MINOR’S DISAFFIRMANCE OF CONTRACT

J.R. v. Electronic Arts, Inc., 98 Cal. App. 5th 1110

J.R., a minor, filed a class action against Electronic Arts (EA) alleging that it violated the Consumer Legal Remedies Act (CLRA) and UCL by inducing impressionable people, particularly minors, to download its video game for free so that they would use the game’s digital currency to purchase various items marketed by EA. The complaint was accompanied by a declaration by JR wherein he disavowed the user agreement (which contained an arbitration clause) he signed when he downloaded the game. EA moved to compel arbitration arguing that JR failed to disavow the delegation clause in the arbitration agreement and therefore an arbitrator, not the trial court, was required to determine arbitrability. The trial court denied the motion and EA appealed.

The Court of Appeal affirmed. There is no requirement that J.R. use the words “delegation provision” when disaffirming it. California law is to the contrary. Berg v. Taylor, 148 Cal. App. 4th 809 (2007). EA instead relied on federal cases concerning the severability of delegation provisions, such as Prima Paint v. Flood & Conklin, 388 U.S. 395 (1967)and RentA-Center West, Inc. v. Jackson, 561 U.S. 63 (2010), but they too did not impose such a requirement. Rather, what is required to overcome a delegation provision and thus authorize a court to decide a gateway issue is a contract defense that goes to the validity of the delegation provision. In Rent-A-Center, for example, the plaintiff employee attacked the arbitration agreement on the ground that it applied to “claims an employee was likely to bring—contract, tort, discrimination, and statutory claims” but not to claims an employer “was likely to bring—intellectual property, unfair competition, and trade secrets claims.” This one-sided-coverage argument did not overcome the delegation provision, because it clearly did not go to the validity of the delegation provision. That is, the issue was not that the plaintiff had failed to include the magic words “delegation provision” when presenting the argument. What mattered was that the argument in substance did not relate to the enforceability of the delegation provision, considered as a severable and separate contract. In contrast, J.R.'s disaffirmance of “any … contract or agreement” accepted through his EA account did go to the validity of the delegation provision, because the delegation provision was a contract or agreement accepted through his EA account. His disaffirmance of the delegation provision was unambiguous and unequivocal. Nothing more was required.