Judge Randolph M. Hammock, Case Number: 23STCV13955, Date: 2024-01-31 Tentative Ruling

Plaintiff Jane Doe alleges she worked as a quality control person for Defendant Califia Farms, LLC, where she faced harassing sexual demands and abuse from a supervisor, Ismael Vieyra. This caused Plaintiff to suffer severe anxiety and depression, which necessitated work accommodations and a leave. Plaintiff alleges Defendant Califia Farms and her supervisor, Defendant Christina Vanworth, harassed, retaliated, and discriminated against her based on her disability and complaints against Vieyra, resulting in Plaintiff’s constructive termination.

This Court is unaware of any legal authority which requires a court to rule on evidentiary objections on a motion, except as to a motion for summary motion/adjudication (CCP § 437c (q)] or a special motion to strike (CCP § 425.16 (b)(2)); see also, Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-949.)

“Under the FAA, there is a strong policy favoring arbitration. [Citations.] ‘The overarching purpose of the FAA is to ensure the enforcement of arbitration agreements according to their terms ....’ [Citation.] Therefore, ‘[a]rbitration is a matter of consent ....’ [Citations.] [¶] ‘ “Although the FAA preempts any state law that stands as an obstacle to its objective of enforcing arbitration agreements according to their terms, ... we apply general California contract law to determine whether the parties formed a valid agreement to arbitrate their dispute.” ’ [Citations.]” (Barrera v. Apple Am. Grp. LLC (2023) 95 Cal. App. 5th 63, 76.) It is settled that “[u]nder both California and federal law, arbitration is strongly favored and any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration.” (Balandran v. Labor Ready, Inc. (2004) 124 Cal.App.4th 1522, 1527.)

California also has a strong public policy in favor of arbitration as an expeditious and cost-effective way of resolving disputes. “Even so, parties can only be compelled to arbitrate when they have agreed to do so.” (Avila v. S. California Specialty Care, Inc. (2018) 20 Cal. App. 5th 835, 843.) “The party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement.” (Id.) An arbitration agreement is a contractual agreement. “General contract law principles include that ‘[t]he basic goal of contract interpretation is to give effect to the parties’ mutual intent at the time of contracting. [Citations.] ... The words of a contract are to be understood in their ordinary and popular sense.” [Citations.] (Garcia v. Expert Staffing W., 73 Cal. App. 5th 408, 412–13.)

“[T]he petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence . . . .” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284). “In determining whether an arbitration agreement applies to a specific dispute, the court may examine only the agreement itself and the complaint filed by the party refusing arbitration [citation]. The court should attempt to give effect to the parties' intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.” (Weeks v. Crow (1980) 113 Cal.App.3d 350, 353). “Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration. The court should order them to arbitrate unless it is clear that the arbitration clause cannot be interpreted to cover the dispute.” (California Correctional Peace Officers Ass'n v. State (2006) 142 Cal.App.4th 198, 205).

“[A] party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. [Citation.] 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.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284). “If a court of competent jurisdiction, whether in this State or not, 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. . . .” (CCP § 1281.4.)

“Under California law, it is presumed the judge will decide arbitrability, unless there is clear and unmistakable evidence the parties intended the arbitrator to decide arbitrability.” (Nelson v. Dual Diagnosis Treatment Center (2022) 77 Cal.App.5th 643, 654.) “Notwithstanding a provision that clearly and unmistakably delegates arbitrability issues to the arbitrator, if a party is claiming that it never agreed to the arbitration clause at all — e.g., if it is claiming forgery or fraud in the factum – then the court must consider that claim.” (Trinity v. Life Insurance Co. of North America (2022) 78 Cal.App.5th 1111, 1122 [cleaned up]; accord Mendoza v. Trans Valley Transport, supra, 75 Cal.App.5th at 774 [“despite the existence of a broadly worded delegation clause such as that before us, courts have held that certain gateway issues are for a court to decide, including whether the parties entered into an agreement to arbitrate at all”].)

Here, Plaintiff argues that she does not recall signing the agreement to arbitrate, and therefore, that the signature on agreement is a forgery. Accordingly, it is for this court to determine the gateway issue of whether a valid agreement exists.

The FAA provides for enforcement of arbitration provisions in any contract “evidencing a transaction involving commerce.” (9 USC § 2.) The term “involving commerce” is functionally equivalent to “affecting commerce” and “signals an intent to exercise Congress’ commerce power to the full.” (Allied-Bruce Terminix Cos., Inc. v. Dobson (1995) 513 US 265, 277.) “The party asserting the FAA bears the burden to show it applies by presenting evidence establishing [that] the contract with the arbitration provision has a substantial relationship to interstate commerce . . . .” (Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238.)

Arguing the transaction here involved commerce, Defendants present evidence that Califia Farms is a “beverage manufacturer that markets, distributes, and sells products in multiple states throughout the country, and multiple countries around the world.” (Beas Decl. ¶ 4.) Defendants have therefore evidenced a transaction involving commerce.

Second, the Arbitration Agreement itself states that it “shall be governed by and shall be interpreted in accordance with the FAA.” (Beas Decl. ¶ 7, Exh. A, p. 6; see Davis v. Shiekh Shoes, LLC (2022) 84 Cal. App. 5th 956, 963 [finding the FAA applies “if it is so stated in the agreement.”].)

Defendants have the initial burden of producing “prima facie evidence of a written agreement to arbitrate the controversy.” (Gamboa v. Ne. Cmty. Clinic (2021) 72 Cal. App. 5th 158, 165.) “[I]t is not necessary to follow the normal procedures of document authentication.” (Condee v. Longwood Mgmt. Corp. (2001) 88 Cal. App. 4th 215, 218.)

Defendants submit the declaration and supplemental declaration [FN 1} from Califia Farms’ Senior Human Resources Manager, Noemi Beas, who attests to the following. (Beas Decl. ¶ 1.) Califia Farms utilizes the Human Resources Information System “Paycom.” (Id. ¶ 7.) To initially access Paycom, new employees receive an email link to Paycom’s Employee Self Service Portal. (Beas Supplemental Decl. ¶ 7.) To log into Paycom for the first time, Paycom creates a unique user ID and temporary password for each employee. (Id. ¶ 8.) An employee uses the unique idea, temporary password, and the last four digits of the employee’s social security number. (Id.) Employees are then prompted to change their temporary password. (Id.) For subsequent log-ins, employees will include a username and password and the last four digits of the employee’s social security number. (Id.) Human resources employees do not have access to employee passwords. (Id.)

Paycom allows employees to create an electronic “handwritten signature” that can be drawn with a mouse, stylus, or finger on touch-screen devices. (Beas Supp. Decl. ¶ 9.) Plaintiff created and signed her employment documents with a “handwritten” electronic signature. (Id. ¶ 13.) Beas states “it is common that an employee’s signature in Paycom does not look the same as a wet signature the employee might have on a physical document.” (Id. ¶ 9.)

The Paycom system distributes the Arbitration Agreement to all Califia Farms employees via email. (Beas Decl. ¶ 7.) Beas submits evidence that Plaintiff signed a “Mutual Arbitration Agreement” on March 12, 2019, using her “handwritten” electronic signature. (Id. ¶ 7, Exh. B; Suppl. Decl. ¶ 13.) Beas attests Plaintiff’s signature “could only have been placed on the Arbitration Agreement by a person who logged into Paycom using Plaintiff’s user ID, password and the last four digits of her social security number at the date and time the Change History and Document Management Audit Report identify.” (Beas Supp. Decl. ¶ 19.) She concludes that “[n]o Califia employee other than Plaintiff could have inserted Plaintiff’s signature on the Arbitration Agreement.” (Id. ¶ 19.)

This switches the burden to Plaintiff, who “bears the burden of producing evidence to challenge the authenticity of the agreement.” (Gamboa, supra, 72 Cal. App. 5th at 165.) Plaintiff can do this in “several ways,” including by “declar[ing] 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.” (Id.)

Plaintiff submits a declaration in support of her opposition. She attests she “do[es] not recall signing the arbitration agreement or affixing [her] electronic signature to it.” (Doe Decl. ¶ 2.) “Even if my recollection is not correct and I signed an arbitration agreement (which I do not recall doing),” Plaintiff continues, “I would not agree to arbitrate these terrible acts of rape, violence and other sexual and non- sexual assaults and batteries.” (Id. ¶ 4.) Later in her declaration, she states that she “specifically recall[s] not agreeing to sign the Employee Handbook,” partly because management would not give her enough time to review it. (Id. ¶ 3.)

Plaintiff attests she “was asked to sign falsified and untrue documents on multiple occasions by management, which [she] refused to do.” (Id.) She also “watched management push others to sign untrue and falsified documents at Califia Farms.” (Id.)

This places the final burden on Defendants to “establish with admissible evidence a valid arbitration agreement between the parties.” (Gamboa, supra, 72 Cal. App. 5th at 165.) In determining whether Plaintiff signed the agreement by a preponderance of the evidence, this court must necessarily sit as the trier of fact and resolve evidentiary conflicts. (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284).

First, the instant case distinguishable from Ruiz, a case relied on by Plaintiff. In Ruiz v. Moss Bros. Auto Grp. (2014) 232 Cal. App. 4th 836, 844, the issue was whether an electronic signature was the “act of” the employee. The employee did not recall signing the agreement. And the employer provided only a Declaration from the employer’s business manager “offer[ing] her unsupported assertion that [the employee] was the person who electronically signed the 2011 agreement.” (Id.) The court held that “[i]n the face of [the employee’s] failure to recall electronically signing the 2011 agreement”, and the employer’s failure to adequately authenticate the agreement, the electronic signature “was insufficient to support a finding that the electronic signature was, in fact, ‘the act of’ [the employee].” (Civ. Code, § 1633.9, subd. (a).) The court noted that authenticating an electronic document or signature is “not a difficult evidentiary burden to meet,” but that it was not met in that case. (Id. at 844.)

The facts here, however, are more in line with Espejo v. S. California Permanente Med. Grp. (2016) 246 Cal. App. 4th 1047, 1053. There, the court came to the opposite conclusion of Ruiz, finding the employer had met its burden “by attaching to their petition a copy of the purported arbitration agreement bearing Espejo's electronic signature.” (Id. at 1060 [emphasis added].) Unlike in Ruiz, the Espejo defendant “had sufficiently security precautions regarding transmission and use of an applicant's unique username and password, as well as the steps an applicant would have to take to place his or her name on the signature line of the employment agreement.” (Id. at 1062.)

Likewise, here Defendants have sufficiently described the “Paycom” electronic onboarding process. Defendant has also explained the security measures in place that suggests with reasonable certainty that only Plaintiff could have signed the agreement. Authenticating an electronic signature, after all, is “not a difficult evidentiary burden to meet.” (Ruiz, supra, 232 Cal. App. 4th at 844.)

The court gives little, if any, weight to Plaintiff’s contention that the signature appearing on the arbitration agreement does not match the one she provides with her declaration. Aside from the evidence being self-serving, it is entirely reasonable (perhaps even expected) that a signature written on an electronic device would look different than a wet signature. Such a difference comes with the difficulty of “writing” a name on a screen.

Ultimately, lacking is any firm denial that Plaintiff did not sign the Arbitration Agreement. This is particularly notable because Plaintiff can “specifically recall” not agreeing to sign the employee handbook yet cannot recall one way or the other whether she signed the Arbitration Agreement. (Doe Decl. ¶ 3.) This calls her recollection into question.

Based on a preponderance of the evidence and the totality of the circumstances, this court finds that Defendants have met their burden to “establish with admissible evidence a valid arbitration agreement between the parties.” (Gamboa, supra, 72 Cal. App. 5th at 165.)

Plaintiff does not contend she has any defenses to enforcement, such as waiver of the right to arbitrate or unconscionability. She does argue, however, that her claims “arising out of rape and violence” should not be arbitrated because they are not within the scope of arbitrable issues.

There is no blanket rule prohibiting the arbitration of tort claims involving alleged sexual misconduct. [FN 2} “Although the law favors contracts for arbitration of disputes between parties,’ there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.” (Victoria v. Superior Court (1985) 40 Cal.3d 734, 744, cleaned up.) When addressing the scope of an arbitration agreement, “[t]he court should attempt to give effect to the parties’ intentions, in light of the usual and ordinary meaning of the contractual language and the circumstances under which the agreement was made.” (RN Sol., Inc. v. Cath. Healthcare W. (2008) 165 Cal. App. 4th 1511, 1523.)

The Arbitration Agreement here applies to “any disputes, claims, or controversies (‘claims’) that either party may have against each other, including their current and former agents, owners, officers, directors, managers, or employees, which have already arisen, or which arise from the application for employment, the employment relationship between Employee and Emplover, or the termination thereof.” (Beas Decl. Exh. A, p. 5.) The Agreement expressly references covered claims as including, but not limited to, “past, present, and future claims of employment discrimination, harassment, retaliation…tort claims, equitable claims, and all statutory and common law claims under state, local or federal law, unless specifically excluded” elsewhere in the Agreement. (Id.)

Plaintiff alleges in her Complaint that the alleged acts occurred “mostly at work” with a work supervisor, Ismael Vieyra. (Compl. ¶¶ 4, 5.) Vieyra “used his supervisor status to sexually harass” Plaintiff. (Id. ¶ 6.) The sexual harassment was based on a “job-related quid pro quo.” (Id. ¶ 4.) The allegations are intertwined with and arise from Plaintiff’s employment relationship with Defendants. Because the Arbitration Agreement applies to tort claims arising out of the employment context, it is broad enough to cover the claims here. (See California Corr. Peace Officers Assn. v. State of California (2006) 142 Cal. App. 4th 198, 205 [“Doubts as to whether an arbitration clause applies to a particular dispute are to be resolved in favor of sending the parties to arbitration”].)

Finally, Defendant Vanworth has consented to arbitration and is a third-party beneficiary of the Arbitration Agreement. The Agreement applies to claims the parties have against each other, “including their current and former agents, owners, officers, directors, managers, or employees…” (Beas Decl., Exh. A., p. 5.) Plaintiff alleges that Defendant Vanworth is an employee of Defendant Califia Farms, LLC, and that each Defendant is the “agent” of the other. (Compl. ¶ 22.) Therefore, Defendant Vanworth may also arbitrate, and there is no risk of inconsistent results.

California has recognized the so-called Broughton-Cruz rule. The rule states that “‘[a]greements to arbitrate claims for public injunctive relief under the CLRA, the UCL, or the false advertising law are not enforceable in California.’ [Citation.] In other words, a plaintiff's claim for ‘public’ injunctive relief under the CLRA or the UCL must be determined in a judicial forum, not in arbitration.” (Clifford v. Quest Software Inc. (2019) 38 Cal.App.5th 745, 751.) “Importantly, the Broughton-Cruz rule distinguishes between public injunctive relief and private injunctive relief, and it only bars arbitration of claims for public injunctive relief. [Citations.] ‘[P]ublic injunctive relief under the UCL, the CLRA, and the false advertising law is relief that has ‘the primary purpose and effect of’ prohibiting unlawful acts that threaten future injury to the general public. [Citation.] Relief that has the primary purpose or effect of redressing or preventing injury to an individual plaintiff—or to a group of individuals similarly situated to the plaintiff—does not constitute public injunctive relief.’ [Citation.]” (Id.)

As argued by Defendant, however, several courts have concluded the FAA preempts the Broughton-Cruz restriction on arbitrability. (See, e.g., Ferguson v. Corinthian Colleges, Inc. (9th Cir. 2013) 733 F.3d 928, 930 [“we conclude that the Broughton-Cruz rule is preempted by the [FAA]”]; Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1136 [Broughton-Cruz rule “is in conflict with the FAA”]; see also AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 341 [FAA preempts any “state law [that] prohibits outright the arbitration of a particular type of claim”].)

The California Supreme Court has not addressed the issue, and in fact, declined the opportunity to do so. (See McGill, supra, 2 Cal.5th at 953, 954, 956 [after granting review of appellate court's finding that FAA preempted Broughton-Cruz, court determined Broughton-Cruz was “not at issue in this case” and expressly declined to address the preemption issue].)

Plaintiff’s complaint seeks public injunctive relief based on Defendants’ alleged wrongdoing, and restitution or relief requiring Defendants to disgorge the profits illegally and unfairly earned by Defendants as a result of such unfair business practices.” (Compl. ¶¶ 194, 196.) Where, as here, a “cause of action includes both arbitrable and inarbitrable claims, such as a request for restitution and a request for public injunctive relief, the trial court must sever the cause of action, order the arbitrable portion to arbitration, and stay the inarbitrable portion pending the completion of arbitration.” (Clifford v. Quest Software Inc. (2019) 38 Cal. App. 5th 745, 750.)

Thus, to the extent Plaintiff’s Fourteenth Cause of Action seeks public injunctive relief, that portion of the cause of action is severed and stayed pending completion of the arbitration. All other causes of action, including those portions of the Fourteenth Cause of Action where Plaintiff seeks restitution, are ordered to arbitration. (Cruz v. PacifiCare Health Sys., Inc. (2003) 30 Cal. 4th 303, 31 [actions for restitution “are fully arbitrable under the FAA”].)

FN 1 - As a general rule, new evidence may not be submitted in reply. But “a trial court may properly consider new evidence submitted with a reply brief ‘so long as the party opposing…has notice and an opportunity to respond to the new material.’” (Wall St. Network, Ltd. v. New York Times Co. (2008) 164 Cal. App. 4th 1171, 1183; Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1538-1538 [court can consider reply declarations that “fill[] gaps in the evidence created by the [plaintiff’s] opposition.” (Jay, supra, 218 Cal. App. 4th at 1538.) To the extent Plaintiff wishes to address the evidence submitted in the reply, she will have the opportunity to do so at the hearing.

FN 2- This court is aware of the existence of the “Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021.” However, the Act does not apply retroactively and is only applicable to a claim arising after the date of enactment. (See H.R. 4445.) Here, Plaintiff’s causes of action accrued by December of 2021 at the latest—which is before the Act’s enactment date of March 3, 2022. (Compl. ¶ 52.) Accordingly, the Act is inapplicable.