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Chen v. Sierra Trading Post, Inc.

United States District Court, W.D. Washington, Seattle

August 6, 2019

WEIMIN CHEN, on behalf of himself and all others similarly situated, Plaintiff,
SIERRA TRADING POST, INC., and DOES 1-20 inclusive, Defendants.


          Honorable Richard A. Jones United States District Judge.


         This matter is before the Court on Defendant Sierra Trading Post Inc.'s motion to compel arbitration (“Motion”). Dkt. # 17. For the reasons below, the Court GRANTS the Motion.


         Defendant Sierra Trading Post, Inc. (“STP”) is an off-price Internet retailer of brand-name outdoor gear, family apparel, footwear, sporting goods, and home fashions. Dkt. # 1-1, ¶ 2. On its website, STP lists comparison prices from other online or brick-and-mortar retailers for the same items it offers for sale. Id., ¶¶ 3, 4. Plaintiff alleges that most of the comparison prices are false, deceptive, or misleading and brings claims related to items he purchased on STP's website between December 2010 and January 2018. Id., ¶¶ 4, 5. He purports to act on behalf of a putative class of purchasers in Washington. Id., ¶ 94.

         STP contends that Chen's use of its website, including any purchases, are governed by STP's Terms of Use (“TOU”). Dkt. # 17. The TOU contains an arbitration agreement which states, in relevant part:

You and we agree that we will resolve any disputes between us through binding and final arbitration instead of through court proceedings. You and we hereby waive any right to a jury trial of any Claim. All controversies, claims, counterclaims, or other disputes arising between you and us relating to these Terms of Use or the Site (each a “Claim”) shall be submitted for binding arbitration in accordance with the Rules of the American Arbitration Association (“AAA Rules”). The arbitration will be heard and determined by a single arbitrator. The arbitrator's decision in any such arbitration will be final and binding upon the parties and may be enforced in any court of competent jurisdiction. The parties agree that the arbitration will be kept confidential and that the existence of the proceeding and any element of it (including, without limitation, any pleadings, briefs or other documents submitted or exchanged and any testimony or other oral submissions and awards) will not be disclosed beyond the arbitration proceedings, except as may lawfully be required in judicial proceedings relating to the arbitration or by applicable disclosure rules and regulations of securities regulatory authorities or other governmental agencies.

Dkt. # 19-1.

         Chen states that he never agreed to be bound by the TOU and never saw it before making any purchases. Dkt. # 23, ¶¶ 4-5. STP nonetheless claims that Chen would have had notice of the TOU via the website's “Checkout” page for purchases he made in October 2017 and January 2018.[1] Dkt. # 19, ¶ 3. Specifically, a few lines below the “Place my order” button, reads, “By placing your order you agree to our Terms & Privacy Policy” (hereinafter, the “Consent line”).[2] Dkt. # 25-1. The Consent line contains hyperlinks to STP's TOU and Privacy Policy. Dkt. # 19, ¶ 3; Dkt. # 25-1. STP now moves to compel arbitration and stay the action based on the TOU's arbitration provision. Dkt. # 17.


         Under the Federal Arbitration Act (“FAA”), a court is limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue. Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008) (internal quotations omitted). The party opposing arbitration bears the burden of showing that the agreement is not enforceable. See Green Tree Fin. Corp. v. Randolph, 531 U.S. 79, 91-92 (2000); Rodriguez de Quijas v. Shearson/American Exp., Inc., 490 U.S. 477, 483 (1989).

         A. Whether a valid agreement to arbitrate exists

         The parties principally dispute whether a valid agreement to arbitrate exists. Courts make this determination by reference to ordinary state law contract principles. See First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).

         Because the parties must manifest their mutual assent to form a valid contract under Washington law, the Court starts its analysis there.[3]See Keystone Land & Dev. Co. v. Xerox Corp., 94 P.3d 945 (Wash. App. 2004); see also Hauenstein v. Softwrap Ltd., No. C07-0572-MJP, 2007 WL 2404624, at *2-3, 6 (W.D. Wash. Aug. 17, 2007) (applying Washington contract law). To determine mutual assent, Washington courts follow the objective manifestation theory of contracts, meaning they look to the reasonable meaning of the contract language instead of the subjective intent of the parties. Hearst Commc'ns, Inc. v. Seattle Times Co., 115 P.3d 262, 267 (Wash. 2005). In the context of an electronic consumer transaction, the occurrence of mutual assent ordinarily turns on whether the consumer had reasonable notice of the merchant's terms of service agreement. See Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1177 (9th Cir. 2014). As indicated above, STP ...

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