Judge Bruce G. Iwasaki, Case Number: 24STCV00088, Date: 2024-03-22 Tentative Ruling

Tentative Ruling: Defendants’ Motions to Compel Arbitration are granted; the matter is stayed pending resolution of arbitration. Plaintiff’s motion for a preliminary injunction is denied.

This dispute arises from Plaintiff Renee Poche’s participation in a television program and her effort to invalidate the Participant Release and Agreement she entered in order to do so.

On January 2, 2024, Plaintiff Rene Poche (Plaintiff) filed a Complaint arising from her appearance on the show, Love is Blind, an unscripted program produced by Defendant Delirium TV, LLC (Delirium) and aired on Defendant Netflix, Inc. (Netflix). The Complaint alleges causes of action for (1.) violations of government Code section 12964.5, (2.) violations of Labor Code section 432.5, (3.) violations of Civil Code section 1668, (4.) unfair competition, (5.) intentional infliction of emotional distress, and (6.) declaratory relief.

Before Plaintiff’s Complaint was filed, Defendant Delirium initiated arbitration against Plaintiff for alleged breach of the Participant Release and Agreement.

On January 16, 2024, Plaintiff filed a motion for preliminary injunction seeking relief on numerous grounds, including an order to stay Delirium’s arbitration proceeding and enjoining Defendants’ enforcement of the parties’ Participant Release and Agreement, which includes an Arbitration Agreement. Defendant Delirium TV, LLC and Netflix, Inc. filed oppositions to the motion for a preliminary injunction.

On February 2, 2024, Defendant Delirium filed a motion to compel arbitration. On February 5, 2024, Defendant Netflix filed a separate motion to compel arbitration. Plaintiff opposed both motions. Both Defendants rely on the arbitration provision of the Participant Release and Agreement, with Netflix as a third-party beneficiary.

The motion to compel arbitration is granted as to Defendants Delirium TV, LLC and Netflix, Inc. This matter is stayed pending the outcome of arbitration. The motion for a preliminary injunction is denied in its entirety.

Delirium’s evidentiary objections are ruled as follows: Nos. 1, 4-7 are overruled, and Nos. 2-3 are sustained.

Netflix’s objections to the Sunshine declaration are ruled as follows: Nos. 1-3 are overruled. Netflix’s objections to the Poche declaration are ruled as follows: Nos. 1-4 are overruled.

Under Code of Civil Procedure section 1281.2, a court may order arbitration of a controversy if it finds that the parties have agreed to arbitrate that dispute. Because the obligation to arbitrate arises from contract, the court may compel arbitration only if the dispute in question is one in which the parties have agreed to arbitrate. (Weeks v. Crow (1980) 113 Cal.App.3d 350, 352.) Since arbitration is a favored method of dispute resolution, arbitration agreements should be liberally interpreted, and arbitration should be ordered unless the agreement clearly does not apply to the dispute in question. (Id. at p. 353; Segal v. Silberstein (2007) 156 Cal.App.4th 627, 633.)

Defendants Delirium TV, LLC and Netflix, Inc. move to compel arbitration of Plaintiff’s claims and stay this matter while the arbitration is pending.

Defendants seek to compel arbitration based on the parties’ Participant Release and Agreement (Agreement) signed by Plaintiff. (Secretov Decl., Ex. A.)

Plaintiff does not dispute the existence or validity of this Agreement. (Poche Decl., ¶¶ 4-8, Ex. A.) In fact, Plaintiff attaches the Agreement to her Complaint. (Compl., ¶ 16., Ex. A.) Plaintiff also does not argue that her claims do not fall within the scope of the arbitration provision. Nor does Plaintiff argue that Netflix does not have standing as a third-party beneficiary to enforce the Agreement for the purposes of this motion.[1]

Rather, Plaintiff argues that the arbitration provision (and other provisions) of the Agreement are unenforceable because they divest Plaintiff of her statutory rights under FEHA, divest her right to seek public injunctive relief, and because the Agreement is unconscionable as a matter of law.

Importantly, however, Plaintiff does not address the delegation clause argument contained in both Defendants’ moving papers. That is, in both motions to compel arbitration, Defendants argue the arbitration provision of the Agreement delegates all threshold questions to the arbitrator to resolve.

“There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable. [Citation.] Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 242; see Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 68, 69, fn. 1.) The “clear and unmistakable” test reflects a “heightened standard of proof” that reverses the typical presumption in favor of the arbitration of disputes. (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 787.)

Here, the language delegating authority to the arbitrator in the Agreement is clear and unmistakable. Specifically, the arbitration provision of the Agreement states: “if any dispute, controversy or claim arising out of or relating to this Agreement, the breach of any term hereof, or any effort by any party to enforce, interpret and/or construe, rescind, terminate or annul this Agreement, or any provision thereof, including without limitation the applicability of this arbitration provision, and any and all disputes or controversies relating in any manner to my appearance on or participation in and in connection with the Program that are not otherwise barred or released pursuant to the terms of this Agreement (collectively “Matters”) cannot be resolved through direct discussions, the parties agree to endeavor first to resolve the Matters by mediation conducted in the County of Los Angeles and administered by JAMS . . . If any Matter is not otherwise resolved through direct discussions or mediation, as set forth above, then the parties agree that it shall be resolved by binding arbitration conducted in accordance with the Streamlined Arbitration Rules and Procedures of JAMS, through its Los Angeles, California office or its Houston, Texas office, as Producer may elect.” (Secretov Decl., Ex. A, ¶ 68 [italics added].)

Based on the foregoing, the parties have clearly agreed to delegate the Court’s responsibility to determine arbitrability to the arbitrator to decide. (See e.g. Tiri v. Lucky Chances, Inc., supra, 226 Cal.App.4th at p. 242 [determining parties agreed to delegate questions regarding enforceability where agreement provided: “The Arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this Agreement, including, but not limited to, any claim that all or any part of this Agreement is void or voidable.”].)

Plaintiff does not address this threshold question of delegation in its opposition. Instead, as noted above, Plaintiff challenges the enforceability of the arbitration agreements as a whole. Plaintiff did not, however, challenge the validity of the delegation provision, which empowers the arbitrator to rule on “any effort by any party to enforce, interpret and/or construe, rescind, terminate or annul this Agreement, or any provision thereof, including without limitation the applicability of this arbitration provision.”

Because Plaintiff did not challenge the delegation provision specifically, the enforceability of the arbitration agreement as a whole must be decided by the arbitrator. (Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 75-76; Luxor Cabs, Inc. v. Applied Underwriters Captive Risk Assurance Co. (2018) 30 Cal.App.5th 970, 979 [“[A] delegation clause nested in an arbitration provision is severable from the remainder of the contract and the question of its enforceability is for the court to decide if a challenge is directed specifically at the validity of the delegation clause.”].) “[A] party’s challenge to the arbitration agreement [as a whole] does not invalidate the delegation clause, and therefore the arbitrator, and not a court, must consider any challenge to the arbitration agreement as a whole.” (Tiri v. Lucky Chances, Inc., supra, 226 Cal.App.4th at p. 240.)

Lastly, while Plaintiff does raise issues of enforceability as matter of law and unconscionability in opposition, she does so only with respect to the Arbitration Agreement as a whole. That is, while Plaintiff’s procedural unconscionability argument is related to the delegation clause because that clause applies to the entire Arbitration Agreement, Plaintiff fails to demonstrate that the delegation clause itself is substantively unconscionable. Plaintiff does not dispute the Defendants’ argument that the delegation clause is mutual because Plaintiff and Defendants are bound by it equally. (Tiri v. Lucky Chances, Inc., supra, 226 Cal.App.4th at p. 247.)

Plaintiff must show both procedural and substantive unconscionability with respect to the delegation clause. Her failure to do so renders the delegation clause enforceable and leaves the issue of the Arbitration Agreement’s overall enforceability to the arbitrator to decide. (Tiri v. Lucky Chances, Inc., supra, 226 Cal.App.4th at p. 250.)

Based on the foregoing, the Court’s analysis ends here. The matter is delegated to the arbitrator to decide all the substantive issues raised by Plaintiff’s opposition to arbitration.

The standards governing a preliminary injunction are well known. “[A] court will deny a preliminary injunction unless there is a reasonable probability that the plaintiff will be successful on the merits, but the granting of a preliminary injunction does not amount to an adjudication of the merits.” (Beehan v. Lido Isle Community Assn. (1977) 70 Cal.App.3d 858, 866.) “The function of a preliminary injunction is the preservation of the status quo until a final determination of the merits.” (Ibid.)

“Trial courts traditionally consider and weigh two factors in determining whether to issue a preliminary injunction. They are (1) how likely it is that the moving party will prevail on the merits, and (2) the relative harm the parties will suffer in the interim due to the issuance or nonissuance of the injunction.” (Dodge, Warren & Peters Ins. Services, Inc. v. Riley (2003) 105 Cal.App.4th 1414, 1420.) “[T]he greater the . . . showing on one, the less must be shown on the other to support an injunction.” (Ibid. [quoting Butt v. State of California, (1992) 4 Cal.4th 668, 678].) The burden of proof is on the plaintiff as the moving party “to show all elements necessary to support issuance of a preliminary injunction.” (O'Connell v. Superior Court (2006) 141 Cal.App.4th 1452, 1481.)

Preliminary injunctive relief requires the use of competent evidence to create a sufficient factual showing on the grounds for relief. (See e.g., Ancora-Citronelle Corp. v. Green (1974) 41 Cal.App.3d 146, 150.) A plaintiff seeking injunctive relief must also show the absence of an adequate damages remedy at law. (Code Civ. Proc., § 526, subd. (a)(4).)

A preliminary injunction ordinarily cannot take effect unless and until the plaintiff provides an undertaking for damages which the enjoined defendant may sustain by reason of the injunction if the court finally decides that the plaintiff was not entitled to the injunction. (See Code Civ. Proc., § 529, subd. (a); City of South San Francisco v. Cypress Lawn Cemetery Assn. (1992) 11 Cal. App. 4th 916, 920.)

Here, Plaintiff moves for a preliminary injunction seeking the following relief against Defendants Delirium TV, LLC and Netflix, Inc.::

An order enjoining them from “a. as a condition of employment, requiring employees in the State of California or subject to California law, to submit to contractual terms:

i. preemptively releasing a claim or right against the Enjoined Parties for violations of the Fair Employment and Housing Act, California Government Code § 12900 et seq. (“FEHA”);

ii. requiring an individual to execute a statement that the individual does not possess any claim or injury against the Enjoined Parties under FEHA;

iii. waiving an individual’s right to file and pursue a civil action or complaint with, or otherwise notify, a state agency, other public prosecutor, law enforcement agency, or any court or other governmental entity in connection with violations of FEHA;

iv. preemptively releasing the Enjoined Parties from liability for intentional misconduct;

v. denying an individual the right to disclose information about unlawful or unsafe working conditions or working conditions reasonably believed to be unlawful or unsafe;

c. engaging in further unfair, deceptive, or unlawful business practices in violation of Business & Professions Code § 17200, et seq.;

Additionally, Plaintiff seeks an order enjoining Defendants pending the trial of this action from:

a. initiating and/or pursuing arbitration against Plaintiff Renee Poche pursuant to that certain Participant and Release Agreement dated December 8, 2021 (the “Agreement”), including, without limitation, the matter of Delirium TV, LLC v. Renee Poche currently pending before JAMS (Ref. No. 520004454);

b. enforcing any portion of the Agreement during the pendency of this action.” (Proposed Order)

As a preliminary matter, the Court’s ruling on the motion to compel arbitration directly moots portions of Plaintiff’s motion for a preliminary injunction, such as, for example, Plaintiff’s request seeking to enjoin Defendants from “initiating and/or pursuing arbitration against Plaintiff.”

However, even to the extent that Plaintiff’s preliminary injunction motion is not entirely moot, the Court’s ruling on the motions to compel arbitration adds a statutory requirement that Plaintiff must now satisfy on her motion for preliminary injunction. That is, having determined that Plaintiff’s claims (including the arbitrability of Plaintiff’s claims) are for the arbitrator to resolve, the Court can now only consider a preliminary injunction to the extent it complies with Code of Civil Procedure section 1281.8.

Code of Civil Procedure section 1281.8 provides in relevant part: “A party to an arbitration agreement may file in the court in the county in which an arbitration proceeding is pending, or if an arbitration proceeding has not commenced, in any proper court, an application for a provisional remedy in connection with an arbitrable controversy, but only upon the ground that the award to which the applicant may be entitled may be rendered ineffectual without provisional relief.” (Italics added.)

Under section 1281.8, when an arbitration agreement governs the parties’ dispute, the party seeking the provisional remedy must demonstrate that any arbitration award ultimately would be “ineffectual without provisional relief.” This additional requirement is necessary to ensure “the court does not invade the province of the arbitrator—i.e., the court should be empowered to grant provisional relief in an arbitrable controversy only where the arbitrator's award may not be adequate to make the aggrieved party whole.” (California Retail Portfolio Fund GMBH & Co. KG v. Hopkins Real Estate Group (2011) 193 Cal.App.4th 849, 856.)

The ineffectual-relief requirement under Code of Civil Procedure section 1281.8 is “similar to irreparable harm” as defined in the injunction context. (California Retail Portfolio Fund GMBH & Co. KG v. Hopkins Real Estate Group (2011) 193 Cal.App.4th 849, 857.)

Here, Plaintiff’s argument and evidence on the balancing of harms is entirely deficient, and the motion could be denied on this basis alone.

As noted above, the second part of the preliminary injunction analysis requires the court to evaluate the harm the plaintiff is likely to sustain if the preliminary injunction is denied compared to the harm the defendant is likely to suffer if the injunction is issued. (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69-70.)

“’[T]the extraordinary remedy of injunction’ cannot be invoked without showing the likelihood of irreparable harm.” (Donahue Schriber Realty Group, Inc. v. Nu Creation Outreach (2014) 232 Cal.App.4th 1171, 1184.)

“Irreparable harm may be established where there is the fact of an injury, such as that arising from a breach of contract, but where there is an inability to ascertain the amount of damage. In other words, to say that the harm is irreparable is simply another way of saying that pecuniary compensation would not afford adequate relief or that it would be extremely difficult to ascertain the amount that would afford adequate relief.” (DVD Copy Control Assn., Inc. v. Kaleidescape, Inc. (2009) 176 Cal.App.4th 697, 722.) That is, an injunction may issue to prevent wrongs “ ‘which occasion damages estimable only by conjecture and not by any accurate standard. ’ ” (Ibid. [citation omitted].) However, “[m]ere litigation expense, even substantial and unrecoupable cost, does not constitute irreparable injury.” (Renegotiation Bd. v. Bannercraft Clothing Co., Inc. (1974) 415 U.S. 1, 24.)

Here, Plaintiff’s motion points vaguely to being unable to “put[] the genie back in the bottle” if the arbitration is allowed to proceed. (Mot., 15:15.) The motion continues by arguing that Plaintiff will be “forced to incur unnecessary legal fees and costs” and granting the preliminary injunction will “save[]both parties the time and expense of arbitrating towards an award that can never be confirmed.” (Mot., 15:21-22.) The reply merely reiterates that harm will result from forcing Plaintiff to participate in arbitration. (Reply 8:22-9:14.)

First, while Plaintiff employs much heated rhetoric, there is absolutely no evidence to support Plaintiff’s claim of harm from arbitration in either the moving papers or reply. (Mot., p. 15; Reply 8:22-9:14; see also Poche Decl., ¶¶ 1-13.)

Further, participating in arbitration, even if later deemed improper, does not constitute irreparable harm. (See e.g., Camping Const. Co. v. District Council of Iron Workers (9th Cir. 1990) 915 F.2d 1333, 1349 [“The district court's principal error lies in its assumption that unnecessarily undergoing arbitration proceedings constitutes irreparable injury. That is simply not the case. First, the party objecting to arbitration might well suffer no harm at all, irreparable or otherwise, for the arbitration panel might decide in its favor.”]; Triangle Const. & Maintenance Corp. v. Our Virgin Islands Labor Union (11th Cir. 2005) 425 F.3d 938, 947 [holding that the time and expense incurred in participating in the arbitration proceedings would not constitute irreparable injury].)

More importantly, however, the Court, as discussed above, has already determined that Plaintiff’s claims are properly subject to resolution by an arbitrator. Thus, on this basis Plaintiff has not demonstrated harm – let alone irreparable harm – to warrant the issuance of preliminary injunction. For this reason, Plaintiff’s papers also fail to demonstrate compliance with Code of Civil Procedure section 1281.8.

Based on Plaintiff’s failure to demonstrate the competing harms prong weighs in her favor by failing to show any harm at all, Plaintiff has not demonstrated entitlement to a preliminary injunction during the pendency of the litigation. The motion for a preliminary injunction is denied.[2]

Defendants’ motions to compel arbitration are granted; the matter is stayed pending resolution of arbitration. A post-arbitration status conference will be set at the hearing. Plaintiff’s motion for a preliminary injunction is denied.

[1] Plaintiff expressly concedes this point. (Opp. To Netflix, p. 1, fn. 3.)

[2] In opposition, Netflix also argues that Plaintiff’s request for preliminary injunction is overbroad based on her seeking to enjoin all contracts for employment entered by either Delirium or Netflix. The Court agrees. (Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 443 [“[T]here is no possibility that the relief sought could be properly awarded after a trial on the merits, such relief may not be awarded on a provisional basis.”].) Moreover, the Court harbors grave doubts Plaintiff has standing to request such sweeping relief.

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