Motion to Compel Arbitration and for Stay Pending Arbitration

Summary

Document 713 in Case 1:21-md-02989-CMA, entered on the FLSD docket December 9, 2024, is the 17-page Motion to Compel Arbitration and for Stay Pending Arbitration by Defendants Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood Securities, LLC. Robinhood asks the Court to compel arbitration of the remaining individual actions in the MDL and to stay those actions pending arbitration, stating that each remaining plaintiff is a Robinhood customer whose customer agreement contains a mandatory arbitration clause providing for arbitration before Financial Industry Regulatory Authority Dispute Resolution. A certificate of conferral states that the plaintiffs in the Remaining Actions did not consent to the relief requested. The motion is dated December 9, 2024 and submitted by Hunton Andrews Kurth LLP and Cravath, Swaine & Moore LLP as counsel for Robinhood.

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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 21-MD-02989-ALTONAGA

In re:

JANUARY 2021 SHORT SQUEEZE
TRADING LITIGATION
_________________________________/

This Document Relates to All Actions

MOTION TO COMPEL ARBITRATION AND FOR STAY PENDING ARBITRATION

Defendants Robinhood Markets, Inc., Robinhood Financial LLC, and Robinhood
Securities, LLC (collectively, “Robinhood”) respectfully request the Court to enter an order (1)
compelling arbitration of the remaining individual actions in this multidistrict litigation (“MDL”)
and (2) staying those actions pending arbitration.  Each plaintiff a remaining individual claim is a
Robinhood customer who, before opening their respective brokerage account, entered into a
customer agreement that contained a mandatory arbitration clause providing for pre-dispute
arbitration before Financial Industry Regulatory Authority Dispute Resolution (“FINRA DR”).
Accordingly, all the remaining claims against Robinhood in this MDL must proceed in arbitration
before FINRA DR.
BACKGROUND
Robinhood’s mission is to democratize finance by providing access to financial markets
through zero-commission trades in stocks, options, and ETFs; no account minimums; and a trading
platform available on a mobile device or computer.  At the time relevant to this MDL, Robinhood’s
securities business involved two entities: Robinhood Financial LLC (“Robinhood Financial”), the
customer-facing introducing broker, and Robinhood Securities, LLC (“Robinhood Securities”),
the clearing broker.  Both brokers are wholly owned by Robinhood Markets, Inc. (“Robinhood
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Markets”).  Customer trading on Robinhood is largely self-directed.  As set forth below, customers
opening a brokerage account with Robinhood Financial must submit an application and enter a
customer agreement that contains an arbitration clause.
1.  The January 28, 2021 Restrictions and the Instant Litigation
On January 28, 2021, in response to extreme market volatility spurred by retail investors
purchasing so-called “meme stocks,”1 Robinhood took a number of steps, including modifying
initial and maintenance margin requirements and imposing a temporary position closing only
(“PCO”) status for certain of the meme stocks.  See In re Jan. 2021 Short Squeeze Trading Litig.,
584 F. Supp. 3d 1161, 1168, 1175 (S.D. Fla. 2022).  When a stock is in PCO status, a customer
may sell the stock, but they may not purchase new shares.  Id. at 1175.  The PCO helped Robinhood
manage the risk posed by the unprecedented amount of meme-stock trading and the rollercoaster
ride of price movements.  See In re Jan. 2021 Short Squeeze Trading Litig., 76 F.4th 1335, 1343–
44 (11th Cir. 2023).
Robinhood’s decision to implement the PCO resulted in immediate litigation.  Id. at 1344.
Scores of individual plaintiffs brought claims against Robinhood and others in federal courts,
asserting causes of action for antitrust violations, a variety of state law claims including breach of
contract and torts, and violations of the federal securities laws.  See id.  On April 1, 2021, the
Judicial Panel on Multi-District Litigation consolidated all these individual claims into this MDL.
See Transfer Order [ECF No. 1].  This Court established four tranches of claims: (1) Antitrust
Tranche, (2) Robinhood Tranche, (3) Other Broker Tranche, and (4) Federal Securities Tranche.

1 The “meme stocks” included AMC Entertainment Holdings, Inc. (AMC), Bed Bath & Beyond
Inc. (BBBY), BlackBerry Ltd. (BB), Express Inc. (EXPR), GameStop Corp. (GME), Koss Corp.
(KOSS), Tootsie Roll Industries Inc. (TR), Nokia Corp. (NOK) and trivago N.V. (TRVG).  See,
e.g., Consolidated Class Action Compl. [ECF No. 446] ¶ 1.
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See Order [ECF No. 310] at 1–2.2  As their names imply, the Antitrust Tranche and Federal
Securities Tranche involved claims against Robinhood arising from antitrust statutes and federal
securities statutes, respectively.  Id. at 1–2.  The Other Broker Tranche involved state-law claims
against other broker-dealers arising from trading restrictions that those broker-dealers
implemented, but did not involve claims against Robinhood.  Id. at 1.  Finally, the Robinhood
Tranche encompassed all “state-law claims against the Robinhood entities or other Robinhood-
related Defendants.”  Id.
The Court ordered the filing of a Master Complaint for each tranche, which would
“supersede the individual complaints filed to date and will constitute the operative pleadings with
respect to those claims pursuant to Fed. R. Civ. P. 8.”  In re Jan. 2021 Short Squeeze, 584 F. Supp.
3d at 1177 (quoting Joint Status Report [ECF No. 322] at 2).  After lead plaintiffs’ counsel for
each tranche filed Master Complaints, and the parties completed briefing on Robinhood’s motions
to dismiss, this Court ultimately dismissed with prejudice the Robinhood, Antitrust, and Other
Broker Tranches.  See Orders [ECF Nos. 453, 470, 525].  The Eleventh Circuit has affirmed each
of these dismissals.  See 76 F.4th 1335 (11th Cir. 2023); 105 F.4th 1346 (11th Cir. 2024); 2024
WL 4440230 (11th Cir. Oct. 8, 2024).  As for the Federal Securities Tranche, this Court granted
Robinhood’s motion to dismiss in part.  See Order [ECF No. 503].  Accordingly, the Federal
Securities Tranche proceeded to discovery on class certification and the merits.  See Scheduling
Order [ECF No. 517] at 1.
On April 28, 2023, the lead plaintiffs for the Federal Securities Tranche filed their Motion
for Class Certification [ECF No. 559].  After the parties fully briefed the issue, see [ECF Nos. 568,
585], the Court denied class certification.  See Order [ECF No. 622].  The lead plaintiffs moved

2 Citations to page numbers refer to the page number displayed in the CM/ECF header.
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for leave to file a renewed motion for class certification, see [ECF No. 624], which Robinhood
opposed, see [ECF No. 631].  The Court denied the lead plaintiffs’ request for renewed class-
certification briefing on April 19, 2024.  See Order [ECF No. 665].  On May 2, 2024, the lead
plaintiffs filed a Motion for Reconsideration [ECF No. 668].  After Robinhood filed its Opposition
to Reconsideration [ECF No. 675] and the lead plaintiffs filed their Reply [ECF No. 676]—but
before the Court entered an order—Robinhood and the lead plaintiffs settled the lead plaintiffs’
claims on an individual basis, and stipulated to the dismissal of those claims.  See Joint Stipulation
of Voluntary Dismissal [ECF No. 691].  The Court dismissed the claims of the lead plaintiffs in
the Federal Securities Tranche on August 14, 2024.  See Order [ECF No. 692].
With the Antitrust, Robinhood, and Other Broker Tranches dismissed with prejudice, and
class certification denied in the Federal Securities Tranche, there remains only one category of
claims in this MDL: individual, federal securities claims brought by plaintiffs who—though their
claims were consolidated into the MDL—were not one of the settling named plaintiffs in the
Federal Securities Tranche.  At the September 18, 2024 Status Conference, Robinhood informed
the Court that Robinhood would seek to compel arbitration of these remaining individual claims
(at that time, ten cases brought by twenty-one plaintiffs), pursuant to the terms of Robinhood’s
customer agreement.  Robinhood has been conferring with counsel for the remaining individual
plaintiffs to (1) confirm their clients’ consent or opposition to Robinhood’s forthcoming motion to
compel arbitration and (2) explore the potential for resolution without the need for arbitration.
Robinhood has been successful in resolving three of the remaining cases.  See Joint Stipulations
of Dismissal with Prejudice [ECF Nos. 703, 707, 710].  Now, there remain the following seven
individual actions (the “Remaining Actions”), which are the subject of this Motion:
• Daniels v. Robinhood Financial, LLC, No. 21-cv-21261;
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• Days v. Robinhood Markets, Inc., No. 21-cv-21310;
• Gatz v. Robinhood Financial, LLC, No. 21-cv-21296;
• Gossett v. Robinhood Financial, LLC, No. 21-cv-21293;
• Scarborough v. Robinhood Financial LLC, No. 23-cv-21572;
• Krumenacker v. Robinhood Financial, LLC, No. 21-cv-21343; and
• Quat v. Robinhood Financial, LLC, No. 21-cv-21404.3
2.  The Remaining Plaintiffs’ Agreement to Arbitrate
Each of the plaintiffs in the Remaining Actions were Robinhood customers in January
2021.  Prior to opening their individual Robinhood brokerage accounts, each plaintiff assented to
Robinhood’s customer agreement.  See Ex. B, Decl. of Marc O’Such (“O’Such Decl.”) ¶ 7.  As
part of the account-opening process (either through the Robinhood mobile application or website),
each plaintiff acknowledged that the customer agreement contained a pre-dispute arbitration
clause.  Id. ¶ 8.  Each plaintiff also represented that they carefully reviewed, understood, and agreed
to the customer agreement in effect at the time, a copy of which was available via hyperlink during
the sign-up process.  Id. ¶¶ 3–6.
Although the plaintiffs signed up for Robinhood accounts at different times, each version
of the customer agreement that was in effect when the plaintiffs signed up contained a mandatory
arbitration clause.  Id. ¶ 8.  The earliest relevant version of the customer agreement, agreed to by
plaintiff Mike Ross in December 2014, contained the following arbitration clause:

3 Not included in the Remaining Actions is Lagmanson v. Robinhood Markets, Inc., No. 21-cv-
21298 (S.D. Fla.), which was consolidated into this MDL from the Northern District of Illinois.
See MDL Transfer In Case Receipt [ECF No. 33].  Robinhood does not seek to compel arbitration
of the Lagmanson claims because the plaintiffs in that case are not Robinhood customers.  The
JPML has since remanded the Lagmanson action to the Northern District of Illinois.  See
Conditional Remand Order [ECF No. 709].
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A.  This Agreement contains a pre-dispute arbitration clause. By signing an
arbitration agreement, the parties agree as follows:
(1) All parties to this Agreement are giving up the right to sue each other in
court, including the right to a trial by jury, except as provided by the rules of
the arbitration forum in which a claim is filed.

. . .

B.  Any controversy or claim arising out of or relating to this Agreement shall
be settled by arbitration in accordance with the rules of FINRA Dispute
Resolution, Inc. (“FINRA DR”). I agree to arbitrate any controversy or claim
before FINRA DR . . . .

See O’Such Decl., Ex. 13 § 29 (bold text in original).  Each later version of the customer agreement
contained substantially the same arbitration clause—in pertinent part, each plaintiff agreed to
arbitrate before FINRA DR any claim arising out of or relating to the customer agreement.  See
O’Such Decl. ¶ 8; see also O’Such Decl., Exs. 3–17.
The version of the customer agreement in effect when the plaintiffs filed the Remaining
Actions is attached as Exhibit A (“Customer Agreement”).4  This operative Customer Agreement
contains several references to its arbitration clause.  The Customer Agreement begins by
acknowledging the arbitration clause on the first page.  See Customer Agreement at 2 (“I
UNDERSTAND THAT THE TERMS AND CONDITIONS OF THIS AGREEMENT
GOVERN ALL ASPECTS OF MY RELATIONSHIP WITH ROBINHOOD REGARDING
MY ACCOUNTS. . . .  I ALSO UNDERSTAND THAT BY CLICKING ‘SUBMIT
APPLICATION’ I HAVE ACKNOWLEDGED THAT THIS AGREEMENT CONTAINS A

4 Each version of the customer agreement also provided that the agreement could be amended by
Robinhood; the plaintiffs accepted responsibility to check Robinhood’s publicly available website
for periodic updates to the agreement.  See O’Such Decl. ¶ 9.  The plaintiffs agreed that, by
continuing to maintain their brokerage accounts, they were accepting the terms of any updated
version of the customer agreement.  Id.  Thus, the Customer Agreement attached as Exhibit A is
the operative customer agreement.  And in any event, the arbitration clauses in the earlier versions
of the customer agreement are materially the same as the arbitration clause in the Customer
Agreement.
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PREDISPUTE ARBITRATION CLAUSE IN SECTION 38 HEREIN.”) (bold text and
capitalization in original).  The Customer Agreement then sets forth the arbitration clause itself:
38.  Arbitration
A.  This Agreement contains a pre-dispute arbitration clause.  By signing an
arbitration agreement, the parties agree as follows: (1) All parties to this
Agreement are giving up the right to sue each other in court, including the
right to a trial by jury, except as provided by the rules of the arbitration forum
in which a claim is filed.
. . .
B.  Any controversy or claim arising out of or relating to this Agreement, any
other agreement between Me and Robinhood,[5] any Account(s) established
hereunder, any transaction therein, shall be settled by arbitration in
accordance with the rules of FINRA Dispute Resolution, Inc. (“FINRA DR”).
Id. at 30 (bold text in original).  The Customer Agreement concludes by re-acknowledging the
arbitration clause.  See id. (“I ALSO UNDERSTAND THAT BY ACCEPTING THIS
AGREEMENT I HAVE ACKNOWLEDGED THAT THIS AGREEMENT CONTAINS A

5 The Customer Agreement defines “Robinhood” as “Robinhood Financial LLC, Robinhood
Securities, LLC, and their agents and assigns.”  See Ex. 1 at 1.  Robinhood Markets, however, may
enforce the arbitration clause because “relevant state contract law allows [it] to enforce the
agreement.”  See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 632 (2009).  Under California
law, a nonsignatory to an agreement may invoke the agreement’s arbitration clause when the
signatory plaintiff’s claims are closely related to the underlying agreement.  See Molecular
Analytical Sys. v. Ciphergen Biosystems, Inc., 186 Cal. App. 4th 696, 706 (2010); see also
Bridgetown Trucking, Inc. v. Acatech Sols., Inc., 197 F. Supp. 3d 1248, 1261 (D. Or. 2016) (“A
nonsignatory to an agreement, however, can be compelled to arbitrate . . . where a preexisting
relationship existed between the nonsignatory and one of the parties to the arbitration agreement,
making it equitable to compel the nonsignatory to also be bound to arbitrate his or her claim.”)
(applying California law).  Here, each of the plaintiffs in the Remaining Actions brings claims
against Robinhood Markets relating to securities transactions in their Robinhood accounts, which
were created by virtue of the Customer Agreement.  Moreover, Robinhood Markets, as the parent
Robinhood entity, had a preexisting relationship with Robinhood Financial and Robinhood
Securities.  Thus, Robinhood Markets may compel arbitration of the Remaining Actions just as
Robinhood Financial and Robinhood Securities can.  Cf. also Order [ECF No. 453] at 34 n.17
(treating Robinhood Markets the same as Robinhood Financial and Robinhood Securities when
determining what duties arose under the Customer Agreement).
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PREDISPUTE ARBITRATION CLAUSE IN SECTION 38 HEREIN.”) (bold text and
capitalization in original).
Consistent with FINRA arbitration rules, the Customer Agreement provided that
Robinhood could not seek to arbitrate a putative class member’s claims until class certification
was denied, the class was decertified, or the customer was excluded from the class by a court.  Id.;
see also FINRA R. 12204.  Now that the Court has denied class certification in the Federal
Securities Tranche, see [ECF No. 622], Robinhood seeks to arbitrate the Remaining Actions in
accordance with the parties’ agreement to mandatory arbitration.
LEGAL STANDARD
The Federal Arbitration Act (“FAA”), 9 U.S.C. § 2, establishes a strong federal policy in
favor of arbitration.  See, e.g., Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1,
24 (1983) (describing the FAA as “a congressional declaration of a liberal federal policy favoring
arbitration agreements”).  “By its terms, the [FAA] leaves no place for the exercise of discretion
by a district court, but instead mandates that district courts shall direct the parties to proceed to
arbitration on issues as to which an arbitration agreement has been signed.”  Dean Witter Reynolds,
Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. §§ 3, 4) (alteration added; emphasis in
original).  “[A]rbitration clauses are to be generously construed and all doubts are to be resolved
in favor of arbitration.”  Ruby-Collins, Inc. v. City of Huntsville, Ala., 748 F.2d 573, 576 (11th Cir.
1984).  Consequently, “the burden is on the party opposing arbitration to prove to the court that
arbitration is improper.”  D.A.M. Prods., Inc. v. Acosta Resituyo, 2018 WL 11372106, at *4 (S.D.
Fla. Feb. 12, 2018).
Courts treat a motion to compel arbitration “as a Rule 12(b)(1) motion to dismiss for lack
of subject-matter jurisdiction.”  Babcock v. Neutron Holdings, Inc., 454 F. Supp. 3d 1222, 1228
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(S.D. Fla. 2020).  As such, “the Court may consider matters outside the four corners of the
Complaint,” such as Robinhood’s Customer Agreement and the O’Such Declaration.  See id. at
1227–28.  Courts consider three issues in reviewing a motion to compel arbitration: “(1) Whether
there is a valid, written agreement to arbitrate; (2) Whether there is an arbitrable issue; and (3)
Whether the right to arbitrate was waived.”  Dimattina Holdings, LLC v. Steri-Clean, Inc., 195 F.
Supp. 3d 1285, 1288 (S.D. Fla. 2016).6
ARGUMENT
A. The Remaining Actions must be compelled to arbitration.
The plaintiffs in the Remaining Actions must arbitrate their claims because (1) each
plaintiff entered into an enforceable, written agreement to arbitrate; (2) the plaintiffs’ claims fall
squarely within the scope of arbitral issues under the arbitration clause; and (3) Robinhood has not
waived its right to arbitrate.
1. There is a valid, written agreement to arbitrate.
Whether the parties entered into an agreement to arbitrate is a matter of contract to which
the Court applies “ordinary state-law principles that govern the formation of contracts.”  Babcock,
454 F. Supp. 3d at 1229 (quoting Dasher v. RBC Bank (USA), 745 F.3d 1111, 1116 (11th Cir.
2014)).  Here, California law governs the contract formation between the parties.  See Customer
Agreement at 30 (providing that the Customer Agreement and all transactions in a customer’s
account “shall be governed by the laws of the State of California”).  Under California law, “[t]he

6 Courts have also considered, citing Section 2 of the FAA, whether there is a “nexus to interstate
commerce.”  E.g., Steele v. Santander Consumer USA, Inc., 2014 WL 4049963, at *2 (S.D. Fla.
Aug. 15, 2014).  Here, that element is easily satisfied because the Remaining Actions arise from
securities trading.  See Herrera Cedeno v. Morgan Stanley Smith Barney, LLC, 154 F. Supp. 3d
1318, 1324 n.2 (S.D. Fla. 2016) (“Where agreements to arbitrate are found in written agreements
pertaining to securities accounts . . . such agreements are per se evidence of transactions in
interstate commerce and are accordingly subject to the Federal Arbitration Act.”).
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essential elements of a contract are: [1] parties capable of contracting; [2] the parties’ consent; [3]
a lawful object; and [4] sufficient cause or consideration.”  Johnson v. Altamirano, 418 F. Supp.
3d 530, 550 (S.D. Cal. 2019) (quoting Lopez v. Charles Schwab & Co., 118 Cal. App. 4th 1224,
1230 (2004)); see also Babcock, 454 F. Supp. 3d at 1229 (“A touchstone of California contract
law is mutual manifestation of assent, whether by written or spoken word or by conduct.”).
Each of the plaintiffs in the Remaining Actions is capable of contracting, as is Robinhood.
See Customer Agreement at 2 (confirming the customer’s capacity to enter a contract).  Moreover,
the Customer Agreement concerned a lawful object: the purchase and sale of securities.  There
was also sufficient consideration underlying the Customer Agreement.  See id. (providing that
Robinhood would open accounts for the customer in exchange for the customer agreeing to terms
of Customer Agreement).
Finally, each plaintiff consented to the terms of the Customer Agreement.  Each customer,
when signing up for a Robinhood account, must accept the terms of the Customer Agreement by
clicking “Submit Application” or electronically signing the application.  See O’Such Decl. ¶¶ 3–
5.  Robinhood informs customers that, by clicking “Submit Application,” the customer “agree[s]
to the terms of the Robinhood Terms and Conditions and Robinhood Financial Customer
Agreement.”  Id. ¶ 4.  This type of agreement—where a website presents users with contractual
terms, which the users must accept by clicking “I agree” or “Submit”—generally is “valid and
enforceable because the user must affirmatively acknowledge receipt of the terms of the contract.”
McLellan v. Fitbit, Inc., 2018 WL 1913832, at *2 (N.D. Cal. Jan. 24, 2018) (citing cases).  Here,
each of the plaintiffs in the Remaining Actions clicked a button or checked a box to “Submit
Application” when signing up for a Robinhood account.  See O’Such Decl. ¶ 7.  Moreover, each
plaintiff not only had the opportunity to review the terms of the Customer Agreement via
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hyperlink, they also had actual notice that there was an arbitration clause because they would have
scrolled past a disclosure that the Customer Agreement contained a pre-dispute arbitration clause,
prior to submitting the application.  Id. ¶¶ 6, 8; see, e.g., id. ¶ 23 (“I HAVE READ THE RHF-
RHS CUSTOMER ACCOUNT AGREEMENT WHICH CONTAINS A PREDISPUTE
ARBITRATION CLAUSE (SECTION 28 ON PAGES 20 AND 21) AND AGREE IN
ADVANCE TO ARBITRATE ANY CONTROVERSIES WHICH MAY ARISE BETWEEN OR
AMONG ME, YOU, AND/OR ROBINHOOD SECURITIES IN ACCORDANCE WITH SUCH
SECTION 28.”) (capitalization in original).  Each plaintiff therefore affirmatively acknowledged
receipt of the Customer Agreement and agreed to be bound by its terms, including the arbitration
clause.7
Further bolstering the enforceability of the arbitration clause is the conspicuous nature of
the clause within the Customer Agreement.  See Keebaugh v. Warner Bros. Entmt. Inc., 100 F.4th
1005, 1019–21 (9th Cir. 2024) (applying California law and finding that an arbitration provision
was sufficiently conspicuous to be enforceable).  The Customer Agreement references the
arbitration clause at the beginning of the agreement in bold and capitalized letters.  See Customer
Agreement at 2.  The Customer Agreement then sets forth the arbitration clause in a separate

7 Courts applying California law have consistently enforced arbitration clauses in similar scenarios.
See, e.g., Meyer v. Uber Techs., Inc., 868 F.3d 66, 75–80 (2d Cir. 2017) (compelling arbitration
where defendant’s terms and conditions were hyperlinked below the button to register for an
account); Dohrmann v. Intuit, Inc., 823 F. App’x 482, 484 (9th Cir. 2020) (affirming grant of
motion to compel arbitration and finding that the defendant’s website provided sufficient notice of
its terms by hyperlinking the terms directly below the sign-in button); Peter v. DoorDash, Inc.,
445 F. Supp. 3d 580, 586–87 (N.D. Cal. 2020) (finding that plaintiffs were on inquiry notice of
terms and conditions where a hyperlink to the terms was in a different color from the surrounding
text, “plainly readable,” “wholly visible” and located close to the sign-up button); Dickey v.
Ticketmaster LLC, 2019 WL 9096443, at *7 (C.D. Cal. Mar. 12, 2019) (granting motion to compel
arbitration and holding that plaintiff assented to the terms of use where the terms were provided in
a blue hyperlink located above the sign-up button).
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section titled “Arbitration,” in all bold letters.  Id. at 30.  Finally, the Customer Agreement re-
acknowledges the arbitration clause in bold and capitalized letters at the end of the agreement.  Id.
These several, conspicuous references to the arbitration clause sufficiently placed each of the
plaintiffs on notice that they were agreeing to arbitrate claims arising from the Customer
Agreement.  Cf. Baggaley v. Wells Fargo Bank, N.A., 2018 WL 8804574, at *4 (C.D. Cal. Aug.
21, 2018) (finding arbitration clause enforceable where clause was “set off under its own, bolded
heading, and contain[ed] numerous conspicuous bold and capitalized terms”); Babcock, 454 F.
Supp. 3d at 1332–34 (enforcing arbitration clause under California law because plaintiff had
sufficient notice of the terms of the defendant’s online agreement).
In sum, the Customer Agreement meets all the elements of a valid contract under California
law.  Thus, the Customer Agreement’s arbitration clause constitutes a valid, written agreement for
the plaintiffs in the Remaining Actions to arbitrate their individual claims.
2. There is an arbitrable issue.
The Customer Agreement contains a broad arbitration clause that covers all the remaining
plaintiffs’ claims, which relate to the securities held in their Robinhood brokerage accounts.  “[A]s
a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in
favor of arbitration[.]”  Moses H. Cone, 460 U.S. at 24–25.
The plaintiffs in the Remaining Actions agreed to arbitrate “[a]ny controversy or claim
arising out of or relating to this Agreement, . . . any Account(s) established hereunder, [or] any
transaction therein.”  Customer Agreement at 30.  Nothing in the Customer Agreement limits the
type of claims that can be arbitrated.  See generally id.  Indeed, the only restriction on arbitration
in the Customer Agreement is that class treatment must be denied (which it has been) before
Robinhood can seek to compel arbitration.  See id. at 30.  Here, citing the restrictions that
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Robinhood placed on the “meme stocks,” each plaintiff in the Remaining Actions asserts causes
of action for federal securities violations relating to securities they held in their Robinhood
accounts.8  Thus, each plaintiff in the Remaining Actions has asserted claims (1) “arising out of”
the Customer Agreement; (2) “relating to” the accounts that the plaintiffs established through the
Customer Agreement; and (3) “relating to” transactions conducted in those accounts.  Accordingly,
there is an arbitrable issue with respect to the plaintiffs’ claims.
This Court has compelled arbitration under similar circumstances.  In Sims v. Clarendon
Nat’l Ins. Co., the arbitration agreement at issue provided that “any dispute” arising under the
parties’ insurance policy “must be arbitrated.”  336 F. Supp. 2d 1311, 1314 (S.D. Fla. 2004).  The
Court reasoned that “the all-encompassing ‘any disputes’ language of the Arbitration Agreement,”
coupled with the fact that there were “no other provisions of the Policy that specifically exclude
any particular disputes from arbitration or show an intent by the parties to exclude certain claims
from [the] scope of their Arbitration Agreement,” meant an arbitrable issue existed.  Id. at 1326
(emphasis in original).  As such, arbitration was appropriate.  See id.
On a broader level, courts routinely find that claims relating to securities transactions
present arbitrable issues.  See, e.g., Shearson/Am. Express, Inc. v. McMahon, 482 U.S. 220, 238
(1987) (rejecting argument that pre-dispute arbitration agreements are categorically unenforceable
in securities claims); Herrera Cedeno, 154 F. Supp. 3d at 1327 (compelling arbitration where
plaintiff agreed to arbitrate “all claims or controversies . . . concerning or arising” from plaintiff’s
securities account with defendant); Park v. E*TRADE Fin. Corp. Servs., Inc., 2023 WL 11779917,
at *2, *10 (N.D. Ga. July 25, 2023) (compelling arbitration by FINRA of plaintiff’s 10b-5 claims).

8 Any of the remaining plaintiffs’ state law or antitrust claims against Robinhood have already
been dismissed with prejudice.  See Orders [ECF Nos. 453, 470].
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And courts have compelled arbitration when the arbitration clause at issue is similar to
Robinhood’s in this case.  Compare Clark v. Colo. Div. of Sec., 2024 WL 1719450, at *2–3 (D.
Colo. Apr. 22, 2024) (compelling arbitration of plaintiff’s claims where the investment agreement
provided for arbitration of “any controversy or claim arising out of or relating to” (1) the
agreement, (2) any account that plaintiff maintained with defendant, and (3) transactions in any
account that plaintiff maintained with defendant), with Customer Agreement at 30 (requiring
arbitration of “any controversy or claim arising out of or relating to” the Customer Agreement,
plaintiffs’ accounts maintained with Robinhood, or transactions in any of the accounts that
plaintiffs maintained with Robinhood).
The plaintiffs in the Remaining Actions broadly agreed to arbitrate any claims arising from
the Customer Agreement, their accounts with Robinhood, and any transaction in those accounts.
Because each of the plaintiffs’ individual causes of action falls within that scope, each plaintiff’s
claims present arbitrable issues.
3. There has been no waiver of the right to arbitrate.
Finally, Robinhood has not waived its right to arbitrate.  When considering the issue of
waiver, the Eleventh Circuit is “mindful of the Supreme Court’s admonition that questions of
arbitrability must be addressed with a healthy regard for the federal policy favoring arbitration.”
Pinnacle Constr. Grp. LLC v. SSC Tuscaloosa Apts. LLC, 2024 WL 3042536, at *1 (11th Cir. June
18, 2024) (quotations omitted).  A party does not waive its right to arbitrate unless “under the
totality of the circumstances, the party has acted inconsistently with the arbitration right . . . .”  Id.
(quoting S & H Contractors, Inc. v. A.J. Taft Coal Co., 906 F.2d 1507, 1514 (11th Cir. 1990),
abrogated on other grounds by Morgan v. Sundance, Inc., 596 U.S. 411 (2022)).
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Robinhood has not acted inconsistently with its right to arbitrate the Remaining Actions.
Under both the Customer Agreement and FINRA Rule 12204, Robinhood was prohibited from
seeking to compel arbitration until “(1) the class certification is denied; or (2) the class is
decertified; or (3) the customer is excluded from the class by the court.”  Customer Agreement at
30; see also FINRA R. 12204(a), (d).  Thus, Robinhood could not compel arbitration until the issue
of class certification was resolved.  And the parties agreed that Robinhood’s “forbearance to
enforce [the] agreement to arbitrate shall not constitute a waiver of any rights under this Agreement
except to the extent stated herein.”  Customer Agreement at 30.  Accordingly, Robinhood’s
participation in class-certification litigation in the Federal Securities Tranche was not inconsistent
with Robinhood’s right to arbitrate—if anything, it was consistent with Robinhood’s right to
arbitrate, as Robinhood needed to resolve class certification as a precondition to seeking
arbitration.  Once class treatment was denied, Robinhood promptly shifted to compelling
arbitration of the Remaining Actions.
In sum, Robinhood has not waived its right to arbitrate the Remaining Actions.
B. This Court should stay the Remaining Actions pending arbitration.
Once the Court is satisfied that a case “is referable to arbitration,” the Court “shall on
application of one of the parties stay the trial of the action until such arbitration has been had . . .
.”  9 U.S.C. § 3; see also Bender v. A.G. Edwards & Sons, Inc., 971 F.2d 698, 699 (11th Cir. 1992)
(“Upon finding that a claim is subject to an arbitration agreement, the court should order that the
action be stayed pending arbitration.”).  As demonstrated above, the claims in the Remaining
Actions are subject to arbitration under the Customer Agreement.  As such, this Court should stay
the Remaining Actions until arbitration is complete.  Cf., e.g., Sims, 336 F. Supp. 3d at 1326
(compelling arbitration and staying the case until arbitration was complete); Davis, 2024 WL
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278293, at *4 (same); Isanto v. Royal Caribbean Cruises, Ltd., 497 F. Supp. 3d 1237, 1251–52
(S.D. Fla. 2020) (same); see also Smith v. Spizzirri, 601 U.S. 472, 477 (2024) (instructing that a
stay, rather than dismissal, is appropriate when a district court compels arbitration).
CONCLUSION
For the foregoing reasons, Robinhood respectfully requests this Court to enter an order (1)
compelling arbitration of the Remaining Actions and (2) staying the Remaining Actions pending
arbitration.
CERTIFICATE OF CONFERRAL
In accordance with Local Rule 7.1(a)(3), counsel for Robinhood certifies that they have
conferred with counsel for each of the plaintiffs in the Remaining Actions regarding the relief
requested in this Motion.  The plaintiffs in the Remaining Actions did not consent to the relief
requested in this Motion.

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Dated: December 9, 2024

Respectfully submitted,
/s/ Samuel A. Danon

HUNTON ANDREWS KURTH LLP
Samuel A. Danon (FBN 892671)
María Castellanos Alvarado (FBN 116545)
Tom K. Schulte (FBN 1025692)
333 S.E. 2nd Avenue, Suite 2400
Miami, Florida 33131
Tel.: (305) 810-2500
Fax: (305) 810-2460
sdanon@huntonak.com
mcastellanos@huntonak.com
tschulte@huntonak.com

CRAVATH, SWAINE & MOORE LLP
Antony L. Ryan (pro hac vice)
Kevin J. Orsini (pro hac vice)
Brittany L. Sukiennik (pro hac vice)
Two Manhattan West
375 Ninth Avenue
New York, NY 10001
Tel.: (212) 474-1000
Fax: (212) 474-3700
aryan@cravath.com
korsini@cravath.com
bsukiennik@cravath.com

Counsel for Robinhood Financial LLC,
Robinhood Securities, LLC, and Robinhood
Markets, Inc.

CERTIFICATE OF SERVICE

I certify that on December 9, 2024, I electronically filed a true and correct copy of the
foregoing via CM/ECF, which will send notice to all counsel of record.
/s/ Samuel A. Danon

Case 1:21-md-02989-CMA   Document 713   Entered on FLSD Docket 12/09/2024   Page 17 of 17

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