G.G. et al v. Valve Corporation, No. 2:2016cv01941 - Document 44 (W.D. Wash. 2019)
Court Description: ORDER granting Defendant's 33 Motion to Lift Stay and Dismiss Case with Prejudice. Signed by U.S. District Judge John C Coughenour. (TH)
Download PDF
<![CDATA[
ions . . . did not make his use of Steam 9 unauthorized within the meaning of the [Agreement]. Accordingly, the Arbitrator again 10 concludes . . . that E.B.’s claims were and are properly subject to arbitration.” (Dkt. No. 35-1 at 11 5.) Although Arbitrator Schiff did not explicitly address Plaintiff G.G.’s new challenge to the 12 arbitrability of her claims, he implicitly rejected any such challenge when he issued his award 13 and specifically denied Plaintiff G.G.’s sought relief, which included “to have the arbitration 14 dismissed and the case sent back to the courts in Washington.” (Dkt. No. 35-2 at 3–4.) 15 In their opposition to the Defendant’s present motion, Plaintiffs raise the same challenge 16 to arbitrability that Arbitrator Laffey and Arbitrator Schiff both rejected. (Compare Dkt. No. 35 17 at 7–11, with Dkt. No. 35-10 at 5–7, 39–41.) In challenging the arbitrators’ determinations now, 18 Plaintiffs bear the burden of showing that the arbitrators violated the FAA or that their 19 determinations were completely irrational or constituted a manifest disregard of the law. See 20 First Options of Chicago, 514 U.S. at 943; Coutee, 336 F.3d at 1132. Plaintiffs have not carried 21 this burden. Plaintiffs do not cite Section 10 of the FAA, or attempt to establish that the 22 arbitrators’ decisions regarding arbitrability fall into one of Section 10’s categories permitting 23 vacatur. (See Dkt. No. 35 at 7–11.) Plaintiffs also do not argue that the arbitrators’ 24 determinations of arbitrability were completely irrational or constituted a manifest disregard of 25 the law; in fact, Plaintiffs’ brief does not acknowledge the arbitrators’ determinations of 26 arbitrability following Plaintiffs’ novel arguments in their post-hearing briefs. (See id.) ORDER C16-1941-JCC PAGE - 6 1 Therefore, Plaintiffs’ renewed challenge to the arbitrability of their claims is DENIED. 2 2. Enforcement of Arbitration Clause in Violation of Washington Public Policy 3 Plaintiffs contend that enforcement of the Agreement’s arbitration clause violates 4 Washington public policy, as Defendant did not enforce the Agreement against those violating it 5 but seeks to enforce the Agreement’s arbitration clause against Plaintiffs. (Dkt. No. 35 at 11– 6 13.) 2 An agreement to arbitrate in a contract “shall be valid, irrevocable, and enforceable, save 7 upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2; 8 see Brown v. Dillard's, Inc., 430 F.3d 1004, 1010 (9th Cir. 2005). “[A]s a matter of substantive 9 federal arbitration law, an arbitration provision is severable from the remainder of the contract.” 10 11 Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006). Plaintiffs assert several arguments that purportedly support their public policy argument. 12 (See Dkt. No. 35 at 12–13.) First, Plaintiffs contend that the doctrine of equitable estoppel 13 precludes Defendant from deriving the benefits of the Agreement while avoiding its burdens. 14 (Id.) (citing Townsend v. Quadrant Corp., 268 P.3d 917, 922 (Wash. 2012)). But Plaintiffs have 15 not pointed to any readily-identifiable benefit gained by Defendant from enforcing the arbitration 16 clause. (See Dkt. No. 35 at 12–13.) Rather, Plaintiffs point to the harms they allegedly suffered 17 as subscribers from Defendant’s failure to prosecute third-party gambling websites who were 18 violating other provisions of the Agreement. (See id.) Further, it is unclear as to what burden 19 Defendant avoided in enforcing the arbitration clause of the Agreement, as Plaintiffs were 20 accorded an opportunity to litigate their claims against Defendant. The fact that the arbitrators 21 found that Plaintiffs’ claims were not meritorious does not mean that Defendant was able to 22 “enforce the arbitration clause to avoid consequences for its actions.” (See id. at 12.) Thus, 23 24 25 26 2 Specifically, Plaintiffs state that, “[Defendant’s] position now is that it simply chose not to enforce the terms of the [Agreement] when it was harming Plaintiffs, but that it wants to enforce the arbitration clause to avoid consequences for its actions. This suggests the [Agreement] is not really a contract at all, and [Defendant] cannot selectively enforce it now.” (Dkt. No. 35 at 12.) ORDER C16-1941-JCC PAGE - 7 1 2 Plaintiffs’ assertion of the doctrine of equitable estoppel is unavailing. Next, Plaintiffs appear to contend that Defendant waived the arbitration provision in the 3 Agreement. (Id. at 13) (quoting Mike M. Johnson, Inc. v. Cty. of Spokane, 78 P.3d 161, 166 4 (Wash. 2003) (“[A] party to a contract may waive a contract provision, which is meant for its 5 benefit, and may imply waiver through its conduct.”). Plaintiffs do not provide substantive 6 argument supporting their assertion, including any indication that Defendant’s conduct evidences 7 any intent to waive the arbitration clause. (See Dkt. No. 35 at 13.) In fact, Defendant has 8 rigorously sought enforcement of the arbitration clause throughout this litigation. (See, e.g., Dkt. 9 Nos. 1, 10) (indicating that Defendant’s initial motion to compel arbitration was filed one week 10 after removing the case from state court). Therefore, any argument by Plaintiffs that Defendant 11 waived the arbitration clause is unavailing. 12 Finally, Plaintiffs appear to argue that the Agreement contravenes Washington’s public 13 policy against illegal gambling, and thus Defendant should not prevail in this litigation. (Dkt. No. 14 35) (citing LK Operating, LLC v. Collection Grp., LLC, 331 P.3d 1147 (Wash. 2014); Wash. 15 Rev. Code § 9.46.010). Plaintiffs appear to direct their challenge toward the Agreement broadly, 16 rather than against the arbitration clause ostensibly at issue in this portion of their brief. (See Dkt. 17 No. 35 at 11–13.) Plaintiffs raised their public policy arguments in both arbitrations, and both 18 arbitrators rejected Plaintiffs’ arguments. (See Dkt. Nos. 35-1 at 5, 35-2 at 3.) Arbitrator Laffey 19 determined that public policy did not prevent enforcement of the arbitration clause, and 20 separately determined that Plaintiff B.S. had not proven any connection between Defendant and 21 third-party websites that rendered it liable for illegal gambling activities. (See Dkt. No. 35-1 at 22 4–5.) Arbitrator Schiff similarly held that Defendant’s conduct did not violate public policy, and 23 that Plaintiff G.G. had not established a connection between Defendant and third-party gambling 24 websites. (See Dkt. No. 35-2 at 3.) Plaintiffs have not established that either arbitrator’s decision 25 merits vacatur under Section 10 of the FAA. See 9 U.S.C. § 10(a); Coutee, 336 F.3d at 1132. 26 Therefore, to the extent that Plaintiffs are attempting to re-litigate their public policy arguments ORDER C16-1941-JCC PAGE - 8 1 2 3 that were rejected by the arbitrators, their argument is unavailing. In sum, Plaintiffs have not established that enforcement of the arbitration clause violates Washington’s public policy, and their challenge to its enforcement is DENIED. 4 5 3. Section 10 of the FAA Plaintiffs assert that the arbitrators’ decisions should be set aside under Section 10 of the 6 FAA. (Dkt. No. 35 at 14–15.) As discussed above, Section 10 of the FAA significantly limits a 7 district court’s authority to vacate an arbitration award. See 9 U.S.C. § 10(a). Therefore, an 8 arbitration award will only be vacated upon a showing that the arbitrator’s conduct violated the 9 FAA, is completely irrational, or constitutes a manifest disregard of the law. Coutee, 336 F.3d at 10 11 1132; Kyocera Corp., 341 F.3d at 997. Plaintiffs argue that the arbitrators erred in a number of ways: blaming Plaintiffs for 12 gambling voluntarily although the doctrine of unclean hands does not provide a defense to 13 statutory claims; concluding that Plaintiffs did not adequately prove their damages although 14 Plaintiffs provided testimony as to their total losses from gambling activities; refusing to 15 consider arguments and theories Plaintiffs sought to raise after discovery; and not crediting 16 Plaintiffs’ argument that their losses exceeded the $10,000 threshold for consumer arbitrations. 17 (Dkt. No. 35 at 14–15.) Plaintiffs contend that the arbitrators “imperfectly executed their 18 powers” and “imperfectly applied Washington law” to Plaintiffs’ proven facts. (Id. at 15.) 19 Plaintiffs have not cited any of Section 10’s enumerated vacatur categories in support of 20 their argument that the Court should set aside the arbitrators’ awards. (See id. at 14–15.) Further, 21 they have not established that any of the arbitrators’ alleged errors render their decisions 22 completely irrational or a manifest disregard of the law. See Coutee, 336 F.3d at 1132; Kyocera 23 Corp., 341 F.3d at 997. For example, both arbitrators found that Plaintiffs failed to prove their 24 cases, and did not rely on the doctrine of unclean hands to reject Plaintiffs’ statutory claims. (See 25 Dkt. Nos. 35-1 at 4–5, 35-2 at 3.) Plaintiffs’ argument regarding whether they adequately proved 26 their damages or established that their losses exceeded the $10,000 threshold for consumer ORDER C16-1941-JCC PAGE - 9 1 arbitrations asks the Court to reweigh evidence submitted in the arbitration proceedings, which 2 the Court may not do in reviewing an arbitration award. See Coutee, 336 F.3d at 1134; Pac. 3 Reinsurance Mgmt. Corp. v. Ohio Reinsurance Corp., 935 F.2d 1019, 1026 (9th Cir. 1991). 4 Finally, Plaintiffs’ challenge to the arbitrators’ decisions regarding discovery do not make the 5 necessary showings that the arbitrators abused their discretion, acted in bad faith, or committed 6 affirmative misconduct, or that Plaintiffs were prejudiced by their decisions. See United 7 Paperworkers Int’l Union v. Misco, Inc., 484 U.S. 29, 40 (1987); U.S. Life Ins. Co. v. Superior 8 Nat’l Ins. Co., 591 F.3d 1167, 1175 (9th Cir. 2010); Emp’rs Ins. of Wausau v. Nat'l Union Fire 9 Ins. Co. of Pittsburgh, 933 F.2d 1481, 1490 (9th Cir. 1991); Sunshine Min. Co. v. United 10 Steelworkers of Am., 823 F.2d 1289, 1295 (9th Cir. 1987). Therefore, Plaintiffs’ request to set 11 aside the arbitrators’ awards pursuant to Section 10 of the FAA is DENIED. 12 III. 13 CONCLUSION For the foregoing reasons, Defendant’s motion to lift stay and dismiss case with prejudice 14 (Dkt. No. 33) is GRANTED. The Clerk is DIRECTED to lift the stay. This case is DISMISSED 15 with prejudice. 16 DATED this 26th day of March 2019. 19 A 20 John C. Coughenour UNITED STATES DISTRICT JUDGE 17 18 21 22 23 24 25 26 ORDER C16-1941-JCC PAGE - 10
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
