Arbitration, Appealability, Nonsignatories: 9th Circuit Grants Writ, Vacates Order Granting Motion To Stay And To Compel Arbitration Obtained By Alleged Zombie Cookie User

How Do You Like Them Zombie Cookies?

"I walked with a Zombie."  1943.

        The Ninth Circuit granted a petition for a writ of mandamus and vacated the district court's order that had granted Turn, Inc.'s motion to stay a putative class action and compel arbitration with Turn, Inc., the alleged user of "zombie" cookies.  In re Henson, No. 16-71818 (9th Cir. 9/5/17) (per curiam).

         Turn, Inc. is a middle-man for Internet-based advertisements, and has a contract with Verizon to deliver advertisements to Verizon subscribers based on usage data collected from the users' mobile devices.  The users' wireless transmissions contain a "Verizon Unique Identifier Header" that can be attached to a tracking cookie to send the user data to Turn, Inc.  As the Court explains, "A 'cookie' is software code that transmits a user's web-browsing history and other usage data back to the entity that attached the cookie."  

        "Subscribers were allegedly unable to detect, delete, or block these 'zombie' cookies attached to their UIDHs."   Even when the user tried to kill a zombie cookie, the cookie would be replicated, and attach to the user's previously collected data.  Turn, Inc. allegedly auctioned off users' collected data so advertisers could place targeted advertisements on the users' mobile phones.  The putative class action alleged deceptive business practices and trespass to chattels by Turn, Inc.  

        Verizon had an arbitration provision in its user contracts, but Turn, Inc. was not a party to those contracts.  Though a nonsignatory, Turn, Inc. sought to take advantage of the arbitration provision, and the district court, applying equitable estoppel, allowed Turn, Inc. to do so, staying the lawsuit and requiring arbitration.  

        A party cannot directly appeal from an order compelling arbitration, requiring the Court to analyze whether mandamus was available.  Applying the so-called Bauman factors, the Court found that the first three weighed in favor of granting mandamus, and granted mandamus.    In Bauman v. U.S. dist. Court, 557 F.2d 650 (9th Cir. 1977), the court considered whether a direct appeal is unavailable, whether prejudice is not correctable on appeal, whether clear error exists, whether the error is often repeated, and whether the issue is of first impression.

    Girl Scout serving cookies.  1936.  Library of Congress.