FILED
NOT FOR PUBLICATION
FEB 19 2021
UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
HAYLEY CHARMAINE TICE, No. 20-55432
individually and on behalf of a class of
similarly situated individuals, D.C. No.
5:19-cv-01311-SVW-KK
Plaintiff-Appellee,
v. MEMORANDUM*
AMAZON.COM, INC.; A2Z
DEVELOPMENT CENTER, INC.,
Defendants-Appellants.
Appeal from the United States District Court
for the Central District of California
Stephen V. Wilson, District Judge, Presiding
Argued and Submitted February 2, 2021
San Francisco, California
Before: RAWLINSON and BUMATAY, Circuit Judges, and EATON,** Judge,
United States Court of International Trade.
Concurrence by Judge BUMATAY; Dissent by Judge EATON
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
Richard K. Eaton, Judge of the United States Court of International
Trade, sitting by designation.
Appellants Amazon.com, Inc. and A2Z Development Center, Inc.
(collectively, Amazon) appeal the district court’s denial in part of their motion to
compel arbitration. Appellee Hayley Charmaine Tice (Tice) filed a class action
complaint alleging that she and other class members were injured because
Amazon’s voice-activated device, Alexa, recorded Tice’s communications without
her consent. Tice alleged that Amazon violated the California Invasion of Privacy
Act (CIPA) because it “creat[ed] permanent recordings of [Tice’s] and the Class
Members’ voices and Alexa communications,” and “intentionally and without the
consent of all parties to a confidential communication used an electronic
amplifying or recording device to record the confidential communication.” Tice
further alleged that Amazon invaded her privacy in violation of California law
“[b]y using its Alexa devices to record, store, analyze, and use the voices and
communications of [Tice] and the Members of the Class without their knowledge
or consent.”
Although not alleged as separate claims in Tice’s complaint, the district
court divided Tice’s factual allegations into “three scenarios”: (1) Tice’s
intentional use of Alexa devices, (2) background recordings that occurred when
another user activated Alexa, and (3) “surreptitious recordings” when “Alexa
sporadically record[ed] conversations without prompting and permission from
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anyone in the household.” The district court concluded that Tice was required to
submit her intentional use and background recording claims to arbitration, but her
claim premised on “surreptitious recordings” was not subject to arbitration.
The district court erred in holding that Tice’s “surreptitious recording” claim
was not subject to arbitration. The district court determined that Amazon’s terms
of use and conditions of use “contain[ed] facially valid arbitration clauses,” and
recognized that incorporation of the American Arbitration Association (AAA)
rules delegated to the arbitrator the determination of whether Tice’s intentional use
and background recording claims were covered by the agreement. The district
court held that, because her husband agreed to the terms of use and conditions of
use for Alexa, Tice was equitably estopped under California law from avoiding
arbitration. After determining that Tice was compelled to arbitrate her other
claims, the district court did not analyze whether the arbitration clauses similarly
delegated the threshold question of the arbitrability of Tice’s “surreptitious
recording” claim. To the extent that the district court held that Tice’s CIPA claim
was not subject to arbitration because Amazon’s conduct was purportedly
“criminal in nature,” this reasoning was erroneous. Tice alleged civil claims and
sought civil remedies under the CIPA, and arbitrators are not precluded from
considering whether such claims are subject to arbitration. See Shearson/Am.
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Express Inc. v. McMahon, 482 U.S. 220, 239-40 (1987) (concluding that statutory
criminal provisions “do not preclude arbitration of bona fide civil actions”).
Finally, the district court narrowly construed the arbitration clauses as
limited to Tice’s “use” of the Alexa devices. However, the arbitration clauses
apply to “any dispute or claim relating in any way to . . . use of any Amazon
Service, or to any products or services sold or distributed by Amazon or through
Amazon.com” and to “[a]ny dispute or claim arising from or relating to this
Agreement or Alexa”). As a result, it is for the arbitrator to decide whether Tice’s
“surreptitious recording” claim is beyond the scope of any arbitration. See Munro
v. Univ. of S. Cal., 896 F.3d 1088, 1091 (9th Cir. 2018) (articulating that “any
doubts concerning the scope of arbitrable issues should be resolved in favor of
arbitration”) (citation and alteration omitted).
REVERSED and REMANDED.
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FILED
Tice v. Amazon.com Inc., No. 20-55432 FEB 19 2021
BUMATAY, Circuit Judge, concurring in the judgment: MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
I agree with Judge Rawlinson’s well-reasoned decision. Nevertheless, I
concur only in the judgment as I believe Tice’s claim as it relates to “surreptitious
recordings” suffers from a jurisdictional defect. Nowhere in her Complaint does she
allege that she was recorded surreptitiously without her or someone else
intentionally using Alexa. As a result, she hasn’t alleged an injury-in-fact to assert
an independent claim for “surreptitious recordings.” See Ctr. for Biological
Diversity v. Bernhardt, 946 F.3d 553, 560 (9th Cir. 2019) (holding that “[a] plaintiff
must establish standing for every claim” under Article III). Accordingly, I concur
in the judgment of the court only.
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FILED
Tice v. Amazon.com Inc., No. 20-55432 FEB 19 2021
EATON, Judge, United States Court of International Trade, dissenting:
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
Because no contract was formed, between Amazon and Plaintiff, requiring
arbitration of the alleged claims for damages resulting from surreptitious recordings,
I respectfully dissent.
The only way in which Plaintiff, a non-signatory, could be bound to the Alexa
Terms of Use would be under the theory of equitable estoppel. To comply with the
Federal Arbitration Act, a District Court must determine (1) whether a valid
agreement to arbitrate was formed between Plaintiff and Amazon, and (2) whether
Plaintiff’s claims were encompassed by the agreement. See, e.g., Knutson v. Sirius
XM Radio Inc., 771 F.3d 559, 564-65 (9th Cir. 2014); see also 9 U.S.C. § 2. Merely
because a valid agreement could be found between the actual signatory (Plaintiff’s
husband) and Amazon with respect to the subjects encompassed by some of
Plaintiff’s claims, it does not follow that the doctrine of equitable estoppel compels
arbitration of all of her claims.
The claims arising from alleged surreptitious recordings result from the
functioning of the Alexa device in ways that are not only unanticipated in the
contract itself, but that Amazon insists did not even occur. That is, Plaintiff alleges
that Alexa sometimes makes recordings, and conveys those recordings to Amazon
for commercial use, when nobody has activated the device. Only a strained parsing
of the contract could result in a finding that these claims resulted from a use of the
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Alexa device, or force a nonsignatory into arbitration to resolve them. As the District
Court recognized, it would be inequitable to bind a non-signatory to limitless terms
in an adhesion contract based solely on her marital relationship with the signatory.
Equity requires more. Thus, even if a valid contract could be found between the non-
signatory Plaintiff and Amazon, Plaintiff’s claims are not encompassed by that
contract and need not be arbitrated. See, e.g., Namisnak v. Uber Techs., Inc., 971
F.3d 1088, 1095 (9th Cir. 2020) (citation omitted) (cleaned up) (“[W]here
[Plaintiff’s] allegations reveal no claim of any violation of any duty, obligation, term
or condition imposed by the [contract] and there is no claim founded in or even
tangentially related to any duty, obligation, term or condition imposed by the
[contract] . . . the claims are fully viable without reference to the terms of [the
contract] and equitable estoppel does not apply.”); see also 9 U.S.C. § 2.
As to standing, the majority necessarily finds that there is no jurisdictional
defect in Plaintiff’s complaint. I agree. To establish injury in fact at the pleading
stage, “both the trial and reviewing courts must accept as true all material allegations
of the complaint and must construe the complaint in favor of the complaining party.”
Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011) (quoting Warth v. Seldin,
422 U.S. 490, 501 (1975)). Here, the separation of the types of recording was a
construction of the District Court, not Plaintiff. Plaintiff’s complaint alleged that she
and other class members were recorded without their knowledge or consent, an
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allegation that covers all of the ways in which Amazon’s Alexa device might have
made recordings, i.e., surreptitious and non-surreptitious. The District Court’s
separation of the different types of recording was a part of its factual analysis when
determining which of Plaintiff’s claims were encompassed by the arbitration
agreement. This separation has no bearing on Plaintiff’s standing to proceed.
Because she has alleged that she was recorded without her knowledge or consent,
Plaintiff has alleged an injury in fact sufficient to establish Article III standing for
all of the types of recording identified by the District Court. I would affirm.
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