Judge: Cherol J. Nellon, Case: 23STCV19348, Date: 2023-12-06 Tentative Ruling
Case Number: 23STCV19348 Hearing Date: December 6, 2023 Dept: 14
Instant Motion
Defendant Club now moves this court
for an order staying this case and compelling Plaintiff to arbitrate his claims,
on the basis that the parties have entered into a binding arbitration agreement.
Decision
Defendant’s Request for Judicial
Notice is DENIED. Defendant seeks Judicial Notice of a trial court ruling in another
case. But this ruling is not being submitted as evidence, it is being cited as
precedent. Such citation is beyond the scope of Judicial Notice and is, on its
own terms, legally improper. See Budrow v. Dave & Buster’s of
California, Inc. (2009) 171 Cal.App.4th 875, 884-885.
The motion is GRANTED. The case is
STAYED, pending the outcome in arbitration.
Discussion
On August 27, 2021, Plaintiff
signed an “Arbitration Agreement” (“Agreement”) which provides in relevant part
as follows:
“1. All disputes shall be submitted
to and determined exclusively by binding arbitration under the Federal
Arbitration Act, in conformity with the procedures of the California Arbit
ration Act (Cal. Code Civ. Proc. sec. 1280 et seq., including section 1283.05
and all of the Act's other mandatory and permissive rights to discovery). In
addition to the requirements imposed by law, any arbitrator herein shall be a
retired California Superior Court Judge selected from the panel of arbitrators
maintained by ADR Services, Inc. To the extent applicable in civil actions in California
courts…
2. All claims shall be resolved
through final and binding arbitration pursuant to the rules of ADR Services,
Inc., (1900 Avenue of the Stars Suite 250 Los Angeles, California 90067) in existence
as of the time the dispute arises. A copy of the rules can be obtained from
www.adrservices.org, or will be provided to Employee upon request. Except as
otherwise provided herein, arbitration may be initiated by either the Employee
or Club in accordance with the procedures specified in those rules.
3. This Agreement is specifically intended to provide for final and binding
arbitration of any and all employment-related claims or controversies, such as
breach of employment agreement, breach of the covenant of good faith and fair
dealing, negligent supervision or hiring. wrongful discharge in violation of
public policy, unpaid wages of overtime under the state and federal wage
payment laws, breach of privacy claims, intentional or negligent infliction of
emotional distress claims, fraud, defamation, and divulgence of trade secrets,
and claims that could be asserted under all state and federal
anti-discrimination laws, including but not limited to the California Fair
Employment and Housing Act, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act , and the
Family and Medical Leave Act. Employee specifically agrees to arbitrate all
claims for discrimination and harassment in employment the basis of race, age,
sex, national origin, alienage, religion, marital status, sexual orientation,
political activity, or any other statutorily-protected basis under the
procedure set forth in this Agreement and not through a court of law. It shall
also include any and all claims employee may have under the Fair Labor
Standards Act, the California Labor Code, and the Industrial Welfare Commission
Wage Orders, as well as any other state and federal statutes. This Agreement is
further intended to apply to any claim Employee may have against any of Club's
officers, directors, employees, agents, members and to any and all past and future
employment relationships Employee may have with Club regardless of job position
or title.
…
5. Except as expressly provided herein,
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.
…
9. This Agreement is entered into
under the Federal Arbitration Act and shall be interpreted and construed in
accordance with the law and procedures developed under that statute.” (Declaration
of Marisa Ortega Exhibit 1) (Emphasis in original).
The parties to the Agreement were Plaintiff and Defendant.
Plaintiff concedes that he signed the agreement, but he now seeks to avoid the
agreement on the basis that it is unconscionable.
There are
two problems with Plaintiff’s position. First, Section 5 of this agreement delegates
unconscionability analysis to the arbitrator. Second, even if this court were
the proper forum for this argument, Plaintiff has no proper support for it.
Who Decides
Arbitrability is presumptively an
issue for the court, and not all issues of arbitrability may be delegated to an
arbitrator. Aanderud v. Superior Court (2017) 13 Cal.App.5th
880, 891. For example, an arbitrator may not
determine whether a contract or arbitration clause is void for lack of mutual
assent. Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th
394, 414-419; see also Ericksen, Arbuthnot, McCarthy, Kearney, & Walsh,
Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 323. For obvious reasons, a
case cannot be sent to arbitration to decide whether both parties actually
reached an agreement to arbitrate.
However, if the parties concede (as
they do here) that an arbitration agreement was indeed reached, the rule is
different. Courts will enforce delegation clauses which require that the
arbitrator to determine, in the first instance, whether either party has a
viable defense to the enforcement of the arbitration agreement. That
includes the defense of unconscionability. Tiri v. Lucky Chances, Inc.
(2014) 226 Cal.App.4th 231, 242. The only requirement is that the language
of the delegation clause be clear. Id.
The language of Section 5 of the
agreement is clear. The arbitrator “shall have exclusive authority to resolve
any dispute relating to the…enforceability… of this Agreement.” The question of
whether the arbitration agreement is unconscionable belongs to the arbitrator.
Unconscionability
There are two prongs to an
unconscionability analysis: procedural and substantive. “Procedural
unconscionability focuses on whether there is “oppression” arising from an
inequality of bargaining power or “surprise” arising from buried terms in a
complex printed form. The substantive element addresses the existence of overly
harsh or one-sided terms. An agreement to arbitrate is unenforceable only if both
the procedural and substantive elements are satisfied. However…the more
substantively oppressive the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the term is
unenforceable, and vice versa.” McManus v. CIBC World Markets Corp.
(2003) 109 Cal.App.4th 76, 87 (internal quotations and citations
omitted).
There is no
dispute that this was a contract of adhesion, rendering the agreement procedurally
unconscionable as a matter of law. Lane v. Francis Capital Management LLC
(2014) 224 Cal.App.4th 676, 689. However, the adhesive nature of a
contract does not weigh terribly strongly on the procedural side of the scale. Baltazar
v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245; Nguyen v.
Applied Medical Resources Corp. (2016) 4 Cal.App.5th 232, 248-249.
And Plaintiff has nothing at all to put on the other side.
Plaintiff’s
whole argument on substantive unconscionability consists of the bare assertion
that arbitration agreements are unconstitutional, the Federal Arbitration Act
is unconstitutional, and “any other law” permitting arbitration is
unconstitutional. While that may be Plaintiff’s opinion and counsel’s opinion,
it is clearly not the law. There is no evidence that the agreement is
substantively unconscionable, which means that the unconscionability defense
cannot succeed.
Conclusion
Because the unconscionability
defense should be decided by the arbitrator, and because Plaintiff has not supplied
the court with sufficient evidence or argument to support that defense, the
motion is GRANTED. The case is STAYED, pending the outcome in arbitration.