Judge: H. Jay Ford, III, Case: 24SMCV00068, Date: 2024-05-14 Tentative Ruling

Case Number: 24SMCV00068    Hearing Date: May 14, 2024    Dept: O

  Case Name:  Huttar v. Uber Technologies, Inc.

SUBJECT:                 MOTION TO COMPEL ARBITRATION

MOVING PARTY:   Defendant Uber Technologies, Inc

RESP. PARTY:         Plaintiff Shaun Huttar

TENTATIVE RULING

            Defendant Uber Technologies, Inc.’s Motion to Compel Arbitration is GRANTED. Defendant proved the existence of a valid arbitration agreement including a valid delegation clause. Plaintiff Shaun Huttar did not meet his burden to prove a defense to enforcement of the delegation clause. The action is stayed pending resolution of arbitration pursuant to CCP §1281.4.

Defendant Uber Technologies, Inc.’s RJN is GRANTED.

REASONING

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…”  (Code Civ. Proc., § 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. (See Code Civ. Proc., § 1281.2.)

If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as set forth under subdivision (c), the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action or special proceeding.

(Code Civ. Proc., § 1281.2.)

I.      Uber Demonstrates Valid Arbitration Agreement including the Delegation Clause

Defendant Uber Technologies, Inc.’s (“Uber”) move to compel arbitration based on the “Arbitration Provision” within the Platform Access Agreement (“PAA”) Plaintiff Shaun Huttar (“Huttar”) initially entered into on 1-29-15 22 when Huttar created an Uber Driver account within the Uber Driver App, and subsequently entered into again through revised agreements on 12-11-15, 11-25-19, 1-6-20 and 1-1-22. (Sauerwin Decl., ¶¶ 5, 7–20, Ex. A–H.) Huttar’s opposition does not dispute Huttar entering into and agreeing upon the multiple PAA’s containing the Arbitration Provision, and Uber provides a spreadsheet purporting to show records of electronic receipt that Uber received Huttar’s acceptance. (Sauerwein Decl.., ¶ 21, Ex. H.) The 1-1-22 PAA Arbitration Provision states as follows:

IMPORTANT: PLEASE REVIEW THIS ARBITRATION PROVISION CAREFULLY, AS IT WILL REQUIRE YOU TO RESOLVE DISPUTES WITH US ON AN INDIVIDUAL BASIS THROUGH FINAL AND BINDING ARBITRATION, EXCEPT AS PROVIDED BELOW. YOU MAY OPT OUT OF THIS ARBITRATION PROVISION BY FOLLOWING THE INSTRUCTIONS BELOW.

(a) This Arbitration Provision is a contract governed by the Federal Arbitration Act, 9 U.S.C. § 1 et seq., and evidences a transaction involving commerce . . . . Except as it otherwise provides, this Arbitration Provision applies to any legal dispute, past, present or future, arising out of or related to your relationship with [Uber] or relationship with any of [its] agents, employees, executives, officers, investors, shareholders, affiliates, successors, assigns, subsidiaries, or parent companies . . . , and termination of that relationship, and survives after the relationship terminates.

. . . .

(c) . . . this Arbitration Provision also applies, without limitation, to disputes between you and us, or between you and any other entity or individual, arising out of or related to your application for and use of an account to use our Platform and Driver App as a driver, the P2P Service that you provide, background checks, your privacy, your contractual relationship with us or the termination of that relationship (including post-relationship defamation or retaliation claims) . . .

. . . .

[A]ll such claims [shall] be resolved only by an arbitrator through final and binding individual arbitration and not by way of court or jury trial. . . . [S]uch disputes include without limitation disputes arising out of or relating to the interpretation, application, formation, scope, enforceability, waiver, applicability, revocability or validity of this Arbitration Provision or any portion of this Arbitration Provision.

 . . . .

13.3. Governing Rules, Starting The Arbitration, And Selecting The Arbitrator.

(a) For claims involving use of the Platform and Driver App in California: The ADR Services, Inc. Arbitration Rules (“ADR Rules”) will apply to arbitration under this Arbitration Provision; however, if there is a conflict between the ADR Rules and this Arbitration Provision, including but not limited to whether any arbitration may proceed on an individual basis, this Arbitration Provision shall govern. The ADR Rules are available by, for example, searching Google.com to locate “ADR Services, Inc. Rules,” or by clicking here: https://www.adrservices.com/services/arbitration-rules/ . . . .

(Sauerwein Decl., ¶ 19, Ex. G, §§ 13, 13.1, 13.3)

            Uber declares drivers can license Uber’s driving app by first downloading and logging into the Uber Drver App “using a unique username (the Driver’s email address) and password selected by the Driver to create a Driver account.” (Sauerwein Decl., ¶ 7.) Uber declares that any “Driver who wishes to access the Rides marketplace must first enter into a PAA.” (Id., ¶ 8.) Sauerwein declares he is a Senior Manager for Corporate Business Operations at Uber, and as result of this position he has “knowledge of Uber’s operations and business model,” including “business records regarding independent transportation providers who use Uber’s mobile application and the trips they made using Uber’s software applications.” (Id., ¶¶ 2–3.) Sauerwein declares that based on his review of “Uber’s business records,” Sauerwein was able to attest to the “date and time stamps for when Huttar accepted each [PAA] agreement.” (Id., ¶¶ 3, 20, Ex. H.)

            The Court finds that Uber has proven the existence of a valid arbitration agreement, agreed upon by Huttar as part of multiple PAA agreements.

a.     Law applicable to delegation clauses within Arbitration Agreement

“When a dispute arises between parties to an arbitration agreement, the parties may disagree not only about the merits of the dispute but also about the threshold arbitrability question—that is, whether their arbitration agreement applies to the particular dispute.  The high court has recognized that parties may agree by contract that an arbitrator, rather than a court, will resolve threshold arbitrability questions as well as underlying merits disputes.  Such threshold or ‘gateway’ questions of arbitrability include whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.”  (Sandoval-Ryan v. Oleander Holdings LLC (2020) 58 Cal.App.5th 217, 222–223 (quoting Henry Schein, Inc. v. Archer and White Sales, Inc. (2019) -- U.S. – (139 S.Ct. 524, 527, 202 L.Ed. 2d 480). 

“Parties to an arbitration agreement may agree to delegate to the arbitrator, instead of a court, questions regarding the enforceability of the agreement.  They can agree to arbitrate almost any dispute—even a dispute over whether the underlying dispute is subject to arbitration.”  (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 241.)  “[A] party's challenge to the arbitration agreement 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. Stated another way, Rent-A-Center acknowledges that while courts may consider enforceability challenges specific to delegation clauses, the arbitrator is to consider challenges to the arbitration agreement as a whole.”  (Id. at 240 [adopting analysis under FAA of delegation clause challenges versus challenges to arbitration agreement in Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 72].) 

            “There are two prerequisites for a delegation clause to be effective. First, the language of the clause must be clear and unmistakable.  Second, the delegation must not be revocable under state contract defenses such as fraud, duress, or unconscionability.”  (Id. at 242.)

II.             The arbitration agreements contain clear and unmistakable delegation clauses

The Arbitration Provision contained in the PAA contains a clear and unmistakable delegation clause stating the arbitrator must decide “disputes arising out of or relating to the interpretation, application, formation, scope, enforceability, waiver, applicability, revocability or validity of this Arbitration Provision or any portion of this Arbitration Provision.” (Sauerwein Decl., Ex. G at § 13.1(b).) This language clearly and unmistakably delegates to the arbitrator questions of the scope or applicability of the agreement to arbitrate, which includes the arbitrability of specific claims. (see Aanderud v. Superior Court (2017) 13 Cal.App.5th 880, 892 [the language “the interpretation, validity, or enforceability of this Agreement . . .  delegates to the arbitrator questions of arbitrability and is clear and unmistakable evidence that the parties intended to arbitrate arbitrability”]; see also Tiri, supra, 226 Cal.App.4^th at p. 242 [clear delegation clause where clause provided “arbitrator…shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, or formation of this agreement”); Malone v. Supr. Ct. (2014) 226 Cal.App.4^th 1551, 1560 [delegation clause clear and unmistakable where clause provided “arbitrator has exclusive authority to resolve any dispute relating to interpretation, applicability, or enforceability of this binding agreement]; Sandoval-Ryan, supra, 58 Cal.App.5^th at p. 223 [delegation language did not clearly delegate arbitrability to arbitrator where language provided that arbitrator would determine “validity, interpretation, construction, performance and enforcement thereof” and “thereof” referred to admission agreement, not arbitration agreement].)

Huttar does not argue that the arbitration agreements do not contain clear and unmistakable delegation clauses, nor does Huttar challenge, or even mention, the delegation clause within his opposition. Huttar argues the entire agreement is unconscionable but fails to specifically target the delegation clause. Thus, Huttar has conceded that the delegation clause is valid and enforceable, allowing for the arbitrator to decide the arbitrability of the complaint. (See Rent-A-Center, 561 U.S. at p. 72 [finding that because Plaintiff “challenged only the validity of the [Arbitration Provision] as a whole,” and not the Delegation Clause, the Delegation Clause was “valid under [FAA] § 2 and must [be] enforce[d] [] under §§ 3 and 4,” thereby “leaving any challenge to the validity of the [Arbitration Provision] as a whole for the arbitrator.”]

            Thus, the Court finds that the valid and unchallenged delegation clause within the PAA Arbitration Provision mandates the arbitrator to determine arbitrability, along with resolving any disputes arising out of or relating to the interpretation, application, formation, scope, enforceability, waiver, applicability, revocability or validity,” of the Arbitration Provision. (Sauerwein Decl., Ex. G at § 13.1(b).)

            Uber’s Motion to Compel Arbitration is GRANTED.

III.           Stay pending resolution of arbitration pursuant to CCP §1281.4 

            “If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc., § 1281.4.)

The action is stayed pending resolution of arbitration pursuant to CCP §1281.4.