Judge: Stephen P. Pfahler, Case: 21STCV38273, Date: 2025-04-24 Tentative Ruling

Case Number: 21STCV38273    Hearing Date: April 24, 2025    Dept: 68

Dept. 68

Date: 4-24-25

Case #21STCV38273

Trial Date: Not Set

RECONSIDERATION

MOVING PARTY: Plaintiff, Cesar Zamora

RESPONDING PARTY: Unopposed/Defendant, Charter Communications, LLC

RELIEF REQUESTED

Motion for Reconsideration of the Order Compelling Arbitration and the Stay of the Action

SUMMARY OF ACTION

On October 18, 2021, Plaintiff filed a complaint for 1. Disability Discrimination; 2. Failure to Engage in the Interactive Process; 3. Failure to Provide Reasonable Accommodations; 4. Failure to Prevent Discrimination; 5. Retaliation; 6. Failure to Prevent Retaliation; 7. Constructive Termination in Violation of Public Policy. On August 1, 2022, the court granted Defendant Charter Communications, LLC’s motion to compel arbitration, and stayed the action.

RULING: Granted.

Plaintiff Cesar Zamora moves for reconsideration of the August 1, 2022, order compelling arbitration pursuant to the Mutual Arbitration Agreement. Plaintiff brings the motion on grounds of the change in underlying case law regarding unconscionability determinations in employment arbitration agreements. The court electronic filing system shows no reply at the time of the tentative ruling publication cutoff. Plaintiff filed a notice of non-opposition.

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order. The party making the application shall state by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown.” (Code Civ. Proc., § 1008, subd. (a).)

“A motion for reconsideration may only be brought if the party moving for reconsideration can offer ‘new or different facts, circumstances, or law which it could not, with reasonable diligence, have discovered and produced at the time of the prior motion. (Citations.) A motion for reconsideration will be denied absent a strong showing of diligence.” (Forrest v. State Of California Dept. Of Corporations (2007) 150 Cal.App.4th 183, 202 disapproved of and overruled on unrelated grounds in Shalant v. Girardi (2011) 51 Cal.4th 1164, 1172 (footnote 3); New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212–213; Baldwin v. Home Sav. of America. (1997) 59 Cal.App.4th 1192, 1199; Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 690.) Disagreement with a ruling is not a new fact that will support the granting of a motion for reconsideration. (Gilberd v.  AC Transit (1995) 32 Cal.App.4th 1494, 1500.) A court acts in excess of jurisdiction when it grants a motion to reconsider that is not based upon “new or different facts, circumstances or law.” (Id., at p. 1499.)  Motions for reconsideration are restricted to circumstances where a party offers the Court some fact or circumstance not previously considered, and some valid reason for not offering it earlier. (Ibid.)

A court acts in excess of jurisdiction when it grants a motion to reconsider that is not based upon “new or different facts, circumstances or law.” (Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1499.)  Motions for reconsideration are restricted to circumstances where a party offers the Court some fact or circumstance not previously considered, and some valid reason for not offering it earlier. (Id.)

The case law relied upon by Plaintiff in support of the motion published on July 14, 2024. Plaintiff filed the motion on December 2, 2024, following the October 28, 2024, Post-Arbitration Status Conference.

The court elects to consider the impacts of the California Supreme Court review of an impactful case on the subject matter. “If a court at any time determines that there has been a change of law that warrants it to reconsider a prior order it entered, it may do so on its own motion and enter a different order.” (Code Civ. Proc. § 1008, subd. (c).) It appears no arbitration proceeded, thereby mitigating any potential basis of prejudice because of any sua sponte reconsideration of the arbitration order. Because Judge Mooney is no longer available to reconsider the motion, and the action remains assigned to this department, the court considers the motion.

Defendant Charter Communications, LLC (Charter) moved to compel arbitration pursuant to the terms of the Mutual Arbitration Agreement executed at the time of employment. The court granted the motion to compel arbitration pursuant to the terms of the agreement.

The latest case from the California Supreme Court prompts new consideration of the standard for arbitration. The court therefore reconsiders the underlying agreement relative to the impacts of the changes to the law regarding unconscionability provisions in employment arbitration contracts.

“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.)

The law creates a general presumption in favor of arbitration. In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413-414; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.) Any challenges to the formation of the arbitration agreement should be considered before any order sending the parties to arbitration. The trier of fact weighs all evidence, including affidavits, declarations, documents, and, if applicable, oral testimony to determine whether the action goes to arbitration. (Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.)

The court declines to reconsider any findings regarding the existence of the agreement itself or applicability to the subject matter. All such facts are presumed from the prior order. The motion for reconsideration maintains the latest precedent regarding determination unconscionability justifies relief from the order. Given unconscionability constitutes a defensive burden for challenging party, e.g. Plaintiff, the court considers the new standard. (Rosenthal v. Great Western Fin'l Securities Corp., supra, 14 Cal.4th at pp. 413-414; Gamboa v. Northeast Community Clinic, supra, 72 Cal.App.5th at pp. 164–165; Hotels Nevada v. L.A. Pacific Ctr., Inc., supra, 144 Cal.App.4th at p. 758.)

Unconscionability claims have both a “‘procedural’” and “‘substantive’” element. (Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519, 1531.) “‘Procedural unconscionability’” concerns the manner in which the contract was negotiated and the circumstances of the parties at that time. (Kinney v. United HealthCare Services, Inc. (1999) 70 Cal.App.4th 1322, 1329.) “‘The procedural element focuses on two factors: “oppression” and “surprise.” “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 supposedly agreed-upon terms of the bargain are hidden in the prolix printed form drafted by the party seeking to enforce the disputed terms.’” (Stirlen v. Supercuts, Inc., supra, 51 Cal.App.4th at p. 1532.) “Substantive unconscionability” involves contracts leading to “‘“overly harsh”’” or “‘“one-sided”’” results.’” … “[U]nconscionability turns … on an absence of ‘justification “for it…” [and therefore] must be evaluated as of the time the contract was made.’” (Ibid.)

In the employment context, a mandatory arbitration agreement is enforceable, if it “(1) provides for neutral arbitrators, (2) provides for more than minimal discovery, (3) requires a written award, (4) provides for all of the types of relief that would otherwise be available in court, and (5) does not require employees to pay either unreasonable costs or any arbitrators’ fees or expenses as a condition of access to the arbitration forum.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 102.) Required execution of an arbitration agreement as a condition of employment may constitute an unconscionable provision, where the contract lacks mutuality and/or imposes a disadvantage on the employee. (Id. at pp. 114-118; Little v. Auto Stiegler, Inc. (2003) 29 Cal.4th 1064, 1071-1072.) A showing of procedural unconscionability will not invalidate an arbitration clause, but can lead to greater scrutiny under the substantive standard, thereby supporting invalidation. (Davis v. TWC Dealer Group, Inc. (2019) 41 Cal.App.5th 662, 674 accord OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 129-130.)

Following Armendariz and continued examination into unequal bargaining circumstances challenging arbitration clauses, California law offers further guidance into the adhesion contract circumstances (e.g. an agreement substantively presented as “take or it leave it” the circumstances of which potentially impose a disadvantage on the employee). “With respect to preemployment arbitration contracts, we have observed that ‘the economic pressure exerted by employers on all but the most sought-after employees may be particularly acute, for the arbitration agreement stands between the employee and necessary employment, and few employees are in a position to refuse a job because of an arbitration requirement.’” (OTO, L.L.C. v. Kho, supra, 8 Cal.5th at pp. 126-127 accord Armendariz v. Foundation Health Psychcare Services, Inc., supra, 24 Cal.4th at p. 115; Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478 [322 Cal.Rptr.3d 825, 837]; Hasty v. American Automobile Association of Northern California, Nevada & Utah (2023) 98 Cal.App.5th 1041, 1055-1056; Serafin v. Balco Properties Ltd., LLC (2015) 235 Cal.App.4th 165, 179-181; see Grand Prospect Partners, L.P. v. Ross Dress for Less, Inc. (2015) 232 Cal.App.4th 1332, 1351; Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 705.)

Plaintiff relies on the California Supreme Court holding, whereby the court found the exact same language incorporated into the Mutual Arbitration Agreement in the instant action was declared procedurally and substantively unconscionable in the Ramirez action as well. The subject agreement was found to constitute an adhesion contract, but found the substantively procedural conditions rendered the agreement invalid. (Ramirez v. Charter Communications, Inc., supra, 16 Cal.5th at p. 493-494, 500-503.) The Ramirez court concluded the terms amounted to “one-sided” terms favoring the employer over the employee rights to investigate and bring a FEHA claim, (Id. at. pp. 497-499.) The court specifically noted the time limitations, and attorney fee provisions as problematic as well. (Id. at pp. 500-503, 508-510.)

Given the subject agreement presents the same terms rejected the California Supreme Court, the court finds the unopposed motion reconsideration well supported. [Declaration of Kristopher Tayyeb.] The court finds the agreement is no longer enforceable, and declare the agreement substantively unconscionable. The unopposed motion for reconsideration based on a change in the law is GRANTED.

The court orders the case removed from arbitration, and restores the action to the civil active list.

Plaintiff to give notice.