Judge Holly J. Fujie, Case Number: 24STCV104497, Date: 2024-07-17 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

The case stems from a motor vehicle accident on February 25, 2023. Plaintiff claims to have been injured while on a ride arranged through Lyft’s ride-sharing service. The vehicle in which Plaintiff was riding, driven by Defendant Walter Robinson (“Robinson”), collided with a vehicle driven by Defendant Uriel Hernandez.

On February 22, 2024, Plaintiff filed the instant complaint (the “Complaint”) alleging causes of action for: (1) negligence; (2) negligence per se; (3) false imprisonment; (4) assault; (5) battery; (6) intentional infliction of emotional distress. The first two causes of action are asserted against all Defendants, and the remaining ones are asserted only against Defendant Robinson. On April 16, 2024, Robinson filed a demurrer to the 2^nd– 6^th causes of action in Plaintiff’s complaint (the “Demurrer”).

On May 28, 2024, Lyft filed a motion to compel arbitration of Plaintiff’s claims and stay proceedings (the “Motion”). Plaintiff filed an opposition July 3, 2024. Lyft filed a reply on July 10, 2024.

“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes. To further that policy, section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies. Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues.” (Acquire II, Ltd. v. Colton Real Estate Group (2013) 213 Cal.App.4th 959, 967; Code Civ. Proc., § 1281.2.) Similarly, “under the FAA, the strong federal policy favoring arbitration agreements requires courts to resolve any doubts concerning arbitrability in favor of arbitration.” (Valencia v. Smyth (2010) 185 Cal.App.4th 153, 176 (internal quotations omitted).)

In deciding a petition to compel arbitration, trial courts must decide first whether an enforceable arbitration agreement exists between the parties, and then determine the second gateway issue whether the claims are covered within the scope of the agreement. (Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) The opposing party has the burden to establish any defense to enforcement. (Gatton v. T-Mobile USA, Inc. (2007) 152 Cal.App.4th 571, 579 [“The petitioner, T–Mobile here, bears the burden of proving the existence of a valid arbitration agreement and the opposing party, plaintiffs here, bears the burden of proving any fact necessary to its defense.”].)

Procedurally, a petition to compel arbitration or stay proceedings must state verbatim the provisions providing for arbitration, or must have a copy of them attached. (Cal. R. Ct., rule 3.1330.)

“With respect to the moving party’s burden to provide evidence of the existence of an agreement to arbitrate, it is generally sufficient for that party to present a copy of the contract to the court.” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.)

Here, Lyft has met its initial burden of showing that an arbitration agreement exists between the parties. Plaintiff affirmatively accepted Lyft’s Terms of Service within the Lyft application on eight (8) separate occasions – at the first instance during the account creation process, and subsequently thereafter when Lyft updated its Terms of Service. (Declaration of Paul McCachern (“McCachern Decl.”), ¶ 12 a-d; Exhs. 1-5.)

The arbitration provision (“Arbitration Agreement”) in the operative December 12, 2022 Terms of Service states in pertinent part:

YOU AND LYFT MUTUALLY AGREE TO WAIVE OUR RESPECTIVE RIGHTS TO RESOLUTION OF DISPUTES IN A COURT OF LAW BY A JUDGE OR JURY AND AGREE TO RESOLVE ANY DISPUTE BY ARBITRATION, as set forth below…

Except as expressly provided below, ALL DISPUTES AND CLAIMS BETWEEN US (EACH A “CLAIM” AND COLLECTIVELY, “CLAIMS”) SHALL BE EXCLUSIVELY RESOLVED BY BINDING ARBITRATION SOLELY BETWEEN YOU AND LYFT. These Claims include, but are not limited to, any dispute, claim or controversy, whether based on past, present, or future events, arising out of or relating to: this Agreement and prior versions thereof (including the breach, termination, enforcement, interpretation or validity thereof), the Lyft Platform, the Rideshare Services, the Lyft Services… and all other federal and state statutory and common law claims. All disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement) shall be decided by the arbitrator, except as expressly provided below.

(McCachern Decl., Exh. 5, ¶ 17(a).) The Federal Arbitration Act (the "FAA") applies to the present agreement[1], a point not contested in the opposition. Therefore, the third-party litigation exception under California Code of Civil Procedure Section 1281.2(c) is preempted. (Dias v. Burberry Ltd. (S.D.Cal. June 9,

2021) 2021 WL 2349730, at *18 [holding that Section 1281.2 was inapplicable because FAA

governs the Agreement.]) The FAA requires the arbitration of all claims within the scope of an arbitration provision even if the action includes nonarbitrable claims by or against third parties. (9 U.S.C. §§ 3, 4.)

Because Lyft establishes the existence of a valid and binding arbitration agreement, the burden shifts to Plaintiff to show why the Arbitration Agreement should not be enforced.

In opposition, Plaintiff does not dispute that she affirmatively consented to the Arbitration Agreement with Lyft or that the Arbitration Agreement covers the claims asserted in the Complaint. Plaintiff’s sole argument is that the Motion should be denied because the Arbitration Agreement is procedurally and substantively unconscionable.

Regardless of the claim asserted, arbitration agreements are only enforceable if they are not unconscionable. (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113; Baxter v. Genworth N. Am. Corp., (2017) 16 Cal.App.5th 713, 721.) “Both procedural and substantive unconscionability must be present for a court to refuse to enforce a contract, although they need not be present in the same degree.” (Baxter, supra, 16 Cal.App.5th at 721 (citing Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243.) Procedural unconscionability focuses on (1) “oppression” resulting from unequal bargaining power that adheres the weaker party to nonnegotiable terms and (2) “surprise” involving “the extent to which the supposedly agreed-upon terms are hidden in a prolix printed form drafted by the party seeking to enforce them.” (Flores v. Transamerica HomeFirst, Inc., (2001) 93 Cal.App.4th 846, 853.) Substantive unconscionability “focuses on overly harsh or one-sided results [that lack substantial justification].” (Baxter, supra, 16 Cal.App.5th at 724; Armendariz, supra, 24 Cal.4th at 117-18.)

Plaintiff argues that the Arbitration Agreement is procedurally unconscionable because it was presented on a “take-it-or-leave-it” basis. The Court is not persuaded by Plaintiff’s assertion.

The attempt to highlight a power imbalance between Lyft and Plaintiff overlooks the fact that this is not an employment scenario where an offer is conditional upon agreeing to arbitrate claims against an employer. Even in the context of employment, existing case law holds that a mandatory arbitration agreement only establishes a small degree of procedural unconscionability. (Armendariz, supra, 24 Cal.4th at 113 (“The term [contract of adhesion] signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.”); Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704 (“It is well settled that adhesion contracts in the employment context, that is, those contracts offered to employees on a take-it-or-leave-it basis, typically contain some aspects of procedural unconscionability.)

Here, the Arbitration Agreement was presented to Plaintiff not in the context of employment, but as a customer who wishes to avail of Lyft’s rideshare service. Plaintiff had the option to use or not use the Lyft platform. She could easily have chosen to seek transportation from various other network companies competing with Lyft or utilized different methods of transit to reach her destination. The risk of coercion in this context is minimal, and Plaintiff has not presented evidence to suggest otherwise. Plaintiff’s opposition does not establish any other basis for finding the agreement procedurally unconscionable.

Plaintiff's only argument concerning substantive unconscionability pertains to the requirement of arbitration on an individual basis and the waiver of class actions. This objection, however, is irrelevant to the present lawsuit as Plaintiff is bringing claims on behalf of herself only and not in any representative capacity. In any case, even if she were asserting representative claims, Plaintiff’s representative claims would simply be stayed pending the conclusion of arbitration of his individual claims. It is well within the Court’s power to do so as contemplated by both courts and the Legislature, and thus does not contribute to unconscionability. (Cal. Civ. Proc., § 1281.4; Adolph v. Uber Technologies, Inc., 14 Cal.5th 1104, 1123-24 (2023). Plaintiff, therefore, has failed to demonstrate any substantive unconscionability.

The Court finds that Plaintiff has failed to meet her burden of establishing that the Arbitration Agreement is unconscionable.

Accordingly, the Motion is GRANTED. Plaintiff’s claims are stayed pending completion of arbitration. The Court sets a Status Conference for January 13, 2025, regarding the status of arbitration.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court

[1] The Arbitration Agreement states: “This agreement to arbitrate (“Arbitration Agreement”) is governed by the Federal Arbitration Act (“FAA”).” (McCachern Decl., Exh. 5, ¶ 17(a).)