In In re StockX Customer Data Sec. Breach Litig., No. 19-12441, 2020 U.S. Dist. LEXIS 241178 (E.D. Mich. Dec. 23, 2020), Judge Roberts ordered the class representative’s claims to arbitration, despite the fact that they were minors when they signed the Terms of Service containing the Arbitration Clause.
This action arises from a data breach to StockX’s system which occurred sometime in May 2019. Plaintiffs filed this and three other similar actions in 2019 and early 2020. In March 2020, the Court entered a stipulated order consolidating the cases. Plaintiffs filed a consolidated class action complaint in May 2020. Plaintiffs say StockX sent an email to its users on August 1, 2019 requiring a password reset because it had completed “system updates.” Plaintiff allege that in reality, StockX suffered a data breach with more than 6.8 million user accounts stolen by a cyber thief, who listed the data for sale on the “Dark Web,” where the data was then sold multiple times and later re-listed on other underground hacker forums. Plaintiffs claim that after StockX’s deception was reported by technology media outlets, StockX sent a follow-up email to its users, acknowledging that its system had been breached and that an unknown criminal had stolen confidential customer data such as names, email addresses, shipping addresses, usernames, passwords, and purchase history. They allege that some Plaintiffs began to suffer identity theft and other fraudulent activities shortly after the breach. Plaintiffs bring their claims on behalf of a nationwide class and several subclasses of individuals who allegedly have been harmed by StockX’s failure to protect their confidential [*9] and personal information and by StockX’s deceptive statements relating to the data breach.
The representatives’ status as minors did not defeat the Arbitration Clause in the Terms of Service.
Their second argument also fails. Plaintiffs say that the infancy doctrine renders the delegation clause invalid and unenforceable for the same reasons that it invalidates the arbitration agreement. They also say that “an agreement to arbitrate arbitrability is . . . more difficult for minors to understand” than an agreement to arbitrate a dispute, and that “forcing arbitration . . . would gut the infancy doctrine and fail to protect minors from contractual obligations they did not have the capacity to make or understand.” However, Plaintiffs cite no case law for either contention. Plaintiffs’ infancy defense is no different from their argument that the entire arbitration agreement is unenforceable. Moreover, contrary to Plaintiffs’ argument, minors are capable of contracting; “their contracts [are] valid until disaffirmed.” Semmens v. Floyd Rice Ford, Inc., 1 Mich. App. 395, 400, 136 N.W.2d 704 (1965). Therefore, the relevant question is whether the delegation clause in StockX’s Terms extends to the issue of whether a minor effectively disaffirmed the arbitration agreement; that is, whether pursuant the delegation clause the arbitrator has exclusive authority to determine if the minor Plaintiffs disaffirmed the agreement. Because the issue relates to the enforceability of the arbitration agreement, the Court finds that it does. A court in this Circuit recently concluded the same when faced with a similar delegation clause and similar infancy defense: even if the court believes that the defendant’s assertion that the plaintiffs’ claims in this lawsuit are subject to arbitration is utterly without merit, or ‘wholly groundless,’ Henry Schein prohibits denial of the Motion to Compel on that basis, because the fact remains that the enforceability of the contract, based on the validity of [plaintiff]’s infancy defense as a basis for rescinding the contract, is a question of arbitrability that has been delegated to the arbitrator. Ingram v. Neutron Holdings, Inc., 467 F. Supp. 3d 575, 585 (M.D. Tenn. 2020). For the same reasons as Ingram, the Court finds that Plaintiffs’ infancy defense is a question of arbitrability reserved for the arbitrator. StockX demonstrates that this matter should be referred to arbitration, and Plaintiffs fail to show that StockX’s motion to compel arbitration should not be granted.