Ninth Circuit bucks at Roblox bid for arbitration in parent's fraud suit

PASADENA, Calif. (CN) — Roblox asked the Ninth Circuit on Friday to overturn a trial judge’s decision denying arbitration over a father’s claims that he was misled by the popular gaming platform into believing it’s safe for his children.

The three-judge panel in Pasadena, California, appeared mostly skeptical about Roblox’s argument that it somehow had preserved its right to compel arbitration — and keep the case out of open court — even though the company first unsuccessfully sought to get the class action claims thrown out on the merits.

While Roblox’s attorney Andrew Pincus argued the parties had been put on notice in its motion to dismiss that the company wanted to move the case into arbitration, the panel seemed unpersuaded that this legal strategy passed muster under the requirements of the federal Arbitration Act.

“You were supposed to seek discovery in order to enforce your right to arbitrate, but instead you chose to file a motion to dismiss,” U.S. Circuit Judge Jennifer Sung observed. “That is literally what we have said is inconsistent with pursuing your right to arbitrate.”

“It’s asking the court, not an arbitrator, to resolve the merits issues,” the Joe Biden appointee added. “You can’t go to the court and ask the court for a merits ruling and then say we were never supposed to be in court in the first place.”

Likewise, U.S. Circuit Judge Patrick Bumatay questioned how Roblox would haven’t known from the outset that the claims by Damien Uhl — the only remaining named plaintiff in the case — were subject to the arbitration provision of its terms of use even if the company didn’t know his daughter’s username until later on.

Uhl is suing Roblox, which is used by millions of children every day, claiming the company misled him into believing that the platform is family friendly and a safe place for his daughters.

He says one of his daughters was befriended by a woman on the platform who pretended to be the same age as the child and attempted to groom his daughter and persuade her into believing she was “of a particular sexual orientation,” along with other messages of a sexual nature.

Uhl says he spent as much as $5,000 on so-called Robux for his children in the mistaken belief that the platform was a safe environment for them to learn, play and develop their expressive creativity.

After failing to get the lawsuit thrown out under Section 230 of the U.S. Communications Decency Act, which shields online sites from liability for the content that users post on them, Roblox tried to send the case into arbitration.

U.S. District Judge Todd Robinson, a Donald Trump appointee, rejected that attempt last year in San Diego federal court.

Jennifer Bennett, Uhl’s lawyer, told the appellate panel that every court has rebuffed Roblox’s wait-and-see approach to enforcing the arbitration clause.

“What you need is some notice that an arbitration clause could apply,” Bennett argued. “Here, there was more than enough notice — Roblox could have moved to compel arbitration from the very beginning.”

Moreover, Bennett said, after Roblox lost its motion to dismiss and when it still didn’t have the username of Uhl’s daughter, the company sent an email seeking to compel arbitration. She said that timing belies the company’s argument it couldn’t move for arbitration earlier because it didn’t have this information.

“That email is most damning for Roblox,” noted Bumatay, a Donald Trump appointee.

The third judge on the panel was U.S. Circuit Judge Kenneth K. Lee, also a Trump appointee.

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