Judge Lon F. Hurwitz, Case 23-01303423 2023-09-27 Tentative Ruling

Judge: Lon F. Hurwitz, Case: 23-01303423, Date: 2023-09-27 Tentative Ruling

Motion to Compel Arbitration

RELIEF SOUGHT: Defendant CR&R Inc. seeks an order: (1) compelling arbitration of Plaintiff’s individual claims, including his PAGA claim; and (2) dismissing Plaintiff’s class claims and representative PAGA claims for lack of standing.

UPCOMING EVENTS: Case Management Conference, September 27, 2023

FACTS/OVERVIEW: This is a putative wage-and-hour class and representative action. On January 24, 2023, Plaintiff Alfredo Barrios, individually and on behalf of all other similarly situated (“Plaintiff”), filed the original Complaint against Defendants CR&R Inc., Clifford Ronnenberg, Joyce Amato, and David Ronnenberg alleging nine (9) causes of action for (ROA 2):

1. Failure to Pay Overtime Wages;

2. Failure to Pay Minimum Wages;

3. Failure to Provide Meal Periods;

4. Failure to Provide Rest Periods;

5. Waiting Time Penalties;

6. Wage Statement Violations;

7. Failure to Timely Pay Wages;

8. Failure to Indemnify; and

9. Unfair Competition.

On March 3, 2023, Plaintiff filed a request for dismissal, without prejudice, as to Individual Defendants Clifford Ronnenberg, Joyce Amato, and David Ronnenberg. (ROA 16). The Order dismissing the Individual Defendants was entered on March 7, 2023. (ROA 17).

On April 7, 2023, Plaintiff filed the operative First Amended Complaint (“FAC”) against CR&R Inc. and the Individual Defendants. (ROA 24). The FAC alleges the same causes of action and adds a PAGA claim.

On May 9, 2023, Defendant CR&R Inc. (“Moving Defendant”) filed the current Motion to Compel Arbitration and Dismiss Class and Representative Claims. Plaintiff opposes the motion, and Moving Defendant replies.

EVIDENTIARY OBJECTIONS:

Plaintiff submits one evidentiary objection, and the recommended ruling is as follows:

1. Para. 10 of the Declaration of Alfred Lamarre – SUSTAINED, improper legal conclusion

Defendant submits evidentiary objections to Plaintiff’s declaration. The recommended rulings are as follows:

1. Para. 3 – OVERRULED

2. Para. 4 – OVERRULED

3. Para. 5 – OVERRULED

4. Para. 10 -- OVERRULED

CONTENTIONS AND ANALYSIS:

Statement of the Law

Under Code of Civil Procedure section 1281.2, a party to an arbitration agreement may move to compel arbitration if another party to the agreement refuses to arbitrate. A party moving to compel arbitration under Section 1281.2 must prove by a preponderance of the evidence that: (1) The parties entered into a written agreement to arbitrate; and (2) one or more of the claims at issue are covered by that agreement. (Code Civ. Proc., § 1281.2; Villacreses v. Molinari (2005) 132 Cal.App.4th 1223, 1230.) If the moving party meets this burden, the burden shifts to the resisting party to prove by a preponderance of evidence a defense to enforcement of the agreement. (Id., at p. 1230.)

California law favors the enforcement of valid arbitration agreements. (Ericksen, Arbuthnot, McCarthy, Kearney & Walsh, Inc. v. 100 Oak Street (1983) 35 Cal.3d 312, 320; In re Tobacco I (2004) 124 Cal.App.4th 1095, 1103.) Any doubts to arbitration will be resolved against the party asserting a defense to arbitration, whether the issue is construction of contract language, waiver, delay or any other defense to arbitrability. (Erickson, supra, 35 Cal.3d at p. 320; In re Tobacco I, supra, 124 Cal.App.4th at p. 1103.)

Merits

Moving Defendant is a recycling and waste collection company that serves more than 3 million people and 25,000 business throughout Southern California, as well as Arizona and Colorado. [Declaration of Alfred Lamarre (“Lamarre Decl.”) (ROA 29), ¶ 2.] Plaintiff was employed as by Moving Defendant from on or around July 25, 2022, until his termination on or around December 14, 2022. [Lamarre Decl., ¶ 5.]

Is There an Enforceable Agreement?

In resolving petitions to compel arbitration, courts must first determine whether the agreement exists—i.e., whether the parties actually entered into a valid contract agreeing to arbitrate certain disputes—and whether it is enforceable. (Pinnacle Museum Tower Ass’n v. Pinnacle Market Develop. (US), LLC (2012) 55 Cal.4th 223, 236.) The moving party has the initial burden to prove the existence of an agreement to arbitrate by either reciting verbatim or providing a copy of the alleged agreement. (CRC, rule 3.1330; Condee v. Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 219.)

If the moving party meets its initial burden and the opposing party disputes the existence of the agreement, then “the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.) The opposing party may do this by declaring under penalty of perjury that the party never saw or does not remember seeing the agreement, or that the party never signed or does not remember signing the agreement. (Ibid.; see also, Bannister v. Marinidence Opco, LLC (2021) 64 Cal.App.5th 541, 546; Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1054.)

If the opposing party meets its burden, then the burden shifts back to the moving party to establish with admissible evidence the existence of a valid arbitration agreement. “The burden of proving the agreement by a preponderance of the evidence remains with the moving party.” (Gamboa, supra, 72 Cal.App.5th at pp. 165-166.)

Here, Moving Defendant contends that Plaintiff signed a written Mutual Arbitration Agreement (“Agreement”) wherein he agreed to arbitrate any controversy, claim, or dispute arising from his employment. [Lamarre Decl., ¶ 6.] According to Moving Defendant, the Agreement requires the arbitration of Plaintiff’s individual claims and precludes any class or representative action. In support, Moving Defendant provides the declaration of Alfred Lamarre, its Vice President of Human Resources. [Id. at ¶ 1.] Lamarre attests that in his role, he has acquired personal knowledge of Moving Defendant’s history and business operations. In addition, Lamarre attests he is the duly authorized custodian of Moving Defendants’ personnel records that are maintained in the ordinary course of business. [Id. at ¶¶ 2, 4.] Lamarre attests he reviewed Plaintiff’s personnel file and is familiar with its contents. [Id. at ¶ 4.]

Lamarre attests that Plaintiff was employed by Moving Defendants from on or around July 25, 2022, to December 14, 2022. [Lamarre Decl., ¶ 5.] According to Lamarre, “Plaintiff’s personnel file show that on or around July 13, 2022, Plaintiff signed the [] Agreement contained within his employment application.” [Id. at ¶ 6, Exh. A.] Notably, Lamarre does not provide any attestations as to whether

In opposition, Plaintiff disputes the existence and validity of the Agreement. As a preliminary matter, Plaintiff contends Moving Defendant has not met its burden. As argued by Plaintiff, Lamarre’s declaration does not contain any detail regarding Plaintiff’s purported execution of the Agreement, and thus fails to establish that Plaintiff actually signed the document.

However, in this instance, it is not asserted that the Agreement was signed electronically. Instead, the Agreement attached to Lamarre’s declaration contains a handwritten signature. This is sufficient. Courts have held that a moving party can bear the initial burden of proof “by attaching a copy of the arbitration agreement purportedly bearing the opposing party’s signature.” (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.) The normal procedures of document authentication need not be followed at this step of the analysis. (Ibid.)

Plaintiff also claims he has no recollection of being asked to sign the document. [Declaration of Alfredo Barrios (“Barrios Decl.”) (ROA 52), ¶ 7.] Plaintiff attests that when he sought a position with Moving Defendant, he was asked to come in person to the recruitment center to complete required paperwork and take a drug test. [Id. at ¶ 3.] Plaintiff states that upon arrival, Moving Defendant’s representative presented him with “a stack of several documents to complete as part of [the] job application.” According to Plaintiff, Moving Defendant’s representative told him he was required to complete the documents in order to be considered for employment. Plaintiff attests that Moving Defendant’s representative did not explain the meaning or purpose of any of the documents, other than to say that they were required as part of the application process. Plaintiff states that as a result, he “was made to understand” that if he did not sign the documents, he would not be considered for employment. [Id. at ¶¶ 4, 5.] In that regard, Plaintiff states, “Because I was not in a financial position to turn down an offer of employment on the basis of legal documents I was required to sign, I did not believe that I had any other choice but to sign the documents provided to me.” [Id. at ¶ 6.]

There is a split in authority as to whether Plaintiff has provided sufficient evidence of a factual dispute to meet his burden in challenging the validity of the Agreement. Under the reasoning of the Second Appellate District, Division Seven, in Gamboa, Plaintiff’s attestations are sufficient to meet his burden. (See, Gamboa, supra, 72 Cal.App.5th at p. 167.)

However, in Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, the First Appellate District, Division Four, disagreed with Gamboa. Under the reasoning in Iyere, Plaintiff’s declaration does not create a factual dispute as to whether he signed the document. He acknowledges signing the “stack of several documents,” but does not deny that the stack included the Agreement. Although he states he does not recall being presented with the Agreement, there is no conflict between him having signed a document on which his handwritten signature appears and, a year later, being unable to recall doing so. In the absence of any evidence that the signature and initials are not his own, there is no evidence that Plaintiff did not in fact sign the Agreement. (See, Iyere, supra, at p. 756.)

Therefore, under Iyere, the burden does not shift back to Moving Defendant. Instead, Plaintiff’s attestations as to why he did not know he had signed the Agreement—i.e., he was told he was required to sign the documents to be considered for employment—are material only as to whether enforcement of the agreement is barred by the defense of unconscionability. (See, Iyere, supra, 87 Cal.App.5th at p. 759.)

There is no specific challenge by Plaintiff that the signature on the subject document is his. Therefore, the issue here is one of unconscionability and, therefore, enforceability, not veracity.

Enforceability

To the extent the Court finds the existence of an arbitration agreement, Moving Defendant’s argument fails in other ways.

Moving Defendant contends that under the holdings in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (“Viking River”), Stolt-Nielsen v. AnimalFeeds Int’l Corp. (2010) 559 U.S. 662, and AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333 (“Concepcion”), Plaintiff must submit his individual PAGA claims to arbitration, and the representative PAGA claims and class claims must be dismissed. According to Moving Defendant, a party cannot be compelled under the Federal Arbitration Act (“FAA”) to submit to class arbitration unless it agreed to do so in the arbitration agreement. Similarly, Moving Defendant contends that under Viking River, the PAGA waiver in the Agreement is enforceable and requires Plaintiff to arbitrate only his individual PAGA claims. Moving Defendant argues that once the individual PAGA claims are sent to arbitration, Plaintiff will not have standing to pursue the representative PAGA claims, and therefore, those claims must be dismissed.

Plaintiff contends that the FAA does not apply to the Agreement because it does not involve interstate commerce. As a result, Plaintiff contends the FAA does not preempt state law in this situation. As argued by Plaintiff, Viking River does not control here, but rather, the holdings in Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th 1281, Galarsa v. Dolgen Calif., LLC (2023) 88 Cal.App.5th 639, and Rocha v. U-Haul Co. of Calif. (2023) 88 Cal.App.5th 65, govern the issues of PAGA standing. In addition, Plaintiff contends there is no contractual basis supporting Moving Defendant’s demand that the class claims be stricken.

As a preliminary matter, the issue of FAA applicability is important because when the FAA does apply, it preempts any state law rule that “stands as an obstacle to the accomplishment of the FAA.” (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 384, abrogated in part by Viking River, supra, 142 S.Ct. at pp. 1922-1924.) The requirement that the FAA applies to any contract “evidencing a transaction involving commerce” means the transaction must, in fact, involve interstate commerce. (Shepard v. Edward MacKay Enterprises, Inc. (2007) 148 Cal.App.4th 1092, 1097; 9 U.S.C. § 2.) “ ‘[T]he phrase “ ‘involving commerce’” in the FAA is the functional equivalent of the term “ ‘affecting commerce,’” which is a term of art that ordinarily signals the broadest permissible exercise of Congress’s commerce clause power.’ [Citations.] Accordingly, 'although Congress’s power to regulate commerce is broad, it does have limits …. [A relatively trivial impact on interstate commerce cannot be used as an excuse for broad regulation of state or private activities. [Citation.]” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238.)

The party asserting FAA preemption bears the burden of presenting sufficient evidence that the contract with the arbitration provision is a “contract evidencing a transaction involving commerce.” Failure to do so renders the FAA inapplicable. (Ibid.)

Here, the Agreement expressly states that it “is subject to and governed by the Federal Arbitration Act.” [Lamarre Decl., Exh. A.] Moving Defendant has also proffered evidence that it is involved in interstate commerce. (9 USC § 2; see, e.g., Allied-Bruce Terminix Cos., Inc. v. Dobson (1995) 513 U.S. 265, 278.) According to the Lamarre declaration, Moving Defendant is a Southern California-based recycling and waste collection company that operates throughout Riverside, Orange, Los Angeles, San Bernardino, and Imperial counties, as well as Arizona and Colorado. [Lamarre Decl., ¶ 2.]

However, Moving Defendant has not provided any evidence that Plaintiff’s employment involved or had any bearing on interstate commerce. Indeed, Lamarre’s declaration does not even state what position Plaintiff held with CR&R—only that he was employed by the company from July 25, 2022, to December 14, 2022. [Id. at ¶ 5.] Therefore, there is no evidence in the record establishing that the relationship between Moving Defendant and Plaintiff had a specific effect or bearing on interstate commerce in a substantial way. (See, e.g., Carbajal, supra, 245 Cal.App.4th at p. 239; Lane v. Francis Capital Mgmt. LLC (2014) 224 Cal.App.4th 676, 688; Hoover v. American Income Life Ins. Co. (2012) 206 Cal.App.4th 1193, 1207-1208.) As a result, even though Moving Defendant has established that it does business in Arizona and Colorado, Lamarre’s declaration is legally insufficient to establish that Plaintiff’s employment contract involved interstate commerce. (See, Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1287-1288.)

It is noted that in both the opening and opposition briefs, the parties state that Plaintiff worked as a “driver” or “trash truck driver” for Defendant. [Motion, 7:7; Opp. Brief, 5:21.] But neither party discusses the dispositive issue of the FAA exemption from coverage for “contracts of employment of seamen, railroad employees, or any other class of workers engaged in foreign or interstate commerce.” (9 USC § 1.) This exemption has been held to apply to “transportation workers.” (Circuit City Stores, Inc. v. Adams (2001) 532 U.S. 105, 109, 121 S.Ct. 1302, 149 L.Ed.2d 234; Garrido v. Air Liquide Industrial U.S. LP (2015) 241 Cal.App.4th 833, 839-840.) It has also been held that this exemption applies even if the employment agreement says that it is subject to and governed by the FAA. (Garrido, supra, 241 Cal.App.4th at p. 839.)

However, even if the parties had raised this issue and Lamarre had attested to Plaintiff’s position as a driver or truck driver, this would not have been enough to establish FAA preemption without additional evidence regarding the nature of Moving Defendant’s business operations. In reply, Moving Defendant asserts in conclusory fashion that “the employment of Plaintiff by a multi-state recycling and waste management corporation has a sufficient ‘nexus to interstate commerce’ to bring the parties’ Mutual Arbitration Agreement within the broad reach of the FAA.” [Reply, 6:14-16.]

For instance, was Plaintiff a driver who drove across state lines or only drove intrastate? Did Moving Defendant transport product across state lines, or were the California, Arizona, and Colorado operations entirely separate and operated only intrastate? Absent evidence to establish that Moving Defendant’s business involved the channels of interstate commerce, the instrumentalities of interstate commerce and persons or things in interstate commerce, or activities having a substantial relation to interstate commerce, Moving Defendant has not met its burden of establishing the FAA applies here. (See, e.g., Betancourt v. Transportation Brokerage Specialists, Inc. (2021) 62 Cal.App.5th 552, 559; Muller v. Roy Miller Freight Lines, LLC (2019) 34 Cal.App.5th 1056, 1069; Nieto v. Fresno Beverage Co. Inc. (2019) 33 Cal.App.5th 274, 281-283.)

Accordingly, Moving Defendant has failed to meet its burden to show the FAA applies to the Agreement. Therefore, its arguments that the FAA preempts California statutes or case law lack merit.

Since Moving Defendant failed to establish that the FAA is applicable, the Court’s analysis must be guided by California law.

Unconscionability

Turning to the defense of unconscionability, Moving Defendant contends that the Agreement cannot be invalidated on this ground because it meets the requirements set forth in Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114. However, although Moving Defendant discusses the alleged “substantive” unconscionability of the Agreement, it fails to discuss the “procedural” element of the unconscionability analysis.

Unconscionability has both a “procedural” and a “substantive” element. (Armendariz v. Found. Health Psychcare Servs., Inc. (2000) 24 Cal. 4th 83, 114.).

“…procedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability….But they need not be present in the same degree….In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” [Emphasis original]. Armenddariz v. Foundation Health, Suprs, 24 cal. 4^th at page 114.

An analysis of procedural unconscionability “begins with an inquiry into whether the contract is one of adhesion.” (Armendariz, supra, 24 Cal.4th at p. 113.) An agreement imposed on an employee as a condition of employment, with no opportunity to negotiate, is typically an “adhesive” contract which may be procedurally unconscionable. (Navas v. Fresh Venture Foods, LLC (2022) 85 Cal.App.5th 626, 633, citing to Armendariz, supra, 24 Cal.4th at p. 115.) “The pertinent question … is whether circumstances of the contract’s formation create such oppression or surprise that closer scrutiny of its overall fairness is required.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.)

“ ‘ “ ‘Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.’”’ [Citations.]” (OTO, supra, 8 Cal.5th at p. 126.) “The circumstances relevant to establishing oppression include, but are not limited to (1) the amount of time the party is given to consider the proposed contract; (2) the amount and type of pressure exerted on the party to sign the proposed contract; (3) the length of the proposed contract and the length and complexity of the challenged provision; (4) the education and experience of the party; and (5) whether the party's review of the proposed contract was aided by an attorney.” (Id. at 126-127.)

“With respect to preemployment arbitration contracts, . . . ‘the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.’” (OTO, supra, 8 Cal.5^th (Armendariz, supra, 24 Cal.4th at p. 113.) An agreement imposed on an employee as a condition of employment, with no opportunity to negotiate, is typically an “adhesive” contract which may be procedurally unconscionable. (Navas v. Fresh Venture Foods, LLC (2022) 85 Cal.App.5th 626, 633, citing to Armendariz, supra, 24 Cal.4th at p. 115.) “The pertinent question … is whether circumstances of the contract’s formation create such oppression or surprise that closer scrutiny of its overall fairness is required.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 126.)

“With respect to preemployment arbitration contracts, . . . ‘the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.’” (OTO, supra, 8 Cal.5^th of respect for the parties’ mutual and voluntary agreement to resolve disputes by this alternative means. [Citation.] However, an inference of voluntary assent can be indulged only so far and must yield in the face of undisputed facts that undermine it. Where an employee is induced to sign an arbitration agreement through “sharp practices” and surprise [citation], the consent rationale carries less force. “[A]rbitration ‘is a matter of consent, not coercion.’” [Citations.] (OTO, supra, 8 Cal.5th at p. 129.)

Here, based on the facts set forth above, it is reasonable to conclude that Plaintiff did not know he was agreeing to arbitrate employment disputes. The Agreement is procedurally unconscionable.

As for the substantive unconscionability prong, it examines the fairness of a contract’s terms and determines whether they are “overly harsh.” (OTO, supra, 8 Cal.5th at p. 129.) “Unconscionable terms ‘ “impair the integrity of the bargaining process or otherwise contravene the public interest or public policy”’ or attempt to impermissibly alter fundamental legal duties. [Citation.]” (Ibid.) Under Armendariz, arbitration agreements must provide for: (1) a neutral arbitrator; (2) more than minimal discovery; (3) a written award; (4) all the types of relief that would otherwise be available in court; and (5) the requirement that the employer pays the arbitrator’s fees or expenses. (Armendariz, supra, 24 Cal.4th at p. 102.)

Here, the Agreement does not appear to be substantively unconscionable. The Agreement provides that any arbitration will be conducted by a neutral arbitrator selected by the parties, and it will be conducted in accordance with the JAMS rules and procedures. Copies of the JAMS rules were purportedly made available to applicants either by Moving Defendant’s Human Resources Department or through the JAMS website. [Lamarre Decl., Exh. A.] In this instance, however, it is not clear if Plaintiff was provided with the JAMS rules before he purportedly signed the Agreement.

The Agreement also provides that the parties may conduct discovery “to the same extent as it would be permitted in court.” [Lamarre Decl., Exh. A.] In addition, the Agreement states the arbitrator “shall have full authority to award all relief and remedies which would otherwise be available in court,” and requires the arbitrator to provide a written award. [Ibid.] Lastly, the Agreement states that Moving Defendant “shall pay the arbitrator’s fees and any JAMS administrative expenses.” [Ibid.]

Regarding the scope of the Agreement, it provides that both employer and employee disputes are to be submitted to arbitration. The Agreement covers disputes arising from unpaid wages or compensation, breach of contract, torts, violations of public policy, discrimination, harassment, retaliation, and other employment-related claims. In addition, the Agreement covers any claims the Moving Defendant may have against an employee, such as misappropriation of company property, disclosure of proprietary information or trade secrets, interference with contract, breach of contract, gross negligence, trade libel, or claims for alleged wrongful conduct or breach of loyalty. [Lamarre Decl., Exh. A.]

The Agreement also allows both Moving Defendant and the employee are also allowed to seek a preliminary injunction or other provisional remedies in court. [Lamarre Decl., Exh. A.] Plaintiff argues that this term is substantively unfair because it provides an exemption from arbitration for claims for relief that Moving Defendant is more likely to assert. However, Plaintiff’s argument has been rejected by the courts. In Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, the employee similarly asserted that the provision allowing the parties to seek preliminary injunctive relief was substantively unconscionable because the employer was more likely to use provisional judicial remedies to protect trade secrets. (Baltazar, supra, at pp. 1241-1242.) But, the California Supreme Court determined that even if it was “willing to accept for the sake of argument that employers are, in general, more likely than employees to seek provisional relief during the pendency of an arbitration,” the clause at issue “does no more than recite the procedural protections already secured by [Code of Civil Procedure] section 1281.8 [, subdivision] (b), which expressly permits parties to an arbitration to seek preliminary injunctive relief during the pendency of the arbitration.” (Id. at p. 1247.) As a result, the Court held that the arbitration provision did not place the employee plaintiff at “an unfair disadvantage” even if such remedies were more likely to be sought by the employer. (Id. at p. 1248.)

However, the substantive fairness of the Agreement in this litigation must be considered in light of its procedural unconscionability. “The prevailing view is that [procedural and substantive unconscionability] must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability.” (Armendariz, supra, 24 Cal.4th at p. 114.) “But they need not be present in the same degree.” (Id.) “Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the greater harshness or unreasonableness of the substantive terms themselves.” (Id.) “In other words, the more substantively oppressive the contract term, the less evidence of procedural unconscionability is required to come to the conclusion that the term is unenforceable, and vice versa.” (Id.)

Ultimately, the question is whether Plaintiff, through oppression and surprise, was coerced or misled into making an unfair bargain. (See, OTO, supra, 8 Cal.5th at p. 136.) By signing the Agreement, Plaintiff gave up his right to pursue civil litigation in exchange for a formal arbitration process that closely resembles civil litigation.

On a side note, Moving Defendant sought to proffer evidence with its reply brief, including a supplemental declaration from Lamarre, a declaration from its corporate recruiter, and a declaration from a forensic document examiner. (ROA 59, 65, 67.) These declarations primarily address the issue of whether Plaintiff executed the Agreement. However, they were disregarded here. “The general rule of motion practice, which applies here, is that new evidence is not permitted with reply papers …. ‘[T]he inclusion of additional evidentiary matter with the reply should only be allowed in the exceptional case …’ and if permitted, the other party should be given the opportunity to respond.” (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.) Although it is within the Court’s discretion to accept new evidence with the reply papers, the evidence proffered by Moving Defendant in reply easily could have, and should have, been provided with the moving papers.

RULING:

Defendant CR&R Inc.’s Motion to Compel Arbitration is GRANTED on the ground that, while the circumstances of the entry into the subject Arbitration Agreement was procedurally unconscionable, the Court cannot find that the Agreement was substantively unconscionable; and while the degree of required substantive unconscionability would be minimal in this case for a finding of overall unconscionability given the severity of procedural unconscionability, the total absence of substantive unconscionability bars the Court from making such a finding under Armendariz, supra, and OTO, supra.

Defendant’s Motion to Dismiss Class and Representative Claims is DENIED.

Defendant CR&R, Inc. shall give notice of this Court’s ruling.