and
`Mark J. Bennett, Circuit Judges.
`
`Opinion by Judge Bennett
`
`
`No. 21-35690
`
`D.C. No.
`2:21-cv-00262-MJP
`
`
`OPINION
`
`
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`SUMMARY*
`
`2
`
`
`
`
`
`Choice of Law / Arbitration
`
`
`The panel vacated the district court’s denial of a motion
`
`to compel arbitration in an action involving a right of
`publicity claim against PeopleConnect, LLC under Ohio
`law.
`
`Plaintiff Barbara Knapke claimed that PeopleConnect
`
`used her name and likeness in its Classmates.com school
`yearbook database without her consent. Knapke retained an
`attorney, Christopher Reilly, who created a Classmates.com
`account and searched for Knapke on the site. In creating the
`account, Reilly agreed to the Terms of Service, which
`contained an arbitration provision. Applying Ohio law, the
`district court denied PeopleConnect’s motion to compel
`arbitration, holding that there was no evidence that Knapke
`gave her counsel authority to bind her to the Terms of
`Service containing the arbitration provision.
`
`The panel held that the district court erred in applying
`
`Ohio law because Washington law governed the threshold
`question of arbitrability. Here, because no conflict was
`shown to exist between the law of Washington (the forum
`state) and Ohio law, Washington law applied.
`
`The panel held that on the record before the district court,
`
`questions of fact precluded ruling on the motion to compel
`arbitration. These questions of fact included: whether
`Knapke and Reilly had an agency relationship when Reilly
`
`* This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`
`
`3
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`agreed to the Terms of Service; if they did have an agency
`relationship, whether and how Knapke limited Reilly’s
`authority as her agent; and whether Knapke ratified Reilly’s
`agreement to arbitrate even if Reilly initially lacked
`authority to bind her to the agreement. The panel rejected
`Knapke’s contention that Fed. R. Civ. P. 11 obligations
`affected Reilly’s use of the Classmates.com account. The
`panel held further that PeopleConnect had a right to conduct
`discovery on these and related arbitrability issues before the
`district court decides the motion to compel arbitration. The
`panel remanded for further proceedings.
`
`
`
`COUNSEL
`
`
`Ian Heath Gershengorn (argued) and Illyana A. Green,
`Jenner & Block LLP, Washington, D.C.; Clifford W.
`Berlow, Debbie L. Berman, and Wade A. Thomson, Jenner
`& Block LLP, Chicago, Illinois; Brent Caslin, Jenner &
`Block LLP, Los Angeles, California; for Defendant-
`Appellant.
`
`Roger Perlstadt (argued), Ryan D. Andrews, and Ben
`Thomassen, Edelson PC, Chicago, Illinois; Philip L.
`Fraietta, Bursor & Fisher P.A., New York, New York; for
`Plaintiff-Appellee.
`
`
`
`
`
`
`
`4
`
`
`KNAPKE V. PEOPLECONNECT
`
`OPINION
`
`BENNETT, Circuit Judge:
`
`Barbara Knapke claims that PeopleConnect, Inc. uses
`her name and likeness in its Classmates.com school
`yearbook database without her consent. Knapke, an Ohio
`resident, wanted to pursue an individual and class action
`right of publicity claim against PeopleConnect under Ohio
`law. Knapke retained an attorney, Christopher Reilly, but
`the record does not reflect when she retained him. Reilly
`created a Classmates.com account and searched for Knapke
`on the site. By creating the account, Reilly agreed to the
`site’s Terms of Service, which contained an arbitration
`provision. Knapke eventually filed suit in the U.S. District
`Court for the Western District of Washington, represented
`by Reilly and his law firm. PeopleConnect sought to compel
`arbitration through a motion to dismiss1 and alternatively
`asked for the right to conduct arbitration-related discovery.
`Applying Ohio law, the district court denied the motion,
`holding that there was no evidence that Knapke gave her
`counsel authority to bind her to the Terms of Service
`containing the arbitration provision. The district court also
`denied discovery.
`
`The district court erred. First, Washington law, not Ohio
`law, governs the threshold question of arbitrability. And
`second, on the record before the district court, questions of
`fact precluded ruling on the motion to compel arbitration.
`These questions of fact include whether Knapke and Reilly
`had an agency relationship when Reilly agreed to the Terms
`of Service; if they did have an agency relationship, whether
`
`1 We follow the parties’ lead in referring to the motion to dismiss as
`a motion to compel arbitration.
`
`
`
`5
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`and how Knapke limited Reilly’s authority as her agent; and
`whether Knapke ratified Reilly’s agreement to arbitrate even
`if Reilly initially lacked authority to bind her to the
`agreement. PeopleConnect has a right to conduct discovery
`on these and related arbitrability issues before the district
`court decides the motion to compel arbitration. We have
`jurisdiction under 9 U.S.C. § 16(a)(1), and we vacate the
`district court’s denial of the motion to compel arbitration and
`remand for further proceedings.
`
`I. BACKGROUND
`
`PeopleConnect, Inc., a Delaware corporation with its
`principal place of business in Seattle, Washington, owns and
`operates Classmates.com, an online library of more than
`450,000 yearbooks. Although any Classmates.com user
`may access some of that library, a user must register for
`either a free or paid account to access most of it. To register,
`a user must agree, by clicking “Submit”, to hyperlinked
`Terms of Service and a privacy policy. The Terms of
`Service contain an arbitration provision. The arbitration
`provision covers, with almost no exceptions, “any and all
`disputes that have arisen or may arise” between the user and
`an array of PeopleConnect entities. The Terms of Service
`also allow a user to “opt-out and not be bound by [the]
`arbitration provision by sending written notice of [the]
`decision to opt-out” within thirty days.
`
`Knapke lives in Sidney, Ohio. Her class action
`complaint is based on Classmates.com’s use of her and other
`Ohioans’ names and likenesses to advertise its products
`without their consent in violation of Ohio’s right to publicity
`statute. The complaint included screenshots from parts of
`Classmates.com accessible only to a user who had first
`agreed to the Terms of Service. Some screenshots show that
`a user named “Christopher” was
`logged
`into a
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`6
`
`Classmates.com account when the screens captured in the
`screenshots were displayed. And PeopleConnect confirmed
`that Christopher Reilly, Knapke’s attorney, created a
`Classmates.com account on January 7, 2021, and purchased
`a three-month subscription on January 29, 2021. Reilly
`could not have done either without first agreeing to the
`Classmates.com Terms of Service.
`
`PeopleConnect moved to compel arbitration, arguing
`that
`the
`arbitration
`clause
`covered
`this dispute.
`PeopleConnect argued that Knapke was bound by the
`arbitration clause because her counsel, Reilly, had agreed to
`the Terms of Service (which include the arbitration
`provision) while acting as her agent. PeopleConnect’s
`Associate Director of Compliance and Intellectual Property
`declared that users must agree to the Terms of Service before
`accessing the results of a Classmates.com search or
`registering for either a free or paid account. PeopleConnect
`also asserted that Reilly was Knapke’s attorney and agent,
`but it did not offer evidence that Knapke had either retained
`or otherwise given authority to Reilly when he agreed to the
`Terms of Service. PeopleConnect stated, as well, that if the
`district court denied its motion, it wished to engage in
`limited discovery about Knapke’s “knowledge of and
`acquiescence to counsel’s use of Classmates.com on her
`behalf” and “the identity of the person who took the
`screenshots that appear in the complaint.”
`
`Knapke argued that she had no relationship with
`PeopleConnect and
`that Reilly’s agreement
`to
`the
`Classmates.com Terms of Service did not bind her. Knapke
`maintained that she had never been a Classmates.com
`customer, had never seen the arbitration agreement, and that
`the “hidden” nature of the clause within the “several
`thousand-word” Terms of Service accessible via hyperlink
`
`
`
`7
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`rendered the clause “irrelevant” regardless. Knapke also
`argued that her counsel created the account to satisfy his
`obligations under Federal Rule of Civil Procedure 11(b); in
`her view, “the failure . . . to check if a plaintiff’s identity was
`in fact publicized by the website would likely draw . . .
`sanctions.” And Knapke claimed that PeopleConnect’s
`attempt
`to bind her
`to
`the arbitration clause was
`“extraordinary overreach” because it would allow websites
`to force every plaintiff into arbitration. Knapke also argued
`that her counsel could not have bound her to the Terms of
`Service because the Terms forbid the creation of accounts on
`behalf of another person and that estoppel does not compel
`her, as a nonsignatory, to arbitrate her claims because she
`did not knowingly accept any benefit from PeopleConnect.
`And Knapke maintained that her counsel did not discuss
`creating a Classmates.com account with her—and that the
`discussions they did have were privileged.
`
`The district court denied PeopleConnect’s motion to
`compel arbitration.2 See Knapke v. PeopleConnect Inc.,
`553 F. Supp. 3d 865 (W.D. Wash. 2021). The district court
`applied Ohio law “because Knapke resides in Ohio and Ohio
`law should apply
`to
`interpreting any attorney-client
`relationship that she entered into from her domicile.” Id.
`at 872. It rejected PeopleConnect’s argument that Reilly’s
`agreement to the Terms of Service bound Knapke. Id.
`at 872–74. The district court also found there was “no
`evidence that Knapke gave her counsel any authority to bind
`
`2 PeopleConnect also argued that Knapke’s claim was: (i) barred by
`Section 230, a provision of the Communications Decency Act;
`(ii) preempted by Section 301 of the Copyright Act; (iii) insufficient to
`state a claim under the Ohio right of publicity statute; (iv) barred by the
`First Amendment; and (v) barred by the Dormant Commerce Clause.
`The district court rejected each of these arguments, and these issues are
`not before us on appeal.
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`8
`
`her to Classmates’ terms of service.” Id. at 873. It found no
`evidence that Reilly acted at Knapke’s direction or that
`Classmates.com understood counsel’s actions to have been
`undertaken on Knapke’s behalf. Id. And it found both that
`Knapke did not discuss creating a Classmates.com account
`with Reilly and that the Terms of Service forbade the
`creation of accounts on behalf of others. Id.
`
`The district court also found that Reilly created and used
`the Classmates.com account
`to satisfy his Rule 11
`obligations.
` Id.
` And
`the district court rejected
`PeopleConnect’s request for discovery because, in its view,
`Knapke had disclosed in her opposition both the extent of
`her knowledge of and acquiescence to Reilly’s use of the
`account and the identity of the person who took the
`screenshots used in the complaint (Reilly). Id. at 874.
`PeopleConnect timely appealed.
`
`II. STANDARD OF REVIEW
`
`We review an order denying a motion to compel
`arbitration de novo, questions of arbitrability “with a healthy
`regard for the federal policy favoring arbitration,” and any
`underlying factual findings for clear error. O’Connor v.
`Uber Techs., Inc., 904 F.3d 1087, 1093 (9th Cir. 2018)
`(quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr.
`Corp., 460 U.S. 1, 24 (1983)).
`
`III. DISCUSSION
`
`The Federal Arbitration Act (“FAA”) “governs the
`enforceability of arbitration agreements
`in contracts
`involving interstate commerce.” Kramer v. Toyota Motor
`Corp., 705 F.3d 1122, 1126 (9th Cir. 2013). Under the FAA,
`private agreements to arbitrate are “valid, irrevocable, and
`enforceable, save upon such grounds as exist at law or in
`
`
`
`9
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`equity for the revocation of any contract.” 9 U.S.C. § 2.
`“The question whether the parties have submitted a
`particular dispute to arbitration, i.e., the question of
`arbitrability, is an issue for judicial determination unless the
`parties clearly and unmistakably provide otherwise.”
`Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83
`(2002) (cleaned up). “Generally, a court must determine two
`issues before deciding whether to compel arbitration:
`(1) whether there is an agreement to arbitrate between the
`parties; and (2) whether the agreement covers the dispute.”
`Zoller v. GCA Advisors, LLC, 993 F.3d 1198, 1201 (9th Cir.
`2021). Knapke does not dispute that the arbitration clause
`covers her claim. The question is thus whether Knapke
`agreed to arbitrate with PeopleConnect.
`
`The FAA “supplies not simply a procedural framework
`applicable in federal courts; it also calls for the application,
`in state as well as federal courts, of federal substantive law
`regarding arbitration.” Preston v. Ferrer, 552 U.S. 346, 349
`(2008). “As federal substantive law, the FAA preempts
`contrary state law.” Mortensen v. Bresnan Commc’ns, LLC,
`722 F.3d 1151, 1158 (9th Cir. 2013). And under the FAA’s
`procedural framework, “[i]f the making of the arbitration
`agreement . . . be in issue, the court shall proceed summarily
`to the trial thereof.” 9 U.S.C. § 4. “In applying this
`language, district courts rely on the summary judgment
`standard of Rule 56 of the Federal Rules of Civil Procedure.”
`Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 670 (9th
`Cir. 2021). As a result, “a court is not authorized to dispose
`of a motion to compel arbitration until after [material]
`factual disputes have been resolved.” Id. at 671.
`
`At summary judgment, if a court “concludes that there
`are genuine disputes of material fact as to whether the parties
`formed an arbitration agreement, the court must proceed
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`10
`
`without delay to a trial on arbitrability and hold any motion
`to compel arbitration in abeyance until the factual issues
`have been resolved.” Id. at 672. “The district court may
`decide the case in a bench trial if the party opposing
`arbitration does not demand a jury trial. But if a jury trial is
`demanded, ‘the court shall make an order referring the issue
`or issues to a jury in the manner provided by the Federal
`Rules of Civil Procedure, or may specially call a jury for that
`purpose.’” Id. at 670 (quoting 9 U.S.C. § 4).
`
`Because the FAA does not “alter background principles
`of state contract law regarding the scope of agreements
`(including the question of who is bound by them),” state law
`governs this inquiry. Arthur Andersen LLP v. Carlisle,
`556 U.S. 624, 630 (2009). Knapke’s status as a nonsignatory
`to the arbitration agreement does not alter the applicability
`of state law. See GE Energy Power Conversion France SAS,
`Corp. v. Outokumpu Stainless USA, LLC, 140 S. Ct. 1637,
`1643 (2020) (“Chapter 1 of the Federal Arbitration Act
`(FAA) permits courts to apply state-law doctrines related to
`the enforcement of arbitration agreements.”); see also
`O’Hanlon v. Uber Techs., Inc., 990 F.3d 757, 766 (3d Cir.
`2021) (“Those background principles include ‘doctrines
`[like estoppel] that authorize the enforcement of a contract
`[against] a nonsignatory.’” (alterations in original) (quoting
`GE Energy, 140 S. Ct. at 1643)); 21 Richard A. Lord,
`Williston on Contracts § 57:19 (4th ed. May 2022 Update)
`(“Thus, a nonsignatory may acquire rights under or be bound
`by an arbitration agreement if so dictated by the ordinary
`principles of contract and agency.” (footnotes omitted)).
`
`to compel
`PeopleConnect, “as the party seeking
`arbitration, must prove the existence of a valid agreement by
`a preponderance of the evidence.” Wilson v. Huuuge, Inc.,
`944 F.3d 1212, 1219 (9th Cir. 2019). It has not proven the
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`existence of such an arbitration agreement binding Knapke
`at this initial stage.
`
`11
`
`A. Choice of Law
`
`The district court erred in its choice-of-law analysis by
`applying Ohio law, Knapke argued that Ohio law applied,
`and PeopleConnect argued that Washington law applied, but
`neither claimed that the choice of law would affect the
`outcome. However, both parties now agree that Washington
`law applies. District courts sitting in diversity apply the
`choice-of-law rules of the forum state. See Lazar v.
`Kroncke, 862 F.3d 1186, 1194 (9th Cir. 2017). And
`Washington, the forum state, employs the “most significant
`relationship test” to determine choice-of-law questions.
`FutureSelect Portfolio Mgmt., Inc. v. Tremont Grp.
`Holdings, Inc., 331 P.3d 29, 36 (Wash. 2014) (citing
`Restatement (Second) of Conflict of Laws §§ 145, 148
`(1971)). But before courts apply that test, “[a]n actual
`conflict between the law of Washington and the law of
`another state must be shown to exist.” Burnside v. Simpson
`Paper Co., 864 P.2d 937, 942 (Wash. 1994). “Absent such
`a showing, the forum may apply its own law.” Id. Here,
`because no conflict has been shown to exist between
`Washington and Ohio law, Washington law applies.
`
`B. Arbitration Agreement
`
`The record does not establish whether Reilly was
`Knapke’s attorney when he agreed to the Classmates.com
`Terms of Service. But even if the record showed that Reilly
`agreed to the Terms of Service after Knapke retained him,
`that would not be enough, on its own, to show that the
`arbitration clause binds Knapke.
`
`
`
`12
`
`
`KNAPKE V. PEOPLECONNECT
`
`1. Agency Relationship
`
`It is unclear whether Reilly and Knapke had an attorney-
`client relationship, and thus an agent-principal relationship,
`when Reilly agreed to the Terms of Service. See West v.
`Thurston County, 275 P.3d 1200, 1212 (Wash. Ct. App.
`2012) (“We recognize that the attorney-client relationship is
`generally a type of principal-agent relationship.”).3 Under
`Washington law, “[t]he burden of establishing an agency
`relationship is on the party asserting it exists”—here,
`PeopleConnect. Afoa v. Port of Seattle, 421 P.3d 903, 911
`(Wash. 2018).
`
`The record does not show when Knapke and Reilly
`formed their agency relationship. Reilly did become
`Knapke’s attorney at some point. But it is unclear if that
`happened before Reilly
`initially
`registered
`for his
`Classmates.com account, or if not, before he bought his
`three-month subscription. The screenshots discussed above
`are evidence of Reilly’s assent to the arbitration agreement.
`See Tompkins v. 23andMe, Inc., No. 5:13-CV-05682-LHK,
`2014 WL 2903752, at *7 (N.D. Cal. June 25, 2014) (access
`to portions of website requiring assent to Terms of Service
`is sufficient evidence of assent to arbitration clause
`contained in it), aff’d, 840 F.3d 1016 (9th Cir. 2016). But
`the record does not establish when Reilly became Knapke’s
`agent, whether as her attorney or otherwise. As discussed
`below, this issue might be material to determining whether
`
`3 Knapke need not have formally retained Reilly’s law firm by that
`time for an agency relationship to have formed. “Consent [to an agency
`relationship] may be implied,” and there need only be “facts or
`circumstances that establish that one person is acting at the instance of
`and in some material degree under the direction and control of the other.”
`Wash. Imaging Servs., LLC v. Wash. State Dep’t of Revenue, 252 P.3d
`885, 892 (Wash. 2011) (internal quotation marks omitted).
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`Knapke is bound by Reilly’s agreement to the Terms of
`Service. We thus remand for discovery on this issue.
`
`13
`
`Knapke focuses on PeopleConnect’s decision not to take
`discovery on this issue before moving to compel arbitration.
`Instead, PeopleConnect noted in its motion that if the district
`court did not grant its motion, it requested leave to engage in
`limited discovery about the agency relationship. So,
`according to Knapke, PeopleConnect “wanted it both
`ways—if it won the motion to compel, great; if it didn’t win,
`only then did it want discovery. Although [PeopleConnect]
`had the burden to present evidence [of an agreement to
`arbitrate], it rolled the dice and chose not to pursue
`additional discovery at the outset.” Appellee’s Br. 16
`(quoting Wilson, 944 F.3d at 1220). But the defendant in
`Wilson “waived its discovery request as it was insufficiently
`raised in a two-line footnote in a reply brief.” 944 F.3d
`at 1220.
` Here, PeopleConnect conditionally, and
`sufficiently, requested discovery in its motion to compel.
`Nothing required PeopleConnect to seek discovery first, and
`the district court never found (nor could it have) that
`PeopleConnect waived taking discovery. And since Wilson,
`we have confirmed that the FAA’s procedure mirrors the
`three phases of federal civil lawsuits: a motion to compel
`arbitration akin to a motion to dismiss; followed by optional
`discovery before summary judgment, if the motion is denied;
`followed by a mini-trial, if necessary. See Hansen, 1 F.4th
`at 670.
`
`2. Binding Effect
`
`Because of a factual dispute about the scope of Reilly’s
`authority, the record does not allow a determination of
`whether Knapke is bound to the arbitration through Reilly’s
`assent. Under Washington law, “[a]rbitration agreements
`may encompass nonsignatories under contract and agency
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`14
`
`principles.” Romney v. Franciscan Med. Grp., 349 P.3d 32,
`42 (Wash. Ct. App. 2015). Washington also recognizes
`various theories under which a nonsignatory may be bound
`by a contract, including agency. Satomi Owners Ass’n v.
`Satomi, LLC, 225 P.3d 213, 230 n.22 (Wash. 2009). “An
`agency relationship may exist, either expressly or by
`implication, when one party acts at the instance of and, in
`some material degree, under the direction and control of
`another.” Hewson Constr., Inc. v. Reintree Corp., 685 P.2d
`1062, 1064 (Wash. 1984). And an agent may bind a
`principal through either actual authority (express or implied)
`or apparent authority. King v. Riveland, 886 P.2d 160, 165
`(Wash. 1994).
`
`A principal may also be bound by contracts her agent
`makes without authority if the principal later ratifies the
`agent’s agreement. Bill McCurley Chevrolet, Inc. v. Rutz,
`808 P.2d 1167, 1170 (Wash. Ct. App. 1991). “A principal
`ratifies an agent’s agreement if the principal (1) receives,
`accepts, and retains benefits from the contract; (2) remains
`silent or fails to repudiate the contract; or (3) otherwise
`exhibits conduct demonstrating adoption and recognition of
`the contract.” Hoglund v. Meeks, 170 P.3d 37, 46 n.7 (Wash.
`Ct. App. 2007).
`
`Under both implied actual authority and ratification, it is
`unclear if Reilly’s agreement to the arbitration provision
`binds Knapke, even if Reilly were Knapke’s attorney when
`he agreed. Knapke’s status as an undisclosed principal when
`Reilly was her agent does not alter the application of
`Washington agency law here. Nor does Reilly’s obligation
`under Federal Rule of Civil Procedure 11 to adequately
`investigate Knapke’s claim.
`
`
`
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`15
`
`a. Implied Actual Authority
`
`The parties dispute whether Reilly had implied actual
`authority to agree to the Classmates.com Terms of Service
`on Knapke’s behalf. Under Washington law, “[i]mplied
`authority is actual authority, circumstantially proved, which
`the principal is deemed to have actually intended the agent
`to possess.” King, 886 P.2d at 165. And “actual authority
`to perform certain services on a principal’s behalf results in
`implied authority to perform the usual and necessary acts
`associated with the authorized services.” Hoglund, 170 P.3d
`at 44. Such usual and necessary acts can include agreeing to
`contracts. See, e.g., Chi. Title Ins. Co. v. Wash. State Off. of
`Ins. Comm’r, 309 P.3d 372, 382 (Wash. 2013). Attorneys
`licensed in Washington also possess the same implied
`authority to act on behalf of their clients. See Wash. R. of
`Prof’l Conduct 1.2(a) (“A lawyer may take such action on
`behalf of the client as is impliedly authorized to carry out the
`representation.”).
`
`At some point, Knapke retained Reilly and his law firm
`file
`suit
`against
`PeopleConnect
`based
`on
`to
`Classmates.com’s alleged unauthorized use of her image.
`But the scope of both their agreement and Reilly’s
`corresponding authority are unclear on this record. Knapke
`now argues that she retained Reilly’s law firm not “to enter
`into the PeopleConnect Terms of Service,” but only “to
`investigate and file a lawsuit.” Appellee’s Br. 21. But
`Knapke filed no declaration, and Reilly’s declaration does
`not discuss this issue. Discovery could reveal, among other
`things, both the contours of Knapke’s agreement with
`Reilly’s law firm and the limits, if any, on Reilly’s authority
`to act on Knapke’s behalf.
`
`Knapke’s memorandum in opposition to the motion to
`compel stated that counsel had no discussion with Knapke
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`16
`
`about creating an account on Classmates.com. But this
`statement is unsupported by any declaration. Knapke’s
`memorandum also states that counsel’s discussions with
`Knapke are protected by privilege and that counsel’s
`representations regarding things they did not discuss do not
`operate as a waiver of the privilege on any subject. The
`district court
`rejected PeopleConnect’s
`request
`for
`“discovery
`to
`learn about Knapke’s knowledge and
`acquiescence to counsel’s use of the account” because
`“[t]hat information ha[d] already been provided in the
`Opposition, rendering the requested discovery a nullity.”
`Knapke, 553 F. Supp. 3d at 874. But that information, if it
`was provided, was not provided
`in a declaration.
`PeopleConnect is entitled to discovery in these areas and
`need not accept at face value the statements Knapke’s
`counsel made in a memorandum of law.
`
`On remand, the district court should determine the
`contours of the attorney-client privilege and any potential
`waiver of that privilege. The district court should also
`determine
`the consequences,
`if any, of Knapke
`simultaneously denying an agency relationship regarding the
`arbitration agreement and asserting a privilege
`for
`communications that would bear directly on that issue. See
`5A Karl B. Tegland, Wash. Prac., Evidence Law and
`Practice § 501.26 (6th ed. Aug. 2021 Update) (“A party
`waives
`the
`privilege
`by
`placing
`confidential
`communications at issue, i.e., by raising an issue as to
`whether confidential communications did or did not occur.
`Waivers have occasionally been found when the intent of a
`contract or other document was placed in issue.” (footnote
`omitted)); 1 Paul R. Rice et al., Attorney-Client Privilege:
`State Law Wash. § 9:30 (July 2020 Update) (“Consistent
`with federal law, Washington courts will not allow the
`attorney-client privilege to be used as both a sword and a
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`shield” and “will not permit selective disclosure of parts of
`privileged communications that are favorable to the client’s
`position and then raise the privilege to prevent disclosure of
`the remaining portions that give context and meaning to
`what the client has disclosed.”).
`
`17
`
`b. Ratification
`
`On this record, it is also unclear if Knapke is bound
`because she ratified Reilly’s agreement to the Terms of
`Service, even if she would not otherwise be bound. In its
`motion to compel arbitration, PeopleConnect noted in
`conditionally requesting discovery that it would ask about
`Knapke’s “knowledge of and acquiescence to [Reilly’s] use
`of Classmates.com on her behalf.” Acquiescence is one
`method of ratification. Barnes v. Treece, 549 P.2d 1152,
`1157 (Wash. Ct. App. 1976). “Under agency law,
`ratification is the affirmance by a person of a prior act which
`did not bind him but which was done or professedly done on
`his account, whereby the act, as to some or all persons, is
`given effect as if originally authorized by him.” Riss v.
`Angel, 934 P.2d 669, 683 (Wash. 1997) (cleaned up).
`Principals can ratify an agent’s agreement in three ways:
`(1) by receiving, accepting, and retaining benefits from the
`contract; (2) by remaining silent, acquiescing, or failing to
`repudiate the contract; or (3) by otherwise exhibiting
`conduct demonstrating adoption and recognition of the
`contract. Hoglund, 170 P.3d at 46 n.7; Barnes, 549 P.2d at
`1157. Ratification by silence or acquiescence requires
`knowledge and either “acceptance of the benefits from the
`contract or prejudicial reliance by the other party.”
`Lockwood v. Wolf Corp., 629 F.2d 603, 609 (9th Cir. 1980)
`(citing Barnes, 549 P.2d at 1157).
`
`The record does not establish whether Knapke knew that
`Reilly had agreed to the Terms of Service on her behalf.
`
`
`
`KNAPKE V. PEOPLECONNECT
`
`18
`
`There is no evidence that Knapke knew, when she filed her
`complaint, that Reilly had even agreed to the Terms of
`Service. And were that still the state of the record following
`discovery, it would follow that there could be no evidence
`that Knapke knew that Reilly had agreed to the Terms of
`Service on her behalf. But the ratification inquiry looks not
`only to the principal’s knowledge, but also to the principal’s
`later actions.
`
`PeopleConnect argues that Knapke learned of Reilly’s
`agreement at the latest when PeopleConnect argued in its
`motion to compel arbitration that Reilly agreed to the Terms
`of Service. And as PeopleConnect notes, in her opposition,
`Knapke did not renounce Reilly’s agreement and employed
`materials that Reilly had obtained for her benefit through his
`agreeing to the Terms of Service. “Ratification can be
`inferred from the principal’s silence if the circumstances are
`such that, according to the ordinary experience and habits of
`men, one would naturally be expected to speak if he did not
`consent.” Smith v. Hansen, Hansen & Johnson, Inc.,
`818 P.2d 1127, 1135 (Wash. Ct. App. 1991) (cleaned up).
`But the record does not establish the facts necessary to
`decide this issue, including what Knapke knew and when she
`knew
`it.
` Knapke’s supposed silence even after
`PeopleConnect moved to compel arbitration does not
`necessitate a finding of ratification on the current record.
`Thus, PeopleConnect is also entitled to discovery on
`ratification.
`
`c. Undisclosed Principal Status
`
`Knapke’s status as a possible undisclosed principal does
`not alone determine whether she is bound by Reilly’s
`agreement. Under Washington law, “where an agent on
`behalf of his principal enters into a simple contract as though
`made for himself, and the existence of the principal is not
`
`
`
`19
`
`KNAPKE V. PEOPLECONNECT
`
`
`
`disclosed, the contract inures to the benefit of the principal
`who may appear and hold the other party to the contract
`made by the agent.” Dana v. Boren, 135 P.3d 963, 965
`(Wash. Ct. App. 2006) (quoting Columbia Sec. Co. v. Aetna
`Accident & Liab. Co., 183 P. 137, 141 (Wash. 1919)). If the
`principal “appear[s] and claim[s] the benefit of the contract,”
`then the contract “becomes [her] own to the same extent as
`if [her] name had originally appeared as a contracting party.”
`Id. (quoting Columbia, 183 P. at 141).
`
`Knapke argues that Reilly did not intend to agree to the
`Terms of Service on her behalf, and so as an undisclosed
`principal, she is not bound. But “[a]n undisclosed principal
`only becomes a party to a contract when an agent acts on the
`principal’s behalf in making the contract. Thus, an
`undisclosed principal does not become a party to a contract
`when the agent does not intend to act for the principal.”
`Restatement (Third) of Agency § 6.03 cmt. c (2006). Cf.
`Kim v. Moffett, 234 P.3d 279, 284 n.10 & 287 (Wash. Ct.
`App. 2010) (citing § 6.03 cmts. d & e when assessing
`Washington law). The question is thus whether Reilly acted
`on Knapke’s behalf in agreeing to the Classmates.com
`Terms of Service, not, as Knapke argues, whether Reilly
`intended to bind her. Further factual development is
`ne
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