Judge Lisa R. Jaskol, Case Number: 23STCV02905, Date: 2024-12-16 Tentative Ruling

Judge: Lisa R. Jaskol, Case: 23STCV02905, Date: 2024-12-16 Tentative Ruling

Case Number: 23STCV02905 Hearing Date: December 16, 2024 Dept: 28

Having considered the moving, opposition, and reply papers, the Court rules as follows.

BACKGROUND

On February 9, 2023, Plaintiff Betsy Salazar (“Plaintiff”) filed this action against Defendants Riley Stack (“Stack”), Olayemi Olagoke, Oleayeme Olagoke; Uber Technologies, Inc., Raiser-CA LLC, Rasier LLC, and Does 1-50 for negligence. Plaintiff alleged that on or about March 6, 2021, Defendants negligently entrusted, managed, maintained, drove, and operated their vehicle, causing it to collide with Plaintiff’s vehicle, injuring Plaintiff.

On July 15, 2024, Defendants Uber Technologies, Inc., Rasier-CA LLC, and Rasier LLC (collectively, “Uber”) filed an answer.

On July 17, 2024, Defendant Olayemi Olagoke (“Olagoke”) filed an answer.

On August 20, 2024, Uber filed a motion to compel Plaintiff to arbitrate her claims against Uber and for a stay pending arbitration. The motion was set for hearing on September 23, 2024. On August 22, 2024, Plaintiff filed an opposition.

On September 23, 2024, Uber’ counsel filed a declaration stating that Plaintiff’s counsel failed to serve Plaintiff’s opposition on Uber’ counsel. Uber’s counsel also asserted that the proof of service on Plaintiff’s opposition was defective. The Court ordered Plaintiff to serve the opposition on Defendants and continued the hearing to November 18, 2024 to give Uber an opportunity to file a reply.

On November 7, 2024, Plaintiff’s counsel filed a declaration stating that he served Plaintiff’s opposition on Defendants’ counsel on September 23, 2024. On November 8, 2024, Uber filed a reply. On November 12, 2024, Plaintiff filed a sur-reply, which the Court has not considered. The Court continued the hearing to December 16, 2024.

Trial is currently scheduled for May 28, 2025.

PARTIES’ REQUESTS

Uber asks the Court to compel arbitration of Plaintiff’s claims and to stay the case pending arbitration.

Plaintiff asks the Court to deny the motion.

LEGAL STANDARD

A. The California Arbitration Act (“CAA”)

“A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable, and irrevocable, save upon such grounds as exist for the rescission of any contract.” (Code Civ. Proc., § 1281.)

Code of Civil Procedure section 1281.2 provides in part:

“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; or

“(b) Grounds exist for rescission of the agreement.

“(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition. This subdivision shall not be applicable to an agreement to arbitrate disputes as to the professional negligence of a health care provider made pursuant to Section 1295.

* * *

“If the court determines that a written agreement to arbitrate a controversy exists, an order to arbitrate that controversy may not be refused on the ground that the petitioner’s contentions lack substantive merit.

“If the court determines that there are other issues between the petitioner and the respondent which are not subject to arbitration and which are the subject of a pending action or special proceeding between the petitioner and the respondent and that a determination of such issues may make the arbitration unnecessary, the court may delay its order to arbitrate until the determination of such other issues or until such earlier time as the court specifies.

“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, subds. (a), (b), (c) & last 3 paragraphs.)

B. Federal Arbitration Act (FAA) preemption of the CAA

“In accordance with choice-of-law principles, the parties may limit the trial court's authority to stay or deny arbitration under the CAA by adopting the more restrictive procedural provisions of the FAA.” (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345 (Victrola), quoting Valencia v. Smyth (2010) 185 Cal.App.4th 153, 157 (Valencia).) “ ‘[T]he FAA’s procedural provisions (9 U.S.C. §§ 3, 4, 10, 11) do not apply unless the contract contains a choice-of-law clause expressly incorporating them.’ ” (Ibid., quoting Valencia, supra, 185 Cal.App.4th at p. 174, original emphasis.) “ ‘[T]he question is not whether the parties adopted the CAA’s procedural provisions: The state’s procedural statutes ([Code Civ. Proc.,] §§ 1281.2, 1290.2) apply by default because Congress intended the comparable FAA sections (9 U.S.C. §§ 3, 4, 10, 11) to apply in federal court. The question, therefore, is whether the parties expressly incorporated the FAA’s procedural provisions into their agreements.’ ” (Ibid., quoting Valencia, supra, 185 Cal.App.4th at p. 177; see also Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal.4th 376, 387, 394 [“Our opinion does not preclude parties to an arbitration agreement to expressly designate that any arbitration proceeding should move forward under the FAA's procedural provisions rather than under state procedural law” (italics omitted)].)

“By its terms, the FAA ‘provides for the enforcement of arbitration provisions in any contract evidencing a transaction involving interstate commerce.’ ” (Victrola, supra, 46 Cal.App.5th at p. 346, quoting Mount Diablo Medical Center v. Health Net of California, Inc. (2002) 101 Cal.App.4th 711, 717.) “But agreements to have such enforcement governed by state rules are enforceable.” (Ibid., citing Volt Info. Sciences v. Leland Stanford Jr. U. (1989) 489 U.S. 468, 479.)

DISCUSSION

A. Uber’s motion

1. Uber’s contentions

Uber argues that (1) Plaintiff agreed to arbitrate her claims against Uber by accepting Uber’s terms of use, which require arbitration of disputes, (2) Plaintiff agreed that the FAA would govern the interpretation and enforcement of the arbitration agreement, (3) Plaintiff was using Uber’s services at the time of the accident, (4) Plaintiff’s allegations are within the scope of the arbitration agreement, and (5) only an arbitrator can resolve any dispute about whether Plaintiff’s claims are subject to arbitration under the arbitration agreement.

2. Uber’s evidence

a. Evidence that Plaintiff accepted Uber’s terms of use, including arbitration agreements

Plaintiff registered for a Uber account on June 30, 2016. The terms of use that applied on June 30, 2016 went into effect on January 2, 2016. These terms of use included an arbitration agreement. (Chenshan Yu declaration (“Yu dec.”) ¶ 8 & exh. B.)

On November 15, 2016, Uber sent plaintiff an email stating that Uber had updated its terms of use and Plaintiff’s continued use of the of the Uber apps would constitute assent to the updated terms of use. (Yu dec. ¶¶ 9-10.) The terms of use in effect on November 21, 2016 included an arbitration agreement. (Yu dec. ¶ 11 & exh. E.)

On January 23, 2021, December 30, 2021, March 25, 2022, July 18, 2022, July 25, 2022, October 12, 2022, October 15, 2022, January 21, 2023, February 1, 2023, March 4, 2023 and March 23, 2023, Plaintiff was presented with an in-app blocking pop-up screen with the header “We’ve updated our terms.” (Yu dec. ¶ 12.) It also stated in large type, “We encourage you to read our Updated Terms in full” and under that message had the phrases “Terms of Use” and “Privacy Notice,” which were displayed underlined and in bright blue text, all of which set the text apart from other text on the screen and indicated hyperlinks. (Yu dec. ¶ 12.) When a user clicked either hyperlink, the Terms of Use or Privacy Notice that were published on Uber’s website were displayed. (Yu dec. ¶ 12.) The hyperlink was linked to the following address: https://www.uber.com/legal/document/?name=general-terms-of-use. The in-app blocking pop-up screen stated: “By checking the box, I have reviewed and agreed to the Terms of Use and acknowledge the Privacy Notice.” (Yu dec. ¶ 12.)

The in-app blocking pop-up screen precluded the use of the Uber app unless and until a user clicked the checkbox on the screen and clicked the large “Confirm” button at the bottom of the screen. (Yu dec. ¶ 13.)

On January 23, 2021, December 30, 2021, March 25, 2022, July 18, 2022, July 25, 2022, October 12, 2022, October 15, 2022, January 21, 2023, February 1, 2023, March 4, 2023 and March 23, 2023, Plaintiff accessed her Uber app, was presented with the in-app blocking pop-up screen regarding the January 18, 2021, December 16, 2021, April 4, 2022, August 16, 2022 and January 17, 2023 terms of use, clicked the checkbox, and tapped the “Confirm” button. (Yu dec. ¶ 15.)

The terms of use in effect on January 18, 2021, December 16, 2021, April 4, 2022, August 16, 2022 and January 17, 2023 contain an arbitration agreement. (Yu dec. ¶ 16 & exh. G.)

Following Plaintiff’s consent to Uber’s terms of use, Plaintiff continued to use the Uber app and access Uber’s services. (Yu dec. ¶ 17 & exh. H.)

b. The arbitration agreements

i. January 2, 2016 terms of use

In a section titled “ARBITRATION RULES AND GOVERNING LAW,” the January 2, 2016 terms of use provided:

“The arbitration will be administered by the American Arbitration Association ("AAA") in accordance with the Commercial Arbitration Rules and the Supplementary Procedures for Consumer Related Disputes (the "AAA Rules") then in effect, except as modified by this "Dispute Resolution" section. (The AAA Rules are available at www.adr.org/arb med or by calling the AAA at 1-800-778-7879.) The Federal Arbitration Act will govern the interpretation and enforcement of this Section.” (Yu dec. exh. G.)

ii. November 21, 2016 terms of use

In a section titled “Rules and Governing Law,” the November 21, 2016 terms of use provided in part:

“The parties agree that the arbitrator (‘Arbitrator’), and not any federal, state, or local court or agency, shall have exclusive authority to resolve any disputes relating to the interpretation, applicability, enforceability or formation of this Arbitration Agreement, including any claim that all or part of this Arbitration Agreement is void or voidable. The Arbitrator shall also be responsible for determining all threshold arbitrability issues, including issues relating to whether the Terms are unconscionable or illusory or any defense to arbitration, including waiver, delay, laches, or estoppel.

“Notwithstanding any choice of law or other provision in the Terms, the parties agree and acknowledge that this Arbitration Agreement evidences a transaction involving interstate commerce and that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), will govern its interpretation and enforcement and proceedings pursuant thereto. It is the intent of the parties that the FAA and AAA Rules shall preempt all state laws to the fullest extent permitted by law. If the FAA and AAA Rules are found to not apply to any issue that arises under this Arbitration Agreement or the enforcement thereof, then that issue shall be resolved under the laws of the State of California.” (Yu dec. exh. G.)

iii. January 18, 2021 terms of use

In a section titled “Rules and Governing Law,” the January 18, 2021 terms of use provided:

“Notwithstanding any choice of law or other provision in the Terms, the parties agree and acknowledge that this Arbitration Agreement evidences a transaction involving interstate commerce and that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. (“FAA”), will govern its interpretation and enforcement and proceedings pursuant thereto. It is the intent of the parties to be bound by the provisions of the FAA for all purposes, including, but not limited to, interpretation, implementation, enforcement, and administration of this Arbitration Agreement, and that the FAA and AAA Rules shall preempt all state laws to the fullest extent permitted by law. If the FAA and AAA Rules are found to not apply to any issue regarding the interpretation or enforcement of this Arbitration Agreement, then that issue shall be resolved under the laws of the state where you reside when you accept these Terms.

“Any dispute, claim, or controversy arising out of or relating to incidents or accidents resulting in personal injury (including but not limited to sexual assault or harassment claims) that you allege occurred in connection with your use of the Services, whether before or after the date you agreed to the Terms, shall be governed by and construed in accordance with the laws of the state in which the incident or accident occurred.” (Yu dec. exh. G.)

iv. December 16, 2021, April 4, 2022, August 16, 2022, and January 17, 2023 terms of use

In a section titled “Delegation Clause,” the December 16, 2021, April 4, 2022, August 16, 2022, and January 17, 2023 terms of use provided in part:

“Only an arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve any disputes relating to the interpretation, applicability, enforceability, or formation of this Arbitration Agreement, including without limitation any claim that all or any part of this Arbitration Agreement is void or voidable. An arbitrator shall also have exclusive authority to resolve all threshold arbitrability issues, including issues relating to whether the Terms are applicable, unconscionable, or illusory or any defense to arbitration, including without limitation waiver, delay, laches, or estoppel. . . .”

In a section titled “Rules and Governing Law,” the December 16, 2021, April 4, 2022, August 16, 2022, and January 17, 2023 terms of use provided:

“Notwithstanding any choice of law or other provision in these Terms, the parties agree and acknowledge that this Arbitration Agreement evidences a transaction involving interstate commerce and that the Federal Arbitration Act, 9 U.S.C. § 1 et seq. ('FAA'), will govern its interpretation and enforcement and proceedings pursuant thereto. It is the intent of the parties to be bound by the provisions of the FAA for all purposes, including, but not limited to, interpretation, implementation, enforcement, and administration of this Arbitration Agreement, and that the FAA and the applicable arbitration provider’s rules shall preempt all state laws to the fullest extent permitted by law. [In January 17, 2023 terms of use only: “All statutes of limitation that would otherwise be applicable will apply to any arbitration proceeding.”] If the FAA and applicable arbitration provider’s rules are found to not apply to any issue regarding the interpretation or enforcement of this Arbitration Agreement, then that issue shall be resolved under the laws of the state where you reside when you accept these Terms.

B. Plaintiff’s opposition

Plaintiff asserts that, when the accident occurred, she was a passenger in Olagoke’s vehicle, Olagoke was logged onto Uber’s application, and Olagoke was working as Uber’s agent.

However, Plaintiff argues the case is not yet “ripe” for arbitration because (1) Plaintiff does not know if Olagoke “had his own personal policy of automobile liability insurance at the time of this accident, or if [Olagoke] was relying [on Uber] to establish his financial responsibility” (Opposition p. 2) and (2) assuming Olagoke had his own personal automobile liability insurance, Plaintiff does not know if the insurer will provide coverage for the accident. Plaintiff has provided no legal support for these argument and the Court considers the arguments waived.

Plaintiff also argues that Stack – who drove the other car involved in the accident – is not a party to the arbitration agreement. Therefore, Plaintiff contends, enforcing the arbitration agreement between Plaintiff and Uber would create “a possibility of conflicting rulings on a common issue of law or fact for purposes of Code of Civil Procedure section 1281.2, subdivision (c), permitting the Court to deny Uber’s arbitration request.

In addition, Plaintiff argues that she never agreed to arbitrate her claims against Uber. She contends that Uber’s terms of service “are actually several combined, run-on documents,” “[t]here is no indicia to call its attention to the reader,” “[t]here is no place for signature or initials of the person who would be bound by this document,” and “[t]he Terms of Service do not highlight the existence of an obligation to arbitrate.” (Opposition p. 4 & Salazar declaration.)

C. Uber’s reply

In its reply, Uber argues that the Court may not apply Code of Civil Procedure section 1281.2 because the parties agreed that the FAA governed their arbitration agreement and preempted state law “to the fullest extent permitted by law.” According to Uber, “the arbitration agreement entered into by Plaintiff explicitly states: ‘the Federal Arbitration Act will govern the interpretation and enforcement of [the arbitration provision].’ ” (Reply p. 2, quoting Yu Decl., Ex. G.)

Uber also argues that it has presented prima facie evidence that Plaintiff and Uber entered into an arbitration agreement and Plaintiff has not carried her burden of refuting this evidence.

D. Analysis

Uber contends that Code of Civil Procedure section 1281.2 does not apply because the arbitration agreements stated that the FAA would govern interpretation and enforcement of the agreements.

The parties have not addressed the provision in the arbitration agreements (beginning in January 18, 2021) that states: “Any dispute, claim, or controversy arising out of or relating to incidents or accidents resulting in personal injury . . . that you allege occurred in connection with your use of the Services, whether before or after the date you agreed to the Terms, shall be governed by and construed in accordance with the laws of the state in which the incident or accident occurred.” (Yu dec. exh. G.)

Based on the reasoning of Victrola, supra, 46 Cal.App.5th 337, the Court concludes that the arbitration agreements’ reference to “enforcement” under the FAA requires the court to consider Uber’s motion to compel arbitration under the FAA. (See Victrola, supra, 46 Cal.App.5th at p. 348.) The provision in the arbitration agreements (beginning in January 18, 2021) stating that personal injury claims will be “governed by and construed in accordance with the laws of the state in which the incident or accident occurred” does not displace the parties’ agreement to proceed under the procedural provisions of the FAA. Therefore, the Court will not apply Code of Civil Procedure section 1281.2, subdivision (c).

Last, the Court finds that Uber has shown that Plaintiff agreed to arbitration based on the evidence discussed above.

CONCLUSION

The Court GRANTS the motion to compel arbitration and to stay the action filed by Defendants Uber Technologies, Inc., Rasier-CA LLC, and Rasier LLC. The Court orders Plaintiff Betsy Salazar to arbitrate her claims against Defendants Uber Technologies, Inc., Rasier-CA LLC, and Rasier LLC. The Court stays Plaintiff Betsy Salazar’s action against Defendants Uber Technologies, Inc., Rasier-CA LLC, and Rasier LLC pending the outcome of arbitration.

The Court sets a status conference re: arbitration on June 16, 2025 at 8:30 a.m. in Department 28 of the Spring Street Courthouse.

Moving parties are ordered to give notice of this ruling.

Moving parties are ordered to file the proof of service of this ruling with the Court within five days.