Reply Defendant Uma Enterprises Incs Reply In Support of Motion To Compel Arbitration

Reply

Cal. Super. - 2nd Dist.November 26, 2019

Electronically FILED by Superior Court of California, County of Los Angeles on 07/27/2020 12:19 PM Sherri R. Carter, Executive Officer/Clerk of Court, by A. Miro,Deputy Clerk A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP CAROTHERS DISANTE & FREUDENBERGER LLP Todd R. Wulffson, State Bar No. 150377 twulffson @cdflaborlaw.com Serafin H. Tagarao, State Bar No. 289885 stagarao @cdflaborlaw.com 18300 Von Karman Avenue, Suite 800 Irvine, CA 92612 Telephone: (949) 622-1661 Attorneys for Defendant UMA ENTERPRISES, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF LOS ANGELES, CENTRAL DISTRICT BENJAMIN LARIOS, an individual, Case No. 19STCV42846 Plaintiff, Assigned for All Purposes To: Judge: Michelle Williams Dept: 74 VS. UMA ENTERPRISES INC. a California corporation; and DOES 1 through 100, inclusive, DEFENDANT UMA ENTERPRISES, INC.’S REPLY IN SUPPORT OF MOTION TO COMPEL ARBITRATION Defendant. RESERVATION ID 208445691522 Date: August 3, 2020 Time: 8:30 a.m. Dept: 74 N r N e N e N e N e N e N e N e N e N e N e N e N e N e N e REPLY ISO MOTION TO COMPEL ARBITRATION 1657940.1 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION In Plaintiff Benjamin Lario’s Opposition to Defendant UMA Enterprises, Inc.’s Motion to Compel Arbitration (“Opposition”), Plaintiff admits that “California has a strong policy favoring arbitration.” Plaintiff further admitted that he signed the arbitration agreement. As will be more fully shown below, Plaintiff cannot establish either procedural or substantive unconscionable provisions in the Arbitration Agreement (“Agreement”), and therefore, Defendant’s Motion to Compel Arbitration and Stay Proceedings Pursuant to Section 1281.4 of the California Arbitration Act (“Motion”) should be granted. II. LEGAL ARGUMENT The party resisting arbitration bears the burden of proving that grounds exist to revoke the agreement or that the claims at issue are unsuitable for arbitration. Green Tree Fin. Corporation- Alabama v. Randolph, 531 U.S. 79, 91 (2000); see also Rosenthal v. Great Western Fin. Securities Corp., 14 Cal. 4th 394, 413 (1996). Competent evidence is required to establish any ground for denial. Main v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 67 Cal. App. 3d 19 n.2 (1997), overruled on other grounds in Rosenthal, 14 Cal. 4th at 407, 417-18. Here, Plaintiff has not presented competent evidence to invalidate his arbitration agreement. A. Public Policy Supports the Enforcement of Arbitration Agreements Including in the Employment Context Both the Federal Arbitration Act and California Arbitration Act’s broad policies favor arbitration, including in the employment context. Epic Systems v. Lewis, 138 S. Ct. 1612, 1619 (2018) (affirming that employers and employees are “allowed to agree that any disputes between them will be resolved through one-on-one arbitration”); Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 113-14, 119 (2001) (the FAA applies to arbitration provisions in employment contracts, except those involving transportation workers); Gilmer v. Interstate-Johnson Lane Corp., 500 U.S. 20, 31 (1991) (employment discrimination claim was subject to compulsory arbitration under the FAA); Iskanian v. CLS Transportation Los Angeles, LLC., 59 Cal. 4th 348, 366 (2014) (holding that employment arbitration agreements with mandatory class action waivers are enforceable and 1 REPLY ISO MOTION TO COMPEL ARBITRATION 1657940.1 ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 state law to the contrary is preempted by the FAA). This is only more true today, when the pandemic has created a significant backlog in the courts. B. The Arbitration Agreement Is Not Procedurally Unconscionable The Arbitration Agreement is not procedurally unconscionable, and Plaintiff’s attempts to characterize it as such ultimately fail. An agreement is not procedurally unconscionable simply because a copy of the rules governing the arbitration are not attached. See Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1246 (2016) (finding that a procedural unconscionability challenge to an agreement that did not attach the AAA rules only has force where the challenge concerns some element of the rules that the employee is unaware of when he signs the agreement); see also Lane v. Francis Capital Management, LLC, 224 Cal. App. 4th 676, 691-92 (2014) (finding an arbitration agreement was not procedurally unconscionable because the agreement stated which set of AAA rules applied and the rules were available on the internet); Peng v. First Republic Bank, 219 Cal. App. 4th 1462, 1472 (2013) (finding a failure to attach of copy of the rules, standing alone, does not render an agreement procedurally unconscionable). Plaintiff has not met her burden in showing that failure to attach a copy of the rules somehow renders the agreement procedurally unconscionable. Even assuming, arguendo, that Plaintiff’s continued employment was conditioned on his signing of the agreement, California law makes clear that “when an employee continues his or her employment after notification that an agreement to arbitration is a condition of continued employment, that employee has impliedly consented to the arbitration agreement.” Diaz v. Sohnen Enterprises, 34 Cal. App. 5th 126, 130, 245 Cal. Rptr. 3d 827, 830 (2019). Indeed, courts have consistently held that requiring an employee to enter into an arbitration agreement does not bar its enforcement. Lagatree v. Luce, Forward, Hamilton & Scripps, 74 Cal. App. 4th 1105, 1127 (1999) (“cases uniformly agree that a compulsory predispute arbitration agreement is not rendered unenforceable just because it is required as a condition of employment or offered on a ‘take it or leave it’ basis”). Thus, Plaintiff cannot establish that the Agreement is procedurally unconscionable. 111 2 REPLY ISO MOTION TO COMPEL ARBITRATION 1657940.1 A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 C. The Arbitration Agreement Is Not Substantively Unconscionable The terms of the arbitration agreement are fair and do not render the agreement substantively unconscionable. 1. The Agreement Allows the Parties to Jointly Select an Arbitrator Contrary to Plaintiff’s assertion in the Opposition, the Agreement does not contain a one- sided arbitrator selection process. Instead, Section 3 of the Agreement expressly provides “that any arbitration shall be conducted before one neutral arbitrator selected by the Parties.” (Perrez Decl., Ex. A). Rule 12 of AAA’s Employment Arbitration Rules and Mediation Procedures (the “Rules™) mandates neutral arbitrators experienced in the field of employment law with no personal or financial interest in the results of the proceeding. (Declaration of Serafin Tagarao in Support of Reply in Support of Motion (Tagarao Decl.”) | 2, Ex. 1 at 15. Moreover, Rule 12 specifically states that the arbitration “shall be heard and determined by one [neutral] arbitrator” in conformity with the procedures of the California Arbitration Act, which provides that arbitration “shall be by a single neutral arbitrator.” Id.; Cal. Code Civ. Proc. § 1283.4.” Thus, the Parties are free to select whomever they wish to serve as an arbitrator even if the proposed arbitrator is from a different arbitration provider. 2. The FAA Preempts Labor Code Section 229 “In matters in which the FAA applies,” such as this one, “it preempts Labor Code section 229, requiring arbitration of claims that otherwise could be resolved in court. Performance Team Freight Sys., Inc. v. Aleman, 241 Cal. App. 4th 1233, 1239 (2015) (citing Perry v. Thomas (1987) 482 U.S. 483, 490-492). Thus, Plaintiff’s argument that the Agreement is void because of Labor Code section 229 fails as a matter of law. Moreover, as Plaintiff admits, he “does not have any wage and hour claims in his case.” (Opposition at 7). 3. The Agreement Provides for Adequate Discovery California courts make clear that “arbitration is meant to be a streamlined procedure.” Dotson v. Amgen, Inc., 181 Cal. App. 4th 975, 983 (2010). “Limitations on discovery, including the number of depositions, is one of the ways streamlining is achieved.” Indeed, adequate discovery does not mean “unfettered” discovery. Mercuro v. Superior Court, 96 Cal.App.4th 167, 3 REPLY ISO MOTION TO COMPEL ARBITRATION 1657940.1 ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 175 (2002). Instead, an arbitration agreement only requires “discovery sufficient to adequately arbitrate their statutory claim, including access to essential documents and witnesses, as determined by the arbitrator(s) . . .” Armendariz v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 106, 6 P.3d 669, 684 (2000). Here, Rule 9 of the Rules explicitly allows for such discovery: “The arbitrator shall have the authority to order such discovery, by way of deposition, interrogatory, document production, or otherwise, as the arbitrator considers necessary to a full and fair exploration of the issues in dispute, consistent with the expedited nature of arbitration.” Tagarao Decl. | 2, Ex. 1 at 14. These rules do not impose an undue limitation on discovery. Roman v. Superior Court, 177 Cal. App. 4th 1462, 1475-76 (2009) (upholding the AAA’s employment dispute rules with regards to discovery). Thus, Plaintiff cannot establish that the Agreement is substantively unconscionable. D. None of the Agreement’s Provisions Should Be Severed Because Plaintiff Cannot Establish any Unconscionable Provisions Only arbitration clauses “permeated” by unconscionability may be held unenforceable. Armendariz, 24 Cal. 4th at 773. In Armendariz, the Court held that the arbitration agreement in that case was not severable because it had both an unlawful damages provision and an unconscionably unilateral arbitration clause. Id. at 124. By contrast, Plaintiff cannot establish that any of those unlawful provisions are present in the instant Agreement. None of the provisions cited by Plaintiff in the Opposition are unconscionable. Even assuming, arguendo, that the Court found any of the provisions in the Agreement unconscionable, those provisions could be severed pursuant to the express severability provisions in the Agreement. Mission Viejo Emergency Med. Assocs. v. Beta Healthcare Grp., 197 Cal. App. 4th 1146, 1159 (2011) (specific provisions raised by plaintiff could be the subject of a motion to sever before the trial court if the parties could not reach agreement on the terms of arbitration). 111 111 111 111 4 REPLY ISO MOTION TO COMPEL ARBITRATION 1657940.1 ~N O Y a B A W 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 III. CONCLUSION In light of the above, Defendant respectfully requests that the Court grant Defendant’s Motion. Dated: 1657940.1 July 27, 2020 CAROTHERS DISANTE & FREUDENBERGER LLP Todd R. Wulffson a” By: c Serafin H. Tagarao Attorneys for Defendant UMA ENTERPRISES, INC. 5 REPLY ISO MOTION TO COMPEL ARBITRATION A N nn W N 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 CAROTHERS DiSANTE & FREUDENBERGER LLP PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF ORANGE. I, the undersigned, declare that I am employed in the aforesaid County, State of California. I am over the age of 18 and not a party to the within action. My business address is 18300 Von Karman Avenue, Suite 800, Irvine, CA 92612. On July 27, 2020, I served upon the interested party(ies) in this action the following document described as: DEFENDANT UMA ENTERPRISES, INC.”S REPLY IN SUPPORT OF MOTION TO COMPEL ARBITRATION By the following method: Jake D. Finkel, Esq. Sheryl L. Marx, Esq. LAW OFFIES OF JAKE D. FINKEL, APC 3470 Wilshire Blvd., Suite 830 Los Angeles, CA 90010 E-MAIL: sheryl @lawfinkel.com; vilma@lawfinkel.com; jessica@lawfinkel.com For processing by the following method: (via designated electronic filing service) I hereby certify that the above-referenced document(s) were served electronically on the parties listed herein at their most recent known email address or email of record by submitting an electronic version of the document(s) to One Legal, LLC, through the user interface at www.onelegal.com. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on July 27, 2020, at Irvine, California. Lisa Shaw ha “© Slaw (Type or print name) (Signature) 6 REPLY ISO MOTION TO COMPEL ARBITRATION 1657940.1