Judge Alison Mackenzie, Case Number: 23STCV18314, Date: 2024-05-03 Tentative Ruling

Judge: Alison Mackenzie, Case: 23STCV18314, Date: 2024-05-03 Tentative Ruling

Case Number: 23STCV18314 Hearing Date: May 3, 2024 Dept: 55

NATURE OF PROCEEDINGS: Defendant Ultragenyx Pharmaceutical Inc.’s Motion to Compel Arbitration and Stay Action Pending Arbitration.

BACKGROUND

ESTHER SCHNEIDER (“Plaintiff”) brings this employment discrimination case against her former employer ULTRAGENYX PHARMACEUTICAL INC. (“Defendant”).

Defendant filed a motion to compel arbitration and to stay this action. Plaintiff opposes the motion.

LEGAL STANDARD

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. Sprunk v. Prisma LLC (2017) 14 Cal.App.5th 785, 793. Once the petitioner meets its burden, “the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges.” Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.

Where a court has ordered arbitration, it shall stay the action pending the outcome of the arbitration. Code Civ. Proc., § 1281.4.

EVIDENTIARY RULINGS

Plaintiff’s evidentiary objections to the Declaration of Noel Barrion and exhibit thereto are overruled. See, e.g., LPP Mortgage, Ltd. v. Bizar (2005) 126 Cal.App.4th 773, 776-777 (management’s custodian of records competently declared records were kept in the ordinary course of business), and Espejo v. So. Cal. Permanente Med. Group (2016) 246 Cal.App.4th 1047, 1060 (copy of signed arbitration agreement satisfies burden, unless defendant evidences a dispute about authenticity).

ANALYSIS

Defendant seeks an order compelling arbitration of Plaintiff’s claims based on a written agreement covering the employment allegations in Plaintiff’s Complaint. Defendant submitted a declaration from its Executive Director, Human Resources Business Partner stating that Plaintiff signed the agreement in 2013. Mot., p. 8; Barrion Decl., ¶¶ 1, 5, Ex. A.

Defendant has sufficiently met its burden of showing the existence of an arbitration agreement, signed by Plaintiff, which covers the claims at issue in Plaintiff’s lawsuit filed against Defendant.

The burden shifts to Plaintiff to challenge the enforceability of the agreement. Plaintiff does not dispute the validity of the agreement or that it covers her claims. Rather, Plaintiff contends that the arbitration agreement should not be enforced because it is procedurally unconscionable (the way the agreement was negotiated) and substantively unconscionable (whether the agreement’s terms are unreasonably one-sided) and that the objectionable provisions cannot be severed for compelling the remainder of the arbitration agreement. Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83, 113-115. The Court disagrees.

Plaintiff contends the agreement has a “high degree” of procedural unconscionability because Defendant did not provide her with an explanation of the terms of the arbitration agreement. Oppn., p. 5. Plaintiff worked as a Clinical Trial Specialist for Defendant, a biopharmaceutical company. Barrion Decl., ¶ 3; Schneider Decl., ¶¶ 2-3. The arbitration provision is in a six-page standalone document signed by Plaintiff. The arbitration provision is in a subsection underlined and bolded “Arbitration.” Barrion Decl., Ex. A. Plaintiff signed the agreement right above another subsection in which she acknowledges that she had the opportunity to seek legal advice and she had read and understood all the provisions. Id. Under this competing set of facts, the Court cannot find that Plaintiff has established procedural unconscionability.

Nor does the Court find it procedurally unconscionable that Plaintiff was not provided a copy of the AAA rules governing any potential arbitration at the time she signed the agreement. Peng v. First Republic Bank (2013) 219 Cal. App. 4th 1462, 1472 (“failure to attach the AAA rules, standing alone, is insufficient grounds to support a finding of procedural unconscionability”).

Plaintiff also contends the arbitration agreement is procedurally unconscionable because it was a form contract that Plaintiff had to sign as a condition of her employment and she had no opportunity to negotiate the terms. But “there is no general rule that a form contract used by a party for many transactions is procedurally unconscionable.” Crippen v. Cent. Valley RV Outlet (2004) 124 Cal. App. 4th 1159, 1165. Plaintiff provides no evidence that she was denied the opportunity to discuss the terms of the arbitration agreement or that Defendant presented it to her as a “take it or leave it” agreement. She simply has not established any facts to support her conclusory contention that the agreement was procedurally unconscionable.

Plaintiff also contends that several provisions of the arbitration agreement are substantively unconscionable. She claims the agreement provides for inadequate discovery but the agreement calls for parties to obtain discovery as provided in the Federal Rules of Civil Procedure. It strains credulity that obtaining discovery under the federal rules somehow does not constitute adequate discovery.

Plaintiff claims that the agreement lacks mutuality but the agreement plainly states that both parties will arbitrate claims they may have against each other related to Plaintiff’s employment. The Court disagrees that the agreement provides that Defendant’s claims against Plaintiff can be brought in court while Plaintiff’s claims all go to arbitration- that is simply not what the agreement says. The agreement also does not, contrary to Plaintiff’s contention, modifies the fee-shifting provisions of the FEHA. Under the agreement, the parties will have the same statutory remedies in arbitration as they would in court. The agreement does state the prevailing party in the arbitration is entitled to attorneys’ fees but this impliedly incorporates the “asymmetric FEHA attorney fee standard” that requires an employer to demonstrate the employee’s action was frivolous or brought in bad faith. Patterson v. Superior Court (2021) 70 Cal. App. 5th 473, 490. As such, this provision does not render the agreement substantively unconscionable.

Finally, Plaintiff contends the provision requiring Plaintiff to bring her claims to the Board before arbitration is substantively unconscionable. While this issue appears moot given that the parties are already in litigation over Plaintiff’s employment, Defendant already told Plaintiff it would agree to strike this provision. To the extent this provision still has any application to this case and is arguably unconscionable, it certainly can be severed from the agreement without affecting the overall agreement. See Bolter v. Superior Court (2001) 87 Cal. App. 4th 900, 910-11. The Court therefore will strike this provision.

CONCLUSION

The motion is granted. The action is stayed pending the outcome of the arbitration. The Court will set a status conference re arbitration on a date that works with both counsel.