Judge: Lee S. Arian, Case: 23STCV28951, Date: 2024-04-15 Tentative Ruling

Case Number: 23STCV28951    Hearing Date: April 15, 2024    Dept: 27

HON. LEE S. ARIAN 

DEPARTMENT 27 

TENTATIVE RULING 

 

Hearing Date: 4/15/2024 at 1:30 p.m. 

Case No./Name: 23STCV28951 ANTHONY JAMARCUS WALKER vs LYFT, INC 

Motion: MOTIONS TO COMEPL ARBITRATION 

Moving Party: Defendant Lyft 

Responding Party: Plaintiff 

Notice: Sufficient 

 

Ruling: MOTION TO COMEPL ARBITRATION IS GRANTED. 

 

Background 

 

On November 28, 2023, Plaintiff filed this auto accident case, alleging injuries sustained while riding as a passenger in a Lyft vehicle. The action was filed against Defendant Lyft and David Sullivan, the driver of the Lyft vehicle. Lyft now moves the court to compel Plaintiff’s claim against Lyft to arbitration. Plaintiff contends that the motion should be denied on the grounds that the arbitration agreement is unconscionable. 

 

Legal Standards 

 

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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; or (b) Grounds exist for the revocation of the agreement.”¿ (Code Civ. Proc. §1281.2, subds. (a), (b).)¿ Under the Federal Arbitration Act, a court’s inquiry is limited to a determination of (1) whether a valid arbitration agreement exists and (2) whether the arbitration agreement covers the dispute(9 U.S.C., § 4;¿Chiron Corp. v. Ortho Diagnostics Systems, Inc.¿(9th Cir. 2000) 207 F.3d 1126, 1130;¿Howsam¿v. Dean Witter Reynolds, Inc.¿(2002) 537 U.S. 79, 84;¿see¿Simula, Inc. v. Autoliv, Inc.¿(9th Cir. 1999) 175 F.3d 716 [if the finding is affirmative on both counts the FAA requires the Court to enforce the arbitration agreement in accordance with its terms].)¿ If a clause delegating enforcement under the FAA exists, the court may only adjudicate the enforceability of the delegation clause itself; if found enforceable, questions regarding the enforceability of the underlying agreement as a whole is reserved for the arbitrator(Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 72.)  In order for a delegation clause to be enforceable, there must be a showing that the parties “clearly and mistakably agreed that an arbitrator, not a court, would decide the question of enforceability.”  (Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425, 1442.) This showing is fulfilled if the arbitration agreement provides that its “enforcement” shall be governed by the FAA. (Victrola 89, LLC v. Jaman Props. 8 LLC (2020) 46 Cal.App.5th 337, 355-56.) 

 

“If an application has been made to a court . . . for an order to arbitrate a controversy . . . 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 the application for an order to arbitrate is determined and, if arbitration of such controversy is ordered, until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.”¿(Code of Civ. Proc., § 1281.4.) 

 

Analysis 

 

A. Controlling Law 

 

Lyft’s arbitration agreement with Plaintiff expressly states that “the agreement to arbitrate (“Arbitration Agreement”) is governed by the Federal Arbitration Act.¿(Def’s Ex. 2; Section 17(a) of the Arbitration Agreement.) Parties to an arbitration agreement may voluntarily elect to have the Federal Arbitration Act (“FAA”) govern enforcement of that agreement.¿(Victrola 89, supra, 46 Cal.App.5th at p. 355.)¿Here, the parties have so elected.¿Plaintiff does not dispute the applicability of FAA in his opposition. Accordingly, the Court finds that the FAA applies. 

 

B. Existence of an Agreement 

 

Under both Title 9 section 2 of the United States Code (known as the FAA) and 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 party moving to compel arbitration must establish the existence of a written arbitration agreement between the parties.¿(Code of Civ., Proc. § 1281.2.)¿ In ruling on a motion to compel arbitration, the court must first determine whether the parties actually agreed to arbitrate the dispute, and general principles of California contract law help guide the court in making this determination.¿(Mendez v. Mid-Wilshire Health Care Center (2013) 220 Cal.App.4th 534, 541.)¿Once petitioners allege that an arbitration agreement exists, the burden shifts to respondents to prove the falsity of the purported agreement, and no evidence or authentication is required to find the arbitration agreement exists.¿(See Condee v. Longwood Mgt. Corp. (2001) 88 Cal.App.4th 215, 219.) 

 

“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.¿(See Condee, supra, 88 Cal.App.4th at 218; see also Cal. Rules of Court, rule 3.1330 [“A petition to compel arbitration or to stay proceedings pursuant to Code of Civil Procedure sections 1281.2 and 1281.4 must state, in addition to other required allegations, the provisions of the written agreement and the paragraph that provides for arbitration.¿The provisions must be stated verbatim or a copy must be physically or electronically attached to the petition and incorporated by reference”].)¿Once such a document is presented to the court, the burden shifts to the party opposing the motion to compel, who may present any challenges to the enforcement of the agreement and evidence in support of those challenges. [Citation]”¿(Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152, 1160.) 

 

Lyft has met its initial burden of showing that an arbitration agreement exists between the parties. On July 29, 2022, Plaintiff accepted Lyft’s Terms of Service. (Def’s Ex. 1.) The Terms of Service was updated on December 9, 2020. As found in Lyft’s Terms of Service, the arbitration provision states in pertinent part: 

 

PLEASE BE ADVISED: THIS AGREEMENT CONTAINS PROVISIONS THAT GOVERN HOW CLAIMS BETWEEN YOU AND LYFT CAN BE BROUGHT (SEE SECTION 17 BELOW). THESE PROVISIONS WILL, WITH LIMITED EXCEPTION, REQUIRE YOU TO SUBMIT CLAIMS YOU HAVE AGAINST LYFT TO BINDING AND FINAL ARBITRATION… 

 

By entering into this Agreement, and/or by using or accessing the Lyft platform you expressly acknowledge that you understand this Agreement (including the dispute resolution and arbitration provisions in Section 17) and accept all of its terms. IF YOU DO NOT AGREE TO BE BOUND BY THE TERMS AND CONDITIONS OF THIS AGREEMENT, YOU MAY NOT USE OR ACCESS THE LYFT PLATFORM…¿(Def’s Ex. 2 at pg. 1.)¿¿ 

 

Furthermore, Section 17(a) of the Terms provides the following: 

 

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. This agreement to arbitrate ("Arbitration Agreement") is governed by the Federal Arbitration Act ("FAA'')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. (Def’s Ex. 2 ¶ 17(a) 

 

Plaintiff does not dispute having assented to the Terms of Service or deny the existence of the arbitration agreement.¿Rather, Plaintiff argues that the arbitration agreement should not be enforced because it is unconscionable. Based on the foregoing, the Court finds that Lyft has proven the existence of the arbitration agreement. 

 

C. Arbitrability 

 

  1. Legal Standard 

 

There often are three separate contracts for a court to consider in deciding whether to compel arbitration: the underlying contract, the arbitration agreement, and the delegation clause.¿A delegation clause purports to delegate arbitrability to the arbitrator.¿The arbitration agreement and delegation clause are often found within the underlying contract itself. 

 

Arbitration “is a matter of contract between the parties.”¿First Options of Chicago, Inc. v. Kaplan, (“First Options”) (1995) 514 U.S. 938, 943.¿Where the parties have agreed to arbitration, challenges to the validity of the underlying contract are for the arbitrator to decide.¿Nielsen Contracting, Inc. v. Applied Underwriters, (2018) 22 Cal.App.5th 1096, 1108 (citations omitted).¿However, challenges to the validity of the arbitration clause itself are generally resolved by the court in the first instance.¿Rent-A-Center, West, Inc. v. Jackson, (“Rent-A-Center”) (2010) 561 U.S. 63, 71. 

 

In First Options, the United States Supreme Court explained that the question of who should decide what is arbitrable (arbitrability) in an arbitration agreement is fairly simple and turns on the parties’ agreement.¿514 U.S. at 943.¿If the parties agreed to submit the arbitrability issue to the arbitrator, then he or she should decide.¿Id. If the parties did not agree to submit the arbitrability question to the arbitrator, then the court should decide arbitrability.¿Id.¿This rule is based on the practical reason that a party who has not agreed to arbitrate should normally have a right to a court’s decision on the merits of a dispute.¿Id. at 942-43.¿Given that a party cannot be forced to arbitrate unless it has agreed to do so, the courts should be hesitant to interpret an arbitration provision’s silence or ambiguity on the who should decide arbitrability issue as giving the arbitrator that power.¿Id. at 945.¿Therefore, courts should not assume that the parties agreed to arbitrate arbitrability without clear and unmistakable evidence that they did so.¿Id. at 944. 

 

In Rent-A-Center, the United States Supreme Court addressed the question of who rules on the enforceability of a delegation clause: the court or the arbitrator?¿Id. at 67-76.¿The high court held that a delegation clause within an arbitration agreement must be viewed as an independent contract.¿Id.¿ As with any independent contract, the courts must resolve specific challenges to the delegation clause that are proper under Federal Arbitration Act (“FAA”) section 2, which includes any generally applicable contract defenses.¿561 U.S. at 68, 71.¿This rule requiring judicial consideration of contract defenses to the enforceability of the delegation clause only exists where the challenge is made to that clause.¿Id. at 71 (challenge to enforcement of arbitration agreement is insufficient to challenge delegation clause).¿See also Nielsen, supra, 22 Cal.App.5th at 1108 (discussion Rent-A-Center’s holding). 

 

Thus, the issue of arbitrability “is an issue for judicial determination unless the parties have clearly and unmistakably provided otherwise.”¿Howsam v. Dean Witter Reynolds, (2002) 537 U.S. 79, 83.¿Parties may agree to have the arbitrator decide not only the merits of a particular dispute, but also gateway questions of arbitrability such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.¿ The default presumption – “and it is a ‘strong’ one” – is that the parties intend the courts, not the arbitrator, to decide arbitrability.¿Clayton Douglass v. Serenivision, Inc., (2018) 20 Cal.App.5th 376, 386.¿Where the parties have delegated arbitrability to the arbitrator through a clear and unmistakable delegation clause, a court may not override the contract to decide any issue of arbitrability.¿See Henry Schein, Inc. v. Archer & White Sales, Inc., (“Henry Schein”) (2019) 139 S.Ct. 524, 529 (arbitrator, not court, must decide argument that the argument for arbitration is “wholly groundless”). 

 

  1. Analysis 

 

Plaintiff contends that it is up to the court to decide the validity of the delegation clause within the arbitration agreement, Yet disregarding the clear and unmistakable evidence that the Parties agreed to arbitration would determine the arbitrability of the agreement. The clear language in the Terms of Service states, "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" (Def’s Ex. 2, Section 17(a)). Plaintiff did not present any evidence or argument to rebut this; the bulk of Plaintiff’s opposition focuses on the unconscionability of the arbitration agreement itself, not the delegation clause. For example, Plaintiff does not show how lack of mutuality or lack of a jury trial has any relevance to the enforceability of the delegation clause. A challenge to the enforcement of the arbitration agreement is insufficient to contest the delegation clause. (Rent-A-Center, West, Inc. v. Jackson (2010) 561 U.S. 63, 71.) Delegation clause within an arbitration agreement must be treated as an independent contract (Id. at 67-76). 

 

Furthermore, even if the Court is to interpret Plaintiff's arguments against the arbitration itself as pertaining to the delegation clause, the Court remains unconvinced that it is unconscionable. Plaintiff's assertion that the Terms of Service are one-sided and presented in a "take it or leave it" manner does not hold. 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. Here, Plaintiff had the option to use or not use the Lyft platform. He could easily have chosen to seek transportation from various other network companies competing with Lyft or utilized different methods of transit to reach his destination. The risk of coercion in this context is minimal, and Plaintiff has not presented evidence to suggest otherwise. 

 

The Court is also not convinced by Plaintiff’s substantial unconscionability argument. First, arbitration is such a common means of dispute resolution that it may be considered within the “reasonable expectations” of consumers (Patterson v. ITT Consumer Financial Corp. (1993) 14 Cal.App.4th 1659, 1665). Over the years, arbitration has become a standard clause in many types of consumer agreements, including those for credit cards, cell phone services, online purchases, and various ridesharing services. Thus, it is reasonable to expect that consumers using these services are aware of and anticipate the use of arbitration in resolving disputes. Second, Plaintiff argues a lack of mutuality, claiming that the arbitration agreement requires consumers to arbitrate their claims while exempting from arbitration all possible claims that the Lyft Defendant might want to assert. However, Plaintiff did not cite any specific portion of the agreement to support this argument. Upon review, section 17(a) of the agreement clearly states: "BY AGREEING TO ARBITRATION, YOU UNDERSTAND THAT YOU AND LYFT ARE WAIVING THE RIGHT TO SUE IN COURT OR HAVE A JURY TRIAL FOR ALL CLAIMS, EXCEPT AS EXPRESSLY OTHERWISE PROVIDED IN THIS ARBITRATION AGREEMENT." This language suggests that both Lyft and the customer mutually waive their right to sue in court. The court will also note that unlike the procedural unconscionability arguments, the substantial unconscionability arguments put forth by the Plaintiff are more directly related to the arbitration agreement itself rather than the delegation clause.  

 

Additionally, the Federal Arbitration Act (FAA) applies to the present agreement, 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.]) 

 

Accordingly, the issue of arbitrability is up to the arbitrator to decide and therefore the present motion is GRANTED.