Judge: Armen Tamzarian, Case: 22STCV15941, Date: 2023-01-27 Tentative Ruling

Case Number: 22STCV15941    Hearing Date: January 27, 2023    Dept: 52

Defendants Epione Medical Corporation, Epione Beverly Hills, Inc., Beverly Hills Plastic Surgery Associates, and Simon Ourian’s Motion to Compel Final and Binding Arbitration and to Stay This Action

Defendants Epione Medical Corporation, Epione Beverly Hills, Inc., Beverly Hills Plastic Surgery Associates, and Simon Ourian move to compel arbitration of this action by plaintiff Sara Simms.  Plaintiff opposes the motion on two grounds. 

(1) Waiver

First, plaintiff argues defendants waived their right to compel arbitration.  “[M]erely participating in litigation, by itself, does not result in a waiver.”  (St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1203.)  When determining waiver, courts consider factors including “(1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether the litigation machinery has been substantially invoked and the parties were well into preparation of a lawsuit before the party notified the opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period before seeking a stay; (4) whether a defendant seeking arbitration filed a counterclaim without asking for a stay of the proceedings; (5) whether important intervening steps [e.g., taking advantage of judicial discovery procedures not available in arbitration] had taken place.”  (Id. at p. 1196, internal quotes omitted.)

Plaintiff argues defendants acted inconsistent with the right to arbitrate by propounding discovery.  Defendants, however, withdrew that discovery upon seeking to enforce the arbitration agreement.  And plaintiff fails to show any of that discovery would not have been available in arbitration. 

Defendants took, at most, minimal actions inconsistent with the right to arbitrate.  Defendants did not substantially invoke the litigation machinery.  Defendants Epione Medical Corporation and Simon Ourian first appeared in this action when they filed their answer on September 13, 2022.  Defendants’ counsel asked plaintiff to agree to arbitration on September 28, 2022.  (Kroll Decl., ¶ 5, Ex. 2.)  Even if measured from when plaintiff filed the complaint in May 2022, defendants’ delay was minimal.  The case is young.  It has not yet been set for trial.     

Plaintiff also argues defendants waived the right to compel arbitration because they withheld a copy of the agreement when plaintiff requested it.  Plaintiff cites no authority that doing so is grounds for waiver.  Plaintiff contends she demanded a copy in April 2022 (before filing this action), and defendants only produced it on September 28, 2022.  That was only about two weeks after they first appeared in the action.  Not producing the agreement earlier constituted, at most, one act inconsistent with the right to arbitrate.  It does not outweigh defendants’ otherwise prompt efforts to enforce the arbitration agreement. 

(2) Public Injunction

            Second, plaintiff argues the motion should be denied because her proposed second amended complaint would seek public injunctions under FEHA and the Labor Code.  Even assuming the court should consider a proposed amendment that has not been filed, it would not warrant denying the motion. 

Plaintiff relies on McGill v. Citibank, N.A. (2017) 2 Cal.5th 945 (McGill) and Vaughn v. Tesla, Inc. (Cal. Ct. App., Jan. 4, 2023, No. A164053) 2023 WL 29132 (Vaughn).  Both cases, however, held that a provision waiving the substantive right to seek an injunction was unenforceable.  “The question we address in this case is the validity of a provision in a predispute arbitration agreement that waives the right to seek this statutory remedy in any forum.  We hold that such a provision is contrary to California public policy and is thus unenforceable under California law.”  (McGill, supra, 2 Cal. 5th at pp. 951-952.)  The California Supreme Court expressly declined to determine whether the rest of the arbitration provision was enforceable.  (Id. at pp. 966-967.) 

Similarly, Vaughn held, “Because Plaintiffs’ request for a public injunction ‘has “the primary purpose and effect of” prohibiting unlawful acts that threaten future injury to the general public’ [citation], the trial court properly denied Defendant's motion to compel arbitration as to that claim.”  (2023 WL 29132 at p. *12.)  The Court of Appeal affirmed the trial court’s order enforcing the arbitration agreement as to some of the plaintiffs’ claims.  (Id. at pp. *2-3.)    

Here, the agreement does not purport to waive the right to seek an injunction.  Plaintiff relies on paragraphs 1 and 2, neither of which limit the remedies available for either side.  They instead state which claims are subject to the binding arbitration agreement.  (Ourian Decl., ¶ 13, Ex. 1, ¶¶ 1-2.)  Rather than limiting remedies, the agreement provides, “The arbitrator will apply the substantive law and the law of remedies of the State of California or the United States, as applicable to the Claims.”  (Id., ¶ 5.4.) 

Assuming the agreement waives plaintiff’s right to seek an injunction in any forum, the court would find that provision severable and stay that portion of the action until after the arbitration proceeding.  

Disposition

Defendants Epione Medical Corporation, Epione Beverly Hills, Inc., Beverly Hills Plastic Surgery Associates, and Simon Ourian’s motion to compel arbitration is granted.  Plaintiff Sara Simms is ordered to arbitrate her claims against defendants.  The court hereby stays the entire action pending resolution of the parties’ arbitration proceeding.

The court hereby vacates the case management conference and the hearing on plaintiff’s motion to compel responses to form interrogatories.