Zynga Moves to Compel Arbitration in ‘Casino-Style’ Games Suit

On Tuesday, Zynga Inc. filed a motion to compel arbitration, stay proceedings, and strike the class allegations in the Northern District of California against a group of consumers asserting that the plaintiffs agreed to arbitrate in a valid and enforceable agreement.

Previously, consumers sued Zynga over its social slots video games that allegedly violate California law. The plaintiffs alleged that Zynga intentionally modeled these video games after the Vegas-style slot machines. Specifically, users pay-to-play, but cannot win any real prize, only the chance to play more.

According to the motion, Zynga moves to compel arbitration for the three causes of action: violation California Unfair Competition Law with respect to the unlawful prong, unfair prong, and fraudulent prong “pursuant to valid agreements mandating individual arbitrations for their claims.” Zynga also to stay the proceeding pending the resolution of the arbitrations. Additionally, Zynga seeks to strike the class and collective action claims and allegations as specified in the motion.

Zynga proffered “(t)here is no merit to (the plaintiffs’) claims because, among other reasons, the games do not constitute illegal slot machines or gambling under the predicate statutes plaintiffs invoke. But this Court need not reach the substantive issues because each plaintiff agreed to arbitrate such disputes.”

Specifically, Zynga contended that that the plaintiffs agreed to arbitrate and assert their claims individually when they expressly agreed to its terms of service, which includes an arbitration agreement and a class action waiver. Zynga claimed that the arbitration agreement is valid and enforceable and that it covers the plaintiffs’ allegations. As a result, Zynga averred that the plaintiffs are not able to proceed on a class basis because each plaintiff waived the right to assert a claim on a group basis. However, Zynga noted that its arbitration agreement does not prevent the plaintiffs from seeking a public injunction in court. Consequently, Zynga claims that pursuant to the Federal Arbitration Act, this action should be stayed pending a ruling on this motion and the resolution of the arbitrations.

Zynga is represented by Quinn Emanuel Urquhart & Sullivan LLP and Paul Hastings LLP. The plaintiffs are represented by Dovel & Luner LLP.