Judge: Peter A. Hernandez, Case: 24STCV22549, Date: 2025-02-27 Tentative Ruling
Case Number: 24STCV22549 Hearing Date: February 27, 2025 Dept: 34
Defendants Uber Technologies, Inc., Rasier, LLC, and
Rasier-CA, LLC’s Motion to Compel Arbitration and Stay
Proceedings is GRANTED.
Background
On
September 3, 2024, Plaintiffs Choonsik Kim and Hyunah Oh (“Plaintiffs”) filed a
complaint against Defendants Uber Technologies, Inc., Rasier, LLC, Rasier-CA,
LLC, Emile Muchtar, and Kilian Paul (“Defendants”) arising from automobile
accident that occurred on September 11, 2022, alleging causes of action for:
1. General
Negligence;
2. Motor
Vehicle Negligence; and
3. Negligence.
On October 18, 2024, Defendants Uber
Technologies, Inc., Rasier, LLC, and Rasier-CA, LLC filed an answer to
Plaintiffs’ complaint.
On October 25, 2024, Plaintiffs filed
Amendments to the Complaint, naming Doe 1 as Kilian Paul and Doe 2 as Paul
Kilian.
On December 3, 2024, the court found
cases 24STCV22549 and 24STCV19965 related, assigning 24STCV19965 as the lead
case.
On December 11, 2024, Defendant Emile Muchtar
filed an answer to Plaintiffs’ complaint.
On January 24, 2025, Defendants Uber
Technologies, Inc., Rasier, LLC, and Rasier-CA, LLC (“Moving Defendants”) filed
this Motion to Compel Arbitration. On February 13, 2025, Plaintiffs filed an
opposition. On February 21, 2025, Moving Defendants filed a reply.
Legal Standard
“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.” (Code Civ. Proc., § 1281.2,
subds. (a) and (b).)
The party seeking to compel arbitration bears the burden of proving the
existence of a valid arbitration agreement by the preponderance of the
evidence. (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144
Cal.App.4th 754, 761.) The burden then shifts to the opposing party to
prove by a preponderance of the evidence a defense to enforcement (e.g., fraud,
unconscionability, etc.) (Ibid.) “In these summary proceedings, the
trial court sits as a trier of fact, weighing all the affidavits, declarations,
and other documentary evidence, as well as oral testimony received at the
court’s discretion, to reach a final determination.” (Engalla v. Permanente
Medical Group, Inc. (1997) 15 Cal.4th 951, 972.)
“If a court of competent jurisdiction. . . has ordered arbitration of a
controversy which is an issue involved in an action or proceeding pending
before a court of this State, 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 an arbitration is had in accordance with the order
to arbitrate or until such earlier time as the court specifies.” (Code Civ.
Proc., § 1281.4).
Discussion
Moving Defendants move
to compel arbitration of Plaintiffs’ claims and staying all further judicial
proceedings in this action pending completion of arbitration.
Moving Defendants argue that Plaintiff
Choonsik Kim (“Kim”) entered into an arbitration agreement by consenting to Uber’s
Terms of Use on August 27, 2022. (Motion, at pp. 8-10.) Chenshan Yu, a data
scientist employed by Uber, testifies that all Uber users must register for an
account and agree to Uber’s Terms of Use to use the application. (Yu Decl., ¶ 6.)Yu
located records associated with Kim’s email address and unique identifying
number determining that Kim registered for an Uber account on January 15, 2015.
(Id., ¶ 8, Exh. A.) In 2022, Kim was presented with an in-app pop-up
screen stating that Uber updated its Terms of Use. (Id., ¶ 9-13; Exhs.
A-C.) The message included a hyperlink to the Terms of Use published on Uber’s
website, as well as a check box next to the words “By checking this box, I have
reviewed and agreed to the Terms of Use and acknowledged the Privacy Notice.” (Ibid.)
Uber’s records show that Kim clicked the check box and tapped the “Confirm”
button agreeing to Uber’s updated Terms of Use on August 27, 2022. (Id.,
¶12, Exh. A.)
Moving Defendants provides evidence of the arbitration provisions and Kim’s
acceptance of the 2022 updated Terms of Use. (Id., Exhs. A, C.) The
arbitration agreement provides as follows:
“By agreeing to the Terms, you agree that you are required to resolve any
claim that you may have against Uber on an individual basis in arbitration as
set forth in this Arbitration Agreement, and not as a class, collective,
coordinated, consolidated, mass and/or representative action. This Arbitration
Agreement will preclude you from bringing any class, collective, coordinated,
consolidated, mass and/or representative action against Uber, and also preclude
you from participating in or recovering relief in any current or future class,
collective, coordinated, consolidated, mass and/or representative action
brought against Uber by someone else—except as provided below in Section
2(a)(3)(c). Thus, the parties agree that the Arbitrator shall not conduct any
form of class, collective, coordinated, consolidated, mass and/or
representative arbitration, nor join, coordinate, or consolidate claims of
multiple individuals against Uber in a single proceeding—except as provided
below in Section 2(a)(3)(c). For the avoidance of doubt, except as provided
below in Section 2(a)(3)(c), this Arbitration Agreement precludes you from
bringing or participating in any kind of class, collective, coordinated,
consolidated, mass and/or representative or other kind of group, multi-plaintiff
or joint action against Uber, other than participating in a classwide,
collective, coordinated, consolidated, mass and/or representative settlement
of claims.
(a) Agreement to Binding Arbitration Between You and Uber.
(1) Covered Disputes: Except as expressly provided below in Section 2(b),
you and Uber agree that any dispute, claim, or controversy in any way arising
out of or relating to (i) these Terms and prior versions of these Terms, or the
existence, breach, termination, enforcement, interpretation, scope, waiver, or
validity thereof; (ii) your access to or use of the Services at any time; (iii)
incidents or accidents resulting in personal injury to you or anyone else that
you allege occurred in connection with your use of the Services (including, but
not limited to, your use of the Uber Marketplace Platform or the driver version
of the Uber App), regardless whether the dispute, claim, or controversy
occurred or accrued before or after the date you agreed to the Terms, and
regardless whether you allege that the personal injury was experienced by you
or anyone else; and (iv) your relationship with Uber, will be settled by
binding individual arbitration between you and Uber, and not in a court of law.
This Arbitration Agreement survives after your relationship with
Uber ends.”
(Yu Decl., Exh. C.)
The arbitration
agreement also provides that “the Federal Arbitration Act, 9 U.S.C § 1 et seq.
(“FAA”), will govern its interpretation and enforcement and proceedings
pursuant thereto.”(Yu Decl., Exh. C.) The court also notes that Plaintiffs do
not dispute that the FAA applies as expressly stated in Uber’s Terms of Use. As
such, the Federal Arbitration Act governs this motion to compel
arbitration. (Victrola 89, LLC v. Jamon Properties 8 LLC (2020) 46
Cal.App.5th 337, 346 [finding the FAA governs a motion to compel arbitration
when an agreement provides its ‘enforcement’ shall be governed by the
FAA].) Therefore, the 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., section 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].)
In opposition,
Plaintiffs argue that Kim registered for an Uber account on January 15, 2015, while
in Hangzhou, China, not the United States, believing that Kim agreed to Uber’s
Terms and Conditions for China. (Opp., at p. 8; Kim Decl., ¶ 6.) Plaintiffs
contend that before Kim’s trip to the United States, Kim re-downloaded the Uber
application in South Korea, where Plaintiffs reside, on July 31, 2022. (Opp.,
at p. 9; Kim Decl., ¶ 8.) As such, Plaintiffs argue that Kim may have agreed to
Uber’s Terms of Use for South Korea. (Opp., at p. 9.)
The court finds that a
valid arbitration agreement exists between Moving Defendants and Kim. Although
Kim may have registered and downloaded Uber’s application outside of the United
States, Moving Defendants provide sufficient evidence to show that Kim accepted
Uber's Terms of Use in the United States on August 27, 2022, which included the
terms described above. (Yu Decl., Exh. A.) Plaintiffs do not dispute that Kim
confirmed his acceptance of such terms or provide evidence to the contrary.
Moreover, the agreement also covers the subject dispute as this action arose
from Plaintiffs’ use of the Uber platform while in the United States’s
following Kim’s acceptance of Uber’s 2022 Terms of Use.
As to Plaintiff Hyunah
Oh (“Oh”), Moving Defendants argue that Oh is bound by Kim’s acceptance of
Uber’s Terms of Use as it is established that non-signatories to a contract may
be compelled to arbitrate. (Motion, at p. 11.)
As an initial matter, even when the Federal Arbitration Act (“FAA”)
applies, state law governs whether a non-signatory may invoke an agreement to
arbitrate. (Thomas v. Westlake (2012) 204 Cal.App.4th 605, 614, fn. 7
(citing Arthur Andersen LLP v. Carlisle (2009) 556 U.S. 624, 630–632; Bank
of America v. UMB Financial Services, Inc. (8th Cir.2010) 618 F.3d 906,
912).)
The general rule is that only a party to an arbitration agreement is
bound by it or may enforce it. (JSM Tuscany, LLC v. Superior Court
(2011) 193 Cal.App.4th 1222, 1236; Thomas, supra, 204 Cal.App.4th at 613
(citing Code Civ. Proc., § 1281.2; Jones v. Jacobson (2011) 195
Cal.App.4th 1, 17; Westra v. Marcus & Millichap Real Estate Investment
Brokerage Co., Inc. (2005) 129 Cal.App.4th 759, 763).)
“There are, however, ‘exceptions to the general rule that a nonsignatory
... cannot invoke an agreement to arbitrate, without being a party to the
arbitration agreement.’” (Thomas, supra, 204 Cal.App.4th at 614
(quoting Westra, supra, 129 Cal.App.4th at 765).)
“Under California law, a nonsignatory can be compelled to arbitrate under
two sets of circumstances: (1) where the nonsignatory is a third party
beneficiary of the contract containing the arbitration agreement; and 2) where
‘a preexisting relationship existed between the nonsignatory and one of the
parties to the arbitration agreement, making it equitable to compel the
nonsignatory to also be bound to arbitrate his or her claim.’” (Crowley
Maritime Corp. v. Boston Old Colony Ins. Co. (2008) 158 Cal.App.4th 1061,
1069–1070 (quoting County of Contra Costa v. Kaiser Foundation Health Plan,
Inc. (1996) 47 Cal.App.4th 237, 242 [Contra Costa]); see Jones, supra,
195 Cal.App.4th at 18 (quoting Nguyen v. Tran (2007) 157 Cal.App.4th
1032, 1036–1037) (internal citations omitted) [“‘Exceptions in which an
arbitration agreement may be enforced by or against nonsignatories include
where a nonsignatory is a third party beneficiary of the agreement and when a
nonsignatory and one of the parties to the agreement have a preexisting agency
relationship that makes it equitable to impose the duty to arbitrate on either
of them.’”].)
Moving Defendants argue that Oh was a third-party beneficiary of the
arbitration agreement between Kim and Moving Defendants. (Motion, at p. 12.) Moving
Defendants contend that Oh’s claims arise directly from the use of Uber’s
services requested by Kim. (Ibid.) As such, Moving Defendants argue that
Oh received a benefit by accepting the Uber ride receiving the same services as
Kim pursuant to the 2022 Terms of Use. (Ibid.) Moving Defendants also
contend that principles of estoppel support compelling arbitration against Oh.
(Ibid.) Moving Defendants argue that Oh’s claims arise solely from the
use of Uber’s services requested through Kim’s application which resulted in
the underlying car accident subject to the arbitration provisions. (Id.,
at p. 13.)
In opposition, Plaintiffs argue that arbitration should be denied as to
Oh as all parties agree that Oh was not a signatory to the arbitration
agreement. (Opp., at p. 21.)
The court finds that Oh was a third-party beneficiary of Kim’s use of the
Uber platform to request the ride involved in this action. Additionally, the
arbitration agreement at issue provides that “[The] Arbitration Agreement shall
be binding upon, and shall include any claims brought by or against any third
parties, including but not limited to your spouses, heirs, third-party
beneficiaries and assigns, where their underlying claims arise out of or relate
to your use of the Services. To the extent that any third-party beneficiary to
this agreement brings claims against the Parties, those claims shall also be
subject to this Arbitration Agreement.” (Yu Decl., Exh. C.) As such,
Moving Defendants may enforce the arbitration agreement as to Oh.
In sum, the court concludes that a valid arbitration agreement exists
between Kim and Moving Defendants; the claims involved in this action are
covered by such arbitration agreement; that the FAA controls; and Oh is subject
to the arbitration agreement. As such, the court grants Moving Defendants
motion. Plaintiff’s additional arguments regarding the arbitration agreement are
not subject to this court’s adjudication under the FAA.
Lastly, if a party applies to a court “for an
order to arbitrate a controversy which is an issue involved in an action or
proceeding pending before a court of this State and such application is
undetermined, 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.)
Because the court has found that arbitration is warranted in this matter,
the court also stays the proceedings during the pendency of the arbitration
process.
Conclusion
Defendants Uber Technologies, Inc.,
Rasier, LLC, and Rasier-CA, LLC’s Motion to Compel Arbitration and Stay
Proceedings is GRANTED.