DiCarlo v. MoneyLion, Inc., No. 20-55058 (9th Cir. 2021)
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The Ninth Circuit affirmed the district court's order compelling arbitration pursuant to the Federal Arbitration Act and dismissing a putative class action brought by plaintiff against MoneyLion, operator of a smartphone app offering financial services to its customers. Plaintiff alleged that MoneyLion violated California's Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act when it refused to allow her to cancel her membership after she fell behind on her fees, deposits, and loan payments.
The panel concluded that the district court correctly determined that the arbitration provision at issue was valid and enforceable because it allowed public injunctive relief and did not violate the McGill rule under California law. The panel explained that in California, litigants proceeding in individual lawsuits may request public injunctive relief without becoming private attorneys general. In this case, the arbitration agreement authorized the arbitrator to award all injunctive remedies available in an individual lawsuit under California law.
Court Description: Arbitration. The panel affirmed the district court’s order compelling arbitration pursuant to the Federal Arbitration Act and dismissing a putative class action against MoneyLion, Inc., et al., operator of a smartphone app offering financial services to its customers. Marggieh DiCarlo enrolled in the MoneyLion Plus program and signed a Membership Agreement, which explained that Plus members owed monthly fees, monthly investment deposits, and (if applicable) monthly loan payments. DiCarlo alleged that MoneyLion violated California’s Unfair Competition Law, False Advertising Law, and Consumers Legal Remedies Act in refusing to allow her to cancel her Plus membership when she fell behind on her fees, deposits, and loan payments. MoneyLion moved to compel arbitration under a provision of the Membership Agreement. The panel affirmed the district court’s conclusion that the Agreement’s arbitration provision was valid and enforceable because it allowed public injunctive relief in arbitration and therefore did not violate California’s McGill rule. The Agreement authorized the arbitrator to award all injunctive remedies available in an individual lawsuit under California law. DiCarlo argued that she could secure public injunctive relief only by acting as a private attorney general, which the DICARLO V. MONEYLION 3 Agreement explicitly prohibited. The panel, however, held that public injunctive relief under California’s UCL, FAL, and CLRA is available in an individual lawsuit without a plaintiff acting as a private attorney general.
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