I. BACKGROUND

26 Plaintiff Glenn Liou filed this putative consumer class action complaint against 27 Defendants Organifi, LLC and Andrew Canole in San Diego Superior Court on August 30, 28 1 2019. [Doc. No. 1-2.] Plaintiff then filed a First Amended Complaint (“FAC”) on January 2 6, 2020. [Doc. Nos. 1-3, 1-4]. The FAC asserted five claims under California law based 3 on Organifi’s allegedly false and misleading statements about its product Organifi Green 4 Juice (“Green Juice” or “Product”): (1) Breach of Implied Warranties of Merchantability 5 and Fitness for Particular Purpose; (2) Breach of Express Warranty; (3) Violation of 6 California’s Consumer Legal Remedies Act (“CLRA”), California Civil Code § 1750 et 7 seq.; (4) Violation of California’s Unfair Competition Law (“UCL”), California Business 8 & Professions Code § 17200 et seq.; and (5) Restitution, Money Had and Received, Unjust 9 Enrichment, and/or Quasi-Contract and Assumpsit. [Id.] 10 Defendants removed the action to this Court on June 12, 2020. [Doc. No. 1.] After 11 removal, Defendants filed a motion to dismiss the FAC, while Plaintiff filed a motion to 12 remand the action to state court. [Doc. Nos. 3, 4.] The Court denied the motion to remand 13 and granted the motion to dismiss with respect to Plaintiff’s breach of the implied warranty 14 of merchantability claim, CLRA and UCL claims premised solely on Defendants’ Benefit 15 Statements,1 and request for injunctive relief, and denied it otherwise. [Doc. Nos. 10, 14.] 16 As permitted by the Court’s order on the motion to dismiss, Plaintiff filed a Second 17 Amended Complaint (“SAC”) on October 22, 2020, asserting the same five claims. [Doc. 18 No. 15.] Defendants now move to dismiss the SAC [Doc. No. 23] or to compel arbitration 19 [Doc. No. 24]. 20 As for the motion to compel arbitration, Defendants contend that by making a 21 purchase on www.organifishop.com, Plaintiff agreed to certain Terms & Conditions 22 (hereinafter “T&C”) linked on the site. [Doc. No. 24-1 at 7.] According to Defendants, 23 these T&C include a valid and binding arbitration agreement that encompasses the present 24 dispute and requires the Court to compel Plaintiff to arbitrate his claims. [Id.] 25 26 27 1 The term “Benefit Statements” refers to the twenty statements Defendants made relating to Green Juice’s alleged benefits that Plaintiff claims are false or misleading. [Doc. No. 1-3 ¶ 31(a)-(t); Doc. No. 28 1 As for the motion to dismiss, Defendants generally argue that the SAC does not 2 remedy the defects articulated by the Court in its order dismissing some of the FAC’s 3 claims and asks the Court to dismiss those claims with prejudice. Because an order 4 granting the motion to compel arbitration would moot the motion to dismiss the SAC, the 5 Court will address the motion to compel arbitration first. 6 II. ORDER ON MOTION TO COMPEL ARBITRATION 7 a. LEGAL STANDARD 8 The Federal Arbitration Act (“FAA”) governs the enforceability of arbitration 9 agreements in contracts involving commerce. See 9 U.S.C. § 1 et seq. The FAA makes 10 such written arbitration agreements “valid, irrevocable, and enforceable, save upon such 11 grounds that exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. 12 “Because arbitration is fundamentally a matter of contract, the central or primary purpose 13 of the FAA is to ensure that private agreements to arbitrate are enforced according to their 14 terms.” Momot v. Mastro, 652 F.3d 982, 986 (9th Cir. 2011) (internal citation omitted). 15 Under the FAA, an aggrieved party to a written arbitration agreement “may petition 16 any United States District Court . . . for an order directing that such arbitration proceed in 17 the manner provided for in [the arbitration] agreement.” 9 U.S.C. § 4. “A party seeking 18 to compel arbitration has the burden under the FAA to show (1) the existence of a valid, 19 written agreement to arbitrate; and, if it exists, (2) that the agreement to arbitrate 20 encompasses the dispute at issue.” Ashbey v. Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 21 1323 (9th Cir. 2015). Upon such a showing, the FAA “mandates that district courts shall 22 direct the parties to proceed to arbitration on issues as to which an arbitration agreement 23 has been signed.” Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985) (emphasis 24 in original). The scope of an arbitration clause must be interpreted liberally, and “as a 25 matter of federal law, any doubts concerning the scope of arbitrable disputes should be 26 resolved in favor of arbitration.” Moses H. Cone Memorial Hosp. v. Mercury Constr. 27 Corp., 460 U.S. 1, 24 (1983). Accordingly, a motion to compel arbitration “should not be 28 denied unless it may be said with positive assurance that the arbitration clause is not 1 susceptible of an interpretation that covers the asserted dispute. Doubts should be resolved 2 in favor of coverage.” United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 3 574, 582-83 (1960). 4 b. DISCUSSION 5 Plaintiff alleges that on January 29, 2019, he placed an order for Green Juice on 6 www.organifishop.com. [Doc. No. 1-3 at 9.] Defendants allege that in order to complete 7 the checkout process on www.organifishop.com, Plaintiff “agreed to Organifi’s Terms and 8 Conditions.” [Doc. No. 24-1 at 7.] Specifically, Defendants contend that directly below 9 the “Complete Purchase” button on the checkout page of www.organifishop.com, a “click 10 box” appears that states: “By purchasing, you are agreeing to Organifi’s Terms & 11 Conditions.” [Doc. No. 24-2 ¶¶ 3-4.] Defendants also allege that there is a hyperlink below 12 the “click box” titled “Terms of service” that directs the user to the T&C. [Id.] Plaintiff 13 disagrees with Defendants’ description of the checkout page, alleging that he “did not have 14 to click any form of acknowledgment of the [T&C] before accessing the website or placing 15 any order, did not see the [T&C], was not aware and did not agree to be bound by” the 16 T&C. [Doc. No. 28 at 8.] 17 The T&C that Defendants allege was linked on www.organifishop.com begins: 18 “Welcome to www.organifi.com or www.fitlife.tv (each a ‘Site’), an online website 19 operated by Fit Life TV LLC, a Florida limited liability company (‘FLT’, ‘We’, ‘Our’, or 20 ‘Us’).” [Doc. No. 30-2 at 2.] The contract defines “FLT,” “We,” “Our,” and “Us” to refer 21 to Fit Life TV LLC (hereinafter “FLT”) and makes no mention of the corporate entity 22 Organifi, LLC or of Andrew Canole as parties to the contract. The T&C, therefore, is a 23 contract between FLT and any user of the two websites listed (“www.organifi.com or 24 www.fitlife.tv”). 25 Paragraph 16 of the T&C states: 26 Class Action Waiver and Arbitration. THIS CLASS ACTION WAIVER

AND ARBITRATION SECTION PROVIDES THAT ANY DISPUTE

27

ARISING FROM THIS AGREEMENT MUST BE RESOLVED BY

28 BINDING ARBITRATION, WHICH REPLACES THE RIGHT TO GO TO 1 COURT. THIS SECTION PROHIBITS YOU FROM BRINGING A CLASS

ACTION OR OTHER REPRESENTATIVE ACTION IN COURT,

2

INCLUDING IN THE FORM OF A PRIVATE ATTORNEY GENERAL

3 ACTION, AND PROHIBITS YOU FROM BRINGING ANY CLAIM IN

ARBITRATION AS A CLASS ACTION OR OTHER REPRESENTATIVE

4

ACTION. IN ADDITION, THIS CLASS ACTION WAIVER AND

5 ARBITRATION SECTION PROHIBITS YOUR ABILITY TO BE PART

OF ANY CLASS ACTION OR OTHER REPRESENTATIVE ACTION

6

BROUGHT BY ANYONE ELSE, AND PROHIBITS YOUR ABILITY TO

7 BE REPRESENTED IN A CLASS ACTION OR OTHER

REPRESENTATIVE ACTION. THE WAIVERS SET FORTH IN THIS

8

SECTION INCLUDE ANY CLAIM THAT YOU MAY HAVE AGAINST

9 FLT WITH RESPECT TO ANY THIRD PARTY SERVICE. TO THE

EXTENT A PROVIDER OF A THIRD PARTY SERVICE JOINS FLT IN

10

ANY ACTION BETWEEN YOU AND SUCH PROVIDER, YOU AGREE

11 THAT THIS SECTION SHALL APPLY TO ANY CLAIMS YOU MAY

HAVE AGAINST FLT. IF NOT FOR THIS CLASS ACTION WAIVER

12

AND ARBITRATION SECTION, YOU MAY HAVE OTHERWISE HAD

13 A RIGHT TO PARTICIPATE OR BE REPRESENTED IN A CASE FILED

IN COURT BY OTHERS (INCLUDING CLASS ACTIONS AND OTHER

14

REPRESENTATIVE ACTIONS) AND YOU AND FLT MAY

15 OTHERWISE HAVE HAD A RIGHT TO BRING CLAIMS IN A COURT

BEFORE A JUDGE OR JURY. EXCEPT AS OTHERWISE PROVIDED

16

BELOW, YOU WAIVE ANY OTHER RIGHTS THAT YOU WOULD

17 HAVE IF YOU WENT TO A COURT, SUCH AS DISCOVERY OR THE

RIGHT TO APPEAL A DECISION.

18

19 The party filing a claim in arbitration must choose one of the following two arbitration administrators: American Arbitration Association; or 20 JAMS/Endispute, both of which are independent from Us. Any arbitration 21 will be conducted under the rules of the selected arbitration administrator by an impartial third party chosen in accordance with the rules of the selected 22 arbitration administrator and as provided herein. . . . Copies of the current 23 rules of the arbitration administrators named above, and well as information about arbitration and arbitration fees, and instructions for initiating arbitration 24 may be obtained by using the following contact information: 25 American Arbitration Association 26 1633 Broadway, 10th Floor, New York, NY 10019 27 Website: www.adr.org Telephone: 800-778-7879 28 1 JAMS 1920 Main Street, Suite 300, Irvine, CA 92614 2 Website: www.jamsadr.com 3 Telephone: 800-352-5267. 4 [Doc. No. 30-2 at 8-9.] Defendants argue that by making a purchase on 5 www.organifishop.com, Plaintiff agreed to the T&C, and is therefore bound by the above 6 class action waiver and arbitration agreement in Paragraph 16. Defendants further argue 7 that based on Paragraph 16, even the threshold issue of arbitrability must be decided by an 8 arbitrator. 9 i. Defendants Are Not Party to the Terms & Conditions and Have No 10 Contractual Right to Compel Arbitration 11 The FAA reflects the “fundamental principle that arbitration is a matter of contract.” 12 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citing Rent-A-Ctr., West, 13 Inc. v. Jackson, 561 U.S. 63, 67 (2010)). The right to compel arbitration is thus a 14 contractual right that “may not be invoked by one who is not a party to the agreement and 15 does not otherwise possess the right to compel arbitration.” Kramer v. Toyota Motor Corp., 16 705 F.3d 1122, 1126 (9th Cir. 2013) (quoting Britton v. Co-op Banking Grp., 4 F.3d 742, 17 744 (9th Cir. 1993) (“An entity that is neither a party to nor agent for nor beneficiary of 18 the contract lacks standing to compel arbitration.”)). Thus, while limited exceptions may 19 exist under state contract law,2 courts generally do not allow a non-signatory to a contract 20 to invoke an arbitration agreement contained therein. See Kramer, 705 F.3d at 1128 (“The 21 United States Supreme Court has held that a litigant who is not a party to an arbitration 22 agreement may invoke arbitration under the FAA if the relevant state contract law allows 23 the litigant to enforce the agreement.”). 24 A fundamental rule of contract interpretation under California law is that contracts 25

26 2 When analyzing the validity of a written agreement to arbitrate, federal courts “apply ordinary state- 27 law principles that govern the formation of contracts.” Int’l Brotherhood of Teamsters v. NASA Servs., Inc., 957 F.3d 1038, 1042 (9th Cir. 2020) (citing First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 28 1 should be construed as a whole. CAL. CIV. CODE § 1641. Construing all provisions of the 2 contract together, the T&C appears to be an agreement between FLT (the website provider) 3 and the consumer browsing the website hosted by FLT (“www.organifi.com or 4 www.fitlife.tv”) governing the terms and conditions of the consumer’s use of the website. 5 First, the beginning sentence of the T&C defines the terms “FLT,” “We,” “Our,” and “Us,” 6 which are used throughout the contract, to refer to FLT. [Doc. No. 30-2 at 2.] The opening 7 paragraph of the T&C then characterizes the contract as governing the use of the website 8 operated by FLT: “These Terms & Conditions of Use (the ‘Agreement’) set forth the terms 9 and conditions which govern Your use of the Site and apply to information We collect on 10 this Site . . .” [Id.] Second, FLT is the only corporation named in the T&C that has a 11 significant relationship to the contract’s subject matter. The few provisions mentioning 12 Organifi relate to the site visitor’s use of the brand materials, intellectual property, and 13 content hosted on the website operated by FLT (i.e., www.organifi.com).3 Interpreting the 14 contract as a whole, the Court finds that FLT is the drafting party to the T&C agreement, 15 not Organifi, LLC. 16 Defendants argue that “We,” “Our,” and “Us” are “grammatically plural” words, so 17 they cannot refer to just one entity (FLT). However, as Defendants point out, companies 18 and entities are often referred to using the third person plural. This is demonstrated by the 19 arbitration agreements at issue in several cases cited by Defendants. See Kramer, 705 F.3d 20 at 1124 (quoting contract between the plaintiff and car dealership as “If either you or we 21 22 23 3 The corporation “Organifi, LLC” is mentioned just once in the nine-page T&C, in the final sentence of the contract: “No products purchased from this site shall be resold without written permission from 24 Organifi LLC.” [Doc. No. 30-2 at 9.] The “Organifi” brand name appears in only four sections 25 throughout the T&C: (1) In the first paragraph, referring to the Site’s capabilities which include enabling users to “participate in programs promoting the Organifi and Fitlife.tv philosophy and practice” [Id. at 26 2]; (2) in section 5, governing the intellectual property and the “content, features and functionality” of the site [Id. at 5]; (3) in section 6.3, regarding the display, sale, or other use of Organifi or FLT licensed 27 materials “[a]s part of Your use of the Site” [Id. at 6]; and (4) in section 8.3, disclaiming any warranties for products sold by other web storefronts [Id. at 7]. All these provisions relate to the site visitor’s use 28 1 elect, any claims or disputes arising out of this transaction, or relating to it, will be 2 determined by binding arbitration . . .”) (emphasis added); Miller v. Time Warner Cable, 3 No. 8:16-cv-00329-CAS (ASx), 2016 WL 7471302, at *2 (C.D. Cal. Dec. 27, 2016) 4 (quoting Subscriber Agreement between the plaintiff and Time Warner Cable as “. . . any 5 dispute, claim, or controversy between you and TWC regarding any aspect of your 6 relationship with us or any conduct or failure to act on our part . . .”) (emphasis added); 7 MacKinnon v. Truck Ins. Exchange, 31 Cal. 4th 635, 639 (2003) (quoting insurance policy 8 between the plaintiff and the insurer as “We do not cover Bodily Injury or Property 9 Damage . . . ”) (emphasis added). The use of the plural pronouns “We,” “Our,” and “Us” 10 in the T&C thus does not preclude the possibility that such words refer to solely one 11 business entity—FLT. Nor does it necessarily mean that the plural refers to Organifi, LLC, 12 which is not mentioned until the final sentence of the nine-page agreement. 13 Defendants further argue that Andrew Canole is entitled to invoke the arbitration 14 clause and compel this matter to arbitration as a non-signatory to the T&C because he acts 15 as an agent to and beneficiary of Organifi, LLC. [Doc. No. 24-1 at 14-16.] However, 16 Defendants’ argument is premised on the assumption that Organifi itself is a party to the 17 T&C—which the Court finds that it is not. Because the T&C is an agreement between the 18 consumer and FLT, Mr. Canole and Organifi’s relationship is irrelevant to this inquiry. 19 For the reasons discussed above, the Court finds that neither Organifi nor Andrew 20 Canole is a party to the T&C.4 Accordingly, neither Defendant is entitled to invoke the 21 T&C’s class action waiver and arbitration provision, and no binding agreement to arbitrate 22 23 24 25 26 27 4 The Court need not reach the issue of whether Plaintiff agreed to be bound by the T&C, as it is irrelevant to the present dispute. Any potential contract would be between Plaintiff and FLT, and FLT is 28 1 exists between the parties. 2 ii. The Parties Did Not Agree to Arbitrate Arbitrability 3 Defendants also argue that under Paragraph 16 of the T&C, the parties delegated the 4 threshold issue of whether they agreed to arbitrate their dispute to an arbitrator. 5 “The question of whether the parties have submitted a particular dispute to 6 arbitration, i.e., the ‘question of arbitrability,’ is an issue for judicial determination unless 7 the parties clearly and unmistakably provide otherwise.” Howsam v. Dean Witter 8 Reynolds, Inc., 537 U.S. 79, 83 (2002) (emphasis in original) (internal quotations omitted). 9 Defendants contend that Paragraph 16 “expressly incorporates the AAA and JAMS Rules, 10 which empower an arbitrator to decide threshold issues of arbitrability,” and therefore 11 constitutes “clear and unmistakable evidence that contracting parties agreed to arbitrate 12 arbitrability.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). However, 13 Defendants ignore a crucial aspect of the Brennan rule—the arbitration agreement must be 14 between contracting parties. Defendants cannot assert a contractual right arising from a 15 contract to which they were not a party.6 See DMS Servs., LLC v. Superior Court, 140 Cal. 16 Rptr. 3d 896, 901 (2012) (noting that the “general rule [is] that one must be a party to an 17

18 5 Even if Plaintiff and Defendants were parties to the T&C, the present dispute would likely not fall 19 within the scope of the arbitration provision contained therein. A party seeking to compel arbitration based on an agreement must show “that the agreement to arbitrate encompasses the dispute at issue.” 20 Ashbey, 785 F.3d at 1323. The T&C’s arbitration provision states that “any dispute arising from this 21 agreement must be resolved by binding arbitration.” [Doc. No. 30-2 at 8] (emphasis added). As the Court previously explained, the T&C purports to govern the terms and conditions of using and accessing 22 www.organifi.com and www.fitlife.tv. Nothing in the T&C suggests that it relates to the quality of or statements made about the goods sold on either website. Because Plaintiff’s claims against Defendants 23 arise out of Defendants’ statements about Green Juice’s efficacy, and not out of Plaintiff’s use of the website operated by FLT, Defendants cannot show that the present dispute arises from the T&C. 24 Accordingly, any alleged agreement to arbitrate disputes arising out of the T&C would not encompass 25 Plaintiff’s claims in this case. 6 The Supreme Court has recognized that “a litigant who is not a party to an arbitration agreement may 26 invoke arbitration under the FAA if the relevant state contract law allows the litigant to enforce the agreement.” Kramer, 705 F.3d at 1128. Under California law, a non-signatory may enforce the terms of 27 an arbitration agreement in rare circumstances, such as when the non-signatory is a third-party beneficiary of the contract or an agent of a contracting party. See DMS Servs., 140 Cal. Rptr. 3d at 901. 28 1 arbitration agreement to invoke it or be bound by it”). Whether Paragraph 16 of the T&C 2 designates jurisdiction to an arbitrator is thus irrelevant to this dispute, as the T&C does 3 not involve Defendants. 4 iii. Defendants Waived Their Right to Compel Arbitration 5 Even if the parties were bound by the T&C and this dispute fell within the scope of 6 the T&C’s arbitration provision, the Court finds that Defendants nevertheless waived their 7 right to compel arbitration in this matter. 8 The right to compel arbitration arises from a contract alleged to be between the 9 parties, and like other contractual rights, can be waived. See United States v. Park Place 10 Assocs., Ltd., 563 F.3d 907, 921 (9th Cir. 2009) (citing Van Ness Townhouses v. Mar Indus. 11 Corp., 862 F.2d 754, 758-59 (9th Cir. 1988)). However, a waiver of a contractual right to 12 arbitration is not favored, and “any party arguing waiver of arbitration bears a heavy burden 13 of proof.” Id. To establish waiver of the right to compel arbitration, a party must show: 14 “(1) knowledge of an existing right to compel arbitration; (2) acts inconsistent with that 15 existing right; and (3) prejudice to the party opposing arbitration resulting from such 16 inconsistent acts.” Martin v. Yasuda, 829 F.3d 1118, 1124 (9th Cir. 2016) (citing Fisher 17 v. A.G. Becker Paribas Inc., 791 F.2d 691, 694 (9th Cir. 1986)). Defendants do not dispute 18 that they had knowledge of their alleged right to compel arbitration with Plaintiff 19 throughout this litigation. Accordingly, the Court addresses only the latter two factors. 20 1. Defendants Engaged in Acts Inconsistent with Their Alleged 21 Right to Arbitration 22 “There is no concrete test to determine whether a party has engaged in acts that are 23 inconsistent with its right to arbitrate.” Martin, 829 F.3d at 1125. Instead, the Court must 24 generally ask whether a party’s actions “indicate a conscious decision . . . to seek judicial 25 judgment on the merits of [the] arbitrable claims, which would be inconsistent with a right 26 to arbitrate.” Id. This element is satisfied when a party (1) “makes an intentional decision 27 not to move to compel arbitration,” Newirth v. Aegis Senior Communities, LLC, 931 F.3d 28 935, 941 (9th Cir. 2019), and (2) “chooses to delay his right to compel arbitration by 1 actively litigating his case to take advantage of being in federal court.” Martin, 829 F.3d 2 at 1125. For example, “[s]eeking a decision on the merits of a key issue in a case indicates 3 an intentional and strategic decision to take advantage of the judicial forum.” Newirth, 931 4 F.3d at 941. 5 Plaintiff filed this putative consumer class action complaint against Defendants in 6 state court on August 30, 2019. [Doc. No. 1-2.] On October 29, 2019, Defendants filed a 7 demurrer to Plaintiff’s complaint [Doc. No. 24-1 at 7], and on January 6, 2020, Plaintiff 8 filed the FAC in response. [Doc. Nos. 1-3, 1-4.] Plaintiff also served various discovery 9 requests on Defendants in January 2020, and Defendants responded with objections to 10 every request. [Doc. Nos. 24-5, 24-6.] The parties participated in a Case Management 11 Conference on February 7, 2020. [Doc. No. 28 at 9.] Defendants then filed another 12 demurrer to the FAC on February 14, 2020. [Doc. No. 24-1 at 8.] Due to delays stemming 13 from the COVID-19 pandemic, the demurrer to the FAC was never heard in state court. 14 After removing the action to this Court in June 2020, Defendants filed a motion to 15 dismiss the FAC, while Plaintiff filed a motion to remand the action to state court. [Doc. 16 Nos. 3, 4.] The Court denied the motion to remand and granted the motion to dismiss in 17 part. [Doc. Nos. 10, 14.] Plaintiff then filed the SAC on October 22, 2020. [Doc. No. 15.] 18 Defendants subsequently filed a motion to dismiss the SAC [Doc. No. 23], as well as a 19 motion to compel arbitration [Doc. No. 24]. 20 Defendants have spent approximately fifteen months litigating this case from when 21 Plaintiff filed his initial complaint in August 2019 until the filing of the present motion in 22 November 2020. Since removing the case to federal court, Defendants have spent 23 approximately seven months litigating before raising their alleged right to compel 24 arbitration, including defending against a motion to remand and bringing two motions to 25 dismiss. “When we have granted motions to compel filed after substantial litigation, there 26 have been unique circumstances that have explained the long delay in filing a motion to 27 compel, such as absence of knowledge, a party's pro se status, or intervening law.” Martin, 28 829 F.3d at 1127 n.5. Defendants have presented no such evidence of unique 1 circumstances here. 2 Additionally, Defendants have actively litigated this case by filing four separate 3 motions to dismiss Plaintiff’s claims between state and federal court. While in state court, 4 Defendants filed two demurrers to Plaintiff’s complaint and FAC, respectively. [Doc. No. 5 24-1 at 7-8.] After removal, Defendants then brought two additional motions to dismiss 6 the FAC and the SAC. [Doc. Nos. 3, 23.] While “filing a motion to dismiss that does not 7 address the merits of the case is not sufficient to constitute an inconsistent act,” seeking a 8 dismissal with prejudice, which is a ruling on the merits, may be so. See Martin, 829 F.3d 9 at 1126 n.4 (“When defendants move for dismissal with prejudice on a key merits issue 10 that would preclude relief as to one or more of plaintiffs' claims, as they did here, they are 11 seeking a ruling on the merits.”). Defendants have twice moved for this Court to dismiss 12 Plaintiff’s claims with prejudice and sought rulings on key merits issues, such as whether 13 Plaintiff’s CLRA and UCL claims are preempted by federal law.7 Although Defendants 14 both “served pure objections” [Doc. No. 24-1 at 23] to Plaintiff’s discovery requests in 15 state court, objecting to one set of discovery requests while simultaneously filing multiple 16 motions to dismiss hardly suggests “a decision to [not] take advantage of the judicial 17 forum.” Newirth, 931 F.3d at 941. 18 In Britton v. Co-op Banking Grp., 916 F.2d 1405, 1413 (9th Cir. 1990), the Ninth 19 Circuit held that a defendant’s efforts to resist discovery requests, pursue a court-appointed 20 attorney and apply for in forma pauperis status reflected only a “determination to avoid or 21 frustrate the litigation.” Defendants’ actions here, on the other hand, are more akin to a 22 “strategic decision to actually litigate.” Newirth, 931 F.3d at 941. Defendants have 23 actively litigated this case for fifteen months, filed four separate motions to dismiss, and 24 have not once raised their alleged right to arbitrate. Based on this record, Defendants’ 25 conduct constitutes “an intentional decision to forgo arbitration in favor of a judicial 26

27 7 Preemption is a “question of law, normally for a judge to decide.” Merck Sharp & Dohme Corp. v. 28 1 forum” and merits a finding of acts inconsistent with any alleged right to compel 2 arbitration. Id. at 941-42. 3 2. Plaintiff Was Prejudiced as a Result of Defendants’ Actions 4 In order to establish prejudice, Plaintiff must show that “as a result of the defendants 5 having delayed seeking arbitration, they have incurred costs that they would not otherwise 6 have incurred, that they would be forced to relitigate an issue on the merits on which they 7 have already prevailed in court, or that the defendants have received an advantage from 8 litigating in federal court that they would not have received in arbitration.” Martin, 829 9 F.3d at 1126 (internal citations omitted). Prejudice is shown when “a party has expended 10 considerable time and money due to the opposing party’s failure to timely move for 11 arbitration and is then deprived of the benefits for which it has paid by a belated motion to 12 compel.” Id. at 1127. 13 Plaintiff has been prejudiced by Defendants’ actions throughout this litigation. 14 Defendants attempted to take advantage of the federal judicial forum by seeking a ruling 15 on the merits of Plaintiff’s allegedly arbitrable claims, and only sought to compel 16 arbitration once the Court ruled adversely to them on their first motion to dismiss. See 17 Newirth, 931 F.3d at 944 (finding prejudice to the plaintiff in similar circumstances). 18 Defendants’ fifteen-month delay required Plaintiff to expend significant time, resources, 19 and effort to litigate this matter in both state and federal court.8 Moreover, if the parties 20 were now compelled to arbitration, Plaintiff would be forced to “relitigate a key legal issue 21 [on the merits] on which the district court has ruled in [his] favor”—i.e., whether Plaintiff’s 22 CLRA and UCL claims are preempted by federal law. See Martin, 829 F.3d at 1128 (“We 23 and other circuits routinely have found this factor dispositive because the plaintiffs would 24 be prejudiced if the defendants got a mulligan on a legal issue it chose to litigate in court 25 26 27 8 Throughout this litigation, Plaintiff has defended against several motions to dismiss, moved to remand to state court, “participat[ed] in futile mediations,” and “prepar[ed] discovery . . . [including] providing 28 1 and lost.”). 2 As in Martin, where the Ninth Circuit found prejudice after defendants “failed to 3 move for arbitration for seventeen months [and] the plaintiffs expended considerable 4 money and effort in federal litigation,” Plaintiff here would be prejudiced if he were forced 5 to arbitrate this case after fifteen months of time and money spent in court. Martin, 829 6 F.3d at 1127-28 (“The unnecessary, additional costs incurred by [Plaintiff] as a result of 7 the defendants’ dilatory motion to compel constitutes obvious prejudice.”). Because 8 Defendants had knowledge of their alleged right to arbitrate and engaged in various acts 9 inconsistent with that right across fifteen months of litigation, and because Plaintiff would 10 suffer prejudice should the Court now compel arbitration, the Court finds that Defendants 11 waived any purported right to arbitrate the present dispute. 12 For the reasons set forth above, Defendants’ motion to compel arbitration [Doc. No. 13 24] is DENIED. 14 III. ORDER ON MOTION TO DISMISS THE SECOND AMENDED 15 COMPLAINT 16 a. LEGAL STANDARD 17 The familiar standards on a motion to dismiss apply here. To survive a motion to 18 dismiss under Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted 19 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 20 662, 678 (2009) (quoting Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Thus, 21 the Court “accept[s] factual allegations in the complaint as true and construe[s] the 22 pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire 23 & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). On the other hand, the Court is 24 “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 25 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Nor is the Court “required to accept as 26 true allegations that contradict exhibits attached to the Complaint or matters properly 27 subject to judicial notice, or allegations that are merely conclusory, unwarranted deductions 28 of fact, or unreasonable inferences.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 1 (9th Cir. 2010). “In sum, for a complaint to survive a motion to dismiss, the non-conclusory 2 factual content, and reasonable inferences from that content, must be plausibly suggestive 3 of a claim entitling the plaintiff to relief.” Moss v. U.S. Secret Serv., 572 F.3d 962, 969 4 (9th Cir. 2009) (quotation marks omitted). 5 b. DISCUSSION 6 The Court previously dismissed Plaintiff’s breach of implied warranty of 7 merchantability claim, CLRA and UCL claims premised solely on Defendants’ Benefit 8 Statements, and request for injunctive relief, granting Plaintiff leave to amend his 9 complaint. [Doc. No. 14.] Upon review of the SAC and Defendants’ motion to dismiss, 10 the Court finds that Plaintiff partially remedied the deficiencies identified in the Court’s 11 previous Order. 12 i. Breach of Implied Warranty of Merchantability 13 The Court previously dismissed Plaintiff’s breach of implied warranty claim in the 14 FAC for failing to allege how Green Juice does not “provide[] for a minimum level of 15 quality” or “lacks even the most basic degree of fitness for ordinary use” as a juice product. 16 Birdsong v. Apple, Inc., 590 F.3d 955, 958 (9th Cir. 2009). In the SAC, Plaintiff clarifies 17 that Green Juice is not a juice, but rather is a nutritional supplement in the form of a 18 “powder that is added to water or other liquids.” [Doc. No. 15 ¶ 25.] Plaintiff further 19 alleges that Green Juice does not “provide the basic promised benefits of a nutritional 20 supplement” that is supported by independent clinical trials, “thus failing to meet a 21 minimum level of quality that would reasonably be expected for such products.”9 [Id. ¶ 22 82.] Plaintiff’s allegations are sufficient to state a claim to relief that is plausible on its 23 face. Therefore, Defendant’s motion to dismiss Plaintiff’s breach of implied warranty of 24 25 9 Plaintiff also alleges that Defendants breached the implied warranty of merchantability because Green 26 Juice is “unable to be sold in and from California as a mislabeled and misbranded product.” [Doc. No. 15 ¶ 82.] Whether Green Juice can be legally sold in California is an unresolved legal question, and for 27 purposes of a motion to dismiss, the Court is “not bound to accept as true a legal conclusion couched as a factual allegation.” Iqbal, 556 U.S. at 678. Thus the Court disregards this allegation at the motion to 28 1 merchantability claim is DENIED. 2 ii. CLRA and UCL Claims Premised on Defendants’ Benefit 3 Statements 4 Plaintiff’s CLRA and UCL claims in the FAC were dismissed to the extent that they 5 were premised solely on Defendants’ Benefit Statements. The Court found that such 6 claims were “lack of substantiation” claims, which private litigants are prohibited from 7 bringing under the CLRA or UCL. See Nat’l Council Against Health Fraud, Inc. v. King 8 Bio Pharm., Inc., 133 Cal. Rptr. 2d 207, 213 (2003). The Court instructed Plaintiff that to 9 sustain his CLRA and UCL claims based on the Benefit Statements, he must “point to 10 direct evidence specifically showing why each of the twenty identified Benefit Statements 11 are provably false.” [Doc. No. 14 at 8.] 12 In the SAC, Plaintiff again presents the same twenty Benefit Statements as a basis 13 for his CLRA and UCL claims. [Doc. No. 15 ¶ 32(a)-(t).] Plaintiff alleges that the Benefit 14 Statements where Defendants claim that “Green Juice’s effectiveness at treating certain 15 conditions has been proven by third-party clinical trials or studies” are provably false 16 because (1) there has only been one study of Green Juice conducted, not multiple; (2) the 17 single study of Green Juice does not qualify as a “clinical trial”; (3) any other studies relied 18 on by Defendants are of Green Juice’s component ingredients, rather than studies of Green 19 Juice itself; and (4) the eighteen clinical trials specifically referenced by Defendants in 20 support of the Benefit Statements do not actually support Green Juice’s efficacy. [Id. ¶¶ 21 33-50.] As for the Benefit Statements that claim to be based on “third party clinical 22 trials”—specifically those identified in paragraph 32, sections (d), (p), (q), (r), (s), and (t), 23 of the SAC—the Court finds that Plaintiff has remedied the defects identified in its prior 24 order and may therefore proceed with his CLRA and UCL claims based on those 25 statements. However, Plaintiff’s claims arising out of the remaining Benefit Statements 26 continue to suffer from the same issues previously identified by the Court, as Plaintiff has 27 not presented any direct evidence of how such statements are provably false. 28 Accordingly, Defendant’s motion to dismiss Plaintiff’s CLRA and UCL claims 1 based solely on the Benefit Statements identified in ¶ 32(d) and ¶ 32(p)-(t) of the SAC is 2 DENIED. Plaintiff’s CLRA and UCL claims premised solely on the Benefit Statements 3 identified in ¶ 32(a)-(c) and ¶ 32(e)-(o) are DISMISSED with prejudice as lack of 4 substantiation claims. 5 iii. Request for Injunctive Relief 6 Finally, Plaintiff’s request for injunctive relief in the FAC was dismissed for lack of 7 standing because Plaintiff did not allege a “sufficient likelihood that he will again be 8 wronged in a similar way.” Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 9 2007) (internal quotations omitted). Specifically, Plaintiff failed to allege facts suggesting 10 that he intends to purchase Green Juice again in the future, and thus failed to establish any 11 threat of future harm as required to warrant injunctive relief. [Doc. No. 14 at 12.] 12 In the SAC, Plaintiff alleges that: 13 he continues to desire to improve his health and would order [Green Juice] or reformulated [Green Juice] in the future if, in fact, Defendants conducted truly 14 independent clinical studies of the effectiveness of the Product or any 15 reformulated Product, or disclosed other truthful information about the Products’ component ingredients and/or scientific proof that correlated to the 16 constituent product levels. . . . Given Defendants’ ongoing business acts and 17 practices, Plaintiff will be unable to rely on the Product’s advertising or labeling in the future, and so will not purchase the product although he would 18 like to. 19 20 [Doc. No. 15 ¶ 71.] In sum, Plaintiff claims he would purchase Green Juice again if it were 21 properly advertised or labeled. This statement appears to contradict Plaintiff’s earlier 22 allegation that he “did not receive any of the claimed benefits of the Product” after 23 consuming it. [Id. ¶ 21.] Nevertheless, Plaintiff has plausibly alleged that he would 24 purchase Green Juice again with accurate labeling, despite the fact that he found the 25 product ineffective. Construing the SAC in the light most favorable to Plaintiff, the Court 26 accepts Plaintiff’s factual allegation on its face and thus will allow him to proceed with his 27 claim for injunctive relief. Accordingly, Defendants’ motion to dismiss Plaintiff’s claim 28 for injunctive relief is DENIED. 1 As discussed above, the SAC remedies most of the deficiencies identified in the 2 ||Court’s order dismissing the FAC.!° Accordingly, Defendants’ motion to dismiss is 3 || GRANTED in part and DENIED in part. 4 IV. CONCLUSION 5 For the reasons set forth above, Defendants’ motion to compel arbitration is 6 || DENIED. Defendants’ motion to dismiss the SAC is GRANTED in part and DENIED 7 ||in part. Plaintiff’s CLRA and UCL claims based solely on the fourteen Benefit Statements 8 |lidentified in § 32(a)-(c) and § 32(e)-(0) of the SAC are DISMISSED WITH 9 || PREJUDICE, and Defendants’ motion to dismiss is DENIED as to all other claims at 10 |/issue. Defendants shall file an answer to the SAC on or before February 26, 2021. 1] It is SO ORDERED. 12 Dated: February 8, 2021 13 € Z 14 Hon. Cathy Ann Bencivengo 15 United States District Judge 16 17 18 19 20 21 22 23 24 25 26 10 As in their motion to dismiss the FAC, Defendants again argue that Plaintiff’s CLRA and UCL claims 27 || should be dismissed under the primary jurisdiction doctrine. [Doc. No. 23-1 at 13.] The Court ng previously rejected this argument when considering the FAC [Doc. No. 14], and Defendants have presented no new grounds warranting reconsideration of the Court’s prior ruling.