Judge: David S. Cunningham, Case: 23STCV30869, Date: 2024-09-17 Tentative Ruling


Case Number: 23STCV30869    Hearing Date: September 17, 2024    Dept: 11

Mora (23STCV30869)

 

Tentative Ruling Re: Motion to Transfer Venue

 

Date:                           9/17/24

Time:                          2:30 pm

Moving Party:           Block, Inc. (“Block”)

Opposing Party:        Gilbert Mora, et al. (collectively “Plaintiffs”)

Department:              11

Judge:                        David S. Cunningham III

________________________________________________________________________

 

TENTATIVE RULING

 

The hearing on Block’s motion to transfer venue is continued.

 

BACKGROUND

 

This is a putative class action regarding Civil Code section 1670.8.[1]  Block operates a mobile application called Cash App.  (See Motion, p. 8.)  Plaintiffs opened Cash App accounts and used Cash App to complete transactions.  (See Complaint, ¶¶ 11-14.)  According to the complaint, the Cash App terms of service violate section 1670.8 because they prohibit customers from making negative comments about Block.  (See id. at ¶¶ 1-8.)

 

Here, Block moves to transfer venue to San Francisco County.[2]

 

DISCUSSION

 

Block

 

Block contends the motion to transfer should be granted because:

 

* Plaintiffs consented to the Cash App terms of service when they opened their accounts (see Motion, pp. 8, 9-15, 21);

 

* the venue provision in the terms of service requires venue in San Francisco County (see id. at pp. 8, 21); and

 

* San Francisco County satisfies Code of Civil Procedure sections 393(a) and 395.5.  (Id. at pp. 21-22.)[3]

 

Plaintiffs

 

Plaintiffs disagree.  They contend the motion should be denied because:

 

* Plaintiffs’ venue choice:

 

– is presumed correct (see Opposition, pp. 8-9);

 

– complies with Code of Civil Procedure section 395(b) (see id. at pp. 8-10); and,

 

– under section 395(c), cannot be waived (see ibid.);[4]

 

* Block fails to overcome the presumption in favor of Plaintiffs’ venue choice (see Opposition, pp. 10-11); and

 

* the terms of service constitute a browsewrap agreement.  (See id. at pp. 11-14.)

 

Reply

 

In reply, Block states:

 

* Plaintiffs admit that they were informed of the terms of service when they opened Cash App accounts (see Reply, pp. 7-8);

 

* the terms of service qualify as a sign-in-wrap agreement (see id. at pp. 8-13);

 

* several courts have found sign-in-wrap agreements enforceable (see ibid.);

 

* Plaintiffs do not dispute that San Francisco County is a statutorily appropriate venue (see id. at pp. 13-14); and

 

* section 395(b) is inapplicable, and section 395(c) does not void the venue provision.  (See id. at pp. 14-15.)

 

Analysis

 

Statute-wise, Los Angeles County and San Francisco County are both acceptable venues.  Los Angeles County is acceptable since Plaintiffs used Cash App in Los Angeles County and resided here when the case commenced.  (See Complaint, ¶¶ 11-14; see also Cal. Code Civ. Proc. § 395, subd. (b).)  San Francisco County is acceptable since Block’s principal place of business was located there during the relevant time period.  (See Opposition, p. 21; see also Cal. Code Civ. Proc. § 395.5.)

 

Also, because San Francisco County is an appropriate forum under section 395.5, section 395(c) does not void section 395.5 or the venue provision.  (See Battaglia Enterprises, Inc. v. Superior Court (2013) 215 Cal.App.4th 309.)  

 

Nevertheless, the Court finds that the hearing should be continued. The ultimate question is whether the venue provision is enforceable against Plaintiffs as a matter of contract.  “Most courts now have identified at least four types of internet contract formation, most easily defined by the way in which the user purportedly gives their assent to be bound by the associated terms: browsewraps, clickwraps, scrollwraps, and sign-in wraps.”  (Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 463.)  “A ‘browsewrap’ agreement is one in which an internet user accepts a website's terms of use merely by browsing the site.”  (Ibid., emphasis in original.)  “A ‘clickwrap’ agreement is one in which an internet user accepts a website’s terms of use by clicking an ‘I agree’ or ‘I accept’ button, with a link to the agreement readily available.”  (Ibid., emphasis in original.)  “A ‘scrollwrap’ agreement is like a ‘clickwrap,’ but the user is presented with the entire agreement and must physically scroll to the bottom of it to find the ‘I agree’ or ‘I accept’ button[.]”  (Id. at 463-464, emphasis in original.)  “‘Sign-in-wrap’ agreements are those in which a user signs up to use an internet product or service, and the sign-up screen states that acceptance of a separate agreement is required before the user can access the service.”  (Id. at 464, emphasis in original.)  “While a link to the separate agreement is provided, users are not required to indicate that they have read the agreement’s terms before signing up.”  (Ibid.)  “Instead, ‘the website is designed so that a user is notified of the existence and applicability of the site’s “terms of use” [usually by a textual notice] when proceeding through the website's sign-in or login process.”  (Ibid.)  California and “federal courts have reached consistent conclusions when evaluating the enforceability of agreements at either end of the spectrum, generally finding scrollwrap and clickwrap agreements to be enforceable and browsewrap agreements to be unenforceable.”  (Id. at 466; see also Weeks v. Interactive Life Forms, LLC (2024) 100 Cal.App.5th 1077 [Second District Court of Appeal analyzing a browsewrap agreement].)  Plaintiffs characterize Block’s terms of service as a browsewrap agreement, yet the characterization is unsupported.  (See Opposition, pp. 12-14.)  The record lacks admissible evidence concerning the steps a customer needs to take to get to the terms-of-service page and whether that page includes an “I agree” or “I accept” button, so the Court intends to order supplemental briefing and/or to hold an evidentiary hearing with live testimony.  A further showing is necessary to determine enforceability.

 

The same is true of Block’s assertion that the terms of service should be deemed a sign-in-wrap agreement.  (See Reply, pp. 8-13.)  Block fails to cite admissible evidence sufficient to make a determination.  A continuation is needed.[5]

 

Plaintiffs’ “proposed contracts” argument does not change the result.  Plaintiffs claim section 1670.8 applies to contracts and proposed contracts.  They suggest that the motion should be denied because the venue provision is not enforceable as to customers who did not enter contracts with Block.  (See Opposition, p. 11.)  The Court disagrees.  For now, the Court is only considering Plaintiffs’ claims (at this point, the putative class is uncertified).  Again, further evidence is needed to assess whether the terms of service can be enforced against Plaintiffs, especially whether the account-opening process utilized browsewrap features.

 


[1] Section 1670.8 provides:

 

(a)(1) A contract or proposed contract for the sale or lease of consumer goods or services may not include a provision waiving the consumer's right to make any statement regarding the seller or lessor or its employees or agents, or concerning the goods or services.

 

(2) It shall be unlawful to threaten or to seek to enforce a provision made unlawful under this section, or to otherwise penalize a consumer for making any statement protected under this section.

 

(b) Any waiver of the provisions of this section is contrary to public policy, and is void and unenforceable.

 

(c) Any person who violates this section shall be subject to a civil penalty not to exceed two thousand five hundred dollars ($2,500) for the first violation, and five thousand dollars ($5,000) for the second and for each subsequent violation, to be assessed and collected in a civil action brought by the consumer, by the Attorney General, or by the district attorney or city attorney of the county or city in which the violation occurred. When collected, the civil penalty shall be payable, as appropriate, to the consumer or to the general fund of whichever governmental entity brought the action to assess the civil penalty.

 

(d) In addition, for a willful, intentional, or reckless violation of this section, a consumer or public prosecutor may recover a civil penalty not to exceed ten thousand dollars ($10,000).

 

(e) The penalty provided by this section is not an exclusive remedy, and does not affect any other relief or remedy provided by law. This section shall not be construed to prohibit or limit a person or business that hosts online consumer reviews or comments from removing a statement that is otherwise lawful to remove.

 

(Cal. Civ. Code § 1670.8.)

 

 

[2] Block has withdrawn its requests to compel arbitration and to strike the class claims.

 

[3] Section 393(a) states:

 

Subject to the power of the court to transfer actions and proceedings as provided in this title, the county in which the cause, or some part of the cause, arose, is the proper county for the trial of the following actions:

(a) For the recovery of a penalty or forfeiture imposed by statute, except, that when it is imposed for an offense committed on a lake, river, or other stream of water, situated in two or more counties, the action may be tried in any county bordering on the lake, river, or stream, and opposite to the place where the offense was committed.

(Cal. Code Civ. Proc. § 393, subd. (a).)

Section 395.5 states:

 

A corporation or association may be sued in the county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated, subject to the power of the court to change the place of trial as in other cases.

 

(Id. at § 395.5.) 

 

[4] Per section 395(b), “in an action arising from an offer or provision of goods” or “services,” the proper venue is “the county where the buyer or lessee in fact signed the contract, where the buyer or lessee resided at the time the contract was entered into, or where the buyer or lessee resides at the commencement of the action[.]”  (Cal. Code Civ. Proc. § 395, subd. (b).)

 

Section 395(c) provides that “[a]ny provision of an obligation described in subdivision (b) waiving that subdivision is void and unenforceable.”  (Id. at § 395, subd. (c); see also Edmon & Karnow, Cal. Practice Guide: Civ. Procedure Before Trial (The Rutter Group June 2024 Update) ¶ 3:452 [instructing that, “[b]ecause the venue statutes declare California public policy with respect to the proper court, agreements fixing venue in some county other than that allowed by statute are unenforceable as contrary to public policy”], emphasis in original.)

 

[5] The Cour notes that, contrary to the federal decisions Block cites, the Sellers court found sign-in-wrap agreements unenforceable.  (See Sellers, supra, 73 Cal.App.5th at 453.)