Judge: Serena R. Murillo, Case: 21STCV36626, Date: 2022-12-16 Tentative Ruling
Case Number: 21STCV36626 Hearing Date: December 16, 2022 Dept: 29
TENTATIVE
The Court
grants Uber Defendants’ motion to compel arbitration. The case is ordered
stayed pending binding arbitration as to the entire action.
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.” (Id., § 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
Claims Fall
within Scope of Arbitration Agreement
Plaintiff’s claim arises from injuries he
sustained while he was involved in a vehicle collision while he 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.
Existence of Valid Written Agreement to Arbitrate
Uber Defendants move to compel Plaintiff to arbitrate his claims, arguing
Plaintiff entered into a valid and enforceable arbitration agreement.
Uber Defendants argue that Plaintiff entered in a valid arbitration
agreement with Uber by way of Uber’s smartphone application. On or about May 15,
2022, Plaintiff was presented with an updated terms of service in Uber’s
application. Plaintiff expressly consented to the April 2022 Terms on May 17,
2022, by clicking an in-App box which read: “By checking the box, I have
reviewed and agree to the Terms of Use and acknowledge the Privacy Notice.”
(Buoscio Decl., ¶¶ 7-9 Ex. A-B.)
The relevant language of the arbitration provision contained in Uber 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, none
of which is applicable here], 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. D.)
In Opposition, Plaintiff makes two arguments against the existence of an
arbitration agreement.
First, Plaintiff argues that the arbitration agreement is not admissible.
Plaintiff did not assert any proper evidentiary objections. (Opposition
12:11-13.) In any event, Plaintiff’s argument is without merit. Uber Defendants
proffer declarations by people who have the knowledge to declare the general
practice of how Uber operated and users agreed to its terms. There is no
requirement for this type of declarant to by physically present when Plaintiff
executed the agreement.
Second, Plaintiff argues that he did not mutually assent to the terms
that include the arbitration agreement.
“An essential element of any contract is the consent of the parties, or
mutual assent.” (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th
373, 381 (Harris).) Consent is not mutual unless the parties all agree
upon the same thing in the same sense. (Civ. Code, § 1580.) Mutual assent is
determined under an objective standard applied to the outward manifestations or
expressions of the parties, i.e., the reasonable meaning of their words and
acts, and not their unexpressed intentions or understandings. (Harris, supra,
248 Cal.App.4th at p. 381.)
As a preliminary matter, Plaintiff does not proffer any evidence, e.g.,
his own declaration, to support his claim of a lack of mutual assent, including
that the pop-up appeared randomly. Therefore, Plaintiff’s claim fails. In any
event, Plaintiff does not deny clicking the agreement. Uber Defendants have
proffered sufficient evidence to show by a preponderance of evidence standard
that Plaintiff actually clicked the agreement. Faced with evidence of Uber’s
general practices supporting a finding of Plaintiff agreeing to the terms in
order to use the application and Plaintiff’s concession that he clicked the
agreement, the Court finds that Plaintiff did click the agreement.
It is irrelevant that Plaintiff argues the manner of the agreement being
presented shows that he did not knowingly enter in the agreement. This argument
sounds in unconscionability and not whether the agreement existed. The general
rule, applicable here, is that one who signs an instrument which on its face is
a contract is deemed to assent to all its terms. (Hulsey v. Elsinore
Parachute Center (1985) 168 Cal.App.3d 333, 339 [“It is well established,
in the absence of fraud, overreaching or excusable neglect, that one who signs
an instrument may not avoid the impact of its terms on the ground that he
failed to read the instrument before signing it.”].)
Finally, the Court rejects Plaintiff’s argument that the agreement should
not be enforced because it is not retroactive in effect. California law holds
that an arbitration agreement may be applied retroactively to transactions
which occurred prior to execution of the arbitration agreement. (Franco v.
Greystone Ridge Condominium (2019) 39 Cal.App.5th 221, 230.) This case
arises from the Plaintiff's claim that he suffered injuries while riding in a
car operated by an Uber driver on November 18, 2019. The arbitration agreement
was entered into in May 2022, and it includes a provision that expressly states
it applies to claims before or after the date of the agreement. Since the
parties agreed that the arbitration agreement would apply to claims arising
before, such as the Plaintiff’s claim from the accident on November 18, 2019,
the arbitration agreement applies to the Plaintiff’s claim.
Accordingly, the Court finds that there is an arbitration agreement
between the parties.
Delegation Clause
Uber Defendants also argue that the April 2022 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 April 2022 Terms outlined that:
The parties agree that the arbitrator ("Arbitrator"), and not
any federal, state, or local court or agency, shall have exclusive authority to
resolve any disputes relating to the interpretation, applicability,
enforceability or formation of this Arbitration Agreement, including any claim
that all or any part of this Arbitration Agreement is void or voidable. The
Arbitrator shall also be responsible for determining all threshold
arbitrability issues, including issues relating to whether the Terms are
applicable, unconscionable or illusory and any defense to arbitration,
including waiver, delay, laches, or estoppel. If there is a dispute about
whether this Arbitration Agreement can be enforced or applies to a dispute, you
and Uber agree that the arbitrator will decide that issue.
(Buoscio Decl., Ex. C.)
Based on this language, it is clear and unmistakable that the parties
intended to delegate issues of arbitrability to the arbitrator. (See Tiri v.
Lucky Chances, Inc. (2014) 226
Cal.App.4th 231, 237 (Tiri) [containing a substantially similar clause,
i.e., “The Arbitrator, and not any federal, state, or local court or
agency, shall have the exclusive authority to resolve any dispute relating to
the interpretation, applicability, enforceability, or formation of this
Agreement, including, but not limited to, any claim that all or any part of
this Agreement is void or voidable.”].)
Additionally, Plaintiff does not dispute that the delegation clause is
clear and unmistakable. Accordingly, the Court finds the delegation provision
is clear and unmistakable.
The Court next examines the second
requirement, i.e., whether the delegation is revocable under state contract
defenses including unconscionability. Plaintiff does not contend that the
delegation clause is unconscionable. Instead, Plaintiff argues, though not in
significant detail, that the agreement as a whole is unconscionable.
The Tiri court explained that in
determining unconscionability in the context of a delegation clause, any claim
of unconscionability must be specific to the delegation clause. (Tiri,
supra, 226 Cal.App.4th at pp. 242-25.) In other words, it is not enough
to demonstrate that the delegation clause is part of an arbitration agreement
that is unconscionable. Rather, the burden is on the party opposing arbitration
to show that the delegation clause itself is unconscionable.
Plaintiff does not meet his burden by not presenting
any reasoned argument as to the delegation clause. In any event, the Court
finds no unconscionability.
There is no procedural unconscionability regarding
the delegation clause. Plaintiff cannot genuinely claim that the delegation
clause was an adhesion contract. Although there was no room to negotiate the
delegation clause, Plaintiff was not forced to use Uber’s services and could
have secured transportation by using other rideshare services, ordering a taxi,
calling a friend, or using public transportation. This was not a situation of
economic necessity, e.g., an employment contract whereby Plaintiff must accept
to live. Plaintiff also had an opportunity to review the delegation clause
further by declining the services at that time once presented with the pop-up
agreement, allowing time to review the delegation clause before accepting the
terms when requesting rideshare services from Uber. At most, there is low
procedural unconscionability because the delegation clause is contained as part
of a lengthy agreement only electronically accessible on a phone’s small
screen. However, considering the delegation clause’s brevity and simple terms
and Plaintiff’s opportunity to review the delegation clause, the Court finds
the inconvenient review method on the phone to have a negligible contribution
to the surprise factor of procedural unconscionability. Therefore, there is no
procedural unconscionability.
Because there is no procedural
unconscionability, the Court does not need to consider whether the delegation
clause is substantively unconscionable. Nevertheless, the Court examines
whether Plaintiff demonstrates that the delegation clause is substantively
unconscionable.
As stated above, the substantive
unconscionability inquiry is directed to the delegation clause itself, not to
the arbitration agreement as a whole. The Tiri court found a virtually
identical delegation clause to not be substantively unconscionable. As in this
case, the Court finds that the delegation clause does not lack mutuality. The Tiri
court also explained that a delegation clause in and of itself is not
substantively unconscionable. (Tiri, supra, 226 Cal.App.4th at
pp. 246-250.)
Because the delegation clause is enforceable,
the Court is compelled to order this case to arbitration so that an arbitrator
can decide whether the arbitration agreement covers the instant dispute.
The Court grants the motion and stays the
action pending resolution of arbitration.
Plaintiff’s
Potential Inconsistent Rulings Defense
Plaintiff argues that the current litigation
against the co-defendants precludes arbitration pursuant to Code of Civil
Procedure section 1281.2, subdivision (c).
However, Code of Civil Procedure section
1281.2, subdivision (c) does not apply here because the FAA applies. In the
instant matter, Uber and Plaintiff consented to arbitrate under the FAA. (Buoscio Decl.,
Ex. C.) Under the FAA, “an arbitration
agreement must be enforced notwithstanding the presence of other persons who
are parties to the underlying dispute but not to the arbitration agreement.” (Moses H. Cone Memorial Hosp. v. Mercury
Const. Corp. (1983) 460 U.S. 1,
20.)
Because the Court finds the FAA, not the California
Arbitration Act, applies, the Code of Civil Procedure section 1281.2,
subdivision (c) defense to arbitration is not available to Plaintiff.
Conclusion
The Court
grants Uber Defendants’ motion to compel arbitration. The case is ordered
stayed pending binding arbitration as to the entire action.
Moving parties are ordered to give notice.