Temu Shopping App Moves to Compel Plaintiffs’ Privacy Claims to Arbitration
The Temu shopping app and its owner, PDD Holdings, seek to compel the privacy claims of seven plaintiffs to arbitration, said their memorandum of law Friday (docket 1:23-cv-15653) in U.S. District Court for Northern Illinois in Chicago in support of…
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
their motion. The lawsuit alleges the Temu app is “purposefully and intentionally loaded” with tools to execute “virulent and dangerous malware and spyware activities” on user devices, and that Temu misled people about how it uses their data (see 2311060041). But the plaintiffs’ claims “belong in arbitration, not in court,” said the memorandum. When the plaintiffs signed up for Temu, “they agreed to individually arbitrate any dispute relating to their use of Temu’s service,” it said. “That agreement is valid,” it said. When the plaintiffs created their Temu accounts, they were presented with a “registration prompt” informing them that, by continuing, they would be agreeing to the etailer’s terms, it said. The prompt “was in a format that multiple federal appeals courts have repeatedly held sufficient to form a valid agreement,” it said. The plaintiffs can’t dispute that they were presented with the prompt and chose to continue past it, and thus they are bound by the terms, it said. Those terms mandate that the plaintiffs’ claims “proceed on an individual basis in arbitration,” it said. “Even if there were any doubt about the arbitration provision’s scope,” the terms delegate resolution of arbitrability issues to the arbitrator, it said. Courts “routinely compel arbitration in these circumstances,” it said. The terms also contain a class action waiver that bars the plaintiffs from pursuing this lawsuit on a class basis, said the memorandum. Plaintiffs agreed that any dispute they bring against Temu must be resolved on an individual basis, it said. The plaintiffs “ignored this requirement when they filed this suit on behalf of a putative class of all Temu users,” it said. Class-action waivers like the one here “are regularly enforced and require that arbitration be compelled on an individual basis,” it said. The plaintiffs can’t “skirt” the arbitration requirement by naming Temu’s parent, PDD Holdings, as a defendant, it said. Though PDD Holdings isn’t a named party to the terms, “settled law holds that a non-signatory may enforce an arbitration agreement where the plaintiff alleges that it has an agency relationship, or engaged in concerted misconduct, with the signatory,” it said. That’s “precisely” what the plaintiffs allege here, it said. They base their claims against PDD Holdings on the "incorrect" premise that it has an agency and “alter ego” relationship with Temu, it said.