Mallh v. Showtime Networks Inc.

Filing 25

OPINION & ORDER.....Showtimes October 11 motion to compel arbitration is granted. This action is stayed pending the outcome of arbitration proceedings. (Signed by Judge Denise L. Cote on 11/7/2017) (gr)

Case 1:17-cv-06549-DLC Document 25 Filed 11/07/17 Page 1 of 13

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
-------------------------------------- X
:
VICTOR MALLH, individually and on
:
behalf of all others similarly
:
situated,
:
:
Plaintiff,
:
:
-v:
SHOWTIME NETWORKS INC.,
:
:
Defendant.
:
:
-------------------------------------- X

17cv6549(DLC)
OPINION & ORDER

APPEARANCES
For Victor Mallh:
Mark C. Gardy
Orin Kurtz
Gardy & Notis, LLP
Tower 56
126 East 56th Street, 8th Floor
New York, New York 10022
For Showtime Networks Inc.:
Yehudah L. Buchweitz
Eric S. Hochstadt
Jessie B. Mishkin
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
DENISE COTE, District Judge:
This case involves a contract dispute between plaintiff
Victor Mallh (“Mallh”) and defendant Showtime Networks Inc.
(“Showtime”) arising out of Showtime’s streaming of an August
26, 2017 boxing match between Floyd Mayweather, Jr. and Conor
McGregor (the “Event”).

Mallh alleges in this putative class

Case 1:17-cv-06549-DLC Document 25 Filed 11/07/17 Page 2 of 13

action that he purchased a live stream of the Event from
Showtime but was unable to view substantial portions of it due
to technical failures.

Showtime has moved to compel

arbitration, or in the alternative, to dismiss the complaint in
part and/or to strike the class allegations.

For the following

reasons, Showtime’s motion to compel arbitration is granted.
Background
The following facts are taken from the complaint and the
evidence described below that was submitted in connection with
Showtime’s motion to compel arbitration.

This Opinion

summarizes only those facts relevant to the instant motion.
Showtime is an entertainment company that owns and operates
a commercial-free premium television program service.

Showtime

also offers events to consumers live on a pay-per-view basis.
On August 26, 2017, Mallh paid $99.95 to view the Event as
a live stream via www.showtimeppv.com (the “Website”).

To

purchase the live stream, Mallh –- like all users of Showtime’s
website streaming service -- had to agree to Showtime’s terms of
use (“TOU”).
Specifically, every person who purchased the live stream
through the Website had to take certain steps.
needed to access a webpage describing the Event.

First, users

2

The page had a

Case 1:17-cv-06549-DLC Document 25 Filed 11/07/17 Page 3 of 13

black background, included large photos of the boxers and
promotional material, and described a schedule of events leading
up to the Event in small white and blue text.

To purchase the

live stream, users were required to click on a bright red box
towards the top of the page containing the following language in
white text: “BUY LIVE PPV EVENT - $99.95.”
original.)

(Emphasis in

At that point, users were transferred to a purchase

page.
The purchase page was uncluttered and dedicated to the
steps required to transact the purchase.

It did not contain any

photos or links to promotional material.

The purchase page had

a black background and, towards the top, users saw the words
“PURCHASE PAY-PER-VIEW” in large white text.
original.)

(Emphasis in

Below that text were the date and time of the Event

in smaller white text.

Below the description of the Event was

small white text that read: “Purchase is solely for viewing at
showtimeppv.com on supported browsers.”

(Emphasis in original.)

Below this text were white boxes that purchasers were required
to fill with their email address, credit card, and billing
address information.
these white boxes.

A smaller white box appeared just below
The following language appeared in small

grey text next to that white box: “I have read and agree to the
Terms of Use, Privacy Policy, and Video Services Policy.
3

I

Case 1:17-cv-06549-DLC Document 25 Filed 11/07/17 Page 4 of 13

agree to receive updates, alerts and promotions from Showtime.”
(Emphasis in original.)

Clicking on the hyperlinked words

“Terms of Use” took users to a page containing the complete TOU.
Two short footnotes appeared below the small white box. 1

Below

the two footnotes was a large red box containing the words
“CONFIRM PURCHASE” in white text.

(Emphasis in original.)

To complete the purchase, users were required to check both
the small white box indicating that they had read and agreed to
the TOU and the larger red box.

Users who clicked on both boxes

then saw an order confirmation page with a black background.
Towards the top were the words “ORDER CONFIRMATION” in large
white text.

(Emphasis in original.)

The page also displayed an

order number and repeated the date and time of the Event in
smaller white text. 2
The TOU contained the following arbitration clause and
class action waiver:
18. Disputes; Arbitration
The footnotes indicated that “[o]ther restrictions and taxes
may apply” and “[p]ay-per-view purchase is for residential use
only. One live stream per pay-per-view purchase. Streaming
quality depends on your network connection.”
1

Users who purchased the Event after it had already started saw
a similar set of pages and were required to complete a similar
series of steps. The pages seen by these users incorporated
minor changes to reflect that the Fight was already in progress.
In both cases, purchasers of the Event were required to click on
a small white box indicating that they had read and agreed to
the TOU and a larger red box to confirm the purchase.
4
2

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If you have any dispute with or claim against us or
any of our affiliates (a “Claim”) arising out of or
relating to the Services or these Terms, and the claim
is not resolved by calling our customer service
department at (877)4-SHOWTIME ([phone]), you and
we each agree to resolve such disputes through an
individual binding arbitration or an individual action
in small claims court. Class arbitrations and class
actions are not permitted, and your Claim may not be
consolidated with any other person’s claim. You and
we agree that the U.S. Federal Arbitration Act governs
the interpretation and enforcement of this provision,
and that you and we are each waiving the right to a
trial by jury or to participate in a class action.
This Section 18 shall survive termination of these
Terms or any subscription that you may have to any of
the Services.
Before you commence an arbitration or file a small
claims court action with respect to your Claim, you
must first send to Provider a written notice of your
claim (“Notice”). The Notice must (1) be sent by
certified mail; (2) be addressed to: Showtime Networks
Inc., 1633 Broadway, New York, NY 10019, Attn: Legal
Department; (3) describe the nature of your Claim; and
(4) specify the damages or other relief you seek. If
we and you do not then resolve the Claim within 30
days after our receipt of your Notice is received,
either you or we may commence an arbitration or file a
small claims court action to resolve the Claim. 3
Any such arbitration shall be administered by the
American Arbitration Association and be conducted in
accordance with its Commercial Arbitration Rules,
including the Consumer-Related Disputes Supplementary
Procedures, if applicable (the “Rules”). Contact
information for the American Arbitration Association,
as well as copies of the Rules and applicable forms,
are available at http://www.adr.org. In circumstances
in which the Rules provide for an in-person hearing,
such hearing will, at your request, take place in the
Showtime also argues that this case should be dismissed
because Mallh fails to allege that he supplied written notice as
required above.
5
3

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U.S. county (or parish) of your residence, or
otherwise in Los Angeles, California. For any nonfrivolous Claim that does not exceed $50,000, Provider
will pay all costs of the arbitration, and reimburse
any filing fees you may be required to pay. If the
arbitrator awards you damages that are greater than
Provider’s last written settlement offer communicated
before commencement of the arbitration, Provider will
pay you the greater of $1,000 or the amount of the
award.
(Emphasis supplied.)

In addition, the TOU contains a choice of

law provision selecting California law.
Mallh contends that he did not realize that by signing up
to watch the Event he was being asked to submit claims against
Showtime to arbitration on an individual, non-class basis.

He

asserts that he was unable to watch a substantial portion of the
Event because Showtime’s service continually logged him out.
During the periods in which he was able to watch the Event, the
pictures were delayed, cutting out, or otherwise incomplete.
Mallh asserts further that he has tried to obtain a refund but
has not succeeded.
Mallh filed this putative class action on August 28, 2017,
and asserts claims for breach of contract, consumer fraud and/or
unconscionable or unfair practices, violations of New York
General Business Law §§ 349 and 350, and unjust enrichment.
complaint asserts subject matter jurisdiction pursuant to the

The

Class Action Fairness Act of 2005, 28 U.S.C. § 1332(d).
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On October 11, Showtime moved to compel arbitration or, in
the alternative, to dismiss the complaint in part and/or to
strike the class allegations.

Mallh opposed Showtime’s motion

to compel arbitration on October 27. 4

The motion became fully

submitted on November 3.
Discussion
When deciding motions to compel arbitration, courts apply a
standard “similar to that applicable for a motion for summary
judgment.”

Meyer v. Uber Techs., Inc., 868 F.3d 66, 74 (2d Cir.

2017) (citation omitted).

On a motion for summary judgment,

courts consider “all relevant, admissible evidence submitted by
the parties and contained in pleadings, depositions, answers to
interrogatories, and admissions on file, together with
affidavits,” and draw all reasonable inferences in favor of the
non-moving party.

Id. (citation omitted).

“Where the

undisputed facts in the record require the matter of
arbitrability to be decided against one side or the other as a
matter of law, [courts] may rule on the basis of that legal
issue and avoid the need for further court proceedings.”

Id.

(citation omitted).
Under Section 2 of the Federal Arbitration Act (“FAA”)
An Order of October 12 stayed briefing on Showtime’s motion to
dismiss and to strike the class allegations.
4

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a written provision in . . . a contract evidencing a
transaction involving commerce to settle by
arbitration a controversy thereafter arising out of
such contract or transaction . . . 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.

The FAA was enacted in response to “widespread

judicial hostility to arbitration.”

Am. Exp. Co. v. Italian

Colors Rest., 133 S. Ct. 2304, 2308–09 (2013).

The Supreme

Court has emphasized that the FAA declares a national policy
favoring arbitration and courts must “rigorously enforce
arbitration agreements according to their terms.”
(citation omitted).

Id. at 2309

See also Nitro–Lift Technologies, L.L.C. v.

Howard, 568 U.S. 17, 20 (2012); Citigroup, Inc. v. Abu Dhabi
Inv. Auth., 776 F.3d 126, 129 (2d Cir. 2015).

Consistent with

this policy, “[a] party to an arbitration agreement seeking to
avoid arbitration generally bears the burden of showing the
agreement to be inapplicable or invalid.”

Harrington v.

Atlantic Sounding Co., Inc., 602 F.3d 113, 124 (2d Cir. 2010).
Courts routinely enforce agreements to arbitrate within the
context of putative class actions.

See, e.g., Am. Exp., 133 S.

Ct. at 2311; Meyer, 868 F.3d at 70.
Courts must decide whether parties have agreed to arbitrate
“unless the parties clearly and unmistakably provide otherwise.”
Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016).
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Case 1:17-cv-06549-DLC Document 25 Filed 11/07/17 Page 9 of 13

The existence of an agreement to arbitrate is a question of
state law.

Meyer, 868 F.3d at 73-74.

Under California law, an

agreement to arbitrate exists where there is “reasonably
conspicuous notice of the existence of contract terms and
unambiguous manifestation of assent to those terms.”

Id. at 75

(citation omitted) (applying California law).
“Courts around the country have recognized that an
electronic click can suffice to signify the acceptance of a
contract . . . as long as the layout and language of the site
give the user reasonable notice that a click will manifest
assent to an agreement.”

Id. (citation omitted).

Web-based

contracts are characterized on the basis of how a user manifests
assent.

Clickwrap agreements require users to affirmatively

click an “I agree” box after being presented with terms of use.
Browsewrap agreements generally post terms and conditions on a
website via a hyperlink at the bottom of the screen and do not
require the user to click on an “I agree” box.

Id.

Courts

routinely uphold clickwrap agreements “for the principal reason
that the user has affirmatively assented to the terms of
agreement by clicking ‘I agree.’”

Id.

It is undisputed that access to the Event was provided to
the plaintiff through the defendant’s website, and that his
purchase of the live stream of the Event required him to click
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on a box indicating that he had read and agreed to the TOU.

The

TOU contained an arbitration provision and class action waiver
requiring the plaintiff to arbitrate his disputes with the
defendant on an individual basis or file an individual action in
small claims court.

The agreement to arbitrate and class action

waiver were reasonably conspicuous and the plaintiff’s click
gave his unambiguous consent to those agreements.
Mallh does not dispute that he checked a box indicating
that he had read and agreed to the TOU.

Nor do the parties

dispute that the TOU contains an arbitration clause and class
action waiver that covers Mallh’s claims.

Mallh argues

principally that the Website did not give him sufficient notice
of the arbitration clause and the waiver of his rights to pursue
a class action.

Mallh emphasizes his lack of notice of the

class action waiver in his submission, and refers to the
arbitration clause and the class action waiver together as the
“Class Waiver.”
Specifically, Mallh argues that he did not have adequate
notice of the obligation to arbitrate disputes with Showtime on
an individual basis because of the following: (1) The Website is
cluttered and, as a result, the arbitration clause and class
action waiver are “buried” behind three hyperlinks; (2) The
hyperlinks to the TOU, Privacy Policy, and Video Services Policy
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are in grey text and hard to see against the black background of
the Website; (3) He was compelled to check a single box at the
point of purchase indicating his agreement with four different
policies; (4) The arbitration clause and class action waiver do
not appear until the fifteenth page of the TOU; and (5) The text
of the arbitration clause and, in particular, the class action
waiver are no more conspicuous than any other paragraph of the
TOU. 5
These arguments are unavailing.
cluttered.

The Website is not

The purchase page is neatly organized and requires

the user to supply a limited amount of information in order to
complete the purchase. 6

It does not contain photos, links to

promotional materials, or other extraneous material.
Nor are the arbitration clause and class action waiver
Mallh also challenges the “authenticity or admissibility” of
the TOU supplied by Showtime because one page of the user flow
screens that Showtime submitted in support of its motion
contained “nonsensical descriptions” of the Event including
“Lorem Ipsum dolor sit. Short description here to give some
idea of what’s happening.” This argument lacks merit. The
language was “placeholder language” that was never visible to
users, and did not affect, in any event, the purchase page or
the TOU.
5

Mallh’s reliance on Nicosia to suggest the Website is too
cluttered to provide adequate notice is misplaced. The
agreement at issue in Nicosia was not a clickwrap agreement.
Moreover, among other things, the order page in that case
involved “between fifteen and twenty-five links . . . alongside
multiple buttons and promotional advertisements.” Nicosia, 834
F.3d at 237.
6

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buried behind the hyperlinks.

They appear in the hyperlinked

TOU, which is the first linked document. 7

While the grey text of

the titles to the hyperlinked documents is smaller than other
text on the page, the titles are underlined and clearly visible
against the black background of the Website.
As described in Meyer, the fact that the TOU was available
only by hyperlink does not preclude a finding that the
arbitration clause and class action waiver were reasonably
conspicuous.

Id. at 78.

“Clicking a hyperlinked phrase is the

twenty-first century equivalent of turning over the cruise
ticket.

In both cases, the consumer is prompted to examine

terms of sale that are located somewhere else.”
omitted).

Id. (citation

Moreover, the “I have read and agree to” language

clearly prompts users to review the TOU, and a purchase may not
be effected without clicking that acknowledgment.
Once a user accesses the TOU, the arbitration clause and
class action waiver are reasonably conspicuous.

They are

contained in a separate section entitled “Disputes; Arbitration”
that extends over three paragraphs.

Under these circumstances,

a purchaser of the Event would be on reasonably conspicuous
Mallh’s declaration only suggests that “it is possible” that
he was distracted by the “I agree to receive updates, alerts and
promotions from Showtime” language and “may not” have realized
that the preceding hyperlinks related to anything other than
receiving advertisements from Showtime.
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Case 1:17-cv-06549-DLC Document 25 Filed 11/07/17 Page 13 of 13

notice of the arbitration clause and class action waiver.
Mallh’s manifestation of assent is also unambiguous as a
matter of law.

Mallh does not dispute that he affirmatively

clicked on a box agreeing to the TOU.

Because notice of the

arbitration clause and class action waiver was reasonably
conspicuous and Mallh unambiguously manifested assent,
Showtime’s motion to compel arbitration is granted.
Conclusion
Showtime’s October 11 motion to compel arbitration is
granted.

This action is stayed pending the outcome of

arbitration proceedings.
Dated:

New York, New York
November 7, 2017

__________________________________
DENISE COTE
United States District Judge

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