Rebecca Swift v. Adknowledge, Inc., et al

Filing 6

Filed (ECF) Appellants Adknowledge, Inc. and KITN Media USA, Inc. response to order to show cause dated 09/15/2011. Date of service: 09/26/2011. [7906855] (DL)

No. 11-16933
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ADKNOWLEDGE, INC., d/b/a Super
Rewards and KITN MEDIA USA, INC.,
d/b/a Super Rewards,
Appellants - Defendants,
v.
REBECCA SWIFT, on behalf of herself &
all others similarly situated,
Respondent - Plaintiff.
APPEAL FROM THE UNITED STATES COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA
(Hon. Elizabeth D. Laporte)
No. 4:09-CV-05443 EDL
APPELLANTS’ RESPONSE TO
ORDER TO SHOW CAUSE
NEWMAN DU WORS LLP
By: Derek A. Newman
Derek Linke
1201 Third Avenue, Suite 1600
Seattle, Washington 98101
Telephone: [phone]
Facsimile: [phone]
Attorneys for Appellants

CORPORATE DISCLOSURE STATEMENT
Pursuant to Federal Rule of Appellate Procedure 26.1, counsel for
Appellants Adknowledge, Inc. and KITN Media USA, Inc. certifies the following:
Adknowledge, Inc. has no parent corporation. No publicly held corporation
owns 10% or more of its stock.
KITN Media USA, Inc. is a subsidiary of Adknowledge, Inc. No publicly
held corporation owns 10% or more of its stock.

Dated this 26th day of September 2011.

NEWMAN DU WORS LLP
By:

s/ Derek Linke
Derek A. Newman
Derek Linke
Attorneys for Appellants

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I.

RELIEF SOUGHT

Appellants Adknowledge, Inc. and KITN Media USA, Inc. (together,
“Adknowledge”) respond to this Court’s September 15, 2011 Order requiring that
“Within 21 days after the date of this order, appellants shall move for voluntary
dismissal of the appeal or show cause why it should not be dismissed for lack of
jurisdiction.” (Dkt. No. 4.)
Adknowledge appeals because the district court issued a final decision
denying Adknowledge’s request that all of Respondent Rebecca Swift’s claims
proceed to arbitration. The district court granted a different defendant’s motion to
compel arbitration and stayed proceedings. But the district court denied
Adknowledge’s motion to compel arbitration and later lifted the stay.
Under the Federal Arbitration Act “an appeal may be taken from . . . a final
decision with respect to an arbitration that is subject to this title.” The district court
made a final decision denying arbitration of Swift’s claims against Adknowledge.
This Court has jurisdiction over Adknowledge’s appeal. Adknowledge respectfully
requests the Court proceed with its appeal.
II.

FACTS

This appeal is taken from the district court’s “Order Granting Zynga’s
Motion to Compel Arbitration; Granting in Part and Denying in Part Other
Defendants’ Parallel Motion to Stay; Denying as Moot: (1) Motion to Compel
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Discovery, (2) Motion to Hear Cross-Motion to Stay Discovery on Shortened
Time, (3) Motion to Stay Discovery; Granting Motion to Seal” (the “Order”).
Declaration of Derek Linke in Support of Appellants’ Response to Order to Show
Cause (“Linke Decl.”) ¶ 2 Ex. A.
Swift alleges she participated in certain online offers “created and
developed” by Adknowledge. (Id. ¶ 3 Ex. B at ¶ 6.) All of Swift’s alleged damages
result from her claimed participation in offers she accessed through Zynga’s
“YoVille” game application. (Id. Ex. B at ¶¶ 37-38.) Swift alleges that
Adknowledge conspired with Zynga in a scheme to defraud consumers, including
herself. (Id. Ex. B at ¶¶ 10, 14, 25, 30.)
After Swift filed her lawsuit, Zynga moved to compel arbitration. (Id. ¶ 4
Ex. C.) Zynga argued that in order to launch the YoVille application, Swift was
required to accept Zynga’s YoVille Terms of Service (“YoVille TOS”) that were
in effect when she played the game. (Id.) The YoVille TOS required Swift to agree
“that any suit, action or proceeding arising out of or relating to these Terms of Use
or any transactions contemplated herein . . . shall be resolved solely by binding
arbitration before a sole arbitrator under the rules and regulations of the American
Arbitration Association.” (Id. at 3:7-9.) Adknowledge filed a joinder to Zynga’s

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motion to compel, arguing that Swift’s claims against them were related to the
YoVille TOS or transactions contemplated by the TOS. (Id. at ¶ 5 Ex. D.)
The district court’s Order granted Zynga’s request to compel arbitration of
Swift’s claims against Zynga. (Id. at ¶ 2 Ex. A.) But the Order denied
Adknowledge’s request to compel arbitration of Swift’s claims against
Adknowledge. (Id. at 2:18-19; Id. at 13-16.) After the district court issued its
Order, Swift dismissed Zynga as a defendant and the district court lifted the stay.
(Id. at ¶ 6 Ex. E at 3:3-5.)
III.

ARGUMENT AND AUTHORITY

The Federal Arbitration Act, 9 U.S.C. § 16(a)(3), provides that: “An appeal
may be taken from . . . a final decision with respect to an arbitration that is subject
to this title.” The decision of the district court concerning whether a dispute should
be referred to arbitration is a question of law. Dean Witter v. Reynolds, Inc. v.
Byrd, 470 U.S. 213, 84 L. Ed. 2d 158, 105 S. Ct. 1238 (1985) (“By its terms, the
FAA leaves no room for the exercise of discretion by a district court”). The district
court’s denial of arbitration is reviewed de novo by the appellate court. United
Food Commercial Workers Union, Local 770 v. Geldin Meat Co., 13 F.3d 1365,
1368 (9th Cir. 1994). This Court has jurisdiction over this appeal from the district
court’s final decision to deny arbitration of Swift’s claims over Adknowledge.
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Adknowledge is not appealing the district court’s grant of Zynga’s request
for arbitration or the temporary stay that the district court already lifted.
Adknowledge is appealing only the district court’s denial of Adknowledge’s
request for arbitration. This Court’s order to show cause is correct that “an order
granting a motion to compel arbitration and staying district court proceedings is
generally not an appealable order”. But this appeal is taken because the district
court denied a motion to compel arbitration and promptly lifted a stay of
proceedings. Because the district court issued “a final decision with respect to an
arbitration,” 9 U.S.C. § 16(a)(3), this Court has jurisdiction.
IV.

CONCLUSION

Adknowledge filed this appeal because the district court denied its motion to
compel arbitration. The district court granted another defendant’s motion, and
temporarily issued a stay that has since been lifted. This Court has jurisdiction over
that denial and should proceed with Adknowledge’s appeal.
DATED this 26th day of September, 2011.
NEWMAN DU WORS LLP
By:

s/ Derek Linke
Derek A. Newman
Derek Linke
Attorneys for Appellants
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CERTIFICATE OF SERVICE
Case No. 11-16933
I hereby certify that on September 26, 2011, I electronically filed the
foregoing with the Clerk of the Court for the United States Court of Appeals for
the Ninth Circuit by using the appellate CM/ECF system.
Participants in the case who are registered CM/ECF users will be served by
the appellate CM/ECF system.

Dated this 26th day of September 2011.
/s/ Derek Linke
Derek Linke

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