PARKER v. ROBINHOOD CYRPTO LLC

Filing 38

MEMORANDUM OPINION: For the reasons discussed in the opinion, the Court will GRANT Defendants Motion to Compel Arbitration. This case is STAYED pending the outcome of arbitration. Plaintiffs Motions to Strike the Motion to Compel 19 , 27 , Motion to Alter or Amend Judgment 33 , Motion for Reconsideration 36 , and Motion for Oral Argument 31 are DENIED. Additionally, Plaintiffs Motion to Expedite Ruling 34 and Motion to Expedite the Motion for Reconsideration 37 are DENIED AS MOOT. The remainder of Plaintiffs Motions are STAYED pending the outcome of arbitration. Details more fully stated in the opinion. An Appropriate Order of Court Shall Follow. Signed by Judge Robert J. Colville on 9/24/24. (cjo)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
JA’QUAN PARKER,

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Plaintiff,
v.
ROBINHOOD CRYPTO LLC,
Defendant.

No. 2:23-cv-01737-RJC
Judge Robert J. Colville

MEMORANDUM OPINION
Robert J. Colville, United States District Judge
Before the Court is a Motion to Compel Arbitration and Stay Proceedings (ECF No. 9)
filed by Defendant, Robinhood Crypto LLC. Also before the Court are the following motions filed
by Plaintiff, Ja’Quan Parker: Motion for Breach of Contract (ECF No. 14), Amended Motion for
Breach of Contract (ECF No. 16), Motions to Strike (ECF Nos. 19, 27), Motion for Public
Disclosure (ECF No. 28), Motion for Oral Argument (ECF No. 31), Motion to Compel and for
Sanctions (ECF No. 32), Motion to Alter or Amend Judgment (ECF No. 33), Motion to Expedite
Ruling (ECF No. 34), Motion for Reconsideration (ECF No. 36), and Motion to Expedite the
Motion for Reconsideration (ECF No. 37).
I.

Factual Background and Procedural History
Plaintiff brings this lawsuit, individually and behalf of all others similarly situated, alleging

that Defendant committed wire fraud, securities fraud, churning accounting fraud, and investment
fraud. Am. Compl. 3. Specifically, Plaintiff alleges that Defendant’s “use of market orders for
crypto buys and sells lead[s] to [the] crypto user[s] [loss of] money every time.” Id.

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After the filing of the Amended Complaint, Defendant filed its Motion to Compel
Arbitration, with exhibits and a Declaration from Marc O’Such, a Senior paralegal with Defendant.
ECF No. 9. 1 The exhibits include Defendant’s Customer Agreement, which Defendant argues
contains a mandatory arbitration provision. Mot., Ex. 3. Plaintiff did not file a direct response to
the Motion to Compel Arbitration but did file a Motion to Strike the Motion to Compel Arbitration.
ECF No. 19.
II.

Legal Standard
Depending on the circumstances, a motion to compel arbitration may be analyzed under

either the Rule 12(b)(6) motion to dismiss standard or the Rule 56 motion for summary judgment
standard. Guidotti v. Legal Helpers Debt Resolution, LLC, 716 F.3d 764, 773–76 (3d Cir. 2013).
The Rule 12(b)(6) standard applies “[w]here the affirmative defense of arbitrability of claims is
apparent on the face of a complaint (or ... documents relied upon in the complaint).” Id. at 773–
74 (internal quotations omitted). The summary judgment standard, however, applies when either
(1) “the motion to compel arbitration does not have as its predicate a complaint with the requisite
clarity to establish on its face that the parties agreed to arbitrate,” or (2) “the opposing party has
come forth with reliable evidence that is more than a naked assertion ... that it did not intend to be
bound by the arbitration agreement, even though on the face of the pleadings it appears that it did.”
Id. at 774 (quotations and citations omitted). If the reviewing court finds that the motion to compel
arbitration must be analyzed under the summary judgment standard, “the parties should be entitled

In its Motion, Defendant states that “by filing th[e] motion, [Defendant] does not waive and expressly reserves all
defenses and rights and does not consent to the jurisdiction of this Court to entertain the claims set forth in Plaintiff’s
Complaint.” Mot. 1, n.1. Additionally, Defendant raises arguments that Plaintiff has not effectuated proper service
against Defendant and that, should the Court deny the Motion to Compel Arbitration, Defendant requests that the
Court dismiss this case based on improper venue. Mot. 1, n.2, 9, n.9. The Court will make no rulings as to these
additional arguments until they are fully briefed by the parties.

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to discovery on the question of arbitrability before a court entertains further briefing on [the]
question.” Id. at 776 (internal quotations omitted).
Here, the Amended Complaint does not contain any facts indicating the existence of an
arbitration agreement. Further, Mr. Parker’s claims do not rely on any documents that contain the
contested arbitration agreement. The arbitrability of Mr. Parker’s claims is therefore not apparent
from the face of the Amended Complaint and the appropriate standard of review is the Rule 56
summary judgment standard.
While the Court acknowledges that it is common to allow the parties to conduct limited
discovery on the question of arbitration when determining a motion to compel arbitration under a
summary judgment standard, the Court does not find that discovery is warranted under the facts
of this case. To begin, Plaintiff has not requested discovery and has raised no arguments against
arbitration, outside of a motion to strike. Therefore, Plaintiff has not asserted any arguments that
are not purely legal in nature. Accordingly, the Court finds that the material facts can be
determined from the record before the Court and are not in dispute. The Court will, therefore,
apply the Rule 56 standard in deciding the Motion to Compel Arbitration, “but will forego
discovery as to the arbitrability issue because the necessary information is already part of the
record.” Strange v. Comcast Corporation, Civil Action No. 18-4032, 2018 WL 6602072, at *2
n.7 (E.D. Pa. Dec. 14, 2018) (citing Glenwright v. Carbondale Nursing Home, Inc., 2017 WL
1092541, at *3 (M.D. Pa. Mar. 23, 2017)) (finding that discovery was not appropriate, under the
Rule 56 standard, where the plaintiff only presented legal arguments and material facts were clear
from the record); Smith v. RGIS, LLC, Case No. 2:16-cv-841, 2017 U.S. Dist. LEXIS 166608, at
*13-14 (W.D. Pa. Oct. 6, 2017) (same).

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Under Rule 56, summary judgment is warranted where the moving party shows that there
is no genuine dispute about any material fact, and that judgment as a matter of law is warranted.
Fed. R. Civ. P. 56(a). In evaluating the evidence, the court must interpret the facts in the light
most favorable to the nonmoving party, drawing all reasonable inferences in his or her favor.
Watson v. Abington Twp., 478 F.3d 144, 147 (3d Cir. 2007).
In ruling on a motion for summary judgment, the court’s function is not to weigh the
evidence, make credibility determinations, or determine the truth of the matter; rather, its function
is to determine whether the evidence of record is such that a reasonable jury could return a verdict
for the nonmoving party. Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150–51
(2000) (citing decisions); Anderson v. Liberty Lobby, 477 U.S. 242, 248–49 (1986); Simpson v.
Kay Jewelers, Div. of Sterling, Inc., 142 F.3d 639, 643 n. 3 (3d Cir. 1998).
The mere existence of a factual dispute, however, will not necessarily defeat a motion for
summary judgment. Only a dispute over a material fact—that is, a fact that would affect the
outcome of the suit under the governing substantive law—will preclude the entry of summary
judgment. Anderson, 477 U.S. at 248.
III.

Discussion
A. Motion to Compel Arbitration
The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, “establishes a strong federal policy

in favor of the resolution of disputes through arbitration.” Alexander v. Anthony Intern., L.P., 341
F.3d 256, 263 (3d Cir. 2003). “Accordingly, ‘federal law presumptively favors the enforcement
of arbitration agreements.’” Id. (citing Harris v. Green Tree Financial Corp., 183 F.3d 173, 178
(3d Cir. 1999)). “A party to a valid and enforceable arbitration agreement is entitled to a stay of

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federal court proceedings pending arbitration as well as an order compelling such arbitration.” Id.
(internal citations omitted).
The Court must first determine whether this case implicates the Federal Arbitration Act.
See Gay v. CreditInform, 511 F.3d 369, 378 (3d Cir. 2007). The Federal Arbitration Act provides
that:
[a] written provision in any maritime transaction or 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.
Plaintiff has raised no arguments that the FAA does not apply. Defendant argues that the
FAA applies because the transaction at issue was conducted via the internet and, therefore, had
an effect on interstate commerce. Mot. to Compel 11 (citing Clerk v. Cash Cent. of Utah, LLC,
2011 WL 3739549, at *3 (E.D. Pa. Aug. 25, 2011); United States v. MacEwan, 445 F.3d 237,
246 (3d Cir. 2006) (the “Internet,…is properly regulated by Congress as a channel and
instrumentality of interstate commerce”); Out of the Box Enterprises, LLC v. El Paseo Jewelry
Exch., 2011 WL 13135643, at *4 (C.D. Cal. Feb. 24, 2011) (citing United States v. Sutcliffe, 505
F.3d 944, 953 (9th Cir. 2007) (“A website, transmitted worldwide over the Internet, falls within
the scope of commerce lawfully regulated by Congress because the Internet has been deemed an
‘instrumentality and channel of interstate commerce.’”)). The Court agrees with Defendant and
finds that the FAA applies.
Because the FAA applies, the Court must now determine:
(1) whether a valid agreement to arbitrate exists and (2) whether the particular
dispute falls within the scope of that agreement. See PaineWebber, Inc. v.
Hartmann, 921 F.2d 507, 511 (3d Cir.1990), overruled on other grounds
by Howsam v. Dean Witter Reynolds, 537 U.S. 79, 85, 123 S.Ct. 588, 154 L.Ed.2d
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491 (2002). When a dispute consists of several claims, the court must determine
on an issue-by-issue basis whether a party bears a duty to
arbitrate. See Painewebber Inc. v. Hofmann, 984 F.2d 1372, 1376–77 (3d
Cir.1993). When determining both the existence and the scope of an arbitration
agreement, there is a presumption in favor of arbitrability. “[A]n order to arbitrate
the particular grievance should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that
covers the asserted dispute.” AT&T Technologies, Inc. v. Communications
Workers of America, 475 U.S. 643, 650, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986).
Trippe Mfg. Co. v. Niles Audio Corp., 401 F.3d 529, 532 (3d Cir. 2005).
i.

Whether a Valid Arbitration Agreement Exists

Generally, “‘[q]uestions concerning the interpretation and construction of arbitration
agreements are determined by reference to federal substantive law.’” Gay, 511 F.3d at 388
(quoting Harris v. Green Tree Fin. Corp., 183 F.3d 173, 179 (3d Cir. 1999)).
Nevertheless, notwithstanding the supremacy of federal law, courts repeatedly have
held that “in interpreting [arbitration] agreements, federal courts may apply state
law, pursuant to section two of the FAA.” Harris, 183 F.3d at 179. In particular,
“generally applicable contract defenses, such as fraud, duress, or
unconscionability, may be applied to invalidate arbitration agreements without
contravening § 2.” Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687, 116
S.Ct. 1652, 1656, 134 L.Ed.2d 902 (1996). In applying ordinary state law
principles to evaluate arbitration agreements, First Options of Chicago, Inc. v.
Kaplan, 514 U.S. 938, 944, 115 S.Ct. 1920, 1924, 131 L.Ed.2d 985 (1995), the
cases have indicated that courts may look in particular to the laws of the involved
state or territory. See, e.g., Parilla v. IAP Worldwide Servs. VI, Inc., 368 F.3d 269,
276 (3d Cir. 2004) (applying Virgin Islands law to determine whether arbitration
agreement was enforceable in lawsuit based on Title VII); Spinetti v. Serv. Corp.
Int'l, 324 F.3d 212, 214 (3d Cir. 2003) (applying Pennsylvania law to determine
whether arbitration agreement was enforceable in action based on Title VII and the
ADEA); Blair v. Scott Specialty Gases, 283 F.3d 595, 603 (3d Cir. 2002) (applying
Pennsylvania law to determine whether arbitration agreement was enforceable in
lawsuit based on Title VII); Harris, 183 F.3d at 181–84 (applying Pennsylvania
law to determine whether arbitration agreement was unconscionable in lawsuit
based on RICO).
The cardinal principle of the law of arbitration is that “under the [FAA, arbitration]
is a matter of consent, not coercion, and parties are generally free to structure their
arbitration agreements as they see fit.” Volt Info. Sciences, Inc. v. Bd. of Trustees
of the Leland Stanford Junior Univ., 489 U.S. 468, 479, 109 S.Ct. 1248, 1256, 103
L.Ed.2d 488 (1989). That freedom extends to choice-of-law provisions governing
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agreements, including agreements to arbitrate. See Trippe Mfg. Co. v. Niles Audio
Corp., 401 F.3d 529, 532 (3d Cir. 2005) (applying New York law pursuant
to choice-of-law provision in determining whether to enforce arbitration
agreement); Gen. Elec. Co. v. Deutz AG, 270 F.3d 144, 155 (3d Cir. 2001) ( “In
general, we respect the choice of law that parties agree upon to resolve their private
disputes.”); see also Suburban Leisure Ctr., Inc. v. AMF Bowling Prods., Inc., 468
F.3d 523, 526 (8th Cir. 2006) (applying Virginia law pursuant to choice-oflaw provision after determining that both Virginia and the forum state of Missouri
enforce choice-of-laws provisions); Overstreet v. Contigroup Cos., 462 F.3d 409,
411 (5th Cir. 2006) (applying Georgia law pursuant to choice-of-law provision in
determining whether to enforce arbitration agreement); Pro Tech Indus., Inc. v.
URS Corp., 377 F.3d 868, 872 (8th Cir. 2004) (applying Texas law pursuant
to choice-of-law provision to determine whether to enforce arbitration agreement).
Gay, 511 F.3d at 388-89.
Here, the Agreement contains a choice-of-law provision providing that “any dispute
between the parties will be governed by this Agreement and the laws of the State of California and
applicable United States law.” Agreement, Ex. 3, ¶ 18. While the Agreement calls for the
application of California law in the arbitration proceeding, it does not indicate what law should
apply when determining whether the Agreement contains a valid choice of law provision. See
General Elec. Co., 270 F.3d at 153 (“Although the arbitration clause called for the application of
Swiss law, that provision applied to the arbitration proceeding, not to the initial determination of
whether there had been an agreement on who would decide arbitrability.”). Therefore, the Court
will look to Pennsylvania law for determining whether there is a valid choice of law provision.
See Gay, 511 F.3d at 389.
Pennsylvania law generally enforces choice of law provisions in contracts “unless either
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no
other reasonable basis or the parties’ choice, or (b) application of the law of the chosen state would
be contrary to a fundamental policy of a state which has a materially greater interest than the
chosen state in the determination of the particular issue.” Kruzits v. Okuma Mach. Tool, Inc., 40

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F.3d 52, 55 (3d Cir. 1994) (citing Smith v. Commonwealth Nat. Bank, 557 A.3d 775. 777 (1989))
(cleaned up). The Court cannot say that California does not have a substantial relationship to the
transaction or that the application of California law would be contrary to the application of
Pennsylvania law. Therefore, the Court will enforce the choice of law provision in the Agreement
and find that California law applies when considering the enforceability of the arbitration
provision.
Having found that California law applies, the Court must now determine whether the
parties agreed to arbitrate and if so, whether the arbitration provision is enforceable.

See

Houtchens v. Google, LLC, 649 F. Supp. 3d 933, 938-43 (N.D. Ca. 2023).
Here, the Court finds that the parties agreed to arbitrate. To begin, Plaintiff has presented
no arguments to the contrary. Additionally, the Court finds that Plaintiff agreed to arbitrate when
he clicked “submit” and accepted Defendant’s Agreement. Decl. of O’Such, ¶ 6. Courts in the
Ninth Circuit have held that mutual assent manifests when internet users accept “clickwrap”
agreements 2, like the one at issue here, as long as the plaintiff was provided “reasonably
conspicuous notice” of the terms of the agreement. Adibzadeh v. Best Buy, Co. Inc., Case No. 20cv-06257, 2021 WL 4440313, at *5 (N.D. Ca. March 2, 2021); Houtchens, 649 F. Supp. 3d at 939.
Here, the Exhibits submitted by Defendant show that Plaintiff was provided “reasonably
conspicuous notice” of the terms of the Agreement. Id. Plaintiff was prompted to review the
Agreement and then had to click “submit” to agree to the Agreement in order to create his account.
Decl. of O’Such, ¶ 8; Mot. to Compel, Ex. 2.

“A clickwrap agreement is an agreement in which internet users are ‘required to click on an “I agree” box after being
presented with a list of terms and condition of use.’” Adibzadeh, 2021 WL 4440313, at *5 (quoting Nguyen v. Barnes
& Noble, Inc., 763 F.3d 1171, 1175-76 (9th Cir. 2014)).

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Having found that the parties agreed to arbitrate, the Court must now determine whether
the arbitration agreement is unenforceable.
Under California law, the party challenging the enforceability of an arbitration
agreement has the burden of proving that the agreement is
unenforceable. Mortensen v. Bresnan Commc'ns LLC, 722 F.3d 1151, 1157 (9th
Cir. 2013). A court must find that a contract is both procedurally and substantively
unconscionable before it can exercise its discretion to refuse to enforce a
contract. Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 114
(2000); Kiefer v. Simonton Bldg. Prod, LLC, No. CV 16-3540 (RHK/SER), 2017
WL 1380497, at *3 (D. Minn. Apr. 17, 2017) (citing Williams v. Walker-Thomas
Furniture Co., 350 F.2d 445, 449 (D.C. Cir. 1965)) (“The unconscionability
doctrine has procedural and substantive aspects, and the party invoking the doctrine
must demonstrate both to avoid the terms of a contract.”). Procedural
unconscionability “focus[es] on ‘oppression or surprise’ due to unequal bargaining
power” while the substantive element “focus[es] on ‘overly harsh’ or ‘one-sided
results.’” Armendariz, 24 Cal. 4th at 114 (citation omitted).
Adibzadeh, 2021 WL 4440313, at *7.
Plaintiff has raised no arguments that the Arbitration Agreement is unconscionable.
However, even if Plaintiff had raised such arguments, the Court does not find that the Arbitration
Agreement is unconscionable. While Plaintiff arguably did not have the same bargaining power
as Defendant when he entered into the Agreement, he has not provided any basis for the Court to
find that the bargaining power was so unequal as to be unconscionable. Additionally, while
Plaintiff was required to click on a “submit” box, accepting the terms of the Agreement, in order
to use Defendant’s services, numerous courts have held that a “clickwrap” agreement is not
unconscionable. See Adibzadeh, 2021 WL 4440313, at *7; In re Holl, 925 F.3d 1076, 1080, 108384(9th Cir. 2019); Mohamed v. Uber Techs, Inc., 848 F.3d 1201, 1211 (9th Cir. 2016); Houtchens
v. Google, LLC, 649 F. Supp. 3d 933 (N.D. Ca. 2023).
Therefore, the Court finds that a valid arbitration agreement exists and is enforceable. The
Court notes, however, that Plaintiff has raised numerous arguments challenging the enforceability
of the Agreement, in general. However, at this stage of the proceedings, when presented with a
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motion to compel arbitration, it is only proper for the Court to determine whether there is a valid
arbitration agreement. The Court may not determine the merits of Plaintiff’s claims because those
claims are left for disposition to the arbitrator. See Gay, 511 F.3d at 386. Therefore, the Court
will not analyze Plaintiff’s arguments about his underlying claims.
ii.

Whether the Dispute Falls Within the Scope of the Arbitration Agreement

Having determined that the parties agreed to arbitration and that the agreement was not
unconscionable, the Court must now determine whether the dispute falls within the Arbitration
Agreement. Here, the Arbitration Agreement clearly states that it applies to “any dispute.”
Agreement, Ex. 3, ¶ 18.

Therefore, Plaintiff’s claims fall squarely within the Arbitration

Agreement.
B. Plaintiff’s Motions
As stated above, the following Motions filed by Plaintiff are also before the Court: Motion
for Breach of Contract (ECF No. 14), Amended Motion for Breach of Contract (ECF No. 16),
Motions to Strike (ECF Nos. 19, 27), Motion for Public Disclosure (ECF No. 28), Motion for Oral
Argument (ECF No. 31), Motion to Compel and for Sanctions (ECF No. 32), Motion to Alter or
Amend Judgment (ECF No. 33), Motion to Expedite Ruling (ECF No. 34); Motion for
Reconsideration (ECF No. 36) and Motion to Expedite the Motion for Reconsideration (ECF No.
37).
Plaintiff’s Motion to Alter or Amend Judgment (ECF No. 33) and Motion for
Reconsideration (ECF No. 36) are denied for the reasons set forth by the Court in its June 3, 2024
Order (ECF No. 30). Additionally, Plaintiff’s Motions to Strike the Motion to Compel (ECF Nos.
19, 27) are denied. Plaintiff’s Motion to Expedite Ruling (ECF No. 34) and Motion to Expedite

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the Motion for Reconsideration (ECF No. 37) are denied as Moot. Finally, Plaintiff’s Motion for
Oral Argument (ECF No. 31) is denied.
The remainder of Plaintiff’s Motions are stayed pending the outcome of arbitration.
IV.

Conclusion
For the reasons discussed above, the Court will GRANT Defendant’s Motion to Compel

Arbitration. This case is STAYED pending the outcome of arbitration. 3
Plaintiff’s Motions to Strike the Motion to Compel (ECF Nos. 19, 27), Motion to Alter or
Amend Judgment (ECF No. 33), Motion for Reconsideration (ECF No. 36), and Motion for Oral
Argument (ECF No. 31) are DENIED. Additionally, Plaintiff’s Motion to Expedite Ruling (ECF
No. 34) and Motion to Expedite the Motion for Reconsideration (ECF No. 37) are DENIED AS
MOOT. The remainder of Plaintiff’s Motions are STAYED pending the outcome of arbitration.
BY THE COURT:
/s/Robert J. Colville
Robert J. Colville
United States District Judge
DATED: September 24, 2024

cc:

All counsel of record
Ja’Quan Parker
705 Baldwin Rd.
Pittsburgh, PA 15207
Ja’Quan Parker
1239 Church Ave.
McKees Rocks, PA 15136

The Arbitration Agreement provides that arbitration will occur in the county of Plaintiff’s domicile or in San
Francisco, California. Plaintiff has not indicated where he would prefer arbitration to occur, but given his pro se
status, the Court finds that arbitration shall occur in the county of Plaintiff’s residence, if Plaintiff so requests.

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