Citizen Power Initiatives for China v. Tencent America CA6

Filed 5/20/24 Citizen Power Initiatives for China v. Tencent America CA6 NOT TO BE PUBLISHED IN OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SIXTH APPELLATE DISTRICT

CITIZEN POWER INITIATIVES FOR H049519, H049717 CHINA et al. (Santa Clara County Super. Ct. No. 21CV375169) Plaintiffs and Respondents,

v.

TENCENT AMERICA LLC et al.,

Defendants and Appellants.

Defendants Tencent America LLC and Tencent International Service Pte. Ltd. (collectively Tencent) operate WeChat, a social media application commonly used by the Chinese-speaking world for electronic communication. The plaintiffs in this consumer class action allege that Tencent aids the People’s Republic of China in monitoring and censoring communications on WeChat. Tencent twice moved unsuccessfully to compel arbitration and has appealed both rulings. For the reasons stated here, we conclude that plaintiffs are equitably estopped from contesting assent to an arbitration clause because the claims in their complaint are inextricably intertwined with the terms of service containing the subject arbitration clause. We will therefore reverse the first order denying the motion to compel arbitration, dismiss the second appeal as moot, and remand the matter for further proceedings. I. BACKGROUND The plaintiffs in this putative class action are Citizen Power Initiatives for China (a nonprofit organization dedicated to advancing democracy in the People’s Republic of

China) and six anonymous WeChat users who live in California. Three of the individual user plaintiffs are citizens of the United States; the other three are citizens of the People’s Republic of China. According to the complaint, WeChat is the predominant way people communicate over the internet in the Chinese-speaking world, holding “an effective monopoly on how the inhabitants of that world communicate with each other electronically.” The plaintiffs allege Tencent turns over private user data to the government of the People’s Republic of China thus enabling surveillance and censorship. As a result, content on WeChat unfavorable to the ruling Chinese Communist Party is removed, and accounts of users who generate the content are blocked. WeChat users are at times investigated, detained, and punished by the Chinese government because of intercepted communications. The plaintiffs identify two categories of unlawful conduct. First, the complaint alleges Tencent uses “ ‘challenged practices’ ” which allow it to profit from “politically motivated, pro-Chinese Communist Party (‘CCP’) censorship and surveillance of California WeChat users.” Second, the complaint alleges “ ‘challenged provisions’ ” in “Tencent’s terms of service and privacy policy which, taken together, are oppressive, obfuscatory, and incoherent.” The complaint quotes from three sources of Tencent written policies: an online “ ‘WeChat Help Center’ ”; a privacy policy; and terms of service. The terms of service quoted in the complaint are from the 2018 terms of service. Those 2018 terms of service incorporate the WeChat privacy policy by reference. The complaint does not quote any other version of the terms of service. The version of the privacy policy in effect in 2018 is not included in the record on appeal. The complaint quotes privacy language from the Help Center, including: “ ‘As content of messages are not permanently stored to our servers nor are data-mined for commercial purposes, any claims that third-parties including members of the WeChat team are “snooping” on your chat messages are incorrect misunderstandings.’ ” The 2