T. et al v. OpenAI LP et al, 3:23-cv-04557, No. 52 (N.D.Cal. Feb. 8, 2024) (2024)

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`TABLE OF CONTENTS
`
`I.
`
`II.
`
`III.
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`IV.
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`INTRODUCTION ......................................................................................................................... 1
`
`FACTUAL BACKGROUND ........................................................................................................ 2
`
`A.
`
`B.
`
`C.
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`D.
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`E.
`
`F.
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`The Microsoft Services Agreement ................................................................................... 2
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`The MSA’s Arbitration Agreement ................................................................................... 3
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`Microsoft Privacy Statement.............................................................................................. 4
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`MSA Updates ..................................................................................................................... 4
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`Arbitration Plaintiffs Accepted the MSA and Its Arbitration Agreement and Class
`Action Waiver .................................................................................................................... 5
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`The Arbitration Plaintiffs’ Claims ..................................................................................... 7
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`LEGAL STANDARD .................................................................................................................... 7
`
`ARGUMENT ................................................................................................................................. 8
`
`A.
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`Each Arbitration Plaintiff Agreed to Arbitrate Disputes with Microsoft. ......................... 8
`
`1.
`
`2.
`
`The Arbitration Plaintiffs Entered Valid Arbitration Agreements. ....................... 8
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`Each Arbitration Plaintiff Accepted Updated Versions of the MSA. .................. 11
`
`B.
`
`C.
`
`Plaintiffs’ Claims Are Within the Scope of the Arbitration Agreement. ......................... 12
`
`The Court Should Stay the Arbitration Plaintiffs’ Claims Pending Arbitration. ............. 14
`
`V.
`
`CONCLUSION ............................................................................................................................ 14
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`TABLE OF AUTHORITIES
`
`Page(s)
`
`Cases
`
`Am. Exp. Co. v. Italian Colors Rest.,
`570 U.S. 228 (2013) ...................................................................................................................7
`
`Amirhamzeh v. Wells Fargo Bank, N.A.,
`2014 WL 12610227 (N.D. Cal Oct. 31, 2014).........................................................................13
`
`Armendariz v. Found. Health Psychcare Servs., Inc.,
`24 Cal. 4th 83 (2000) ...............................................................................................................14
`
`AT&T Techs., Inc. v. Commc’ns Workers of Am.,
`475 U.S. 643 (1986) .................................................................................................................12
`
`Berman v. Freedom Fin. Network, LLC,
`30 F.4th 849 (9th Cir. 2022) ................................................................................................9, 10
`
`Brennan v. Opus Bank,
`796 F.3d 1125 (9th Cir. 2015) ...................................................................................................7
`
`Day v. Microsoft Corp.,
`2014 WL 243159 (W.D. Wash. Jan 22, 2014) .................................................................2, 8, 10
`
`Diaz v. Intuit, Inc.,
`2017 WL 4355075 (N.D. Cal. Sept. 29, 2017) ........................................................................14
`
`Dohrmann v. Intuit, Inc.,
`823 F. App’x 482 (9th Cir. 2020) ......................................................................................10, 11
`
`Epic Sys. Corp. v. Lewis,
`584 U.S. 497 (2018) ...................................................................................................................8
`
`In re Facebook Biometric Info. Priv. Litig.,
`185 F. Supp. 3d 1155 (N.D. Cal. 2016) ...................................................................................12
`
`Graf v. Match.com, LLC,
`2015 WL 4263957 (C.D. Cal. July 10, 2015) ..........................................................................11
`
`Henry Schein, Inc. v. Archer and White Sales, Inc.,
`139 S. Ct. 524 (2019) .................................................................................................................7
`
`Hovis v. Homeaglow, Inc.,
`2023 WL 5003583 (S.D. Cal. Aug. 4, 2023) ...........................................................................14
`
`J.A. through Allen v. Microsoft Corp.,
`2021 WL 1723454 (W.D. Wash. Apr. 2, 2021) ...............................................................2, 8, 10
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`In re Juul Labs, Inc., Antitrust Litig.,
`555 F. Supp. 3d 932 (N.D. Cal. 2021) .....................................................................................14
`
`Lamps Plus, Inc. v. Varela,
`139 S. Ct. 1407 (2019) .........................................................................................................8, 12
`
`Lee v. Ticketmaster L.L.C.,
`817 F. App’x 393 (9th Cir. 2020) ......................................................................................10, 11
`
`Long v. Provide Com., Inc.,
`245 Cal. App. 4th 855 (2016) ....................................................................................................9
`
`Maher v. Microsoft Corp.,
`2018 WL 1535043 (N.D. Ill. Mar. 29, 2018) ...................................................................2, 8, 10
`
`Mendoza v. Microsoft Inc.,
`2014 WL 4540225 (W.D. Wash. Sept. 11, 2014) ............................................................2, 8, 10
`
`Meyer v. Uber Techs., Inc.,
`868 F.3d 66 (2d Cir. 2017).......................................................................................................11
`
`Nevarez v. Forty Niners Football Co., LLC,
`2017 WL 3492110 (N.D. Cal. Aug. 15, 2017) ........................................................................11
`
`Nguyen v. Barnes & Noble Inc.,
`763 F.3d 1171 (9th Cir. 2014) ...............................................................................................8, 9
`
`Oberstein v. Live Nation Ent., Inc.,
`60 F.4th 505 (9th Cir. 2023) ................................................................................................9, 10
`
`Romanov v. Microsoft Corp.,
`2021 WL 3486938 (D.N.J. Aug. 9, 2021) .......................................................................2, 8, 10
`
`Sadlock v. Walt Disney Co.,
`2023 WL 4869245 (N.D. Cal. July 31, 2023) ..........................................................................12
`
`Selden v. Airbnb, Inc.,
`2016 WL 6476934 (D.D.C. Nov. 1, 2016) ................................................................................9
`
`In re Uber Techs., Inc.,
`2019 WL 6317770 (C.D. Cal. Aug. 19, 2019) .........................................................................12
`
`Walsh v. Microsoft Corp.,
`2014 WL 4168479 (W.D. Wash. Aug. 20, 2014) ............................................................2, 8, 10
`
`West v. Uber Techs.,
`2018 WL 5848903 (C.D. Cal. Sept. 5, 2018) ..........................................................................12
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`Statutes
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`9 U.S.C. § 2 ......................................................................................................................................7
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`9 U.S.C. § 3 ....................................................................................................................................14
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`NOTICE OF MOTION AND MOTION TO COMPEL ARBITRATION AND STAY
`PLEASE TAKE NOTICE that, on April 11, 2024, Defendant Microsoft Corporation will and
`hereby does move for an order compelling Plaintiffs Nicholas Guilak, Paul Martin, and Jair Paz to
`individually arbitrate their claims under 9 U.S.C. §§ 1–4 and staying their claims under 9 U.S.C. § 3
`pending the outcome of their arbitrations. This Motion is based on this Notice, the accompanying
`Memorandum, the Declaration of Suzanne Fogarty and attached exhibits, the First Amended Complaint,
`and any other matters presented at the time of the hearing.
`
`I.
`
`INTRODUCTION
`Three named Plaintiffs—Nicholas Guilak, Paul Martin, and Jair Paz (“Arbitration Plaintiffs”)—
`allege they are users of Microsoft’s Bing Chat service (now known as Microsoft Copilot).1 Plaintiffs
`allege that Microsoft “integrated” OpenAI’s generative artificial intelligence technology (i.e., the large
`language models powering ChatGPT) into Microsoft Copilot and that Microsoft subsequently
`“intercepted” their private data as they used Microsoft Copilot.
`All of Plaintiffs’ claims are fundamentally flawed.2 But the Arbitration Plaintiffs’ claims in
`particular belong in individual arbitration, not in court under Rule 23. When they signed up for Microsoft
`accounts, the Arbitration Plaintiffs agreed to the Microsoft Services Agreement (“MSA”), including its
`arbitration agreement, through an easy-to-understand and enforceable method of notice and assent. The
`MSA applies to Bing generally and to Microsoft Copilot specifically, and it explicitly incorporates the
`Microsoft Privacy Statement, which explains what data Microsoft collects and uses, and gives customers
`such as the Arbitration Plaintiffs choices about their data. The Arbitration Plaintiffs’ claims thus fall
`squarely within the scope of the MSA’s arbitration agreement, under which the Arbitration Plaintiffs also
`
`1 While five other Plaintiffs allege using other Microsoft services, only Plaintiffs Guilak, Martin, and Paz
`allege using Microsoft services enabled with generative AI—the subject of their claims. Nor does
`Microsoft have adequate information about the other Plaintiffs for it to confirm whether an arbitration
`agreement applies to the other Plaintiffs’ claims. Microsoft does not waive, and expressly reserves, its
`right to compel other Plaintiffs to arbitration should the record show their claims are subject to a Microsoft
`arbitration agreement.
`2 Microsoft concurrently files a Motion to Dismiss First Amended Complaint asking this Court to dismiss
`with prejudice the claims against Microsoft in Plaintiff’s First Amended Complaint (Dkt. 45) under Rule
`12(b)(6). Should the Court grant this Motion, it need not reach Microsoft’s Motion to Dismiss as to the
`Arbitration Plaintiffs.
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`agreed they would not bring a class action against Microsoft in court. Courts across the country have
`repeatedly enforced Microsoft’s arbitration agreements and class action waivers, and have done so under
`long-settled Supreme Court and Federal Arbitration Act case law. See, e.g., J.A. through Allen v.
`Microsoft Corp., 2021 WL 1723454, at *4 (W.D. Wash. Apr. 2, 2021); Romanov v. Microsoft Corp., 2021
`WL 3486938, at *4 (D.N.J. Aug. 9, 2021); Maher v. Microsoft Corp., 2018 WL 1535043, at *1 (N.D. Ill.
`Mar. 29, 2018); Mendoza v. Microsoft Inc., 2014 WL 4540225, at *1 (W.D. Wash. Sept. 11, 2014); Walsh
`v. Microsoft Corp., 2014 WL 4168479, at *1 (W.D. Wash. Aug. 20, 2014); Day v. Microsoft Corp., 2014
`WL 243159, at *1 (W.D. Wash. Jan 22, 2014). As with these courts, this Court should enforce the MSA,
`compel the Arbitration Plaintiffs’ claims to individual arbitrations, and stay all of their claims pending the
`outcome of those arbitrations.
`
`II.
`
`FACTUAL BACKGROUND
`The Microsoft Services Agreement
`A.
`To access Microsoft’s consumer online services, one must first create a Microsoft services account.
`To create such an account when the Arbitration Plaintiffs did, the Arbitration Plaintiffs had to enter an
`email address on the account creation page, create a password, and then press a button marked “I Agree”
`to proceed. Fogarty Decl. ¶ 3. Above the “I Agree” button, the screen told the Arbitration Plaintiffs that
`“Choosing I Agree means that you agree to the Microsoft Services Agreement” and provided a prominent
`hyperlink to the MSA immediately above the “I Agree” button in blue font. Id. The Arbitration Plaintiffs
`therefore had the opportunity to review the MSA in its entirety, including its arbitration agreement, before
`deciding whether to click the “I Agree” button and accept the MSA. Ex. 1 (example of sign-up screen).3
`The Arbitration Plaintiffs could not have created their Microsoft services accounts without going through
`this process and clicking on “I Agree” after receiving notice of and an opportunity to review the MSA.
`Since 2012, the terms of the MSA have included an arbitration agreement. Fogarty Decl. ¶ 2. The MSA
`listed the “Covered Services” to which it applies in an easy to find section titled “Covered Services.”
`Microsoft periodically updates the MSA, sends users notices of those updates, and gives them the
`
`3 Currently, a user clicks “Next” instead of “I Agree” to manifest assent and proceed with account creation,
`and Microsoft tells prospective users that “Choosing Next means that you agree to the Microsoft Services
`Agreement.” Fogarty Decl. ¶ 3. The language change has no legal significance; the process otherwise
`remains the same.
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`opportunity to review the updated terms before continuing to use Microsoft’s services, as discussed more
`fully below. Infra Part II.D. The Covered Services included Bing.com and, once released in 2023,
`Microsoft Copilot. Fogarty Decl. ¶ 4; Exs. 8 (2012), 2 (2014), 10 (2016), 9 (2022), 5 (2023), 6 (current).
`Before Bing Chat (also known as Bing Conversational Experiences) was rebranded as Microsoft Copilot,
`Bing Conversational Experiences was separately identified as a Covered Service in the MSA. Ex. 5.
`
`The MSA’s Arbitration Agreement
`B.
`The MSA includes a binding individual arbitration agreement and class action waiver. The first
`sentence of the MSA contains a conspicuous notice in capitalized and bold letters instructing readers to
`review the arbitration agreement and class action waiver located in Section 15 of the MSA. Directly below
`the “Microsoft Services Agreement” title, the following appears: “IF YOU LIVE IN (OR YOUR
`PRINCIPAL PLACE OF BUSINESS IS IN) THE UNITED STATES, PLEASE READ THE
`BINDING ARBITRATION CLAUSE AND CLASS ACTION WAIVER IN SECTION 15. IT
`AFFECTS HOW DISPUTES ARE RESOLVED.” Ex. 6. A materially identical notice appeared in
`each version of the MSA since the arbitration agreement was added in 2012 (Ex. 8); the same language
`appeared in the 2022 and 2023 MSA that the Arbitration Plaintiffs accepted when they received notice of
`and an opportunity to review those updated MSAs (Exs. 5, 6, 9).
`Under Section 15 of the MSA, Microsoft requires users having disputes with Microsoft to engage
`in informal dispute resolution efforts for a period of 60 days. Ex. 6 § 15. If the dispute is not resolved
`within the 60-day window, the user and Microsoft
`
`individual arbitration before the American
`agree to binding
`Arbitration Association (“AAA”) under the Federal Arbitration Act
`(“FAA”), and not to sue in court in front of a judge or jury. Instead, a
`neutral arbitrator will decide and the arbitrator’s decision will be final
`except for a limited right of review under the FAA. Class action lawsuits,
`class-wide arbitrations, private attorney-general actions, requests for
`public injunctions, and any other proceeding or request for relief where
`someone acts in a representative capacity aren’t allowed. Nor is
`combining individual proceedings without the consent of all parties.
`Id. § 15(a) (emphasis in original).
`A “dispute” under the MSA is defined to be “as broad as it can be,” so as to include
`
`any claim or controversy between you and us concerning the Services, the
`software related to the Services, the Services’ or software’s price, your
`Microsoft account, marketing, communications, your purchase transaction,
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`billing, or these Terms, under any legal theory including contract, warranty,
`tort, statute, or regulation, except disputes relating to the enforcement or
`validity of your, your licensors’, our, or our licensors’ intellectual property
`rights.
`Id. § 15(a) (emphasis omitted).
`
`C. Microsoft Privacy Statement
`The first provision of the MSA addresses privacy and expressly states that Microsoft may collect,
`use, and disclose users’ data in accordance with the Microsoft Privacy Statement, which is incorporated
`by reference in the MSA and readily available to review through a prominent blue hyperlink in the MSA.
`Section 1 of the version of the MSA currently in effect (which the Arbitration Plaintiffs accepted) provides
`as follows:
`
`Your privacy is important to us. Please read the Microsoft Privacy
`Statement (the “Privacy Statement”) as it describes the types of data we
`collect from you and your devices (“Data”), how we use your Data, and the
`legal bases we have to process your Data. The Privacy Statement also
`describes how Microsoft uses your content . . . . Where processing is based
`on consent and to the extent permitted by law, by agreeing to these Terms,
`you consent to Microsoft’s collection, use and disclosure of Your Content
`and Data as described in the Privacy Statement.
`
`Ex. 6 § 1 (second emphasis added). The Microsoft Privacy Statement explains the “personal data
`Microsoft processes, how Microsoft processes it, and for what purposes.” Id. It includes numerous
`provisions governing, among other things, use and sharing of user data and choices users may make about
`their data.
`
`D. MSA Updates
`Users agree to be bound by updates to the MSA. Section 7 of the current version of the MSA
`provides that Microsoft
`
`may change these Terms at any time, and we’ll tell you when we do. Using
`the Services after the changes become effective means you agree to the new
`terms. If you don’t agree to the new terms, you must stop using the Services,
`close your Microsoft account and, if you are a parent or guardian, help your
`minor child close his or her Microsoft account.
`Ex. 6 § 7. Earlier versions of the MSA, including earlier versions accepted by the Arbitration Plaintiffs,
`had materially identical language. See Exs. 8 § 1.4; 2 § 1.3; 10, 9, 5, 6 § 7. When Microsoft updates the
`MSA, it notifies existing account holders through email notifications and pop-up notices (referred to as
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`“interrupt” notices). Fogarty Decl. ¶ 4. Interrupt notices appear when the user accesses a Microsoft online
`customer service following an MSA update; the interrupt notices require that the user click “Next” to
`acknowledge the notice before the user can proceed to use the service. Id. Email notifications that are
`sent to all Microsoft services account holders before the updated MSA goes into effect provide a
`hyperlink—bolded and in blue text—to the updated MSA and a second hyperlink to an FAQ page
`summarizing any changes to the MSA. Exs. 7 (2012), 11 (2022), 3 (2023). In this way, Microsoft gives
`users the opportunity to review the updated MSA, including any updates to the arbitration agreement,
`before deciding whether to click “Next.” The email notice reminds the user that they agree to the new
`terms by “continu[ing] use of the products and services” after the effective date of the update. The notice
`also reminds the user to discontinue use and close their Microsoft services account if they do not assent
`to the changed terms. Exs. 7 (2012), 11 (2022), 3 (2023). When Microsoft first added an arbitration
`agreement to the MSA in 2012, its email to users specifically noted that agreement. Ex. 7. When
`Microsoft added Bing Conversational Experiences to the “Covered Services,” that update was also part of
`the September 2023 MSA update that followed this same prior notice and opportunity to review process.
`Exs. 3, 5.
`
`E.
`
`Arbitration Plaintiffs Accepted the MSA and Its Arbitration Agreement and Class
`Action Waiver
`Microsoft business records confirm that each Arbitration Plaintiff consented to the MSA and its
`arbitration agreement and class action waiver. Each Arbitration Plaintiff alleges using various Microsoft
`consumer online services, including Bing Chat, now Microsoft Copilot. See First Amended Complaint
`(“FAC”) ¶¶ 35 (Guilak), 46 (Martin), 77 (Paz). The MSA governs the Arbitration Plaintiffs’ Microsoft
`services accounts and their use of the Covered Services, including Microsoft Copilot. Exs. 5 (“Bing
`Conversational Experiences” included in Covered Services), 6 (“Microsoft Copilot” included in Covered
`Services).
`After commencing this litigation, counsel for the Arbitration Plaintiffs provided to Microsoft the
`email addresses associated with these Plaintiffs’ Microsoft services accounts. Microsoft then confirmed
`by searching its business records that each Arbitration Plaintiff accepted the MSA by creating a Microsoft
`services account registered with those emails and using those services. See Fogarty Decl. ¶¶ 7–9.
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`Specifically, each Arbitration Plaintiff registered their Microsoft services account and initially agreed to
`Microsoft’s terms at the dates and times listed below:
`
`Plaintiff
`
`Paul Martin
`
`Nicholas Guilak
`
`Jair Paz
`
`Time/Date of Account
`Registration
`
`May 23, 2015
`at 11:50:12 PM UTC
`
`September 11, 2001
`at 8:13:10 AM UTC4
`
`January 31, 2017
`at 1:51:20 AM UTC
`
`August 10, 2012
`at 5:11:15 PM UTC5
`
`January 22, 2017
`at 11:21:10 PM UTC
`
`Fogarty Decl. ¶¶ 7–9.
`In 2023, Microsoft sent each of the Arbitration Plaintiffs an email notification of updates to the
`MSA, which took effect on September 30, 2023. See Fogarty Decl. ¶¶ 7–9; Ex. 3 (2023 email notification
`regarding MSA update). Microsoft’s business records also show that Martin clicked on an interrupt notice
`acknowledging the September 30, 2023, MSA update, and Guilak and Paz clicked on interrupt notices
`acknowledging the August 15, 2022, MSA update. Fogarty Decl. ¶¶ 7–9. Each Arbitration Plaintiff
`clicked those notices and agreed to the updated MSAs at the dates and times listed below after having an
`opportunity to review the updated MSAs:
`
`Plaintiff
`
`Paul Martin
`
`Nicholas Guilak
`
`Time/Date of Updated MSA
`Acknowledgement
`
`October 12, 2023
`at 12:43:26 PM UTC
`
`September 25, 2022
`at 3:42:16 PM UTC
`
`N/A
`
`
`4 Guilak assented to the MSA, and its arbitration agreement, by continuing to use this account after the
`MSA was updated in 2012. Fogarty Decl. ¶ 8.
`5 Paz assented to the MSA, and its arbitration agreement, by continuing to use this account after the MSA
`was updated later in 2012. Fogarty Decl. ¶ 9.
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`September 24, 2022
`at 5:33:13 AM UTC
`
`Jair Paz
`
`September 25, 2022
`at 5:15:21 AM UTC
`Fogarty Decl. ¶¶ 7–9. All of the Arbitration Plaintiffs’ accounts remain active in Microsoft’s system. Id.
`
`The Arbitration Plaintiffs’ Claims
`F.
`As explained in the concurrently filed Motions to Dismiss, Plaintiffs’ allegations against Microsoft
`are opaque to the point of failing to state a plausible claim. It appears, however, that Plaintiffs allege
`Microsoft is liable for unspecified harms to Plaintiffs’ privacy and property rights due to OpenAI
`purportedly training its generative AI models on data from Microsoft’s services that incorporate generative
`AI technology, i.e., Microsoft Copilot. See FAC ¶¶ 35 (alleging Guilak “uses Bing Chat to interact with
`an AI-powered chat for quick information research” and not identifying other AI features he has used in
`Microsoft services), 46 (same for Martin), 77 (same for Paz); see also id. ¶¶ 453–67 (allegations of training
`OpenAI technology on data from plug-ins), 580 (alleging that Microsoft integrates OpenAI plug-ins into
`its technology). But having agreed to individually arbitrate any disputes with Microsoft arising from their
`use of these services, the Arbitration Plaintiffs may not pursue their claims in this Court as a class action.
`
`III. LEGAL STANDARD
`Under the Federal Arbitration Act (“FAA”), written agreements to arbitrate “shall be valid,
`irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any
`contract.” 9 U.S.C. § 2. The FAA “reflects the overarching principle that arbitration is a matter of
`contract” and “courts must rigorously enforce arbitration agreements according to their terms.” Am. Exp.
`Co. v. Italian Colors Rest., 570 U.S. 228, 233 (2013) (cleaned up); see also Henry Schein, Inc. v. Archer
`and White Sales, Inc., 139 S. Ct. 524, 529 (2019) (“Under the Act, arbitration is a matter of contract, and
`courts must enforce arbitration contracts according to their terms.” (emphasis added)). As a result, courts
`decide only two “gateway” issues on a motion to compel arbitration: “(1) whether there is an agreement
`to arbitrate between the parties; and (2) whether the agreement covers the dispute.” Brennan v. Opus
`Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). In deciding these issues, courts “apply ordinary state-law
`principles that govern the formation of contracts.” Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175
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`(9th Cir. 2014). The FAA not only “require[s] courts to respect and enforce agreements to arbitrate; it
`also specifically direct[s] them to respect and enforce the parties’ chosen arbitration procedures.” Epic
`Sys. Corp. v. Lewis, 584 U.S. 497, 506 (2018); see also Lamps Plus, Inc. v. Varela, 139 S. Ct. 1407, 1416
`(2019) (“Consent is essential under the FAA because arbitrators wield only the authority they are
`given. . . . Whatever they settle on, the task for courts and arbitrators at bottom remains the same: to give
`effect to the intent of the parties.” (cleaned up)).
`
`IV. ARGUMENT
`Each Arbitration Plaintiff created an account to use Microsoft’s online consumer services. When
`they did so—as Microsoft shows in the evidence submitted with this Motion—they agreed to the MSA,
`including its arbitration agreement and class action waiver, after having had notice of and an opportunity
`to review those terms. Since then, each Arbitration Plaintiff has also agreed to the current version of the
`MSA that includes the current binding arbitration agreement, again after receiving notice of and an
`opportunity to review the terms, including the fact the MSA covers Bing Conversational Experiences (now
`called Microsoft Copilot). Courts, including this Court, routinely enforce internet agreements that are
`materially identical to this one, and have repeatedly enforced Microsoft’s online arbitration agreements
`specifically. See, e.g., J.A., 2021 WL 1723454, at *4; Romanov, 2021 WL 3486938, at *4; Maher, 2018
`WL 1535043, at *1; Mendoza 2014 WL 4540225, at *1; Walsh, 2014 WL 4168479, at *1; Day, 2014 WL
`243159, at *1. The broad arbitration agreement in the MSA governs the Arbitration Plaintiffs’ claims,
`and the Court should compel them to individually arbitrate their claims and stay those claims pending
`their arbitrations.
`
`A.
`
`Each Arbitration Plaintiff Agreed to Arbitrate Disputes with Microsoft.
`The Arbitration Plaintiffs Entered Valid Arbitration Agreements.
`1.
`Each Arbitration Plaintiff agreed to the MSA when creating their respective Microsoft services
`accounts using the process described above, enabling them to use the services of which they now
`complain.6 See supra Parts II.A, II.E. Consequently, each Arbitration Plaintiff formed a valid and
`
`
`6 Plaintiffs Guilak and Paz each have one account that was opened before the MSA included an arbitration
`agreement, and one account that was opened after that date. Even as to the earlier accounts, they have
`assented to the arbitration agreement in subsequent MSA updates. See infra Part IV.A.2.
`
`MOTION TO COMPEL ARBIRATION AND STAY CLAIMS
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`8
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`Case No. 3:23-cv-04557-VC
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`Case 3:23-cv-04557-VC Document 52 Filed 02/08/24 Page 14 of 20
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`enforceable agreement to arbitrate disputes with Microsoft under California law. See Nguyen, 763 F.3d
`at 1175 (state contract law applies to arbitration agreement formation).7
`Under California law, “mutual manifestation of assent, whether by written or spoken word or by
`conduct, is the touchstone of contract.” Long v. Provide Com., Inc., 245 Cal. App. 4th 855, 862 (2016).
`“While new commerce on the Internet has exposed courts to many new situations, it has not fundamentally
`changed the principles of contract.” Nguyen, 763 F.3d at 1175 (cleaned up). When evaluating online
`agreements like the MSA, courts find enforceable agreements where “(1) the website provides reasonably
`conspicuous notice of the terms to which the consumer will be bound; and (2) the consumer takes some
`action, such as clicking a button or checking a box, that unambiguously manifests his or her assent to
`those terms.” Oberstein v. Live Nation Ent., Inc., 60 F.4th 505, 515 (9th Cir. 2023); see also Berman v.
`Freedom Fin. Network, LLC, 30 F.4th 849, 856 (9th Cir. 2022) (courts examine whether “the consumer
`has received notice of the terms being offered and, in the words of the Restatement, ‘knows or has reason
`to know that the other party may infer from his conduct that he assents’ to those terms” (quoting
`Restatement (2d) of Contracts) § 19(2))). Consequently, courts regularly enforce “sign-in wrap”
`agreements—those “in which a user signs up to use an internet product or service, and the signup screen
`states that acceptance of a separate agreement is required before the user can access the service.” Selden
`v. Airbnb, Inc., 2016 WL 6476934, at *4 (D.D.C. Nov. 1, 2016), aff’d, 4 F.4th 148 (D.C. Cir. 2021)
`(compelling arbitration). Courts look to whether the sign-in wrap agreement provides reasonably
`conspicuous notice and requires an unambiguous manifestation of assent. See, e.g., Obe