Judge: Serena R. Murillo, Case: 21STCV34066, Date: 2023-01-09 Tentative Ruling
Case Number: 21STCV34066 Hearing Date: January 9, 2023 Dept: 29
TENTATIVE
Defendant Uber Technologies, Inc., Rasier, LLC’s Motion to Compel
Arbitration is GRANTED. The proceedings of this action are stayed pending the outcome
of the parties’ arbitration.
Legal Standard
“A written agreement to submit to arbitration an existing
controversy or a controversy thereafter arising is valid, enforceable and
irrevocable, save upon such grounds as exist for the revocation of any
contract.” (Code Civ. Proc., § 1281.) “On petition of a party to an
arbitration agreement alleging the existence of a written agreement to
arbitrate a controversy and that a party thereto refuses to arbitrate such
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 the
revocation of the agreement.” (Code Civ. Proc., § 1281.2.)
In ruling on a motion to compel arbitration, “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.” (Peng v. First Republic
Bank (2013) 219 Cal.App.4th 1462, 1468.) The court’s involvement is
limited to “determining (1) whether a valid agreement to arbitrate exists and,
if it does, (2) whether the agreement encompasses the dispute at issue.”
(See Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955.)
“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 Hosp. v. Blue Cross of Cal.
(2000) 83 Cal.App.4th 677, 686.)
“The party seeking arbitration bears the burden of proving the
existence of an arbitration agreement by a preponderance of the evidence, and
the party opposing arbitration bears the burden of proving by a preponderance
of the evidence any defense, such as unconscionability.” (Pinnacle
Museum Tower Assn. v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223,
236.)
The Federal Arbitration Act (FAA) generally
confines the court’s analysis to two issues: (1) whether the
arbitration agreement is valid and enforceable, and (2) whether it
encompasses the dispute at issue. (Chiron Corp. v. Ortho Diagnostic
Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130.)
Discussion
Existence of Valid Written Agreement to Arbitrate
Defendant moves to compel Plaintiff to arbitrate her claims, arguing
non-party Omar Mesina (Account Holder) entered into a valid and enforceable arbitration
agreement.
On or about February 26, 2022 at 6:23
p.m. UTC (which converts to February 26, 2022 at 10:23 a.m. PST), Account
Holder was presented with an in-app blocking pop-up screen in the Rider App
notifying him that Uber had updated its Terms of Use. (Buoscio Decl. ¶ 7-8
& Ex. A.) The in-app blocking pop-up screen had a header in large type
which stated “We’ve updated our terms.” (Id. at ¶ 7 & Ex. A.) It
also stated in large type, “We encourage you to read our Updated Terms in full”
and under that message had the phrases “Terms of Use” and “Privacy Notice,”
which were displayed underlined and in bright blue text, all of which set the
text apart from other text on the screen and indicated a hyperlink. (Ibid.)
When a user clicked either hyperlink, the Terms of Use or Privacy Notice,
respectively, were displayed. (Id. at ¶ 7.) The in-app blocking pop-up
screen additionally had a clickbox which a user could select and next to the
clickbox it expressly stated that: “By checking the box, I have reviewed and
agreed to the Terms of Use and acknowledge the Privacy Notice.” (Id. ¶ 9
& Ex. A.) Account Holder expressly consented to the December 2021 Terms on
February 26, 2022 at 6:23 p.m. UTC (which converts to February 26, 2022 at
10:23 a.m. PST) by clicking the checkbox. (Id. at ¶ 7-9 & Ex. B.)
The
relevant language of the arbitration provision contained in Defendants’ Terms
of Use states:
Except as expressly provided below in Section
2(b) [relating to small claims, sexual assault/harassment claims and
intellectual property claims], 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 that you allege occurred in connection with your use of the
Services, whether the dispute, claim or controversy occurred or accrued
before or after the date you agreed to the Terms, or (iv) your relationship
with Uber, will be settled by binding arbitration between you and Uber, and not
in a court of law. This Agreement survives after your relationship with Uber
ends.
(Buoscio
Decl., Ex. C.)
Moreover, Defendant argues that
those terms are specifically binding on Plaintiff. The agreement further
states:
This 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 the underlying claims arise out of or related
to your use of the Services. To the extent any third-party beneficiary to this
agreement brings claims against the Parties, those claims shall be subject to
this Arbitration Agreement.”
(Id., Section 2(a)(5).)
Based on
the foregoing, Defendant has met its initial burden to show that an arbitration
agreement exists between them and Plaintiff.
In
opposition, Plaintiff argues that Plaintiff
never agreed to
arbitrate any claim as Plaintiff Villegas had never been a signatory to the
contract which initiated the subject Uber ride.
A nonsignatory may also be
compelled to arbitrate a dispute when the nonsignatory is a third- party
beneficiary of the contract containing the arbitration agreement. (See Epitech,
Inc. v. Kann (2012) 204 Cal.App.4th 1365, 1371.) A nonsignatory must be
determined to be a third-party beneficiary in order to be bound by the
arbitration agreement. (See id.) The contract must show an intent by the
contracting parties to confer a benefit on the third party. (Id. at 1372.)
“‘[I]t is not enough that the third party would incidentally have benefited
from performance.’” (Id. (quoting Souza v. Westlands Water Dist. (2006)
135 Cal.App.4th 879, 891).)
Here, Plaintiff benefitted from
the use of Uber’s rideshare services when she became a passenger in Defendant
Whittlesey’s vehicle. Moreover, the arbitration agreement additionally states
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 the
underlying claims arise out of or related to your use of the Services. To the
extent any third-party beneficiary to this agreement brings claims against the
Parties, those claims shall be subject to this Arbitration Agreement.” (Buoscio Decl., Exh. C.) Thus, the contract
containing the agreement was intended to benefit and cover any person who
benefitted from using the Uber application.
Therefore,
Plaintiff has not refuted Defendant’s evidence that there is a valid
arbitration agreement which binds Plaintiff.
Delegation
Clause
Defendant
also argues that the December 2021 Terms explicitly outline a clear delegation
of authority to the arbitrator to determine threshold arbitrability issues. “A delegation clause gives an arbitrator authority to
decide even the initial question whether the parties' dispute is subject to
arbitration.”
(New Prime Inc. v. Oliveira (2019) 139 S.Ct. 532, 538.) To be
enforceable, a delegation clause must satisfy two prerequisites: (1) the
language must be clear and unmistakable, and (2) the delegation must not be
revocable under state contract defenses such as fraud, duress, or
unconscionability. (Pinela v.
Neiman Marcus Group, Inc. (2015)
238 Cal.App.4th 227, 240.)
The December 2021 Terms outlined
that:
An arbitrator shall have exclusive authority to resolve
all threshold arbitrability disputes whether the Terms are
applicable, unconscionable, or illusory and any defense to arbitration,
including without limitation waiver, delay, laches, or estoppel.
(Id.,
Section 2(a)(4).)
The Court finds that the
delegation clause is clear and unmistakable, and as Plaintiff has not argued
that the clause is revocable under state contract defenses, the Court finds no
cause to find it is revocable.
Plaintiff
also argues that Defendant waived the right to arbitration by delaying for 6
months before filing this motion.
However, pursuant to the delegation clause, all threshold arbitrability
disputes are to be determined by the arbitrator, including the defense of
waiver.
Claims Fall
within Scope of Arbitration Agreement
Plaintiff’s claim arises from injuries
she sustained while she was involved in a vehicle collision while she was a
passenger in an Uber driver’s vehicle. Thus, Plaintiff’s claims arise from the
use of Uber’s services, and fall within the scope of the arbitration agreement.
Plaintiff does not dispute this point.
Because Defendant has proven the existence of a valid arbitration agreement, delegation
clause, and that the claims fall within the scope of the arbitration agreement,
and Plaintiff has not refuted these elements, Defendant’s motion to compel
arbitration is granted.
Conclusion
Accordingly, Defendant Uber
Technologies, Inc., Rasier, LLC’s Motion to Compel
Arbitration is GRANTED. The proceedings of this action are stayed pending the outcome
of the parties’ arbitration.
Moving party is ordered to give notice.