Oura Ring's ARL lawsuit: a masterclass in the power of an arbitration clause

Oura made the smart ring mainstream: a hardware purchase paired with an optional membership for the health data behind it. Its ARL lawsuit is one of the most useful cases to dissect precisely because it didn't end with a ruling on the checkout, and it didn't end in a settlement. Oura filed a motion to compel arbitration, and the plaintiffs dismissed the case within a week without ever filing a response.

The lawsuit, explained

Lekhadia v. Oura Health Oy and Ouraring, Inc., brought by three plaintiffs, alleged Oura failed to clearly disclose automatic-renewal terms at checkout and made it difficult to cancel recurring membership charges. One plaintiff described being charged $6.41 for a one-month membership, then hit with ongoing charges without clearly consenting to the recurring arrangement.

Oura sells a $300+ piece of hardware with an optional membership layered on top, a combination that trips up hardware-plus-subscription brands who assume "we sell a software subscription" gets them out of ARL exposure. It doesn't. If any part of your offer auto-renews and charges a card, the law applies.

How the arbitration clause fought off the class action

When Oura got the opportunity, they filed two motions: one to compel arbitration and stay the case, and another to dismiss outright. The arbitration motion was decisive. Instead of relying on a single terms page, Oura presented three separate, dated versions of its Terms and Conditions, aligned with when each plaintiff purchased, plus membership setup and usage data from the plaintiffs' own accounts.

“That's a company with a complete paper trail showing exactly what each customer saw and agreed to on their signup date. Most companies don't have those records. Oura did.”

No judge ever ruled on whether Oura's checkout violated the ARL. They didn't need to. Plaintiffs' counsel had the chance to argue the arbitration clause was unenforceable, and never filed a response, consistent with counsel deciding the fight wasn't winnable, not with Oura being vindicated on the merits.

Why are ARL cases almost always class actions?

Most ARL complaints involve modest monthly charges: $20 to $40, the kind any company would refund without hesitation. But refunding one customer doesn't make the exposure disappear. These claims are typically brought under the CLRA, which provides statutory damages regardless of what a customer actually lost.

Multiply a fixed statutory amount by a class of 10,000, 50,000, or 200,000 subscribers, and a case worth nothing per person becomes worth tens of millions in aggregate. That gap is the entire business model behind boilerplate ARL lawsuits, which is exactly why certification is the whole game.

Who's actually filing these lawsuits?

Since California's amended ARL took effect in July 2025, a small set of serial plaintiffs and an even smaller set of law firms have been running a repeatable playbook: subscribe, let it renew once, ask to cancel. A demand letter follows within a month or two, and regardless of how the brand responds, a lawsuit often follows another month or two after that.

“These firms aren't hunting for brands that scammed anyone. They're hunting for any brand that left the technicalities undone.”

How to avoid being a target

What plaintiff firms actually screen for splits into two questions: is there a well-founded argument your purchase flow violates the ARL: conspicuous disclosure, affirmative consent, an acknowledgment email, easy cancellation? And if you are sued, can it become a class action: does your Terms and Conditions include a real, enforceable arbitration clause your customers affirmatively agreed to?

Fix the first, and you reduce the odds of being sued at all. Get the second right, and even if a complaint lands in your inbox, it can die quickly, the way Oura's did.