Judge: Daniel M. Crowley, Case: 22STCV04164, Date: 2022-09-09 Tentative Ruling

Case Number: 22STCV04164    Hearing Date: September 9, 2022    Dept: 28

Defendants Rasier, LLC and Uber Technologies, Inc.’s Motion to Compel Arbitration

Having considered the moving, opposing, and reply papers, the Court rules as follows. 

BACKGROUND

On February 2, 2022, Plaintiff Monica Flowers (“Plaintiff”) filed this action against Defendants Rasier, LLC (“Rasier”) and Uber Technologies, Inc. (“Uber”) for negligence and vicarious liability.

On April 15, 2022, Rasier and Uber filed answers.

On August 12, 2022, Defendants filed a Motion to Compel Arbitration to be heard on August 12, 2022. On August 26, 2022, Plaintiff filed an opposition. On September 1, 2022, Defendants filed an answer.

Trial is currently set for January 2, 2024.

PARTY’S REQUESTS

Defendants request the Court compel arbitration.

Plaintiff requests the Court deny the motion.

LEGAL STANDARD

A petition to compel arbitration must allege both (1) a “written agreement to arbitrate” the controversy, and (2) that a party to that agreement “refuses to arbitrate” the controversy. (Code Civ. Proc., § 1281.2.) The Court shall grant the petition unless the petitioner waived the right to compel arbitration, or other grounds exist for rescission of the agreement. (Id.) 

California Code of Civil Procedure § 1290.4, subdivision (b) requires a petition to compel arbitration under § 1281.2 to be served on the parties as provided in their arbitration agreement or, if no method was agreed to, in the same manner required for service of summons, if the party to be served has not previously appeared in the proceeding and has not previously been served in accordance with this subdivision. (Miranda v. 21st Century Ins. Co. (2004) 117 Cal.App.4th 913, 928.)

Waiver of the right to arbitrate is assessed through a number of 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”; and (6) whether the delay “affected, misled, or prejudiced” the opposing party. (St. Agnes Medical Center v. PacificCare of California (2003) 41 Cal. 4 th 1187, 1196.)

So long as an arbitration agreement is clear and explicit in meaning, an arbitration agreement can encompass incidents or claims that occurred or accrued prior to the agreement. (Salgado v. Carrows Restaurants, Inc. (2019) 33 Cal.App.5th 356, 356, 360-361.) 

Under California law, an arbitration agreement must be in some measure both procedurally and substantively unconscionable in order for the agreement to be unenforceable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 114.) “But they need not be present in the same degree. . . . [T]he 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.” (Id.) 

Procedural unconscionability focuses on two factors: oppression and surprise. (A & M Produce Co. v.  FMC Corp. (1982) 135 Cal.App.3d 437, 486.) Oppression is an “inequality of bargaining power which results in no real negotiation and ‘an absence of meaningful choice.’” (Id.) Surprise involves the extent to which the agreed upon terms are hidden away “by the party seeking to enforce the disputed terms.” (Id.)

Substantive unconscionability does not have a precise definition, but generally a contract is found to be “substantively suspect if it reallocates the risks of the bargain in an objectively unreasonable or unexpected manner.” (Id. at 487.) 

DISCUSSION

Compel Arbitration

On or around December 21, 2021, Plaintiff was presented with an in-app pop-up screen in the Uber Rider App notifying her Uber had updated its Terms of Use and encouraged her to read the updated terms in full. (Declaration of Ryan Buoscio ¶ 7; Ex. A.) It contained clearly hyperlinks to the Terms of Use and Privacy Notice in the pop-up. (Id.) The pop-up contained a click box, labeled with the description “[b]y checking the box, I have received and agreed to the Terms of Use and acknowledged the Privacy Notice.” (Ex. A.) Plaintiff clicked the checkbox, expressly consenting to the Terms of Use. (Buoscio Decl. ¶ 8.) These terms of use clearly required Plaintiff to resolve any applicable claims she may have against Uber on an individual basis in arbitration and that both Plaintiff and Uber waived their right to trial by jury. Applicable claims included “any incidents or accidents resulting in personal injury that [Plaintiff] allege occurred in connection with [Plaintiff’s] use of the Services, whether the dispute, claim or controversy occurred or accrued before or after the date you agreed to the Terms...” (Ex. C.)

Plaintiff alleges she was injured in a motor vehicle accident on February 7, 2020, while riding in a vehicle obtain through Uber when the driver allegedly rear ended another vehicle. This would constitute an incident or accident resulting in injury that occurred in connection with Plaintiff’s use of the service. Plaintiff did not file her lawsuit until after she agreed to the December 2021 Terms of Use. As the Terms of Use are clear in that it encompasses incidents that occurred prior to the date Plaintiff signed the agreement, the arbitration agreement as to previously occurring incidents is binding. Plaintiff must submit to arbitration. Plaintiff has refused to do so in submitting both the complaint and an opposition to this motion. 

Defendant has met its initial burden for a petition to compel arbitration by providing proof of a written agreement and a refusal by Plaintiff to arbitrate. The burden thus shifts to Plaintiffs to prove why the arbitration agreement should be unenforceable.

Unenforceability via Unconscionability 

Plaintiff argues that the arbitration agreement should not be enforced because it is both procedurally and substantively unconscionable. 

The Court finds that the arbitration agreement is potentially procedurally unconscionable; in order to utilize any of Uber’s app’s services, a party must agree to the terms. There is no meaningful way for an individual to argue or alter the terms of the agreement. However, there is no ‘surprise’ as to the terms of the agreement. Plaintiff was alerted that the Terms of Use were updated, and had to agree to those terms prior to continuing to use the Uber Rider App. There was a clear link to the Terms of Use, where Plaintiff could read the exact terms of the agreement. (Ex. A.) The Terms of Use has a bolded, capitalized paragraph that says “PLEASE BE ADVISED THAT THIS AGREEMENT CONTAINS PROVISIONS THAT GOVERN HOW CLAISM BETWEEN YOU AND UBER CAN BE BROUGHT, INCLUDING THE ARBITRATION AGREEMENT (SEE SECTION 2 BELOW). PLEASE REVIEW THE ARBITRATION AGREEMENT BELOW CAREFULLY, AS IT REQUIRES YOU TO RESOLVE ALL DISPUTES WITH UBER...THROUGH FINAL AND BINDING ARBITRATION...” (Ex. C.) Even if Plaintiff did not read the multipage section dedicated to the arbitration agreement, Uber made clear that there was an arbitration agreement. There is no ‘surprise’ in this matter. As such, the Court finds that if there is any procedural unconscionability, it is minor. If Plaintiff wishes to argue unconscionability, the agreement must also be found to be substantively unconscionable.

The Court does not find the agreement to be substantively unconscionable. Substantive unconscionability usually focuses on fairness. Plaintiff claims that Uber bound her to an agreement that did not articulate the changes from previous terms of use, making it substantively unconscionable; the Court disagrees. Uber clearly told Plaintiff that there were updated Terms of Use and provided a means to view said Terms of Use before allowing Plaintiff to continue to utilize their services. Plaintiff’s failure to read the provided terms does not mean Uber failed to provide said terms. Uber fairly provided notice that there were terms of use; if Plaintiff did not want to abide by these terms, she could have simply utilized a different ride share app or called a taxi. As the terms are not substantively unconscionable, the agreement is not substantively unconscionable. Plaintiff has failed to meet her burden to prove why the arbitration agreement should be unenforceable. The Court grants the motion. 

CONCLUSION

Defendants Rasier, LLC and Uber Technologies, Inc.’s Motion to Compel Arbitration is GRANTED. Plaintiff is compelled to arbitrate her claims against Defendants. This action is stayed pending completion of arbitration.

            Moving party is ordered to give notice of this ruling.

Moving Party is ordered to file the proof of service of this ruling with the Court within five days.

The parties are directed to the header of this tentative ruling for further instructions.