The class action was brought by Verizon subscribers against a “targeted advertising” company business partner of Verizon (Turn, Inc.) for deceptive trade practices under New York law. Plaintiffs alleged that Turn violated users’ reasonable expectations of privacy by creating “zombie cookies” that monitored their behavior surreptitiously and that users could not detect, delete, or block. Turn, Inc. sought to compel arbitration based on a clause in the Verizon subscribers’ service provider agreements with Verizon. Plaintiffs opposed arbitration on the ground that Turn, Inc. was not a signatory to the Verizon service provider agreements. The court, however, agreed with Turn’s argument that plaintiffs were estopped from avoiding arbitration against Turn. The court found that it was certain that Turn’s defense required an analysis of the Verizon contracts, which include Verizon’s privacy policy at issue. Because the Verizon subscriber agreements “clearly anticipate the introduction of third parties to play a role in connection with the delivery of targeted advertising, Turn must invoke the Verizon agreements as a defense.” The court therefore found that “the issues to be resolved concern substantially interdependent and concerted conduct by both” Turn and Verizon “and are inextricably intertwined with the agreement to arbitrate.” The court therefore compelled arbitration of plaintiffs’ claims against Turn. Henson v. Turn, Inc., Case No. 4:15-cv-01497 (USDC N.D. Cal. Mar. 14, 2016).
This post written by Michael Wolgin.
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