Comb v. PayPal, Inc.
United States District Court for the Northern District of California
218 F. Supp. 2d 1165 (2002)
- Written by Sean Carroll, JD
Facts
PayPal, Inc. (defendant) required its users to agree to a user agreement prior to using PayPal’s services. The agreement contained an arbitration clause requiring any disputes between the parties to go to arbitration and requiring that any arbitration take place in California. The agreement allowed PayPal to unilaterally freeze users’ accounts and unilaterally amend the user agreement at any time. The agreement prohibited users from consolidating claims. The agreement did not delineate who bore the burden of the costs of arbitration, meaning that each party would be liable for a pro rata share of the costs. The average PayPal transaction amounted to $55. Craig Comb and other PayPal users (plaintiffs) sued PayPal for a variety of claims relating to PayPal’s customer service. None of the claims involved exceeded $310. PayPal filed a motion to compel arbitration pursuant to the arbitration clause in the PayPal user agreement.
Rule of Law
Issue
Holding and Reasoning (Fogel, J.)
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