Memorandum Points and AuthoritiesCal. Super. - 6th Dist.April 5, 20211o 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LITTLEORWMEauegtfnaN 7m F oor San Jose, CA 95113.2431 408.998.4150 21 CV3791 47 Santa Clara - Civil ANDREW M. SPURCHISE, Bar No. 245998 aspurchise@littler.com LITTLER MENDELSON P.C. 900 3rd Avenue, 8th Floor New York, NY 10022-3298 Telephone: 212.583.9600 Fax No.2 212.832.2719 ELISA NADEAU, Bar N0. 199000 enadeau@littler.com LINDA NGUYEN BOLLINGER, Bar N0. 2895 1 5 lbollinger@littler.com ALEC S. DIMARIO, Bar N0. 309811 adimario@littler.com LITTLER MENDELSON, P.C. 50 W. San Fernando, 7th Floor San Jose, CA 951 13.2431 Telephone: 408.998.4150 Fax No.2 408.288.5686 Attorneys for Defendant GARUDA LABS, INC. dba INSTAWORK Electronically Filed by Superior Court of CA, County of Santa Clara, on 9/10/2021 4:10 PM Reviewed By: R. Walker Case #21 CV379147 Envelope: 7244811 SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA DEANGELO DANIELS, individually, and 0n behalf of other members 0f the general public similarly situated; Plaintiff, V. GARUDA LABS, INC. dba INSTAWORK, an unknown business entity; and DOES 1 through 100, inclusive, Defendants. Case No. 2 1CV379 147 Honorable Patricia M. Lucas Department 3 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT GARUDA LABS, INC. DBA INSTAWORK'S MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS Hearing Date: October 27, 2021 Hearting Time: 1:30 pm Department: 3 Complaint Filed: April 5, 2021 Case No. 21CV379147 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 TABLE OF CONTENTS 2 PAGE 3 1. INTRODUCTION ................................................................................................................... 3 4 II. STATEMENT OF RELEVANT FACTS AND PROCEDURAL BACKGROUND .............. 3 A. THE INSTAWORK APP CONNECTS PROFESSIONALS LIKE DANIELS 5 WITH BUSINESS OPPORTUNITIES FOR THIRD PARTIES. ............................... 3 6 B. DANIELS’S CONTRACTOR SERVICES AGREEMENT. ...................................... 4 C. DANIELS AGREED TO SUBMIT ALL DISPUTES TO BILATERAL 7 ARBITRATION. ......................................................................................................... 5 8 D. DANIELS BREACHED THE ARBITRATION PROVISION BY FILING THIS ACTION ............................................................................................................. 6 9 III. ARGUMENT ........................................................................................................................... 6 10 A. THE FAA REQUIRES DANIELS TO ARBITRATE HIS CLAIMS. ........................ 6 B. THE CLASS ACTION WAIVER IS VALID AND ENFORCEABLE, AND 11 PLAINTIFF’S CLASS CLAIMS SHOULD BE STRICKEN ..................................... 7 12 C. THE PARTIES UNMISTAKABLY RESERVED ALL OTHER ISSUES FOR ARBITRATION. ......................................................................................................... 9 13 D. THE ARBITRATION PROVISION COVERS THIS DISPUTE. ............................ 10 1 4 1. THERE IS A VALID AGREEMENT TO ARBITRATE. ............................ 10 2. THE ARBITRATION PROVISION COVERS THIS DISPUTE. ................ 11 15 IV. REQUEST FOR STAY AND CONCLUSION ..................................................................... 12 16 17 18 19 20 21 22 23 24 25 26 27 28 2 Case No. 21CV379147 LITTLER MENDELSON P.C. MEMORANDUM 0F POINTS AND AUTHORITIES IN SUPPORT 0F DEFENDANT’SW' MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1o 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LITTLEORWMEauegtfnaN 7m F oor San Jose, CA 95113.2431 408.998.4150 I. INTRODUCTION Plaintiff DeAngelo Daniels (“Daniels”) contracted t0 use Defendant Garuda Labs, Inc. dba Instawork’s (“Instawork”) application (“Instawork App”)1 t0 find work opportunities With third parties, across a host 0f industries. In doing so, Daniels voluntarily agreed, as part of his Contractor Services Agreement, t0 submit all disputes With Instawork t0 final and binding bilateral arbitration (“Arbitration Provision”). The Arbitration Provision is governed by the Federal Arbitration Act (“FAA”), which mandates that it must be enforced as written, in accordance with its terms. Lamps Plus, Inc. v. Varela, 139 S.Ct. 1407, 1415-19 (2019); Epic Sys. Corp. v. Lewis (“Epic”), 138 S.Ct. 1612, 1619 (2018). Despite his express agreement to arbitrate, Daniels filed the instant putative class action. Because the operative Arbitration Provision clearly and unmistakably delegates questions of arbitrability t0 an arbitrator, the Court’s limited task here is t0 determine Whether an arbitration agreement exists. Henry Schein, Inc. v. Archer & White Sales, Ina, 139 S.Ct. 526, 529 (2019). The Arbitration Provision’s class action waiver, the enforceability 0f which is the only relevant issue expressly reserved for the Court, is indisputably enforceable here. As a delegation clause exists and the class action waiver is enforceable, the Court must order individual arbitration, strike Daniels’s class allegations, and stay any further proceedings pending arbitration. II. STATEMENT OF RELEVANT FACTS AND PROCEDURAL BACKGROUND A. The Instawork App Connects Professionals Like Daniels With Business Opportunities for Third Parties. Instawork, a technology company, develops software applications connecting businesses with professional contractors (“pros”) for short-term work (“gigs”) 0r longer-term jobs. Declaration 0f Adam Stepinski (“Stepinski Decl.”) at 1] 3. Free of charge, pros like Daniels can use the Instawork App t0 access gigs and other opportunities. Id. Through the App, third-party businesses select and negotiate directly With Instawork pros regarding the work to be performed, as well as the rates, schedules, locations, and other details for the work. Id. The third-party business sets all the parameters of work, including training, supervision, and the provision of equipment. Id. 1 For ease of reference, “Instawork App” 0r “the App” Will include Instawork’s various websites, software platform, mobile applications, content, and services. 3 Case No. 21CV379147 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 T0 book a gig, a pro downloads the Instawork App from the Apple App Store or Google 2 Play store. Stepinski Decl. 1] 4, Ex. A, Contractor Services Agreement (“CSA”) Slides, p. 1, Step 3 1. Once the Instawork App is downloaded, the pro creates a new account, providing their first and 4 last name, telephone number, and email address. Id. 1] 4, EX. A, CSA Slides, p. 1, Step 2. Before 5 tapping “Next” t0 complete the process of creating a new account, the pro is expressly informed, 6 directly in the middle 0f the page without surrounding text: “[b]y tapping Next, you agree t0 our 7 Privacy Policy and Terms of Use[.]” Id. (emphasis in original demonstrating hyperlinks). 8 After creating a personal, unique account, the pro must follow the onboarding process and 9 complete all required documentation before booking their first gig. Stepinski Decl. 1] 5, Ex. A, CSA 10 Slides, p. 1. By tapping the “[b]ook your first gig” button, the pro can then View “Open gigs” and 11 “My gigs.” Id. 11 5, EX. A, CSA Slides, p.1, Step 3. Once the pro taps t0 book a gig, they are 12 prompted t0 and must tap to review the Contractor Services Agreement t0 continue. Id. 1] 5, EX. A, 13 CSA Slides, p. 1, Steps 4-5 (button states “Review Agreement”). The pro must then scroll down 14 t0 review and read the entire CSA. Id. 11 5, EX. A, CSA Slides, p. 2, Step 7. At the end of the CSA, 15 to continue, the pro must then tap “I accept” t0 agree to its terms. Id. A pro cannot accept a gig 16 Without scrolling through and accepting the CSA. Id. 1H] 5, 7. 17 B. Daniels’s Contractor Services Agreement. 18 On November 9, 2020, Daniels negotiated his first work opportunity with a third-party 19 business as a pro; in order to do so, he entered into a CSA with Instawork in accordance With the 20 process set forth above. Stepinski Decl. 1] 9, Ex. B. 21 On 0r about March 20, 2021, Instawork issued an updated Contractor Services Agreement. 22 Stepinski Decl. at fl 10 23 On April 2, 2021, Daniels again negotiated a work opportunity With a third-party business 24 as a pro; just as he had done previously, he entered into the updated CSA with Instawork in 25 accordance With the process set forth above. Stepinski Decl. 1] 11, EX. C. 26 27 28 4 Case No. 21CV379147 LITTLER MENDELSON P.C. soAW'QZfFaetrnLaardo MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S S“ ”23358332510324“ MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 C. Daniels Agreed to Submit All Disputes to Bilateral Arbitration. 2 The updated and operative CSA contains an Arbitration Provision? See generally Stepinski 3 Decl., EX. C, CSA. The CSA’s introduction contains the following disclaimer: 4 You further acknowledge that You have read, understood, and voluntarily agreed t0 all of the terms in this Agreement, including the Mutual Arbitration and Dispute 5 Resolution provision (“Mutual Arbitration Provision”) found in Section 11. 6 IMPORTANT: THE MUTUAL ARBITRATION PROVISION, IF ACCEPTED, REQUIRES THE PARTIES TO RESOLVE DISPUTES BETWEEN THEM 7 THROUGH FINAL AND BINDING ARBITRATION ON AN INDIVIDUAL BASIS TO THE FULLEST EXTENT PERMITTED BY LAW. 9 Stepinski Decl. EX. C, CSA, p. 1. 10 The Arbitration Provision in the CSA requires bilateral arbitration 0f the disputes in this 1 1 case: 12 Arbitration of Disputes. The Parties mutually agree t0 resolve any and all disputes between them 0r between You and Instawork or any of Instawork’s parents, 13 subsidiaries, affiliates, successors, assigns, officers, directors, employees, and/or agents exclusively through final, binding, and individual arbitration instead offiling 14 a lawsuit in court (except as otherwise provided below). 15 Stepinski Decl. EX. C, CSA § 11.1. 16 The Arbitration Provision expressly provides that it is governed by the FAA: “Arbitration 17 Governed by the FAA. Instawork and You expressly agree that this Mutual Arbitration Provision 18 is a licensing agreement governed by the Federal Arbitration Act (9 U.S.C. §§ 1-16) (‘FAA’). . . .” 19 Stepinski Decl. EX. C, CSA § 11.2 20 The Arbitration Provision specifically delegates to the arbitrator all threshold issues 0f 21 arbitrability: 22 Delegation. Only an arbitrator, and not any federal, state, or local court or agency, shall have the exclusive authority to resolve any dispute relating to the 23 interpretation, applicability, enforceability, or formation of this Mutual Arbitration 24 Provision, including Without limitation any dispute concerning arbitrability. 25 2 The CSA accepted by Daniels on April 2, 2021, supersedes all prior agreements to the extent any 26 such agreements govern the subject matter 0fthe CSA. Stepinski Dec1., EX. C, CSA § 17.7. Because Daniels accepted a CSA 0n April 2, 2021, after the CSA accepted 0n November 9, 2020, the CSA 27 accepted 0n April 2, 2021 contains the operative Arbitration Provision between Instawork and Daniels. Stepinski Decl. EX. C, CSA, p. 1. Unless otherwise specified, “Arbitration Provision” and 28 “CSA” reference the agreement contained in the CSA Daniels accepted 0n April 2, 2021. LITTLER MENDELSON P.C. 5 case NO 21CV379147 MEMORANDUM 0F POINTS AND AUTHORITIES 1N SUPPORT 0F DEFENDANT’S Jozgéggaaaggs-W MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 Stepinski Decl. EX. C, CSA § 11.3. 7, 2 Another provision, entitled “Class Action Waiver, further confirmed the parties’ 3 agreement to individual arbitration: 4 CLASS ACTION WAIVER. Instawork and You mutually agree that any and all disputes 0r claims between the Parties Will be resolved in individual arbitration. 5 The Parties further agree that by entering into this Agreement, they waive the right t0 have any dispute 0r claim brought, heard, administered, resolved, or arbitrated 6 as a class, collective, 0r mass action, and an arbitrator shall not have any authority 7 to hear or arbitrate any class, collective, and/or mass action, or to award relief to anyone but the individual in arbitration (“Class Action Waiver”). 8 Stepinski Decl. EX. C, CSA § 11.6. 9 The Arbitration Provision further provides that the delegation clause “shall not apply to any 10 dispute relating t0 0r arising out of the Class Action Waiver. . . .” Stepinski Decl. EX. C, CSA 1 1 § 1 1.3. 12 D. Daniels Breached the Arbitration Provision By Filing This Action. 13 Daniels failed t0 comply With the Arbitration Provision. Indeed, only three days after 14 entering the CSA, he filed this putative class action 0n April 5, 2021, alleging that Instawork 15 misclassified him and others as independent contractors and asserting claims for Violation of the 16 Labor Code. E.g., P1.’s Compl. 1H 1, 12-16, 19, 51-121. 17 III. ARGUMENT 18 A. The FAA Requires Daniels t0 Arbitrate His Claims. 19 The FAA requires that “[a] written provision in any . . . contract evidencing a transaction 20 involving commerce to settle by arbitration a controversy thereafter arising . . . shall be valid, 21 irrevocable, and enforceable, save upon such grounds as exist at law 0r in equity for the revocation 22 0f any contract.” 9 U.S.C. § 2. The statute “reflects the fundamental principle that arbitration is a 23 matter of contract.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010). Enacted to 24 remedy “widespread judicial hostility t0 arbitration agreements,” the FAA requires liberal 25 enforcement of arbitration agreements. AT&T Mobility LLC v. Concepcion (“Concepcion”), 563 26 U.S. 333, 339 (201 1); Epic, supra, 138 S.Ct. at 1623. Accordingly, courts must resolve “any doubts 27 concerning the scope 0f arbitrable issues . . . in favor of arbitration” in order to “move the parties 28 6 Case No. 21CV379147 LITTLER MENDELSON P.C. MEMORANDUM 0F POINTS AND AUTHORITIES 1N SUPPORT 0F DEFENDANT’S Jozgéggaaaggs-W MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 t0 an arbitrable dispute out of court and into arbitration as quickly and easily as possible.” Moses 2 H. Cone Mem ’l Hosp. v. Mercury Constr. Corp, 460 U.S. 1, 24-25 (1983). 3 The FAA governs the parties’ dispute because the Arbitration Provision expressly provides 4 that it is governed by the FAA. Stepinski Decl. EX. C, CSA § 11.2; Buckeye Check Cashing, Inc. 5 v. Cardegna, 546 U.S. 440, 442-43 (2006); see Rodriguez v. Am. Techs., Ina, 136 Cal.App.4th 6 1110, 1122 (2006). The Arbitration Provision, which is contained within Daniels’s agreement t0 7 use the Instawork App to negotiate and claim work opportunities, also falls Within the FAA’s 8 requirement that it evidence a transaction “involving commerce.” Stepinski Decl. EX. C, CSA 9 § 11.2; see 9 U.S.C. § 2. This requirement is broadly construed, consistent with the full reach 0f 6 10 the Commerce Clause, to apply the FAA even if there is n0 “specific effect upon interstate 11 commerce if in the aggregate the economic activity in question would represent ‘a general 12 practice . . . subject t0 federal c0ntrol.”’ Citizens Bank v. Alafabco, Ina, 539 U.S. 52, 56-57 (2003) 13 (quoting Mandeville Island Farms, Inc. v. Am. Crystal Sugar C0., 334 U.S. 219, 236 (1948)). 14 B. The Class Action Waiver Is Valid and Enforceable, and Plaintiff’s Class Claims 15 Should Be Stricken. 16 The Arbitration Provision expressly reserves for the Court the authority t0 determine only 17 certain issues, the only one of Which relevant to this motion is the enforceability of the parties’ 18 Class Action Waiver. Stepinski Decl. EX. C, CSA § 11.3. The “primary purpose” of the FAA is 19 “ensuring that private agreements t0 arbitrate are enforced according t0 their terms.” Volt Info. 20 Scis., Inc. v. Bd. 0f Trustees, 489 U.S. 468, 479 (1989); see Mastrobuono v. Shearson Lehman 21 Hutton, Ina, 514 U.S. 52, 53-54 (1995). Because the FAA provides that a party may obtain an 22 order compelling arbitration “in the manner provided for in [the parties’] agreement,” the Court 23 should enforce the Arbitration Provision as written, including the Class Action Waiver, and order 24 the parties t0 individual arbitration. 9 U.S.C. § 4; see 0 ’Connor v. Uber Techs., Ina, 904 F.3d 1087, 25 1094 (9th Cir. 2018) (class certification is inappropriate Where the putative class is comprised 0f 26 individuals Who agreed t0 resolve their claims through individual arbitration). 27 The Supreme Court has repeatedly upheld the enforcement of class action waivers. For 28 7 Case No. 21CV379147 LITTLER MENDELSON P.C. soAVvérngFaetrnLaaxdo MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S S“ ”23358332510324“ MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 example, the Supreme Court held in Stolt-Nielsen S.A. v. AnimalFeeds International Corp, that “a 2 party may not be compelled under the FAA t0 submit to class arbitration unless there is a contractual 3 basis for concluding that the party agreed t0 d0 so.” 559 U.S. 662, 684 (2010); accordLamps Plus, 4 139 S. Ct. at 1415, 1418-19 (courts may not compel parties to arbitrate in any manner that is 5 “markedly different from . . . traditional individualized arbitration” and that “interferes With [the] 6 fundamental attributes of arbitration"-informality, speed, and cost-efficiency-unless the parties 7 expressly agreed t0 do so). The Supreme Court affirmed the enforceability of class waivers a year 8 later, reiterating that the bedrock principle 0f the FAA is that arbitration agreements must be 9 enforced as written. Concepcion, 563 U.S. at 352. Specifically, the Supreme Court held that 10 California’s rule restricting enforcement of class action waivers was preempted because it 11 interfered with the fundamental attributes of arbitration as contemplated by the FAA and created a 12 scheme inconsistent with the FAA. See id. at 348, 352. 13 The Supreme Court again reinforced the enforceability of class action waivers in American 14 Express C0. v. Italian Colors Restaurant, 570 U.S. 228 (2013), holding that courts “must 15 ‘rigorously enforce’” arbitration agreements according to their terms, including terms that “specify 16 With whom [the parties] choose t0 arbitrate their disputes.” Id. at 233 (citations omitted); see id. at 17 236-39 (class waiver enforceable even if the plaintiff‘s costs of individually arbitrating a claim 18 exceed the potential individual recovery). And most recently, in Epic, the Supreme Court 19 invalidated a rule (the “Morris rule”)3 barring class and collective action waivers based on the 20 purported Violation 0f employees’ rights under the National Labor Relations Act (“NLRA”). The 21 Supreme Court rejected that reasoning, holding that Morris rule ran afoul of the FAA because it 22 was not a defense that “would render any contract unenforceable,” but rather, it “attack[ed] (only) 23 the individualized nature of the arbitration proceedings” and “interfere[d] with one of arbitration's 24 fundamental attributes.” Epic, 138 S.Ct. at 1622. The NLRA could not override class waivers 25 because “[i]n the [FAA], Congress has instructed federal courts t0 enforce arbitration agreements 26 according to their terms-including terms providing for individualized proceedings.” Id. at 1619. 27 28 3 See Morris v. Ernst & Young, LLP, 834 F.3d 975, 989-90 (9th Cir. 2016). LITTLER MENDELSON P C 8 case NO' 21CV379147 so MEMORANDUM 0F POINTS AND AUTHORITIES 1N SUPPORT 0F DEFENDANT’S Jozgéggaaaggs-W MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 The Supreme Court concluded that its holding is consistent with its prior holding “decades ago that 2 an identical collective action scheme (in fact, one borrowed from the FLSA) does not displace the 3 Arbitration Act or prohibit individualized arbitration proceedings.” Id. at 1626. 4 This Court must follow the above binding precedent and enforce the Arbitration Provision 5 as written, including the Class Action Waiver. See Stepinski Decl. EX. C, CSA § 11.6; see Auto 6 Equity Sales, Inc. v. Superior Court, 57 Cal.2d 450, 455 (1962) (“[A]11 tribunals exercising inferior 7 jurisdiction are required t0 follow decision 0f courts exercising superior jurisdiction”); see also 8 Marmet Health Care Ctr., Inc. v. Brown, 565 U.S. 530, 533 (2012). Thus, this Court must enforce 9 Daniels’s agreement to individually arbitrate and strike his class claims. 10 C. The Parties Unmistakably Reserved All Other Issues for Arbitration. 11 Normally, in deciding Whether t0 compel arbitration, a court is charged with determining 12 two “gateway” issues (discussed below). However, there is an exception to this general rule where, 13 as here, “the parties clearly and unmistakably provide otherwise.” AT&T Tech, Inc. v. Commc ’ns 14 Workers 0fAm., 475 U.S. 643, 649 (1986); see also First Options 0f Chicago, Inc. v. Kaplan 15 (“Kaplan”), 514 U.S. 938, 943 (1995). In such a case, the court examines the underlying contract 16 t0 determine Whether the parties agreed to commit questions of enforceability or arbitrability t0 the 17 arbitrator. Rent-A-Center, 561 U.S. at 70. 18 Here, the Arbitration Provision contains a clear and unmistakable delegation provision 19 stating that “[o]nly an arbitrator, and not any federal, state, or local court 0r agency, shall have the 20 exclusive authority t0 resolve any dispute relating to the interpretation, applicability, enforceability, 21 or formation of this Mutual Arbitration Provision, including without limitation any dispute 22 concerning arbitrability.” Stepinski Decl. EX. C, CSA § 11.3. Aside from striking Plaintiff’s class 23 claism due t0 the express reservation of authority in the Class Action Waiver, because the FAA 24 governs this dispute, and because the Arbitration Provision includes a delegation clause, there is no 25 other work for the Court t0 do but compel arbitration. See, e.g., Henry Schein, 139 S.Ct. at 529 26 (court must enforce delegation clause even ifargument that arbitration agreement exists and applies 27 to dispute is “wholly groundless”); Mohamed v. Uber Techs., Inc. 848 F.3d 1201, 1208-12 (9th 28 9 Case No. 21CV379147 LITTLER MENDELSON P.C. MEMORANDUM 0F POINTS AND AUTHORITIES 1N SUPPORT 0F DEFENDANT’S Jozgéggaaaggs-W MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 Cir. 2016) (enforcing delegation clause). 2 D. The Arbitration Provision Covers This Dispute. 3 Even assuming the Court decides the gateway issues (which it should not), the result is the 4 same. The FAA requires arbitration because the Arbitration Provision satisfies the two gateway 5 issues: (1) a valid agreement t0 arbitrate exists between the parties; and (2) the agreement covers 6 the dispute. PacifiCare Health Sys., Inc. v. Book, 538 U.S. 401, 407 n.2 (2003). 7 1. There Is a Valid Agreement to Arbitrate. 8 “When deciding Whether the parties agreed t0 arbitrate a certain matter,” courts generally 9 “should apply ordinary state-law principles that govern the formation of contracts.” Kaplan, 514 10 U.S. at 944. California law applies t0 Daniels’s claims because he alleges that he resides in 11 California and that the acts and omissions alleged in his Complaint took place in California. Pl.’s 12 Compl. W 4-5. Furthermore, the Arbitration Provision’s choice of law provision elects the FAA. 13 Stepinski Decl. EX. C, CSA § 11.2; see also id. EX C., CSA § 17.4. Under the FAA, courts may not 14 invalidate arbitration agreements under state law contract principles applicable only to arbitration 15 provisions; only generally applicable contract defenses, such as fraud, duress, 0r unconscionability, 16 may be applied t0 invalidate arbitration agreements Without contravening the FAA. 9 U.S.C. § 2; 17 Aviation Data, Inc. v. Am. Express Travel Related Servs. C0., 152 Cal. App. 4th 1522, 1535 (2007). 18 As a general matter, “[t]he FAA applies t0 arbitration clauses in contracts involving interstate 19 commerce and ‘Was designed to “overrule the judiciary’s long-standing refusal t0 enforce (‘620 agreements t0 arbitrate,” [citation], and to place such agreements upon the same footing as other 3” 21 contracts. [Citation] ‘However, the FAA’S purpose is not t0 provide special status for arbitration 22 agreements, but only “to make arbitration agreements as enforceable as other contracts. . . .”’” 23 Rodriguez v. Am. Techs., Ina, 136 Cal.App.4th 1110, 1117 (2006) (quoting Cronus Invs., Inc. v. 24 Concierge Servs., 35 Cal.4th 376, 384 (2005)). 25 Applying California law, a contract is formed electronically When a user receives reasonable 26 notice of its terms and takes action that objectively manifests assent. See In re Hall, 925 F.3d 1076, 27 1082-85 (9th Cir. 2019) (“Federal courts [applying California law] . . . have recognized the general 28 10 Case No. 21CV379147 LITTLER MENDELSON P.C. MEMORANDUM 0F POINTS AND AUTHORITIES 1N SUPPORT 0F DEFENDANT’S Jozgéggaaaggs-W MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 enforceability 0f similar online agreements that require affirmative user assent”); Meyer v. Uber 2 Techs., Ina, 868 F.3d 66, 74-80 (2d Cir. 2017) (collecting cases and applying California law); see 3 also Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 681, 687-88 (1996) (FAA preempts 4 heightened state notice requirements for arbitration clauses); Espejo v. S. Cal. Permanente Med. 5 Grp., 246 Cal. App. 4th 1047, 1060 (2016) (enforcing e-signature). 6 Here, Daniels formed a contract with Instawork to arbitrate upon accepting the CSA. See 7 Marin Storage & Trucking, Inc. v. Benco Contracting & Eng’g, Ina, 89 Ca1.App.4th 1042, 1049- 8 50 (2001) (“[O]rdinarily one Who signs an instrument Which on its face is a contract is deemed t0 9 assent to all its terms.”). The existence and specific terms 0f the Arbitration Provision were clearly 10 and conspicuously communicated t0 Daniels When he signed up t0 use the Instawork App. Before 11 beginning a gig for a third-party business through the Instawork App, 0n April 2, 2021, Daniels 12 agreed t0 the operative Arbitration Provision contained within the CSA, through which he was 13 required t0 scroll in order t0 proceed. Stepinski Decl. W 7, 11, EX. A, CSA Slides, pgs. 1-2; EX. C, 14 CSA, § 11. The CSA notifies users 0f the existence 0f the Arbitration Provision using all caps 15 and/or bold font to distinguish it from the ordinary font used for other terms in the sign-up and CSA 16 process. Id., EX. C, CSA, p. 1. Indications of assent in similar circumstances have repeatedly been 17 deemed valid acceptance ofan agreement to arbitrate. See, e.g., Meyer, 868 F.3d at 74-80; id. at 75 18 (courts “routinely uphold” agreements when “the user has affirmatively assented to the terms of 19 agreement by clicking ‘I agree’”); Mohamed, 848 F.3d at 1207-104 20 2. The Arbitration Provision Covers This Dispute. 21 Because there is a presumption of arbitrability, a motion to compel arbitration must be 22 granted unless it can “be said With positive assurance that the arbitration [agreement] is not 23 susceptible 0f an interpretation that covers the asserted dispute.” AT&T Techs., 475 U.S. at 650 24 (quotation marks omitted). “Doubts should be resolved in favor 0f coverage.” Id. (quotation marks 25 omitted). Here, the Arbitration Provision plainly covers Daniel’s misclassification and wage-and- 26 27 4 See also, e.g., Levin v. Caviar, Ina, 146 F.Supp.3d 1146, 1157 (N.D. Cal. 2015); Swift v. Zynga Game Network, Ina, 805 F.Supp.2d 904, 910-12 (N.D. Cal. 2011); Long v. Provide Commerce, 28 Ina, 245 Cal.App.4th 855, 862-63 (2016). LITTLER MENDELSON P.C. 11 case NO 21CV379147 so MEMORANDUM 0F POINTS AND AUTHORITIES 1N SUPPORT 0F DEFENDANT’S Jozgéggaaaggs-W MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 hour claims: 2 The Parties mutually agree t0 resolve any and all disputes between them 0r between You and Instawork . . . exclusively through final, binding, and individual arbitration 3 instead of filing a lawsuit in court. . . . 4 Stepinski Decl. EX. C, CSA, § 11.1. 5 Instawork and You expressly agree . . .that the FAA shall apply t0 any and all disputes between the Parties, including but not limited to those arising out of or 6 relating t0 . . . Your classification status as a worker 0r service provider (e.g., an alleged employment relationship), . . . the remuneration received by You for 7 providing Services, . . . and all other aspects 0f Your relationship with Instawork, past or present, Whether arising under federal, state, or local law, including Without 8 limitation . . . claims arising under or related to . . . state and local wage and hour laws, state and local statutes, ordinances, 0r regulations addressing the same 0r 9 similar subject matters, and all other federal, state, and/or local claims arising out 10 of or relating to Your relationship . . . with Instawork. 11 Stepinski Decl. EX. C, CSA, § 11.2. 12 Daniels’s claims must be arbitrated under the express terms of the Arbitration Provision 13 because they all arise out 0f his use 0f the Instawork App, his classification as an independent 14 contractor (see, e.g., P1.’s Comp]. 1N 17-19), and/or from his provision 0f services t0 third-party 15 businesses and the payments he received for those services. 16 IV. REQUEST FOR STAY AND CONCLUSION 17 The Court should compel Daniels t0 submit his individual claims to binding arbitration, 18 strike his class allegations, and stay this action pursuant to Section 3 0f the FAA because there is 19 an arbitration agreement and any questions regarding its enforceability were unambiguously 20 delegated t0 the arbitrator. 9 U.S.C. § 3 (court “shall 0n application of one of the parties stay the 21 trial . . . until such arbitration” is complete); Concepcion, 563 U.S. at 344 (court must stay litigation 22 pending arbitration). Further, pursuant t0 California Code 0f Civil Procedure section 1281.4, 23 Defendant requests that the Court order all proceedings stayed pending disposition of this motion. 24 /// 25 /// 26 /// 27 /// 28 12 Case No. 21CV379147 LITTLER MENDELSON P.C. soA§§‘?'§ZfisFi‘mL§S"do MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANT’S S“ ”23358332510324“ MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 1 Dated: September 10, 2021 LITTLER MENDELSON P.C. 3 XMBSW 4 Andrew M. Spurchise Elisa Nadeau 5 Linda Nguyen Bollinger Alec S. DiMario Attorneys for GARUDA LABS, INC. dba INSTAWORK 4842-3008-2041 .3 / 108436-1004 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 LITTLER MENDELSON P.C. 13 case No- 21CV379147 smgnggffirau MEMORANDUM 0F POINTS AND AUTHORITIES IN SUPPORT 0F DEFENDANT’S “isggssiirsi‘m MOTION T0 COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS