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VPPA Class Action Plaintiffs May Not Waive Arbitration Goodbye
- A federal court in the Northern District of California ruled that a VPPA class action lawsuit should be resolved through arbitration due to the defendant company's arbitration clause.
- Plaintiffs alleged that DirectToU LLC and Alliance Entertainment LLC shared consumer data with Meta through the Meta Pixel on their websites.
- Defendants filed a motion to compel arbitration, citing a clause in the Terms of Use that users had to agree to before making purchases.
- Under the FAA, a party may waive its right to arbitration if it acts inconsistently with that right.
- Plaintiffs argued that the Defendants had waived their right to arbitration by engaging in discovery and settlement negotiations.
- The court considered various factors and determined that the Defendants had not waived their arbitration right.
- The court highlighted that the settlement involved the earlier version of the complaint, not the current one.
- Companies facing VPPA litigation should carefully craft arbitration clauses to reduce class action risk.
- Arbitration clauses are essential but not foolproof, and companies should also be mindful of their litigation strategies.
- Crafting valid and enforceable arbitration provisions is crucial to protecting arbitration rights.
- Companies must exercise caution to avoid unintentionally forfeiting their arbitration rights.
- Valid arbitration clauses can help companies minimize class action risks in the VPPA litigation landscape.
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