Engen v. Grocery Delivery E-Services U.S. Inc.

453 F.Supp.3d 1231

Amanda ENGEN, on behalf of herself and others similarly situated, Plaintiff,

v.GROCERY DELIVERY E-SERVICES USA INC. doing business as Hello Fresh, Defendant.

Case No. 19-cv-2433 (ECT/TNL)

United States District Court, D. Minnesota.

Signed April 10, 2020

Michael D. Reif and Brenda L. Joly, Robins Kaplan LLP, Minneapolis, MN; Samuel J. Strauss, Turke & Strauss LLP, Madison, WI; and Anthony I. Paronich, Paronich Law, P.C., Hingham, MA, for Plaintiff Amanda Engen and proposed class.

Robert J. Gilbertson and Caitlinrose H. Fisher, Greene Espel PLLP, Minneapolis, MN; and Shannon Z. Petersen and Lisa S. Yun, Sheppard Mullin Richter & Hampton LLP, San Diego, CA, for Defendant Grocery Delivery E-Services USA Inc. d/b/a Hello Fresh.

OPINION AND ORDER

Eric C. Tostrud, United States District Judge Plaintiff Amanda Engen alleges that telephone calls she received from Defendant Grocery Delivery E-Services USA Inc. ("HelloFresh") in early 2019 violated the Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227 ("TCPA"). In this case, she seeks injunctive relief and damages on her own behalf and, if certified, on behalf of two nationwide classes of persons who received telephone calls from HelloFresh under like circumstances. HelloFresh has moved to compel individual arbitration of Engen's TCPA claim. HelloFresh says that Engen agreed to the individual arbitration of her claim by creating a HelloFresh account in January 2017 and then, after receiving notice that HelloFresh had revised its Terms and Conditions of use to include arbitration provisions, returning to HelloFresh's website to use her account once more in January 2019. HelloFresh's motion will be denied because as a matter of law Engen and HelloFresh did not agree to arbitrate disputes.

I

Engen's contractual relationship with HelloFresh began January 21, 2017. Meininghaus Decl. ¶ 4 [ECF No. 31]. That day, Engen "visited HelloFresh's website, created an account, signed up to receive meal-kit delivery service, and placed her first meal-kit delivery order." Id. Engen went through several steps to create her HelloFresh account. Zak Decl. ¶¶ 4–5 [ECF No. 32]. She entered her name, address, telephone number, billing address, and delivery instructions. Id. ¶ 4. After entering this information, Engen was directed to a "Payment Information" page where she chose her payment method and provided information to enable payment for any charges she incurred. Id. Before leaving this page and entering her first order, Engen was required to click a box next to the phrase "I accept the terms and conditions and I have read the privacy policy." Id. ¶¶ 4, 5. The words "terms and conditions" were hyperlinked to document entitled "Terms and Conditions of Grocery Delivery E-Services USA INC.," "which were the Terms and Conditions in effect on [that date,] January 21, 2017." Id. ¶ 5, Ex. B. Engen then placed a meal kit delivery order. Id. ¶ 5; Meininghaus Decl. ¶ 4. This would be the first of only two orders Engen ever placed with HelloFresh and the only one resulting in delivery of a meal kit. See Meininghaus Decl. ¶¶ 4–6; Engen Decl. ¶¶ 2–4, 6–8 [ECF No. 39]. After receiving the meal kit, Engen says she " ‘deactivated’ " her subscription. Engen Decl. ¶ 4.

The Terms and Conditions in effect on January 21, 2017, were first effective July 7, 2016, Zak Decl. ¶ 5, and they contained no arbitration provision, see generally id. , Ex. B. (The Parties refer to these as the "2016 Terms and Conditions," and this Opinion will follow that usage.) Relevant here, the 2016 Terms and Conditions contained the following two terms in a section entitled "21. OUR RIGHT TO VARY THESE TERMS AND CONDITIONS ":

21.1

We have the right to revise and amend these terms and conditions from time to time to reflect changes in market conditions affecting our business, changes in technology, changes in payment methods, changes in relevant laws and regulatory requirements and changes in our system's capabilities.

21.2 You will be subject to the policies and terms and conditions in force at the time that you order Products from us, unless any change to those policies or these terms and conditions is required to be made by law or governmental authority (in which case it will apply to orders previously placed by you), or if we notify you of the change to those policies or these terms and conditions before we send you the Confirmation (in which case we have the right to assume that you have accepted the change to the terms and conditions, unless you notify us to the contrary within seven working days of receipt by you of the Products).

Id. § 21.

HelloFresh first added arbitration provisions to its Terms and Conditions effective February 21, 2017. Id. ¶ 6, Ex. C § 23. HelloFresh revised or amended the arbitration terms effective June 6, 2018, and this version of the arbitration provisions is at issue here. Meininghaus Decl. ¶ 5, Ex. B § 24. It reads, in relevant part:

24.1

Arbitration is Binding. YOU AND HELLOFRESH ARE AGREEING TO GIVE UP ANY RIGHTS TO LITIGATE CLAIMS IN A COURT OR BEFORE A JURY. OTHER RIGHTS THAT YOU WOULD HAVE IF YOU WENT TO COURT MAY ALSO BE UNAVAILABLE OR MAY BE LIMITED IN ARBITRATION.

ANY CLAIM, DISPUTE, OR CONTROVERSY (WHETHER IN CONTRACT, TORT, OR OTHERWISE, WHETHER PRE-EXISTING, PRESENT, OR FUTURE, AND INCLUDING STATUTORY, CONSUMER PROTECTION, COMMON LAW, INTENTIONAL TORT, INJUNCTIVE, AND EQUITABLE CLAIMS) BETWEEN YOU AND HELLOFRESH ARISING FROM OR RELATING IN ANY WAY TO YOUR PURCHASE OR USE OF PRODUCTS OR OFFERINGS THROUGH THE SITE AND/OR APP, WILL BE RESOLVED EXCLUSIVELY AND FINALLY BY BINDING ARBITRATION.

Id. , Ex. B § 24.1. The arbitration provisions that took effect June 6, 2018 also included a class action waiver that reads, in part:

24.3

Waiver of Class Actions & Class Arbitrations. To the fullest extent permitted by law, you agree to arbitration on an individual basis, and to give up any rights to bring, join, or participate in any class action or representative action with respect to any claim, dispute or controversy that you may have against HelloFresh.

Id. § 24.3. (Following the Parties convention, the agreement in which these arbitration provisions appear will be referred to as the "2018 Terms and Conditions.")

Engen did not return to the HelloFresh website until January 6, 2019. Meininghaus Decl. ¶ 6. That day, Engen "logged into her account, reactivated her subscription, changed her meal subscription plan, and placed one meal-kit delivery order." Id. ; see also Mem. in Opp'n at 5 [ECF No. 38] (accepting the truth of this assertion). However, Engen canceled this order later that same day. Engen Decl. ¶ 6. Engen's "credit card never made payment on a 2019 HelloFresh order." Id. ¶ 7. Engen and HelloFresh have different accounts of what happened next. Engen says that for "months" she "received repeated calls from HelloFresh" asking her to re-subscribe and purchase meal kits and that she "asked HelloFresh on numerous occasions to stop calling [her]." Id. ¶¶ 9–11; see also Compl. ¶ 36 ("On two or three occasions, Ms. Engen asked the callers from Hello Fresh [sic] to stop calling her.") These calls are the basis for her TCPA claims in this case. Compl. ¶¶ 33–55. HelloFresh says its "vendors made a total of three calls" to Engen, two in January 2019 and one in March 2019. Fiaschi Decl. ¶¶ 4–5 [ECF No. 29]. According to HelloFresh, Engen did not answer the first call, answered the second but "did not tell HelloFresh to stop calling during [that] call," and answered the third call and "asked HelloFresh to stop calling her." Id. ¶ 5. HelloFresh says that in response to this request it "immediately placed [Engen's] phone number on its internal Do-Not-Call (‘DNC’) list and, based on its records, never called [Engen] again." Id.

II

A

A motion to compel arbitration is analyzed either as a motion to dismiss under Federal Rule of Civil Procedure Rule 12(b)(6) or as a motion for summary judgment under Rule 56, depending on how the motion is presented. Seldin v. Seldin , 879 F.3d 269, 272 (8th Cir. 2018) ; City of Benkelman v. Baseline Eng'g Corp. , 867 F.3d 875, 881 (8th Cir. 2017). Here, because "matters outside the pleadings" have been presented and considered, the motion "must be treated as one for summary judgment under Rule 56." Fed. R. Civ. P. 12(d) ; see also City of Benkelman , 867 F.3d at 882.

The Federal Arbitration Act ("FAA") provides that "[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." 9 U.S.C. § 2. The Supreme Court's "cases place it beyond dispute that the FAA was designed to promote arbitration. They have repeatedly described the [FAA] as ‘embod[ying] [a] national policy favoring arbitration[.]’ " AT&T Mobility LLC v. Concepcion , 563 U.S. 333, 346, 131 S.Ct. 1740, 179 L.Ed.2d 742 (2011) (quoting Buckeye Check Cashing, Inc. v. Cardegna , 546 U.S. 440, 443, 126 S.Ct. 1204, 163 L.Ed.2d 1038 (2006) ). Of course, "a party cannot be required to submit to arbitration any dispute which [s]he has not agreed ... to submit." United Steelworkers of Am. v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 4 L.Ed.2d 1409 (1960). "The question whether the parties have submitted a particular dispute to arbitration, i.e. , the ‘question of arbitrability ,’ is ‘an issue for judicial determination [u]nless the parties clearly and unmistakably provide otherwise.’ " Howsam v. Dean Witter Reynolds, Inc. , 537 U.S. 79, 83, 123 S.Ct. 588, 154 L.Ed.2d 491 (2002) (quoting AT&T Techs., Inc. v. Commc'n Workers, 475 U.S. 643, 649, 106 S.Ct. 1415, 89 L.Ed.2d 648 (1986) ) (emphasis in original). "[A] matter should not be sent to arbitration unless [1] there is a valid agreement to arbitrate and [2] the underlying dispute falls within the scope of that agreement." Northport Health Servs. of Ark., LLC v. Posey , 930 F.3d 1027,...