Margulis v. HomeAdvisor, Inc.

MARILYN MARGULIS and MAX MARGULIS,individually and on behalf of all others similarly situated, Plaintiff(s), v. HOMEADVISOR, INC., and JOHN DOES 1-10, Defendant(s).

Case No. 4:19-cv-00226-SRC

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MISSOURI EASTERN DIVISION

August 12, 2020

MEMORANDUM AND ORDER

The Margulis family business is filing TCPA lawsuits, which is all fine so long as the positions they take in those cases have merit. Here, attorney Max Margulis argues that he shouldn't have to arbitrate his hoped-for class action with HomeAdvisor based on what boils down to some misquoted dicta from a case in another circuit, and the tenuous contention that this Court should first disregard the choice-of-law provision of a contract he entered into, and then disregard an on-point decision from the jurisdiction whose law he claims controls. On the basis of attorney Margulis's affidavit that he "[did] not recall" establishing an online account with HomeAdvisor, the Court ordered discovery on the issue of arbitration; that discovery shows that he unquestionably established an account. The Court now considers, and grants, HomeAdvisor's second Motion to Compel Arbitration [54].

I. FACTS AND BACKGROUND

On behalf of his wife, Marilyn, attorney Margulis submitted a service request on the website of Defendant HomeAdvisor, Inc. In doing so, he gave HomeAdvisor his phone number and agreed to the Terms and Conditions of the website. The Terms and Conditions included an agreement to arbitrate and a class action waiver. Plaintiffs allege they later received unsolicited telemarketing phone calls because they gave HomeAdvisor their phone number, and bring claims under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (TCPA) and Missouri's No-Call Law, Mo. Rev. Stat. § 407.1098.

The following facts are uncontroverted for purposes of HomeAdvisor's Motion:

A. The Parties and the service request

Plaintiff Max Margulis is the spouse of Plaintiff Marilyn Margulis and has represented her as her attorney. Doc. 58 at ¶ 1, 31. The Court takes judicial notice of the fact that Plaintiffs are frequent litigants under the TCPA. See, e.g., Vertex Chemical Corp. v. HMA South County, L.L.C., No. 02CC-002866, 2010 WL 7124926 (Mo. Cir. Nov. 09, 2010) ("Mr. Margulis has testified that for the last seven (7) years his practice has been exclusively handling TCPA actions ... Max Margulis or his wife Marilyn Margulis have been plaintiffs in approximately 208 individual suits filed under the TCPA ... [Between] 1996 through June 29, 2004, Mr. Margulis has filed a total of 1,215 lawsuits under the TCPA").

Sometime in 2017, Plaintiffs began converting their home's screened-in porch into an enclosed sunroom. Id. at ¶ 7. As part of this project, Plaintiffs planned to install baseboards under the sunroom to add extra insulation and improve its appearance. Id. at ¶ 8. At her deposition, Marilyn¹ testified that the sunroom project "wasn't for [Max] because he didn't even want to do it." Id. at ¶ 29. Conversely, Marilyn wanted the sunroom project done and considered the project an improvement to their home. Id. at ¶ 29-30. Marilyn testified that, for home improvement projects, she would not be the one to seek contractor bids because, within their family, "that's Max's job." Id. at ¶ 28.

Defendant HomeAdvisor's business includes providing free referrals through its website by matching customer requests for various types of service work with member service professionals who are part of HomeAdvisor's referral network. Id. at ¶ 10. As part of the sunroom project, in September 2017, Max requested quotes for painting service through HomeAdvisor's website. Id. at ¶ 9. Through HomeAdvisor's online service request process, Max provided HomeAdvisor with his phone number, email address, and a description of the requested service, i.e., painting of the sunroom baseboards. Id. at ¶ 14. In order to complete online submission of a service request through HomeAdvisor's website, Max navigated to the submission webpage and clicked a button labeled "View Matching Pros." Id. at ¶ 15. It is not possible to complete submission of a service request on the HomeAdvisor website without navigating to the submission page and clicking on the "View Matching Pros" button. Id.

At the time Max submitted the service request to HomeAdvisor, the webpage displayed, directly underneath the "View Matching Pros" button, the following text: "By submitting this request, you are agreeing to our Terms & Conditions." Id. at ¶ 16. The phrase "Terms & Conditions" was an active hyperlink, and was set off from the other text in blue font. Id. The "Terms & Conditions" hyperlink was also, separately, present on nearly every page of the HomeAdvisor website. Id. at ¶ 17. Clicking on any of the "Terms & Conditions" hyperlinks would direct the user to a webpage containing HomeAdvisor's complete Terms and Conditions. Id. at ¶ 18.

B. HomeAdvisor's Terms and Conditions

At the time Max submitted the service request, HomeAdvisor's Terms and Conditions included the following arbitration provision:

17. Arbitration and Governing LawThe exclusive means of resolving any dispute between you and HomeAdvisor or any claim made by you or HomeAdvisor arising out of or relating to your use of this Website and/or HomeAdvisor's services (including any alleged breach of these Terms and Conditions) shall be Binding Arbitration administered by the American Arbitration Association. The one exception to the exclusivity of arbitration is that you have the right to bring an individual claim against HomeAdvisor in a small-claims court of competent jurisdiction OR EXCEPT AS EXPRESSLY PROVIDED BY APPLICABLE FEDERAL OR STATE LAW. But whether you choose arbitration or small-claims court, you may not under any circumstances commence or maintain against HomeAdvisor any class action, class arbitration, or other representative action or proceeding.

*NOTICE OF RIGHTS*

a. By using the Website and/or HomeAdvisor's Services in any manner, you agree to the above arbitration agreement. In doing so, YOU GIVE UP YOUR RIGHT TO GO TO COURT to assert or defend any claims between you and HomeAdvisor (except for matters that may be taken to small-claims court). YOU ALSO GIVE UP YOUR RIGHT TO PARTICIPATE IN A CLASS ACTION OR OTHER CLASS PROCEEDING. Your rights will be determined by a NEUTRAL ARBITRATOR, NOT A JUDGE OR JURY. You are entitled to a fair hearing before the arbitrator. The arbitrator can grant any relief that a court can, but you should note that arbitration proceedings are usually simpler and more streamlined than trials and other judicial proceedings. Decisions by the arbitrator are enforceable in court and may be overturned by a court only for limited reasons. For details on the arbitration process, see our Arbitration Procedures.

Id.

The phrase "Arbitration Procedures" in the above paragraph was an active hyperlink, and appeared on the webpage in blue font. Id. at ¶ 19. When clicked, the "Arbitration Procedures" hyperlink opened a webpage containing the complete Arbitration Procedures. Id. The Arbitration Procedures provide in relevant part:

Applicable Rules. The arbitration will be governed by the AAA's Commercial Arbitration Rules and its Consumer-Related Disputes Supplementary Procedures (together, the "AAA Rules"), as modified by these Arbitration Procedures. If there is any inconsistency between the AAA Rules and these Arbitration Procedures, the Arbitration Procedures will control. However, if the arbitrator determines that a strict application of the Arbitration Procedures would not result in a fundamentally fair arbitration, the arbitrator may make any order necessary to provide a fundamentally fair arbitration that is consistent with the AAA Rules.

Id.

AAA's Commercial Arbitration Rules include the following:

R-7. Jurisdiction

(a) The arbitrator shall have the power to rule on his or her own jurisdiction, including any objections with respect to the existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or counterclaim.

Id. at ¶ 20.

C. Conduct after the service request

In response to Max's service request, HomeAdvisor submitted the referral to three contractors. Plaintiffs then received phone calls from the contractors who informed Plaintiffs that they received the request for a service quote from HomeAdvisor. Plaintiffs chose not to use any of the contractors referred by HomeAdvisor because their service quotes were higher than who Plaintiffs ended up using.

Plaintiffs allege that they began to receive unsolicited telemarketing calls in 2018 because they shared their phone number with HomeAdvisor. See Doc. 3. Accordingly, Plaintiffs initiated the present lawsuit against HomeAdvisor, asserting violations of the TCPA and Missouri's No-Call Law. Id. HomeAdvisor filed its first Motion to Compel Arbitration before the Parties conducted any discovery. Doc. 30. The Court denied that Motion because Max's affidavit stating that he "[did] not recall" setting up an account with HomeAdvisor precluded a conclusive showing that the service request submitted in Max's name was actually submitted by him. Doc. 52. The Court then permitted a period of discovery pertaining solely to the issues of contract formation and whether the Parties agreed to arbitration. Id.

That discovery conclusively shows that Max set up a HomeAdvisor account. During Max's deposition, HomeAdvisor's counsel played clips of a phone call between Max andHomeAdvisor. Doc. 58-2 at pgs. 28-29. Counsel then asked if the phone call refreshed Max's recollection about making a service request on the HomeAdvisor website. Max replied:

Yeah, I didn't need my recollection refreshed. I remember making a specific - well, the background is that I - we were looking for a quote for some painting in 2017. I went on the internet and typed - in Google and typed in painting quote St. Louis. And I guess I ended up on ... the HomeAdvisor website.

Id. at 30:2-8. Having...