David Gould et al v. Hyundai Motor Company et al

Filing 46

ORDER GRANTING DEFENDANTS' MOTIONS TO COMPEL ARBITRATION [ECFNo. 29 and 32 ] by Judge John W. Holcomb. For the foregoing reasons, the Court hereby ORDERS as follows: The Kia Motion [ECF No. 29] is GRANTED. The Hyundai Motion [ECF No. 3 2] is GRANTED. Plaintiffs are DIRECTED to pursue their respective claims for relief through appropriate arbitration proceedings, in accordance with the arbitration provisions in the Kia Connect agreement and the Hyundai BlueLink agreement. T his matter is STAYED until further order of the Court. Any party may move at any time to modify or vacate the stay, for good cause shown. The parties are DIRECTED to file no later than April 4, 2025, and every 90 days thereafter, a Joint Report that advises the Court regarding the posture of the arbitration proceedings. The Clerk is DIRECTED to close this case administratively. IT IS SO ORDERED. (yl)

JS-6
O

UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA

DAVID GOULD;
KAUSHIK IYENGAR;
BRENDON LOBO;
JOHN NIXON;
JANE CHANG BRIGHT;
SHANE MAHON;
PETER CONHEIM; and
KINGSLEY BARNIE, individually and
on behalf of all others similarly
situated,
Plaintiffs,
v.
HYUNDAI MOTOR COMPANY;
HYUNDAI MOTOR AMERICA;
KIA CORPORATION;
KIA AMERICA, INC.;
GENESIS MOTOR, LLC; and
GENESIS MOTOR AMERICA LLC,
Defendants.

Case No. 8:23-cv-01344-JWH-DFM
ORDER GRANTING
DEFENDANTS’ MOTIONS TO
COMPEL ARBITRATION [ECF
No. 29 and 32]

I. SUMMARY OF DECISION
Before the Court are two motions:
x the motion of Defendant Kia America, Inc. to compel arbitration of the claims
asserted by Plaintiffs Jane Chang Bright and Kingsley Barnie; 1 and
x the motion of Defendant Hyundai Motor America, Inc. to compel arbitration of
the claims asserted by Plaintiffs David Gould, Kaushik Iyengar, Brendon Lobo,
John Nixon, Shane Mahon, and Peter Conheim. 2
The Court concludes that these matters are appropriate for resolution without a hearing.
See Fed. R. Civ. P. 78; L.R. 7-15. After considering the papers filed in support and in
opposition, 3 the Court orders that the Motions are GRANTED, 4 for the reasons set forth
herein.

II. BACKGROUND
A.

Procedural History

In July 2023, Plaintiffs David Gould, Kaushik Iyengar, and John Nixon
commenced this action, on behalf of themselves and all others similarly situated. 5 Two
months later, Plaintiffs Jane Chang Bright, Peter Conheim, Kingsley Barnie, and Shane
Mahon, on behalf of themselves and all others similarly situated, commenced a related
action. 6 Both actions arise from allegations that Defendants Hyundai Motor Company,
Ltd.; Hyundai Motor America, Inc.; Kia America, Inc.; Kia Corporation; Genesis Motor
1

Def. Kia America, Inc.’s Mot. to Compel Individual Arbitration (the “Kia Motion”)
[ECF No. 29].
2
Def. Hyundai Motor America Inc.’s Mot. to Compel Individual Arbitration (the
“Hyundai Motion”) [ECF No. 32].
3

See Pls.’ Omnibus Opposition to the Kia Motion and the Hyundai Motion (the
“Opposition”) [ECF No. 38]
4
The Court considered the documents of record in this action, including the following
papers: (1) First Am. Consolidated Class Action Compl. (the “Amended Complaint”) [ECF
No. 27]; (2) Kia Motion (including its attachments); (3) Hyundai Motion (including its
attachments); (4) Opposition (including its attachments); (5) Kia’s Reply in Supp. of the Kia
Motion (the “Kia Reply”) (including its attachments) [ECF No. 40]; and (6) Hyundai’s Reply in
Supp. of the Hyundai Motion (the “Hyundai Reply”) (including its attachments) [ECF No. 41].
5

Compl. [ECF No. 1].
6
Bright v. Hyundai Motor Co. Ltd., Case No. 8:23-cv-01602-JWH-DFM (C.D. Cal.
Sept. 27, 2023) [ECF No. 1] (the “Bright Case”).

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LLC; and Genesis Motor America LLC manufactured, sold, and leased electric vehicles
that do not charge reliably or as advertised. In October 2023, the parties stipulated to
consolidate the instant action and the Bright Case. 7 The Court granted that stipulation
and concluded that this action and the Bright Case are appropriate for consolidation under
Rule 42(a) of the Federal Rules of Civil Procedure. 8
Later in October 2023, Plaintiffs filed their consolidated Amended Complaint.
The next month, Kia and Hyundai moved to compel arbitration. In the Kia Motion, Kia
notes that Kia Corporation has not been served, but, assuming that Kia Corporation is
later served and is subject to personal jurisdiction, the arbitration agreement applies
equally to that entity. 9 Similarly, in the Hyundai Motion, Hyundai notes that Hyundai
Motor Company has not been served, but, assuming that Hyundai Motor Company is
later served and is subject to personal jurisdiction, the arbitration agreement likewise
applies equally to that entity. 10
These Motions are fully briefed. Plaintiffs filed an Omnibus Opposition, 11 which
responds to the arguments that Kia and Hyundai make in both Motions. Kia and Hyundai
filed Replies 12 in support of their respective Motions.
B.

Facts
The factual allegations in the Amended Complaint are summarized as follows:
x Gould, a New York resident, purchased a MY 2023 Ioniq 5 electric vehicle from a
Hyundai dealership in New York. 13
x Iyengar, a Georgia resident, purchased a MY 2023 Ioniq 5 Limited electric vehicle
from a Hyundai dealership in New York. 14
x Lobo, a Georgia resident, purchased a Hyundai 5 SE electric vehicle from a
Hyundai dealership in Georgia. 15

7
8
9
10
11
12
13

Joint Stip. to Transfer and Consolidate Cases [ECF No. 31 in the Bright Case].
Ord. Granting Joint Stip. to Consolidate Cases [ECF No. 28].
Kia Motion 6:26-28 n.1.
Hyundai Motion 7:26-28 n.1.
See Opposition.
See Kia Reply; Hyundai Reply.
Amended Complaint ¶ 11.

14

Id. at ¶ 14.

15

Id. at ¶ 19.

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x Nixon, a Florida resident, entered into a two-year contract to lease a new MY 2023
Ioniq 5 electric vehicle from a Hyundai dealership in Florida. 16
x Bright, a California resident, purchased a MY 2022 Kia EV6 electric vehicle from a
Kia dealership in California. 17
x Mahon, a resident of Illinois, purchased a MY 2022 Hyundai Ioniq 5 electric
vehicle from a Hyundai dealership in Wisconsin. 18
x Conheim, a California resident, purchased a MY 2022 Hyundai Ioniq 5 electric
vehicle from a Hyundai dealership in New Mexico. 19
x Barnie, a New York resident, purchased a MY 2022 Kia EV6 electric vehicle from
a Kia dealership in New York. 20
In this class action lawsuit, Plaintiffs allege that the Class Vehicles—defined as the
Hyundai Ioniq 5, Ioniq 6, Kia EV6, Kia Niro EV, Kia PHEV, and Genesis GV60 21—are
defective and that they do not charge as advertised. 22 The Nationwide Class is defined as
all persons or entities who purchased or leased one or more of the Class Vehicles. 23 The
State Sub-Classes are defined as all members of the Nationwide Class in California,
Florida, Georgia, Illinois, New Mexico, and New York. 24
Plaintiffs allege that Defendants knowingly and intentionally concealed the Class
Vehicles’ defects. 25 Plaintiffs contend that they would not have purchased the Class
Vehicles, or would have paid less, if Defendants disclosed the defects. 26 Plaintiffs assert
the following 19 claims for relief:
x violation of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030; 27

16

Id. at ¶ 22.

17

Id. at ¶ 25.
Id. at ¶ 30.

18
19
20
21
22
23
24
25

Id. at ¶ 35.
Id. at ¶ 40.
Id. at ¶ 2 n.1.
See generally id.
Id. at ¶ 92.
Id.
Id. at ¶ 153.

26

Id. at ¶ 13.

27

Id. at ¶¶ 102-122.

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x violation of the California Computer Data Access and Fraud Act, Cal. Penal Code
§ 502; 28
x violation of the California Unfair Competition Law, Cal. Bus. & Prof. Code
§ 17200; 29
x violations of the California Consumer Legal Remedies Act, Cal. Civ. Code
§ 1750; 30
x violation of the California False Advertising Law, Cal. Bus. & Prof. Code
§ 17500; 31
x trespass to chattels; 32
x violations of New York General Business Law § 349; 33
x violations of New York General Business Law § 350; 34
x unjust enrichment; 35
x violation of Georgia’s Fair Business Practices Act, GA. Code Ann. § 10-1-390; 36
x violation of the Georgia Uniform Deceptive Trade Practices Act, GA. Code Ann.
§ 10-1-370; 37
x unjust enrichment; 38
x violations of the Florida Deceptive and Unfair Trade Practices Act, Fla. Stat. Ann.
§ 501.201; 39
x unjust enrichment; 40
x violations of the California Consumer Legal Remedies Act, Cal. Civ. Code
§ 1750; 41

28

Id. at ¶¶ 123-140.

29

Id. at ¶¶ 141-148.
Id. at ¶¶ 149-165.

30
31
32
33
34
35
36
37
38
39

Id. at ¶¶ 166-173.
Id. at ¶¶ 174-181.
Id. at ¶¶ 182-198.
Id. at ¶¶ 199-215.
Id. at ¶¶ 216-225.
Id. at ¶¶ 226-240.
Id. at ¶¶ 241-245.
Id. at ¶¶ 246-255.
Id. at ¶¶ 256-268.

40

Id. at ¶¶ 269-278.

41

Id. at ¶¶ 279-295.

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x violations of the California Unfair Competition Law, Cal. Bus. & Prof. Code
§ 17200; 42
x violation of the California False Advertising Law, Cal. Bus. & Prof. Code
§ 17500; 43
x violation of the Illinois Consumer Fraud Act, 815 ILCS 505/1-12; 44 and
x violation of the New Mexico Unfair Practices Act, N.M. Stat. Ann. §§ 57-12-1. 45

III. LEGAL STANDARD
Pursuant to the Federal Arbitration Act (the “FAA”), “[a] written provision in
any . . . 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.” 9 U.S.C. § 2. While the FAA reflects a “liberal federal policy favoring
arbitration,” AT & T Mobility v. Concepcion, 563 U.S. 333, 339 (2011) (quoting Moses H.
Cone Memorial Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24 (1983)), “arbitration is a
matter of contract and a party cannot be required to submit to arbitration any dispute
which he has not agreed so to submit,” United Steelworkers v. Warrior & Gulf Navigation
Co., 363 U.S. 574, 582 (1960). “Because the FAA mandates that ‘district courts shall
direct the parties to proceed to arbitration on issues as to which an arbitration agreement
has been signed,’ the FAA limits courts’ involvement to ‘determining (1) whether a valid
agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the
dispute at issue.’” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008)
(internal citations and emphasis omitted) (citing Chiron Corp. v. Ortho Diagnostic Sys.,
Inc., 207 F.3d 1126, 1131 (9th Cir. 2000)).
In evaluating the validity of an arbitration agreement, a federal court “appl[ies]
ordinary state-law principles that govern the formation of contracts,” Ingle v. Circuit City
Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (quoting First Options of Chi., Inc. v.
Kaplan, 514 U.S. 938, 944 (1995)), “while giving due regard to the federal policy in favor
of arbitration by resolving ambiguities as to the scope of arbitration in favor of
arbitration,” Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042, 1044 (9th Cir. 2009)
(quoting Wagner v. Stratton Oakmont, Inc., 83 F.3d 1046, 1049 (9th Cir. 1996)).

42
43

Id. at ¶¶ 296-303.
Id. at ¶¶ 304-311.

44

Id. at ¶¶ 312-321.

45

Id. at ¶¶ 322-334.

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IV. DISCUSSION
A.

Valid Agreements to Arbitrate Exist
1.

Applicable Law

“The threshold issue in deciding a motion to compel arbitration is ‘whether the
parties agreed to arbitrate.’” Quevedo v. Macy’s, Inc., 798 F. Supp. 2d 1122, 1133 (C.D.
Cal. 2011) (citing Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 756 (9th Cir.
1988)). “In determining whether the parties have agreed to arbitrate, ‘district courts rely
on the summary judgment standard of Rule 56 of the Federal Rules of Civil Procedure.’”
Pierre v. IEC Corp., 2023 WL 3551962, at *3 (C.D. Cal. Mar. 14, 2023) (citing Hansen v.
LMB Mortg. Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021)). A factual dispute is genuine if
“a reasonable jury could return a verdict for the nonmoving party.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 248 (1986). The non-moving party “must do more than simply
show that there is some metaphysical doubt as to the material facts.” Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). “[O]nce a district court
concludes that there are genuine disputes of material fact as to whether the parties formed
an arbitration agreement, the court must proceed without delay to a trial on arbitrability
and hold any motion to compel arbitration in abeyance until the factual issues have been
resolved.” Hansen, 1 F.4th at 672.
2.

Plaintiffs’ Enrollment in the Services Providing Arbitration
Agreements
a.

Kia
i.

Kia Connect Services

In the Kia Motion, Kia asserts that Bright and Barnie enrolled in Kia Connect, “an
integrated in-vehicle communications and entertainment system that provides consumers
with vehicle features such as navigation, alerts, roadside assistance, and cloud voice
recognition. [Kia Connect] also allows consumers to perform various tasks from their
smartphone, including vehicle charging, including remotely charging their vehicle, setting
charging schedules, and receiving charging status notifications.” 46 Bright and Barnie
have “repeatedly logged into their Kia Connect accounts,” and, by doing so, they
“agreed to the current version of the Kia Connect Terms of Service.” 47

46

Decl. of Sujith Somasekharan in Supp. of the Kia Motion (the “Somasekharan
Declaration”) [ECF No. 29-2] ¶¶ 4 & 6.
47

Id. at ¶ 16.

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To enroll in Kia Connect, a consumer selects the “Kia Connect” button on the
dashboard, followed by the ”Kia Connect Settings” button. 48 After making those
selections, the consumer is directed to another screen, where he or she is required to click
“Activate Service.” 49 Then the consumer is presented with the Kia Connect Terms of
Service on the dashboard screen. 50 The consumer can scroll through the Terms of
Service, and he or she is required to check a box agreeing to those terms. 51 After
completing that initial in-vehicle step, the consumer is prompted to enter his or her
mobile phone number or email address to obtain a verification code necessary to complete
enrollment. 52 The consumer then receives the Kia Owners Portal registration page,
which requires the consumer to select a checkbox acknowledging that he or she has “read
and agree[d] to the Kia Connect Terms of Service” before he or she can create an
account and obtain a verification code. 53 The phrase “Kia Connect Terms of Service” is
offset in red, italicized text, and, if it is clicked, the system presents the consumer with the
full text of the agreement. 54 After agreeing to the Terms of Service by selecting the
checkbox, the consumer must click a button stating “ACCEPT TO GET THE
CODE.” 55 The consumer also must complete a single webform entitled “CREATE
ACCOUNT,” which requires the consumer to enter his or her personal information. 56
After entering that information, the consumer is required to select another checkbox
acknowledging that he or she has “read and agree[d] to the General Terms of Use.” 57
Then the consumer presses the “SAVE” button, thereby accepting and agreeing to the
General Terms of Use. 58 After completing those steps, the consumer is provided with a
verification code, which he or she must enter on the vehicle’s on-screen dashboard to
complete the enrollment process. 59

48

Id. at ¶ 7.

49

Id.
Id.

50
51
52
53
54
55
56
57

Id.
Id. at ¶ 8.
Id. at ¶ 9.
Id.
Id.
Id. at ¶ 10.
Id.

58

Id.

59

Id.

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ii.

Kia Arbitration Agreement

The Kia Connect Terms of Service provide as follows:
These terms require you to arbitrate any disputes you have with us on an
individual basis. This means you waive the ability to bring claims against us
in a class or representative action to the maximum extent permitted by law. 60
The consumer agrees to arbitrate “any matters relating to or arising out of your Vehicle
purchase, ownership, or lease, except any disputes or claims which are under governing
law are not subject to arbitration, to the maximum extent permitted by applicable law.” 61
The arbitration agreement includes, but is not limited to, “claims based in contract, tort,
warranty, statute, fraud, misrepresentation or any other legal theory[.]” 62 The arbitration
agreement states that “the Federal Arbitration Act governs the interpretation and
enforcement of this arbitration provision.” 63 “All issues are for the arbitrator to decide,
including the scope and enforceability of this arbitration provision as well as the
Agreement’s other terms and conditions[.]” 64
iii.

Plaintiffs’ Response

In Plaintiffs’ Opposition, Bright asserts that she did not know that there was an
arbitration agreement anywhere in the Terms and Conditions of the Kia Connect
Service. 65 Bright contends that her vehicle’s Connected Services were configured at the
dealership. 66 Specifically, a dealership employee instructed Bright to sign up for the
Connected Services by using her cell phone. 67 The dealership employee assisted her with
the signup process. 68 At one point, Bright passed her cell phone to the dealership
employee so that the employee could make sure that Bright was enrolling properly. 69
Bright contends that a dealership employee never told her about an arbitration agreement,
60

Somasekharan Declaration, Ex. D (“Kia’s Exhibit D”) [ECF No. 29-6] 2; id., Ex. F
(“Kia’s Exhibit F”) [ECF No. 29-8] 2.
61
62
63
64

Kia’s Exhibit D 29; Kia’s Exhibit F 13.
Kia’s Exhibit D 30; Kia’s Exhibit F 13.
Kia’s Exhibit D 30; Kia’s Exhibit F 14.
Kia’s Exhibit D 32; Kia’s Exhibit F 14.

65

Decl. of Jane Chang Bright in Supp. of the Opposition (the “Bright Declaration”) [ECF
No. 38-5] ¶ 3.
66
Id. at ¶ 4.
67
Id.
68

Id.

69

Id.

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never showed her the Terms of Service, and never gave her a chance to accept, reject,
question, or revise them. 70 Bright asserts that she did not give the dealership employees
authority to accept an arbitration agreement on her behalf. 71 She testifies that “[t]he only
authority [she] gave to dealership employees was to assist [her] with purchasing the
vehicle and to verify that [she] was proceeding through the Connected Services signup
process.” 72
Similarly, Barnie asserts that he did not know that there was an arbitration
agreement anywhere in the Terms and Conditions of the Kia Connect Services. 73 Barnie
contends that his vehicle’s Connect Services were configured at the dealership. 74 The
dealership employee told Barnie that Barnie should download the app and that it was
important for using the vehicle’s capabilities to their fullest extent, such as charging and
remote starting. 75 The dealership employee directed Barnie to the correct mobile app
store and told him which app to download. 76 Barnie asserts that a dealership employee
never told him about an arbitration agreement, never showed him the Terms of Service,
and never gave him a chance to accept, reject, question, or revise them. 77 Barnie testifies
that “[t]he only authority [he] gave to dealership employees was to assist [him] with
purchasing the vehicle.” 78
b.

Hyundai
i.

BlueLink Services

Similarly, in the Hyundai Motion, Hyundai argues that Gould, Iyengar, Lobo,
Nixon, Conheim, and Mahon enrolled in Hyundai BlueLink Services, “a connected car
system that includes various functions and features.” 79 Gould, Iyengar, Lobo, Nixon, and

70
71

Id. at ¶ 5.
Id.

72

Id.
73
Decl. of Kingsley Barnie in Supp. of the Opposition (the “Barnie Declaration”) [ECF
No. 38-8] ¶ 3.
74
Id. at ¶ 4.
75
76
77

Id. at ¶ 5.
Id. at ¶ 4.
Id. at ¶ 5.

78

Id.
79
Decl. of Vijay Rao in Supp. of the Hyundai Motion (the “Rao Declaration”) [ECF
No. 32-2] ¶¶ 8 & 10-15.

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Conheim each enrolled through the same Dealer-Assisted Enrollment process. 80 Mahon
enrolled through the online Customer Web Portal enrollment process, 81 while Iyengar,
Lobo, Mahon, and Conheim subsequently logged into the Hyundai Connected Services
mobile application. 82
To enroll through the Dealer-Assisted Enrollment Process, a customer agrees to
the then-effective Connected Services Agreement, which is often called the Terms and
Conditions. 83 A consumer must click the box to acknowledge that he or she has “read
and agree[d] to the Blue Link Terms & Conditions[.]” 84 A consumer would then have to
click the box to acknowledge his or her assent to the Terms and Conditions. 85 To enroll
through the Customer Web Portal process, a consumer must click the box to acknowledge
that he or she has “agree[d] to the Terms & Conditions” and then would have to click
the “Place Order” button. 86
ii.

Hyundai Arbitration Agreement

The Hyundai BlueLink Terms and Services include the following arbitration
agreement:
Hyundai and you agree to arbitrate any and all disputes and claims between
us arising out of or relating to this Agreement, Connected Services,
Connected Services Systems, Service Plans, the Vehicle, use of the sites, or
products, services, or programs you purchase, enroll in or seek product
support/service support for, whether you are a Visitor or Customer, via the
sites or through mobile application, except any disputes or claims which
under governing law are not subject to arbitration, to the maximum extent
permitted by applicable law. This agreement to arbitrate is intended to be
broadly interpreted and to make all disputes and claims between us subject to
arbitration . . . to arbitrate otherwise includes, but is not limited to: claims

80

Id. at ¶¶ 10-14.

81

Id. at ¶ 15.
Id. at ¶¶ 21-25.
Id. at ¶¶ 9 & 16.
Id. at ¶ 17.

82
83
84
85

Id.

86

Id. at ¶ 18.

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based in contract, tort, warranty, statute, fraud, misrepresentation or any
legal theory . . . . 87
The arbitration agreement further provides:
[Y]ou and Hyundai are each waiving the right to a trial by jury or to
participate in a class or representative action to the maximum extent
permitted by law. This Agreement evidences a transaction in interstate
commerce, and thus the Federal Arbitration Act governs the interpretation
and enforcement of this arbitration provision. 88
iii.

Plaintiffs’ Response

Gould asserts that he did not know that there was an arbitration agreement
anywhere in the Hyundai BlueLink Terms and Conditions. 89 A dealership employee set
up the Connected Services for Gould by downloading the app on Gould’s phone,
registering him, and signing into the app using his newly registered profile. 90 Gould did
not accept any terms; the services were set up and were fully functional before he began
using them. 91 Gould testifies that a dealership employee never told him anything about an
arbitration agreement, never showed him the terms, and never gave him a chance to
accept, reject, question, or revise them. 92 Gould “did not give the dealership employees
authority to accept an arbitration agreement on [his] behalf.” 93
Similarly, Iyengar asserts that he did not know that there was an arbitration
agreement in the Hyundai BlueLink Terms and Conditions. 94 A dealership employee
completed the configuration process for him, and Iyengar does not recall accepting any
terms associated with Hyundai BlueLink. 95 Iyengar testifies that a dealership employee
never told him anything about an arbitration agreement, never showed him the Terms

87

Rao Declaration, Ex. C (“Hyundai’s Exhibit C”) [ECF No. 32-5] 12 (emphasis omitted);
id., Ex. D (“Hyundai’s Exhibit D”) [ECF No. 32-6] 11.
88

Hyundai’s Exhibit C 13; Hyundai’s Exhibit D 11.
89
Decl. of David Gould in Supp. of the Opposition (the “Gould Declaration”) [ECF
No. 38-2] ¶ 3.
90
Id. at ¶ 4.
91
92
93

Id. at ¶ 5.
Id. at ¶ 6.
Id.

94

Decl. of Kaushik Iyengar in Supp. of the Opposition (the “Iyengar Declaration”) [ECF
No. 38-3] ¶ 3.
95

Id. at ¶ 4.

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and Conditions, and never gave him a chance to accept, reject, question, or revise them. 96
Iyengar “did not give the dealership employees authority to accept an arbitration
agreement on [his] behalf.” 97
Lobo also asserts that he did not know that there was an arbitration agreement in
the Hyundai BlueLink Terms and Conditions. 98 The dealership employee asked Lobo to
download the Connected Services app. 99 The dealership employee explained that the
configuration of the Connected Services app was a “mandatory step” for the delivery of
Lobo’s vehicle. 100 The dealership employee configured the Connected Services app for
Lobo and then handed his phone back to him. 101 Lobo testifies that a dealership employee
never told him about an arbitration agreement, never showed him the Terms and
Conditions, and never gave him the chance to accept, reject, question, or revise them. 102
Lobo “did not give the dealership employees authority to accept an arbitration agreement
on [his] behalf.” 103 Lobo asserts that the “only authority [he] gave to dealership
employees was to configure the Connected Services app.” 104
Nixon likewise asserts that he did not know that there was an arbitration
agreement in the Hyundai BlueLink Terms and Conditions. 105 The dealership delivered
the vehicle to Nixon, and he was never physically present at the dealership. 106 The
dealership employee did not discuss Connected Services with Nixon. 107 Nixon testifies
that a dealership employee never told him about an arbitration agreement, never showed
him the Terms and Conditions, and never gave him a chance to accept, reject, question,

96
97

Id. at ¶ 5.
Id.

98

Decl. of Brendon Lobo in Supp. of the Opposition (the “Lobo Declaration”) [ECF
No. 38-1] ¶ 3.
99
100
101
102

Id. at ¶ 4.
Id.
Id.
Id. at ¶ 5.

103

Id.
Id.
105
Decl. of John Nixon in Supp. of the Opposition (the “Nixon Declaration”) [ECF
No. 38-4] ¶ 3.
104

106

Id. at ¶ 5.

107

Id.

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or revise them. 108 Nixon asserts that he “did not give the dealership employees authority
to accept an arbitration agreement on [his] behalf.” 109
Conheim asserts that he also did not know that there was an arbitration agreement
in the Hyundai BlueLink Terms and Conditions. 110 Conheim’s vehicle’s Connected
Services were configured at the dealership when Conheim picked up the vehicle. 111 A
dealership employee obtained Conheim’s email address and phone number, and Conheim
believes that the dealership employee used that information to begin the Connected
Services setup process. 112 The Connected Services did not function properly, so
Conheim later called Hyundai’s customer service department for assistance in setting up
the Connected Services. 113 The dealership employee gave Conheim “a quick summary of
any terms and conditions, instructing [him] to accept them in order to obtain the vehicle
and access the Connected Services.” 114 A dealership employee never told Conheim about
an arbitration agreement, never showed him the Terms and Conditions, and never gave
him the chance to accept, reject, question, or revise them. 115 Conheim “did not give the
dealership employees authority to accept an arbitration agreement on [his] behalf.” 116
“The only authority [he] gave to dealership employees was to assist [him] with
purchasing the vehicle, and to begin the Connected Services signup process.” 117
Finally, Mahon asserts that he did not know that there was an arbitration
agreement in the Hyundai BlueLink Terms and Conditions. 118 Mahon’s vehicle’s
Connected Services were configured at the dealership. 119 The dealership employee made
it “seem like a vehicle purchaser was required to sign up for [Connected Services] in

108
109

Id. at ¶ 6.
Id.

110

Decl. of Peter Conheim in Supp. of the Opposition (the “Conheim Declaration”) [ECF
No. 38-6] ¶ 3.
111
112
113
114
115
116
117

Id. at ¶ 4.
Id.
Id.
Id. at ¶ 7.
Id. at ¶ 8.
Id.
Id.

118

Decl. of Shane Mahon in Supp. of the Opposition (the “Mahon Declaration”) [ECF
No. 38-7] ¶ 3.
119

Id. at ¶ 4.

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order to use the vehicle.” 120 The dealership employee also explained that, if Mahon
signed up for the Connected Services, then he would receive a free two-year subscription
to a third-party electric vehicle charging network. 121 The dealership employee instructed
Mahon to download the Connected Services app. 122 During the signup process, Mahon
received an email from Hyundai to set a password for the Connected Services. 123 At
certain points during the signup process, “the dealership employee may have asked to use
[his] cell phone as part of the process, and [he] may have provided it to him.” 124 Mahon
does not recall accepting the terms himself. 125 Mahon testifies that a dealership employee
never told him about an arbitration agreement, never showed him the Terms and
Conditions, and never gave him the chance to accept, reject, question, or revise them. 126
Mahon “did not give the dealership employees authority to accept an arbitration
agreement on [his] behalf. The only authority [he] gave to dealership employees was to
assist [him] with the purchase of the vehicle and the Connected Services signup
process.” 127
3.

Analysis

After considering the relevant facts, the applicable law, and the positions of all
parties, the Court concludes that a valid agreement to arbitrate exists between Plaintiffs
and Kia and Hyundai.
Plaintiffs argue that the relevant law governing these motions varies according to
the state in which each Plaintiff purchased his or her subject vehicle: California (Bright),
Georgia (Lobo), Wisconsin (Mahon), Florida (Nixon), New Mexico (Conheim), and New
York (Barnie, Gould, and Iyengar). 128 Hyundai asserts that the Terms and Conditions are
governed by California law, but “[e]ven if Plaintiffs’ home states’ law applied, the
analysis would be the same.” 129 For avoidance of doubt, the Court applies the state law
where each Plaintiff purchased the subject vehicle. See Franz v. Hyundai Motor Am., 2024

120

Id.

121

Id.
Id. at ¶ 5.
Id.

122
123
124
125
126
127

Id. at ¶ 6.
Id.
Id. at ¶ 7.
Id.

128

Opposition 4:20-22.

129

Hyundai Reply 8:26-28 n. 1.

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WL 176227, at *6 (C.D. Cal. Jan. 12, 2024) (applying South Carolina law to analogous
facts and arbitration language when the plaintiff purchased the vehicle in South Carolina).
a.

Clickwrap Agreements

Kia and Hyundai contend that the Kia Connect and Hyundai BlueLink Terms of
Service are clickwrap agreements. 130 Under a clickwrap agreement, a “user is required to
affirmatively acknowledge the agreement before proceeding with use of the website.”
Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1176 (9th Cir. 2014). Courts regularly
enforce arbitration clauses contained in clickwrap agreements. See, e.g., Valiente v.
StockX, Inc., 645 F. Supp. 3d 1331, 1338 (S.D. Fla. 2022) (citation omitted) (granting a
motion to compel arbitration and noting that “[i]n Florida and the federal circuits . . .
click-wrap agreements are valid and enforceable contracts”); Rahim v. Chime Fin., Inc.,
2022 WL 18459836, at *2 (N.D. Ga. Nov. 14, 2022) (noting that “Georgia courts have
generally ruled that arbitration clauses” contained in clickwrap agreements are
“enforceable”); Griffin v. Vivint Solar, Inc., 2021 WL 2186408, at *7 (D.N.M. May 28,
2021) (citation omitted) (granting a motion to compel arbitration and noting that the
“Tenth Circuit has ‘routinely’ upheld these type of ‘clickwrap’ agreements as
enforceable”); Velasquez-Reyes v. Samsung Elecs. Am., Inc., 2020 WL 6528422, at *3
(C.D. Cal. Oct. 20, 2020) (“clickwrap agreements have been consistently upheld by the
courts and used to compel arbitration”); Plazza v. Airbnb, Inc., 289 F. Supp. 3d 537, 549
(S.D.N.Y. 2018) (citation omitted) (in “New York, clickwrap agreements are valid and
enforceable contracts”).
b.

Authority Given to Dealership Employees

Plaintiffs argue that the agreements cannot be enforced against them because
Plaintiffs were not shown the Kia Connect or Hyundai BlueLink Terms of Service and
Plaintiffs did not authorize Defendants’ employees to consent to Defendants’ respective
terms. 131 But those arguments fail to create genuine issues of material fact regarding the
existence of an Arbitration Agreement.
Lobo, Conheim, Mahon, and Bright expressly admit that they gave authority to
dealership employees to begin, assist, or configure the Connected Services signup
process. 132 Gould implicitly acknowledges that he gave his phone to a dealership
130

Kia Motion 12:9-10; Hyundai Motion 7:23.
Gould Declaration ¶ 6; Iyengar Declaration ¶ 5; Lobo Declaration ¶ 5; Nixon Declaration
¶ 6; Bright Declaration ¶ 5; Conheim Declaration ¶ 8; Mahon Declaration ¶ 7; Barnie
Declaration ¶ 5.
131

132

Lobo Declaration ¶ 5; Conheim Declaration ¶ 8; Mahon Declaration ¶ 7; Bright
Declaration ¶ 5.

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employee to set up the Connected Services app. 133 Iyengar admits that a dealership
employee completed the configuration process for him the same day that he received the
vehicle at the Hyundai dealership. 134
Nixon asserts that the dealership delivered the vehicle to him and that the
dealership employee did not discuss Connected Services with him. 135 However, Nixon
fails to explain how his vehicle was enrolled in BlueLink.
Barnie admits that she was “sitting in the vehicle” with a dealership employee as a
part of the enrollment process. The dealership employee directed Barnie to the correct
mobile app store and told her which app to download. 136
c.

Agency Relationship Created

Based upon the facts recited above, Plaintiffs cannot dispute that dealership
employees were acting as their agents. Under California law, an agency relationship may
be created informally through “conduct by each party manifesting acceptance of a
relationship whereby one of them is to perform work for the other under the latter’s
direction.” Malloy v. Fong, 37 Cal. 2d 356, 372 (1951). “The power of the principal to
terminate the services of the agent gives him the means of controlling the agent’s
activities.” Id. at 370. “Under Georgia law, an agency relationship can arise in three
distinct ways: expressly, by implication, or through subsequent ratification by the
principal of the agent’s conduct.” J’Carpc, LLC v. Wilkins, 545 F. Supp. 2d 1330, 1337
(N.D. Ga. 2008). “In order that acts of an agent be binding on his alleged principal, a
principal and agent relationship must be proved and it must be established that agent
acted within scope of authority.” Anaya v. Coello, 279 Ga. App. 578, 580 (2006). “Under
Wisconsin common law, agency doctrine allows a person to bind and be bound by the
actions of another designated to act on his or her behalf.” Kolbe & Kolbe Millwork, Co. v.
Manson Ins. Agency, Inc., 983 F. Supp. 2d 1035, 1041 (W.D. Wis. 2013). Under Florida
law, a principal can create the appearance of an agent’s authority by knowingly permitting
an agent to act in a certain manner as if he or she were authorized, by failing to correct a
known misrepresentation by an agent that the agent has certain authority, or by silently
acting in a manner that creates a reasonable appearance of an agent’s authority. See Ja
Dan, Inc. v. L-J, Inc., 898 F. Supp. 894, 900 (S.D. Fla. 1995). Under New Mexico law,
the principal’s “right to control, and not the actual exercise of control” is “an essential
element of an agency relationship.” Alfaro-Huitron v. Cervantes Agribusiness, 982 F.3d
133
134

Gould Declaration ¶ 4.
Iyengar Declaration ¶ 4.

135

Nixon Declaration ¶ 5.

136

Barnie Declaration ¶ 4.

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1242, 1253 (10th Cir. 2020). Under New York law, an “agency relationship can be
created by written or spoken words or other conduct of the principal which, reasonably
interpreted, causes the agent to believe that the principal desires him so to act on the
principal's account.” Liu Jo S.P.A. v. Jenner, 630 F. Supp. 3d 501, 516 (S.D.N.Y. 2022)
(citation omitted).
In Velasquez-Reyes, the plaintiff took a phone to a T-Mobile store for activation.
See Velasquez-Reyes, 2020 WL 6528422, at *1. The sales representative completed the
set-up process at the store. See id. The phone displayed a Terms and Conditions page,
which contained a binding arbitration clause. See id. The sales representative could not
continue setting up the phone until clicking an “Agree to all” bubble next to the words
“Terms and Conditions.” See id. The sales representative then had to click “Next” to
continue. See id. The sales representative did not say anything to the plaintiff about the
arbitration agreement or about any other terms and conditions. See id. at *2. The court
enforced the arbitration agreement. Applying California agency principles, the court
concluded that the plaintiff “could have asked the representative to stop at any time or
asked for his [phone] back, meaning the representative was subject to his control.” Id. at
*3; see also, e.g., Nicosia v. Amazon.com, Inc., 384 F. Supp. 3d 254, 269 (E.D.N.Y. 2019)
(granting a motion to compel arbitration under agency principles when the plaintiff gave
her account password to her friend and allowed the friend to enroll the plaintiff in the
service); Hofer v. Gap, Inc., 516 F. Supp. 2d 161, 175 (D. Mass. 2007) (concluding that the
plaintiff was bound to Expedia’s terms and conditions under agency principles by giving
her friend permission to book her travel plans on the website).
In three recent cases, district courts have enforced orders compelling arbitration
with respect to analogous facts and the same arbitration language. See Franz, 2024 WL
176227, at *6 (concluding that an agency relationship existed between the plaintiff and the
dealership employee when the dealership employee enrolled the plaintiff into BlueLink
services); Tamburo v. Hyundai Motor Am. Corp., 2024 WL 22230, at *4 (N.D. Ill. Jan. 2,
2024) (concluding that the plaintiff agreed to the arbitration provision when signing up
for BlueLink services); Maranda v. Hyundai Motor Am., Inc., 2023 WL 6474450, at *7
(C.D. Cal. Oct. 2, 2023) (concluding that “the dealership employees acted as [p]laintiffs’
agents” by completing the sign-up processes for BlueLink and Kia services).
d.

Conclusion

In view of those authorities, the Court concludes as a matter of law that Plaintiffs
authorized dealership employees to enter into the agreements on their behalf.
Additionally, Bright, Barnie, Lobo, Iyengar, Mahon, and Conheim assented to the
services’ Terms of Use by subsequently logging into the Hyundai BlueLink Connected
Services and Kia Services applications. Plaintiffs fail to dispute that the dealership

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employees were acting as their agents. Therefore, the Court concludes that a valid
agreement to arbitrate exists.
B.

The Arbitration Agreements Encompass Plaintiffs’ Claims

Kia and Hyundai assert that Plaintiffs’ claims are covered by the arbitration
agreements. 137 Plaintiffs do not address that point. Therefore, any argument that
Plaintiffs could make in defense is waived. See Hartranft v. Encore Cap. Grp., Inc., 2021
WL 2473951, at *10 (S.D. Cal. June 16, 2021) (“where a non-moving party fails to address
an argument raised by the moving party in the opposition brief, the Court may consider
any arguments unaddressed by the non-moving party as waived”). Accordingly, the
Court concludes that the arbitration agreements encompass Plaintiffs’ claims.
C.

Unconscionability

Plaintiffs argue that the arbitration agreements are unenforceable because they are
procedurally and substantively unconscionable. 138
In California, contractual unconscionability has both a procedural and a
substantive component. See Armendariz v. Found. Health Psychcare Servs., Inc., 24
Cal. 4th 83, 114 (2000). To establish unconscionability, “the party opposing arbitration
must demonstrate that the contract as a whole or a specific clause in the contract is both
procedurally and substantively unconscionable.” Poublon v. C.H. Robinson Co., 846 F.3d
1251, 1260 (9th Cir. 2017) (citing Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899,
910 (2015)) (emphasis added). California uses a sliding scale to determine
unconscionability: “the more substantively oppressive the contract term, the less
evidence of procedural unconscionability is required to come to the conclusion that the
term is unenforceable, and vice versa.” Id. (quoting Sanchez, 61 Cal. 4th at 910).
“Georgia’s unconscionability doctrine contemplates both procedural
unconscionability, which ‘addresses the process of making the contract,’ and substantive
unconscionability, which ‘looks to the contractual terms themselves.’” Cappuccitti v.
DirecTV, Inc., 623 F.3d 1118, 1124 (11th Cir. 2010) (citation omitted). A “contract of
adhesion requiring arbitration is not per se unconscionable or unenforceable[.]” Hopkins
v. World Acceptance Corp., 798 F. Supp. 2d 1339, 1346 (N.D. Ga. 2011).
“Under Florida law, unconscionability will invalidate an arbitration agreement if a
party shows that it has procedural and substantive unconscionability.” Solis v. Am.
Express Nat’l Bank, 2023 WL 4474322, at *2 (M.D. Fla. July 11, 2023), report and
137

Kia Motion 16:9-18; Hyundai Motion 17:1-18.

138

Opposition 8:11-11:13.

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recommendation adopted by 2023 WL 4831307 (M.D. Fla. July 28, 2023). The “procedural
and substantive aspects of unconscionability must be present, although not necessarily to
the same degree, and both should be evaluated interdependently rather than as
independent elements.” Basulto v. Hialeah Auto., 141 So. 3d 1145, 1161 (Fla. 2014).
Under New Mexico law, a “contract can be procedurally or substantively
unconscionable.” Laurich v. Red Lobster Restaurants, LLC, 295 F. Supp. 3d 1186, 1210
(D.N.M. 2017). “While there is a greater likelihood of a contract’s being invalidated for
unconscionability if there is a combination of both procedural and substantive
unconscionability, there is no absolute requirement in our law that both must be present
to the same degree or that they both be present at all.” Id. at 1211 (citation omitted).
“Procedural and substantive unconscionability often have an inverse relationship. The
more substantively oppressive a contract term, the less procedural unconscionability may
be required for a court to conclude that the offending term is unenforceable.” Cordova v.
World Fin. Corp. of NM, 146 N.M. 256, 263 (N.M. 2009).
Under New York law, an arbitration agreement “is unconscionable when it is so
grossly unreasonable or unconscionable in the light of the mores and business practices of
the time and place as to be unenforceable according to its literal terms.” Ragone v. Atl.
Video at Manhattan Ctr., 595 F.3d 115, 121 (2d Cir. 2010) (internal quotation marks and
citation omitted). “Courts assess overall unconscionability by applying a sliding scale
where the more questionable the meaningfulness of choice, the less imbalance in a
contract’s terms should be tolerated and vice versa.” Haft v. Haier US Appliance Sols.,
Inc., 578 F. Supp. 3d 436, 452 (S.D.N.Y. 2022) (internal quotation marks and citation
omitted).
Under Wisconsin law, “[p]rocedural and substantive unconscionability factors
must be weighed ‘on a case-by-case basis.’” Schultz v. Epic Sys. Corp., 376 F. Supp. 3d
927, 933 (W.D. Wis. 2019) (citation omitted). “The more substantive unconscionability
present, the less procedural unconscionability is required, and vice versa.” Wisconsin
Auto Title Loans, Inc. v. Jones, 290 Wis. 2d 514, 533–34 (Wis. 2006).
1.

Procedural Unconscionability
a.

Applicable Law

Under California law, procedural unconscionability “concerns the manner in
which the contract was negotiated and the circumstances of the parties at that time.”
Kinney v. United HealthCare Servs., Inc., 70 Cal. App. 4th 1322, 1329 (1999). The focus is
whether there is “oppression or surprise due to unequal bargaining power.” Poublon, 846
F.3d at 1260 (quoting Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55
Cal. 4th 223, 236 (2012)). Oppression “arises from an inequality in bargaining power

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which results in no real negotiation and an absence of meaningful choice.” Stirlen v.
Supercuts, Inc., 51 Cal. App. 4th 1519, 1531 (1997). Surprise is defined as “the extent to
which the supposedly agreed-upon terms of the bargain are hidden in the prolix printed
form drafted by the party seeking to enforce the disputed terms.” Gatton v. T-Mobile
USA, Inc., 152 Cal. App. 4th 571, 581 (2007) (citation and quotations omitted).
Under Georgia law, courts look to the following factors to determine whether a
contract is procedurally unconscionable: “age, education, intelligence, business acumen
and experience of parties, their relative bargaining power, the conspicuousness of and
comprehensibility of the contract language, the oppressiveness of the terms, and the
presence or absence of meaningful choice.” Caley v. Gulfstream Aerospace Corp., 428 F.3d
1359, 1377 (11th Cir. 2005) (citation omitted).
Under Florida law, the “absence of meaningful choice when entering into the
contract is often referred to as procedural unconscionability, which relates to the manner
in which the contract was entered[.]” Basulto, 141 So. 3d at 1157 (citation omitted). A
contract of adhesion is a “strong indicator that the contract is procedurally
unconscionable because it suggests an absence of meaningful choice,” but “the presence
of an adhesion contract alone does not require a finding of procedural unconscionability.”
VoiceStream Wireless Corp. v. U.S. Commc’ns, Inc., 912 So. 2d 34, 40 (Fla. Dist. Ct. App.
2005) (internal quotation marks and citation omitted).
Under New Mexico law, procedural unconscionability “is determined by analyzing
the circumstances surrounding the contract’s formation, such as whether it was an
adhesive contract and the relative bargaining power of the parties.” Laurich, 295
F. Supp. 3d at 1211. Adhesion contracts “generally warrant heightened judicial
scrutiny,” and adhesion contracts are “procedurally unconscionable and unenforceable
when the terms are patently unfair to the weaker party.” Jerry Erwin Assocs., Inc. v. Est. of
Asher by & through Zangara, 290 F. Supp. 3d 1213, 1241 (D.N.M. 2017) (citation omitted).
Under New York law, even “a form contract that is offered on a ‘take it or leave it’
basis” may be valid and “inequality in bargaining position alone is not sufficient.”
Catalano v. MarineMax, 590 F. Supp. 3d 487, 506 (E.D.N.Y. 2022) (internal quotation
marks and citation omitted).
Under Wisconsin law, “[p]rocedural unconscionability relates to factors bearing
on the meeting of the minds of the contracting parties, such as age, education,
intelligence, business acumen and experience, relative bargaining power, who drafted the
contract, whether the terms were explained to the weaker party, whether alterations in
the printed terms would have been permitted by the drafting party, and whether there
were alternative providers of the subject matter of the contract.” Aul v. Golden Rule Ins.
Co., 304 Wis. 2d 227, 245 (Wis. Ct. App. 2007).

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b.

Analysis

Plaintiffs assert that the arbitration agreements are procedurally unconscionable
because the agreements are contracts of adhesion, Plaintiffs were not aware of the
arbitration agreements, and Plaintiffs had no opportunity to opt out of the arbitration
agreements. 139 Kia and Hyundai respond that an adhesion contract is not automatically
procedurally unconscionable, and Plaintiffs either enrolled or authorized the dealer
employees—as their agents—to enroll them in Kia Connect or Hyundai BlueLink
Services. 140
The Court concludes that the degree of procedural unconscionability here is
minimal. The arbitration agreements are indeed contracts of adhesion. However,
Plaintiffs have not shown that the arbitration agreements are oppressive or patently
unfair. Therefore, this very minimal degree of procedural unconscionability does not bar
enforcement of the arbitration agreements.
2.

Substantive Unconscionability
a.

Applicable Law

Under California law, substantive unconscionability focuses “on overly harsh or
one-sided results.” Armendariz, 24 Cal. 4th at 114 (citation omitted). An arbitration
clause is substantively unconscionable if the terms “are so one-sided as to shock the
conscience.” Kinney, 70 Cal. App. 4th at 1329. The mutuality of the agreement is the
“paramount consideration” in assessing substantive unconscionability. Pokorny v.
Quiztar, 601 F.3d 987, 997-98 (9th Cir. 2010). “Agreements to arbitrate must contain at
least ‘a modicum of bilaterality’ to avoid unconscionability.” Id. (internal citations and
quotations omitted).
“Under Georgia law, an unconscionable contract is ‘such an agreement as no sane
man not acting under a delusion would make and that no honest man would take
advantage of.’” Caley, 428 F.3d at 1378 (citing Hall v. Fruehauf Corp., 179 Ga. App. 362,
362 (1986)). Under Florida law, substantive unconscionability focuses on “the
unreasonableness of the terms.” Basulto, 141 So. 3d at 1157-58. Under New Mexico law,
substantive unconscionability “is found where the contract terms themselves are illegal,
contrary to public policy, or grossly unfair.” State ex rel. King v. B & B Inv. Grp., Inc., 329
P.3d 658, 670 (N.M. 2014). Under New York law, “[s]ubstantive unconscionability
exists where the contractual terms are grossly unreasonable and favor the party seeking to

139

Id. at 10:20-11:13.

140

Kia Reply 18:14-19; Hyundai Reply 17:20-18:7.

-22-

enforce the contract.” Doe #1 v. Coll. Bd., 440 F. Supp. 3d 349, 355–56 (S.D.N.Y. 2020)
(internal quotation marks and citation omitted). Under Wisconsin law, substantive
unconscionability “refers to whether the terms of a contract are unreasonably favorable to
the more powerful party. The analysis of substantive unconscionability requires looking
at the contract terms and determining whether the terms are ‘commercially reasonable,’
that is, whether the terms lie outside the limits of what is reasonable or acceptable.”
Coady v. Cross Country Bank, 299 Wis. 2d 420, 440 (Wis. Ct. App. 2007).
b.

Analysis

Plaintiffs maintain that the arbitration agreements are substantively
unconscionable because they create “infinite arbitration clauses.” 141 But Kia and
Hyundai counter that the arbitration agreements are sufficiently limited. 142 For example,
Kia contends that the arbitration provision “is limited to disputes arising out of the
agreement, Kia Connect (which includes vehicle charging features), Plaintiffs’ vehicles,
and Plaintiffs’ use of their vehicles.” 143 Similarly, Hyundai asserts that the arbitration
provision “is limited to disputes arising out of the agreement itself, Connected Services
(which includes vehicle charging features), Plaintiffs’ vehicles, and Plaintiffs’ use of their
vehicles. The arbitration agreement would not, for example, extend to a shareholder suit
against Hyundai. If Plaintiffs were employed by Hyundai, the arbitration agreement
would not cover employment claims, either.” 144
After considering the relevant facts and applicable law, the Court concludes that
the arbitration agreements are not substantively unconscionable. The Court agrees with
Defendants’ assertions that the arbitration agreements are sufficiently limited. Plaintiffs
have failed to show that the arbitration agreements are grossly unreasonable.
Thus, the Court concludes that the arbitration agreements are only minimally
procedurally unconscionable and that they are not substantively unconscionable.
Accordingly, the arbitration agreements are not unenforceable for unconscionability.
D.

Discovery

Plaintiffs request limited discovery regarding the enforceability of the arbitration
agreements. 145 Defendants oppose that request, arguing that Plaintiffs have failed to

141
142
143

Opposition 9:1-10:15.
Kia Reply 18:1-19; Hyundai Reply 16:15-20.
Kia Reply 18:3-5.

144

Hyundai Reply 16:15-20.

145

Opposition 11:14-12:24.

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