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Savetsky v. Pre-Paid Legal Servs.

United States District Court for the Northern District of California

February 12, 2015, Decided; February 12, 2015, Filed

Case No. 14-03514 SC

Opinion

ORDER DENYING MOTION TO COMPEL ARBITRATION

I. INTRODUCTION

Now before the Court is Defendant LegalShield's1 motion to compel arbitration. ECF No. 18 ("Mot."). Plaintiff Michael Savetsky opposes. ECF No. 24 ("Opp'n"). The motion is fully briefed, ECF No. 26 ("Reply"), and appropriate for resolution without oral argument under Civil Local Rule 7-1(b). For the reasons set forth below, the motion is DENIED.

II. BACKGROUND

This is a putative class action alleging [*2]  that LegalShield improperly charged recurring payments for pre-paid legal services without sufficient consent or disclosure.

Pre-paid legal services providers generally eschew the traditional 'fee-for-service' model of legal representation, instead selling fixed-rate memberships that entitle customers to a menu of legal services. See generally Judith L. Maute, Pre-Paid and Group Legal Services: Thirty Years After the Storm, 70 Fordham L. Rev. 915, 916-18 (2001). LegalShield contracts with law firms in the states where it operates and, in exchange for a monthly fee (sometimes as little as $20 per month) gives its members access to that law firm for various types of legal services. LegalShield provides non-legal services as well, including identity theft protection, which can be purchased along with or separately from a pre-paid legal services plan.

When a prospective customer logs on to LegalShield's website, he is presented with the option to "Buy Now" or "Learn More." If he chooses to "Buy Now," the customer is prompted to select his state and given an overview of the pre-paid legal service plans available in that state. Alongside those options is a link to "More Plan Details." A customer need not review those additional [*3]  details to purchase the plan, however, if he does, he is informed that the details are "a general overview," and "[f]or more specific information, please view our member contract." ECF No. 18-2 ("Pinson Decl.") at Ex. A. The words "member contract" are a link that takes the prospective customer to a sample version of LegalShield's member contract. The member contract in effect when Savetsky purchased his membership contained the following clause:

Settlement of Disputes: All disputes or claims relating to the Company, this Contract, any Company products or services or any claims or causes of action between you and the Company, and any of the Company's officers, directors, employees or affiliates, whether in tort or contract, shall be settled totally and finally by arbitration according to the Commercial Arbitration Rules of the American Arbitration Association . . . . If you file a claim or counterclaim against the Company . . . in any such arbitration, you may do so only on an individual basis and not with any other member or as part of a class action . . . .

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2015 U.S. Dist. LEXIS 17591 *; 2015 WL 604767

MICHAEL SAVETSKY, individually and on behalf of all others similarly situated, Plaintiff, v. PRE-PAID LEGAL SERVICES, INC. d/b/a LegalShield, Defendant.

Subsequent History: Motion denied by Savetsky v. Pre-Paid Legal Servs., 2015 U.S. Dist. LEXIS 44312 (N.D. Cal., Apr. 3, 2015)

Motion to strike denied by Savetsky v. Pre-Paid Legal Servs., 2015 U.S. Dist. LEXIS 55595 (N.D. Cal., Apr. 28, 2015)

Motion granted by, Stay granted by Savetsky v. Pre-Paid Legal Servs., 2015 U.S. Dist. LEXIS 99891 (N.D. Cal., July 30, 2015)

CORE TERMS

arbitration, assent, membership, shrinkwrap, customer, user, website, notice, consumer, browsewrap, clickwrap, manifestation, pre-paid, cancel, click