pro hac vice - static.reuters.com · JUDITH LANDERS, LISA MARIE BURKE, and JOHN MOLENSTRA,...

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1572150.8

PLAINTIFFS’ STATEMENT RE STATUS OF ARBITRATION

CASE NOS. 16-CV-00036-JD, 16-CV-00777-JD

Elizabeth J. Cabraser (CA SBN 083151)[email protected] Kelly M. Dermody (CA SBN 171716) [email protected] Kevin R. Budner (CA SBN 287271) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008

Jonathan D. Selbin (CA SBN 170222) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (212) 355-9500 Facsimile: (212) 355-9592 Robert Klonoff (pro hac vice) [email protected] ROBERT H. KLONOFF, LLC 2425 SW 76th Ave. Portland, OR 97225 Telephone: (503) 291-1570

Rosemary M. Rivas (CA SBN 209147)[email protected] Adam C. McCall (CA SBN 302130) [email protected] LEVI & KORSINSKY LLP 445 South Figueroa Street, 31st Floor Los Angeles, CA 90071 Telephone: (213) 985-7290 Facsimile: (866) 367-6510 Andrea Clisura (pro hac vice) [email protected] Courtney E. Maccarone (pro hac vice) [email protected] LEVI & KORSINSKY LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171

Attorneys for Plaintiffs, individually and on behalf of all others similarly situated

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA

SAN FRANCISCO DIVISION

KATE MCLELLAN, TERESA BLACK, DAVID URBAN, ROB DUNN, RACHEL SAITO, TODD RUBINSTEIN, RHONDA CALLAN, JAMES SCHORR, BRUCE MORGAN, and AMBER JONES, Individually and on Behalf of All Others Similarly Situated,

Plaintiffs, v.

FITBIT, INC.,

Defendant.

Case Nos. 16-cv-00036-JD; 16-cv-00777-JD

PLAINTIFFS’ STATEMENT ON THE STATUS OF ARBITRATION PROCEEDINGS Date: TBD Time: TBD Ctrm: 11, 19th Floor The Honorable James Donato JUDITH LANDERS, LISA MARIE BURKE,

and JOHN MOLENSTRA, Individually and on Behalf of All Others Similarly Situated,

Plaintiffs, v.

FITBIT, INC.,

Defendant.

Case 3:16-cv-00036-JD Document 146 Filed 06/14/18 Page 1 of 22

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TABLE OF CONTENTS

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I. TIMELINE OF RELEVANT EVENTS ............................................................................. 3

A. Fitbit Tells the Court That Arbitrability Defenses Can Be Heard Only by an Arbitrator. ................................................................................................................ 3

B. Ms. McLellan Initiates Arbitration to Seek a Ruling on Arbitrability. ................... 4

C. AAA Sets a Deadline of May 9, 2018, for Fitbit to Submit the Requisite Filing Fees. .............................................................................................................. 5

D. Fitbit Makes a Settlement Offer; Ms. McLellan Rejects It to Seek a Determination on Arbitrability; Fitbit Unilaterally Concludes the Arbitration Before it Begins. ................................................................................... 5

E. At the May 31, 2018, Hearing, Fitbit Confirms That It Unilaterally Closed the Arbitration and That No “Rational” Fitbit Consumer Would Seek to Arbitrate Her Claims. .............................................................................................. 8

F. After This Court Expresses Concern, Fitbit Attempts to Reverse Course and “Re-Open” the Arbitration, Falsely Claiming to Have “Misunderstood” Ms. McLellan’s Intentions. ..................................................................................... 9

II. IMPLICATIONS AND NEXT STEPS ............................................................................. 11

A. Fitbit Breached the Arbitration Agreement and Has No Right to “Reverse” or “Re-open” Those Proceedings. ......................................................................... 11

B. Fitbit Has Now Conceded That Arbitration Is Not a Viable Forum for Resolving Arbitrability or Hearing Any Other Aspect of These Claims. ............. 14

C. Fitbit Must Be Held to Account. ........................................................................... 16


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TABLE OF AUTHORITIES

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CASES

Am. Exp. Co. v. Italian Colors Rest., 570 U.S. 228 (2013) ................................................................................................................... 15

Anders v. Hometown Mortg. Services, Inc., 346 F.3d 1024 (11th Cir. 2003)............................................................................................ 14, 15

AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) ............................................................................................................... 2, 12

Brown v. Dillard’s, Inc., 430 F.3d 1004 (9th Cir. 2005)............................................................................................. passim

Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663 (2016) ................................................................................................................. 13

Chen v. Allstate Ins. Co., 819 F.3d 1136 (9th Cir. 2016).................................................................................................... 13

Cigna Ins. Co. v. Huddleston, 986 F.2d 1418 (5th Cir. 1993).................................................................................................... 16

Green Tree Fin. Corp. v. Randolph, 531 U.S. 79 (2000) ............................................................................................................... 14, 15

Int’l Union of Petroleum & Indus. Workers v. W. Indus. Maint., Inc., 707 F.2d 425 (9th Cir. 1983)...................................................................................................... 16

Kristian v. Comcast Corp., 446 F.3d 25 (1st Cir. 2006) ........................................................................................................ 15

Legair v. Circuit City Stores, Inc., 2005 WL 1865373 (S.D. Ohio July 26, 2005) ........................................................................... 16

Nadeau v. Equity Residential Properties Mgmt. Corp., 251 F. Supp. 3d 637 (S.D.N.Y. 2017) ........................................................................................ 13

Pre-Paid Legal Servs., Inc. v. Cahill, 786 F.3d 1287 (10th Cir. 2015).................................................................................................. 14

Rapaport v. Soffer, No. 2:10-CV-00935-KJD, 2011 WL 1827147 (D. Nev. May 12, 2011) ................................... 14

Sheet Metal Workers’ Int’l Ass’n Local Union No. 359 v. Madison Indus., Inc. of Ariz., 84 F.3d 1186 (9th Cir. 1996)...................................................................................................... 16

Sink v. Aden Enterprises, Inc., 352 F.3d 1197 (9th Cir. 2003).............................................................................................. 13, 14

OTHER AUTHORITIES

Black’s Law Dictionary 428 (7th ed. 1999) ................................................................................... 13


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Pursuant to the Court’s direction at the May 31, 2018 hearing and subsequent minute

order, Plaintiffs submit this statement setting forth the facts relating to the arbitration proceeding

initiated by Plaintiff Kate McLellan.1 See May 31, 2018, Hr’g Tr. 12:25-13:4; Dkt. 141.

Plaintiffs also address the implications of these facts for how this case proceeds.

At the hearing, the Court stressed:

[I]f I find that Fitbit has forced this case out of court, and then has unilaterally refused to arbitrate it, there will be an accounting. And the accounting will have potentially grave consequences, both professionally for the attorneys and possibly for the client, as well. I am very disturbed that this would be the tactic that Fitbit would use. You cannot shut down people’s claims through games. And I am gravely concerned that that is what has happened here.

May 31, 2018, Hr’g Tr. 13:22-14:5. The undisputed factual record substantiates the Court’s

concerns.

In sum, and as detailed below: For two years Fitbit insisted to this Court that all Plaintiffs

and all claims in this case (other than those brought by arbitration opt outs) must go to arbitration,

including the threshold issue of arbitrability. This Court ultimately granted Fitbit’s motion to

compel, and sent the case to arbitration for the express purpose of deciding arbitrability—a

decision that became final with the Court’s reconsideration order on January 24, 2018.

Ms. McLellan did as the Court instructed, and on April 3, 2018, she initiated an individual

arbitration in AAA, and paid her share of the filing fee. She expressly requested an arbitrator

with “experience evaluating consumer claims contesting the scope and enforceability of the

arbitration agreement.” Rather than pay its share of the fees as required by its own Terms of

Service and as requested by AAA, Fitbit refused to arbitrate arbitrability, and, after

unsuccessfully trying to buy off her individual claim, unilaterally pronounced Ms. McLellan’s

arbitration proceeding “concluded,” and so informed AAA.

This was no “misunderstanding” or mistake: Fitbit knew precisely what it was doing.

1 So as not to exceed the scope of the briefing ordered by the Court, Plaintiffs have not filed a motion to lift the stay with respect to Ms. McLellan and the other non-opt-out Plaintiffs, or a formal motion to reconsider the Court’s prior rulings compelling arbitration. However, the facts laid out below warrant both, and should the Court deem formal motions necessary, Plaintiffs will file them.


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Plaintiffs’ counsel explained to Fitbit on a meet and confer call on May 14, 2018, that

Ms. McLellan intended to seek a ruling on arbitrability (as well as other relief) in arbitration, and

reconfirmed that fact by letter the same day. Fitbit’s counsel informed Plaintiffs’ counsel on that

call that he had “no intention” of letting Ms. McLellan do that. Fitbit then refused to arbitrate,

instructed AAA that it regarded the arbitration “concluded,” remained silent after Plaintiffs filed

their sur-reply, and informed the Court at the hearing (some five times) that no “rational litigant”

would arbitrate such a claim.

Following the hearing, Fitbit rushed to try to undo the self-inflicted damage. In a letter

sent the next day, Fitbit advanced a newly-minted assertion that it previously “misunderstood”

Ms. McLellan’s intentions, and offered to now proceed with arbitration. But Fitbit’s post-hearing

attempt to reverse course is not only too little, too late under controlling Ninth Circuit law, but it

further evinces its gamesmanship because it is premised on a demonstrably false claim of

misunderstanding.

Plaintiffs respectfully submit that Fitbit must be held to account. If nothing else, it has

violated this Court’s orders, breached the terms of its own arbitration clause, and forfeited any

right to enforce the clause against Ms. McLellan. Furthermore, by its conduct, and its repeated

admission in court that no “rational litigant” would arbitrate these claims individually, Fitbit has

given the lie to any claim that arbitration is an appropriate alternative forum for these claims to be

heard, as basic due process requires. Far from furthering “[t]he overarching purpose of the

AAA . . . to ensure the enforcement of arbitration agreements according to their terms so as to

facilitate streamlined proceedings,” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344

(2011) (emphasis added), Fitbit has ensured there will be no proceedings at all, thereby depriving

Ms. McLellan of her right to have these claims heard. And Fitbit did not just admit that

arbitration of these claims is irrational for Ms. McLellan alone; it admitted that arbitration here is

irrational for any consumer. As such, it has demonstrated that its arbitration clause is void and

unenforceable as to all consumers who purchased the class devices. Finally, Plaintiffs submit that

if the Court is inclined to sanction Fitbit, either by way of civil contempt or under its inherent

authority, the most appropriate sanction would be to void the arbitration clause as to all Plaintiffs


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and proposed class members in this case.

I. TIMELINE OF RELEVANT EVENTS

A. Fitbit Tells the Court That Arbitrability Defenses Can Be Heard Only by an Arbitrator.

As detailed in Plaintiff Dunn’s sur-reply, Fitbit argued for two years that because its

Terms of Service incorporated a “delegation clause,” only an arbitrator—and not this Court—

could review the non-opt-out Plaintiffs’ challenges to the applicability and enforceability of the

arbitration clause and class action waiver. See, e.g., Dkt. 57 at 3 (“[T]he arbitrability of

Plaintiffs’ claims in this case must be decided by an arbitrator.”); id. at 8 (“The Court should refer

the parties to the AAA to decide whether the arbitration clause is to be enforced.”); Dkt. 62 at 10

(“The Court should refer the parties to the AAA to decide whether the arbitration clause is to be

enforced.”); Dkt. 88 at 5 (“[T]he parties agreed that arbitrability is for the arbitrator, not a

court.”); Dkt. 94 at 7 (“The parties have clearly and unmistakably delegated all issues of

arbitrability to an arbitrator. The Court should refer the parties to the AAA to decide whether the

arbitration clause is to be enforced . . . .”); Dkt. 118 at 3 (“[T]he arbitrator” must consider whether

a “provision [that] purports to waive” a plaintiff’s “right to seek public injunctive relief in all

fora” renders the arbitration provision unenforceable) (citation omitted); Dkt. 134 at 3 (“The

arbitrator must decide the arbitrability” of any claim brought by a non-opt out plaintiff).

The Court agreed, holding that the non-opt-out Plaintiffs’ arguments that “Fitbit procured

the agreement to arbitrate by fraud” and that “the arbitration provision is unenforceable as applied

to plaintiffs’ claims for public injunctive relief . . . must be considered by the AAA arbitrator in

the first instance,” and that “the arbitrator will resolve [the non-opt-out] plaintiffs’ challenges to

the scope and enforceability of the arbitration clause.” Dkt. 114 at 8-9 (emphasis added). At the

most recent hearing, the Court again confirmed that

I sent the case to AAA to decide arbitrability; not to decide a $161 claim. That is not even a portion of my Order. It’s not even mentioned in my Order. The Order as to AAA was: Under the current state of the law, you, Mr. Arbitrator or Ms. Arbitrator, need to decide this question. The question goes to the heart of which forum will hear this case. It had nothing to do, even remotely, with the dollar value of her watch. . . .


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May 31, 2018, Hr’g Tr. 16:2-10.

B. Ms. McLellan Initiates Arbitration to Seek a Ruling on Arbitrability.

Pursuant to the Court’s order and the “delegation clause” incorporated into Fitbit’s Terms

of Service, Ms. McLellan initiated arbitration on April 3, 2018, under AAA’s Commercial

Arbitration Rules.2 See Exhibit A, Declaration of Jonathan Selbin (“Selbin Decl.”) ¶ 1,

Attachment 1 (Arbitration Demand); id., Attachment 2 (Terms of Service: “Arbitration

Procedures: The American Arbitration Association (AAA) will administer the arbitration under

its Commercial Arbitration Rules and the Supplementary Procedures for Consumer Related

Disputes.”). Upon filing her arbitration demand, Ms. McLellan paid the $750 dollar filing fee

required under the AAA’s commercial rules. Id. ¶ 2.

At the hearing, Fitbit made much of the fact that in the portion of the AAA form demand

addressing the “Dollar Amount of Claim,” Ms. McLellan inputted the price of her defective

device. As the Court observed, this is a red herring—especially so because Ms. McLellan made

clear in the very next section that the proceeding required an arbitrator with “experience

evaluating consumer claims contesting the scope and enforceability of the arbitration agreement”:

See Ex. A (Selbin Decl.), Attachment 1.3 Ms. McLellan’s intentions to seek a determination on 2 Fitbit suggested in its reply to the motion to strike, and again at the hearing, that Ms. McLellan acted improperly in waiting “six months before filing her AAA claim.” Dkt. 134 at 5; see also May 31, 2018, Hr’g Tr. 6:19-21 (“Following the Court’s ruling Your Honor made October 2017, six months went by.”). This is irrelevant (Fitbit raises no timeliness defense). It is also misleading because the date after which Ms. McLellan might reasonably initiate arbitration was not October 11, 2017, as Fitbit states, but rather January 24, 2018, when the Court issued its order on the non-opt-out Plaintiffs’ motion for reconsideration. 3 Fitbit also highlighted the fact that under the “type of business” section of the form demand, Ms. McLellan identified herself as an “individual” as opposed to a corporate entity. May 31, 2018, Hr’g Tr. 7:7-9. In no way can this be interpreted as evidence that she did not intend to


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her challenges to the scope and enforceability of the arbitration clause were clear, not only from

two years of briefing and this Court’s orders, but also on the face of her arbitration demand itself.

C. AAA Sets a Deadline of May 9, 2018, for Fitbit to Submit the Requisite Filing Fees.

On April 25, 2018, AAA informed the parties that it would apply the Commercial

Arbitration Rules and explained that under those rules, “the consumer pays a filing fee of $200

and the business pays a filing fee of $1,700.” See Ex. A (Selbin Decl.), Attachment 3. It went on

to note that the AAA had received Ms. McLellan’s fee but that the “filing requirements” would

not be “complete” until Fitbit “submit[ed] filing fees of $1,700 and the arbitrator’s

compensation deposit of $2,500, totaling $4,200.” Id. AAA set a deadline of May 9, 2018, for

Fitbit to tender the fees. Id. (“The requested payment should be received no later than May 9th,

2018 and the AAA may decline to administer this dispute if the business does not timely

respond.”) (underlining added).

D. Fitbit Makes a Settlement Offer; Ms. McLellan Rejects It to Seek a Determination on Arbitrability; Fitbit Unilaterally Concludes the Arbitration Before it Begins.

Instead of paying the filing fees by the deadline, Fitbit made Ms. McLellan a settlement

offer on May 3, 3018.4 See Ex. A (Selbin Decl.), Attachments 4 and 5. Notably, in those

settlement letters—which Ms. McLellan had not yet accepted and would ultimately reject—Fitbit

advised that it “consider[ed] the arbitration demand of Ms. McLellan resolved” and “regard[ed]

this matter as closed.” Id.

Ms. McLellan, however, did not consider the matter resolved or closed. She informed her

counsel that she intended to reject the settlement offer and to proceed to arbitrate the threshold

questions of arbitrability. See Exhibit B, Declaration of Kate McLellan (“McLellan Decl.”) ¶ 6.

pursue her arbitrability challenges, especially since Fitbit’s Terms of Service allow her “only [to] resolve Disputes with Fitbit on an individual plaintiff” and prohibit her from consolidating her arbitrations with others’. Ex. A (Selbin Decl.), Attachment 2. 4 The offer was communicated via two letters, one addressed to Plaintiffs’ counsel, and the other addressed directly to Ms. McLellan. See Ex. A (Selbin Decl.), Attachments 4 and 5. The letter addressed to Ms. McLellan was signed by Fitbit’s Associate General Counsel, Gloria Lee. Fitbit did not couch either of these letters as privileged settlement communications, nor did either side limit their subsequent discussions and communications as such.


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Plaintiffs’ counsel then requested a conference with Fitbit’s counsel to communicate

Ms. McLellan’s decision and to seek clarification on Fitbit’s assertion that the arbitration

proceeding was “closed” regardless of Ms. McLellan’s response.

That conference took place by telephone on May 14, 2018. Although it was not

transcribed, a paralegal at Lieff Cabraser Heimann & Bernstein, LLP, took comprehensive and

contemporaneous notes, which he circulated to Plaintiffs’ counsel later that afternoon. See

Exhibit C, Declaration of Max Blaisdell (“Blaisdell Decl.”) ¶¶ 4-5, Attachment 1.5 Those notes,

and the recollection of Plaintiffs’ counsel, confirm that Plaintiffs’ counsel communicated to Fitbit

that Ms. McLellan rejected the settlement offer because, among other reasons, “there are

unresolved issues on the delegation provision”—meaning the “scope” and enforceability of the

arbitration clause—“that she would like the arbitrator to decide.” Id.; Ex. A (Selbin Decl.) ¶¶ 3-4;

Exhibit D, Declaration of Kevin R. Budner (“Budner Decl.”) ¶¶ 3-4. Those notes also confirm

that Fitbit’s counsel had no intention of proceeding with the arbitration, notwithstanding

Ms. McLellan’s rejection. Fitbit’s full response, as found in the contemporaneous notes—which

again are not presented as a verbatim transcription, but which have not been altered in any way

after they were recorded—was as follows:

We plan to tell AAA that we made an offer and regard the matter as concluded even though Kate declining the offer and see what AAA will do. We to [sic] offered her everything and there’s nothing more she could get from AAA. We’ll enclose the letters and say that we regard it as concluded. We never plan on getting to scope and enforceability with the arbitrator and are not going to seeking to file briefs on those matters.

Ex. C. (Blaisdell Decl.), Attachment 1 (emphasis added). The substance of this response is

confirmed by the recollection of Plaintiffs’ counsel, see Ex. A (Selbin Decl.) ¶¶ 3-4; Ex. D,

(“Budner Decl.”) ¶¶ 3-4, and tracks the language of Fitbit’s subsequent letter to AAA, detailed

below.

After the call, Plaintiffs’ counsel sent Fitbit a letter memorializing Ms. McLellan’s

5 As he explains in his accompanying declaration, paralegal Max Blaisdell endeavored to take “comprehensive and accurate” notes, and those notes, attached as Attachment 1 to his Declaration, have not been altered or edited in any way.


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position. That letter stated, in relevant part:

Ms. McLellan maintains that, as Fitbit has long argued and as Judge Donato ruled, she has the right to have an arbitrator determine (1) whether the arbitration clause and class action waiver are enforceable and/or applicable to her claims, and (2) whether she can bring a claim for public injunctive relief on behalf of all members of the proposed class. See Dkt. No. 114 at 9 (“The arbitrator will resolve [the non-opt-out] plaintiffs’ challenges to the scope and enforceability of the arbitration clause.”); id. at 8 (plaintiffs’ arguments that “Fitbit procured the agreement to arbitrate by fraud” and that “the arbitration provision is unenforceable as applied to plaintiffs’ claims for public injunctive relief . . . must be considered by the AAA arbitrator in the first instance”). Ms. McLellan intends to enforce her right to seek this determination.

Ex. A (Selbin Decl.), Attachment 6 (emphasis added).6 In other words, as of May 14, 2018,

Ms. McLellan had (at least twice) made abundantly clear her intention to exercise her rights under

this Court’s orders and the delegation clause in Fitbit’s Terms of Service to have arbitrability

decided in arbitration.

But Fitbit would not let her. After receiving Ms. McLellan’s rejection, Fitbit did not pay

the filing fees that it was contractually obligated to pay and that were, at that point, already five

days overdue. See Ex. A (Selbin Decl.), Attachment 2 (Terms of Service: “Fitbit will pay all

arbitration fees for claims less than $75,000.”). Nor did it seek to retract or in any way revise its

statement that it viewed the arbitration to be “closed.” Instead, Fitbit doubled down.

On May 16, 2018, Fitbit sent a letter to AAA terminating the arbitration. It stated, in

relevant part:

Fitbit’s goal is customer satisfaction. However, the filing fee alone ($750) is almost five times her total out-of-pocket claim, were she to succeed. We believe Fitbit’s total offer of $2,814.75—which is more than 17 times what she paid—is many times more than what she could recover if she were to proceed to arbitration and prevail.

Fitbit regards this matter as concluded.

See Ex. A (Selbin Decl.), Attachment 7 (emphasis added). As Fitbit itself made clear in the meet

and confer, it never intended to let Ms. McLellan arbitrate scope and arbitrability. Its intention

was to pick her off with an individual settlement. When she refused, Fitbit concluded the

6 Plaintiffs’ counsel also stated in this letter that Ms. McLellan sought relief for the entire class of consumers, further undermining Fitbit’s claim that it believed she was seeking only individual monetary relief. Id.


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arbitration anyway.

E. At the May 31, 2018, Hearing, Fitbit Confirms That It Unilaterally Closed the Arbitration and That No “Rational” Fitbit Consumer Would Seek to Arbitrate Her Claims.

More than two weeks passed between the date Fitbit sent its letter to AAA and the hearing

before this Court. During that time, Plaintiff Dunn filed a sur-reply, again explaining that Ms.

McLellan “initiated an arbitration seeking a determination on precisely the arbitrability issues that

the Court concluded must be determined by an arbitrator,” and informing the Court that “Fitbit

has acted to deprive Ms. McLellan of any opportunity to resolve her arbitrability challenges in

any forum, including in arbitration.” See Dkts. 137, 139. Fitbit made no effort to “dispel any”

purported “misunderstanding,” see Ex. A (Selbin Decl.), Attachment 8, and filed nothing in

response. Nor did it pay the arbitration fees necessary for the arbitration to proceed, or take any

other action to revive the proceedings it had unilaterally “concluded.”

At the hearing, Fitbit’s counsel confirmed that “we’ve told AAA” about Ms. McLellan’s

decision to reject its settlement offer, “[a]nd we said, We regard that matter as concluded. So we

have had no further communications with them. We haven’t posted our fee with AAA.” May 31,

2018, Hr’g Tr. 11:5-6 (italics in original). Only after it became obvious that the Court saw

through and disapproved of Fitbit’s tactics, Fitbit’s counsel argued that, in his view, Fitbit’s

“decision” to terminate the arbitration “is not irreversible.” Id. at 11:10. Later, Fitbit’s counsel

reiterated his position that Fitbit’s decision to end the arbitration “isn’t irreversible. And I can

visit and I will revisit with the client whether we want to re-open the arbitration.” Id. at 14:24-

15:1 (bolding added; italics in original). Whether that decision is actually “reversible” (it is not, as

discussed below), these statements again verify that Fitbit had, in fact and in its own view,

unilaterally closed the arbitration.

Fitbit’s counsel also confirmed what Plaintiffs had long argued: that Fitbit used its

arbitration clause not to provide an alternative, efficient forum to adjudicate consumers’ claims,

but to ensure that consumers would have no reasonable opportunity to bring their claims at all.

Again and again, counsel explained that “a claim that is $162 -- an individual claim -- is not one

that any rational litigant would litigate.” Id. at 15:5-7; see also, e.g., id. at 10:7-9 (“[I]n our view,


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a rational litigant wouldn't litigate $162 claim where the filing fee, itself, is $750.”). Counsel

later explained:

[W]hat I understand Ms. McLellan wants . . . is a right to be heard. And my understanding of that right to be heard is simply to have, pursuant to the Delegation Clause -- is to have the arbitrator decide the remaining two formation issues that Your Honor didn’t decide, which would be fraudulent inducement, and scope.

So when I’m hearing notions about she’s been denied a right of Due Process, an opportunity to be heard, let's be clear on what that right is. What she is asking us to do is go to arbitration on a claim of $162; that we have to pay $750 just to get the arbitrator, in order to have her two formation defenses decided. At least, that’s the first step.

As I said, we felt no rational litigant would require that.

Id. at 11:13-25. In other words, Fitbit admitted that no rational consumer would ever seek to

individually arbitrate the claims in this case. Nor will Fitbit permit any consumer to actually test

the arbitrability of these claims in arbitration, despite its argument that only an arbitrator can

decide that issue. Fitbit’s arbitration clause, as construed by Fitbit itself, thus precludes any

consumer—rational or not—from ever having these claims heard in any forum.

F. After This Court Expresses Concern, Fitbit Attempts to Reverse Course and “Re-Open” the Arbitration, Falsely Claiming to Have “Misunderstood” Ms. McLellan’s Intentions.

This Court did not mince words at the hearing, and Fitbit surely understood that it was in

trouble. Fitbit’s response was a transparent effort to re-write history. In a letter sent the day after

the hearing, Fitbit claimed that the whole thing had been a “misunderstanding” and that “it was

never Fitbit’s intent to preclude Ms. McLellan (or any Fitbit customer) of their right to proceed in

arbitration.” Ex. A (Selbin Decl.), Attachment 8. To justify its actions, Fitbit stated that it

previously understood Ms. McLellan to be seeking only

monetary relief. . . . As for a determination about contract formation, we assumed that Plaintiffs decided not to present that question to the arbitrator via Ms. McLellan and instead might have been reserving that issue for one of the other eleven non-optouts (whose arbitration demands still have not been filed).

Id. This is demonstrably false, as this Court foresaw:

I don’t imagine that there could be a misunderstanding, because I sent the case to AAA to decide arbitrability; not to decide a $161 claim. That is not even a portion of my Order. It's not even mentioned in my Order.


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The Order as to AAA was: Under the current state of the law, you, Mr. Arbitrator or Ms. Arbitrator, need to decide this question. The question goes to the heart of which forum will hear this case. It had nothing to do, even remotely, with the dollar value of her watch; and I’m taken aback that you keep focusing on that. You know that’s not the case. Even the lawyer in this case, from Day One, you signed all of those briefs. You argued it to me. You know what was delegated to the AAA to decide. It was not a $161 claim.

May 31, 2018, Hr’g Tr. 16:1-14.

Furthermore, as shown above, Ms. McLellan’s arbitration demand—a one-page form

provided by AAA, with limited space—stated that the proceeding would require an arbitrator

with “experience evaluating consumer claims contesting the scope and enforceability of the

arbitration agreement.” Ex. A (Selbin Decl.), Attachment 1. And Plaintiffs’ counsel made crystal

clear on May 14, 2018, both in the telephonic meet and confer and in the letter sent later that day,

that “Ms. McLellan . . . has the right to have an arbitrator determine . . . whether the arbitration

clause and class action waiver are enforceable and/or applicable to her claims,” and that she

“intend[ed] to enforce her right to seek this determination.” Id., Attachment 6. In response,

Fitbit’s counsel stated “We never plan on getting to scope and enforceability with the arbitrator,”

and, two days later, it sent a letter to AAA stating that the matter was “concluded.” Ex. C

(Blaisdell Decl.), Attachment 1; Ex. A (Selbin Decl.) ¶¶ 2-3, Attachment 7; Ex. D (Budner Decl.)

¶¶ 2-3. Fitbit did nothing in the following weeks that would even remotely suggest it had

somehow misunderstood the situation, nor did it pay the filing fees necessary for the arbitration to

proceed. In light of the above, Fitbit’s post-hoc assertion of “misunderstanding” is, at best,

disingenuous, and appears to be yet another example of Fitbit’s gamesmanship.

Plaintiffs’ counsel recounted these facts in a responsive letter sent on June, 4, 2018. In

that letter, counsel further articulated Ms. McLellan’s intention “to present the full and accurate

factual record to the Court as ordered by Judge Donato in our upcoming papers” and explained

that “[u]ntil such time as Judge Donato rules, . . . it is her position that Fitbit has waived

enforcement of, defaulted on, and/or voided its arbitration clause as to her and all absent class

members by its failure to participate as required by Court order and its own Terms of Service.”

Ex. A (Selbin Decl.), Attachment 9.

Plaintiffs’ counsel received a letter from AAA on June 11, 2018, indicating that Fitbit had


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finally tendered the filing fees—more than a month late, and notwithstanding the fact that this

Court is now reviewing the propriety of Fitbit’s actions and its effect on the enforceability of the

arbitration clause. Id., Attachment 10. Plaintiffs’ counsel then informed AAA that they intend to

await this Court’s ruling before proceeding, and AAA stayed the case for 30 days. Id.,

Attachment 11; id. ¶ 15.

* * *

In sum, this undisputed record verifies the facts that caused this Court concern at the

hearing. Fitbit unilaterally terminated the very arbitration proceeding that it long argued was the

only forum for Ms. McLellan to advance her arbitrability challenges, thereby denying her any

forum to be heard on those issues.

II. IMPLICATIONS AND NEXT STEPS

A. Fitbit Breached the Arbitration Agreement and Has No Right to “Reverse” or “Re-open” Those Proceedings.

Controlling Ninth Circuit law is clear: a party that refuses to pay its portion of arbitration

fees or to otherwise participate in an arbitration proceeding is in breach of the arbitration

agreement and cannot later reverse course and compel arbitration. See Brown v. Dillard’s, Inc.,

430 F.3d 1004 (9th Cir. 2005). In Dillard’s, an employee (Brown) filed a notice of intent to

arbitrate a dispute with her employer (Dillard’s) pursuant to the company’s Fairness in Action

Program, which contained an arbitration clause. Id. at 1008. Soon after Brown filed the notice

and paid her portion of the arbitration fees, AAA requested that Dillard’s pay its portion of the

fees. Id. Dillard’s did not pay the fee or otherwise respond. Id. at 1008-09. Brown later spoke

to a representative at Dillard’s who told Brown that the company refused to arbitrate. Id. at 1009.

Brown then filed a complaint in court, and Dillard’s moved to compel arbitration. Id.

The district court denied the motion to compel, and the Ninth Circuit affirmed. It held

that “Dillard’s breached its agreement with Brown by refusing to participate in the arbitration

proceedings Brown initiated. Having breached the agreement, Dillard’s cannot now enforce it.”

Id. at 1010. The Ninth Circuit further explained that

If Dillard’s believed Brown’s claim was meritless, its proper course of action was


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to make that argument in arbitration. Instead, Dillard’s refused to participate in the arbitration process at all. Under general principles of California contract law, Dillard’s breach of its obligations under the arbitration agreement deprives it of the right to enforce that agreement . . . .

If we took Dillard’s view and allowed it to compel arbitration notwithstanding its breach of the arbitration agreement, we would set up a perverse incentive scheme. Employers like Dillard’s would have an incentive to refuse to arbitrate claims brought by employees in the hope that the frustrated employees would simply abandon them. This tactic would be costless to employers if they were allowed to compel arbitration whenever a frustrated but persistent employee eventually initiated litigation. We decline to adopt a rule that would encourage companies to refuse to participate in properly initiated arbitration proceedings. To promote our national policy in favor of arbitration, see Southland Corp. v. Keating, 465 U.S. 1, 10, 104 S.Ct. 852 (1984), we must decline to compel it in this case.

Id. at 1010-11. The Ninth Circuit also concluded that Dillard’s waived its right to arbitrate. Id. at

1012.

The similarities between Dillard’s and this case are striking. Fitbit, like Dillard’s, refused

to pay the arbitration fees and refused to arbitrate (that is, until this Court conveyed its

disapproval of Fitbit’s tactics). If anything, Fitbit’s conduct here was more egregious than the

conduct in Dillard’s—it did more than simply remain silent and refuse to pay, it affirmatively

communicated to AAA that it “regard[ed] the matter as concluded.” Ex. A (Selbin Decl.),

Attachment 7. Under the same California contract law principles applicable in Dillard’s, Fitbit

breached its arbitration agreement and waived its right to enforce it. Fitbit cannot turn back the

clock to undo its breach, and it would not have even attempted to do so but for this Court’s

intervention.

Fitbit’s actions, like Dillard’s’, “display[] the dark side of our nation’s policy in favor of

arbitration,” in which companies force consumers and employees into arbitration not as an

alternative forum to have claims heard, but to prevent them from being heard at all. Dillard’s,

430 F.3d at 1013. As the Supreme Court noted in Concepcion, “[t]he overarching purpose of the

FAA . . . is to ensure the enforcement of arbitration agreements according to their terms so as to

facilitate streamlined proceedings.” 563 U.S. at 344 (emphasis added). This, of course,

presupposes the existence of such proceedings; here, Fitbit forced Ms. McLellan into arbitration

and then unilaterally terminated them before they began. While certainly “streamlined,” that does

not qualify as a “proceeding” in any sense of the word, and thus neither serves the FAA’s


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“overarching purpose” nor comports with basic due process. Under binding precedent, Fitbit’s

actions must have consequences. Dillard’s, 430 F.3d at 1012-13; see also Nadeau v. Equity

Residential Properties Mgmt. Corp., 251 F. Supp. 3d 637, 644 (S.D.N.Y. 2017) (following

Dillard’s and holding that an employer refusing to pay arbitration fees or participate in arbitration

after employee rejected employer’s settlement offer breached its arbitration agreement and could

not later enforce it).7

For similar reasons, Fitbit also defaulted on its contractual obligations under its own

arbitration agreement. Sink v. Aden Enters., Inc., 352 F.3d 1197, 1199 (9th Cir. 2003). In Sink,

an employee (Sink) initiated arbitration against its employer (Aden). The employer was

contractually required to pay the arbitration fees and, as in Dillard’s, it did not do so by the

deadline imposed by the arbitrator. Id. at 1198-99. The arbitrator and district court found that the

employer had defaulted on its arbitration obligations. The Ninth Circuit affirmed, interpreting

“‘default’ to mean ‘[t]he omission or failure to perform a legal or contractual duty; esp., the

failure to pay a debt when due.’” Id. at 1999 n.2 (quoting Black’s Law Dictionary 428 (7th ed.

1999)). The Ninth Circuit further held that the employer could not later compel arbitration, and

noted that “Aden’s failure to pay required costs of arbitration was a material breach of its

obligations in connection with the arbitration. Aden had a fair chance to proceed with arbitration,

but Aden scuttled that prospect by its non-payment of costs . . . .” Id. at 1201.

As with Dillard’s, the application of Sink to this case is clear. Like Aden, Fitbit failed to

pay its contractually-required arbitration fees by the deadline. And, although no formal default

was requested or entered here, Fitbit unilaterally informed Ms. McLellan and AAA that it

regarded the matter closed. Until this Court’s intervention, Fitbit displayed absolutely no

7 As confirmed in Nadeau, the fact that Ms. McLellan rejected Fitbit’s settlement offer does not change this analysis. As this Court correctly noted at the hearing, Ms. McLellan had every right to do so. May 31, 2018, Hr’g Tr. at 10:16-19 (“[T]he Supreme Court has said you cannot unilaterally moot a claim. And you certainly can’t moot standing, simply by tendering what you consider to be full relief.”); see also Campbell-Ewald Co. v. Gomez, 136 S. Ct. 663, 672 (2016) (“[A]n unaccepted settlement offer or offer of judgment does not moot a plaintiff’s case.”); Chen v. Allstate Ins. Co., 819 F.3d 1136, 1144 (9th Cir. 2016) (“As we read Campbell–Ewald, a lawsuit—or an individual claim—becomes moot when a plaintiff actually receives all of the relief he or she could receive on the claim through further litigation.”) (emphasis in original).


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intention to ever pay its fees or otherwise revive the arbitration. The same principles therefore

apply: a party that “fail[s] to pay a debt when due” forfeits its right to arbitrate. See id. at 1198-

1201; accord Pre-Paid Legal Servs., Inc. v. Cahill, 786 F.3d 1287, 1295, 1299 (10th Cir. 2015)

(following Sink and confirming that the same result follows whether or not the arbitrator

“formally entered default”); Rapaport v. Soffer, No. 2:10-CV-00935-KJD, 2011 WL 1827147, at

*3 (D. Nev. May 12, 2011) (same).

Fitbit failed to timely pay its filing fees and refused to participate in Ms. McLellan’s

arbitration. It cannot now “reverse” that decision and has lost its right to compel arbitration.

B. Fitbit Has Now Conceded That Arbitration Is Not a Viable Forum for Resolving Arbitrability or Hearing Any Other Aspect of These Claims.

Fitbit unilaterally imposed an arbitration clause in post-purchase Terms of Service. As the

Court knows, Plaintiffs challenged the enforceability of that clause in a host of ways, including

that the manner in which Fitbit imposed the arbitration clause itself was a scheme by Fitbit to

immunize itself from all liability. See, e.g., Dkt. 42 at 27-29, 41-42. When Ms. McLellan and

other consumers sought to challenge the clause in court, Fitbit argued for two years that such

arguments must be heard only by an arbitrator. After the Court ruled in Fitbit’s favor, Ms.

McLellan tried to seek that determination in arbitration. But Fitbit wouldn’t let her. This is a

direct violation of the Court’s order, and it reveals that Fitbit never intended arbitration to be a

viable alternative to have these claims heard—it was only ever meant to preclude consumers from

having them heard at all. See Dillard’s, 430 F.3d at 1012-13.

This is further evidenced by Fitbit’s counsel’s repeated admission that, notwithstanding its

repeated prior insistence that all issues in this case—including arbitrability—must go to

arbitration for resolution, no “rational litigant” would arbitrate these claims individually. These

admissions also make clear that, as applied to any claims that the proposed class of consumers

might reasonably bring here, “the cost of arbitration precludes the effective vindication of

statutory rights in arbitration,” and the “agreement to arbitrate is unenforceable.” Anders v.

Hometown Mortg. Servs., Inc., 346 F.3d 1024, 1028 (11th Cir. 2003) (citing Green Tree Fin.

Corp. v. Randolph, 531 U.S. 79, 90 (2000)); see also Am. Exp. Co. v. Italian Colors Rest., 570


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U.S. 228, 236 (2013) (citing Green Tree and confirming the validity of the “effective vindication”

exception to arbitration); Kristian v. Comcast Corp., 446 F.3d 25, 52 (1st Cir. 2006).

In Italian Colors, the Supreme Court made it clear that effective vindication requires “a

right to pursue statutory remedies” in arbitration. 570 U.S. at 235 (emphasis in original; citation

omitted). That is, at minimum, a plaintiff must be afforded the right to pursue statutory remedies

in arbitration if she is to be compelled to do so. The Supreme Court went on to explain that its

minimum requirement rule “would certainly cover a provision in an arbitration agreement

forbidding the assertion of certain statutory rights. And it would perhaps cover filing and

administrative fees attached to arbitration that are so high as to make access to the forum

impracticable.” Id. at 236.

Here, Fitbit has done both: it has foreclosed Ms. McLellan from pursuing her statutory

rights in arbitration, and it has—by its own admission—required filing and administrative fees

that are so high relative to the value of her individual claim so as to render access impracticable

or, in its counsel’s words, irrational. While, ordinarily, one party’s agreement to pay the

arbitration fees would undermine this position, see Anders, 346 F.3d at 1030, Fitbit’s repeated

statements that no rational litigant would arbitrate low-value claims under Fitbit’s Terms of

Service set this case apart. This conclusion applies to all members of the proposed class, and

Plaintiffs submit that the arbitration agreement is unenforceable as to all of them.

Much of the current Supreme Court jurisprudence around arbitration clauses is already

fiction built upon fiction. The fiction that consumers knowingly waive their Seventh Amendment

right to a jury trial every time they buy a product and click “agree” next to tens of pages of

miniature text often, as here, after they have already paid for the product or service. The fiction

that they knowingly delegate arbitrability to an arbitrator. The fiction that individual arbitration is

a viable alternative forum for consumers with small value claims. But one does not have to view

these fictions as bad law or bad policy to agree that, here, Fitbit has conceded that its entire

arbitration procedure is nothing more than a fraud, a scheme designed to prevent consumers from

having their claims heard in any forum.


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C. Fitbit Must Be Held to Account.

The Court already concluded that if the facts demonstrate that “Fitbit has forced this case

out of court, and then has unilaterally refused to arbitrate it, there will be an accounting. And that

accounting will have potentially grave consequences, both professionally for the attorneys and

possibly for the client, as well.” May 31, 2018, Hr’g Tr. 13:23-14:2. If the Court makes such a

finding on the full record now before it, Plaintiffs respectfully submit that the most appropriate

way to hold Fitbit to account for attempting to “shut down people’s claims though games” would

be to invalidate the arbitration clause as to all members of the proposed class and permit them to

be brought in court.

Plaintiffs recognize that a common sanction for bad-faith conduct related to arbitration is

an award of attorneys’ fees. See, e.g., Int’l Union of Petroleum & Indus. Workers v. W. Indus.

Maint., Inc., 707 F.2d 425, 428 (9th Cir. 1983) (“[W]e agree with other circuits . . . that an

unjustified refusal to abide by an arbitrator’s award may equate an act taken in bad faith,

vexatiously or for oppressive reasons.”); Sheet Metal Workers’ Int’l Ass’n Local Union No. 359 v.

Madison Indus., Inc. of Ariz., 84 F.3d 1186, 1192 (9th Cir. 1996) (same); Legair v. Circuit City

Stores, Inc., 2005 WL 1865373 (S.D. Ohio July 26, 2005) (finding plaintiff’s counsel “in

contempt of this court’s order to arbitrate” and granting monetary sanctions to “reimburse

defendant for any excess costs and expenses caused by [counsel’s] obstructionist actions”); Cigna

Ins. Co. v. Huddleston, 986 F.2d 1418 (5th Cir. 1993) (upholding district court’s award of

attorney’s fees as sanction for party’s “bad-faith refusal to be bound by the arbitration award”).

Here, however, sanctions in the amount of the relatively modest attorneys’ fees associated with

these latest proceedings would do little to alter the “perverse incentive scheme” or to

“[dis]courage companies [like Fitbit from] refus[ing] to participate in properly initiated arbitration

proceedings.” See Dillard’s, Inc., 430 F.3d at 1011.

The record is clear: Fitbit has abused this process, and its arbitration clause, to avoid all

accountability for these claims in any forum. It would not even allow an arbitrator to decide the

very issue—arbitrability—it spent two years telling this Court must only be decided by an

arbitrator. It did so, we now know thanks to its counsel’s candor, because it knows no rational


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consumer would actually arbitrate these claims individually, and if anyone dares try—as Ms.

McLellan did—Fitbit will unilaterally shut it down. This is not about an alternative forum for

claims to be pressed, it is about insulating Fitbit altogether from legitimate claims. Respectfully,

in light of its conduct, Fitbit should not have the ability to invoke its arbitration clause again, at

least not as to these claims by these Plaintiffs and the consumers they seek to represent.

Dated: June 14, 2018

Respectfully submitted, LIEFF CABRASER HEIMANN & BERNSTEIN, LLP By: /s/ Jonathan D. Selbin

Jonathan D. Selbin Jonathan D. Selbin (CA SBN 170222) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (212) 355-9500 Facsimile: (212) 355-9592

Elizabeth J. Cabraser (CA SBN 083151) [email protected] Kelly M. Dermody (CA SBN 171716) [email protected] Kevin R. Budner (CA SBN 287271) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008

Robert Klonoff (pro hac vice)[email protected] ROBERT H. KLONOFF, LLC 2425 SW 76th Ave. Portland, OR 97225 Telephone: (503) 291-1570

Rosemary M. Rivas (CA SBN 209147) [email protected] Adam C. McCall (CA SBN 302130) [email protected] LEVI & KORSINSKY LLP 445 South Figueroa Street, 31st Floor Los Angeles, CA 90071 Telephone: (213) 985-7290 Facsimile: (866) 367-6510


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Andrea Clisura (pro hac vice)[email protected] Courtney E. Maccarone (pro hac vice) [email protected] LEVI & KORSINSKY LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171

Attorneys for Plaintiffs, individually and behalf of all others similarly situated


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CERTIFICATE OF SERVICE

I hereby certify that, on June 14, 2018, service of this document was accomplished

pursuant to the Court’s electronic filing procedures by filing this document through the ECF

system. /s/ Jonathan D. Selbin Jonathan D. Selbin


EXHIBIT A

Case 3:16-cv-00036-JD Document 146-1 Filed 06/14/18 Page 1 of 47

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Elizabeth J. Cabraser (CA SBN 083151) [email protected] Kelly M. Dermody (CA SBN 171716) [email protected] Kevin R. Budner (CA SBN 287271) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008 Jonathan D. Selbin (CA SBN 170222) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (212) 355-9500 Facsimile: (212) 355-9592

Robert Klonoff (pro hac vice) [email protected] ROBERT H. KLONOFF, LLC 2425 SW 76th Ave. Portland, OR 97225 Telephone: (503) 291-1570


Andrea Clisura (pro hac vice) [email protected] Courtney E. Maccarone (pro hac vice) [email protected] LEVI & KORSINSKY LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171



SAN FRANCISCO DIVISION KATE MCLELLAN, TERESA BLACK, DAVID URBAN, ROB DUNN, RACHEL SAITO, TODD RUBINSTEIN, RHONDA CALLAN, JAMES SCHORR, BRUCE MORGAN, and AMBER JONES, Individually and on Behalf of All Others Similarly Situated,

Plaintiffs, v. FITBIT, INC.,

Defendant.


DECLARATION OF JONATHAN D. SELBIN IN SUPPORT OF PLAINTIFFS' STATEMENT ON THE STATUS OF ARBITRATION PROCEEDINGS

Date: TBD Time: TBD Ctrm: 11, 19th Floor

The Honorable James D. Donato JUDITH LANDERS, LISA MARIE BURKE, and JOHN MOLENSTRA, Individually and on Behalf of All Others Similarly Situated,


Defendant.

- 1 - DECLARATION IN SUPPORT OF

STATEMENT RE STATUS OF ARBITRATION CASE NOS. 16-CV-0036-JD; 16-CV-00777-JD


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I, Jonathan D. Selbin, declare as follows:

1. I am a partner at the law firm Lieff Cabraser Heimann & Bernstein, LLP. I am a

member in good standing of the bars of the States of California and New York, and the bar of the

District of Columbia, and I am admitted to practice in this District. I respectfully submit this

declaration in support of Plaintiffs’ Statement on the Status of Arbitration Proceedings.

2. Following the Court’s order regarding Plaintiffs’ Motion for Partial

Reconsideration (Dkt. 126), Plaintiff Kate McLellan indicated that she wished to pursue

arbitration to seek a determination on her challenges to the arbitration clause. Attorneys working

under my direction prepared and filed the demand and submitted the $750 filing fee required

under AAA’s commercial arbitration rules.

3. On May 14, 2018, I participated on a call that included my partner Kevin R.

Budner, a paralegal from my office, Max Blaisdell, and Fitbit’s counsel, William L. Stern and Kai

S. Bartolomeo. I understand that Mr. Budner requested in advance that Mr. Blaisdell take

contemporaneous and detailed notes of that telephone call. I have reviewed the notes that Mr.

Blaisdell circulated later that day (and which are attached to Mr. Blaisdell’s declaration without

any alteration or amendment).

4. Mr. Blaisdell’s notes confirm my independent recollection that on that call (a)

Plaintiffs’ counsel expressly and clearly communicated to Fitbit’s counsel Ms. McLellan’s

intention to have an arbitrator rule on her challenges to the scope and enforceability of the

arbitration clause (arbitrability), and (b) Fitbit’s counsel—Mr. Stern—stated that Fitbit had no

intention of allowing Ms. McLellan to test arbitrability with the arbitrator, and that they believed

the matter was concluded.

5. Attached hereto as Attachment 1 is a true and correct copy of Kate McLellan’s

arbitration demand, submitted to AAA on April 3, 2018. For efficiency, the exhibits to the

demand—which consist of the Complaint, two of this Court’s orders, and Fitbit’s Terms of

Service—are not included herein.

6. Attached hereto as Attachment 2 is a true and correct copy of Fitbit’s Terms of

Service, produced by Fitbit with the bates range FITBIT_HR_000012-16.

1573972.2 - 2 -

DECLARATION IN SUPPORT OF STATEMENT RE STATUS OF ARBITRATION

CASE NOS. 16-CV-0036-JD; 16-CV-00777-JD


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7. Attached hereto as Attachment 3 is a true and correct copy of a letter sent on

April 25, 2018, by AAA’s consumer filing team setting a May 9, 2018, deadline for Fitbit to

submit its portion of the arbitration fees.

8. Attached hereto as Attachment 4 is a true and correct copy of a letter e-mailed on

May 3, 2018, by Fitbit’s counsel and addressed to Plaintiffs’ counsel, setting forth Fitbit’s

settlement offer to Ms. McLellan.

9. Attached hereto as Attachment 5 is a true and correct copy of a letter e-mailed to

Plaintiff’s counsel on May 3, 2018, by Fitbit’s counsel and addressed to Ms. McLellan, setting

forth Fitbit’s settlement offer to Ms. McLellan

10. Attached hereto as Attachment 6 is a true and correct copy of a letter sent by

Plaintiffs’ counsel to Fitbit’s counsel on May 14, 2018, confirming that Ms. McLellan rejected

Fitbit’s settlement offer and reiterating her intention to “have an arbitrator determine . . . whether

the arbitration clause and class action waiver are enforceable and/or applicable to her claims.”


Fitbit’s counsel to AAA on May 16, 2018, informing AAA that Ms. McLellan had rejected

Fitbit’s settlement offer and that Fitbit “regard[ed] this matter as concluded.” The attachments to

this letter, which are also attached separately to this declaration, are omitted for efficiency.


Fitbit’s counsel to Plaintiffs’ counsel on June 1, 2018, alleging that Fitbit had previously

misunderstood Ms. McLellan’s intentions.


Plaintiffs’ counsel to Fitbit’s counsel on June 4, 2018, responding to Fitbit’s June 1, 2018, letter

(Attachment 8).


AAA to the parties on June 11, 2018, stating that Fitbit had submitted its fees.


Plaintiffs’ counsel to AAA on June 13, 2018, updating AAA of recent events in the case. The

1573972.2 - 3 -




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attachments to this letter, which include the transcript of the May 31, 2018, hearing and other

documents attached separately to this declaration, are omitted for efficiency.

16. On June 13, 2018, a representative from AAA sent an email to the parties

confirming receipt of the Plaintiffs’ June 13, 2018, letter and stating that “AAA will place this

case into a 30 day stay pending the outcome of the court resolution.”

I declare under penalty of perjury under the laws of the United States that the foregoing is

true and correct, to the best of my knowledge and belief, and that the foregoing was executed on

June 14, 2018, in New York, New York.

By: /s/ Jonathan D. Selbin Jonathan D. Selbin

1573972.2 - 4 -




ATTACHMENT 1


COMMERCIAL ARBITRATION RULES DEMAND FOR ARBITRATION

You are hereby notified that a copy of our arbitration agreement and this demand are being filed with the American Arbitration Association with a request that it commence administration of the arbitration. The AAA will provide notice of your opportunity to file an answering statement.

Name of Respondent: Name of Representative (if known):

Address: Name of Firm (if applicable):

Representative’s Address:

City: State: Zip Code: City: State: Zip Code:

Phone No.: Fax No.: Phone No.: Fax No.:

Email Address: Email Address:

The named claimant, a party to an arbitration agreement which provides for arbitration under the Commercial Arbitration Rules of the American Arbitration Association, hereby demands arbitration.

Dollar Amount of Claim: $ Other Relief Sought:

Attorneys Fees Interest Arbitration Costs

Punitive/ Exemplary Other

Amount enclosed: $ In accordance with Fee Schedule: Flexible Fee Schedule Standard Fee Schedule

Please describe the qualifications you seek for arbitrator(s) to be appointed to hear this dispute:

Hearing locale: (check one) Requested by Claimant Locale provision included in the contract

Estimated time needed for hearings overall:

hours or daysType of Business: Claimant:

Respondent:

Are any parties to this arbitration, or their controlling shareholder or parent company, from different countries than each other?

Signature (may be signed by a representative): Date:

Name of Claimant: Name of Representative:

Address (to be used in connection with this case): Name of Firm (if applicable):

Representative’s Address:

City: State: Zip Code: City: State: Zip Code:

Phone No.: Fax No.: Phone No.: Fax No.:

Email Address: Email Address:

To begin proceedings, please send a copy of this Demand and the Arbitration Agreement, along with the filing fee as provided for in the Rules, to: American Arbitration Association, Case Filing Services, 1101 Laurel Oak Road, Suite 100 Voorhees, NJ 08043. At the same time, send the original Demand to the Respondent.

Please visit our website at www.adr.org if you would like to file this case online. AAA Case Filing Services can be reached at 877-495-4185.

For Consumer or Employment cases, please visit www.adr.org for appropriate forms.

Fitbit, Inc. William Stern

Morrison Foerster

425 Market Street199 Fremont Street, 14th Floor

San Francisco CA 94105 San Francisco CA 94105

(877) 623-4997 415-268-7637 (415) 268-7522

[email protected]

Brief Description of the Dispute: Consumer fraud claims regarding Fitbit's alleged deceptive marketing of its activity trackers, as set forth in the complaint filed in the United States District Court, Northern District of California (Exhibit 1; class claims not pursued in arbitration). Exhibits 2 and 3 reflect court orders enforcing a "delegation clause" in the arbitration provision. The arbitration provision is found in Exhibit 4.

161.94

750

Claimant submits that a qualified arbitrator shall have experience evaluating consumer claims contesting the scope and enforceability of the arbitration agreement.

2Individual

Wearable Device Manufacturer

No.

4/3/2018

Kate McLellan Jonathan D. Selbin

Lieff Cabraser Heimann & Bernstein, LLP

250 Hudson Street, 8th Floor36883 Pictor AvenueMurrieta CA 92563 New York NY 10013

(619) 727-0373 212-355-9500 212-355-9592

[email protected] [email protected]

San Francisco, CA


ATTACHMENT 2


7/14/2015 Fitbit Terms of Use

http://www.fitbit.com/terms 1/5

Terms of Service

Terms Of ServiceDate of Last Update: December 18, 2014.

Fitbit designs products and tools that track everyday health and fitness to empower and inspire users to lead healthier, more active lives. These Terms ofService (“Terms”) govern your use of our personal fitness and electronic body monitoring products, our websites, including www.fitbit.com, thesoftware embedded in Fitbit devices, the Fitbit Connect software, the Fitbit mobile applications, memberships and other Fitbit services (collectively, the“Fitbit Service”).

You must accept these Terms to create a Fitbit account and to use the Fitbit Service. If you do not have an account, you accept these Terms by visitingwww.fitbit.com (https://www.fitbit.com) or using any part of the Fitbit Service. IF YOU DO NOT ACCEPT THESE TERMS, DO NOT CREATE ANACCOUNT, VISIT WWW.FITBIT.COM (https://www.fitbit.com) OR USE THE FITBIT SERVICE.

These Terms May ChangeThese Terms will change over time. If we make minor changes to the Terms without materially changing your rights, we will post the modified Termson www.fitbit.com. We will notify you by email, through the Fitbit Service, or by presenting you with a new Terms of Service to accept if we make amodification that materially changes your rights. When you use the Fitbit Service after a modification is posted, you are telling us that you accept themodified terms.

Read Our Privacy PolicyAny information that Fitbit collects through your use of the Fitbit Service is subject to the Fitbit Privacy Policy (http://domain.com/privacy) , which is partof these Terms.

Who Can Use Fitbit?You may use the Fitbit Service if you are over 13 years of age and are not barred from receiving services under applicable law.

Creating an AccountFull use of the Fitbit Service requires that you create an account by providing us with a valid email address and strong password. You are responsible forall activity that occurs in association with your account. Fitbit is not liable for any loss or damages caused by your failure to maintain the confidentialityof your account credentials.

We may need to contact you about your use of the Fitbit Service. These communications are part of the Fitbit Service and you may not optout fromreceiving them. You can manage and optout from receiving other communications and keep your email address uptodate from your account settings.

Necessary EquipmentFull use of the Fitbit Service is dependent upon your use of a computer with adequate software or a supported mobile device and Internet access. Themaintenance and security of this equipment may influence the performance of the Fitbit Service and it is your responsibility to ensure the equipment’sfunctionality.

Posting Your Content On The Fitbit ServiceYou may post photos, exercise regimens, food logs, recipes, comments, and other content (“Your Content”) to the Fitbit Service. You retain all rights toYour Content that you post to the Fitbit Service. By making Your Content available on or through the Fitbit Service you grant to Fitbit a nonexclusive,transferable, sublicensable, worldwide, royaltyfree license to use, copy, modify, publicly display, publicly perform and distribute Your Content only inconnection with operating and providing the Fitbit Service.

You are responsible for Your Content. You represent and warrant that you own Your Content or that you have all rights necessary to grant us a license touse Your Content as described in these Terms. You also represent and warrant that Your Content and the use and provision of Your Content on the FitbitService will not: (a) infringe, misappropriate or violate a third party’s patent, copyright, trademark, trade secret, moral rights or other intellectualproperty rights, or rights of publicity or privacy; (b) violate, or encourage any conduct that would violate, any applicable law or regulation or wouldgive rise to civil liability; (c) be fraudulent, false, misleading or deceptive; (d) be defamatory, obscene, pornographic, vulgar or offensive; (e) promotediscrimination, bigotry, racism, hatred, harassment or harm against any individual or group; (f) be violent or threatening or promote violence or actionsthat are threatening to any person or entity; or (g) promote illegal or harmful activities or substances.

You also agree that Your Content will comply with the following community guidelines:

1. Be respectful of the opinions of others. Even though you might not agree with someone, that doesn't mean they are wrong or deserve to be belittled.Remember that what works for you may not work for everyone else. Give everyone the same courtesy you would expect in return.2. Do not post profane or explicit content.3. Do not post profile pictures that might be considered inappropriate.4. Do not post communications that could be interpreted as threatening or harassing.

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5. Do not post, advertise, or promote products or services commercially.

Fitbit’s Rights“Fitbit Content” includes any text, graphics, images, music, software, audio, video, works of authorship of any kind, and information or other materialsthat are posted, generated, provided or otherwise made available through the Fitbit Service to you. Except for Your Content, Fitbit Content, the FitbitService and its underlying technology are protected by copyright, trademark, patent, intellectual property, and other laws of the United States andforeign countries. You agree not to remove, change or obscure any copyright, trademark, service mark or other proprietary rights notices incorporated inor accompanying the Fitbit Service.

What You Can Do On The Fitbit ServiceThe Fitbit Service is intended for your personal, noncommercial use.

Fitbit grants you a limited, nonexclusive, nontransferable, nonsublicensable license to (1) access and view the Fitbit Content, (2) access and use thesoftware and mobile applications provided by the Fitbit Service, and (3) use the software that is embedded into Fitbit products as authorized in theseTerms. This license is provided solely for your personal use and enjoyment of the Fitbit Service as permitted in these Terms.

You will not use, copy, adapt, modify, prepare derivative works based upon, distribute, license, sell, transfer, publicly display, publicly perform,transmit, broadcast or otherwise exploit the Fitbit Content, Fitbit Service or any portion thereof, except as expressly permitted in these Terms. Nolicenses or rights are granted to you by implication or otherwise under any intellectual property rights owned or controlled by Fitbit or its licensors,except for the licenses and rights expressly granted in these Terms.

Things You Cannot Do On The Fitbit ServiceExcept to the extent permitted by law, you may not do any of the following while accessing or using the Fitbit Service: (1) use, display, mirror or framethe Fitbit Service or any individual element within the Fitbit Service, Fitbit’s name, any Fitbit trademark, logo or other proprietary information, or thelayout and design of any page or form contained on a page, without Fitbit’s express written consent; (2) access or tamper with nonpublic areas of theFitbit Service, Fitbit’s computer systems, or the technical delivery systems of Fitbit’s providers; (3) test the vulnerability of any Fitbit system or breachany security or authentication measures; (4) circumvent any technological measure implemented by Fitbit or any of Fitbit’s providers or any other thirdparty (including another user) to protect the Fitbit Service or Fitbit Content; (5) access the Fitbit Service or Fitbit Content through the use of anymechanism other than through the Fitbit Service or Fitbit API; or (6) modify, decompile, disassemble, reverse engineer, tamper with or otherwiseattempt to derive the source code of any software that Fitbit provides to you or any other part of the Fitbit Service.

Our Enforcement RightsWe are not obligated to monitor access or use of the Fitbit Service, Fitbit Content, or Your Content or to review or edit any Fitbit Content or YourContent, but we have the right to do so for the purpose of operating the Fitbit Service, to ensure compliance with these Terms, and to comply withapplicable law or other legal requirements. We may consult with and disclose unlawful conduct to law enforcement authorities; and pursuant to validlegal process, we may cooperate with law enforcement authorities to prosecute users who violate the law. We reserve the right (but are not required) toremove or disable access to the Fitbit Service, any Fitbit Content, or Your Content at any time and without notice, and at our sole discretion, if wedetermine that the Fitbit Content, Your Content, or your use of the Fitbit Service is objectionable or in violation of these Terms. We have the right toinvestigate violations of these Terms and any conduct that affects the Fitbit Service.

Use The Fitbit Service At Your Own RiskOur goal is to provide helpful and accurate information on the Fitbit Service, but we make no endorsement, representation or warranty of any kind aboutany Fitbit Content, information, services or recommendations.. We are not responsible for the accuracy, reliability, effectiveness, or correct use ofinformation you receive through the Fitbit Service. Maps, directions, and other GPS or navigation data, including data relating to your current location,may be unavailable, inaccurate or incomplete. If you rely on any Fitbit Content or the Fitbit Service, you do so solely at your own risk.

Consult Your Doctor Before Using The Fitbit ServiceThe Fitbit Service is not intended to diagnose, treat, cure, or prevent any disease. If you have a medical or heart condition, consult your doctor beforeusing the Fitbit Service, engaging in an exercise program or changing your diet. If you experience a medical emergency, stop using the Fitbit Serviceand consult with a medical professional. We are not responsible for any health problems that may result from training programs, consultations, products,or events you learn about through the Fitbit Service. If you engage in any exercise program you receive or learn about through the Fitbit Service youagree that you do so at your own risk and are voluntarily participating in these activities. If you start to experience redness or skin irritation on yourwrist, remove your device. If symptoms persist longer than 23 days of not using your device, contact a dermatologist.

Use Common SenseUse of the Fitbit Service should not replace your good judgment and common sense. Please read and comply with all safety notices that accompany yourFitbit product or service, including those located on our Wear and Care (http://domain.com/productcare) page.

DMCA/Copyright PolicyFitbit respects copyright law and expects its users to do the same. It is Fitbit’s policy to terminate in appropriate circumstances account holders whorepeatedly infringe the rights of copyright holders. Please see Fitbit’s DMCA/Copyright Policy (http://domain.com/copyrightpolicy) .

Additional Policies Apply To Product OrdersFitbit’s Terms of Sale (http://domain.com/termsofsale) and Return Policy and Warranty (http://domain.com/returns) apply to purchases made through theFitbit store. All orders placed are subject to Fitbit’s acceptance. We may accept, decline, or place limits on your order for any reason.

FITBIT_HR_000013




Feedback And Submissions PolicyIf you submit comments, ideas, or feedback to us, you agree that we can use them without any restriction or compensation to you. We do not waive anyrights to use similar or related ideas or feedback previously known to us, developed by Fitbit, or obtained from sources other than you. Our Feedbackand Submissions Policy (http://domain.com/feedbackpolicy) is also part of the Terms.

Terms Specifically Related to Our Premium Fitbit MembershipAdditional terms and conditions apply to the Premium Fitbit membership.

Contests And GiveawaysAdditional terms and conditions may apply to contests, giveaways and other promotions sponsored by Fitbit and its partners. It is your responsibility tocarefully review those terms and conditions.

You Agree to Receive Alerts And NotificationsAs part of your use of the Fitbit Service, you may receive notifications, text messages, alerts, or emails. You agree to the receipt of thesecommunications. You can control receipt of nonservice related communications from your account settings. You are responsible for any messaging ordata fees you may be charged by your wireless carrier.

We Are Not Responsible For ThirdParty Links On The Fitbit ServiceThe Fitbit Service contains links to thirdparty websites, apps, services and resources (collectively “ThirdParty Services”) that are not under Fitbit’scontrol. We provide these links only as a convenience and are not responsible for the content, products or services that are available from ThirdPartyServices. You acknowledge sole responsibility and assume all risk arising from your use of any ThirdParty Services.

Fitbit Does Not Control ThirdParty Services That You Link With Your Fitbit AccountThe Fitbit Service may provide the opportunity for you to link your Fitbit account, Fitbit data, or the Fitbit Service with ThirdParty Services. Althoughwe offer this opportunity, you acknowledge that any ThirdParty Services that you use in connection with the Fitbit Service are not part of the FitbitService. You acknowledge that these Terms and the Fitbit Privacy Policy do not apply to any ThirdParty Services. You are responsible for reading andunderstanding the terms and conditions and privacy policy that applies to your use of any ThirdParty Services.

Changes To The Fitbit ServiceFitbit may change or discontinue, temporarily or permanently, any feature or component of the Fitbit Service at any time without notice. Fitbit is notliable to you or to any third party for any modification, suspension or discontinuance of any feature or component of the Fitbit Service. We reserve theright to determine the timing and content of software updates, which may be automatically downloaded and installed by Fitbit products without priornotice to you.

TerminationIf you violate these Terms, we reserve the right to deactivate your account or terminate these Terms, at our sole discretion, at any time and withoutnotice or liability to you. Upon any such termination, we may delete Your Content and other information related to your account. You may cancel youraccount at any time by contacting Customer Support (http://help.fitbit.com/customer/portal/emails/new) . Upon any termination, discontinuation orcancellation of the Fitbit Service or your account, the following provisions of these Terms will survive: Posting Your Content On The Fitbit Service;Fitbit’s Rights; Our Enforcement Rights; Consult Your Doctor Before Using The Fitbit Service; Termination; Disclaimers; Indemnity; Limitation ofLiability; Dispute Resolution; and General Terms.

DisclaimersTHE FITBIT SERVICE AND FITBIT CONTENT ARE PROVIDED “AS IS,” WITHOUT WARRANTY OF ANY KIND. WITHOUT LIMITINGTHE FOREGOING, WE EXPLICITLY DISCLAIM ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,QUIET ENJOYMENT OR NONINFRINGEMENT, AND ANY WARRANTIES ARISING OUT OF COURSE OF DEALING OR USAGE OFTRADE. We make no warranty that the Fitbit Service or Fitbit Content will meet your requirements or be available on an uninterrupted, secure, orerrorfree basis. We make no warranty regarding the quality, accuracy, timeliness, truthfulness, completeness or reliability of the Fitbit Service or anyFitbit Content. You acknowledge and agree that if you rely on any Fitbit Content or the Fitbit Service, you do so solely at your own risk.

IndemnityYou will indemnify and hold harmless Fitbit and its officers, directors, employees and agents, from and against any claims, disputes, demands, liabilities,damages, losses, and costs and expenses, including, without limitation, reasonable attorneys’ fees arising out of or in any way connected with (i) youraccess to or use of the Fitbit Service, (ii) Your Content, or (iii) your breach of any warranties made by you hereunder or your violation of any otherprovision of these Terms. We reserve the right to assume control of the defense of any thirdparty claim that is subject to indemnification by you, inwhich event you will cooperate with us in asserting any available defenses.

Limitation Of LiabilityNEITHER FITBIT, ITS SUPPLIERS OR LICENSORS, NOR ANY OTHER PARTY INVOLVED IN CREATING, PRODUCING, ORDELIVERING THE FITBIT SERVICE WILL BE LIABLE FOR ANY INCIDENTAL, SPECIAL, EXEMPLARY OR CONSEQUENTIALDAMAGES, INCLUDING LOST PROFITS, LOSS OF DATA OR GOODWILL, SERVICE INTERRUPTION, COMPUTER DAMAGE ORSYSTEM FAILURE OR THE COST OF SUBSTITUTE SERVICES ARISING OUT OF OR IN CONNECTION WITH THESE TERMS OR FROMTHE USE OF OR INABILITY TO USE THE FITBIT SERVICE, WHETHER BASED ON WARRANTY, CONTRACT, TORT (INCLUDING

FITBIT_HR_000014




NEGLIGENCE), PRODUCT LIABILITY OR ANY OTHER LEGAL THEORY, AND WHETHER OR NOT FITBIT HAS BEEN INFORMED OFTHE POSSIBILITY OF SUCH DAMAGE, EVEN IF A LIMITED REMEDY SET FORTH HEREIN IS FOUND TO HAVE FAILED OF ITSESSENTIAL PURPOSE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FORCONSEQUENTIAL OR INCIDENTAL DAMAGES, SO THE ABOVE LIMITATION MAY NOT APPLY TO YOU.

IN NO EVENT WILL FITBIT’S TOTAL LIABILITY ARISING OUT OF OR IN CONNECTION WITH THESE TERMS OR FROM THE USE OFOR INABILITY TO USE THE FITBIT SERVICE EXCEED THE AMOUNTS YOU HAVE PAID TO FITBIT FOR USE OF THE FITBITSERVICE OR ONE HUNDRED DOLLARS ($100), IF YOU HAVE NOT HAD ANY PAYMENT OBLIGATIONS TO FITBIT, AS APPLICABLE.

THE EXCLUSIONS AND LIMITATIONS OF DAMAGES SET FORTH ABOVE ARE FUNDAMENTAL ELEMENTS OF THE BASIS OF THEBARGAIN BETWEEN FITBIT AND YOU.

Dispute ResolutionYou agree that any dispute between you and Fitbit arising out of or relating to these Terms of Service, the Fitbit Service, or any other Fitbit products orservices (collectively, “Disputes”) will be governed by the arbitration procedure outlined below.

Governing Law: The Terms of Service and the resolution of any Disputes shall be governed by and construed in accordance with the laws of the State ofCalifornia without regard to its conflict of laws principles.

Informal Dispute Resolution: We want to address your concerns without needing a formal legal case. Before filing a claim against Fitbit, you agree to tryto resolve the Dispute informally by contacting [email protected] (mailto:[email protected]) . We'll try to resolve the Dispute informally by contactingyou through email. If a dispute is not resolved within 15 days after submission, you or Fitbit may bring a formal proceeding.

We Both Agree To Arbitrate: You and Fitbit agree to resolve any Disputes through final and binding arbitration, except as set forth under Exceptions toAgreement to Arbitrate below.

Optout of Agreement to Arbitrate: You can decline this agreement to arbitrate by contacting [email protected] (mailto:[email protected]) within 30 days offirst accepting these Terms of Service and stating that you (include your first and last name) decline this arbitration agreement.

Arbitration Procedures: The American Arbitration Association (AAA) will administer the arbitration under its Commercial Arbitration Rules and theSupplementary Procedures for Consumer Related Disputes. The arbitration will be held in the United States county where you live or work, SanFrancisco, California, or any other location we agree to.

Arbitration Fees: The AAA rules will govern payment of all arbitration fees. Fitbit will pay all arbitration fees for claims less than $75,000. Fitbit willnot seek its attorneys' fees and costs in arbitration unless the arbitrator determines that your claim is frivolous.

Exceptions to Agreement to Arbitrate: Either you or Fitbit may assert claims, if they qualify, in small claims court in San Francisco (CA) or any UnitedStates county where you live or work. Either party may bring a lawsuit solely for injunctive relief to stop unauthorized use or abuse of the Fitbitproducts or Fitbit Service, or infringement of intellectual property rights (for example, trademark, trade secret, copyright or patent rights) without firstengaging in arbitration or the informal disputeresolution process described above.

No Class Actions: You may only resolve Disputes with Fitbit on an individual basis, and may not bring a claim as a plaintiff or a class member in a class,consolidated, or representative action. Class arbitrations, class actions, private attorney general actions, and consolidation with other arbitrations aren'tallowed under our agreement.

Judicial Forum for Disputes: In the event that the agreement to arbitrate is found not to apply to you or your claim, you and Fitbit agree that any judicialproceeding (other than small claims actions) will be brought in the federal or state courts of San Francisco County, California. Both you and Fitbitconsent to venue and personal jurisdiction there. We both agree to waive our right to a jury trial.

Limitation on Claims: Regardless of any statute or law to the contrary, any claim or cause of action arising out of or related to your use of the Fitbitproducts or Fitbit Service must be filed within one (1) year after such claim or cause of action arose, or else that claim or cause of action will be barredforever.

General TermsExcept as otherwise stated herein, these Terms constitute the entire and exclusive understanding and agreement between Fitbit and you regarding theFitbit Service, and these Terms supersede and replace any and all prior oral or written understandings or agreements between Fitbit and you regardingthe Fitbit Service and Fitbit Content. If for any reason a court of competent jurisdiction finds any provision of these Terms invalid or unenforceable, thatprovision will be enforced to the maximum extent permissible and the other provisions of these Terms will remain in full force and effect.

You may not assign or transfer these Terms, by operation of law or otherwise, without Fitbit’s prior written consent. Any attempt by you to assign ortransfer these Terms, without such consent, will be null. Fitbit may freely assign or transfer these Terms without restriction. Subject to the foregoing,these Terms will bind and inure to the benefit of the parties, their successors and permitted assigns.

Any notices or other communications provided by Fitbit under these Terms, including those regarding modifications to these Terms, will be given: (i)via email; or (ii) by posting to the Fitbit Service. For notices made by email, the date of receipt on the message will be deemed the date on which suchnotice is transmitted.

Fitbit’s failure to enforce any right or provision of these Terms will not be considered a waiver of such right or provision. The waiver of any such rightor provision will be effective only if in writing and signed by a duly authorized representative of Fitbit. Except as expressly set forth in these Terms, theexercise by either party of any of its remedies under these Terms will be without prejudice to its other remedies under these Terms or otherwise.

Additional Terms May ApplyAdditional terms may apply to certain products or services. In the event that there is a conflict between these Terms and any additional terms, theadditional terms will control.

Contact Us

FITBIT_HR_000015




GET THE SKINNY ON ALL THINGS FITBIT

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Please contact us if you have any questions about these Terms.

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ATTACHMENT


1101 Laurel Oak Road, Suite 100Voorhees, NJ 08043

Telephone: (856)435-6401

April 25, 2018

Jonathan D. Selbin, Esq.Lieff Cabraser Heimann & Bernstein, LLP250 Hudson Street8th FloorNew York, NY 10013Via Email to: [email protected]

William L. Stern, Esq.Morrison & Foerster, LLP425 Market Street34th FloorSan Francisco, CA 94105-2482Via Email to: [email protected]

Case Number: 01-18-0001-3597

Kate McLellan-vs- Fitbit, Inc.

Dear Parties:

The claimant has filed with us a demand for arbitration. The American Arbitration Association (“AAA”) has determined that this arbitration arises out of a consumer agreement and, as such, the Consumer Arbitration Rules (“Consumer Rules”) apply to this dispute. The Consumer Rules may be found on our website at www.adr.org.

We note that the contract references the Commercial Arbitration Rules. According to R-1* of the Commercial Arbitration Rules, the AAA applies the Consumer Arbitration Rules to disputes arising out of consumer arbitration agreements.

We are in receipt of a court order compelling arbitration. Accordingly, we are proceeding on that basis.

Under California law (the Ethics Standards for Neutral Arbitrators in Contractual Arbitration), upon the appointment of an arbitrator in consumer arbitrations, the AAA is required to disclose certain information regarding cases we have administered. Also, pursuant to the California Code of Civil Procedure section 1281.96, the AAA must collect and make available to the public information regarding our involvement in, and outcome of, consumer arbitrations.

The AAA relies on the information provided by the parties to fulfill its obligations under California law. Therefore, we ask that you take the time to review party names in the case caption (located under the case number at the top of this letter) and immediately advise me if any changes need to be made.

Pursuant to section 1284.3 of the California Code of Civil Procedure, consumers with a gross monthly income of less than 300% of the federal poverty guidelines are entitled to a waiver of arbitration fees


and costs. This waiver of fees does not include arbitrator fees and compensation. This law applies to all consumer agreements subject to the California Arbitration Act, and to all consumer arbitrations conducted in California. A consumer meeting these requirements must submit to the AAA a declaration under of oath regarding monthly income and the number of persons in the consumer's household. Please email me if you have any questions regarding the waiver of administrative fees.

Under the Consumer Rules, the consumer pays a filing fee of $200 and the business pays a filing fee of $1,700. We have received the consumer's $200 portion of the filing fee So that the filing requirements are complete, the business is requested to submit filing fees of $1,700 and the arbitrator's compensation deposit of $2,500, totaling $4,200.

Please make the check payable to the American Arbitration Association and include a reference to the case number. Checks should be mailed to 1101 Laurel Oak Road, Suite 100, Voorhees, NJ 08043. In the event that payment is being made by a third party, such as an insurance company, please request that payment be sent directly to the business' representative. The business' representative should then forward payment to the AAA in accordance with the foregoing instructions.

The requested payment should be received no later than May 9th, 2018 and the AAA may decline to administer this dispute if the business does not timely respond. It should be noted that the consumer's satisfaction of the filing requirements triggers the business' obligation to promptly pay its share of the filing fees under the rules and the business may owe all or a portion of the filing fees even if the matter is settled or withdrawn. The AAA will refund any overpayments received from the consumer with the filing.

No answering statement or counterclaim is due at this time and the parties will be notified of the applicable deadlines upon satisfaction of all the filing requirements.

Please email [email protected] if you have any questions. The AAA appreciates the opportunity to assist you with your dispute resolution needs.

Sincerely,

Consumer Filing [email protected] (877) 304-8457


ATTACHMENT 4


sd-717734

Writer’s Direct Contact +1 (415) 268.7637 [email protected]

425 MARKET STREET SAN FRANCISCO CALIFORNIA 94105-2482

TELEPHONE: 415.268.7000 FACSIMILE: 415.268.7522

WWW.MOFO.COM

M O R R I S O N & F O E R S T E R L L P

B E I J I N G , B E R L I N , B R U S S E L S , D E N V E R , H O N G K O N G , L O N D O N , L O S A N G E L E S , N E W Y O R K , N O R T H E R N V I R G I N I A , P A L O A L T O , S A N D I E G O , S A N F R A N C I S C O , S H A N G H A I , S I N G A P O R E , T O K Y O , W A S H I N G T O N , D . C .

May 3, 2018

Via e-mail and U.S. Mail

Jonathan D. Selbin Lieff Cabraser Heimann & Bernstein, LLP 250 Hudson Street, 8th Floor New York, NY 10013 [email protected]

Kevin R. Budner Lieff Cabraser Heimann & Bernstein, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111 [email protected]

Andrea Clisura Levi & Korsinsky, LLP 30 Broad St., 24th Floor New York, NY 10004 [email protected]

Robert Klonoff Robert H. Klonoff, LLC 2425 SW 76th Ave. Portland, OR 97225 [email protected]

Re: Demand for Arbitration

Dear Counsel:

This letter confirms receipt of your email dated April 3, 2018, enclosing a demand for arbitration on behalf of Claimant Kate McLellan. As set forth below, Fitbit has agreed to pay the claim set forth in Ms. McLellan’s demand.

Payment of Demand

Fitbit has elected to pay the claim set forth in the demand in full, as follows:

1. A refund of the amount Ms. McLellan claims she paid for the Charge HR she purchased at Sports Chalet in Temecula, California on February 27, 2015 ($161.94 after tax), along with prejudgment interest on that amount;

2. Punitive damages calculated as the total amount in #1, above, times four. We have followed the Ninth Circuit’s lead that “a ratio of up to 4 to 1 serves as a good proxy


Jonathan D. Selbin Kevin R. Budner Andrea Clisura Robert Klonoff May 3, 2018 Page Two

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for the limits of constitutionality.” Planned Parenthood of Columbia/Willamette Inc. v. American Coalition of Life Activists, 422 F.3d 949, 962 (9th Cir. 2005)1; and

3. Reasonable attorneys’ fees and costs associated with the arbitration in the amount of $1,750 (1,000 in fees, plus $750 in costs in accordance with the AAA’s Standard Fee Schedule).

Letter to Ms. McLellan

Enclosed please find a letter addressed to Ms. McLellan, which details how her payment was calculated. Please feel free to give us a call if you have any questions regarding how Fitbit calculated these numbers.

In terms of payment, Fitbit will prepare a check for Ms. McLellan, subject to receipt of her W-9. Once we receive Ms. McLellan’s W-9, we will send her check to you for transmittal. Fitbit will prepare a check payable to you upon receipt of counsel’s W-9.

Pursuant to California Business & Professions Code § 6103.5 and California Rule of Professional Conduct 3-510(a), please forward this letter to Ms. McLellan. Note that under California Business & Professions Code § 6103.5, Fitbit is entitled to discover whether you have sent the letter to your client.

We consider the arbitration demand of Ms. McLellan resolved.

Sincerely,

William L. Stern

1 The payment of punitives should not be construed as an admission that Ms. McLellan is entitled to punitive damages. Fitbit maintains that Ms. McLellan is not entitled to punitive damages but has agreed to pay punitives purely for purposes of compromise and repose.


Jonathan D. Selbin Kevin R. Budner Andrea Clisura Robert Klonoff May 3, 2018 Page Three

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cc: Gloria Y. Lee Erin M. Bosman Julie Y. Park Kai S. Bartolomeo


ATTACHMENT 5




ATTACHMENT 6


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6&, 9(&,<")<;0 %= 7>???@AAA7/ >?4B74CB?DDD$ >?4B74CB?DDE

Kevin R. BudnerPartner

[email protected]

FFFB:"#$$<&'(&)#(B<;+6&, 9(&,<")<; G#F H;(I G&)8J": :# 6#&//:#

May 14, 2018

VIA E-MAIL

Will L. Stern

[email protected]

Morrison Foerster

425 Market Street

San Francisco, CA 94105

Erin M. Bosman

[email protected]

Kai S. Bartolomeo

[email protected]

Julie Y. Park

[email protected]

Morrison Foerster

12531 High Bluff Dr., #100

San Diego, CA 92130

RE: McLellan v. Fitbit, Inc., Response to Fitbit’s Correspondence re Demand for

Arbitration

Dear Counsel:

We have received your letters emailed on May 3, 2018, and relayed them to Ms.

McLellan. As a threshold matter, we note that Fitbit’s decision to unilaterally set the ratio of

compensatory to punitive damages is unsupported and that the specific ratio it offers does not

constitute full relief, even under the case law Fitbit cites. See Planned Parenthood of

Columbia/Willamette Inc. v. Am. Coal. of Life Activists, 422 F.3d 949, 962 (9th Cir. 2005)

(holding that “where there are insignificant economic damages but the behavior was particularly

egregious, the single-digit ratio may not be a good proxy for constitutionality,” and that “our

constitutional sensibilities are not offended by a 9 to 1 ratio”).

Nevertheless, if the proposed resolution were offered to all members of the proposed

class that Ms. McLellan seeks to represent, and if it included public injunctive relief in the form


May 14, 2018

Page 2

of modified and corrective marketing and packaging, Ms. McLellan would accept the offer.

Barring those modifications, Ms. McLellan declines the offer.

Ms. McLellan maintains that, as Fitbit has long argued and as Judge Donato ruled, she

has the right to have an arbitrator determine (1) whether the arbitration clause and class action

waiver are enforceable and/or applicable to her claims, and (2) whether she can bring a claim

for public injunctive relief on behalf of all members of the proposed class. See Dkt. No. 114 at 9

(“The arbitrator will resolve [the non-opt-out] plaintiffs’ challenges to the scope and

enforceability of the arbitration clause.”); id. at 8 (plaintiffs’ arguments that “Fitbit procured the

agreement to arbitrate by fraud” and that “the arbitration provision is unenforceable as applied

to plaintiffs’ claims for public injunctive relief . . . must be considered by the AAA arbitrator in

the first instance”). Ms. McLellan intends to enforce her right to seek this determination.

Sincerely,

Kevin R. Budner

1557529.2


ATTACHMENT 7


sd-718887




WWW.MOFO.COM


B E I J I N G , B E R L I N , B R U S S E L S , D E N V E R , H O N G K O N G , L O N D O N , L O S A N G E L E S , N E W Y O R K , N O R T H E R N V I R G I N I A , P A L O A L T O , S A N D I E G O , S A N F R A N C I S C O , S H A N G H A I ,S I N G A P O R E , T O K Y O , W A S H I N G T O N , D . C .

May 16, 2018

VIA EMAIL AND FACSIMILE

American Arbitration Association Consumer Filing Team 1101 Laurel Oak Road, Suite 100 Voorhees, NJ 08043 Telephone: (856)435-6401 Facsimile: (877) 304-8457 [email protected]

Re: Kate McLellan v. Fitbit, Inc., Case No. 01-18-0001-3597

Dear Consumer Filing Team:

We are counsel for Fitbit, Inc., the respondent in the above-referenced matter. We received your letter of April 25, 2018 regarding Claimant Kate McLellan’s demand for arbitration. On May 3, 2018, Fitbit sent Claimant and her counsel a written offer to pay 100%-plus of her claim. Specifically, Fitbit offered Claimant:

Full refund plus interest. A refund of $161.94, which is the full amount Claimant alleges she paid for the device, along with 10% prejudgment interest on that amount ($51.01). This is almost seven times what she paid. In addition to a full refund of the purchase price, Ms. McLellan would get to keep her device;

Punitive damages. Punitive damages of $851.80, which reflect a 4-1 compensatory-to-punitive damages ratio, consistent with the law in the Ninth Circuit; and

Attorney’s fees/costs. $1,000 in attorneys’ fees plus reimbursement of $750 in costs (in accordance with the AAA’s Standard Fee Schedule), for a total of $1,750.

Copies of Fitbit’s letters communicating this offer are enclosed as Attachments 1 and 2.

On May 14, 2018, Claimant rejected Fitbit’s offer. On our telephone call, we asked counsel what amount, in their view, would be acceptable, but counsel declined to give a number, aside from non-monetary relief. They required that Fitbit extend this offer “to all members of the proposed class that Ms. McLellan seeks to represent.” This isn’t so much a counter-


American Arbitration Association May 16, 2018 Page Two

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offer as a demand that Fitbit rewrite her contract. You should know that there is an ongoing class action case, McLellan v. Fitbit, Inc., No. 16-cv-00036-JD (N.D. Cal.), and counsel told us they plan to address their concerns to the district court. Attached is her counsel’s rejection letter. (Attachment 3.)

Fitbit’s goal is customer satisfaction. However, the filing fee alone ($750) is almost five times her total out-of-pocket claim, were she to succeed. We believe Fitbit’s total offer of $2,814.75—which is more than 17 times what she paid—is many times more than what she could recover if she were to proceed to arbitration and prevail.

Fitbit regards this matter as concluded.

Please feel free to contact me should you have any questions.

Sincerely,

William L. Stern cc: Jonathan D. Selbin Kevin R. Budner Andrea Clisura Robert Klonoff Gloria Y. Lee Erin M. Bosman Julie Y. Park

Kai S. Bartolomeo


ATTACHMENT 8


sf-3905708




WWW.MOFO.COM


B E I J I N G , B E R L I N , B R U S S E L S , D E N V E R , H O N G K O N G , L O N D O N , L O S A N G E L E S , N E W Y O R K , N O R T H E R N V I R G I N I A , P A L O A L T O , S A N D I E G O , S A N F R A N C I S C O , S H A N G H A I , S I N G A P O R E , T O K Y O , W A S H I N G T O N , D . C .

June 1, 2018

Via E-mail and U.S. Mail

Jonathan D. Selbin Lieff Cabraser Heimann & Bernstein, LLP 250 Hudson Street, 8th Floor New York, NY 10013 [email protected]

Kevin R. Budner Lieff Cabraser Heimann & Bernstein, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111 [email protected]

Andrea Clisura Levi & Korsinsky, LLP 30 Broad Street, 24th Floor New York, NY 10004 [email protected]

Robert Klonoff Robert H. Klonoff, LLC 2425 SW 76th Avenue Portland, OR 97225 [email protected]

Re: Demand for Arbitration

Dear Counsel:

I write regarding Kate McLellan’s demand for arbitration and to clarify Fitbit’s offer to resolve Ms. McLellan’s claim. Unfortunately, that offer has been misinterpreted as an attempt to circumvent her agreement to arbitrate. (See Dkt. No. 137.) Fitbit intended nothing of the sort.

As discussed below, and as Fitbit will explain in its forthcoming submission to Judge Donato, its offer was a good faith effort to resolve what it understood to be Ms. McLellan’s grievance. Ms. McLellan rejected that offer, as is her right. Fitbit will contact AAA with an update on the parties’ discussions. With the understanding that Ms. McLellan is not seeking to engage in individual monetary settlement discussions at this time, Fitbit intends to submit the formation issues to the arbitrator.

I hope the following explanation will further dispel any misunderstanding.

The Court issued its order granting Fitbit’s motion to compel arbitration as to the twelve non-opt-out plaintiffs on October 11, 2017. In that order, the Court stated that those twelve plaintiffs were to have their challenges to the scope and enforceability of the arbitration


Jonathan D. Selbin Kevin R. Budner Andrea Clisura Robert Klonoff June 1, 2018 Page Two

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clause resolved by the arbitrator. For six months, Fitbit heard nothing further from any of the non-optout plaintiffs regarding their intent to pursue their claims before the AAA. Then, on April 25, 2018, Fitbit received formal service of an arbitration demand from one of the twelve non-opt-outs: Ms. McLellan. Ms. McLellan’s AAA demand is expressly styled as an “individual” demand. On its face, it seeks monetary relief only: $161.94 in monetary damages plus attorneys’ fees, interest, costs, punitive damages, and “other.” It doesn’t, for example, seek a determination as to “contract formation,” and it makes no mention of the other eleven opt-outs who were also subject to the Court’s October 2017 order.

Based on Ms. McLellan’s demand, it appeared that:

• Ms. McLellan was demanding monetary relief for herself only, with the only question being the dollar amount.

• As for a determination about contract formation, we assumed that Plaintiffs decided not to present that question to the arbitrator via Ms. McLellan and instead might have been reserving that issue for one of the other eleven non-optouts (whose arbitration demands still have not been filed).

Fitbit’s offer of full relief was based on the content of Ms. McLellan’s demand and what Fitbit reasonably believed she was requesting to resolve her grievance.

To reiterate what I said at the hearing, Fitbit is dedicated to customer service. The company has little interest in litigating against its customers when it appears there is a reasonable, mutually agreeable route to resolution. Indeed, the Terms of Service (ToS) expressly say “We want to address your concerns without needing a formal legal case” and that Fitbit will “try to resolve the Dispute informally.” It was in that spirit that Fitbit extended, through counsel, its offer. Ms. McLellan, of course, was within her rights to decline.

I apologize if there was a misunderstanding, but it was never Fitbit’s intent to preclude Ms. McLellan (or any Fitbit customer) of their right to proceed in arbitration. And that is still true today.


Jonathan D. Selbin Kevin R. Budner Andrea Clisura Robert Klonoff June 1, 2018 Page Three

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We will contact AAA and proceed to the next steps in arbitration.

Sincerely,

William L. Stern cc: Gloria Y. Lee

Erin M. Bosman Julie Y. Park Kai S. Bartolomeo


ATTACHMENT 9


Jonathan D. Selbin Partner

[email protected]

June 4, 2018

VIA E-MAIL AND U.S. MAIL

William L. Stern

Morrison Foerster

425 Market Street

San Francisco, CA 94105-2482

[email protected]

RE: 3:16-cv-00036; McLellan et al. v. Fitbit, Inc.

Dear Will:

I write in response to your letter of June 1, 2018 regarding Ms. McLellan and

arbitration. Any claim now that Fitbit simply “misunderstood” Ms. McLellan’s position until the

hearing last week is patently false: you (and Fitbit) well-knew she was not seeking merely

individual monetary relief, but rather intended to seek the ruling on arbitrability for which

Judge Donato ordered the case to arbitration.

That you knew of Ms. McLellan’s intention to seek a ruling on arbitrability is

supported, among other things, by the following undisputed facts, none of which your letter

acknowledges. First, we expressly informed you of her intention to do so in our telephonic meet

and confer on May 14, 2018. You acknowledged that intention and countered that you had no

intention of permitting her to do so. Second, we reconfirmed her intention in our May 14, 2018

follow-up letter declining Fitbit’s offer. Third, we reiterated her position in our May 22 sur-

reply. Yet, neither you nor your client ever sought to “correct” any supposed

“misunderstanding” prior to—or even at—the hearing before Judge Donato until it became clear

that Judge Donato had seen through what he aptly called your “gamesmanship.”

Simply put, you do not get to rewrite the actual history and now pretend to have

misunderstood Ms. McLellan’s intentions. Those intentions were plainly—and repeatedly—

stated to you in advance of the hearing. In light of that, we view your June 1 letter as yet another

instance of your lack of candor and gamesmanship.


William L. Stern

June 4, 2018

Page 2

We intend to present the full and accurate factual record to the Court as ordered

by Judge Donato in our upcoming papers, including your belated attempt to conjure a false

defense of “misunderstanding.” Should the Court once again order Ms. McLellan to arbitration

to decide arbitrability, she will (again) comply with that order. Until such time as Judge Donato

rules, however, it is her position that Fitbit has waived enforcement of, defaulted on, and/or

voided its arbitration clause as to her and all absent class members by its failure to participate as

required by Court order and its own Terms of Service.

In the meantime, you state that your client is “dedicated to customer service” and

“has little interest in litigating against its customers when it appears there is a reasonable,

mutually agreeable route to resolution.” If that is true, Ms. McLellan, and we, stand prepared—

as we always have been—to mediate a mutually agreeable resolution that provides relief to the

entire class of purchasers. If that is of interest please let us know. Otherwise we will await

Judge Donato’s ruling.

Very truly yours, Jonathan D. Selbin

cc: Erin M. Bosman

Kai S. Bartolomeo Julie Y. Park Gloria Lee Robert H. Klonoff

Kevin R. Budner Andrea Clisura

1567786.2


ATTACHMENT 10


Western Case Management CenterNeil Currie

Vice President45 E River Park Place West, Suite 308

Fresno, CA 93720Telephone: (877)528-0880

Fax: (855)433-3046

June 11, 2018

Jonathan D. Selbin, Esq.Lieff Cabraser Heimann & Bernstein, LLP250 Hudson Street8th FloorNew York, NY 10013Via Email to: [email protected]

William L. SternMorrison & Foerster, LLP425 Market Street34th FloorSan Francisco, CA 94105-2482Via Email to: [email protected]

Case Number: 01-18-0001-3597

Kate McLellan-vs-Fitbit, Inc.

Dear Counsel:

This will acknowledge that the filing requirements have been met. Your case is now assigned to me for administration.

The Consumer Arbitration Rules have been applied to this matter.

Administrative Fees:

Consumer is responsible for $200 as her share of the filing fee, which has been paid.•Business is responsible for $1700 as their share of the filing fee, which has been paid as well as the •arbitrator compensation of $2500, which has been paid.An additional administrative fee of $500 is payable by the Business when there is an evidentiary •hearing process and telephonic or in-person hearings are held.

Pursuant to section 1284.3 of the California Code of Civil Procedure, consumers with a gross monthly income of less than 300% of the federal poverty guidelines are entitled to a waiver of arbitration fees and costs, exclusive of arbitrator fees. This law applies to all consumer agreements subject to the California Arbitration Act, and to all consumer arbitrations conducted in California. If you believe that you meet these requirements, you must submit to the Association a declaration under oath regarding your monthly income and the number of persons in your household. Please contact the undersigned if you have any questions regarding the waiver of administrative fees.


Arbitrator Compensation:

Arbitrators serving on a case with an in-person or telephonic hearing will receive compensation at •a rate of $2500 per day.Arbitrators serving on a desk arbitration/documents only case will receive compensation at a rate •of $1500 per case.Deposits for arbitrator compensation must be received prior to the administrative appointment of •an arbitrator or the AAA may decline to further administer this matter.

Answer:

The Respondent has until June 25, 2018 to file an answer to the claim. If no answer is filed within •14 calendar days, the AAA will assume that the respondent does not agree with the claim filed by the claimant. The case will move forward after 14 days regardless of whether an answer is filed. •Answers received after the due date will still be provided to the arbitrator.•Please reference the Rules if filing a counterclaim.•Per Consumer Rule R-2(e) “If no answer is filed within 14 calendar days, the AAA will assume that •the respondent does not agree with the claim filed by the claimant. The case will move forward after 14 days regardless of whether an answer is filed.”

Initial List of People Form

We ask that the enclosed Initial List of People Form be returned to the AAA by June 25, 2018. •Further instructions are provided on the enclosed reference sheet.

Hearing Type and Locale of In-Person Hearing:

If no disclosed claim or counterclaim exceeds $25,000, the matter shall be resolved by the •Procedures for the Resolution of Disputes thro ugh Document Submission contained in the Consumer Arbitration Rules, unless a party asks for a hearing or the arbitrator decides that a hearing is necessary.If an in-person hearing is to be held, the requested hearing location is San Francisco, California. •Please refer to the Consumer Arbitration Rules for information regarding the Fixing of Locale (the city, county, state, territory and/or country where the arbitration will take place).

Next Administrative Step:

Upon receipt of the appropriate fees and receipt of the answer, or after the deadline for filing the •answer, the AAA will administratively appoint an Arbitrator from the National Roster. The parties will be provided with the arbitrator's completed appointment documents.

Mediation

Mediation is available to the parties at any time prior to the issuance of the award. In Mediation, an •impartial person (the mediator) helps the parties try to settle their dispute by reaching an agreement together. A mediator's role is to help the parties come to an agreement. A mediator does not arbitrate or decide the outcome. If you would like more information about the AAA 's mediation services please contact me or visit Mediation.org for more information.

CA CCP §1282.4


The parties' attention is directed to California Code of Civil Procedure Section 1282.4, regarding •representation by an attorney not licensed to practice in the State of California. Please contact us if you need a certification form as described in the statute.

Please review the enclosed Consumer Arbitration Reference Sheet and Steps of the Consumer Arbitration Process as well as our website at www.adr.org for additional information regarding the administration process.

The AAA appreciates the opportunity to assist you with your dispute resolution needs.

Sincerely,/s/Sophia ParraManager of ADR ServicesDirect Dial: (559)490-1907Email: [email protected]: (855)433-3046

Supervisor Information: Cathe Stewart, Assistant Vice President 559-490-1840 [email protected]

Enclosurescc: Kevin R. Budner, Esq.


AMERICAN ARBITRATION ASSOCIATIONInitial List of People, Firms, Companies, and/or Groups Involved in the Arbitration

In the Matter of the Arbitration between:

Case Number: 01-18-0001-3597

Kate McLellan-vs-Fitbit, Inc.

Sophia Parra, Manager of ADR ServicesDATE: June 11, 2018

An Arbitrator serving on this case must know the names of all persons, firms companies or other groups involved in this arbitration in or to make proper disclosures of any interests or relationships. The arbitrator uses the information you provide below to check his or her records for any interests or relationships. Providing complete information on this document is also important because it lowers to possibility of having to remove the arbitrator because of an interest or relationship after he or she begins serving on the case.

The AAA does not give this list to the opposing party and the parties are not required to share this list with each other, although the parties may do so voluntarily. This list will be given to the arbitrator, together with the filing documents. The arbitrator will need to divulge any relevant information when making appropriate and necessary disclosures in accordance with the applicable arbitration rules.

This form will only be used to check for conflicts and is not a preliminary or final witness list.

Please list all people, firms, companies, and/or groups involved in the arbitration, including, but not limited to, witnesses, consultants, attorneys, and all other interested parties. Subsidiary and other related entities of any person, firm, company or other group should also be included on this list.

PLEASE CIRCLE ONE: CONSUMER / BUSINESS

NAME AFFILIATION ADDRESS


CONSUMER ARBITRATION REFERENCE SHEET

APPLICATION OF CONSUMER RULES:

The AAA applies the Consumer Arbitration Rules to arbitration clauses in agreements between individual consumers and businesses where the business has a standardized, systematic application of arbitration clauses with customers and where the terms and conditions of the purchase of standardized, consumable goods or services are non-negotiable or primarily non-negotiable in most or all of its terms, conditions, features, or choices. The product or service must be for personal or household use. The Consumer Rules and the Consumer Due Process Protocol may be found on our web site at www.adr.org.

In order to determine if the arbitration agreement substantially and materially complies with the due process standards of the Consumer Due Process Protocol, the AAA reviews the parties' arbitration clause only,and not the entire contract. The AAA's review of the arbitration clause is only an administrative review to determine whether the clause complies with the AAA 's minimum due process standards in consumer arbitrations. However, the AAA's review is not an opinion on whe ther the arbitration agreement, the contract, or any part of the contract is legally enforceable.

CONSUMER FEE SCHEDULE:

Pursuant to the Consumer Rules Fee Schedule, the consumer pays $200 as their share of the filing fee and the business pays $1700 as their share of the filing fee and, if and when applicable, $500 for the hearing fee. Additionally, the business shall pay the arbitrator's compensation. Any payments submitted with the filing of the Demand will be applied to the filing party 's portion of these fees. Please note that arbitrator compensation depends on the type of proceeding, either Desk Arbitration or an evidentiary hearing process. Please refer to the Consumer Rules, specifically the Costs of Arbitration section, for additional information.

Also note that should either party not pay their fees in accordance with the Consumer Rules, the opposing party has the option to do so, thereby allowing us to proceed with the administration of this case. That party may then request that the arbitrator assess these costs in the award.

Please send payments to the attention of the case administrator. As a service to our users, you may make payments with a credit card online via AAA's WebFile. If you desire to do so, please login at www.adr.organd select File and Manage a Case. Please note registration is required to use AAA WebFile. If you are mailing the payment, please include the top portion of the invoice with payment. Checks should be made payable to the American Arbitration Association.

INITIAL LIST OF PEOPLE FORM

The Initial List of People form requests parties to list those witnesses you expect to present, as well as any persons or entities with an interest in these proceedings. Please see the Initia l List of People form for additional information. The parties are to exchange copies of all correspondence except this Initial List of People form.

DOCUMENTS-ONLY ARBITRATION (DESK ARBITRATION)

When no disclosed claim exceeds $25,000, the AAA expects to administer the dispute as a Documents-Only Arbitration, sometimes called Desk Arbitration, to be decided by the Arbitrator on the submission of documents only, unless any party requests an oral hearing, or the Arbitrator determines that an oral hearing is necessary. Upon the Arbitrator's appointment, a fair and equitable schedule for the submission of documents will be established by the Arbitrator. Should either party request an oral hearing they should confirm their request in writing no later than the deadline for the filing of an answer.


LOCALE OF IN-PERSON EVIDENTIARY HEARING

Please review the Consumer Rules, particularly Rule R-11 below, and the Consumer Due Process Protocol regarding the locale of hearings.

Rule R-11. Fixing of Locale (the city, county, state, territory and/or country where the arbitration will take place)If an in-person hearing is to be held and if the parties do not agree to the locale where the hearing is to be held, the AAA initially will determine the locale of the arbitration. If a party does not agree with the AAA's decision, that party can ask the arbitrator, once appointed, to make a final determination. The locale determination will be made after considering the positions of the parties, the circumstances of the parties and the dispute, and the Consumer Due Process Protocol.

COMMUNICATION:

The AAA will make maximum use of electronic mail when communicating in writing, and requests that the parties do the same. If you have not provided us with your email address, we ask that you do so at this time. If a party does not provide us with their email address, then that party will have to rely on receiving correspondence via regular mail.

This case will be administered by facilitating the exchange of appropriate written correspondence either through the AAA or directly to the arbitrator. To ensure the proper handling of case-related documents, the parties are asked to always copy the AAA and all other parties. The AAA will determine if wr itten communication was properly served to all participants and will provide that correspondence to parties or the arbitrator as needed.

EXTENSION REQUESTS:

The AAA has a strict policy regarding requests for extensions. If you need to extend any deadline during the course of the administrative process, please try to obtain the other party's agreement prior to contacting the AAA. The AAA or the arbitrator may for good cause extend any period of time in these Rules, except as set forth in R-42. The AAA will notify the parties of any extension.

AAA WEBFILE:

We invite the parties to visit our website to learn more about managing your case online. As part of our administrative service, AAA's WebFile allows parties to perform a variety of case related activities, such as filing additional claims; completing the Initial List of People form; viewing invoices and submitting payments; sharing and managing documents and review of case status and hearing dates and times. If the case does not show up when you log in, you may request access to the case through WebFile. Your request should be processed within 24 hours, if not, please contact your case administrator.

MEDIATION:

The AAA provides mediation services for all cases. Mediation is a private, non-binding process under which the parties submit their dispute to a third-party mediator. The mediator may suggest ways of resolving the dispute, but does not impose a settlement on the parties; the parties attempt to negotiate their own settlement agreement. If you would like more information about the AAA's mediation services including our Fixed Rate Mediation Program for cases involving only two parties with claims under $75,000 for the flat rate of $850, please contact your case administrator or visit Mediation.org for more information.

REFUND SCHEDULE:


In closing we wish to remind the parties that the AAA has a Refund Schedule found in the Costs of Arbitration section of the Rules. If the case is settled or withdrawn within 30 calendar days of the claimant having met their filing requirements the business is eligible for a 50% refund of the business 's filing fees. However, no refund of the filing fee will be made once an arbitrator has been appointed and no refunds will be made on awarded cases. If the matter is settled or withdrawn prior to receipt of filing fees from the business, the AAA will bill the business in accordance with this refund schedule.

If the parties enter settlement negotiations at any time after the AAA has opened its file, you should take into consideration the refund schedule in the Rules. The AAA will only refund filing fees as outlined in the Rules and does not refund arbitrator costs incurred when parties settle their dispute or withdraw their claims. We encourage parties to resolve their disputes as amicably as possible and this notice is just to alert you to this issue so that it does not become a concern in the future.

CALIFORNIA STATUTORY REQUIREMENT:

Pursuant to the California Code of Civil Procedure section 1281.96, the AAA must collect and make available to the public information regarding our involvement in, and outcome of, all of our consumer arbitrations. The AAA's Consumer Arbitration Statistics are available on the consumer page of the AAA's website.

To fulfill our obligations under California law the AAA relies on the information provided by the parties. Therefore, we ask that you review the party names in the case caption and immediately advise your case administrator if any changes need to be made.


ATTACHMENT 11


Jonathan D. Selbin Partner

[email protected]

June 13, 2018

VIA E-MAIL

Sophia Parra

Manager of ADR Services

American Arbitration Association

45 E River Park Place West, Suite 308

Fresno, CA 93720

[email protected]

RE: Case Number: 01-18-0001-3597; Kate McLellan -vs- Fitbit, Inc.

Dear Ms. Parra:

We are in receipt of your June 11, 2018 letter, and write to update you on a

number of developments regarding this matter. Ms. McLellan respectfully submits that, for the

reasons outlined below, this matter should be stayed pending further proceedings in the United

States District Court.

By way of background, Ms. McLellan and others filed a lawsuit against Fitbit, Inc.

(“Fitbit”) in the United States District Court, Northern District of California. The Plaintiffs in

that action raised a number of challenges to the scope and enforceability of the arbitration

clause in Fitbit’s Terms of Service. United States District Judge James Donato ultimately

decided that the Terms of Service contained a valid “delegation clause” that required the

Plaintiffs who had not opted out of the arbitration clause to arbitrate these threshold

“arbitrability” issues.

Ms. McLellan filed her arbitration demand on April 3, 2018, and attached the

relevant court orders as Exhibits 2 and 3 to that demand. AAA then set a deadline of May 9,

2018 for Fitbit to submit its portion of the filing fees. Fitbit decided not to pay its fees, and

instead told Ms. McLellan and then AAA that it “regard[ed] this matter as concluded” because

Ms. McLellan had not accepted Fitbit’s settlement offer. See May 16, 2018 letter from Fitbit’s

counsel to AAA.

Ms. McLellan raised this issue with Judge Donato, and the parties discussed the

matter with him at a hearing on May 31, 2018. See Exhibit A (transcript of the proceedings). As

evidenced by the transcript, Judge Donato was not pleased with what he described as Fitbit’s

“absolutely unacceptable level of gamesmanship.” Ex A at 12:12. He directed the parties to


Sophia Parra

June 13, 2018

Page 2

submit briefing detailing the sequence of events, and stated that the potential outcome of that

briefing might include a finding of civil contempt or a reversal of his delegation order. Ex A at

13:8-10.

After that hearing, Fitbit’s counsel advised Ms. McLellan’s counsel that there had

been a “misunderstanding” and that—in direct contradiction to its words and actions—it did not

intend to conclude the arbitration. See Exhibit B. Ms. McLellan’s counsel explained in a

responsive letter that Fitbit’s alleged “misunderstanding” was demonstrably false and that

further proceedings in arbitration would be inappropriate until Judge Donato rules on the

matters that are currently being briefed and which may result in the invalidation of the

delegation clause, among other things. See Exhibit C.

We now understand that Fitbit has nevertheless tendered its filing fees. For the

reasons outlined above, however, Ms. McLellan submits that it would be premature to proceed

until Judge Donato decides that Ms. McLellan is still obligated to pursue her claims and

arbitrability defenses in arbitration. If Judge Donato again directs Ms. McLellan to arbitration,

she is prepared to proceed at that time.

Very truly yours,

Jonathan D. Selbin CC: William L. Stern

Erin M. Bosman Kai S. Bartolomeo Julie Y. Park Robert H. Klonoff Kevin R. Budner Andrea Clisura

1573282.1


EXHIBIT B


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Elizabeth J. Cabraser (CA SBN 083151) [email protected] Kelly M. Dermody (CA SBN 171716) [email protected] Kevin R. Budner (CA SBN 287271) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008 Jonathan D. Selbin (CA SBN 170222) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (212) 355-9500 Facsimile: (212) 355-9592 Robert Klonoff (pro hac vice) [email protected] ROBERT H. KLONOFF, LLC 2425 SW 76th Ave. Portland, OR 97225 Telephone: (503) 291-1570

Rosemary M. Rivas (CA SBN 209147) [email protected] Adam C. McCall (CA SBN 302130) [email protected] LEVI & KORSINSKY LLP 445 South Figueroa Street, 31st Floor Los Angeles, CA 90071 Telephone: (213) 985-7290 Facsimile: (866) 367-6510 Andrea Clisura (pro hac vice) [email protected] Courtney E. Maccarone (pro hac vice) [email protected] LEVI & KORSINSKY LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171





Defendant.


DECLARATION OF KATE MCLELLAN IN SUPPORT OF PLAINTIFFS’ STATEMENT ON THE STATUS OF ARBITRATION PROCEEDINGS Date: TBD Time: TBD Ctrm: 11, 19th Floor The Honorable James D. Donato

JUDITH LANDERS, LISA MARIE BURKE, and JOHN MOLENSTRA, Individually and on Behalf of All Others Similarly Situated,


Defendant.




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I, Kate McLellan, declare as follows:

1. I respectfully submit this declaration in support of Plaintiffs’ Statement on the

Status of Arbitration Proceedings. I have personal knowledge of the facts set forth below, and I

am competent to testify about them.

2. I am a plaintiff in the above-captioned action.

3. I have reviewed the Court’s October 11, 2017 and January 24, 2018 orders in this

case. I understood from those orders that my “challenges to the scope and enforceability of the

arbitration clause” would be resolved by an arbitrator.

4. Pursuant to those orders and to the arbitration provision in Fitbit’s Terms of

Service, I initiated an arbitration proceeding with the American Arbitration Association (“AAA”)

on April 3, 2018. My intention in initiating the arbitration was to have an arbitrator resolve my

challenges to the scope and enforceability of the arbitration clause.

5. Fitbit sent two letters to my counsel on May 3, 2018, through which Fitbit offered

to settle my claim. My counsel forwarded me those letters, and we discussed them at length on

May 10, 2018.

6. I informed my counsel, first over the phone and later by e-mail, that I did not wish

to accept the settlement offer because, among other reasons, I wished to have an arbitrator resolve

my challenges to the scope and enforceability of the arbitration clause.

7. My counsel drafted a letter to Fitbit informing the company of my decision. I

reviewed and approved that letter before it was sent, and it accurately reflects my position.

8. I understand that Fitbit later informed my counsel and the arbitrator that it

regarded the arbitration as “concluded” even though I had rejected the settlement offer.

9. I declare under penalty of perjury under the laws of the United States that the

foregoing is true and correct, to the best of my knowledge and belief, and that the foregoing was

executed on June 13, 2018, in Murrieta, California.

By: /s/ Kate McLellan Kate McLellan

1572141.1 - 2 -

DECLARATION IN SUPPORT OF STATEMENT RE STATUS OR ARBITRATION



EXHIBIT C


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Elizabeth J. Cabraser (CA SBN 083151) [email protected] Kelly M. Dermody (CA SBN 171716) [email protected] Kevin R. Budner (CA SBN 287271) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008 Jonathan D. Selbin (CA SBN 170222) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (212) 355-9500 Facsimile: (212) 355-9592 Robert Klonoff (pro hac vice) [email protected] ROBERT H. KLONOFF, LLC 2425 SW 76th Ave. Portland, OR 97225 Telephone: (503) 291-1570

Rosemary M. Rivas (CA SBN 209147) [email protected] Adam C. McCall (CA SBN 302130) [email protected] LEVI & KORSINSKY LLP 445 South Figueroa Street, 31st Floor Los Angeles, CA 90071 Telephone: (213) 985-7290 Facsimile: (866) 367-6510 Andrea Clisura (pro hac vice) [email protected] Courtney E. Maccarone (pro hac vice) [email protected] LEVI & KORSINSKY LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171





Defendant.


DECLARATION OF MAX BLAISDELL IN SUPPORT OF PLAINTIFFS’ STATEMENT ON THE STATUS OF ARBITRATION PROCEEDINGS Date: TBD Time: TBD Ctrm: 11, 19th Floor The Honorable James D. Donato

JUDITH LANDERS, LISA MARIE BURKE, and JOHN MOLENSTRA, Individually and on Behalf of All Others Similarly Situated,


Defendant.




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I, Max Blaisdell, declare as follows:

1. I respectfully submit this declaration in support of Plaintiffs’ Statement on Status

of Arbitration Proceedings. I have personal knowledge of the facts set forth below, and I am

competent to testify about them.

2. I joined the law firm of Lieff Cabraser Heimann & Bernstein, LLP (“Lieff

Cabraser”), as a case clerk on June 20, 2016. On June 20, 2017, I was promoted to paralegal. I

left the firm on May 25, 2018, to join the Peace Corps.

3. During my tenure with Lieff Cabraser, I was assigned to several cases, including

McLellan et al. v. Fitbit, Inc. My role in this case included a number of paralegal-type tasks,

including but not limited to, organizing the case file, saving correspondence and docket entries,

preparing binders and chambers’ copies, communicating with clients, and, on some occasions,

participating in and taking notes on calls and meetings. In performing these tasks, I worked under

the direction and supervision of Lieff Cabraser attorneys Jonathan Selbin and Kevin Budner and

others

4. On May 14, 2018, Mr. Budner requested that I take notes on a call scheduled that

day with Fitbit’s counsel regarding Fitbit’s settlement offer to Kate McLellan. I listened in on the

call, took contemporaneous notes, formatted those notes, and e-mailed them to Mr. Budner later

that day.

5. A true and correct copy of the notes that I recorded and e-mailed to Mr. Budner on

the afternoon of May 14, 2018, is attached hereto as Attachment 1. They have not been altered or

edited in any way.

6. I declare under penalty of perjury under the laws of the United States that the

foregoing is true and correct, to the best of my knowledge and belief, and that the foregoing was

executed on June 13, 2018, in Sykia, Greece.

By: /s/ Max Blaisdell Max Blaisdell

1571595.1 - 2 -




ATTACHMENT 1


1557467.1

5/14/2018

Meet and Confer re McLellan Arbitration Offer

Arbitration Settlement Offer

(Budner) We relayed Fitbit’s offer letters to Ms. McLellan and discussed with her.

Do I understand that Ms. McLellan is obligated to accept this offer and cannot

dispute this offer?

o (Stern) We regarded this as an offer to Ms. McLellan, she is free to accept

or not accept.

(Budner) Ms. McLellan is not inclined to accept. There are threshold issues she’d

like the arbitrator to decide. She would like the arbitrator to decide on scope and

bring her injunctive claims to court.

Next Steps

(Budner) My understanding is that there is now a window for Fitbit to submit the

fees to the arbitrator, to assert counter-claims, and then this will proceed.

o (Stern) We plan to tell AAA that we made an offer and regard the matter

as concluded even though Kate declining the offer and see what AAA will

do. We to offered her everything and there’s nothing more she could get

from AAA. We’ll enclose the letters and say that we regard it as

concluded. We never plan on getting to scope and enforceability with the

arbitrator and are not going to seeking to file briefs on those matters.

(Budner) Per the terms of the contract, there are unresolved issues on the

delegation provision that she would like the arbitrator to decide. Your position

seems clear, will see where it goes from there. To the extent that Fitbit makes full

payment, we dispute this. The punitive ratio of 4:1 is by no means a resolved

issue. The case that is cited in the letter cites positive ruling from the 9th

Circuit(?)

in which a 37:1 ratio for compensatory damages is deemed acceptable. In the case

cited itself, the court’s sensibility was that it would not object to a 9:1 ratio.

o (Stern) Your complaint asks for price difference between the device and

the feature of HR and in this offer she gets to keep the device as well as

compensatory damages. If she went to hearing she would not get $161, if

she did then it would mean no other features have value.

(Budner) You’re right that the punitive ratio is one dispute, but there are other

threshold issues that she wants to resolve.

o (Stern) Anything else besides punitive ratio?

(Budner) One other example is that monetary relief does not address her desire to

be heard in court to decide her claims.

o (Stern) Would her injunctive relief claim be different from what we

offered?

(Budner) She wants threshold issues resolved, public injunctive relief.

o (Stern) We’ve given her everything possible from arbitration.

(Selbin) Obviously there are ways that injunctive relief could change how

advertise Fitbit advertises its products. You spent years going to court saying we

needed to arbitrate. Now we want to see if there’s a class waiver. Judge Donato

granted your motion to compel arbitration and now you won’t let us do it. She


1557467.1

wants the arbitrator to decide if we need a class waiver, and would like to seek

injunctive relief and punitive damages beyond what offered. Maybe Donato will

side with you, but she would like to see what arbitrator says.

o (Stern) Nothing further.


EXHIBIT D


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Elizabeth J. Cabraser (CA SBN 083151) [email protected] Kelly M. Dermody (CA SBN 171716) [email protected] Kevin R. Budner (CA SBN 287271) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 275 Battery Street, 29th Floor San Francisco, CA 94111-3339 Telephone: (415) 956-1000 Facsimile: (415) 956-1008 Jonathan D. Selbin (CA SBN 170222) [email protected] LIEFF CABRASER HEIMANN & BERNSTEIN, LLP 250 Hudson Street, 8th Floor New York, NY 10013 Telephone: (212) 355-9500 Facsimile: (212) 355-9592

Robert Klonoff (pro hac vice) [email protected] ROBERT H. KLONOFF, LLC 2425 SW 76th Ave. Portland, OR 97225 Telephone: (503) 291-1570


Andrea Clisura (pro hac vice) [email protected] Courtney E. Maccarone (pro hac vice) [email protected] LEVI & KORSINSKY LLP 30 Broad Street, 24th Floor New York, NY 10004 Telephone: (212) 363-7500 Facsimile: (212) 363-7171





Defendant.


DECLARATION OF KEVIN R. BUDNER IN SUPPORT OF PLAINTIFFS’ STATEMENT ON THE STATUS OF ARBITRATION PROCEEDINGS

Date: TBD Time: TBD Ctrm: 11, 19th Floor

The Honorable James D. Donato JUDITH LANDERS, LISA MARIE BURKE, and JOHN MOLENSTRA, Individually and on Behalf of All Others Similarly Situated,


Defendant.




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I, Kevin R. Budner, declare as follows:

1. I am a partner at the law firm Lieff Cabraser Heimann & Bernstein, LLP. I am a

member in good standing of the California bar, and I am admitted to practice in this District. I

respectfully submit this declaration in support of Plaintiffs’ Statement on the Status of Arbitration

Proceedings.

2. Following the Court’s order regarding Plaintiffs’ Motion for Partial

Reconsideration (Dkt. 126), Plaintiff Kate McLellan indicated that she wished to pursue

arbitration to seek a determination on her challenges to the arbitration clause.

3. On May 14, 2018, I participated on a call that included my partner Jonathan D.

Selbin, a paralegal from my office, Max Blaisdell, and Fitbit’s counsel, William L. Stern and Kai

S. Bartolomeo. I requested in advance that Mr. Blaisdell take contemporaneous and detailed

notes of that telephone call. I have reviewed the notes that Mr. Blaisdell circulated later that day

(and which are attached to Mr. Blaisdell’s declaration without any alteration or amendment).

4. Mr. Blaisdell’s notes confirm my independent recollection that on that call (a)

Plaintiffs’ counsel expressly and clearly communicated to Fitbit’s counsel Ms. McLellan’s

intention to have an arbitrator rule on her challenges to the scope and enforceability of the

arbitration clause (arbitrability), and (b) Fitbit’s counsel—Mr. Stern—stated that Fitbit had no

intention of allowing Ms. McLellan to test arbitrability with the arbitrator, and that they believed

the matter was concluded.

I declare under penalty of perjury under the laws of the United States that the foregoing is

true and correct, to the best of my knowledge and belief, and that the foregoing was executed on

June 14, 2018, in San Francisco, California.

By: /s/ Kevin R. Budner Kevin R. Budner

1574491.1 - 2 -




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