Pizarro v. Quinstreet, Inc.

Filing 28

ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION; DENYING DEFENDANT'S REQUEST FOR DISMISSAL; STAYING ACTION; VACATING CASE MANAGEMENT CONFERENCE. Signed by Judge Maxine M. Chesney on August 15, 2022. (mmclc2, COURT STAFF) (Filed on 8/15/2022)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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SHARON PIZARRO,

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Plaintiff,

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v.

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QUINSTREET, INC.,

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Defendant.

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United States District Court
Northern District of California

Case No. 22-cv-02803-MMC
ORDER GRANTING DEFENDANT'S
MOTION TO COMPEL ARBITRATION;
DENYING DEFENDANT’S REQUEST
FOR DISMISSAL; STAYING ACTION;
VACATING CASE MANAGEMENT
CONFERENCE

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Before the Court is defendant QuinStreet, Inc.’s (“QuinStreet”) “Motion to Compel

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Arbitration,” filed July 8, 2022. Plaintiff Sharon Pizarro (“Pizarro”) has filed opposition, to

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which QuinStreet has replied. Having read and considered the papers filed in support of

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and in opposition to the motion, the Court rules as follows.1
BACKGROUND

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In her Complaint, Pizarro alleges QuinStreet is a “marketing company” that “sells

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consumer contact information to lenders” in exchange for referral fees. (See Compl. ¶ 4.)

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Specifically, Pizarro alleges, QuinStreet “harvests consumer lead information and

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telephone numbers” through the following form on its website, www.amone.com:

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By order filed August 8, 2022, the Court took the matter under submission.

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United States District Court
Northern District of California

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(See Compl. ¶¶ 3, 27.)2

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The subject webpage is no longer available on the above-referenced website.
The instant image is taken from a screenshot provided by Pizarro in her Complaint and
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a prerecorded voice message to be transmitted to [her] cellular telephone,” and that the

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voice, identifying itself as “AmOne,” stated “the caller would like to ‘help’ with [Pizarro’s]

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‘financial situation’” and “asked [Pizarro] to call . . . back” at a particular telephone

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number. (See Compl. ¶¶ 20-21, 25.) According to Pizarro, the “unsolicited prerecorded

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message . . . inva[ded] [her] privacy” and caused “aggravation,” “annoyance,”

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“inconvenience[,]” and “disruption to [her] daily life.” (See Compl. ¶ 38.)

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Based on the above allegations, Pizarro asserts, on behalf of herself and a

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putative class, a claim for violation of the Telephone Consumer Protection Act (“TCPA”),

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United States District Court
Northern District of California

Pizarro further alleges that, on or around November 13, 2021, QuinStreet “caused

47 U.S.C. §§ 227(b) and 64.1200(a).

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DISCUSSION

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By the instant motion, QuinStreet seeks an order (1) compelling arbitration of

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Pizarro’s claim and (2) dismissing the above-titled action in light thereof.

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A. Arbitration

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Pursuant to the Federal Arbitration Act (“FAA”), contractual arbitration agreements

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“shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in

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equity for the revocation of any contract.” See 9 U.S.C. § 2. “By its terms, the [FAA]

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leaves no place for the exercise of discretion by a district court, but instead mandates

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that district courts shall direct the parties to proceed to arbitration on issues as to which

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an arbitration agreement has been signed.” See Dean Witter Reynolds, Inc. v. Byrd, 470

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U.S. 213, 218 (1985) (emphasis in original). Thus, a district court’s role under the FAA is

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“limited to determining (1) whether the agreement to arbitrate exists and, if it does,

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(2) whether the agreement encompasses the dispute at issue.” See Chiron Corp. v.

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Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “If the response is

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affirmative on both counts,” the court must “enforce the arbitration agreement in

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accordance with its terms.” Id.

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does not necessarily reflect the size or quality of the form as viewed online.
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United States District Court
Northern District of California

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Here, the subject arbitration clause is contained in QuinStreet’s “Terms of Use”

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and provides, in relevant part, that “all disputes between you and [QuinStreet] . . . with

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regard to your relationship with the Site, including disputes related to this Agreement,

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your use of the Site, and/or rights of privacy and/or publicity, will be resolved by binding,

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individual arbitration under the American Arbitration Association’s rules for arbitration of

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consumer-related disputes . . . .” (See Decl. of Alex Yunerman in Supp. of QuinStreet,

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Inc.’s Mot. to Compel Arbitration (“Yunerman Decl.”), Ex. B ¶ 17.) The American

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Arbitration Association’s rules, in turn, provide that “[t]he arbitrator shall have the power

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to rule on his or her own jurisdiction, including any objections with respect to the

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existence, scope, or validity of the arbitration agreement or the arbitrability of any claim or

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counterclaim.” (See Decl. of Becca J. Wahlquist in Supp. of QuinStreet, Inc.’s Mot. to

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Compel Arbitration (“Wahlquist Decl.”), Ex. H at 17.)

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QuinStreet argues that, under the terms of the above-quoted arbitration clause,

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Pizarro must be compelled to arbitrate her TCPA claim and “any issues of scope and

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enforceability are for the arbitrator to decide.” (See Mot. at 11:13-19.) In response,

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Pizarro does not dispute that the arbitration clause, on its face, encompasses her TCPA

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claim or that it contains a provision delegating questions of arbitrability to the arbitrator.

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(See Opp. at 5:3-7.) Rather, Pizarro argues arbitration should not be compelled

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because, according to Pizarro, “no arbitration agreement was formed.” (See Opp. at

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1:21-23.)

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“It is well-established that some ‘gateway’ issues pertaining to an arbitration

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agreement, such as issues of validity and arbitrability, can be delegated to an arbitrator

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by agreement.” Ahlstrom v. DHI Mortg. Co., 21 F.4th 631, 634 (9th Cir. 2021). Where,

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as here, a party challenges “the very existence of” that agreement, however, such

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challenge must be resolved by the court. See Kum Tat Ltd. v. Linden Ox Pasture, LLC,

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845 F.3d 979, 983 (9th Cir. 2017); see also Caremark, LLC v. Chickasaw Nation, --- F.4th

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---, 2022 WL 3206683, *7 (9th Cir. Aug. 9, 2022) (holding, “even in the presence of a

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delegation clause,” court “must resolve any challenge that an agreement to arbitrate was
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never formed”). The Ninth Circuit has held this rule to apply “not only [to] challenges to

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the arbitration clause itself, but also [to] challenges to the making of the contract

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containing the arbitration clause.” See Sanford v. MemberWorks, Inc., 483 F.3d 956, 962

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(9th Cir. 2007).

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In determining whether an arbitration agreement was formed, “federal courts apply

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ordinary state-law principles that govern the formation of contracts.” Nguyen v. Barnes &

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Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 2014) (internal quotation and citation omitted).3

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“To form a contract under . . . California law, the parties must manifest their mutual

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assent to the terms of the agreement,” either “by written or spoken word” or “through

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United States District Court
Northern District of California

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conduct.” Berman, 30 F.4th at 855.
Here, QuinStreet argues, Pizarro manifested her assent by clicking the “See My

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Rates” button on the above-referenced web form. (See Mot. at 1:21-2:1; see also

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Yunerman Decl. ¶¶ 10-14; Compl. ¶ 27 (“By clicking See My Rates, you agree

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to . . . AmOne’s . . . Terms of Use . . . .”).) Pizarro argues that, nevertheless, no

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arbitration agreement was formed because QuinStreet assertedly “failed to provide [her]

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with conspicuous notice of its Terms of Use.” (See Opp. at 1:21-23.) Pizarro further

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argues that, even if QuinStreet’s Terms of Use were sufficiently conspicuous, her

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manifestation of assent to those terms was not effective because it

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was “procured . . . through misrepresentations” by QuinStreet. (See Opp. at 2:6-9, 15:1-

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6.) The Court considers each of Pizarro’s argument in turn.

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1. Reasonably Conspicuous Notice

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“[A]n offeree, regardless of apparent manifestation of his consent, is not bound by

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inconspicuous contractual provisions of which he was unaware, contained in a document

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whose contractual nature is not obvious.” Windsor Mills, Inc. v. Collins & Aikman Corp.,

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25 Cal. App. 3d 987, 993 (1972). “[W]here, as here, there is no evidence that [a] website

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The “principles of contract formation apply with equal force to contracts formed
online.” See Berman v. Freedom Fin. Network, LLC, 30 F.4th 849, 855-56 (9th Cir.
2022).
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user had actual knowledge of [an online] agreement,” such as the website operator’s

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“terms of use,” the occurrence of meaningful assent ordinarily “turns on whether the

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website puts a reasonably prudent user on inquiry notice of the terms of the contract.”

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See Nguyen, 763 F.3d at 1177. “Whether a [reasonably prudent] user has inquiry notice

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of [the] . . . agreement, in turn, depends on the design and content of the website and the

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agreement’s webpage,” i.e., “the conspicuousness and placement of the ‘Terms of Use’

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hyperlink, other notices given to users of the terms of use, and the website’s general

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design.” See id.

United States District Court
Northern District of California

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In her opposition, Pizarro, relying on Berman, contends QuinStreet’s Terms of Use

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were “the antithesis of conspicuous.” (See Opp. at 9:9-10.) As QuinStreet points out,

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however, Berman is distinguishable on its facts. In particular, the textual notice

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containing the “Terms & Conditions” hyperlink in Berman was displayed “in a tiny gray

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font . . . so small that it [was] barely legible to the naked eye,” surrounded by

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“comparatively larger” text that “naturally direct[ed] the user’s attention everywhere else,”

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and “sandwiched” between a “large green button with text that stated, in easy-to-read

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white letters, ‘Continue>>,’” and two other large buttons that allowed the user to “select

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[a] gender.” See 30 F.4th at 854, 856-57, App. B. In addition, “the textual notice [was]

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further deemphasized by the overall design of the webpage, in which other visual

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elements,” including a bright blue border and “several fields” requiring the user to input

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information, “dr[ew] the user’s attention away from the barely readable critical text.” See

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id. at 854, 857, App. B.

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Here, by contrast, the Court finds QuinStreet’s textual notice and Terms of Use

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hyperlink, when viewed in the context of the overall design and content of the webpage,

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are “reasonably conspicuous.” See id. at 856. In particular, the notice and hyperlink

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appear directly below the “See My Rates” button, are set off by ample white spacing, and

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are primarily surrounded by text no larger than the notice itself. Further, the general

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design of the webpage, which is comprised of only two data fields, is relatively

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uncluttered and has a muted, and essentially uniform, color scheme. See Dohrmann v.
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United States District Court
Northern District of California

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Intuit, Inc., 823 Fed. App’x 482, 854 (9th Cir. 2020) (finding contract was formed where

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terms-of-use hyperlink was “the only text on the webpage in italics” and “located directly

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below the sign-in button,” and where overall webpage design was “relatively

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uncluttered”); Peter v. DoorDash, Inc., 445 F. Supp. 3d 580, 586 (N.D. Cal. 2020) (finding

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contract was formed where terms-of-use hyperlink appeared “directly below” the “sign-up

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button,” its text “contrast[ed] clearly with the background” and was “plainly readable,” and

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overall webpage design was “uncluttered”).4 Moreover, the instant hyperlink, although

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the same color as the rest of the textual notice, is underlined5 and adequately contrasted

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with the white background, such that a user would not “be required to hover their mouse

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over otherwise plain-looking text or aimlessly click on words on a page in an effort to

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ferret out hyperlinks.” See Berman, 30 F.4th at 857 (internal quotation and citation

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omitted).6

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2. Misrepresentation

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Pizarro next argues that, even if the Terms of Use provided reasonably

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conspicuous notice, no contract was formed because QuinStreet “procured her assent”

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by “misrepresent[ing] essential terms of the proposed contract.” (See Opp. at 2:6-8,

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15:1-4.) In particular, Pizarro contends, QuinStreet “misrepresented” that Pizarro “would

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receive a loan rate or quote in exchange for inputting her contact information” when,

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Contrary to Pizarro’s contention that cases “predat[ing] Berman” are “no longer
good law” (see Opp. at 10:22-23), Berman, as QuinStreet points out, “does not create a
bright-line rule requiring [certain] design elements,” but, rather, requires courts to
examine the “design and content” of the particular website at issue (see Reply at 3:2-7);
see also Berman, 30 F.4th at 858; Maree v. Deutsche Lufthansa AG, Case No. SACV 20885-MWF (MRWx), 2021 WL 4352912, at *3 (C.D. Cal. June 21, 2021) (noting “whether
a website’s design put users on inquiry notice of its terms of use is highly context
specific”).
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See Sellers v. JustAnswer LLC, 73 Cal. App. 5th 444, 453 n.2 (2021) (noting “a
hyperlink is a word, phrase, or image . . . typically underlined or in blue font”).
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Although Pizarro contends QuinStreet’s webpage “suffers from . . . other
deficiencies” because it “does not mention the existence of an arbitration provision” or
refer to the “Terms of Use . . . within the orange ‘See My Rates’ button” (see Opp. at
3:24-4:7), none of the cases cited by Pizarro suggest such features are required.
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instead, she was referred to third-party lenders who could provide her with “loan options.”

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(See Opp. at 11:22-24, 12:22-27.) As discussed below, the Court is unpersuaded.7
“[A] misrepresentation as to the . . . essential terms of a proposed contract”

United States District Court
Northern District of California

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prevents formation of the contract only if it “induces conduct that appears to be a

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manifestation of assent by one who neither knows nor has a reasonable opportunity to

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know of the character or essential terms of the proposed contract.” See Rosenthal v.

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Great W. Fin. Secs. Corp., 14 Cal. 4th 394, 415 (1996) (emphasis in original).

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Here, although Pizarro argues she did not know the true terms of the contract, she

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does not argue, nor has she shown, her “apparent assent to the contract[] . . . is negated

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by fraud so fundamental that [she was] deceived as to the basic character of the

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[contract] . . . and had no reasonable opportunity to learn the truth.” See id. at 425-429

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(finding, where contract challenged by multiple plaintiffs, misrepresentations as to terms

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rendered assent ineffective only as to those who were “legally blind” or had “limited ability

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to understand English”); see also Munoz v. Patel, --- Cal. Rptr. 3d ---, 2022 WL 2981178,

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at *7-8 (Ct. App. July 28, 2022) (noting cases finding lack of reasonable opportunity to

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learn true character or essential terms of proposed contract typically involve either “some

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limitation—such as blindness, illness, or illiteracy—[that] prevents a party from reading or

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understanding a contract” or “parties [that] reach consensus on material terms of an

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agreement, but one side surreptitiously swaps or modifies the agreement memorializing

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the terms without the other side’s knowledge”).

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3. Conclusion: Arbitration

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In sum, for the reasons stated above, the Court finds the parties entered into an

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agreement to arbitrate. Accordingly, to the extent QuinStreet seeks an order compelling

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arbitration, the motion will be granted.

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As noted, challenges to the existence of a contract containing an arbitration
agreement must be decided by the court. See Ahlstrom, 21 F.4th at 635; Sanford, 483
F.3d at 962.
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The FAA provides that, when “any issue” in an action is “referable to arbitration”

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under an arbitration agreement, the court “shall on application of one of the parties stay

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the trial of the action until such arbitration has been had in accordance with the terms of

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the agreement.” See 9 U.S.C. § 3.

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United States District Court
Northern District of California

B. Dismissal or Stay

QuinStreet argues dismissal, rather than a stay, of the instant action “is the most

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efficient path forward.” (See Mot. at 13:15-16.) Although a court has discretion to

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dismiss an action where, as here, “all of the claims raised” are subject to arbitration, see

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Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072, 1073-74 (9th Cir. 2014), in the

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instant case, in light of the Ninth Circuit’s “preference for staying an action pending

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arbitration rather than dismissing it,” see MediVas, LLC v. Marubeni Corp., 741 F.3d 4, 9

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(9th Cir. 2014), the Court finds a stay is appropriate, and, accordingly, QuinStreet’s

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request for dismissal will be denied.
CONCLUSION

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For the reasons stated above, the Court orders as follows:

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1. QuinStreet’s motion to compel arbitration is hereby GRANTED.

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2. QuinStreet’s request for dismissal of the above-titled action is hereby DENIED,

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and the action is STAYED pending completion of arbitration proceedings.
3. The Case Management Conference currently scheduled for October 7, 2022, is
hereby VACATED.

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IT IS SO ORDERED.

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Dated: August 15, 2022
MAXINE M. CHESNEY
United States District Judge

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