Opposition ObjectionsCal. Super. - 6th Dist.April 5, 2021410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 21 CV379147 Santa Clara - Civil Edwin Aiwazian (SBN 232943) Arby Aiwazian (SBN 269827) Joanna Ghosh (SBN 272479) Elizabeth Parker-Fawley (SBN 301592) Arman Marukyan (SBN 327150) LAWYERS for JUSTICE, PC 410 West Arden Avenue, Suite 203 Glendale, California 91203 Tel: (818) 265-1020 / Fax: (818) 265-1021 Attorneysfor Plaintiff Electronically Filed by Superior Court of CA, County of Santa Clara, on 10/14/2021 5:38 PM Reviewed By: R. Walker Case #21 CV379147 Envelope: 7469061 SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF SANTA CLARA DEANGELO DANIELS, individually, and on behalf 0f other members of the general public similarly situated; Plaintiff, vs. GARUDA LABS, INC. DBA INSTAWORK, an unknown business entity; and DOES 1 through 100, inclusive, Defendants. Case N0.: 21CV3 79 147 Honorable Patricia M. Lucas CLASS ACTION PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS Hearing Date: October 27, 2021 Hearing Time: 1:30 p.m. Department: 3 Complaint Filed: April 5, 2021 Trial Date: None Set PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF CONTENTS I. INTRODUCTION ......................................................................................................... 1 II. STATEMENT OF FACTS ........................................................................................... 2 III. LEGAL STANDARD .................................................................................................... 3 IV. ARGUMENT ................................................................................................................. 4 A. Defendant has Not Proven the Existence 0f an Enforceable Arbitration Agreement by Credible Evidence ..................................................................... 4 B. The Agreement Is Procedurally and Substantially Unconscionable................ 6 1. The Agreement is Procedurally Unconscionable. ................................... 7 2. The PurportedAgreement is Substantively Unconscionable................. 10 C. The Unconscionable Provisions are Not Severable. ....................................... 12 D. Dismissal of Class Claims is Contrary t0 California Law.............................. 13 E. In the Alternative, The Court Should Order Arbitration-Related Discovery .......................................................................................................................... 14 V. CONCLUSION ............................................................................................................ 15 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 TABLE OF AUTHORITIES Cases Ajamian v. Cantor LP (2012) 203 Ca1.App.4th 771 .............................................................................................. 4, 10 Armendariz v. Foundation Health Psych. Serv., Inc. (2000) 24 Ca1.4th 83 ...................................................................................................... passim AT&TMobilily LLC v. Concepcion (2011) 131 S. Ct. 1740 ............................................................................................................ 4 AT&T Technologies, Inc. v. Commc'ns Workers ofAm. (1986) 475 U.S. 643 ................................................................................................................ 3 Bruni v. Didion (2008) 160 Cal.App.4th 1272 .............................................................................................. 4, 9 Burton v. Cruise (2010) 190 Cal.App.4th 939 .................................................................................................. 14 Carlson v. Home Team Pest Defense, Inc. (2015) 239 Ca1.App.4th 619 .................................................................................................... 9 Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Cal.App.4th 74 ...................................................................................................... 9 Chamber ofCommerce offhe U.S. v. Bonta (9th Cir. Sep. 15, 2021)_ F.4th_, 2021 WL 4187860 ............................................... 8, 11 Chavarria v. Ralphs Grocery C0. (9th Cir. Oct. 28, 2013) 733 F.3d 916 .................................................................................. 7, 9 Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Ca1.App.4th 676 ...................................................................................................... 3 Cooper v. MRM Invest. C0. (MD. Tenn. 2000) 199 F. Supp. 2d 771 ................................................................................ 13 Davis v. Blue Cross (1979) 25 Cal.3d 418 ............................................................................................................ 14 Engalla v. Permanente Medical Group, Inc. (1997) 15 Ca1.4th 951 ............................................................................................................. 4 Ferguson v. Countrywide Credit Indus. (9t Cir. July 23, 2002) 298 F.3d 778 ....................................................................................... 7 First Options 0f Chicago, Inc. v. Kaplan (1995) 514U.S. 938 ........................................................................................................ 1, 3,4 Flores v. Transamerica Homefirst, Inc. (2001) 93 Ca1.App.4th 846 .................................................................................................... 13 Franco v. Athens Disposal C0. (2009) 171 Cal.App.4th 1277 ................................................................................................ 13 Frederick v. First Union Sea, Inc. (2002) 100 Ca1.App.4th 694 .................................................................................................... 3 Gentry v. Superior Court (2007) 42 Ca1.4th 443 ........................................................................................................... 10 Hamby v. Power Toyota Irvine (S.D. Cal. 201 1) 798 F. Supp. 2d 1163 .................................................................................. 15 Hibler v. BCI Coca-Cola Bottling C0. (S.D. Cal. September 14, 201 1) 2011 U.S. Dist. LEXIS 103707 ........................................... 15 In re Managed Care Litig. (S.D. Fla. 2000) 132 F. Supp. 2d 989 .................................................................................... 13 Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165 ................................................................................................. 1 Iskanian v. CLS Transp. Los Angeles, LLC (2014) 59 Cal.4th 348 ............................................................................................................. 8 1 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Jaramillo v. JHReal Estate Partners, Inc. (2003) 111 Cal.App.4th 394 .................................................................................................... 7 Kinney v. United HealthCare Serv., Inc. (1999) 70 Cal.App.4th 1322 .................................................................................................... 7 Little v. Auto Stiegler, Inc. (2003) 29 Ca1.4th 1064 ......................................................................................................... 10 Luckey v. Sup. Ct. (2014) 228 Cal.App.4th 81 .................................................................................................... 13 Madden v. Kaiser Foundation Hospitals (1976) 17 Cal.3d 699 .............................................................................................................. 9 Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514U.S. 52 ............................................................................................................... 12 Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc. (1985) 473 U.S. 614................................................................................................................ 3 Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 8 ............................................................................................................... 3 Morris v. Ernst & Young, LLP (9th Cir. 2016) 834 F.3d 975 ................................................................................................... 4 Newton v. Clearwire Corp. No. 2:1 1-CV-00783-WBS-DAD, 2011 U.S. Dist. LEXIS 108794 ......................................... 15 O’Brien v. Am. Express C0. 2012 U.S. Dist. LEXIS 64553 ............................................................................................... 15 Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal.App.4th 494 .................................................................................................. 13 Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425 .................................................................................................. 4 Pinela v. Neiman Marcus Group, Inc. (2015) 238 Ca1.App.4th 227 .........................................................................................4, 10, 12 Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307 ............................................................................................................... 3 Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836 .................................................................................................. 6 Saint Agnes v. PacifiCare (2003) 31 Cal.4th 1187 ......................................................................................................... 14 Sanchez v. Western Pizza Enterprises, Inc. (2009) 172 Cal.App.4th 154 .................................................................................................... 8 Stirlen v. Supercuts, Inc. (1997) 51 Cal.App.4th 1519 .............................................................................................. 7, 15 Suh v. Sup. Ct. (2010) 181 Ca1.App.4th 1504 ................................................................................................ 13 Tannehil v. Finch (1986) 188 Cal.App.3d 224 ..................................................................................................... 4 Tirz' v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231 .................................................................................................... 9 Victoria v. Superior Court (1985) 40 Cal.3d 734 .............................................................................................................. 1 Wherry v. Award, Inc. (2011) 192 Cal.App.4th 1242 ....................................................................................... 7, 10, 13 Zullo v. Sup. Ct. (201 1) 197 Cal.App.4th 477 .................................................................................................... 9 Statutes 9 U.S.C. § 2 .......................................................................................................................... 3, 7 Cal. Code Civ. Proc. § 1281.2 ............................................................................................. 3, 14 Cal. Code CiV. Proc. § 1281 ...................................................................................................... 3 11 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Cal. Code Civ. Proc. § 1633.9 ................................................................................................... 6 Cal. Code CiV. Proc. § 1668 ...................................................................................................... 4 Cal. Code CiV. Proc. §1670.5 .................................................................................................. 15 Cal. Evid. Code § 1401 ............................................................................................................. 6 Cal. Lab. Code § 1194 ............................................................................................................ 10 Cal. Lab. Code § 206.5 ........................................................................................................... 10 Cal. Lab. Code § 229 .............................................................................................................. 10 Cal. Lab. Code § 2804 ............................................................................................................ 10 Cal. Lab. Code § 219 .............................................................................................................. 10 Cal. Lab. Code §432.6 ........................................................................................................ 8, 11 Other Authorities Restatement (Second) 0f Contracts, § 184 ............................................................................... 13 iii PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 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 Defendant Garuda Labs, Inc. d/b/a Instawork’s (“Defendant”) Motion t0 Compel Arbitration, Strike Class Allegations, and Stay Proceedings (the “Motion t0 Compel Arbitration”) and the arbitration agreement 0n which it relies are both fundamentally flawed, and Defendant’s motion should be denied in its entirety. The arbitration agreement is both procedurally and substantively unconscionable in a manner that precludes severability and renders the agreement unenforceable. The agreement was a contract 0f adhesion, and like many “take-it-or-leave-it” agreements between an employer and employee, it is marked by procedural and substantive unconscionability. Although arbitration is often Viewed as a favored method of resolving disputes, judicial enthusiasm for arbitration does not override the rules governing the existence 0f contracts. Victoria v. Superior Court (1985) 4O Cal.3d 734, 738-39. In evaluating the validity 0f an arbitration agreement, federal courts “apply ordinary state-law principles that govern the formation of contracts”. Ingle v. Circuit City Stores, Ina, (9th Cir. 2003) 328 F.3d 1165, 1170 (quoting First Options 0f Chicago, Inc. v. Kaplan, (1995) 514 U.S. 938, 944). California law sets forth certain limits for enforcing contracts, including arbitration provisions. Arbitration agreements are subject to rescission 0n the same grounds as other contracts thus courts must look t0 see Whether the agreement is enforceable and satisfies the bare minimum showing that the arbitration provision is not unconscionable under Armendariz v. Foundation Health Psych. Serv., Inc. (2000) 24 Cal.4th 83, 114. Here, Plaintiff was presented with a one-sided arbitration clause-in the form 0f a “pop- up” on Plaintiff’s mobile phone screen, and which Plaintiff was required t0 accept t0 continue posting his availability for work-that was blatantly drafted in Defendant’s favor to give Defendant an advantage it would not otherwise have. The Agreement (defined below) was procedurally and substantively unconscionable for the following reasons: the Agreement was a condition ofemployment; Plaintiffwas not aware he had an opportunity t0 ask questions 0r review the Agreement; and the Agreement unlawfully waives representative PAGA claims. 1 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Moreover, the electronic Agreement is merely a “click t0 agree” type of document, Which Plaintiff never actually signed. Even in Defendant’s own records, there is n0 indication that Plaintiff signed the document. What exists is an arbitration agreement With n0 signature line and, separately, an online portal reflecting that an agreement was “created” on the date 0f posting. The Agreement, along with the notation 0n the online portal fail to create a contract, are not evidence of a “meeting 0f the minds” or knowing consent, and are procedurally and substantively unconscionable because the adhesive Agreement unlawfully waives nonwaivable statutory rights. Indeed, Defendant has failed t0 present any actual evidence that Plaintiff signed 0r otherwise accepted the Agreement. Thus, Defendant has not met its burden t0 prove the existence of an agreement t0 arbitrate between Plaintiff and Defendant. Furthermore, Defendant’s adhesive Agreement contains both procedural and substantive inadequacies, and therefore cannot form the basis for arbitration. As such, the Court must deny Defendant’s Motion to Compel Arbitration in its entirety. II. STATEMENT OF FACTS Plaintiffwas employed by Defendant in November 2020 and April 202 1. (See Declaration 0f Deangelo Daniels in support 0f Plaintiff s Opposition t0 Defendant’s Motion to Compel Arbitration [“Daniels Decl.”], 1] 2.) Plaintiff worked as an hourly warehouse worker in a position called “Material Handler.” (Id.) Prior t0 posting his availability for work With Instawork, Plaintiff was required to scroll through pop-up screens in the Instawork App on his mobile phone. (Id. at W 3-6.) The content 0f the pop-up screen was not presented to Plaintiff as a document that he could review in his own time, 0r that he could discuss with an attorney. (Id.) Plaintiff could not negotiate or change the terms 0r language contained in the pop-up screen. He also was not given a copy of any arbitration rules at the time. (Id.) Plaintiff believed that he was agreeing to arrive to work 0n time 0n the specified dates, and confirming that I had the ability to perform the work offered. He did not understand himself to be giving away any legal rights 0r his ability t0 sue Defendant. (Id. fl 8.) Plaintiff’ s counsel made repeated requests for Defendant to produce any documents signed by Plaintiff in relation t0 his employment With Defendant. (Declaration 0f Elizabeth 2 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Parker-Fawley in Support of Plaintiffs Opposition t0 Defendant Garuda Labs, Inc. dba Instawork’s Motion to Compel Arbitration, Strike Class Allegations, and Stay Proceedings (“Parker-Fawley Decl.”), 1W 2-4, Eth. A-C.) However, Defendant failed t0 provide responsive documents. (Id. at fl 5.) On April 5, 202 1 , Plaintiff Deangelo Daniels filed a Class Action Complaint for Damages against Defendant Garuda Labs, Inc. d/b/a Instawork in Santa Clara Superior Court. (See Complaint.) Plaintiff alleges, inter alia, that Defendant engaged in, and continues t0 engage in, a pattern and practice ofwage abuse against its hourly paid, non-exempt employees within the State of California. (Id.) On September 10, 2021, Defendant filed the instant Motion to Compel Arbitration (“Motion”), which represents an attempt by Defendant to chill class action participation and undermine the class action device. (See generally Defendant’s Motion to Compel Arbitration.) On the same day, Defendant filed a Motion to Compel Arbitration and Stay Proceedings in the related PAGA action Daniels v. Garuda Labs, Inc. dba Instawork (Santa Clara Superior Court Case N0. 21CV383683), wherein Plaintiff filed a complaint for enforcement under the Private Attorneys General Act, Cal. Labor Code §2698, et seq. (the “PAGA Motion t0 Compel Arbitration,” and together with the Motion to Compel Arbitration, the “Motions”). III. LEGAL STANDARD Under both federal and state law, a court Will order parties t0 arbitrate a controversy only “if it determines that an agreement t0 arbitrate the controversy exists” under principles 0f state contract law. Cal. Code Civ. Proc. §§ 1281, 1281.2; Frederick v. First Union Sea, Inc. (2002) 100 Cal.App.4th 694, 697; Platt Pacific, Inc. v. Andelson (1993) 6 Cal.4th 307, 313; Moncharsh v. Heily & Blase (1992) 3 Cal.4th 1, 8; 9 U.S.C. § 2; AT&T Technologies, Inc. v. Commc’ns Workers ofAm. (1986) 475 U.S. 643, 648; see also, Mitsubishi Motors Corp. v. Soler Chrysler- Plymouth, Inc. (1985) 473 U.S. 614, 626; First Options 0f Chicago, Inc. v. Kaplan (1995) 514 U.S. 938. “The question 0f whether the parties agreed to arbitrate is answered by applying state contract law even When it is alleged that the agreement is covered by the [Federal Arbitration Act].” Cheng-Canindin v. Renaissance Hotel Associates (1996) 50 Cal.App.4th 676, 683. “When 3 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 deciding Whether the parties agreed to arbitrate a certain matter,” courts generally “should apply ordinary state-law principles that govern the formation 0f contracts.” First Options 0f Chicago, Ina, 514 U.S. at 944. Arbitration agreements are to be put on an equal footing with all other contracts; the FAA treats the contract like any other. Morris v. Ernst & Young, LLP, (9th Cir. 2016) 834 F.3d 975, 984. Agreements t0 arbitrate are to be invalidated by generally applicable contract defenses, and grounds that exist at law or in equity, under state law, for the revocation 0f any contract, such as fraud, duress, or unconscionability. AT&TMobility LLC v. Concepcion (201 1) 131 S. Ct. 1740, 1746. California courts Will not enforce an agreement t0 arbitrate in a manner that is “plainly obnoxious to California public policy.” Pinela v. Neiman Marcus Group, Inc. (2015) 238 Ca1.App.4th 227, 252; see also Cal. Code CiV. Proc. § 1668. Defendant bears the burden 0f proving the existence 0f a valid agreement to arbitrate the dispute at issue by the preponderance 0f the evidence. Brunz' v. Didion (2008) 160 Cal.App.4th 1272, 1282; Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 972. The preponderance of the evidence standard requires that the existence 0f a fact be more probable than not. Tannehil v. Finch (1986) 188 Ca1.App.3d 224, 228. The enforceability of an arbitration agreement is a gateway issue for the court t0 decide? Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal.App.4th 1425, 1445; Ajamian v. Cantor LP (2012) 203 Cal.App.4th 771, 785. IV. ARGUMENT A. DEFENDANT HAS NOT PROVEN THE EXISTENCE OF AN ENFORCEABLE ARBITRATION AGREEMENT BY CREDIBLE EVIDENCE Defendant has not met its burden 0fproving the existence 0f a valid arbitration agreement by the preponderance 0f the evidence. The declaration 0f Adam Stepinski, Director of Engineering for Defendant Garuda Labs, Inc. dba Instawork, falls woefully short 0f fulfilling the factual and evidentiary burden Defendant must satisfy t0 prevail 0n its Motion to Compel 2 Defendant’s Motion claims that the CSAs’ delegation clause prevents this Court from determining whether an enforceable arbitration agreement exists and is applicable t0 this Action. (Defendant’s Memorandum 0f Points and Authorities (“Defendant’s M.P.A.” 1722-12.) However, the clause cited explicitly says “the preceding clause shall not apply to any dispute relating t0 0r arising out of the Class Action Waiver and/or Representative PAGA Action Waiver. .. which must proceed to a court 0f competent jurisdiction and cannot be heard 0r arbitrated by an arbitrator.” (Stepinski Decl. Exh. C, § 11.3.) 4 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Arbitration. Defendant’s arbitration agreement is embedded Within a general “Contractor Services Agreement” (“CSA” 0r “Agreement”) which each of its employees is required t0 sign.” (Declaration 0f Adam Stepinski in Support of Defendant Garuda Labs, Inc. dba Instawork’s Motion t0 Compel Arbitration, [“Stepinski Decl.”] 1E). Mr. Stepinski declares in a conclusory fashion that “[0]n November 9, 2020, Plaintiff tapped ‘I accept’ t0 accept the terms of the CSA” (Stepinski Decl. 119). Defendant never avers that it has a signed, dated contract Within its records. Instead, it states that Plaintiff s personnel file contains two Contractor Services Agreements, the first one “created” on November 9, 2020 (“CSA-l”) and the second “created” on April 2, 2021 (“CSA-Z”, and together With CSA-l, the “Agreements”). (Stepinski Decl., 11 12, Exhibit D). The CSA, along with the rest of the registration process, is provided on a mobile phone screen, in miniscule print, as a “scroll-through” document. It is in the middle of this scroll-through document that Defendant has embedded arbitration provisions. Then, per Mr. Stepinski’s declaration, there is a separate online portal where there is a record 0f the employee having “accepted” the Agreement. But again, there is n0 signature on file and the notation in the online portal merely says the Agreement was “created,” not signed 0r accepted. Indeed, Defendant has not provided any evidence demonstrating the agreement was “accepted” by Plaintiff. Furthermore, Mr. Stepinski does not purport to have personally witnessed Plaintiff receive, review, acknowledge, or sign anything. Instead, he explains What, in general, an employee 0f Instawork must d0 to create an account and search for “gigs.” (Stepinski Decl., 1W 4 - 7). While Mr. Stepinski claims that Plaintiff tapped “I accept” according t0 the electronic files t0 which he has access, he fails t0 provide any evidence to support this claim. Moreover, Mr. Stepinski asserts n0 personal knowledge of Whether the purported acceptance was actually proffered by the Plaintiff, 0r 0f having witnessed any understanding or consent by Plaintiff at the time. As far as Mr. Stepinski’s Declaration reflects, a robot, a pet, 0r even a phone glitch could have “consented” to the CSAS. Mr. Stepinksi also provides n0 information 0n Whether the company has compliance procedures 0r practices t0 audit 0r check with a candidate “pro” to confirm that it was really the “pro” who completed the online account creation process or whether a “pro” encountered any issues with the process. 5 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Furthermore, Defendant cannot adequately authenticate the purported electronic signature. There is a “critical gap in the evidence supporting” Defendant’s Motion. Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 844. As a matter of law, the party seeking t0 enforce an agreement t0 arbitrate must still satisfy basic contract formation principles. Any writing must be authenticated before the writing, 0r secondary evidence of its content, may be received in evidence. Ruiz, 232 Ca1.App.4th at 841; Cal. Evid. Code § 1401. The burden t0 authenticate an electronic signature and prove that there was a valid arbitration agreement is 0n the partying seeking to enforce the agreement. Id. In Ruiz, the Court determined that defendant employer failed t0 show that the purported arbitration agreement was What the employer claimed it t0 be, because defendant failed t0 provide direct evidence of plaintiff’s having submitted his signature electronically, failed t0 show that the electronic signature could only have been placed 0n the document by plaintiff, and failed to explain how one could conclude that the electronic signature was attributable to plaintiff. Id. at 843-844.; Cal. Code CiV. Proc. § 1633.9(a). Mr. Stepinski’s declaration does not demonstrate that he has any personal knowledge or basis for making his assertions, and the declaration is ambiguous as to these key facts required to sustain a finding that the “document is What it purports t0 be.” Id. at 843 (internal quotes omitted). Neither the “facts” attested t0 by Mr. Stepinski nor the record support a finding that the signature could only have been placed by Plaintiff. Defendant has not established that the purported electronic “signature” 0n the CSA was “an act attributable” t0 Plaintiff. Cal. Code CiV. Proc. § 1633.9(a). For these reasons, Defendant has failed t0 satisfy its burden 0f establishing as a preliminary matter, that any enforceable obligation to arbitrate any claims by a preponderance of the evidence. B. THE CSAS ARE PROCEDURALLY AND SUBSTANTIVELY UNCONSCIONABLE This Court has the authority to disregard agreements that are unconscionable. Under California law, a court may exercise its discretion t0 refuse t0 enforce an otherwise valid contract 0r clause under the doctrine 0f unconscionability when both substantive and procedural unconscionability are present. Armendariz v. Foundation Health Psych. Serv., Inc. (2000) 24 6 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Ca1.4th 83.4 The substantive and procedural elements d0 not need t0 be present to the same degree-if there is more evidence 0f one, less evidence is required 0f the other. Armendariz, 24 Ca1.4th at 114; Jaramillo v. JH Real Estate Partners, Inc. (2003) 111 Cal.App.4th 394, 400. 1. The CSAs Are Procedurally Unconscionable. Procedural unconscionability concerns the manner in which the contract is negotiated and exists Where there is an absence 0f meaningful choice, surprise, and/or oppressions. See Kinney v. United HealthCare Serv., Inc. (1999) 7O Cal.App.4th 1322, 1329; Stirlen v. Supercuts, Inc. (1997) 51 Ca1.App.4th 1519, 1531-32; see also Chavarria v. Ralphs Grocery C0. (9th Cir. Oct. 28, 2013) 733 F.3d 916, 922. “‘Oppression’ arises from an inequality 0f bargaining power Which results in no real negotiation and an absence 0f meaningful choice.” Ferguson v. Countrywide Credit Indus. (9th Cir. July 23, 2002) 298 F.3d 778, 783, citing Kinney v. United Healthcare Servs., Inc. (1999) 70 Ca1.App.4th 1322. For example, in Chavarria v. Ralphs Grocery C0,, the Court found the arbitration policy was oppressive and procedurally unconscionable because it was a condition 0f applying for employment presented 0n a “take it 0r leave it” basis and the applicant had n0 opportunity t0 negotiate its terms. Chavarria, 733 F.3d at 922. a. Take It 0r Leave It California courts have routinely found that agreements presented on a take-it-or-leave-it basis in the employment context are procedurally unconscionable. Wherry v. Award, Inc. (201 1) 192 Ca1.App.4th 1242, 1247-48. Here, Defendant has offered n0 evidence that Plaintiff did 0r could have taken part in the drafting 0f the Agreements. Additionally, Defendant does not provide any evidence that shows it gave Plaintiff the choice to sign the Agreements free 0f any adverse employment consequence, and that it gave Plaintiff a fair opportunity to understand the Agreements, to ask questions and level the unequal bargaining position 0n which he was placed. Plaintiff unwittingly scrolled through the CSAS With Defendant’s unilateral terms on the spot, because he was required t0 do so, Without any advice 0r explanation as t0 what he was consenting t0, and unaware that he could consult an attorney prior to doing so. (Declaration 0f Deangelo 4 See also 9 U.S.C.A. § 2 (The “savings clause” 0fthe (FAA) provides an exception to the enforceability ofarbitration agreements for generally applicable contract defenses such as fraud, duress, or unconscionability). 7 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Daniels in Support 0f Plaintiffs Opposition t0 Defendant’s Motion t0 Compel Arbitration (“Daniels Decl.”) 1H 3-8). In fact, Plaintiff could not post his availability for work until he cleared the hurdle of accepting the Agreement, making Defendant’s employment contingent upon signing the Agreement, which contravenes California Law. Cal. Lab. Code §432.6; Chamber 0f Commerce 0f the U.S. v. Bonta (9th Cir. Sep. 15, 2021)_ F.4th _, 2021 WL 4187860. Defendant concedes that “[a] pro cannot claim a gig 0r other opportunity Without reviewing and accepting the CSA.” (Stepinski Decl. fl 7). Mr. Stepinski further states that before Plaintiff could accept a second opportunity for work, Plaintiff “had t0 enter into an updated CSA with Instawork.” (Stepinski Decl. 1111) (emphasis added). There was no bargaining, discussion, or opportunity for Plaintiff t0 modify the CSAS’ terms. The Defendant unilaterally changed the terms of the Agreement at-will, and mandated Plaintiff t0 agree t0 the updated terms ifhe wanted to receive work opportunities. Notably, the recitations in the first and second iterations 0fDefendant’s CSA are markedly different when it refers to claims under the Private Attorneys General Act (PAGA), Cal. Labor Code §2628 et seq. CSA-l states “Private attorney general representative actions brought 0n behalf of the state under the California Labor Code are not arbitrable. . .” (Stepinski Decl., Exhibit B, 1116). Conversely, CSA-2 includes a waiver 0f PAGA claims. (Stepinski Decl., Exhibit C fl 11.7). This illustrates the degree t0 Which the Defendant was simply presenting its uniform agreement t0 Plaintiff on a “take it 0r leave it” basis, and the Plaintiff had n0 ability t0 negotiate the terms of his employment. The Agreements are also procedurally unconscionable in light 0f Defendant’s superior bargaining power as the employer. This “inequality in bargaining power between the. .. employees and their employer makes it likely that the employees felt... pressure t0 sign the arbitration agreement.” Sanchez v. Western Pizza Enterprises, Ina, (2009) 172 Cal.App.4th 154, 173-174 [abrogated 0n other grounds by Iskanian v. CLS Transp. Los Angeles, LLC, (2014) 59 Ca1.4th 348]. /// /// 8 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 b. N0 Opportunity t0 Review the Agreement. While Defendant states that Plaintiff “signed” the CSAs, Defendant not only fails to provide Plaintiff’s signature, but also fails to provide facts t0 suggest that Plaintiff was even afforded an opportunity t0 review the Agreement. Thus, as the Court affirmed in Chavarria, the circumstances surrounding the “negotiation” 0f the Agreement were oppressive. The degree 0f procedural unconscionability is enhanced when a contract binds an individual t0 later-provided terms. Chavarria, 733 F.3d at 922. Here, the Plaintiff was never provided a copy 0f the CSAs he allegedly “signed,” much less the JAMS rules governing them. These facts evidence oppression and surprise, rendering it procedurally unconscionable. As such, the failure t0 provide an opportunity t0 review the CSAS contributes t0 the overall unconscionability of the Agreements. Moreover, the Agreements involved a high level 0f surprise. “Surprise” exists When the “supposedly agreed-upon terms 0f the bargain are hidden in the prolix printed form drafted by the party seeking t0 enforce the disputed terms.” Tirz' v. Lucky Chances, Inc. (2014) 226 Ca1.App.4th 231, 245. Here, Defendant has offered n0 evidence that Plaintiff knew 0f 0r understood the CSA. Defendant has not alleged that Plaintiff was provided with copies of the CSAs, actually read 0r reviewed the CSA, knew of them 0r understood their contents, 0r was afforded the opportunity t0 discuss 0r ask questions about the CSAs. In fact, Plaintiff was surprised to find out that Defendant alleges he “signed” anything that would affect his legal rights or his rights t0 his day in court. (Daniels Decl. fl 8.) “[F]ailure t0 read [an adhesive] contract helps establish actual surprise.” Brunz' v. Didion (2008) 160 Ca1.App.4th 1272, 1290-91, citations omitted; Madden v. Kaiser Foundation Hospitals, (1976) 17 Cal.3d 699, 710-12. Courts have also found that “surprise” exists Where the employer fails t0 provide a copy 0f the rules that apply to the arbitral forum. Carmona v. Lincoln Millennium Car Wash, Inc. (2014) 226 Ca1.App.4th 74, 84-85; Zullo v. Sup. Ct. (2011) 197 Ca1.App.4th 477, 485-486; Carlson v. Home Team Pest Defense, Inc. (2015) 239 Cal.App.4th 619, 632. A substantial degree 0f surprise permeates Defendant’s Agreement. Here, Plaintiff was unaware 0f accepting any document waiving his legal rights, and he was not provided a copy 0f the Agreements or of the rules governing the Agreements (the “JAMS Rules”) at any time. (Daniels Decl., 1N 3-8.) While CSA-l provides a web address for the JAMS Comprehensive Arbitration Rules and suggests the 9 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Employee use Google to look it up, CSA-2 does not even make that feeble attempt at providing a copy 0f the rules. (Stepinski Decl., Exhibit B, 1] 16(f).) CSA-2 makes no mention 0f the JAMS rules whatsoever, making it unclear, even now, Which arbitral rules Defendant contends would apply. Thus, a substantial degree of surprise permeates Defendant’s Agreements, rendering them procedurally unconscionable. 2. The CSAs Are Substantively Unconscionable. Substantive unconscionability is present when the terms of the contract are unduly harsh, oppressive, one-sided 0r unfair given the circumstances. Armendariz, 24 Cal.4th at 114; Wherry v. Award, Inc. (201 1) 192 Ca1.App.4th 1242, 1246;Ajamian v. CantorLP (2012) 203 Ca1.App.4th 771, 797; Little v. Auto Stiegler, Inc. (2003) 29 Ca1.4th 1064, 1071. Due t0 the high degree 0f procedural unconscionability, only a minimal showing 0f substantive unconscionability is required. The purported arbitration agreement is substantively unconscionable, because it seeks t0 require Plaintiff to relinquish unwaivable statutory rights. “Many statutory rights designed for the protection 0fa class of employees, including [. . .] Labor Code rights [. . .] are unwaivable.” Pinela, 238 Ca1.App.4th 227, 252; Cal. Lab. Code §§ 219, 229, 206.5, and 1194. Under California law, “arbitration agreements that encompass unwaivable statutory rights must be subj ect t0 particular scrutiny[.]” Armendariz, 24 Cal.4th at 100. Thus, Where “arbitration provisions undermine statutory protections, courts have readily found unconscionability.” Id. at 254 (citations omitted). Here, the purported arbitration agreement embedded in the Contractor Services Agreement seeks t0 affect a waiver 0f unwaivable statutory rights. For example, Labor Code sections §§ 5 10, 1194, and 2802 cannot be waived. Cal. Lab. Code §§ 1194 and 2804; See Gentry v. Superior Court (2007) 42 Ca1.4th 443, 455 (“By its terms, the rights t0 the legal minimum wage and legal overtime compensation conferred by the statute are unwaivable.”). Moreover, despite the Defendant’s own knowledge that PAGA claims are non-arbitrable (as evidenced by the first iteration 0f the CSA drafted by Defendant, which states “Private attorney general representative actions brought 0n behalf 0f the state under the California Labor Code are not arbitrable”), Defendant nonetheless asserts in the second iteration of the CSA that PAGA claims 10 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 must be resolved in arbitration. This is an attempt by Defendant t0 “pull the wool” over Plaintiff s eyes. That is, knowing that arbitration is not appropriate for PAGA claims, Defendant still puts in their Agreements that PAGA must be arbitrated, in an attempt t0 misdirect potential litigants and t0 mislead them as to their rights. As such, the Agreement is unconscionable, unenforceable, and void. a. The CSAs Unlawfully Predicate Employment 0n Acceptance 0f Mandatory Arbitration Plaintiff could not post his availability for work until he cleared the hurdle 0f accepting the Arbitration Agreement. So, in effect, Defendant made his employment contingent upon signing the Agreement, Which contravenes California State Law. Cal. Lab. Code § 432.6; Bonta, _ F.4th _, 2021 WL 4187860 (holding Cal. Labor Code § 432.6 is not preempted by the FAA). As the 9th Circuit stated in Bonta, “[N]0thing in the [FAA] grants an employer the right to force arbitration agreements 0n unwilling employees.” Id. at *9. Here, Plaintiff was unable t0 register for work with the Defendant until he scrolled through the CSAS. This is substantively unconscionable and a Violation 0f Labor Code section 432.6 . b. Unconscionable Provisions Permeate the CSAs Here, Defendant makes several contradictory assertions in its two Contractor Services Agreements and in its Motion to Compel Arbitration. Taken in the totality, these contradictions smack of gamesmanship and an attempt to use any tool in Defendant’s arsenal, regardless 0f the existing laws, to get the advantage over its employees. First, Defendant concedes in CSA-l that PAGA claims are non-arbitrable (Stepinksi Decl., Exhibit B, fl 16), yet Defendant now seeks to compel arbitration of Plaintiff’ s PAGA Action, in contradiction to existing law. And, despite the concession that PAGA claims are non-arbitrable contained in CSA-l (dated November 9, 2020), the CSA-2 (Which is dated only 5 months later on April 2, 2021, during Which time neither the statutory scheme nor the case law had changed) binds the employee to a waiver ofPAGA claims and t0 arbitration of any claims that may fall under the PAGA statute (Stepinksi Decl., Exhibit C, fl 11.). Another contradiction comes in the provision of an opportunity t0 opt out of arbitration. In CSA-l there is n0 such option. In CSA-Z there is an opt-out clause that requires that the 11 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS LAWYERS for JUSTICE, PC 410 West Arden Avenue, Suite 203 Glendale, California 91 203 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 employee submit their decision t0 opt-out in writing and the writing may not be signed by an attorney. (Stepinksi Decl., Exhibit C, fl 11.1 1). If the employee even is aware of this part of the agreement, and his supposed choice to opt-out of arbitration, the Agreement here discourages consultation with an attorney on the topic of opting out. That is substantively unconscionable. Finally, in Defendant’s CSA-Z, in the clause regarding initiating arbitration (CSA-Z, fl 11.5), it is written that the party seeking t0 bring a dispute t0 arbitrations must certify, among other things, that: “(1) the demand for arbitration is not being presented for any improper purpose, such as to harass, cause unnecessary delay, 0r needlessly increase the cost 0f dispute resolution; (2) the claims and other legal contentions are warranted by existing law...” Defendant has not complied with either of the above requirements 0f its own contract. Defendant’s demand for arbitration is based 0n an unenforceable clause for the seeming purpose of causing unnecessary delay and costs. As discussed above, this alleged agreement has a high level 0f procedural unconscionability and is substantively unconscionable in many significant aspects. Armendariz, 24 Cal.4th at 110-1 1 1. Since both procedural and substantive unconscionability are present t0 a high degree, the agreement as set forth by Defendant is unenforceable. As such, Plaintiff respectfully requests that the Court deny Defendant’s Petition. C. THE UNCONSCIONABLE PROVISIONS ARE NOT SEVERABLE. Defendant drafted the terms of the purported arbitration agreement, as such, the language of said agreement must be construed in favor 0f Plaintiffs Here, the totality 0f the circumstances, including and not limited t0 the various contradictory clauses described above, is permeated by unconscionable terms. Severance would not serve the interest 0f justice and there is no single provision that the Court can strike to remove the unconscionable taint from the actual agreement Defendant obtained-Which includes Defendant’s attempt t0 preserve the right to pursue legal action in a court 0f law against Plaintiff, While seeking t0 require Plaintiff to waive the ability to 5 In Pinela. the Appellate Court noted: “‘Where one party chooses the terms 0f a contract, he is likely to provide more carefully for the protection 0f his own interests than for those 0fthe other party. He is also more likely than the other party t0 have reason t0 know 0f uncertainties 0f meaning. Indeed, he may leave meaning deliberately obscure, intending to decide at a later date what meaning t0 assert. In cases 0f doubt, therefore, so long as other factors are not decisive, there is substantial reason for preferring the meaning 0f the other party.’” See Pinela, 238 Ca1.App.4th at 245 (citing Mastrobuono v. Shearson Lehman Hutton, Inc. (1995) 514 U.S. 52, 54, 63). 12 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 bring any action, including a PAGA representative action (contrary to established law), in a court of law and intentionally including provisions that Violate existing law. Armendariz, 24 Cal.4th at 124-25; Franco v. Athens Disposal C0. (2009) 171 Ca1.App.4th 1277, 1282-1299 (holding the inclusion 0f two unlawful provisions required the entire arbitration agreement to be voided); Wherry v. Award, Inc. (2011) 192 Ca1.App.4th 1242, 1250 (multiple unconscionable terms rendered agreement s0 permeated by unconscionability that the entire agreement had t0 be set aside). The inclusion and use 0f multiple substantively unconscionable provisions demonstrate “an intent t0 impose upon Plaintiff, as the weaker party, an inferior forum that works t0 the employee’s advantage.” Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal.App.4th 494, 509 (citation 0mitted).6 Particularly where, as here, the party that drafted the arbitration agreement enters into numerous such contracts, the interests 0f justice dictate that the Court not save the arbitration agreement by severing an unconscionable provision. Courts should not “aid a party who has taken advantage 0f his dominant bargaining power to extract from the other party a promise that is clearly so broad as t0 offend public policy by redrafting the agreement so as t0 make a part 0f the promise enforceable.” Restatement (Second) 0f Contracts, § 184 cmt. b. D. DISMISSAL OF CLASS CLAIMS IS CONTRARY TO CALIFORNIA LAW. Until a class is certified, the court “has a fiduciary responsibility as guardian 0f the rights 0f the absentee class members” t0 prevent unfairness and prejudice t0 the class and is the only party who can appear and represent the interest 0f the absent class members and an action may only “be dismissed Without notice t0 class members if the court finds that the dismissal Will not prejudice them.” Luckey v. Sup. Ct. (2014) 228 Ca1.App.4th 81, 94-101. Cal. R. Ct. 3.770 (c). Prior t0 certification “the Superior Court is the only party who can appear and represent the interest 0f the absent class members.” Id at 97. 6 “An employer will not be deterred from routinely inserting such a deliberately illegal clause into the arbitration agreements it mandates for its employees if it knows that the worst penalty for such illegality is the severance 0f the clause after the employee has litigated the matter. In that sense, the enforcement 0f a form arbitration agreement containing such a clause drafted in bad faith would be condoning, 0r at least not discouraging, an illegal scheme, and severance would be disfavored.” Armendariz, 24 Ca1.4th at 125, n. 13; see also, Flores v. Transamerica Homefirst, Inc. (2001) 93 Ca1.App.4th 846, 857; Suh v. Sup. Ct. (2010) 181 Ca1.App.4th 1504, 1517; In re Managed Care Litig. (S.D. Fla. 2000) 132 F. Supp. 2d 989, 1001; Cooper v. MRM Invest. C0. (M.D. Tenn. 2000) 199 F. Supp. 2d 771, 782. 13 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 E. DEFENDANT HAS ACTED INCONSISTENTLY WITH A PURPORTED RIGHT TO COMPEL ARBITRATION Waiver can be implied by a party’s conduct, and waiver need not be voluntary. See Cal. CiV. Proc. Code § 1281.2, Davis v. Blue Cross (1979) 25 Cal.3d 418, 425; Burton v. Cruise (2010) 190 Ca1.App.4th 939, 944. Waiver is found when the waiving party (1) has knowledge 0f an existing right t0 compel arbitration, (2) acts inconsistent with that existing right, and (3) the party opposing arbitration is prejudiced. Saint Agnes v. PacifiCare (2003) 31 Cal.4th 1187. Here, Defendant contends that it has a right t0 compel arbitration, yet Defendant refused t0 produce the CSAs when requested by Plaintiff’s counsel 0n three occasions. (Parker-Fawley Decl. W 1-5, Exhs. A-C.) Further, Defendant failed t0 timely raise the CSAS for months after this case was filed and failed t0 produce the CSAS for nearly a year after Plaintiff’s request that Defendant produce any arbitration agreements that he may have signed with Defendant. (Id) These actions are inconsistent With an existing right t0 compel arbitration. Lastly, Plaintiff was prejudiced by Defendant’s failure t0 produce the purported agreements as required by California Labor Code section 432, as Plaintiff proceeded with filing this action and incurred costs and fees. Moreover, Defendants’ delay in compelling arbitration has prejudiced the putative class members. In order t0 meaningfully prepare a motion for class certification or PAGA trial, Plaintiff will need to obtain substantial documents and information from Defendant and contact percipient Witnesses, such as the putative class members/aggrieved employees, their supervisors, and other employees 0f Defendant. Over time, discovery becomes more difficult as documents are misplaced, destroyed, 0r otherwise difficult to locate, employees leave the company, and witnesses become more difficult to contact as they change addresses and telephone numbers. Defendant has interrupted and delayed the litigation process in a manner that prejudices the certification 0f the putative class, and will prejudice the rights and interests 0fthose putative class members. Defendant also seeks an indefinite stay 0f Plaintiff” s separate claim under PAGA, that will further delay discovery in this action and/or prejudice the putative class members and aggrieved employees. Defendant had no just cause for its delay in raising arbitration. Defendant acted inconsistently With the right t0 arbitrate, and Plaintiff, the putative class, and the aggrieved employees have suffered and will suffer prejudice due t0 Defendant’s conduct. 14 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91 203 LAWYERS for JUSTICE, PC 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Accordingly, Defendant has waived its right t0 compel arbitration, and its Motion should be denied in its entirety. F. IN THE ALTERNATIVE, THE COURT SHOULD ORDER ARBITRATION- RELATED DISCOVERY Courts have found that the “legislative recognition [regarding] a claim of unconscionability often cannot be determined merely by examining the face 0f the contract, but Will require inquiry into its setting, purpose, and effect.” Stirlen v. Supercuts, Inc. (1997) 51 Ca1.App.4th 1519, 1536. As it stands, the record is insufficient t0 support a finding that an enforceable agreement t0 arbitrate Plaintiffs sole PAGA cause of action exists. The Stepinski Declaration falls woefully short 0f fulfilling the factual and evidentiary burden that Defendant must satisfy t0 prevail on its Motion, i.e. establishing, as a preliminary matter, that any agreement to arbitrate the claims asserted in this action exists by a preponderance of the evidence. In fact, courts have refused to issue orders compelling arbitration until sufficient discovery has taken place with respect to unconscionability.7 When unconscionability is at issue, discovery must be allowed: “When it is claimed or appears to the court that the contract 0r any clause thereof may be unconscionable the parties shall be afforded a reasonable opportunity t0 present evidence as t0 its commercial setting, purpose, and effect t0 aid the court in making the determination.” Cal. Code CiV. Proc.§1670.5(b). If the Court is not inclined t0 deny Defendant’s Motion to Compel Arbitration at this time, meaningful discovery regarding the facts and circumstances surrounding the purported receipt and execution 0f the “arbitration agreement” should be allowed. Such discovery will allow for the presentation of evidence and the development 0f an adequate record from Which the Court can properly make its determination with respect t0 Defendant’s Motion t0 Compel Arbitration. V. CONCLUSION For the foregoing reasons, Plaintiff respectfully requests that this Court deny Defendant’s Motion t0 Compel Arbitration and Strike Class Claims in its entirety. 7 See 0 ’Brien v. Am. Express C0., 2012 U.S. Dist. LEXIS 64553, **16-20; Hamby v. Power Toyota Irvine (S.D. Cal. 201 1) 798 F. Supp. 2d 1163, 1165 (taking the hearing on defendant’s motion to compel arbitration off calendar to allow discovery for unconscionability defense); Newton v. Clearwire Corp, No. 2: 1 1-CV-00783-WBS-DAD, 2011 U.S. Dist. LEXIS 108794, at *8 (E.D. Cal. Sept. 23, 201 1); see also Hibler v. BCI Coca-Cola Bottling C0. (S.D. Cal. September 14, 201 1) 2011 U.S. Dist. LEXIS 103707. 15 PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO CONIPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS 410 West Arden Avenue, Suite 203 Glendale, California 91203 LAWYERS for JUSTICE, PC \DOOQON 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Dated: October 14, 2021 By: 16 LAWYERSfor JUSTICE, PCW Elizabeth Parker-Fawley Attorneysfor Plaintiff PLAINTIFF’S OPPOSITION TO DEFENDANT GARUDA LABS, INC. DBA INSTAWORK’S MOTION TO COMPEL ARBITRATION, STRIKE CLASS ALLEGATIONS, AND STAY PROCEEDINGS