Graham v. Bloomberg L.P.

1

JUSTIN GRAHAM, on behalf of himself and all others similarly situated, Plaintiff, v. BLOOMBERG L.P., Defendant.

No. 22-CV-7015 (VSB)

United States District Court, S.D. New York

September 15, 2023

Victoria Jennings Maniatis, Milberg Coleman Bryson Phillips Grossman PLLC, Joshua David Arisohn Bursor & Fisher, P.A. Counsel for Plaintiff

Adya Baker Jeffrey Landis ZwillGen PLLC Washington, DC Counsel for Defendant.

OPINION & ORDER

VERNON S. BRODERICK, United States District Judge

Defendant Bloomberg L.P. (“Bloomberg”) moves to dismiss the complaint in this action and compel Plaintiff Justin Graham (“Graham”) to participate in arbitration. (Doc 8.) Because I find the arbitration agreement between Bloomberg and Graham to be valid and that the better practice is to stay this proceeding rather than dismiss it Bloomberg's motion is GRANTED IN PART and DENIED IN PART. The case is STAYED pending the outcome of arbitration.

I. Factual Background^[1]

On February 16, 2021, Graham purchased a subscription to Bloomberg's news service. (Doc. 10 ¶¶ 2, 5.) To do so, Graham navigated to Bloomberg's online subscription page. (Id. ¶ 7.) The page, as it existed on the day Graham visited it, is reproduced below.

(Image Omitted)

(Doc. 22 ¶ 8; Doc. 22-1 at 2.) On this screen was a line stating “By submitting my information, I agree to the Privacy Policy and Terms of Service and to receive offers and promotions from Bloomberg.” (Doc. 22-1 at 2.) Each of the underlined terms, when clicked on, linked to different webpages-the “Terms of Service” text linked to a page containing Bloomberg's terms of service. (Doc. 10 ¶¶ 8, 11.)

The “Terms of Service” webpage (the “Terms of Service Page”) includes the following text in the first paragraph:

PLEASE READ ALL OF THE FOLLOWING TERMS AND CONDITIONS OF SERVICE FOR THIS WEB SITE (“TOS”) BEFORE USING THIS SITE. By continuing to access, link to, or use this site, or any service on this site, you signify YOUR ACCEPTANCE OF THE TOS, INCLUDING WITHOUT LIMITATION, THE ARBITRATION AGREEMENT AND CLASS ACTION WAIVER DESCRIBED IN PARAGRAPH 14 BELOW.

(Doc. 10 ¶ 12; Doc. 10-2 at 1.) Paragraph 14 of the Terms of Service Page sets out the agreement to arbitrate (the “Arbitration Agreement”) which provides, in relevant part, that:

By using this site in any way, you unconditionally consent and agree that: (1) any claim, dispute, or controversy (whether in contract, tort, or otherwise) you may have against Bloomberg and/or its parent, subsidiaries, affiliates and each of their respective current or former members, officers, directors and employees (all such individuals and entities collectively referred to herein as the “Bloomberg Entities”) arising out of, relating to, or connected in any way with the website or the determination of the scope or applicability of this agreement to arbitrate, will be resolved exclusively by final and binding arbitration administered by JAMS and conducted before a sole arbitrator in accordance with the rules of JAMS; (2) this arbitration agreement is made pursuant to a transaction involving interstate commerce, and shall be governed by the Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16; . . .

(Doc. 10-2 at ¶ 14.) The same section further provides that “there shall be no authority for any claims to be arbitrated on a class or representative basis.” (Id.) Graham did not know about the Arbitration Agreement when he signed up for Bloomberg's services. (Doc. 17 ¶ 3.)

II. Procedural History

Graham filed a class action complaint on August 17, 2022, alleging violations of the federal Video Privacy Protection Act, 18 U.S.C. § 2710. (Doc. 1.) Bloomberg promptly waived service. (Doc. 8.) On October 18, 2022, Bloomberg moved to compel Graham to arbitrate his claims on an individual basis and dismiss the complaint. (Doc. 8.) In support, it submitted a memorandum of law, (Doc. 9), and the declaration of Marissa Zanetti-Crume (“Zanetti-Crume”) with supporting exhibits, (Doc. 10). Graham opposed the motion on November 22, 2022, (Doc. 15), and submitted the declarations from Philip L. Fraietta, (Doc. 16), and Graham, (Doc. 17), in support. The motion was fully briefed on December 13, 2022, when Bloomberg filed its reply, (Doc. 21), and a further declaration from Zanetti-Crume with supporting exhibits, (Doc. 22).

III. Legal Standard

Under the FAA, “[a] written provision in . . . a contract . . . 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. Where a party moves to compel arbitration pursuant to such an agreement, “the court shall hear the parties, and upon being satisfied that the making of the agreement for arbitration or the failure to comply therewith is not in issue, the court shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement.” 9 U.S.C. § 4. Thus, when a court is requested to enforce an agreement to arbitrate, “the district court must first determine whether such agreement exists between the parties.” Meyer v. Uber Techs., Inc., 868 F.3d 66, 73 (2d Cir. 2017). “This question is determined by state contract law.” Id. at 73-74. “If the district court concludes that an agreement to arbitrate exists, it should then consider whether the dispute falls within the scope of the arbitration agreement.” Id. at 74 (internal quotation marks omitted). “Where parties are bound to an arbitration agreement, courts are instructed to favor arbitration as a form of dispute resolution.” Barrows, 36 F.4th at 50. “But on the antecedent question of whether the parties actually agreed to arbitration (that is, whether an arbitration agreement between them exists at all), [a court] show[s] no such special solicitude.” Id.

“Motions to compel arbitration are governed by a standard similar to that applicable for a motion for summary judgment.” Id. at 49 (cleaned up). In considering such a motion, a “court considers all relevant, admissible evidence submitted by the parties and contained in pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, and draws all reasonable inferences in favor of the non-moving party.” Meyer, 868 F.3d at 74 (cleaned up). In the context of a motion to compel arbitration, new evidence may be submitted and considered in the reply if that evidence is submitted in response to new material issues raised in opposition papers. See Yorke v. TSE Grp. LLC, No. 18-CV-5268 (JMF), 2019 WL 3219384, at *2 (S.D.N.Y. July 17, 2019) (collecting cases).

“When a district court grants an application to enforce an arbitration clause, there is a question as to whether Section 3 of the FAA requires that a stay be entered.” Bissonnette v. LePage Bakeries Park St., LLC, 49 F.4th 655, 663-64 (2d Cir. 2022) (Jacobs, J., concurring). “Courts across the Circuits are divided on this question; some hold that a stay is mandatory, and others hold that a district court may dismiss the case.” Id. Although the “structure, and underlying policy of the FAA mandate a stay of proceedings when all of the claims in an action have been referred to arbitration and a stay requested,” Katz v. Cellco P 'ship, 794 F.3d 341, 347 (2d Cir. 2015), “courts in this Circuit are split on whether a stay is required even if no party requests one.” Bissonnette, 49 F.4th at 664 (Jacobs, J., concurring). “There is no question, however, that the Court has discretion to impose a stay pursuant to its ‘inherent authority to manage [its] docket[ ].'” Monk v. Goldman Sachs & Co. LLC, No. 22-CV-6056 (JMF), 2023 WL 22618, at *7 (S.D.N.Y.Jan. 3, 2023) (quoting Katz, 794 F.3d at 346) (alterations in original).

IV. Discussion

A. Arbitrability of the Dispute

Graham does not contest that the present dispute falls within the scope of the Arbitration Agreement. (See generally Doc. 15.) Additionally, neither party disputes that New York law governs the interpretation of whether a valid arbitration agreement exists between parties. (See Doc. 9 at 6 n.2; Doc. 15 at 4.) Therefore, the only question before me is whether the Arbitration Agreement between Graham and Bloomberg is valid. Both parties agree that this question turns on whether Graham agreed to the Arbitration Agreement, (compare Doc. 9 at 7 with Doc. 15 at 3), given that “[i]t is a basic tenet of [New York] contract law that, in order to be binding, a contract requires a ‘meeting of the minds' and ‘a manifestation of mutual assent.'” Starke v. SquareTrade, Inc., 913 F.3d 279, 288 (2d Cir. 2019) (citing Express Indus. & Terminal Corp. v. N.Y. Dep't of Transp, 715 N.E.2d 1050 (NY. 1999)). In making this determination, I consider the parties' moving papers, (Docs. 9, 15, 21), and the declarations they submitted in support of those papers. (Docs. 10, 16, 17, 22.)^[2]

The parties do not contest that Graham lacked actual knowledge of the Arbitration Agreement. (Doc. 17 ¶ 3.) Thus “in cases such as this, where the purported assent is largely passive, the contract-formation question will often turn on whether a reasonably prudent offeree would be on notice of the term at issue.” Schnabel v. Trilegiant Corp., 697 F.3d 110, 120 (2d Cir. 2012). “In other words, where there is no actual notice of the term, an offeree is still bound by the provision if he or she is on inquiry notice of the term and assents to it through the conduct that a reasonable person would understand to constitute assent.” Id.^[3] Graham does not suggest that if he was on inquiry notice of the Arbitration Agreement, his conduct would not constitute assent. (See Doc. 15 at 6-10.) Moreover, this argument would be unavailing. Where a party is on inquiry notice that clicking a button in a website's interface binds them...