Judge: Lee S. Arian, Case: 24STCV05452, Date: 2024-07-17 Tentative Ruling

Case Number: 24STCV05452    Hearing Date: July 17, 2024    Dept: 27

Hon. Lee S. Arian, Dept 27 

 

MOTION TO COMPEL ARBITRATION 

Hearing Date: 7/17/24¿ 

CASE NO./NAME: 24STCV05452 SHAUN MAYE WILLIAMS et al. vs LYFT et al.

Moving Party: Defendant Lyft 

Responding Party: Plaintiffs

Notice: Sufficient¿ 

Ruling: MOTION TO COMPEL ARBITRATION IS GRANTED. 

 

Background 

 

This case stems from a June 20, 2022, motor vehicle accident in which Plaintiffs Mycah Bacchus and Shaun Williams allegedly sustained personal injuries. At the time of the accident, Plaintiffs were passengers in a vehicle driven by Lyft driver Sabrelio Sibrian. Plaintiff Mycah Bacchus used the Lyft platform to arrange the ride for Plaintiffs. On March 4, 2024, Plaintiffs filed the present action. On March 21, 2024, law firm Homan, Stone & Rossi, attorneys for Defendant Sibrian, erroneously filed an answer on behalf of Lyft. On April 3, 2024, law firm Fox Rothschild, filed an answer on behalf of Lyft, and on May 22, 2024, Lyft filed a notice of errata indicating that due to a clerical error, Homan, Stone & Rossi filed an answer for Lyft but Homan was retained to represent Defendant Sibrian only and never represented Lyft in this action. On May 22, 2024, Lyft filed the present motion to compel arbitration.

 

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.¿Plaintiffs does not dispute the applicability of FAA in their 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. The 2016 Lyft Terms of Service, which contains the original arbitration agreement between the parties (Def’s Ex. 2), states in pertinent part:

 

 

PLEASE BE ADVISED: THIS AGREEMENT CONTAINS PROVISIONS THAT GOVERN HOW CLAIMS YOU AND LYFT HAVE AGAINST EACH OTHER 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 ON AN INDIVIDUAL BASIS, NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY CLASS, GROUP OR REPRESENTATIVE ACTION OR PROCEEDING …

 

By entering into to this Agreement, you expressly acknowledge that you understand this Agreement (including the dispute resolution and arbitration provisions Section 17) and accept all of its terms. IF YOU DO NOT AGREE TO BE BOUND BY THE TERMS AND COND ITIONS OF THIS AGREEM ENT, YOU MAY NOT USE OR ACCESS THE LYFT PLATFORM. ¿(Def’s Ex. 2 at pg. 1.)¿¿ 

 

Furthermore, Section 17(a) of the 2016 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)

 

Plaintiffs do not dispute having assented to Lyft's 2016 terms at the time of downloading the Lyft application. Defendant has provided evidence that in order to access Lyft's software platform to request rides, a person (the "user") must first create a Lyft user account using the Lyft App. This process requires the user to input information such as their first and last name, email address, and phone number. After entering the required personal information, the user is prompted within the Lyft App to accept the Terms of Service during their account creation process. A user cannot access the Lyft software platform without first creating a Lyft user account and cannot request or purchase rideshare services through the Lyft App unless they have affirmatively accepted Lyft's Terms of Service. (Declaration of Alex Sniegowski ¶¶ 7-8)

 

Plaintiff argues that Ms. Bacchus and Mr. Williams are not bound by even the original agreement they have entered into because Lyft had abandoned those terms by the time of the subject collision. This argument is not backed by any evidence or legal authority and is speculative.

 

Furthermore, Plaintiff argues that Lyft has presented zero evidence to establish that Ms. Bacchus or Mr. Williams received and therefore voluntarily assented to these terms when they continued using the Lyft app. However, this is not true. Defendant has produced evidence showing that Plaintiffs both affirmatively accepted Lyft's Terms of Service within the Lyft App on four separate occasions and Plaintiffs could not have used Lyft’s services unless consenting to the terms. (Defendant's Exhibits 1 and 8, Sniegowski Decl.¶¶ 13-14.) Plaintiff has failed to provide any evidence, such as declarations or documents, to rebut this. Thus, the Court finds the existence of an arbitration agreement between the parties.

 

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 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”).

 

2.  Discussion

 

Plaintiffs do not dispute that they assented to the 2016 terms or the delegation clause contained within, which states: "All disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability, or validity of the Arbitration Agreement)." The delegation clause is clear and unmistakable, and the parties agreed to delegate all disputes concerning arbitrability to the arbitrator. Furthermore, Defendant does not argue that the initial arbitration agreement was entered into via fraud, duress, or that the delegation clause or the arbitration agreement is unconscionable. (Def’s Ex. 2 ¶17(a).)

 

Plaintiff puts forth the following arguments: that the personal injury claim is outside the scope of the 2016 terms, that Plaintiff has waived arbitration, and that the third-party litigation exception applies. The overriding issue with Plaintiff’s opposition is that the various arguments put forth mostly relate to arbitrability, which Plaintiff does not dispute has been delegated to the arbitrator. Additionally, Plaintiff’s arguments rely on remedies available only under the California Arbitration Act (CAA), which have been preempted as the parties have elected the Federal Arbitration Act (FAA) to be the controlling law.

 

A.  Applicability of Arbitration

 

Plaintiffs argue that they originally entered into an arbitration agreement with Lyft under the 2016 terms, but the terms were materially changed in 2020, and only the 2020 agreement covers the present personal injury claims. The Court is not persuaded because in the foregoing analysis under the "existence of an agreement" section, it found that Plaintiffs affirmatively assented to modifications to the terms, including the 2020 terms. Furthermore, even assuming, arguendo, that Plaintiffs did not assent to any modifications, the Court is still not convinced that Plaintiffs’ personal injury claims are not covered by the 2016 terms.

 

The Court examined the 2016 Terms and the 2020 Terms and does not see any material changes. The material changes were not highlighted to the Court, and there is no reference to the inclusion of personal injury claims in the 2020 Terms. Furthermore, the 2016 terms state: "These Claims include ... the Services, any other goods or services made available through the Lyft Platform … and all other federal and state statutory and common law claims." (Def’s Ex. 2 ¶ 17(a).)

 

In Section 1 of the 2016 Terms, Lyft defines Services as: "the driving services provided by Drivers to Riders that are matched through the Platform shall be referred to collectively as the 'Services.'"

 

Undoubtedly, Plaintiff Bacchus’s personal injury claims relate to the “Services” Lyft provided to Plaintiff or fall under the catch-all provision of "all other federal and state statutory and common law claims," as Plaintiff does not dispute that Bacchus utilized the Lyft application to obtain driving services from Lyft, where Plaintiff was injured as a passenger.

 

As to Plaintiffs’ argument that Plaintiff Williams did not himself utilize the Lyft application for driving services and therefore the arbitration agreement does not apply to Williams, the Court notes that although Williams did not use the application to order the Lyft, he did use the driving services rendered by the driver, as he was one of the passengers who was allegedly injured while riding in a vehicle driven by a Lyft driver. The court does find that an ambiguity exists as to whether Williams’s personal injury claims fall under claims arising out of Services provided by Lyft. Nonetheless, it is undisputed that both Bacchus and Williams delegated the question of the scope and applicability of the arbitration agreement to the arbitrator and whether the arbitration agreement applies to the dispute at hand is a question for the arbitrator. (Douglass v. Serenivision, Inc. (2018) 20 Cal.App.5th 376, 386.)

 

B.  Waiver and Third Party Exception

 

Plaintiffs’ other arguments—that there is no arbitration agreement with Defendant Sibrian, that there is a related action with a serious possibility of conflicting rulings pursuant to CCP § 1281.2(c), or that Defendant through its conduct has waived arbitration pursuant to CCP § 1281.2(a)—all cite to CCP § 1281.2 or the California Arbitration Act (CAA). However, Plaintiff does not dispute that the Federal Arbitration Act (FAA) applies. Therefore, CCP § 1281.2 is preempted, and 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)].

 

Furthermore, as to waiver, although “the right to arbitration, like other contractual rights, can be waived” (Martin v. Yasuda, 829 F.3d 1118, 1124 (9th Cir. 2016)), “the question whether a party waived its right to arbitrate on the basis of its litigation conduct is a question of arbitrability” and thus a gateway issue (Id. at 1123.) This issue is “presumptively for a court and not an arbitrator to decide,” unless there is “clear and unmistakable language” that shows the parties' intent for an arbitrator to decide the issue (Id. at 1123-24.) Here, pursuant to Section 17a of the 2016 terms or 2020 terms, Plaintiffs agreed that “All disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement)” would be decided by the arbitrator. The delegation clause is clear and contains unmistakable language. Therefore, the issue of waiver is for the arbitrator and not the court to decide.

 

Conclusion

 

The Court grants Defendant’s Motion to Compel Arbitration and Stay the proceedings as to Lyft pursuant to the Federal Arbitration Act, 9 U.S.C. § 1, et seq.

 

PLEASE TAKE NOTICE: 

 

If a party intends to submit on this tentative ruling,¿the party must send an email to the court at¿sscdept27@lacourt.org¿with the Subject line “SUBMIT” followed by the case number.¿ The body of the email must include the hearing date and time, counsel’s contact information, and the identity of the party submitting. 

 

Unless¿all¿parties submit by email to this tentative ruling, the parties should arrange to appear remotely (encouraged) or in person for oral argument.¿ You should assume that others may appear at the hearing to argue. 

 

If the parties neither submit nor appear at hearing, the Court may take the motion off calendar or adopt the tentative ruling as the order of the Court.¿ After the Court has issued a tentative ruling, the Court may prohibit the withdrawal of the subject motion.