Judge: William A. Crowfoot, Case: 22STCV12685, Date: 2022-12-08 Tentative Ruling

Case Number: 22STCV12685    Hearing Date: December 8, 2022    Dept: 27

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

I.            INTRODUCTION

On April 15, 2022, plaintiff Gianna Pilato (“Plaintiff”) filed this action against defendants Bird Rides, Inc. (“Defendant”), Segway, Inc. (“Segway”), County of Los Angeles (“County”), City of Los Angeles (“City”), and California Department of Transportation (“DOT”).  Plaintiff asserts three causes of action for: (1) premises liability, (2) strict products liability, and (3) negligence. 

On October 3, 2022, Defendant filed this petition to compel arbitration of all claims asserted by Plaintiff.

II.          LEGAL STANDARD

Under both the Title 9 section 2 of the United States Code (known as the Federal Arbitration Act, hereinafter “FAA”) and the Title 9 of Part III of the California Code of Civil Procedure commencing at section 1281 (known as the California Arbitration Act, hereinafter “CAA”), arbitration agreements are valid, irrevocable, and enforceable, except on such grounds that exist at law or equity for voiding a contract.  (Winter v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.)

“The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, 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.” (Giuliano v. Inland Empire Personnel, Inc. (2007) 149 Cal.App.4th 1276, 1284.)   “The party opposing arbitration has the burden of demonstrating that an arbitration clause cannot be interpreted to require arbitration of the dispute.” (Rice v. Downs (2016) 247 Cal.App.4th 1213, 1223, citing Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686-87.) 

III.        DISCUSSION

Following a review of the evidence and arguments advanced by Defendant in its unopposed motion, the Court finds Defendant has sufficiently demonstrated that an agreement to arbitrate exists between the parties.

According to a declaration by Jonathan Grubb (“Grubb”), Defendant’s Senior Director – City Technology, Defendant operates an on-demand personal electric scooter sharing network, which permits customers to download Defendant’s “Bird App” and rent electric scooters for transportation purposes.  (Grubb Decl., ¶¶ 1-4.)  In order to rent an electric scooter, customers are required to download Defendant’s “Bird App” to his or her smartphone and create an account.  (Id., ¶ 4.)  Once downloaded, Defendant’s “Bird App” prompts the customer to enter his or her e-mail address and click the “Ride” button.  (Id., ¶ 12.)  The following message appears directly above the “RIDE” button: “By clicking “RIDE,” I confirm that I’m at least 18 years old, and I agree to Bird’s Terms of Service and Privacy Policy.  Both “Terms of Service” and “Privacy Policy” are underlined clickable links that take the user to the respective policy.  (Id., ¶ 12.)  When a user is ready to take the first ride, the user must enter payment information.  (Id., ¶ 13.)  Upon verifying his or her e-mail address, the user must then follow three steps to accept the Bird Rental Agreement.  (Id., ¶ 14.)  The user must (1) scroll and read through the entirety of the Bird Rental Agreement, which is displayed on the Bird App; (2) check two boxes confirming the 3 user’s acceptance of the terms and conditions set forth in the Bird Rental Agreement, including certain highlighted sections; and (3) click the “I AGREE” button at the end of the Bird Rental Agreement.  (Id., ¶ 14.)  This process is the same when new versions of the Bird Rental Agreement are  released.  (Id., ¶ 14.)  The rider must follow the same three steps to accept the new Bird Rental Agreement: scrolling through the document, checking the boxes, and clicking ” AGREE.”  (Id., ¶ 14.)  It is technologically impossible for a user to complete the sign-up process to become a Bird rider and thereby unlock and rent a Bird scooter without first completing those three steps in the Bird App, as the scooter’s wheels remain disabled and the motor will not engage without completion of those three steps as part of the first ride.  (Id., ¶ 15.)  It is also impossible for someone to ride a scooter once a new version of the Bird Rental Agreement is released without expressly agreeing to the Bird Rental Agreement in effect.  (Id., ¶ 15.)

Grubb declares that on December 31, 2020, Plaintiff accepted and agreed to the Bird Rental Agreement.  (Id., ¶ 19.)  The App generated a record of her acceptance and tagged the Bird Rental Agreement accepted by her to her user ID number.  (Id., ¶ 20.)  Bird’s records do not show that Plaintiff has ever opted out of the Bird Rental Agreement or its arbitration provisions.  (Id., ¶¶ 21-22.) 

The electronic page displaying the Bird Rental Agreement begins with the following statement, displayed in all capital letters: “PLEASE READ THIS AGREEMENT CAREFULLY.  IT SETS FORTH THE LEGALLY BINDING TERMS AND CONDITIONS FOR YOUR USE OF THE SERVICE.”  (Id., Ex. A at p. 1.)  Additionally, before the recitation of the Agreement’s terms, the “Bird Rental Agreement” states in all capital and bolded letters, “THIS AGREEMENT CONTAINS RELEASES, DISCLAIMERS, ASSUMPTION-OF-RISK PROVISIONS, AND A BINDING ARBITRATION AGREEMENT THAT MAY LIMIT YOUR LEGAL RIGHTS AND REMEDIES.  FOR MORE DETAILS, PLEASE REFER TO SECTIONS 9 AND 15 BELOW.”  (Id., p. 2.)  

Section 9.2 of the Bird Rental Agreement, which is titled “Binding Arbitration and Class Action Waiver”, provides: “If the parties do not reach an agreed upon solution through the support process, then either party may initiate binding arbitration as the sole means to resolve claims, subject to the terms set forth below.  Specifically, all claims arising out of or relating to use and rental of a Vehicle, this Agreement, and the parties’ relationship with each other shall be finally settled by binding arbitration.  The substantive law of the State of California shall govern the underlying dispute, but the Federal Arbitration Act, 9 U.S.C., § 1 et seq., shall govern the interpretation and enforcement of all provisions of this Agreement pertaining to arbitration (Sections 9.1 to 9.7).  The arbitration shall be administered by JAMS, or alternatively a mutually agreed upon arbitrator or arbitration service, under the applicable commercial arbitration rules for JAMS or the mutually agreed upon arbitration service, excluding any rules or procedures governing or permitting class actions.”

Section 9.2 further provides: “The arbitrator, and not any federal, state or local court or agency, shall have exclusive authority to resolve all disputes arising out of or 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 are void or voidable, or whether a claim is subject to arbitration.” 

In light of this language, the Court finds Defendant has shown that Plaintiff has agreed to arbitrate her claims against Defendant. 

Defendant also argues that Plaintiff should be compelled to arbitrate her claims against City, County, and Segway (collectively, “Co-Defendants”) as well, arguing that they are third-party beneficiaries of the arbitration agreement. 

Generally, a plaintiff or defendant must be a party to the arbitration agreement in order to be bound by it or invoke it.  (See JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236.)  However, a non-signatory may be compelled to arbitrate a dispute when the non-signatory 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 party will be determined to be a third-party beneficiary only where the contract shows an intent by the contracting parties to confer a benefit on the third party.  (See id. at p. 1372.)  “‘[I]t is not enough that the third party would incidentally have benefited from performance.’”  (Ibid. [quoting Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891].)  

Defendant argues Co-Defendants are third-party beneficiaries of the Agreement because Section 15, titled “Releases; Disclaimers; Assumption of Risk”, serves to benefit to Co-Defendants.  Section 15 of the “Bird Rental Agreement” states that Plaintiff releases the following parties from liability: “[Defendant], Technology Services Provider and all of its and their owners, managers, affiliates, employees, contractors, fleet management service providers, officers, directors, shareholders, agents, representatives, successors, assigns, and to the fullest extent permitted by law any Municipality (including its elected and appointed officials, officers, employees, agents, contractors, and volunteers) in which Rider utilizes Services, and every property owner or operator with whom [Defendant] has contracted to operate Services and all of such parties’ owners, managers, affiliates, employees, contractors, officers, directors, shareholders, agents, representatives, successors, and assigns  . . . .”  (Grubb Decl., Ex. A, Section 15.)  Defendant argues that City and County are municipalities that expressly benefit from the exculpatory clause of the rental agreement of the electric scooter (Motion 5:13-24), and that, as the scooter manufacturer, Segway is part of its “owners, managers, affiliates, employees, contractors, officers, directors, shareholders, agents, representatives, successors, [and] assigns. . . .” (Motion, 6:7-13.) 

The Court notes that none of the Co-Defendants were served with this motion and Segway only recently filed an answer on November 2, 2022.  The cases that Defendant cites in its memorandum of points and authorities are distinguishable because the third-party beneficiaries in those cases were seeking to enforce the arbitration agreement.  Here, Co-Defendants have not expressly sought to compel arbitration.  Accordingly, the Court DENIES Defendant’s petition insofar as it seeks to compel the arbitration of claims that are not asserted against it. 

IV.         CONCLUSION

Defendant’s petition is GRANTED in part.  Plaintiff is ordered to arbitrate her claims against Defendant pursuant to the arbitration provisions set forth in the Bird Rental Agreement.  The remainder of the action is STAYED pending completion of the arbitration between Plaintiff and Defendant. 

The Court sets a status conference re: arbitration for June 8, 2023, at 8:30 a.m. in Department 27 of the Spring Street Courthouse. 

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org.  Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter.  Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue.  If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.