Judge Laurel Beeler, in the Northern District of California, denied a motion to dismiss for lack of personal jurisdiction and granted a motion to compel arbitration in a privacy class action against a national provider of ketamine treatment services. The ruling highlights the reach of California courts over out-of-state companies with significant online operations and reinforces the enforceability of arbitration clauses in consumer contracts, even for privacy-related claims.
Personal Jurisdiction
The defendant, a Delaware corporation headquartered in Texas, argued that it was not subject to personal jurisdiction in California, as it operates nationally and does not specifically target California consumers. The court found that the company’s regular business activities—including shipping prescription products to California residents, facilitating appointments with California clinicians, and collecting personal and health information from California customers—constituted purposeful direction of activities at the forum state. The court relied on recent Ninth Circuit precedent, emphasizing that a business’s choice to serve a state’s market, even through a national platform, is sufficient for specific jurisdiction when the claims arise from those contacts.
The court rejected defendant’s argument that the lack of California-specific marketing or the proportion of California revenue (13%) diminished jurisdiction. Instead, it found that the company’s interactive website and direct engagement with California consumers established the necessary minimum contacts. The court also determined that exercising jurisdiction was reasonable, given California’s strong interest in protecting residents’ privacy rights.
This lawsuit involves known California customers, who completed forms to obtain ketamine treatment, had a consultation with a California clinician, and had their PII intercepted, all through CYH’s online business, which serves customers in twenty-one states, including California. CYH’s business model is not a passive website. Id. at 1088–92; Briskin, 135 F.4th at 752–53, 758.
…
CYH’s acts meet these criteria: CYH knew about its California customers, conducted business with them, required and facilitated their communication with California medical clinicians, and intercepted their PII. Despite its national platform, CYH’s contacts with California are express aiming because they are its choices and are not random, isolated, or fortuitous. Id. at 756–59. CYH’s arguments — that its California revenues are only thirteen percent of overall revenues and it does not hyper-target California and instead treats all states similarly — are foreclosed by Briskin‘s overruling AMA‘s requirement for a forum-specific focus. Id. at 758.
Enforceability and Scope of Arbitration Clause
The court found that plaintiff’s privacy claims were subject to arbitration under the company’s terms of service. The plaintiff challenged arbitration on several grounds, including unconscionability, lack of clarity regarding fees, and the argument that privacy claims fell outside the scope of the agreement.
The court found the arbitration clause enforceable. It determined that the terms of service, including the arbitration provision, were conspicuously presented to customers through hyperlinks and required affirmative acceptance before purchase and appointment scheduling. The court held that the agreement was not procedurally unconscionable, as the process for acceptance was clear and standard for online transactions. Substantive unconscionability was also rejected, as the plaintiff failed to show that the arbitration process would impose unfair costs.
In April 2024, the website required customers, like Ms. Martinez, to check a box agreeing to the website’s terms of service and privacy policy, both presented via a hyperlink, before completing the purchase.11 The purchase page listed the purchased treatment package and cost and — in this order —required a customer to input patient information (email, name, billing address, and shipping address) and credit-card information (number, CVC, and expiration date), check the box “I agree to the Terms of Use and Privacy Policy,” hyperlinked in blue, and then click Pay to complete the transaction.
The court concluded that the arbitration clause’s broad language—covering any dispute “arising out of, or relating in any way to” the terms or use of the service—encompassed the privacy claims at issue. The court also held that the clause applied to claims based on conduct occurring before the plaintiff’s acceptance of the terms, as there was no temporal limitation in the agreement.
Martinez v. Choose Your Horizon, Inc., No. 24-CV-02798-LB, 2025 WL 2498138 (N.D. Cal. Sept. 1, 2025).
