Judge Lynne M. Hobbs, Case Number: 24STCV21473, Date: 2024-12-18 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 24STCV21473, Date: 2024-12-18 Tentative Ruling

Case Number: 24STCV21473 Hearing Date: December 18, 2024 Dept: 61

BRADLEY BINGHAM vs EPT SPE, LLC, et al.

TENTATIVE

Defendant EPT SPE, LLC’s Motion to Compel Arbitration is GRANTED.

Moving party to provide notice.

DISCUSSION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[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.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendants Essex Property Trust, Inc. and EPT SPE, LLC (Defendants) move to compel the arbitration of Plaintiff Bradley Bingham’s (Plaintiff) claims based on two arbitration agreements, one executed electronically in February 2020, the other executed by the same means in January 2024. (Sullivan Decl. Exhs. L, M.) The latter agreement requires arbitration for “any employment-related claims or disputes that arise regarding your employment, including those associated with the termination of your employment.” (Sullivan Decl. Exh. M.)

Plaintiff in opposition argues that the agreement is unenforceable per the provisions of 9 U.S.C. § 402, which prohibits enforcement of predispute arbitration agreements for actions involving claims of sexual assault or harassment. (Opposition at pp. 4–5.) Plaintiff also argues that the arbitration agreements are not adequately authenticated. (Opposition at pp. 5–6.) Plaintiff finally argues that the agreements are unconscionable because they do not state the scope of discovery to be provided, and does not specifically guarantee a neutral arbitrator. (Opposition at pp. 6–9.)

Plaintiff lays no evidentiary foundation to challenge the arbitration agreement, and misapplies the law relating to authenticating electronic signatures. Plaintiff challenges the authenticity of his signature on the arbitration agreement on grounds that no foundation has been laid for it, but no such foundation is required until the plaintiff challenges its authenticity:

For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication. . . . The statute does not require the petitioner to introduce the agreement into evidence. A plain reading of the statute indicates that as a preliminary matter the court is only required to make a finding of the agreement's existence, not an evidentiary determination of its validity. (Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218–219.) Later cases have held that authentication may be required when a plaintiff challenging arbitration denies signing the agreement or states that he cannot recall doing so (Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 846.) But Plaintiff here presents no declaration supporting either grounds for contest. The sole challenge to the authenticity of the signature comes not from Plaintiff’s declaration, but from the averment of Plaintiff’s counsel made in his opposition memorandum, which are unsworn, without foundation, and evidently based on hearsay. (Opposition at pp. 5–6.)*

Yet even if this challenge is deemed sufficient to place Plaintiff’s signature at issue, Defendants have provided more than sufficient material to authenticate it. The agreement is supported by the declaration of William Cane, Defendants’ Director of Human Resources Information Systems (HRIS), who testifies to Defendants’ policy of requiring associates, including Plaintiff, to sign documents electronically through Workday, Defendants’ HRIS system. (Caine Decl. ¶ 5.) Associates sign documents through this system using their private email address and a password created by them, which Defendants do not have access to. (Caine Decl. ¶ 5.) For the 2024 agreement, associates were directed to sign the documents via email, and were required to login using these credentials and multi-factor authentication. (Caine Decl. ¶¶ 18–22.)** It is by this process that Plaintiff’s signature appears on the 2024 agreement. (Sullivan Decl. ¶ 5, Exh. M.) This testimony supports the conclusion that only Plaintiff could have electronically signed the document at the time indicated. (See Ruiz, supra, 232 Cal.App.4th at p. 844.) Plaintiff’s opposition makes no mention of this evidence.

Plaintiff’s arguments as to unconscionability also fail, because Plaintiff identifies no substantively unconscionable aspects of the agreement. “Unconscionability requires a showing of both procedural unconscionability and substantive unconscionability.” (Ajamian v. CantorCO2e, L.P. (2012) 203 Cal.App.4th 771, 795.) “The oppression that creates procedural unconscionability arises from an inequality of bargaining power that results in no real negotiation and an absence of meaningful choice.” (Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1347–1348.) “Substantive unconscionability is not susceptible of precise definition. It appears the various descriptions—unduly oppressive, overly harsh, so one-sided as to shock the conscience, and unreasonably favorable to the more powerful party—all reflect the same standard. Substantive unconscionability is not concerned with a simple old-fashioned bad bargain.” (Id. at p. 1349, citations omitted.)

Plaintiff’s arguments as to substantive unconscionability do not take issue with any express terms of the agreement, but rather objects to the absence of any provision specifying discovery procedures or the neutrality of the arbitrator. (Opposition at pp. 8–9.) But the absence of discovery provisions is no basis for invalidating the agreement: “We . . . infer that when parties agree to arbitrate statutory claims, they also implicitly agree, absent express language to the contrary, to such procedures as are necessary to vindicate that claim.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 106.) And Plaintiff’s contention that the agreement does not provide for neutral arbitrators is simply wrong. (Sullivan Decl. Exh. M, §§ 2, 3.)

This leaves the arguments arising from 9 U.S.C. § 402, which invalidates arbitration agreements applicable to certain harassment claims. Defendants in their motion argue that application of the statute is inapposite, because the statute applies only to “predispute” arbitration agreements, while Plaintiff alleges he complained of harassment from the beginning of his employment in March 2020, and suffered retaliation for same throughout — i.e. before he signed the January 2024 arbitration agreement. (Motion at pp. 16–17.)

The statute prevents the enforcement of arbitration agreements for a “sexual harassment dispute,” and further states that “no predispute arbitration agreement . . . shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the . . . sexual harassment dispute.” (9 U.S.C. § 402, subd. (a).) The law thus invalidates “predispute” arbitration agreements, with “dispute” interpreted to mean the following:

We conclude the date that a dispute has arisen for purposes of the Act is a fact-specific inquiry in each case, but a dispute does not arise solely from the alleged sexual conduct. A dispute arises when one party asserts a right, claim, or demand, and the other side expresses disagreement or takes an adversarial posture. (Famuyide, supra, at *3.) In other words, “[a] dispute cannot arise until both sides have expressed their disagreement, either through words or actions.” (Id. at *8.) Until there is a conflict or disagreement, there is nothing to resolve in litigation. (Ibid.) (Kader v. Southern California Medical Center, Inc. (2024) 99 Cal.App.5th 214, 222–223.)

Defendant relies on allegations in the Complaint which state that Plaintiff suffered harassment “from the onset” of his employment in March 2020 (Complaint ¶ 15a), that he “assert[ed] his legal rights” and “complain[ed] about and/or protest[ed] against the . . . harassment” during the same period (Complaint ¶ 109), and that this same “from the outset” harassing conduct formed the retaliation that he suffered for raising his complaints. (Complaint ¶ 50a.) Defendant thus argues that the Complaint discloses that Plaintiff was continually harassed, continually complaining about harassment, and continually suffering retaliation for the complaints, from the onset of and continuing throughout his employment, meaning that the 2024 arbitration agreement is a post-dispute agreement, not a pre-dispute agreement subject to 9 U.S.C. § 402.

This is a fair reading of the Complaint, and Plaintiff in opposition does not address the argument. Instead, Plaintiff offers an entirely immaterial discussion about the date his claim accrued in relation to the statute’s going into effect, which is not an issue raised in Defendants’ motion. (Opposition at pp. 4–5.) It is thus unclear whether the dispute forming the basis for this litigation pre-dated the arbitration agreement, as implied by the Complaint, or if the allegations implying this conclusion are the results of clumsily drafted pleadings and the insertion of the same block quoted allegations into different causes of action. In any case, this inference is entirely the product of Plaintiff’s ill-drafted complaint and opposition. In the absence of Plaintiff’s proffer of evidence that he did not complain of harassment or suffer retaliation thereto prior to the January 2024 arbitration agreement, it is proper to take the Complaint at its word and deem the agreement a post-dispute agreement to which 9 U.S.C § 402 does not apply.

The motion is therefore GRANTED.

* The only evidence offered to support Plaintiff’s opposition is the declaration of his counsel, Aaron Akhavan, which consists entirely of legal argument or of testimony to the underlying facts of Plaintiff’s employment, for which Akhavan lays no foundation in personal knowledge. Defendants’ objections to this declaration are SUSTAINED.

** Plaintiff’s objections to this declaration are OVERRULED.