Unreported / Non-Citable
Background
DeJanne Johnson and Sandra Gamlin purchased preimplantation genetic testing for aneuploidy (“PGT-A”) services from NextGen Genetics, LLC, which does business as Luminary Genetics, in connection with in vitro fertilization treatment. Before undergoing testing, each plaintiff watched an informational video and signed the company’s “Uniform Patient Consent Form,” which included an arbitration clause requiring that any dispute over the services be resolved through binding arbitration before the American Arbitration Association (AAA), under California law.
Johnson and Gamlin later filed a putative class action asserting ten claims, including violations of California’s Unfair Competition Law and Consumers Legal Remedies Act, the Virginia Consumer Protection Act, breach of warranty, and fraud. NextGen moved to compel arbitration of all claims and, alternatively, to dismiss the complaint. While the motions were pending, plaintiffs also sought leave to file a Florida federal decision as supplemental authority supporting their opposition to arbitration.
The Court’s Holding
The court granted the motion to compel arbitration on an individual basis. It first rejected plaintiffs’ argument that “Luminary Genetics” could not enforce the agreement because the caption described it only as a prior name of NextGen; the company’s corporate filings showed “Luminary Genetics” was simply a registered trade name of the same entity that signed the consent form, so this was not a non-signatory enforcement problem at all.
The pivotal issue was delegation. Because the consent form incorporated the AAA’s rules — which give the arbitrator authority to decide questions of its own jurisdiction — the agreement “clearly and unmistakably” delegated arbitrability, including scope and unconscionability challenges, to the arbitrator rather than the court. Under the Supreme Court’s Rent-A-Center framework, a party resisting arbitration must specifically challenge the delegation clause itself, not just the arbitration clause more broadly, for a court to retain authority to decide the issue. Because plaintiffs’ arguments that their claims arose from advertising rather than “services provided,” and that the form was unconscionable, targeted only the broader arbitration agreement, those arguments belonged to the arbitrator.
The court also held that the agreement’s silence on class arbitration meant plaintiffs could only proceed individually, and that California’s McGill rule — which bars waiving the right to seek public injunctive relief — did not apply because the complaint sought only restitution and damages for the plaintiffs’ own past purchases, not forward-looking public relief. Following Smith v. Spizzirri, the court stayed rather than dismissed the case pending arbitration, and denied the motion to dismiss as moot since the arbitrator would address those arguments first.
Key Takeaways
- A broad delegation clause incorporating AAA rules sends not just arbitrability but also scope and unconscionability challenges to the arbitrator — plaintiffs must attack the delegation clause itself, not the arbitration agreement generally, to keep those issues in court.
- A defendant doing business under a trade name different from its formal corporate name is not a “non-signatory” for arbitration purposes if corporate records show the trade name belongs to the signing entity.
- Silence on class arbitration in an agreement is not grounds to compel class-wide arbitration; absent explicit authorization, claims proceed individually.
- California’s McGill rule protecting the right to seek public injunctive relief does not rescue claims seeking only private restitution and damages for past purchases.
- Under Smith v. Spizzirri, a party that requests a stay (rather than dismissal) pending arbitration is entitled to one as a matter of law.
Why It Matters
This ruling is a roadmap for consumer and health-services companies seeking to enforce arbitration clauses against putative class claims in California. By showing that incorporating AAA rules effectively delegates nearly every arbitration-related fight to the arbitrator, defendants can shortcut protracted scope and unconscionability litigation — provided the agreement and corporate paperwork are in order.
For plaintiffs’ counsel, the decision is a reminder that opposition briefs must expressly target the delegation clause, with supporting evidence of unconscionability, or risk losing the opportunity to have a court — rather than an arbitrator — decide those threshold questions.