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NGUYEN v. BARNES & NOBLE, INC.
KEVIN KHOA NGUYEN, individually and on behalf of all others similarly situated, Plaintiff,
v.
BARNES & NOBLE, INC., and DOES 10, inclusive, Defendants.
Case No. 8:12-cv-0812-JST (RNBx).
United States District Court, C.D. California.
August 28, 2012.
ORDER DENYING DEFENDANT'S MOTION TO COMPEL ARBITRATION, DENYING MOTION TO STAY AS MOOT, AND VACATING HEARING DATEJOSEPHINE STATON TUCKER, District Judge. Before the Court is a Motion to Compel Arbitration ("Motion"), as well as a Motion to Stay Proceedings pending Final Resolution of that Motion, filed by Defendant Barnes & Noble, Inc. ("Barnes & Noble" or "Defendant"). (Doc. 10; Doc. 21.) Plaintiff filed an opposition (Doc. 11), and Defendant has replied (Doc. 14). Having read and considered the parties' papers and heard oral argument on July 20, 2012, the Court DENIES Defendant's Motion. Accordingly, the Court DENIES AS MOOT Defendant's Motion to Stay and the Court VACATES the hearing on Defendant's Motion to Stay set for August 31, 2012. I. BACKGROUND On April 17, 2012, Plaintiff filed his Complaint alleging violations of: (1) the New York Unfair Competition Law § 349; (2) the New York False Advertising Law § 350; (3) Breach of Contract under New York's UCC; (4) California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.; (5) the California False Advertising Law, Cal. Bus. & Prof. Code §§ 17500, et seq.; and (6) California's Consumers Legal Remedies Act, Civil Code §§ 1750, et seq. (Compl., Exh. A, Doc. 1.) Defendant removed Plaintiff Kevin Khoa Nguyen's ("Plaintiff's" or "Nguyen's") Complaint to federal court on May 18, 2012. (Doc. 1.) Plaintiff alleges that "[o]n or about August 21, 2011, Mr. Nguyen was on the Internet and saw an advertisement for 16 GB HP TouchPad Tablets being sold on Defendant's website, barnesandnoble.com, for a price of $101.95." (Compl. ¶ 9.) Plaintiff alleges that he purchased two of these HP TouchPad Tablets and "submitted his credit card information, as well as his email address and shipping address to Defendant" and shortly thereafter "received a confirmation email from Barnes & Noble stating that his order had been placed and further promoting barnesandnoble.com." (Id.) Plaintiff states that he received a Confirmation Number and an Order Confirmation stating that "[y]our credit card will be charged when your order ships." (Id.) Plaintiff states that the next day he received an email from Barnes & Noble "informing him that it was cancelling his order, and would not be shipping him the TouchPads for the advertised price." (Id. ¶ 10.) Plaintiff alleges that due to "Barnes & Noble's representations, as well as the delay in informing him it would not honor the sale," Plaintiff was "unable to obtain an HP Tablet during the liquidation period for the discounted price." (Id.) As a result, Plaintiff was "forced to rely on substitute tablet technology, which he subsequently purchased . . . [at] considerable expense." (Id.) On May 25, 2012, Defendant filed this Motion, alleging that by placing an order on Barnes & Noble's website, Plaintiff accepted the website's Terms of Use and therefore agreed to arbitrate claims arising from his use of barnesandnoble.com. (Mot. at 7-8.)
1. The relevant section states:
XVIII. DISPUTE RESOLUTION
Any claim or controversy at law or equity that arises out of the Terms of Use, the Barnes & Noble.com Site or any Barnes & Noble.com Service (each a "Claim"), shall be resolved through binding arbitration conducted by telephone, online or based solely upon written submissions where no in-person appearance is required. In such cases, the arbitration shall be administered by the American Arbitration Association under its Commercial Arbitration Rules (including without limitation the Supplementary Procedures for Consumer-Related Disputes, if applicable), and judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.
. . . .
Any Claim shall be arbitrated or litigated, as the case may be, on an individual basis and shall not be consolidated with any other party whether through class action proceedings, class arbitration proceedings or otherwise.
. . . .
Each of the parties hereby knowingly, voluntarily and intentionally waives any right it may have to a trial by jury in respect of any litigation (including but not limited to any claims, counterclaims, cross-claims, or third party claims) arising out of, under or in connection with these Terms of Use. Further, each party hereto certifies that no representative or agent of either party has represented, expressly or otherwise, that such a party would not in the event of such litigation, seek to enforce this waiver of a right to jury trial provision. Each of the parties acknowledges that this section is a material inducement for the other party entering into these Terms of Use.
(Rowland Decl., Exh. 1, at p. 8.)
2. Indeed, Defendant uses as a "binding judicial admission" Plaintiff's allegation in the Complaint that his breach of contract claim is governed by New York's UCC. (Reply at 8 (citing Compl. at ¶ 34).) Specifically, Defendant states that because Plaintiff seeks to benefit from the Terms of Use "by asserting the choice of law provision contained therein" (Reply at 11), he should be required to arbitrate his claims under the doctrine of equitable estoppel. (Reply at 10-11.) Defendant cites Washington Mut. Fin. Group, LLC v. Bailey, 364 F.3d 260, 268 (5th Cir. 2004) for the proposition that a plaintiff cannot claim the benefit of an agreement and simultaneously avoid its burdens. (Mot. at 9; Reply at 11). Washington and the instant case are inapposite, however, because Washington involved a third party, namely the wife of one of the defendants, claiming the benefits of an agreement without the requisite obligation. Further, there was no dispute that an agreement had been made between the primary parties, but involved the issue of whether that agreement would apply to the third party. The Court therefore declines to extend the holding of Washington to the facts of this case and finds that Plaintiff is not equitably estopped from arguing that he is not bound by the arbitration agreement at issue.
3. "Federal courts sitting in diversity look to the law of the forum state when making choice of law determinations." Hoffman v. Citibank (S.D.), N.A., 546 F.3d 1078, 1082 (9th Cir. 2008) (per curiam). "When an agreement contains a choice of law provision, California courts apply the parties' choice of law unless the analytical approach articulated in § 187(2) of the Restatement (Second) of Conflict of Laws . . . dictates a different result." Id. Using the Restatement approach, the Court concludes that there is no fundamental conflict between California and New York law. Compare Nayal v. HIP Network Services IPA, Inc., 620 F.Supp.2d 566, 569 (S.D.N.Y. 2009) with Larian v. Larian, 123 Cal.App.4th 751, 759-60.
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