Judge: Steven A. Ellis, Case: 21STCV42513, Date: 2024-01-31 Tentative Ruling
Case Number: 21STCV42513 Hearing Date: February 7, 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 November 25, 2019, on Martin
Luther King Jr. Boulevard in Los Angeles.
On November 17, 2021, Plaintiffs Rodrick Echols, Angela Echols, and
Pamela Brown filed the Complaint in this action asserting a cause of action for
negligence against Defendants Jesus Pineda, Jesus Alejandro Martinez Pineda,
Armando Aguilera, Rafael Guijosa, Lyft, Inc. (“Lyft”), and Does 1 through 50.
On March
6, 2023, Defendant Rafael Guijosa Jr. (erroneously sued as Rafael Guijosa) (“Guijosa”)
filed his Answer.
On November
14, 2023, 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 January
4, 2024, Defendant filed this motion to compel arbitration. Plaintiffs Angela
Echols (“Echols”) and Pamela Brown (“Brown”) (collectively ‘Plaintiffs”) filed an
untimely opposition on January 25, six calendar days before the hearing. Lyft filed a reply on January 29.
On
January 31, 2024, the Court continued the hearing so that the Court would have
the opportunity to review the late filed papers.
Meanwhile,
on January 10, 2024, the Court dismissed all claims asserted by Plaintiff Rodrick
Echols at his request.
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 three preliminary matters.
First, the Court exercises its discretion to consider
Plaintiffs’ late-filed opposition, and Lyft’s reply to the opposition. This is an important issue, and the Court will
resolve this issue based on the facts and the law, not on Plaintiffs’ procedural
default.
Second, 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.
Third, 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 Echols accepted
Lyft’s Terms of Service when she created her user account on January 7, 2016 and
subsequently accepted a series of Lyft’s updated Terms of Service on October
31, 2016; on September 28, 2019; on October 28, 2019; on November 25, 2019; on
July 22, 2021; on January 12, 2022; on January 19, 2023; and on April 14, 2023;
and (2) that Plaintiff Brown accepted Lyft’s Terms of Service when she created
her user account on February 18, 2020. (McCachern
Decl., ¶¶ 11-16.)
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 August 26, 2019, which Plaintiff Echols accepted for
the first time on September 28, 2019, prior to the accident, includes an
agreement to arbitrate “all disputes and claims between us,” subject to some
exclusions that do not apply here (Id., Exh. 4, at p. 21.); (2) that
paragraph 17 of the Terms of Service that Plaintiff Echols accepted in 2021, as
well as paragraph 17 of the Terms of Service that Plaintiff Echols accepted in 2023,
also contain similar provisions (Id., Exhs. 6, 8.); (3) that paragraph
17 of the Terms of Service dated August 26, 2019, which Plaintiff Brown
accepted on February 18, 2020, after the accident, includes an agreement to
arbitrate “all disputes and claims between us,” subject to some exclusions that
do not apply here (Id., Exh. 4, at p. 21.); (4) that Paragraph 17 of the
Ters of Service accepted by Plaintiff Brown states that the arbitration
agreement applies to “past, present, or future events, arising out of or
relating to … the Rideshare Services” (Ibid.); and (5) that all of the Terms
of Service accepted by Plaintiffs state that the parties’ agreement to
arbitrate “is governed by the Federal Arbitration Act.” (Id., Exhs. 4, 6, 8.)
In their Opposition to the motion to compel arbitration, Plaintiffs
make essentially two arguments.
First, Plaintiffs argue that because there is no arbitration
agreement governing Plaintiffs’ 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 unnumbered pp. 8-11.)
There is no question here that Plaintiffs
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 Plaintiffs’ 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. 4, 6, 8.) 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 Plaintiffs 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 they never consented or agreed to the arbitration provision in the Terms
of Service. (Opp. at unnumbered pp. 11-17.)
They present no evidence in support of this contention, only legal
argument based on the case law. The
evidence submitted by Lyft, however, is to the contrary. (See McCachern Decl., ¶¶ 7-19.) As set forth in Lyft’s evidence, including the
declaration of its Safety Program Lead and the exhibits he authenticated, the arbitration
provisions here were sufficiently conspicuous to put Plaintiffs on notice of
them. Accordingly, the Court finds that Plaintiffs
did assent to those provisions when they created their user accounts (and, in
Plaintiff Echols’ case, when she accepted the revised Terms of Service).
Conclusion
The Court GRANTS
Lyft’s motion to compel arbitration.
The Court ORDERS
the parties to arbitrate their disputes pursuant to the terms of the agreements
between each of the Plaintiffs and Lyft.
The Court STAYS
litigation of Plaintiffs’ claims against Lyft.
The Court sets
an OSC re dismissal (completion of arbitration) for ______________, 2024, at
8:30 a.m., in Department 29 of the Spring Street Courthouse.
Moving Party is
ORDERED to give notice.