Judge Michelle C. Kim, Case Number: 22STCV26112, Date: 2023-05-24 Tentative Ruling

On April 9, 2021, Plaintiff Sonya Smith (“Plaintiff”) was allegedly involved in an automobile accident. Plaintiff alleges she was riding as a passenger in the vehicle of Defendant Norman Thomas at the time, the latter of whom was allegedly operating the vehicle on behalf of Defendant Lyft, Inc. (“Lyft”). Defendant Dejon Daniels was another driver involved in the accident.

Plaintiff filed this lawsuit on August 12, 2022, alleging causes of action against Defendant Thomas, Lyft, and Daniels for Motor Vehicle and General Negligence. Lyft filed the instant petition to compel arbitration on April 3, 2023 based on an agreement Plaintiff purportedly executed with Lyft to use Lyft’s rideshare services via a software application. Lyft argues that the agreement contains an arbitration clause requiring mandatory arbitration of all disputes between Plaintiff and Lyft, including Plaintiff’s claims in this action. Plaintiff has opposed the petition and Lyft has replied. Defendants Thomas and Daniels have neither opposed the motion nor appeared in the action as of yet.

The Court notes that Lyft submitted an additional declaration in its reply. Generally, new evidence is not permitted on reply unless it fills in gaps in the evidence created by the opposing party’s opposition and is not raising new substantive issues for the first time; otherwise, a further hearing would be required to permit the opposing party to respond. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.) The Court notes that Plaintiff has not objected to this evidence either. Nevertheless, the Court declines to consider such evidence as the Court does not rely on it in reaching its decision here.

The Court further notes that Plaintiff’s opposition is more than ten pages long but fails to include a table of contents and table of authorities. (CRC Rule 3.1113(f).) The Court exercises its discretion to still consider Plaintiff’s opposition, but admonishes Plaintiff and Plaintiff’s counsel to comply with the California Rules of Court going forward.

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿(Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.) A party moving to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-357.)

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” (Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts involving interstate commerce. (9 U.S.C. § 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

Lyft states that it attempted to meet and confer with Plaintiff before bringing the instant petition to compel arbitration. (MacLeod Decl., ¶¶ 2-5, Ex. A.) Lyft further states that Plaintiff declined to stipulate to sending this matter to arbitration. (MacLeod Decl., ¶ 5.)

As a preliminary matter, the Court finds that the enforceability of the Arbitration Agreement (defined below), falls under the California Arbitration Act, i.e., Code of Civil Procedure section 1281.2, et seq. While the Arbitration Agreement provides that it is governed by the Federal Arbitration Act (“FAA”), the procedural provisions of the FAA, i.e., 9 U.S.C. sections 3, 4, 10, and 11, must be expressly incorporated into the terms of the Arbitration Agreement to be enforceable under the FAA. Otherwise, the California Arbitration Act applies as the default procedural rules. (Victrola 89, LLC v. Jaman Properties 8, LLC (2020) 46 Cal.App.5th 337, 345.) It also follows then that the reference to Delaware law under the Arbitration Agreement is insufficient to invoke the alternative procedural provisions of Delaware arbitration laws since it does not expressly incorporate the procedural rules of Delaware arbitration law. (See Id.; Coombs Decl., Ex. 2, ¶ 17; Ex. 3, ¶ 17; Ex. 5, ¶ 17.)

The initial burden of proving the existence of an arbitration agreement falls on Lyft. Lyft has presented various iterations of its Terms of Service throughout the time Plaintiff has purportedly used Lyft’s rideshare services. (Coombs Decl., Exs. 2-5.) The Terms of Service contain mandatory binding arbitration language. (Coombs Decl., Ex. 2, ¶ 17; Ex. 3, ¶ 17; Ex. 5, ¶ 17.) Lyft has also presented evidence showing that Plaintiff has accepted these Terms of Service. (Coombs Decl., Ex. 1.) The Court finds that Lyft has met this initial burden of proving the existence of an arbitration agreement (the “Arbitration Agreement”). Accordingly, the burden now shifts to Plaintiff to challenge the validity of the Arbitration Agreement.

Plaintiff contends she does not recall signing the Arbitration Agreement and did not click any boxes accepting the Terms of Service. (Smith Decl., ¶ 5.) Under Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, this is sufficient to challenge the authentication of the Arbitration Agreement. “If the moving party meets its initial prima facie burden and the opposing party disputes the agreement, then in the second step, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement. [Citation.] The opposing party can do this in several ways. For example, the opposing party may testify under oath or declare 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. [Citations].” (Id. at pp. 165-66.) The burden now shifts back to Lyft to prove its validity by admissible evidence.

The Court finds that the evidence Lyft has submitted is sufficient to establish the validity of the Arbitration Agreement by a preponderance of the evidence. Lyft has established that Plaintiff signed the Terms of Service containing the Arbitration Agreement on at least six separate occasions. (Coombs Decl., Ex. 1.) Not being able to recall signing an agreement on one occasion is perhaps understandable, but six separate occasions leads this Court to the conclusion that Plaintiff either knew or should have known of the Arbitration Agreement. (Desert Outdoor Advertising v. Superior Court (2011) 196 Cal.App.4th 866, 872 [“A cardinal rule of contract law is that a party's failure to read a contract, or to carefully read a contract, before signing it is no defense to the contract's enforcement.”].)

Lyft must then show that the terms of the Arbitration Agreement cover the claims in question. The terms of the arbitration provision from each iteration of Lyft’s Terms of Service provide that it governs any dispute between Lyft and its users. (Coombs Decl., Ex. 2, ¶ 17; Ex. 3, ¶ 17; Ex. 5, ¶ 17.) The scope of this provision is sufficiently broad to encompass Plaintiff’s claims against Lyft in this action. The Court finds that Lyft has also established this burden.

Plaintiff does not necessarily dispute that the Arbitration Agreement governs the claims at issue, but does contend that it does not cover the dispute as to Defendants Thomas and Daniels because they did not sign the Arbitration Agreement. While that is technically true, this does not prohibit the Court from sending this matter to arbitration; in fact, Thomas and Daniels might be able to join in the arbitration of this dispute under the doctrine of equitable estoppel, which provides that a nonsignatory defendant to an arbitration agreement may move to compel a signatory plaintiff to arbitration where the arbitration agreement and the subject of the dispute are intimately founded in and intertwined with the underlying contractual obligations. (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1237.)

Additionally, Plaintiff’s contention that Code of Civil Procedure section 1281.2 prohibits arbitration where third parties are involved is without merit. The Court has the discretion under that code provision to send a matter to arbitration while staying the litigation as to the remaining parties. (CCP § 1281.2(d).)

Therefore, the Court finds that Plaintiff’s claims are covered by the Arbitration Agreement.

“[P]rocedural 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 v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102 (“Armendariz”).) The courts invoke a sliding scale 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, i.e., 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., at p. 114.) Plaintiff bears the burden of proving that the provision at issue is both procedurally and substantively unconscionable.

“Procedural unconscionability focuses on the elements of oppression and surprise. [Citations] ‘Oppression arises from an inequality of bargaining power which results in no real negotiation and an absence of meaningful choice … Surprise involves the extent to which the terms of the bargain are hidden in a ‘prolix printed form’ drafted by a party in a superior bargaining position.’ [Citations]” (Roman v. Superior Court (2009) 172 Cal.App.4th 1462, 1469.)

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create ‘overly harsh’ or ‘‘one-sided’ results’ [Citations] that is, whether contractual provisions reallocate risks in an objectively unreasonable or unexpected manner. [Citation] Substantive unconscionability ‘may take various forms,’ but typically is found in the employment context when the arbitration agreement is ‘one-sided’ in favor of the employer without sufficient justification, for example, when ‘the employee’s claims against the employer, but not the employer’s claims against the employee, are subject to arbitration.’ [Citations]” (Roman, supra, 172 Cal.App.4th at pp. 1469-1470.)

Here, the Court finds that Plaintiff’s arguments of unconscionability are conclusory and not supported by any evidence in the record. Plaintiff does not cite to any evidence to support this contention. Therefore, the Court rejects Plaintiff’s arguments on this point.

Plaintiff’s contention that other cases found no enforceable arbitration agreement in a software application is unpersuasive. Plaintiff cites to a case from the First Circuit of the Federal Court of Appeals, i.e., Cullinane v. Uber Tech. (1st Cir. 2018) 893 F.3d 53, which is not binding on California courts. (People v. Brooks (2017) 3 Cal.5th 1, 91.) The other case Plaintiff cited, Ramos v. Uber Tech. (2018) 77 N.Y.S. 3d 296, is from New York state court, which is also not binding on California courts. (People v. Lopez (2019) 8 Cal.5th 353, 379.)

As noted above, Code of Civil Procedure section 1281.2(d) provides that the Court may stay litigation pending arbitration. (CCP § 1281.2(d).) The Court further notes that Defendants Thomas and Daniels have not yet appeared in this action, so there is no risk of inconsistent rulings here at the moment. Nevertheless, should they become parties to this action later, that could create the risk of inconsistent rulings. Accordingly, the Court will stay this action pending arbitration between Lyft and Plaintiff.

The Court GRANTS Lyft’s petition to compel arbitration and stay proceedings pending arbitration.

· Parties are encouraged to meet and confer after reading this tentative ruling to see if they can reach an agreement.

· If a party intends to submit on this tentative ruling, the party must send an email to the court at sscdept31@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 without leave.

Hon. Michelle C. Kim

Judge of the Superior Court