On Thursday, Judge Michael W. Fitzgerald issued an order regarding Ring LLC’s motion to compel arbitration in a consolidated class action lawsuit filed by users over alleged flaws in the company’s home security product and its failure to protect customers’ personal data. The court found Ring’s arbitration provision binding as to Ring purchasers, but not as to non-purchaser plaintiffs, including 12 minor children and one elderly woman.
The case was originally filed in 2019, and the first consolidated amended complaint on Dec. 17, 2020. The court explained that the defendant manufactures and sells home security and smart home devices. In addition, Ring sells a subscription service through which customers can purchase additional services and benefits related to their devices.
In the complaint, the plaintiffs alleged that Ring’s security systems were defectively designed without sufficient security protocols, leaving users open to cyberattack, identity theft, and physical harm. The operative complaint also contended that “Ring actively shared users’ sensitive personal identifying information with third parties without first obtaining users’ authorization or consent, which allowed third parties to track and surveil Plaintiffs.”
Ring moved to compel arbitration as to both purchaser plaintiffs and non-purchaser plaintiffs, which the consumers opposed. After a telephonic hearing in April, the court issued a ruling this week. Judge Fitzgerald held that the purchaser plaintiffs in possession of an online Ring account were on “inquiry notice” of Ring’s terms of service, and thereby bound by its arbitration clause.
Specifically, the court considered whether the terms of use, resembling what is known as a clickwrap agreement, provided sufficient constructive notice of its conditions. Judge Fitzgerald held that various versions of the agreement did because of their conspicuousness and their requiring users’ affirmative acknowledgement. Because the arbitration provision also contained a comprehensive delegation clause, the court declined to address arguments concerning whether it was unconscionable or unenforceable, instead leaving those questions for the arbitrator.
As to the non-purchase plaintiffs, the court declined to send their claims to arbitration. Judge Fitzgerald reasoned that Ring failed to meet its burden of proving, by a preponderance of the evidence, that the non-purchaser plaintiffs, non-signatories to the terms of use, agreed to arbitrate their claims. The court considered but declined to adopt the reasoning set forth in non-binding case law holding non-signatory family members to the terms of adhesion contracts for consumer goods.
Tycko & Zavareei LLP, Robinson Calcagnie Inc., and Ahdoot & Wolfson PC are interim co-lead counsel for the plaintiff and the classes and Ring is represented by Hueston Hennigan LLP.
