Kiana Jones, along with thousands of other consumers represented by the same law firm, filed demands for arbitration against Starz Entertainment, LLC, alleging violations of privacy laws. The arbitration provider, JAMS, consolidated these 7,300 identical filings into a single proceeding to ensure efficient adjudication. The process stalled because the law firm repeatedly disqualified arbitrators appointed by JAMS on behalf of thousands of claimants. Starz never refused to participate in the process and remained ready to proceed with the consolidated arbitration. Jones petitioned the federal district court to compel individual arbitration, arguing that the consolidation violated her agreement and that the terms were unconscionable. The district court denied the petition, finding Jones was not 'aggrieved' under the Federal Arbitration Act and that consolidation was not a gateway question for the court.
Judge Clifton, writing for the panel, affirmed the district court's decision based on three primary legal grounds. First, the court analyzed 9 U.S.C. § 4, which permits a 'party aggrieved by the alleged failure, neglect, or refusal of another to arbitrate' to petition for an order compelling arbitration. The court found that Starz never refused to arbitrate; rather, Starz participated in the selection of arbitrators and paid fees for the consolidated proceeding. The consolidation was ordered by JAMS, not Starz, and the Terms of Use incorporated JAMS rules that explicitly allowed for consolidation of filings sharing common issues of fact or law. The court distinguished this from class arbitration, noting that consolidation does not involve representative claims or bind absent parties, and therefore does not trigger the same arbitrability concerns. Second, the court addressed the argument that consolidation was a 'gateway question of arbitrability' requiring judicial intervention. The court held that because there was no dispute about the validity or scope of the arbitration agreement itself, the question of JAMS's procedural application of its rules was not a gateway issue for the court. Third, the court rejected Jones's alternative argument that the Terms were unconscionable to the extent they allowed consolidation. The court explained that a party seeking to compel arbitration cannot simultaneously argue the agreement is unconscionable to modify its terms. The FAA authorizes courts to compel arbitration 'in accordance with the terms of the agreement,' and a petitioner cannot use unconscionability as a sword to carve out individual arbitration when the contract permits consolidation.
The decision affirms that mass arbitration tactics relying on procedural consolidation by providers like JAMS do not automatically trigger federal court intervention to compel individual arbitration. Consumers seeking to bypass consolidation must pursue remedies within the arbitration framework, such as arguing the issue to the arbitrator or petitioning state courts for arbitrator appointment under California law. The ruling clarifies that federal courts will not modify arbitration agreements to force individual proceedings when the contract explicitly allows for consolidation under provider rules.
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