Judge: H. Jay Ford, III, Case: 21STCV05390, Date: 2023-09-12 Tentative Ruling

Case Number: 21STCV05390    Hearing Date: September 12, 2023    Dept: O

Case Name:               Katherine Martinez v. Bird Rides, Inc., et al.

SUBJECT:                MOTION TO COMPEL ARBITRATION  

MOVING PARTY:   Defendant Bird Rides, Inc.  

RESP. PARTY:         Plaintiff Katherine Martinez

TENTATIVE RULING

            Defendant Bird Rides Inc. Motion to Compel Arbitration is GRANTED. The action is stayed pursuant to CCP §1281.4 pending completion of arbitration.  Plaintiff’s objections to the evidence in support of Plaintiff’s opposition to Defendant’s Motion to Compel Arbitration are Overruled. Defendant has met their burden of providing the existence of a valid agreed upon arbitration agreement. Plaintiff has not met their burden proving Defendant waived their right to arbitrate under CCP 1281.2(a).

            Defendant Bird Rides, Inc. moves to compel arbitration of Plaintiff’s complaint based on the binding arbitration agreement within the Bird Rental Agreement, Waiver of Liability and Release (“Bird Rental Agreement”). (Declaration of Michael Franscella (“Franscella Decl.”) Ex. A, § 9.)  The arbitration agreement, located in § 9 of the Bird Rental Agreement, states:

“[A]ll claims arising out of or relating to use and rental of a Vehicle, this Agreement, and the parties’ relationship with each other shall be finally settled by binding arbitration administered by JAMS, or alternatively a mutually agreed upon arbitrator or arbitration service, under the applicable commercial arbitration rules for JAMS or the mutually agreed upon arbitration service, excluding any rules or procedures governing or permitting class actions.”

(Frascella Decl., Ex. A, § 9.2.)

            The arbitration agreement includes a delegation clause stating:

“[t]he arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve all disputes arising out of or 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 are void or voidable, or whether a claim is subject to arbitration”

(Ibid.)

            Under both the Title 9 section 2 of the United States Code (known as the Federal Arbitration Act, hereinafter “FAA”) and the Title 9 of Part III of the California Code of Civil Procedure commencing at section 1281 (known as the California Arbitration Act, hereinafter “CAA”), arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract.  (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) 

“The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.)   “The party opposing arbitration has the burden of demonstrating that an arbitration clause cannot be interpreted to require arbitration of the dispute.” (Rice v. Downs (2016) 247 Cal.App.4th 1213, 1223, citing Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686-87.)   “On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner…”  CCP §1281.2.

            “A party opposing the petition bears the burden of proving by a preponderance of evidence any fact necessary to its defense.” Olvera v. El Pollo Loco, Inc. (2009) 173 Cal.App.4th 447, 453. CCP §1281.2 only allows the Court to deny enforcement of an applicable arbitration agreement where the party resisting arbitration demonstrates (1) waiver; (2) grounds for rescission of the agreement; or (3) subsection (c) grounds involving third parties to the arbitration agreement and potential for inconsistent rulings of fact or law.

There is a strong policy in favor of enforcing agreements to arbitrate, but there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.  (State Farm Mut. Auto. Ins. Co. v. Superior Court (1994) 23 Cal.App.4th 1297, 1301-1302.) 

I.  Defendant has proved by a preponderance of the evidence Plaintiff agreed to a valid agreement to arbitration her claims.

            “An essential element of any contract is the consent of the parties, or mutual assent.”  (Donovan v. RRL Corp. (2001) 26 Cal.4th 261, 270.)  “Mutual assent may be manifested by written or spoken words, or by conduct.”  (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 850.)  A party does not assent to binding arbitration by terms on a website that are inconspicuous.  (Long v. Provide Commerce, Inc. (2016) 245 Cal.App.4th 855, 866-867.)  Relevant factors relating to conspicuousness of an arbitration clause include the hyperlink’s placement, color, size, and other qualities relative to the overall design of the website.  (See id. at pp. 865-866.) 

Defendant Bird Rides, Inc. provides an on-demand personal electric scooter sharing network.  (Frascella Decl., ¶ 3.)  Riders can download Defendant Bird Rides, Inc’s application on their smartphones and use the application to locate and rent electric scooters.  (Frascella Decl., ¶ 4.)  The sign-up process for users to rent Defendant Bird Rides, Inc.’s scooters require users to receive, review, and accept the terms of Defendant Bird Rides, Inc.’s rental agreement, waiver of liability, and release.  (Frascella Decl., ¶ 7.)  The sign-up process requires users to verify their email address.  (Frascella Decl., ¶ 12.)  After verifying their emails, users must accept the rental agreement by scrolling through the entire rental agreement, checking boxes to confirm agreement to highlighted terms, and click “I AGREE” at the end of the agreement to accept.  (Frascella Decl., ¶¶ 14, 17.)  Defendant Bird Rides, Inc. captures identifying information when a user agrees to Defendant Bird Rides, Inc.’s rental agreement.  (Frascella Decl., ¶¶ 16, 17, 18.) 

Plaintiff agreed to Defendant Bird Rides, Inc.’s rental agreement on February 9, 2020 at 12:46 p.m.  (Frascella Decl., ¶¶ 19, 20, Exh. C.)  This rental agreement stated the following: 

9.         Binding Arbitration and Class Action Waiver 

PLEASE READ THIS SECTION CAREFULLY – IT MAY SIGNIFICANTLY AFFECT YOUR LEGAL RIGHTS, INCLUDING YOUR RIGHT TO FILE A LAWSUIT IN COURT. . . . 

9.2       Binding Arbitration 

If the parties do not reach an agreed upon solution through the support process, then either party may initiate binding arbitration as a sole means to resolve claims, subject to the terms set forth below.  Specifically, all claims arising out of or relating to the use and rental of a Vehicle, this Agreement, and the parties’ relationship with each other shall be finally settled by binding arbitration administered by JAMS, or alternatively a mutually agreed upon arbitrator or arbitration service, under the applicable commercial arbitration rules for JAMS or the mutually agreed upon arbitration service, excluding any rules or procedures governing or permitting class actions. 

The arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve all disputes arising out of or 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 are void or voidable, or whether a claim is subject to arbitration.  The arbitrator shall be empowered to grant whatever relief would be available in a court under law or in equity. . . . 

9.6       Right to Opt Out 

You have the right to opt-out and not be bound by the arbitration and class action waiver provisions set forth above by sending written notice of your decision to opt-out to the following address: Bird Rides, Inc., 406 Broadway, #369, Santa Monica, California 90401.  The notice must be sent within 30 days of the effective date or your first use of the Service, whichever is later, otherwise you shall be bound to arbitrate disputes in accordance with the terms of those paragraphs.  If you opt-out of these arbitration provisions, Bird also will not be bound by them. 

(Frascella Decl., ¶¶ 8, 19, Exh. A, C.)  “Vehicle” is defined as Defendant Bird Ride, Inc.’s electric vehicles.  (Frascella Decl., ¶ 8, Exh. A.)  Plaintiff did not opt out of the arbitration clause.  (Frascella Decl., ¶ 22.) 

Plaintiff states she does not recall signing any agreement to arbitrate, nor would have agreed to arbitrate the claims. (Opposition, pg. 4­­­­–6; Katherine Martinez Declaration (“Martinez Decl.”), ¶ 5.)  Plaintiff states she does not recall ever clicking through the Bird, Inc. application and checking boxes “to agree to certain terms and conditions,” nor that she was ever provided with any information of her agreeing to arbitrate. (Martinez Del., ¶¶ 5–6.)

As stated above, Defendants have supplied evidence of a valid arbitration agreement between Plaintiff and Defendant agreed to and electronically signed on February 9, 2020 at 12:46 p.m. (Frascella Decl., ¶¶ 8, 19, Exh. A, C.)  The declaration of Michael Frascella, a senior product manager at Bird, Inc., persuasively proves with admissible evidence that Plaintiff agreed to the terms of the agreement at the specified date and time along with Plaintiff’s IP address and name of Plaintiff. (Frascella Decl., ¶¶ 1, 8, 19, Exh. A, C.)  Further defendants persuasively prove that a “user cannot rent a Bird scooter without first downloading the Bird App and creating an account,” and furthermore in order to utilize a Bird scooter the user must agree to the Bird Rental Agreement which includes the arbitration agreement making it impossible for a user to ride the scooter without expressly agreeing to the Bird Rental Agreement. (Frascella Decl., ¶¶ 8, 10, 11, 12, 13, 14, 15, Exh. A.) 

Therefore, the Court finds that Defendants have met their burden to show by a preponderance of the evidence Plaintiff agreed to a valid arbitration agreement.

II.        Waiver

            “[T]he court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner . . .” (Code Civ. Proc., § 1281.2.) As the party asserting waiver, Plaintiff bears the heavy burden of proving by a preponderance of evidence any fact necessary to its defense.  (See St. Agnes Medical Center v. PacifiCare of California (2003) 31 Cal.4th 1187, 1195; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

            While there is no single test for establishing waiver, the relevant factors include: (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 (5) whether the delay affected, misled, or prejudiced the opposing party.  (See Saint Agnes Med. Ctr. v. PacifiCare of Calif. (2003) 31 C4th 1187, 1203.)  The presence or absence of prejudice from the litigation is a determinative issue.  (Id. at 1203–1204.)

            Any claim that the right to arbitration has been waived is reviewed with close judicial scrutiny.  (Id. at 1195.)  “Although a court may deny a petition to compel arbitration on the ground of waiver (§ 1281.2, subd. (a)), waivers are not to be lightly inferred and the party seeking to establish a waiver bears a heavy burden of proof.”  (Id.)  Any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.  (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 320.) 

            “Waiver does not occur by mere participation in litigation.  As an abstract exercise in logic it may appear that it is inconsistent for a party to participate in a lawsuit for breach of a contract, and later to ask the court to stay that litigation pending arbitration. Yet the law is clear that such participation, standing alone, does not constitute a waiver, for there is an overriding federal policy favoring arbitration.  Mere delay in seeking a stay of the proceedings without some resultant prejudice to a party cannot carry the day.”  (Adolph v. Coastal Auto Sales, Inc. (2010) 184 Cal.App.4th 1443, 1450 (defendant waived right to arbitrate where defendant delayed six months from filing of complaint, defendant filed multiple demurrers, defendant accepted and contested discovery requests, engaged in scheduling discovery, defendant failed to indicate arbitration in CMC statement and defendant’s actions substantially undermined plaintiff’s ability to take advantage of benefits and costs savings of arbitration).) 

            Plaintiff’s claim of waiver is based solely on Defendants’ delay in seeking arbitration.  Plaintiff argues Defendant served the motion fifteen months after the complaint was filed, stating, “[t]hat is too late,” and grounds for waiver under CCP § 1281.2(a). Defendant demurred to the complaint, failed to indicate in the CMC statement that he intended to seek arbitration, and only sought arbitration after a trial date was set.  These facts support a finding of delay.  However, delay alone is insufficient to find waiver

Plaintiff also makes no showing as to prejudice.  Delay that does not prejudice the other party does not support a finding of waiver.

Moreover, Defendant’s actions merely indicate he participated in litigation.  Plaintiff fails to establish that the parties have substantially invoked the litigation machinery. Defendant did not engage in multiple rounds of demurrers, nor has Plaintiff demonstrated that either party has engaged in any discovery.  Defendant did not file a counterclaim seeking any affirmative relief.   The motion to compel arbitration was filed on 7-21-23, and no trial date has been set. Plaintiff has not met its burden show Defendant waived its right to compel arbitration. 

Defendant Bird Rides’ Motion to Compel Arbitration of All Claims Against Bird Rides, Inc. and Stay this Action Pending Arbitration is GRANTED. The action is stayed pursuant to CCP §1281.4 pending completion of arbitration.