Judge: Steven A. Ellis, Case: 21STCV34841, Date: 2024-01-11 Tentative Ruling

Case Number: 21STCV34841    Hearing Date: February 8, 2024    Dept: 29

Motion to Compel Arbitration, filed by Defendant Lyft, Inc.

Tentative

The motion is granted.

Background

This case arises out of an alleged motor vehicle accident on December 11, 2019, near the intersection of Adams Boulevard and San Pedro Street in Los Angeles.  On September 21, 2021, Plaintiff Lawanda Harvey (“Plaintiff”) filed the Complaint in this action against Defendants Lyft, Inc. (“Lyft”), Eddie Jackson (“Jackson”), Elizabeth Amezquita, Joseph Flores, and Does 1 through 50, asserting causes of action for motor vehicle negligence and general negligence.

On December 2, 2022, Jackson filed his Answer.  On December 27, 2022, Lyft filed its Answer.  In its Fifteenth Affirmative Defense, Lyft alleges there was a binding arbitration agreement between Plaintiffs and Lyft that governs the claims asserted in this case.  (Answer, ¶ 15.)

On December 5, 2023, Lyft filed this motion to compel arbitration. Plaintiff filed her opposition on December 27, 2023. Lyft filed its reply on January 2, 2024.

Legal Standard

California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act (“FAA”), including a presumption in favor of arbitrability. (See Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-72.) Under the FAA, “A written provision in … a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equty for the revocation of any contract ….”  (9 U.S.C., § 2.)  Under Code of Civil Procedure section 1281, 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 of Civil Procedure section 1281.2 provides, in pertinent part, the following:

“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. 

(c) A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact ....” 

(d) … If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as set forth under subdivision (c), the court (1) may refuse to enforce the arbitration agreement and may order intervention or joinder of all parties in a single action or special proceeding; (2) may order intervention or joinder as to all or only certain issues; (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding; or (4) may stay arbitration pending the outcome of the court action or special proceeding.

(Code Civ. Proc., § 1281.2.) 

“[W]hen a petition to compel arbitration is filed and accompanied by prima facie evidence of a written agreement to arbitrate the controversy, the court itself must determine whether the agreement exists and, if any defense to its enforcement is raised, whether it is enforceable. Because the existence of the agreement is a statutory prerequisite to granting the petition, the petitioner bears the burden of proving its existence by a preponderance of the evidence. If the party opposing the petition raises a defense to enforcement—either fraud in the execution voiding the agreement, or a statutory defense of waiver or revocation (see §1281.2(a), (b))—that party bears the burden of producing evidence of, and proving by a preponderance of the evidence, any fact necessary to the defense.” (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 413.)

Preliminary Matters

Before addressing the merits, the Court begins with two preliminary matters.

First, the Court disregards entirely Lyft’s citations to the ruling of other California Superior Courts, and Lyft’s argument based on these rulings.  In California state court, the only state court decisions that can be cited, and the only decisions that have any weight, are published decisions by appellate courts.  Rulings by California state trial courts, no matter how inspired and thoughtful, are not published, are not citable, and have no precedential authority.   

Second, the Court disregards entirely Lyft’s unhelpful suggestion that the risk of inconsistent rulings – which is the necessary and the inevitable result of Lyft’s motion – could be avoided if Plaintiffs simply dismissed all of their claims against Lyft.  Arbitration clauses are designed to provide an alternate forum for the prompt and efficient resolution of disputed claims.  Contrary to Lyft’s argument, arbitration clauses are not designed to provide blanket immunity from liability for the party with greater bargaining power.  Lyft’s apparent suggestion to the contrary is meritless and lacks any support in the law.

Discussion

Lyft moves for an order compelling arbitration of Plaintiffs’ claim against Lyft in accordance with the terms of an agreement between the parties to arbitrate.  Lyft also seeks to stay litigation of Plaintiffs’ claims against Lyft pending completion of the arbitration.

As a threshold matter, Lyft has met its initial burden of showing that there is an agreement to arbitrate between the parties that covers the matters in dispute here. 

Paul McCachern, Safety Program Lead for Lyft, has submitted a written declaration explaining (among other things): (1) that Plaintiff accepted Lyft’s Terms of Service when she created her user account on January 14, 2019; and (2) that Plaintiff accepted Lyft’s updated Terms of Service on October 30, 2019.  (McCachern Decl., ¶¶ 11-15.) 

The documents attached to Mr. McCachern’s declaration, and authenticated by him, demonstrate (among other things): (1) that paragraph 17 of the Terms of Service dated February 6, 2018, which Plaintiff accepted on January 14, 2019, includes an agreement to arbitrate “all disputes and claims between us,” subject to some exclusions that do not apply here (Id., Exh. 2, at p. 10.); (2) that paragraph 17 of the Terms of Service that Plaintiff accepted on October 30, 2019, prior to the accident, contains similar provisions (Id., Exh. 4.); and (3) that both of the Terms of Service accepted by Plaintiff state that the parties’ agreement to arbitrate “is governed by the Federal Arbitration Act.”  (Id., Exhs. 2, 4.)

In their Opposition to the motion to compel arbitration, Plaintiff makes essentially two arguments.

First, Plaintiff argue that because there is no arbitration agreement governing Plaintiff’s claims against the defendants other than Lyft, and because there is a risk that arbitration of the claims against Lyft and litigation of the claims against the other defendants could lead to inconsistent rulings, the Court should deny the motion under Code of Civil Procedure section 1281.2, subdivisions (c) and (d)(1).  (Opp. at pp. 3-6.)

There is no question here that Plaintiff and Lyft, who are parties to an arbitration agreement, are also parties “to a pending court action … with a third party, arising out of the same transaction or series.”  (Code Civ. Proc., § 1281.2, subd. (c).)  There is also no question that there is “a possibility of conflicting rulings on a common issue of law or fact.”  (Ibid.) The claims involving the other defendants are not subject to arbitration.  If the Court enforces the arbitration agreement, there will be a risk that in the arbitration, Lyft might prevail in blaming the other defendants for Plaintiff’s injuries, and then in the litigation the other defendants might prevail in blaming Lyft.

As Lyft argues, however, the parties stated that their agreement to arbitrate is “governed by the Federal Arbitration Act.”  (McCachern Decl., Exhs. 2, 4.)  It is of course generally true that California state courts follow and apply California procedural rules, including Code of Civil Procedure section 1281.2.  (Cronus Investments v. Concierge Services (2005) 35 Cal.4th 376, 390; Nixon v. Amerihome Mortgage Co. (2021) 67 Cal.App.4th 934, 945.)  But where, as here, the parties have agreed that their agreement to arbitrate is “governed by” the Federal Arbitration Act, and there is no reference to California law or procedure governing the arbitration, the procedural provisions of Code of Civil Procedure section 1281.2 are displaced.  (Victrola 89 v. Jaman Properties (2020) 46 Cal.App.5th 337, 346-48; Rodriguez v. American Technologies (2006) 136 Cal.App.4th 1110, 1121-22.)  Instead, the procedural rules of the FAA apply, because that is what the parties agreed to.  And under the FAA’s procedural rules, the motion to compel the arbitration must be granted, and the litigation between the parties who agreed to arbitrate must be stayed, even if there are other pending claims not subject to arbitration that arise from the same transaction or occurrence, and even if there is a risk of inconsistent or conflicting rulings.  (See 9 U.S.C. § 3; Moses H. Cone Memorial Hosp. v. Mercury Construction (1983) 460 U.S. 1.)  The FAA “leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has been signed,” even when “the result would be the possibility inefficient maintenance of separate proceedings in different forums.”  (Dean Witter Reynolds v. Byrd (1985) 470 U.S. 213, 218.)

In sum, the agreement is governed by the procedural provisions of the FAA, not Code of Civil Procedure section 1281.2.  Under those provisions, the Court must grant the motion to compel arbitration and stay the litigation between Plaintiff and Lyft.  “While we may question the wisdom of the parties’ choice, and decry the potential for inefficiency, delay, and conflicting rulings, the parties were free to choose their arbitration rules.  The court will not rewrite their contract.”  (Rodriguez, supra, 136 Cal.App.4th at p. 1122.)

Second, Plaintiffs contend that Lyft waived its right to compel arbitration by participating in discovery in the litigation.  (Opp. at pp. 6-7.)  The Court has considered the evidence and argument submitted by the parties on this point.  Waiver is a valid defense to a motion to compel arbitration, but on this record there is not sufficient evidence that Lyft waived its contractual right to compel arbitration of Plaintiff’s claims.

Conclusion

The Court GRANTS Lyft’s motion to compel arbitration.

The Court ORDERS Plaintiff and Lyft to arbitrate their disputes pursuant to the terms of their agreements.

The Court STAYS litigation of Plaintiff’s claims against Lyft.

The Court does not stay any other aspect of the litigation.

Order to Show Cause Re: Dismissal / Completion of Arbitration as to Lyft, Inc. is scheduled for
05/09/2024 at 08:30 AM in Department 29 at Spring Street Courthouse.

Moving Party is ORDERED to give notice.