Kauffman v. Six Continents Hotels, Inc. et al

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
DAVID KAUFFMAN, individually and
on behalf of others similarly situated,
Plaintiffs,
v.
SIX CONTINENTS HOTELS, INC. and
HOLIDAY INN CLUB VACATIONS
INCORPORATED,
Defendants.
Case No.: 25-CV-424 JLS (DDL)
ORDER GRANTING MOTION TO
COMPEL ARBITRATION
(ECF No. 12)
Presently before the Court is Defendants Six Continents Hotels, Inc.’s and Holiday
Inn 	Club 	Vacations 	Incorporated’s 	(collectively, 	“Defendants”) 	Motion 	to 	Compel
Arbitration, or, Alternatively, Motion to Dismiss Plaintiff’s First Amended Complaint or,
Alternatively, to Strike Class Allegations (“Mot.,” ECF No. 12). Also before the Court is
Plaintiff David Kauffman’s (“Plaintiff”) Response in Opposition to Defendants’ Motion to
Compel Arbitration, Alternative Motion to Dismiss Plaintiff’s First Amended Complaint,
and 	Alternative 	Motion 	to 	Strike 	Class 	Allegations 	(“Opp’n,” 	ECF 	No. 	14) 	and
Defendants’ Reply in Support of Motion (“Reply,” ECF No. 15). 	After reviewing
Plaintiff’s First Amended Complaint (“FAC,” ECF No. 11), the Parties’ arguments, and
the law, the Court GRANTS Defendants’ Motion (ECF No. 12).
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BACKGROUND
This case arises out of a one-minute phone call made by Defendants’ third-party
vendor to conduct a follow-up survey of IHG One Rewards member, Plaintiff, after a stay
at an IHG branded property. 	FAC ¶¶ 20–24. 	In 2021, Plaintiff joined the IHG One
Rewards program offered by Six Continents Hotels, Inc., and its subsidiaries and
affiliates—all of which are InterContinental Hotels Group companies. Id. ¶ 20. Defendant,
Holiday Inn Club Vacations Incorporated, participates in the IHG One Rewards program.
Id. ¶ 21. In May of 2024, Plaintiff stayed at a Holiday Inn Express in Brattleboro, Vermont.
Id. ¶ 22. After this stay, Plaintiff received an email from IHG Hotels & Resorts asking for
feedback. 	Id. 	“On July 9, 2024, an agent with ‘IHG Brands’ called Plaintiff and asked
him to participate in a survey.” Id. ¶ 23. “Plaintiff reluctantly agreed to participate in the
survey, and they began discussing Plaintiff’s membership in the IHG [One] Rewards
Program.” 	Id. 	About a minute into the phone call, the caller “informed Plaintiff that
Defendants were recording the call, at which point Plaintiff felt deceived and ended the
call.” 	Id. ¶ 24. Plaintiff alleges that during the first minute of conversation there was no
warning that the call was being recorded—thus constituting a violation of California Penal
Code § 632.7(a). Id. ¶¶ 26–30. California Penal Code § 632.7(a)—the California Invasion
of Privacy Act (“CIPA”)—allows a private cause of action against the unauthorized
recording of cellular communications without the consent of the other party.1
For Plaintiff to join the IHG One Rewards program, he had to accept the IHG One
Rewards Membership Terms and Conditions (“Terms”) and read and accept the Privacy
Statement.2 Mot. at 9. 	Plaintiff accepted the Terms online on July 7, 2021, on the IHG
1 California Penal Code § 637.2 states that “[a]ny person who has been injured by a violation of [§ 632.7]
may bring an action against the person who committed the violation for the greater of the following
amounts: (1) Five thousand dollars ($5,000) per violation. (2) Three times the amount of actual damages,
if any, sustained by the plaintiff.” Section 637.2(b) also permits a plaintiff to bring injunctive relief to
“enjoin and restrain any violation of this chapter.”
2 The Court takes judicial notice of Defendants’ Membership Terms and Conditions (“Terms,” Shepherd
Decl., Ex. A) as their authenticity is not disputed by either party nor subject to reasonable dispute. See
Barnes v. Marriott Hotel Servs., Inc., 2017 WL 635474, at *4 (N.D. Cal. Feb. 16, 2017) (taking judicial
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website when he created his IHG One Rewards account, and “agreed that by continuing
his membership in the Program, he agreed to changes and updates to the terms during his
membership.” 	Mot. at 9 (citing Shepherd Decl. ¶ 3). 	The Terms contain an arbitration
provision in § 9 that provides in part:
9. Arbitration: Except with respect to any claim or dispute
involving the ownership, validity, or use of any IHG trademarks
or service marks, and to the extent permitted by applicable law,
any dispute arising out of or related to the Program or the
Program 	Terms 	and 	Conditions, 	seeking 	as 	relief 	money
damages or Points and/or attorneys’ fees or other damages
(“Covered Claims”) will be submitted for arbitration to 	the
American Arbitration Association (AAA). IHG shall have the
right in a proper case to obtain temporary restraining orders,
temporary preliminary injunctive relief, and/or declaratory relief
(other than declarations with respect to the amount of money
damages) from a court of competent jurisdiction.
Terms § 9 (emphasis added) (the “Arbitration Agreement”).
Defendants bring the current Motion arguing, first, that Plaintiff is bound by the
Arbitration Agreement; second, if the Court finds the Arbitration Agreement unenforceable,
that the FAC fails to state a claim or allege concrete damages; third, Plaintiff’s class
allegations fail; and fourth, that Plaintiff lacks standing to bring injunctive relief. 	See
generally Mot.
DISCUSSION
The Court first addresses Defendants’ arguments regarding standing, then will
address whether the claims are subject to arbitration.
I. 	Standing
Defendants argue that Plaintiff has failed to plead any concrete damages, and
therefore, lacks standing to bring his damage-based claims. 	Mot. at 19–20. 	Defendants
also argue that Plaintiff lacks standing for his injunctive relief because he has failed to
notice of information found on Marriott’s website as it was not in dispute or subject to reasonable dispute);
Matthews v. Nat’l Football League Mgmt. Council, 688 F.3d 1107, 1113 n.5 (9th Cir. 2012) (taking
judicial notice of statistics on the NFL’s website).
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demonstrate a “real or immediate threat that [he] will be wronged again—a ‘likelihood of
substantial and immediate irreparable injury.’” City of Los Angeles v. Lyons, 461 U.S. 95,
111 (1983) (quoting O’Shea v. Littleton, 414 U.S. 488, 502 (1974)).
“Article III of the Constitution confines the federal judicial power to the resolution
of ‘Cases’ and ‘Controversies.’” 	TransUnion LLC v. Ramirez, 594 U.S. 413, 423 (2021).
To establish standing, a plaintiff must show “(i) that he suffered an injury in fact that is
concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the
defendant; and (iii) that the injury would likely be redressed by judicial relief.” Id. (quoting
Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–61 (1992)). At the pleading stage, “the
plaintiff must ‘clearly . . . allege facts demonstrating’ each element.” 	Spokeo, Inc. v.
Robbins, 578 U.S. 330, 338 (2016) (quoting Warth v. Seldin, 422 U.S. 490, 518 (1975)).
A. Statutory Damages
Defendants argue that Plaintiff lacks standing because his only alleged injury is that
he was “completely unaware he was being recorded until the end of the call”—which lasted
about a minute. 	Mot. at 19 (quoting FAC ¶ 48). 	Plaintiff argues that statutory damages
suffice when a traditional legal interest has been violated. Opp’n at 11 (citing Spokeo, Inc.,
578 U.S. at 340–41). The Court agrees with Plaintiff.
“Various intangible harms can . . . be concrete.” TransUnion LLC, 594 U.S. at 425.
“Chief among them are injuries with a close relationship to harms traditionally recognized
as providing a basis for lawsuits in American courts.” Id. (citing Spokeo, Inc., 578 U.S. at
340–41). The Ninth Circuit has found that “[t]he harms protected by [CIPA] bear a ‘close
relationship’ to ones that have ‘traditionally been regarded as providing a basis for a
lawsuit.’” 	Campbell v Facebook, 951 F.3d 1106, 1117 (9th Cir. 2020) (quoting Spokeo,
Inc., 578 U.S. at 340–41). 	Thus, CIPA “codif[ies] a substantive right to privacy, the
violation of which gives rise to a concrete injury sufficient to confer standing.” 	In re
Facebook, Inc. Internet Tracking Litig., 956 F.3d 589, 598 (9th Cir. 2020) (citing Campbell,
951 F.3d at 1117). Therefore, Plaintiff has standing to bring his CIPA damages claim.
/ / /
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B. Injunctive Relief
Defendants then argue that Plaintiff lacks standing to seek injunctive relief because
“Plaintiff does not and cannot allege that he will receive a call from Defendants again
without knowing about Defendants’ recording policy and/or that Defendants will not advise
of the call recording at the outset of any subsequent call.” 	Mot. at 23. 	Further, since
“Plaintiff knows about the recording practices, he cannot possibly allege that any future call
would be recorded without his consent.” 	Id. at 23–24. 	Plaintiff argues that the harm is
imminent and will occur again because every future phone call will not be guaranteed to
have Plaintiff’s consent since Defendants did not advise “at the outset of the conversation”
that it was being recorded. Opp’n at 14.
To establish standing for injunctive relief, Plaintiff must show “either ‘continuing,
present adverse effects’ due to [his] exposure to [Defendants’] past illegal conduct or ‘a
sufficient likelihood that [he] will again be wronged in a similar way.’” Campbell, 951 F.3d
at 1119–20 (quoting Villa v. Maricopa Cty., 865 F.3d 1124, 1129 (9th Cir. 2017)); see also
Lyons, 461 U.S. at 111. 	Standing for prospective injunctive relief cannot rest solely on
“[p]ast exposure to illegal conduct.” 	O’Shea, 414 U.S. at 495–96. 	“Allegations that a
defendant’s conduct will subject unnamed class members to the alleged harm is insufficient
to establish standing to seek injunctive relief on behalf of the class.” Matera v. Google Inc.,
No. 15-CV-4062-LHK, 2016 WL 5339806, at *15 (citing Hodgers-Durgin v. de la Vina,
199 F.3d 1037, 1044–45 (9th Cir. 1999)). 	If both Parties consent to the communication,
Plaintiff would lack standing because Plaintiff would not be under “real and immediate
threat of repeated injury in the future.” Id. at *16.
Here, the Court agrees with Defendants that Plaintiff has not sufficiently alleged that
he will be harmed in the same way again. 	Plaintiff is on notice that Defendants record
phone calls for surveys, and thus, implicitly consents to any future recording. 	See NEI
Contr. & Eng’g, Inc. v. Hanson Aggregates Pac. Southwest, Inc., No. 12-CV-1685-
BAS(JLB), 2016 WL 4886933, at *6 (S.D. Cal. Sept. 15, 2016) (finding lack of standing
for CIPA injunctive relief because plaintiff had previously heard the warning that the call
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would be recorded and if a call happened again, plaintiff “would know, and thus impliedly
consent, that its telephone call would be recorded”). 	The Court is not persuaded by
Plaintiff’s argument that his future consent is not guaranteed because, based on Plaintiff’s
allegations, in the past Defendants did not ask for consent at the very outset of the call.
Opp’n at 14. 	Prospective standing cannot be established based on past conduct. 	See
O’Shea, 	414 	U.S. 	at 	495–96. 	Therefore, 	Plaintiff’s 	claim 	for 	injunctive 	relief 	is
DISMISSED for lack of standing.
II. 	Arbitration
Defendants also argue that “[t]he American Arbitration Association has personal and
subject matter jurisdiction over this dispute based on the Terms.” 	Mot. at 17. 	The
Arbitration Agreement, which Plaintiff admits he agreed to, applies to “any dispute arising
out of or related to the Program or the Program Terms and Conditions.” Id. (quoting Terms
§ 9). 	Plaintiff “agrees that the arbitration provision included in the Program Terms is
mostly valid” but argues that “Plaintiff’s claim does not arise from the program, rather, the
claim arises from a violation of California penal code.” Opp’n at 8.
The Federal Arbitration Act (“FAA”) governs the enforceability of arbitration
agreements in contracts. 	See 9 U.S.C. § 1, et seq.; Gilmer v. Interstate/Johnson Lane
Corp., 500 U.S. 20, 24–26 (1991). Reflected in the FAA are both a “liberal federal policy
favoring arbitration” and the “fundamental principle that arbitration is a matter of contract.”
AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (first quoting Moses H. Cone
Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); and then quoting Rent-A-
Center, W., Inc. v. Jackson, 561 U.S. 63, 67 (2010)).
In deciding whether a case is properly arbitrable, courts must generally “determine
two ‘gateway’ issues: (1) whether there is an agreement to arbitrate between the parties;
and (2) whether the agreement covers the dispute.” Brennan v. Opus Bank, 796 F.3d 1125,
1130 (9th Cir. 2015) (citing Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84
(2002)). Courts generally resolve those issues by “apply[ing] ordinary state-law principles
that govern the formation of contracts.” First Options of Chi., Inc. v. Kaplan, 514 U.S. 938,
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944 (1995); see also 9 U.S.C. § 2. 	If the answer to both questions is yes, a court must
enforce the agreement and compel arbitration. See, e.g., Lifescan, Inc. v. Premier Diabetic
Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). 	Doubts regarding the scope of an
agreement must be resolved in favor of arbitration. See Mastrobuono v. Shearson Lehman
Hutton, Inc., 514 U.S. 52, 62 (1995).
Plaintiff “does not dispute that a limited arbitration agreement exists under the
Program Terms.” Opp’n at 7. Plaintiff only contests “whether Plaintiff’s claim is within
the scope of the Terms.” 	Id. 	Thus, the Court will only consider whether the Arbitration
Agreement covers the dispute.
Plaintiff argues that the CIPA violation “arose independently of the contractual
relationship between the [P]arties” because Plaintiff’s claims arose wholly out of the
California penal code.3 Id. at 9. Defendants argue that “Plaintiff unambiguously ties the
call that he received to the IHG One Rewards program.” Mot. at 17. In the FAC, Plaintiff
alleges that IHG Hotels & Resorts sent him an email for feedback after his stay at a Holiday
Inn Express in Brattleboro Vermont in May of 2024. FAC ¶ 22. Plaintiff then alleges that
on July 9, 2024, “an agent with ‘IHG Brands’ called Plaintiff and asked him to participate
in a survey,” and they “began discussing Plaintiff’s membership in the IHG Reward
Program.” Id. ¶ 23. Further, the Terms that Plaintiff agreed to “twice specifically address
and outline how Plaintiff’s IHG One Rewards program membership may result in his
3 Plaintiff relies on Jackson v. Amazon.com, Inc., 65 F.4th 1093 (9th Cir. 2023) for the proposition that
the claims in this case arose independent of the contractual relationship defined by the Terms. Opp’n at 9.
The Court finds this reliance misplaced. The facts of Jackson are distinguishable from the current case.
In Jackson, the Ninth Circuit rejected Amazon’s argument that its unlawful monitoring of its driver’s
private Facebook groups off hours was a dispute covered by an arbitration agreement. Jackson, 65 F.4th
at 1096. 	The Court found that this unlawful monitoring did not fall under the arbitration agreement
because it was unrelated to the underlying driver terms of service because this off-duty monitoring was in
no way related to the agreement. 	Id. at 1102. 	Here, the call at issue was directly contemplated in the
Terms at § 15 and was entirely related to membership in the IHG One Rewards program. Reply at 8–9.
Therefore, Defendants alleged misconduct has a direct relationship to the underlying contractual
agreement. See Jackson, 65 F.4th at 1104.
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receipt of the calls in question.” Mot. at 12 (citing Terms §§ 15, 40).4
The Court agrees with Defendants that the “recorded telephone call at issue stems
entirely from Plaintiff’s participation in the IHG One Rewards program.” Mot. at 11. As
discussed above, any doubts regarding the scope of an agreement must be resolved in favor
of arbitration. 	See Mastrobuono, 514 U.S. at 62. 	“To require arbitration, [Plaintiff’s]
factual allegations need only ‘touch matters’ covered by the contract containing the
arbitration clause . . . .” 	Simula, Inc. v. Autoliv, Inc., 175 F.3d 716, 721 (9th Cir. 1999)
(citing Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 624 n.13
(1985)). Based on Plaintiff’s own allegations in the FAC, the call at issue flowed directly
from Plaintiff’s membership in the IHG One Rewards program, was about Plaintiff’s
participation in the program, was conducted by an IHG agent, and was about Plaintiff
staying at one of the program’s affiliated hotels. 	See FAC ¶¶ 22–25. 	Therefore, the
Arbitration Agreement covers the dispute.
The Court concludes that the Arbitration Agreement is valid, and the dispute at issue
is covered by the Arbitration Agreement. See Brennan, 796 F.3d at 1130 (citing Howsam,
537 U.S. at 84). 	Therefore, the Court must compel arbitration. 	See, e.g., Lifescan, Inc.,
363 F.3d at 1012.
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4 Section 15 states in relevant part: “Such third parties or IHG may contact you by mail, fax, telephone,
email or SMS. 	In addition, IHG may offer you a benefit in the form of an opportunity to receive
information on goods or services that may be of interest or value to you . . . .” Section 40 states in relevant
part—when discussing available promotions—that “[m]any of these promotions are only available to
Program Members who receive a specific, targeted communication from IHG” and these promotions “are
governed by these Terms and Conditions.”
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CONCLUSION
In light of the foregoing, the Court GRANTS Defendants’ Motion to Compel
Arbitration, or, Alternatively, Motion to Dismiss Plaintiff’s First Amended Complaint or,
Alternatively, to Strike Class Allegations (ECF No. 12) and COMPELS arbitration
pursuant to the Arbitration Agreement. The Court STAYS this action pending completion
of the arbitration proceedings. The Court VACATES any pending deadlines. The Parties
SHALL FILE a joint status report within thirty (30) days of the completion of the
arbitration proceedings.
IT IS SO ORDERED.
Dated: February 5, 2026
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