Judge: Alison Mackenzie, Case: 23STCV09254, Date: 2023-12-12 Tentative Ruling
Case Number: 23STCV09254 Hearing Date: December 12, 2023 Dept: 55
NATURE OF PROCEEDINGS: Motion of Defendant Citistaff Solutions Inc. to
Compel Arbitration. Joinder Therein of
Defendants Golden West Food Group, Inc., California Farms Meat Company, Inc.
and Raul Morales.
The motion and joinder are denied.
The Court sustains Plaintiff’s evidentiary objections
as to the declaration of Charles Slater. The Court overrules the remaining
evidentiary objections.
On 4/24/23, BETSABE NAVA (“Plaintiff”) filed a
Complaint alleging that the employer defendants wrongfully terminated Plaintiff’s
work as a machine operator and meat packer, in retaliation for Plaintiff’s
complaints about sexual harassment by a manager. Plaintiff alleges claims under
the Fair Employment and Housing Act (FEHA), among others. Moving and joining defendants
bring a motion to compel Plaintiff to submit all causes of action to
arbitration in accordance with an arbitration agreement, and to stay or dismiss
this case. Plaintiff opposes the motion.
FAA
As a threshold issue, Defendants contend that the Federal
Arbitration Act (FAA) governs the arbitration agreement. The party seeking to compel arbitration
pursuant to the FAA has the burden to demonstrate that an underlying agreement
involves interstate commerce. Hoover
v. Amer. Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1207-08 (party
failed to evidence that the agreement involved interstate commerce, and that
the contractual relationship had a “specific effect or ‘bear[ing] on interstate
commerce in a substantial way.’”). “Even
when the Federal Arbitration Act applies, state law governs such matters as who
is bound by and who may enforce an arbitration agreement.” Thomas v. Westlake (2012) 204
Cal.App.4th 605, 614 n. 7. Under both
state law and the FAA, “[w]hen a party to an arbitration agreement challenges
the agreement as unenforceable, we decide the issue based on the same state law
standards that apply to contracts generally.” Boghos v. Certain Underwriters
at Lloyd's of London (2005) 36 Cal.4th 495, 501.
The Court finds that both of the moving parties’
declarations taken together demonstrate that Plaintiff’s work in preparing
products for sale to out-of-state customers had a substantial bearing on
interstate commerce. But even applying
the FAA, the Court observes that the above-cited authorities dictate that
California law governs the determination of contract formation with respect to
the arbitration agreement. The FAA, therefore, has no effect on this ruling.
Arbitration Contract
Formation
A party seeking arbitration has the burden of proving
by a preponderance of evidence that a valid arbitration agreement exists. Ruiz
v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 842; see also
§ CCP 1281.2. A party meets its initial
burden simply by reciting the terms of the governing provision, or by attaching
a copy of the provisions, unless there is a dispute over authenticity that is
beyond merely contesting the preliminary showing. Sprunk v. Prisma LLC (2017) 14
Cal.App.5th 785, 793; Ruiz 232 Cal.App.4th at 846 (“In the face of …[plaintiff’s]
failure to recall signing … [party moving for arbitration] had the burden of
proving by a preponderance of the evidence that the electronic signature was
authentic….”). See also
Espejo v. So. Cal. Permanente Med. Group (2016) 246 Cal.App.4th 1047,
1060 (“defendants … met their initial burden by attaching to their petition a
copy of the purported arbitration agreement bearing … electronic signature.
Once … challenged …, defendants were then required to establish by a preponderance
of the evidence that the signature was authentic.”).
Defendants present two declarations and a copy of the
arbitration agreement in support of their contention that they have established
the existence of a valid arbitration agreement. Defendants contend that the evidence
shows Plaintiff signed and entered an arbitration agreement with CitiStaff,
which also covers CitiStaff’s customer, Defendants Golden West Food Group, Inc.
and California Farms Meat Company, Inc. (See Cerdas Decl., ¶¶ 4-5). Defendants
rely upon the Aurelio Cerdas declaration for supporting authentication of the
arbitration agreement as a business record, based upon a showing of personal
knowledge as the Director of Human Resources and custodian of records of
CitiStaff. By contrast, the declaration
of Charles Slater, counsel for moving Defendant, fails to show personal
knowledge about the arbitration agreement. As a result, the Court sustained the
evidentiary objections as to that declaration.
The Court has compared the signature on the
arbitration agreement with the signature on Plaintiff’s opposing declaration,
and they look nothing alike. (Compare Mot., Ex. A, last page, with Opp.,
Plaintiff’s decl., p. 2.) Given such drastically different signatures and
moving parties’ heavy reliance upon authentication based upon general employer
procedures, without more, the Court does not find that Plaintiff assented to an
arbitration agreement. Cf. Chambers
v. Crown Asset Mgmt., LLC (2021) 71 Cal. App. 5th 583, 591, 595 (“trial
court could reasonably find that … affidavit was insufficient to establish that
the unspecified records were ‘made at or near the time of the act, condition,
or event’ and ‘[t]he sources of information and method and time of preparation
were such as to indicate its trustworthiness.’”).
Because the Court finds that an arbitration agreement
has not been shown by a preponderance of evidence, it need not reach the
further issue of whether opposing proof supports denying Defendants’ request
for arbitration.
Unconscionability
Next, the parties disagree
as to whether unconscionability facts are present.
Surprise caused by hidden
arbitration agreements indicates procedural unconscionability. Thompson v. Toll Dublin, LLC (2008)
165 Cal.App.4th 1360, 1373. Claims
brought under the Fair Employment and Housing Act (FEHA) (such as the claims in
this case) are subject to arbitration, if there are provisions for arbitrator
neutrality, discovery, written decisions, and expense limits. O'Hare v. Municipal Resource Consultants
(2003) 107 Cal. App. 4th 267, 273; Fittante
v. Palm Springs Motors, Inc.(2003) 105 Cal. App. 4th 708, 716; Armendariz
v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 96-121;
Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 422-23; Blake v. Ecker (2001) 93 Cal.App.4th
728, 433, overruled on other grounds
by Le Francois v. Goel (2005)
35 Cal.4th 1094, 1108 n. 5.
Cases that have held that the failure to provide a
copy of the arbitration rules support finding procedural unconscionability have
involved an unconscionability claim that somehow depended upon the incorporated
arbitration rules. Baltazar v.
Forever 21, Inc. (2016) 62 Cal.4th 1237, 1246. “Whether a document purportedly incorporated
by reference was ‘readily available’ is a question of fact.” Baker v. Osborne Development Corp.
(2008) 159 Cal.App.4th 884, 895.
Given the Court’s finding against contract formation,
it is unnecessary to reach the issue of unconscionability. However, the failure to obtain Plaintiff’s
assent would constitute procedural and substantive unconscionability, because
surprise, and a complete absence of terms, exist.
Staying
or Dismissing
The issue of whether to stay or to dismiss a case only
arises after arbitration is ordered compelled, which is not the case here.
Conclusion
In light of the lack of assent, the motion and joinder
therein are denied.