Pilon et al v. Discovery Communications, LLC

Filing 41

OPINION AND ORDER re: 18 MOTION to Compel Arbitration filed by Discovery Communications, LLC. For the forgoing reasons: The petition to compel arbitration before JAMS (ECF No. 1) is GRANTED as to Russell Stephen and DENIED as to B rian Pilon. The cross-motion to compel arbitration before NAM (ECF No. 18) is DENIED as to Russell Stephen and GRANTED as to Brian Pilon. The motion for discovery concerning Russell Stephen's assent to the Second Visitor Agreement is DEN IED. And this action is hereby STAYED pending the completion of the arbitrations contemplated by the parties' agreements. See 9 U.S.C. § 3. The Clerk of Court is directed to close the motion at ECF No. 18 and to mark this case as stayed. SO ORDERED. (Signed by Judge J. Paul Oetken on 3/10/2025) (vfr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
BRIAN PILON, et al.,
Petitioners,
24-CV-4760 (JPO)
-vOPINION AND ORDER
DISCOVERY COMMUNICATIONS,
LLC,
Respondent.

J. PAUL OETKEN, District Judge:
In this case, Petitioners Brian Pilon and Russell Stephen, and Respondent Discovery
Communications, LLC (“Discovery”), agree that their dispute concerning alleged federal and
California privacy law violations belongs in arbitration. But they disagree on where. Before the
Court now are Pilon’s and Stephen’s petition to compel arbitration before Judicial Arbitration
and Mediation Services (“JAMS”) and Discovery’s cross-motion to compel arbitration before
National Arbitration and Mediation (“NAM”). Discovery moves also for limited discovery
concerning Stephen’s assent to the arbitration agreement selecting NAM. For the reasons that
follow, the petition is granted as to Stephen and denied as to Pilon; the cross-motion is denied as
to Stephen and granted as to Pilon; Discovery’s request for discovery is denied; and the action is
stayed until such arbitrations have been had in accordance with the parties’ agreements.
I.

Background
A.

Factual Background

The following facts are drawn from the parties’ submissions and, unless noted, not in
dispute. Discovery is a large media company that offers a streaming platform, Discovery+,
featuring “an array of real-life, nonfiction television series and specials.” (ECF Nos. 1 (“Pet.”)
¶ 1; 20 (“Waibel Dec.”) ¶ 3.) Discovery+ is accessible by users on its website, smart phone

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application, and television application. (Waibel Dec. ¶ 5.) To access content on Discovery+,
users must create accounts by entering a username and password and accepting a “Visitor
Agreement and Privacy Notice” containing terms governing the relationship between Discovery+
and its users. (Id. ¶ 6.) All types of Discovery+ accounts are offered on a “month-to-month”
subscription basis, which permits users to cancel at any time to prevent being billed for the
following month. (Id. ¶ 8.) Users are able to log into the Discovery+ service even after their
subscriptions have ended, and users with current subscriptions may, under certain circumstances,
extend those subscriptions to “authorized users” who do not themselves pay for Discovery+
subscriptions. (Id. ¶ 10.)
For many years and through several revisions, the Discovery+ Visitor Agreement and
Privacy Notice contained arbitration provisions selecting JAMS as its arbitral forum. (Pet. ¶ 3;
ECF No. 11 (“Pet. Mem.”) at 8-9.) That version of the agreement (which is really several
versions of the agreement, but one—the “First Visitor Agreement”—for present purposes) also
contained provisions purporting to describe how it could be modified. First, it stated at the
beginning:
We may change the terms of this Visitor Agreement from time to time to
accommodate changes in the marketplace. By continuing to use any of the
discovery+ offerings on discovery+ after we post any such changes, you accept this
Visitor Agreement, as modified. We may change, restrict access to, suspend or
discontinue discovery+, or any portion of discovery+, at any time. YOUR
CONTINUED USE OF DISCOVERY+ FOLLOWING THE POSTING OF
CHANGES TO THIS VISITOR AGREEMENT WILL MEAN YOU
ACCEPT THOSE CHANGES. UNLESS WE PROVIDE YOU WITH
SPECIFIC NOTICE, NO CHANGES TO OUR VISITOR AGREEMENT
WILL APPLY RETROACTIVELY.
(ECF No. 4-1 (“First Visitor Agreement”) at 2 (emphasis in original).) Moreover, the agreement
contained a clause addressing modifications and retroactivity with respect to its arbitration
provisions:

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Modification of Arbitration Clause With Notice. Discovery may modify these
arbitration provisions, but such modifications shall only become effective thirty
(30) days after Discovery has given notice of such modifications and only on a
prospective basis for claims arising from Discovery Transactions and Relationships
occurring after the effective date of such notification . . . .
(Id. at 22.) The agreement also selected New York law to govern disputes and contained a
clause delegating disputes over arbitrability to the arbitrator. (See id. at 21-22.)
Pilon signed up for a Discovery+ account on August 5, 2021 and has made month-tomonth subscription payments ever since. (Waibel Dec. ¶ 16.) Stephen, meanwhile, created his
account on January 15, 2021. (Id. ¶ 22.) His subscription expired, and he stopped making
payments in April 2022, though Stephen did log into his account at least once in June 2024. (Id.
¶¶ 22-24.)
On January 6, 2023, Pilon and Stephen, through counsel, sent letters to Discovery
indicating that they intended to assert video privacy claims under federal and California law.
(See Pet. Mem. at 10; ECF Nos. 4-2, 4-3 (together, the “Pre-Arbitration Notices”).) 1 Those
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letters also indicated that Pilon and Stephen were prepared to engage in arbitration with
Discovery over those claims consistent with the First Visitor Agreement, but did not cite any
particular arbitration procedure to be used. (See Pre-Arbitration Notices at 3.)
On the same day that the Pre-Arbitration Notices were delivered to Discovery—January
9, 2023—Discovery updated the visitor agreement governing Discovery+ (the “Second Visitor
Agreement”). (Waibel Dec. ¶ 11.) To notify users of the change, Discovery emailed the below

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The letters are dated January 6, 2023. (See ECF Nos. 4-2, 4-3.) The parties do not
appear to dispute that the letters were sent on January 6, 2023, and delivered to Discovery’s
registered agent on January 9, 2023. (See ECF No. 4 ¶ 2.) In any event, the difference is
irrelevant.
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notice, including a hyperlink to the Second Visitor Agreement’s terms, to all Discovery+
subscribers on February 1, 2023. (Id. ¶ 12.)

(Id.) And beginning on February 1, 2023, Discovery added pop-up notifications on the
Discovery app and website:

(Id. ¶ 13 (in-app notification).)

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(Id. ¶ 14 (website notification).)
According to Discovery’s records, Pilon clicked through both the website and in-app
notifications in order to use Discovery+ to stream content after February 1, 2023, including on
March 27, 2023, to stream an episode of a television show that was not available at the time
Pilon’s subscription renewed on March 12, 2023. (Id. ¶¶ 18-20.)
The Second Visitor Agreement contains several new arbitration provisions, including
selecting NAM as the arbitral forum, rather than JAMS. (ECF No. 24-8 (“Second Visitor
Agreement”) at 18.) In particular, the Second Visitor Agreement contained specialized
procedures for arbitrating mass claims in stages, providing:
If, at any time, 25 or more claimants (including you) submit Notices or seek to file
demands for arbitration raising similar claims against the other party or related
parties by the same or coordinated counsel or entities, consistent with the definition
and criteria of Mass Filings (“Mass Filing”) set forth in NAM’s Mass Filing
Supplemental Dispute Resolution Rules and Procedures (“NAM’s Mass Filing
Rules,” available at https://www.namadr.com/resources/rules-fees-forms/), you
and we agree that the additional procedures set forth below shall apply. The parties
agree that throughout this process, their counsel shall meet and confer to discuss
modifications to these procedures based on the particular needs of the Mass Filing.
The parties acknowledge and agree that by electing to participate in a Mass Filing,
the adjudication of their dispute might be delayed. Any applicable limitations
period (including statute of limitations) and any filing fee deadlines shall be tolled
beginning when the Mandatory Pre-Arbitration Notice and Informal Dispute
Resolution Procedures are initiated, so long as the pre-arbitration Notice complies
with the requirements in this Arbitration Agreement, until your claim is selected to
proceed as part of a staged process or is settled, withdrawn, otherwise resolved, or
opted out of arbitration.
(Id. at 20-21.) The procedures permit a maximum of fifty claims to proceed first, then another
100 claims, and then another 200 claims, with each stage followed by a global mediation session.

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(See id. at 21.) The agreement provides that for any claim not resolved through that staged
procedure, the claimant may opt out of arbitration in writing or remain in arbitration, proceeding
in batches of 200 randomly selected claims. (See id. at 21-22.)
In addition to the mass-filing provisions, the Second Visitor Agreement purports to apply
its arbitration provisions retroactively to already accrued claims, specifying:
This Arbitration Agreement is intended to be broadly interpreted. It includes, but
is not limited to . . . claims that arose before this or any prior Agreement (including,
but not limited to, claims relating to advertising) . . . .
(Id. at 16.) It also contains a clause containing choice-of-law and forum-selection provisions:
These Terms shall be governed by the laws of the State of New York, without
regard to conflict of law principles. Any dispute that is not subject to arbitration,
or any issues involving arbitrability or enforcement of any provisions under the
dispute resolution clause or Arbitration Agreement shall be brought in the
appropriate state or federal court located in New York County, New York.
(Id. at 23.)
B.

Procedural Background

After the parties’ “settlement discussions broke down,” on May 2, 2024, Pilon and
Stephen filed individual arbitration demands with JAMS against Discovery, asserting claims
under federal and California law. (Pet. Mem. at 13-14.) Discovery objected to arbitrating before
JAMS, contending that the arbitration should proceed before NAM according to the Second
Visitor Agreement. (Id. at 14.) JAMS, under the impression that the Second Visitor Agreement
had taken effect before the filing of Pilon’s and Stephen’s arbitration demands and thus
controlled, indicated that it would not proceed with arbitration in the absence of a court order.
(Id. at 15.)
On June 21, 2024, Petitioners filed a petition in this Court to compel arbitration with
Discovery pursuant to the First Visitor Agreement. (Pet.) They filed a memorandum in support
of the petition on July 5, 2024. (Pet. Mem.) On August 19, 2024, Discovery filed a
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cross-motion to compel arbitration pursuant to the Second Visitor Agreement. (ECF No. 18.)
On the same day, Discovery filed memoranda in support of that cross-motion (ECF No. 19
(“Cross-Mot. Mem.”)) and in opposition to the petition (ECF No. 22 (“Pet. Opp.”)). On
September 16, 2024, Petitioners opposed the cross-motion (ECF No. 29 (“Cross-Mot. Opp.”))
and replied in further support of the petition (ECF No. 30 (“Pet. Reply”)). On October 7, 2024,
Discovery replied in further support of the cross-motion. (ECF No. 33 (“Cross-Mot. Reply”).)
The parties submitted additional briefing concerning new authority on November 1, 2024 (ECF
No. 37 (“Pets. Supp. Ltr.”)) and November 5, 2024 (ECF No. 28 (“Resp. Supp. Ltr.”)).
II.

Legal Standard
The Federal Arbitration Act (“FAA”), reflecting a “liberal federal policy favoring

arbitration agreements,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24
(1983), provides for the judicial enforcement of arbitration agreements “save upon such grounds
as exist at law or in equity for the revocation of any contract or as otherwise provided in chapter
4.” 9 U.S.C. § 2. Any party to such a contract “aggrieved by the alleged failure, neglect, or
refusal of another to arbitrate under a written agreement for arbitration may petition any United
States district court” which would otherwise have jurisdiction over the subject matter of the
dispute to enforce the agreement. 9 U.S.C. § 4. So, too, may a party already litigating in district
court file a motion to compel arbitration. 9 U.S.C. § 6. In deciding petitions and motions to
compel arbitration under Sections 4 and 6 of the FAA, “the court applies a standard similar to
that applicable for a motion for summary judgment.” Bensadoun v. Jobe-Riat, 316 F.3d 171, 175
(2d Cir. 2003); see also Meyer v. Uber Techs., 868 F.3d 66, 74 (2d Cir. 2017). In doing so, the
court “must consider all relevant, admissible evidence submitted by the parties and contained in
pleadings, depositions, answers to interrogatories, and admissions on file, together with
affidavits.” Nicosia v. Amazon.com, Inc., 834 F.3d 220, 229 (2d Cir. 2016) (cleaned up).
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“[W]here 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, [the court] may rule on the basis of that legal
issue and avoid the need for further court proceedings.” Id. (quotation marks omitted).
III.

Discussion
Four established FAA principles guide the resolution of this case. First, as arbitration is

ultimately a matter of contract, whether the parties have agreed to arbitrate—that is, assented to
such a contract—is a question for the court to decide. See Coinbase, Inc. v. Suski, 602 U.S. 143,
148-49 (2024). Second, in the absence of a valid contract clearly delegating questions of
arbitrability to an arbitrator, the court is to decide those issues as well. See First Options of Chi.,
Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (“Courts should not assume that the parties agreed to
arbitrate arbitrability unless there is clear and unmistakable evidence that they did so.” (cleaned
up)); see also Henry Schein, Inc. v. Archer & White Sales, Inc., 586 U.S. 63, 72 (2019). Third,
though ordinarily arbitration provisions are “severable” from the remainder of a contract such
that unconscionability challenges to the entire agreement go to the arbitrator, Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 448-49 (2006), they are not severable where “a party
challenges the validity under § 2 of the precise agreement to arbitrate at issue.” Rent-A-Center,
West, Inc. v. Jackson, 561 U.S. 63, 71 (2010). And fourth, when considering direct substantive
challenges to arbitration clauses, the court is to turn to the applicable state’s general contract law
to resolve them. See 9 U.S.C. § 2; Perry v. Thomas, 482 U.S. 483, 492 n.9 (1987) (“A court may
not . . . in assessing the rights of litigants to enforce an arbitration agreement, construe that
agreement in a manner different from that in which it otherwise construes nonarbitration
agreements under state law.”). Thus, like many arbitration cases, this one involves four
inquiries: (1) formation, (2) delegation, (3) severability, and (4) the application of substantive
contract law. Each is addressed in turn.
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A.

Formation of the Second Visitor Agreement

Forming any contract, including a contract to arbitrate, requires mutual assent as defined
by the applicable state law. Bell v. Cendant Corp., 293 F.3d 563, 566 (2d Cir. 2002); see also
Brooks v. WarnerMedia Direct, LLC, No. 23-CV-11030, 2024 WL 3330305, at *8 (S.D.N.Y.
July 8, 2024). Consistent with New York’s choice-of-law rules, 2 to determine whether a contract
1F

has been formed, the Court must first determine the correct law to apply without regard to any
choice-of-law clause contained in the contract itself, as formation is a prerequisite to the

The determination of which choice-of-law rules to apply in this case, brought pursuant
to the Court’s federal-question and supplemental jurisdiction under 28 U.S.C. §§ 1331 and 1367
(see Pet. ¶ 27), is less than straightforward. In most FAA cases, the underlying dispute between
the parties arises purely under state contract law, and the federal court has jurisdiction over the
case only under the diversity statute, 28 U.S.C. § 1332(a). See Wash. Nat’l Ins. Co. v. OBEX
Grp. LLC, 958 F.3d 126, 133-34 (2d Cir. 2020). When federal courts sit in diversity, they are
required to apply the choice-of-law rules of the state in which they sit. Klaxon Co. v. Stentor
Elec. Mfg. Co., 313 U.S. 487, 496 (1941). But in the narrower category of cases in which the
underlying dispute between the parties arises under federal law, such that a federal court may
exercise federal question jurisdiction pursuant to 28 U.S.C. § 1331, it is not obvious which
choice-of-law rules the court is to apply. For some of the limited appellate court discussion of
this issue, see Berman v. Freedom Fin. Network, LLC, 30 F.4th 849, 862 (9th Cir. 2022) (Barker,
J., concurring); Setty v. Shrinivas Sugandhalaya LLP, 986 F.3d 1139, 1148-50 (9th Cir. 2021)
(Bea, J., dissenting), opinion withdrawn and superseded, 998 F.3d 897 (9th Cir. 2021), 3 F.4th
1166 (9th Cir. 2021). As a practical matter, many federal courts simply resort to the Klaxon rule
when exercising federal question jurisdiction and confronted with a state law issue. See Zachary
D. Clopton, Horizontal Choice of Law in Federal Court, 169 U. Pa. L. Rev. 2193, 2202 (2021)
(“[A] review of lower federal court decisions finds that federal courts follow Klaxon not only for
diversity cases but also when applying state law in federal question and supplemental jurisdiction
cases. And for many other jurisdictional bases, there is no indication that federal courts do
anything but Klaxon.”) But that is not the only available approach. See generally Tobias
Barrington Wolff, Choice of Law and Jurisdictional Policy in the Federal Courts, 165 U. Pa. L.
Rev. 1847 (2017) (arguing that Klaxon does not require federal courts to apply the choice-of-law
rules of the state in which they sit when exercising a source of jurisdiction beyond Section
1332(a)). But because the parties have not briefed the issue, and because the Court is confident
that any other choice will make no difference in the ultimate outcome of the case, the Court is
content to apply New York’s choice-of-law rules. See also Berman, 30 F.4th at 862 (Barker, J.,
concurring) (“I think analysis of the Supreme Court’s decisions . . . favors applying forum state
choice-of-law rules to state-law issues arising in federal-question cases, at least where Congress
has vested concurrent jurisdiction in state and federal courts.”).
2

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enforcement of such a clause. See Schnabel v. Trilegiant Corp., 697 F.3d 110, 119 (2d Cir.
2010).
New York selects the law governing contract formation by conducting an “interest
analysis,” considering “[i] the place of contracting; [ii] the place of the contract negotiations; [iii]
the place of the performance of the contract; [iv] the location of the subject matter of the
contract; and [v] the domicile, residence, nationality, places of incorporation, and places of
business of the parties.” Brooks, 2024 WL 3330305, at *9 (quoting Philips Credit Corp. v.
Regent Health Grp., Inc., 953 F. Supp. 482, 502 (S.D.N.Y. 1997)). Discovery contends that
“Petitioners concede New York law governs by citing New York law in the section of the brief
concerning [contract] formation” and that both contracts at issue “contained a New York choice
of law provision.” (Cross-Mot. Mem. at 20 n.8.)
The Court agrees with Petitioners for the purposes of the law governing contract
formation. As a starting matter, that the visitor agreements purport to select New York law is
irrelevant for selecting the law to govern formation, which, as explained, is an issue antecedent
to the scope of any choice-of-law clause. Schnabel, 687 F.3d at 119. And though it is true a
party may concede the applicability of one state’s law through exclusive citations to decisions
applying that law in briefing, Petitioners’ citations are not so clear as to constitute such a
concession. In fact, Petitioners have, throughout their briefing in this case, reserved the right to
invoke California law and have cited cases applying it. Indeed, Discovery supplies no answer to
Petitioners’ response that “Pilon contends California law applies and cites New York law in this
filing only for completeness” and that “California has the strongest interest here because Pilon
claims the protection of that state’s laws, where he lives, where all relevant events took place,
and where all the contracts were formed.” (Cross-Mot. Opp. at 17 n.3.)

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Applying New York’s choice-of-law rules to the formation of the visitor agreements, the
Court concludes that California law governs the issue of formation. Here, like in Brooks—a case
on which Discovery frequently relies—though “Respondent is a resident of New York,”
“Petitioners are all residents of California,” and seemingly “signed up for their [Discovery]
accounts in and utilized [Discovery’s] streaming services from California,” cf. Brooks, 2024 WL
3330305, at *9. (See Pet. ¶¶ 24-26; ECF Nos. 2, 3.) Aside from Discovery’s unfounded
arguments regarding waiver and the choice-of-law clause (which is inapplicable to formation), it
offers no argument that any applicable choice-of-law rule would select non-California law to
govern formation of the visitor agreements. “Accordingly, [because] the performance of the
contract and the impact of any injury incurred therefrom occurred in California,” and because
Discovery does not make any persuasive arguments to the contrary, “it is appropriate to apply
California law to issues of contract formation in this case.” Cf. Brooks, 2024 WL 3330305, at
*9-10. That said, however, “New York and California apply ‘substantially similar rules for
determining whether the parties have mutually assented to a contract term.’” Meyer, 868 F.3d at
74 (quoting Schnabel, 697 F.3d at 119).
“Under California law, the formation of a contract requires ‘the parties [to] manifest their
mutual assent to the terms of the agreement.’” Brooks, 2024 WL 3330305, at *10 (quoting
Berman v. Freedom Fin. Network, LLC, 30 F.4th 849, 855 (9th Cir. 2022)). That principle
applies “with equal force” to agreements formed via the internet, on the theory that, under the
right circumstances, users of an electronic service are on “inquiry notice” of the terms of such
agreements and have thus consented to be bound by them. See Berman, 30 F.4th at 855-56.
Specifically, California law determines the validity of internet contracts with reference to “the
way in which the user purportedly gives their assent to be bound by the associated terms:

11

browsewraps, clickwraps, scrollwraps, and sign-in wraps.” Keebaugh v. Warner Bros. Ent., Inc.,
100 F.4th 1005, 1014 (9th Cir. 2024) (quoting Sellers v. JustAnswer LLC, 289 Cal. Rptr. 3d 1, 15
(Cal. Ct. App. 2021)). Scrollwrap contracts—essentially always enforceable—require the
electronic user to scroll through a full list of terms and conditions before accepting them. See id.
Clickwrap contracts are similarly often enforceable, and “require[] users to click on an ‘I agree’
box after being presented with a list of terms and conditions of use.” Id. (citing Nguyen v.
Barnes & Noble Inc., 763 F.3d 1171, 1178-79 (9th Cir. 2014)).
By contrast, browsewrap contracts—in which consumers are deemed to have accepted
posted terms of an electronic service merely by continuing to use the service—are rarely
enforceable unless the terms are conspicuously displayed on the electronic service. See Nguyen,
763 F.3d at 1177. But “[c]ourts have also been more willing to find the requisite notice for
constructive assent where the browsewrap agreement resembles a clickwrap agreement—that is,
in which the user is required to affirmatively acknowledge the agreement before proceeding with
use of that website.” Id. at 1176. That is because, unlike a pure browsewrap, when a user must
affirmatively acknowledge terms that are hyperlinked, they are on notice of the terms’ existence,
much like when someone agrees to “a multipage written paper contract.” Fteja v. Facebook,
Inc., 841 F. Supp. 2d 829, 840 (S.D.N.Y. 2012) (quotation marks omitted); see also Berkson v.
Gogo LLC, 97 F. Supp. 3d 359, 397-98 (E.D.N.Y. 2015). That bespeaks a more general
principle: “[T]o establish the enforceability of a browsewrap agreement, a textual notice should
be required to advise consumers that continued used of a Web site will constitute the consumer’s
agreement to be bound by the Web site’s terms of use.” Long v. Provide Com., Inc., 200 Cal.
Rptr. 3d 117, 126 (Cal. Ct. App. 2016) (citing Nguyen, 763 F.3d at 1178-79).

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Since Long, California courts have treated the middle ground between browsewrap and
clickwrap contracts as “sign-in wrap agreements,” which “do include a textual notice indicating
the user will be bound by the terms, but . . . do not require the consumer to review those terms or
to expressly manifest their assent to those terms by checking a box or clicking an ‘I agree’
button. Instead, the consumer is purportedly bound by clicking some other button that they
would otherwise need to click to continue with their transaction or their use of the website—
most frequently, a button that allows the consumer to ‘sign in.’” Sellers, 289 Cal. Rptr. 3d at 21.
Such a contract is enforceable if “(1) the website provides reasonably conspicuous notice of the
terms to which the consumer will be bound; and (2) the consumer takes some action, such as
clicking a button or checking a box, that unambiguously manifests his or her assent to those
terms.” Keebaugh, 100 F.4th at 1014 (quoting Berman, 30 F.4th at 856). Terms are “reasonably
conspicuous” when they are “displayed in a font size and format such that the court can fairly
assume that a reasonably prudent Internet user would have seen it,” which for a hyperlink means
that the hyperlink is “readily apparent,” rather than “simply underscore[ed].” Id. at 1014
(cleaned up).
1.

Pilon’s Assent to the Second Visitor Agreement

Turning to this case, Pilon’s unambiguous assent is straightforward. He does “not
dispute that [he] received reasonably conspicuous notice of [Discovery’s] updated terms of use,”
cf. Brooks, 2024 WL 3330305, at *11, in a pop-up on the Discovery app and website, along with
an email. (Waibel Dec. ¶¶ 12-14; see also Cross-Mot. Opp. at 20.) To close the pop-up on the
Discovery website, users—including Pilon—had to press an “X” button in “the top right corner
of the notification.” (Id. ¶¶ 14, 18.) Not only did Pilon click through the conspicuous notice of
the change, but he also continued to subscribe to and use Discovery+, including by streaming an
episode of television. (Id. ¶¶ 18-20.) Because Pilon was “explicitly advised” that renewing his
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subscription and continuing to use Discovery’s service would “constitute assent to the terms and
conditions of” the Second Visitor Agreement, cf. Berman, 30 F.4th at 857, he unambiguously
assented to that agreement as a sign-in wrap contract. See also Brooks, 2024 WL 3330305, at
*11 (“[A] contract may be formed where users receive sufficient inquiry notice of a website’s
terms of use via email and thereafter continue to use the site.” (collecting cases)).
It is thus irrelevant that, according to Petitioners, it would have been unreasonable for
Pilon to expect a retroactive change to the arbitration procedure based on the First Visitor
Agreement (see Pet. Reply at 7; Cross-Mot. Opp. at 20), because, as Petitioners themselves point
out, California’s “rules to determine whether meaningful assent has been given” work to “avoid
the unfairness of enforcing contractual terms that consumers never intended to accept.” (See
Cross-Mot. Opp. at 20 (quoting Berman, 40 F.4th at 856). Petitioners’ argument that Discovery
cannot “force a consumer to assent, by mere inquiry notice, to unilateral changes it makes to
impede the resolution of an ongoing dispute” (Cross-Mot. Opp. at 21) misunderstands the nature
of inquiry notice. The theory does not permit the enforcement of a contract that reasonable
consumers would not read. Instead, the doctrine explains the types of contracts that the law
deems consumers to have read, obviating any unfairness Pilon argues stems from his acceptance
of the Second Visitor Agreement’s new arbitration provisions. Moreover, even if Pilon had no
reason to expect retroactive arbitration provisions in light of the First Visitor Agreement, he had
plenty of reason—according to the law of inquiry notice—to expect new terms in that contract,
and if he had read it, he would have found the retroactive provisions. Pilon’s inquiry notice here
is all the more plausible given Petitioners’ emphatic support for these very types of agreements
in their opening brief, where they note that “[c]ourts around the country have recognized that an
electronic ‘click’ can suffice to signify the acceptance of a contract, and that there is nothing

14

automatically offensive about such agreements, as long as the layout and language of the site
give the user reasonable notice that a click will manifest assent to an agreement.” (Pet. Mem. at
17 (quoting Meyer, 868 F.3d at 75).) 3
2F

Because, as to Pilon, the Second Visitor Agreement satisfied the requirements for an
enforceable sign-in wrap contract under California law, his particular expectations about the
contents of that agreement do not destroy his unambiguous assent to it as a matter of law.
2.

Stephen’s Assent to the Second Visitor Agreement

Stephen’s case is different. Unlike Pilon’s subscription, Stephen’s “expired on April 29,
2022,” before any purported formation of the Second Visitor Agreement. (Waibel Dec. ¶ 22.)
And though Discovery represents that “Stephen logged in to his discovery+ account on the
discoveryplus.com website,” his “activity after he logged in to his discovery+ account is not
available in Discovery’s records.” (Id. ¶ 24.) Importantly, Discovery makes no representation
that Stephen continued to subscribe to discovery+ after receiving notice of the Second Visitor
Agreement, only that it is likely that he “continued to use the discovery+ service even after his
subscription expired, potentially on another individual’s account.” (Pet. Opp. at 29.) Though
Discovery contends that use of another’s account may bind that user to the terms governing the
account in general, that is not the case here, because two of the three forms of notice specified
that “continuing to subscribe” (see Waibel Dec. ¶¶ 13, 14) was the “action” by which the
consumer would “unambiguously manifests his or her assent to those terms.” Cf. Keebaugh, 100

3

Petitioners’ argument that, because the First Visitor Agreement contains a provision
purporting to limit retroactive modifications, the Second Visitor Agreement was never formed
(see Cross-Mot Opp. at 21), is unavailing. Even if Petitioners were correct about the ability of
the First Visitor Agreement to limit future modifications (and they are not, see infra § III.D.2),
such a limitation would affect only the enforceability of the Second Visitor Agreement’s
retroactive terms, rather than the formation of the modified agreement as whole.
15

F.4th at 1014 (quoting Berman, 30 F.4th at 856). Stephen’s potential continued use, without
continued subscription, could not have constituted unambiguous consent. The case is thus
different from Brooks, where Judge Failla concluded that continued use by an authorized user
could constitute unambiguous assent, in light of a notice that provided for acceptance “[b]y
continuing to subscribe to and/or access” the electronic service in question. Cf. Brooks, 2024
WL 30330305, at *3, 14 (emphasis added). And though the email notice in this case did provide
for acceptance through “continued subscription to and/or access of discovery+” (Waibel Dec.
¶ 12), that the notices contain different mechanisms of acceptance renders any assent Stephen did
manifest through potential subsequent use ambiguous at best, and thus insufficient under
California law.
Accordingly, Discovery’s request for discovery as to Stephen’s assent to the Second
Visitor Agreement is denied, because Discovery’s allegation that Stephen never subscribed after
receiving notice of the Second Visitor Agreement (assuming even that he did receive such
notice) renders any further discovery futile. And because Stephen did not assent to that
agreement, he is not bound by its arbitration provisions. Thus, the petition to compel arbitration
consistent with the First Visitor Agreement—to which Discovery mounts no legal objections
other than supersession—is granted as to Stephen. Discovery’s cross-motion is likewise denied
as to him.
B.

Delegation of Arbitrability

Move now to the second FAA principle: the role of delegation clauses, which work to
send questions of arbitrability—in addition to the underlying merits of a dispute—to an
arbitrator. When parties’ valid agreements lack a delegation clause, the court’s task is clear:
determine arbitrability for itself. See Henry Schein, 586 U.S. at 72. And, conversely, when
parties have clearly confirmed their intent to delegate questions of arbitrability and neither
16

challenges that provision specifically, the court is to leave the arbitrability decision to the
arbitrator. See Rent-A-Center, 561 U.S. at 63. “But, where . . . parties have agreed to two
contracts—one sending arbitrability disputes to arbitration, and the other either explicitly or
implicitly sending arbitrability disputes to the courts—a court must decide which contract
governs.” Coinbase, 602 U.S. at 152.
Though the parties supply the full text of both visitor agreements, neither party makes
any allusion to the fact that, like in Coinbase, the agreements here contain conflicting forumselection clauses on the issue of arbitrability. The First Visitor Agreement explicitly delegates
arbitrability questions to the arbitrator, providing:
Arbitrator Will Interpret This Agreement. The Arbitrator, and not any federal,
state or local court or agency, shall have the exclusive authority to resolve any
dispute arising under or relating to the validity, interpretation, applicability,
enforceability or formation of this Visitor Agreement and/or these arbitration
provisions in this Section hereof, including but not limited to any claim that all or
any part of this Visitor Agreement is void or voidable.
(First Visitor Agreement at 21.) But the Second Visitor Agreement, lacking that clause, provides
instead: “[A]ny issues involving arbitrability or enforcement of any provisions under the dispute
resolution clause or Arbitration Agreement shall be brought in the appropriate state or federal
court located in New York County, New York.” (Second Visitor Agreement at 23.)
This conflict is to be governed by generally applicable contract principles. Coinbase, 602
U.S. at 152. As to Pilon, his manifested assent to the Second Visitor Agreement, see supra
§ III.A.1, extinguishes any right he once had under the delegation clause. 4 Cf. Dallasa
3F

4

Though the parties dispute whether a modification applicable to accrued contract claims
is enforceable, that dispute does not extend to a subsequent forum-selection clause that
supersedes a delegation clause. That is because the arbitrability decision is not a claim that
accrues, but merely a forum-selection determination based on the scope of an agreement to
arbitrate. In any event, because the Court concludes that the Second Visitor Agreement
constitutes a proper modification of the First Visitor Agreement, see infra § III.D.2, there is no
reason to doubt the propriety of the Second Visitor Agreement’s forum-selection clause. And
17

Aerospace, Inc. v. CIS Air Corp., 352 F.3d 775, 783 (2d Cir. 2003). As to Stephen, because he
did not assent to the Second Visitor Agreement, and because Discovery challenges no other
aspect of the First Visitor Agreement, the delegation clause works to send arbitrability disputes
over his claims to the arbitrator. But as no arbitrability disputes remain in this case as to
Stephen, the Court need not consider the precise contours of the delegation clause to resolve the
petition and cross-motion.
C.

Severability of the Arbitration Provisions

Assured that the relevant parties have not agreed to delegate questions of arbitrability to
an arbitrator, the Court must next ascertain whether Petitioners’ substantive challenges to the
Second Visitor Agreement are directed at the arbitration provisions themselves, or to the
agreement as a whole. That is because “challenges to a contract containing an arbitration clause
fall into two categories: those that challenge the contract as a whole, and those that challenge the
arbitration clause in particular. If the challenge is to the arbitration clause itself—an issue which
goes to the making of the agreement to arbitrate—the federal court may proceed to adjudicate it.”
Ipcon Collections LLC v. Costco Wholesale Corp., 698 F.3d 58, 61 (2d Cir. 2012) (citation and
quotation marks omitted). But the FAA “does not permit the federal court to consider” general
challenges to contracts containing enforceable arbitration provisions, see id. (quoting Buckeye,
546 U.S. at 445, with the exception of challenges to the formation of an agreement, Granite Rock
Co. v. Int’l Bd. of Teamsters, 561 U.S. 287, 296 (2010).

ultimately, Petitioners appear content to let the Court—rather than an arbitrator—make
arbitrability decisions in this case, seeing as they base their petition on substantive challenges to
the Second Visitor Agreement and make no argument concerning the legal effect of the First
Visitor Agreement’s delegation clause.
18

Neither party has briefed this issue. Nevertheless, it is sufficiently clear that Petitioners’
challenges to the Second Visitor Agreement are directed at the arbitration clause contained in
that agreement, rather than the agreement as a whole. First, Petitioners contend that the Second
Visitor Agreement’s arbitration clause could not modify the First Visitor Agreement’s arbitration
clause because the latter clause contains a specific prohibition on modifications with respect to
accrued claims. (See Cross-Mot. Opp. at 18-24.) And second, Petitioners argue that the Second
Visitor Agreement’s arbitration clause is unconscionable because, in part, of the substantive
unfairness of the arbitration procedure it selects and because of California state law prohibiting
class action waivers in consumer contracts. (See Pet. Mem. at 22-26.) Because both challenges
turn not on any agreement as a whole, but on the specific provisions for arbitrating disputes, they
are properly before the Court. See Rent-A-Center, 561 U.S. at 71.
D.

Substantive Challenges to the Arbitration Provisions

Past all of those threshold considerations lies one core dispute: Where are the parties to
arbitrate? Answering that question requires addressing three more: First, which state’s law
supplies the substantive contract law principles applicable in this case? Second, did the Second
Visitor Agreement modify the First Visitor Agreement? And third, if the Second Visitor
Agreement indeed modified the First Visitor Agreement, is the modification nevertheless
unconscionable?
1.

Choice of Law Governing Enforceability

Again, the Court begins with New York’s choice of law rules—this time, those that
concern the effect of a contract clause that selects New York law to govern disputes between the

19

parties. 5 To reiterate, in New York, a choice-of-law clause does not dictate the law applicable to
4F

the formation of the very agreement containing such a clause. Schnabel, 697 F.3d at 119. But
once the parties have formed a valid agreement, they may select a particular state’s law to govern
challenges to its enforceability. See, e.g., Ragone v. Atl. Video at Manhattan Ctr., 595 F.3d 115,
121 (2d Cir. 2010) (applying New York law to an unconscionability challenge to an arbitration
clause because “the arbitration agreement at issue contains a choice-of-law clause which
provides that New York law will govern the agreement’s construction and enforcement”);
Behrens v. JPMorgan Chase Bank, N.A., No. 21-2603, 2024 WL 1090856, at *3 (2d Cir. Mar.
13, 2024) (summary order) (similar, for an arbitration agreement selecting Illinois law to
govern).
Here, both visitor agreements manifest intent to be bound by New York law. The First
Visitor Agreement provides: “This Agreement has been made in and shall be construed in
accordance with the laws of the State of New York, without giving effect to any conflict of law
principles.” (First Visitor Agreement at 22.) Likewise, the Second Visitor Agreement provides:
“These Terms shall be governed by the laws of the State of New York, without regard to conflict
of law principles.” (Second Visitor Agreement at 23.) Petitioners’ argument, citing Brooks, that
California law nevertheless applies because “California has the strongest interest here because
Pilon claims the protection of that state’s laws, [and it is the state] where he lives, where all the
relevant events took place, and where all the contracts were formed” (Opp. Cross-Mot. at 17
n.3), is inapposite, since a valid choice-of-law clause trumps ordinary interest analysis in
selecting which law governs a contract dispute. See Fin. One Pub. Co. Ltd. v. Lehman Bros.

5

The same jurisdictional principles implicated by selecting choice-of-law rules in a
federal question case, 28 U.S.C. § 1331, apply here as well. For the same reasons explained in
note 2, supra, the Court will apply New York’s choice-of-law rules.
20

Special Fin., Inc., 414 F.3d 325, 332-33 (2d Cir. 2005). Brooks does not compel a different
result because it considered a challenge to formation, which, as already explained, cannot be
governed by a choice-of-law clause contained in the very agreement that one party has argued is
invalid. See Brooks, 2024 WL 3330305, at *9.
That leaves the enforceability of the choice-of-law clauses under New York law. “New
York courts used to look to [considerations such as] significant contacts, interest in the litigation,
and the public policy of the foreign jurisdiction [] even when faced with a contract with a New
York choice-of-law provision.” Willis Re Inc. v. Herriott, 550 F. Supp. 3d 68, 91 (S.D.N.Y.
2021) (collecting cases under the old regime). But following the New York Court of Appeals’
instruction that “New York courts should not engage in any conflicts analysis where the parties
include a choice-of-law provision in their contract,” Ministers & Missionaries Benefit Bd. v.
Snow, 26 N.Y.3d 466, 474 (2015), New York courts now “refuse[] to consider the public policy
of foreign states—including California—to overturn an otherwise valid contractual choice of law
provision.” Capstone Logistics Holdings, Inc. v. Navarrete, No. 17-CV-4819, 2018 WL
6786338, at *22 (S.D.N.Y. 2018) (emphasis omitted) (collecting cases); see also Petróleos de
Venezuela S.A. v. MUFG Union Bank, N.A., 41 N.Y.3d 462, 474 (2024) (reaffirming the
Ministers rule with three exceptions not relevant here). Accordingly, the Court is to apply New
York law to govern Petitioners’ challenges to the enforceability of the Second Visitor
Agreement.
2.

Modification of the First Visitor Agreement

The penultimate question in this case is whether the Second Visitor Agreement actually
modified the First Visitor Agreement. Petitioners, in opposing Discovery’s cross-motion, argue
that the purported modification violates California law’s implied covenant of good faith and fair
dealing and is thus unenforceable. (See Cross-Mot. Opp. at 22-24.) Of course, the interpretation
21

and enforceability of the Second Visitor Agreement is a matter of New York law, 6 and so the
5F

Court must apply New York’s analogous covenant.
“Under New York law, ‘implicit in all contracts is a covenant of good faith and fair
dealing in the course of the contract performance.’” DBT Gmbh v. J.L. Min. Co., 544 F. Supp.
2d 364, 384 (S.D.N.Y. 2008) (quoting Dalton v. Educ. Testing Serv., 87 N.Y.2d 384, 389
(1995)). “The covenant ‘embraces a pledge that neither party shall do anything which will have
the effect of destroying or injuring the right of the other party to receive the fruits of the
contract.’” Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89, 98 (2d Cir.
2007) (quoting Dalton, 87 N.Y.2d at 389). “In determining whether a party has breached the
obligation or covenant of good faith and fair dealing, a court must examine not only the express
language of the parties’ contract, but also any course of performance or course of dealing that
may exist between the parties.” Id. (quoting 23 Williston on Contracts § 63:22 (4th ed. 2006)).
However, the covenant does not come from thin air, but from the promises the parties have
actually made to each other through contract. Benex LC v. First Data Merchant Servs. Corp.,
695 F. App’x 12, 15 (2d Cir. 2017) (summary order) (“Under New York law, the implied
covenant of good faith and fair dealing can only impose obligations consistent with the terms of
the contract, and the implied covenant cannot add substantive terms not included therein.”).
That partially explains why “New York law does not recognize a duty of good faith in the
formation of a contract.” Mendez v. Bank of Am. Home Loans Serv., LP, 840 F. Supp. 2d 639,

6

Although the parties’ references to the effect of the Second Visitor Agreement at times
appear like challenges to the validity of that agreement, as the Court has already explained, supra
§ III.A.1, Pilon and Discovery formed a valid contract in entering into the Second Visitor
Agreement. Determining whether applicable contract principles permit enforcing the Second
Visitor Agreement to override the First Visitor Agreement thus involves, properly understood, a
blend of interpretation and enforcement considerations that are governed by New York law
pursuant to the visitor agreements’ choice-of-law provisions.
22

653 (S.D.N.Y. 2012) (citing Frutico S.A. de C.V. v. Bankers Trust Co., 833 F. Supp. 288, 300
(S.D.N.Y. 1993)). So, Petitioners cannot argue that the implied covenant prevented the
formation of the Second Visitor Agreement via valid modification. Indeed, the implied covenant
of good faith ordinarily works to save provisions allowing unilateral modifications—even
retroactive ones—from being considered illusory, since the covenant bars the party with
unilateral power to modify from using that power capriciously. See e.g., Eiess v. USAA Fed.
Savings Bank, 404 F. Supp. 3d 1240, 1250-51 (N.D. Cal. 2019). Petitioners’ primary cases on
this point—albeit not applying New York law—bear out this principle. See Peleg v. Neiman
Marcus Grp., Inc., 204 Cal. App. 4th 1425, 1467 (Cal. Ct. App. 2012) (refusing to enforce a
unilateral modification to an arbitration provision under Texas law); Peng v. First Repub. Bank,
219 Cal. App. 4th 1462, 1474 (Cal. Ct. App. 2013) (explaining that the implied covenant of good
faith regulates the use of the power to unilaterally modify a contract); Cobb v. Ironwood Country
Club, 233 Cal. App. 4th 960, 963 (Cal. Ct. App. 2015) (“When one party to a contract retains the
unilateral right to amend the agreement governing the parties’ relationship, its exercise of that
right is constrained by the covenant of good faith and fair dealing which precludes amendments
that operate retroactively to impair accrued rights.”). Petitioners’ argument does not extend to
mutual modifications, however, as it is a basic principle of contract law that parties to a contract
cannot prohibit their own ability to validly modify their contract sometime in the future. See
Restatement (Second) of Contracts § 311 cmt. a (1979) (“The parties to a contract cannot by
agreement preclude themselves from varying their duties to each other by subsequent
agreement.”). Here, though the Second Visitor Agreement became effective after Pilon provided
notice of the accrual of his claim, it was the parties, rather than Discovery alone, that effectuated

23

that agreement. New York’s (or even California’s) implied covenant of good faith and fair
dealing does not prevent parties from mutually modifying their contracts in such a way.
Accordingly, the Court concludes that the Second Visitor Agreement’s modification of
the First Visitor Agreement does not violate New York’s implied covenant of good faith and fair
dealing.
3.

Unconscionability

The final issue to resolve is Petitioners’ argument that the Second Visitor Agreement’s
arbitration provisions are unconscionable and therefore unenforceable. (See Pet. Mem. at 20-26;
Cross-Mot. Opp. at 24-32.) Again, Petitioners rely primarily on California law when New
York’s unconscionability doctrine governs. Still, many of Petitioners’ arguments map onto New
York’s requirements.
“Under New York law, a contract 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, 595 F.3d at 121 (quoting Gillman v.
Chase Manhattan Bank, N.A., 73 N.Y.2d 1, 10 (1988)). Defeating a contractual obligation on
unconscionability grounds generally requires demonstrating “both procedural and substantive
unconscionability.” Haft v. Haier US Appliance Sols., Inc., 578 F. Supp. 3d 436, 451 (S.D.N.Y.
2022) (citing Shema Kolainu-Hear Our Voices v. ProviderSoft, LLC, 832 F. Supp. 2d 194, 201
(S.D.N.Y. 2022)). And although state law supplies the unconscionability doctrine even in an
FAA case, that doctrine may not be “applied in a fashion that disfavors arbitration” as opposed to
other contracts. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 341 (2011); see also
Sutherland v. Ernst & Young LLP, 726 F.3d 290, 297 (“In Concepcion, the Court held that the
FAA preempted a California judicial rule regarding the unconscionability of class arbitration
waivers in consumer contracts . . . .”).
24

The procedural unconscionability prong considers “the size and commercial setting of the
transaction, whether deceptive or high-pressured tactics were employed, the use of fine print in
the contract, the experience and education of the party claiming unconscionability, and whether
there was disparity in bargaining power.” Application of Whitehaven S.F., LLC v. Spangler, 45
F. Supp. 3d 333, 351 (S.D.N.Y. 2014) (quoting Gillman, 73 N.Y.2d at 10). In line with those
considerations, Petitioners contend that the Second Visitor Agreement is procedurally
unconscionable because “it is a contract of adhesion” drafted and offered by Discovery without
any opportunity for negotiation. (Pet. Mem. at 20-21.) But in New York, being offered contract
terms on a “form . . . offered on a take-it-or-leave it basis” is generally “insufficient to render the
contract unconscionable, particularly when the [party charging unconscionability] had the
ability” to take its business elsewhere. Anonymous v. JP Morgan Chase & Co., No. 05-CV2442, 2005 WL 2861589, at *6 (S.D.N.Y. 2005); see also Plazza v. Airbnb, Inc., 289 F. Supp. 3d
537, 558-59 (S.D.N.Y. 2018) (“Airbnb’s TOS is a standard adhesion contract, which does
suggest some level of procedural unconscionability. . . . However, this is not sufficient to
invalidate the arbitration provision.”); Ragone, 595 F.3d at 122; Nayal v. HIP Network Servs.
IPA, Inc., 620 F. Supp. 2d 566, 571-72 (S.D.N.Y. 2009). That is the case here, as Pilon was free
to take his business to a different streaming service. Moreover, Petitioners do not argue that
Pilon is illiterate or otherwise unable to understand the contracts he enters. To the contrary, and
undermining their argument for procedural unconscionability here, Petitioners explain that Pilon
read the First Visitor Agreement—presented in essentially the same form as the second one—
and expected those terms to govern his relationship with Discovery. That he did not expect the
Second Visitor Agreement to modify the anti-retroactivity provision of the First Visitor
Agreement does not create any procedural unconscionability, especially because Discovery

25

explicitly identified changes to its arbitration provisions when it notified Pilon and others of the
new terms. (See Waibel Dec. ¶¶ 12-14.) Therefore, even though there may have been a degree
of procedural unconscionability, because Pilon had no opportunity to negotiate the terms in the
Second Visitor Agreement, its impact was minimal.
Substantive unconscionability, on the other hand, “requires an analysis of the substance
of the bargain to determine whether the terms were unreasonably favorable to the party against
whom unconscionability is urged.” Haft, 578 F. Supp. 3d at 452 (quotation marks omitted). At
the outset, Petitioners’ argument that the agreement here is substantively unconscionable under
California’s anti-class-arbitration-waiver rule is irrelevant, since New York law governs the
enforceability of the Second Visitor Agreement and contains no such rule. Petitioners contend
also, however, that the Second Visitor Agreement’s arbitration provisions are substantively
unconscionable because they apply retroactively, impose notice and affidavit requirements, stage
the processing of claims, and require opt-out to proceed to litigation following the staged
claim-resolution process. (See Pet. Mem. at 22.) None of those arguments are availing.
To begin, not even California law—which Petitioners would have this Court apply—
renders retroactive arbitration provisions in consumer contracts unconscionable. See Brooks,
2024 WL 33030305, at *17 (distinguishing retroactive arbitration provisions in employer
contracts from those in consumer contracts, for the latter of which “courts have permitted this
kind of retroactivity”). And the arbitration provisions themselves do not appear to unreasonably
favor Discovery, for even if they do require consumers to send Discovery affidavits or to proceed
in batches, that does not abridge consumers’ substantive rights in any way or require them to do
more than what is often required in ordinary (or multi-district) litigation, where complicated
submissions and delays are common. To the contrary, Petitioners do not contest Discovery’s

26

characterization of the JAMS procedure as unreasonably favoring mass claimants by allowing
law firms to “use the . . . fee structure to cause massive fees to be assessed on Discovery, thereby
enabling [the firm] to extract a windfall settlement untethered to the merit of those claimants’
claims.” (Cross-Mot. Mem. at 11.) That the Second Visitor Agreement reverts to a procedure
that prevents that manipulation of the arbitral forum’s fee structure, even if overcorrecting, is not
so substantively unreasonable as to be unconscionable.
Petitioners’ cited cases are inapposite. First is MacClelland v. Cellco Partnership, 609 F.
Supp. 3d 1024 (N.D. Cal. 2022). As Judge Failla explained in Brooks, the MacClelland court
was concerned that an arbitration procedure—“plagued by delays”—would work to stall claims
past their expiration, as the respondent had refused to toll claims pending their completion of the
staged arbitration process. Brooks, 2024 WL 3330305, at *17. That is not the case here, because
the NAM procedure contained in the Second Visitor Agreement provides that “[a]ny applicable
limitations period (including statute of limitations) and any filing fee deadlines shall be tolled
beginning when the Mandatory Pre-Arbitration Notice and Informal Dispute Resolution
Procedures are initiated.” (Second Visitor Agreement at 18.) Also concerning to the court in
MacClelland was the lack of a right to opt out of arbitration following the phased procedure,
which, like in Brooks, is not a concern with the NAM arbitration procedure as contemplated by
the Second Visitor Agreement. See Brooks, 2024 WL 3330305, at *17.
Petitioners’ second case, Heckman v. Live Nation Entertainment, Inc., 120 F.4th 670 (9th
Cir. 2024), brought to the Court in supplemental briefing (see Pets. Supp. Ltr.) is similarly
inapposite. First, Heckman concerned an unconscionability challenge to mass-filing arbitration
provisions under California law, not New York law, and so its explicitly “alternative” holding
regarding California’s particular anti-class-action-waiver rule is not relevant here. Cf. Heckman,

27

120 F.4th at 689-90. Second, the mass-filing procedures at issue in Heckman—and,
correspondingly, the unconscionable aspects of it—are not present. 7 For example, the Heckman
6F

court took issue with the fact that early “bellwether” arbitrations could have binding precedential
effect on subsequent arbitrations, thus diminishing the rights of subsequent claimants to be heard
on all aspects of their claims. See id. at 684-85. Petitioners identify no similar provision in the
NAM procedure or Second Visitor Agreement. The court also took issue with restrictions on
discovery and briefing allowed under the mass-filing provisions, id. at 685-86, concerns which
are not implicated by NAM arbitration. (See Resp. Supp. Ltr. at 2.) Likewise, Petitioners make
no argument that this case involves the types of lopsided appeal and arbitrator-selection rights as
were at issue in Heckman, cf. at 686-87. Finally, and contrary to Petitioners’ assertions,
unconscionability does not “permeate[]” (cf. Pet. Mem. at 26) the Second Visitor Agreements’
arbitration provisions, for the same reasons that the particular procedures identified are not
substantively unconscionable.
Accordingly, the Court concludes that the arbitration procedures specified by the Second
Visitor Agreement are not unconscionable and may be enforced as to Pilon.
IV.

Conclusion
For the forgoing reasons: The petition to compel arbitration before JAMS (ECF No. 1) is

GRANTED as to Russell Stephen and DENIED as to Brian Pilon. The cross-motion to compel
arbitration before NAM (ECF No. 18) is DENIED as to Russell Stephen and GRANTED as to
Brian Pilon. The motion for discovery concerning Russell Stephen’s assent to the Second

7

Note that while the following citations are from the Heckman court’s discussion of the
unconscionability of the delegation clause in that case, the court concluded in cursory form that
“[t]he provisions of the arbitration agreement and New Era’s Rules that make the delegation
clause unconscionable also serve to make the entire agreement unconscionable.” Heckman, 120
F.4th at 688.
28

Visitor Agreement is DENIED. And this action is hereby STAYED pending the completion of
the arbitrations contemplated by the parties’ agreements. See 9 U.S.C. § 3.
The Clerk of Court is directed to close the motion at ECF No. 18 and to mark this case as
stayed.
SO ORDERED.
Dated: March 10, 2025
New York, New York

29