SANDQUIST v. LEBO AUTOMOTIVE

Respondents’ Petition for Review

Cal.August 27, 2014

$220812 2 IN THE SUPREME COURT OF THE STATE OF CALIFORNIA SUPREME COURT TIMOTHY SANDQUIST, FILED Plaintiff and Appellant, AUG 27 2014 VS. Frank A. McGuire Clerk LEBO AUTOMOTIVE,INC., etal. Deputy Defendants and Respondents. Appeal from the Superior Court for the County of Los Angeles Case No. BC476523 The Honorable Elihu M. Berle After Review by the Court of Appeal, Second Appellate District, Division Seven Case No. B244412 DEFENDANTS’ AND RESPONDENTS’ PETITION FOR REVIEW James J. McDonald, Jr., Bar No. 150605 email: jmcdonald@laborlawyers.com Grace Y. Horoupian, Bar No. 180337 email: ghoroupian@laborlawyers.com Jimmie E. Johnson, Bar No. 223344 email: jjohnson@laborlawyers.com FISHER & PHILLIPS LLP 2050 Main Street, Suite 1000 Irvine, California 92614 Telephone: (949) 851-2424 Facsimile: (949) 851-0152 Attorneys for Defendants and Respondents Lebo Automotive,Inc., et al. FPDOCS 30097617.4 IN THE SUPREME COURTOF THE STATE OF CALIFORNIA TIMOTHY SANDQUIST, Plaintiff and Appellant, VS. LEBO AUTOMOTIVE,INC.,et al. Defendants and Respondents. Appealfrom the Superior Court for the County of Los Angeles Case No. BC476523 The Honorable Elihu M.Berle After Review by the Court of Appeal, Second Appellate District, Division Seven Case No. B244412 DEFENDANTS’ AND RESPONDENTS’PETITION FOR REVIEW James J. McDonald, Jr., Bar No. 150605 email: jmcdonald@laborlawyers.com Grace Y. Horoupian, Bar No. 180337 email: ghoroupian@laborlawyers.com Jimmie E. Johnson, Bar No. 223344 email: jjohnson@laborlawyers.com FISHER & PHILLIPS LLP 2050 Main Street, Suite 1000 Irvine, California 92614 Telephone: (949) 851-2424 Facsimile: (949) 851-0152 Attorneys for Defendants and Respondents Lebo Automotive, Inc., et al. FPDOCS 30097617.4 TABLE OF CONTENTS Page TABLE OF AUTHORITIES.00...ee eecscseeseeescesseesesesesseesseseeseeeeerenssesseeees iii PETITION FOR REVIEW......cccsssssssssssesscssersccsecsecesessesnessssesesnesesesesesenssesees 1 ISSUES PRESENTED FOR REVIEW..........csssscsssssscsessscssseseesseeneeenesenseesees 1 WHY REVIEW SHOULD BE GRANTED 1.0... ec cecccsssesceeensenseeeeeeseeneees 1 STATEMENTOF THE CASE...ccsesesccssessesessessesessesesesesseesessesssessesessees 3 A. The Parties............ccccsecccsseessesscscssesesecssssseseseesesesssesasesseenseeseneseseeeneenees 3 B. The Parties’ Arbitration Agreement............cc ce seeecesessssesenseeseasoeues 3 C. Procedural History ...........:ceccssssssssesceseessesseseesessesscessscusseeesseeseessessaes 4 LEGAL DISCUSSION.......ccccescesssseeseseeeeceeeeesseesesseseesesssssscseesessseseseeneaseeees 5 I. THE SECOND DISTRICT FAILS TO ADDRESS THIS COURT’S CONTRADICTORY AND CONTROLLING PRECEDENTIN CITYOFLOSANGELES......ccccscssssssssossscsseessesesssesvscesseesseeseeaseseeneees 5 A. The SecondDistrict Creates a Presumption that Arbitrators May Determine Their Own Jurisdiction To Decide Class Claims Absent Contractual Direction to the Contrary............ 5 B. This Court Reached the Opposite Result in City ofLos ANGELES veesecsssssssscseesseseessesseencossesevseeessessssesssenssesseeseeesbonseeseesees 6 II. THE SECOND DISTRICT ALSO DISREGARDED ESTABLISHED CALIFORNIA LAW BASED UPON AN INCORRECT INTERPRETATION OF BAZZLE.......cccccssccsseesseneens 7 A. California Law Has Long Empowered the Courts to Determine the Authority of Arbitrators to Hear Class Cais 0... ceseeeesscssceseectceeeseeseeecneeenersersasosseessessesssesessssennesearens 7 FPDOCS 30097617.4 Ii. IV. VI. B. The Bazzle Plurality Solely Determinedthat the Strong Presumption Previously Employed by the United States Supreme Court in Favor of Courts Determining the Jurisdiction of Arbitrators Was Not Appropriate on the © Question of Whether an Arbitrator Has the Authority to Hear Class Claims... ceeeeeecesesseecsseeseseeesscceessneessessensessescesseeseneees 9 VOLTAND STOLT-NIELSEN FORECLOSE ANY PRESUMPTIONIN FAVOR OF ARBITRATORS DETERMINING THEIR OWN SCOPE OF AUTHORITY.......... 11 DETERMINING WHO WILL DECIDE WHETHER AN ARBITRATOR CAN HEAR CLASS CLAIMSIS NOT A PROCEDURAL QUESTION.....cece csessscesrsessesecesssesseeseresseseeeees 12 THE SECOND DISTRICT MISCONSTRUES THE HISTORY OF FEDERAL CASES PREVIOUSLY REVIEWING THE QUESTION..ccseccsssessccssecsssseccssscsssssecsssevssssssutsssssecssssecsssisesssesessassesses 15 WHEREAS THE SUPERIOR COURT CORRECTLY DETERMINED THAT THE ARBITRATOR HAD NO AUTHORITY TO HEAR A CLASS ARBITRATION, ANY PURPORTED ERROR BY THE SUPERIOR COURT CHOOSING TO MAKE THAT CORRECTDECISION ITSELF WAS HARMLESS...... cee eeeesceeeeeeseeeesecsscensecnsnsesssessesssesesseessssesseenseeseesenees 19 CONCLUSION. 000... cceecceeceescesseeseccessssecssssessesensesseesseeseesesseaessesessaeenseesseees 19 CERTIFICATE OF COMPLIANCE.......ceeccescesscessessssccesseseeneesnseecsneeeenees 20 DECLARATION OF SERVICE ii FPDOCS 30097617.4 TABLE OF AUTHORITIES Page(s) Cases Alarid v. Vanier (1958) 50 Cal.2d 617oeesesesssescesesecssesscsessesessesesseeseesessenseeserenens 17 AT&T Technologies v. Communications Workers (1986) 475 ULS. 643eeeeescsceseesseesssecssssesensecrsesssesseseenseeseessenees 7,9, 10 Cassim v. Allstate Insurance Company (2014) 33 Cal.4th 780...eeeecseseeeeecesssssssesssenseessessseseeseeeneees 2, 16, 17 City ofLos Angeles v. Superior Court (2013) 56 Cal.4th 1086 0...eeecsecsesesessesssssssscsessssesenseeerensens 2,5, 6,7 County ofMonterey v. W.W. Leasing Unlimited (1980) 109 CalApp.3d 636 occescsscsssssesscssessssssssseesseseersssessesseenees 17 Deposit Guaranty Nat. Bank v. Roper (1980) 445 U.S. 326 o..ceeeecessssssesserseseseesssessceescesenecesessseneeseseneeneess 12, 14 Duran v. U.S. Bank Nat. Assn. (2014) 59 Cal.4th 1172oeeessscesessssssscseseeserssesesesnesesseseeeens 12, 14 Fantastic Sam’s Franchise Corp. v. FSRO Association Ltd. (Ist Cir. 2012) 683 F.3d 18... ccsecsetscesecessesssseeeseeeeeesessenseseesaeenes 15 First Options ofChicago, Inc. v. Kaplan (1995) 514 U.S. 938 weececsssssetssscecsessesssseessensesesseseseessesassnsnseeeeees 12 Garcia v. Direct TV (2004) 115 CalApp.4th 297 oo...ccc cscsseseeseeeesesesseseeneneesenseeeeness 7, 8,9 Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 ooesceseescesessssssseesscssrsssessensecneenseesees 5, 7, 8, 9, 10 Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79 coeececcscsessssscescsssssscsesesesesseeeseesesenssensesnscasensnesees 10, 13 Jock v. Sterling Jewelers Inc. (2d Cir. 2011) 646 F.3d 113 ceceeseseseseeseeseeeeseeneeesnetneneteeetacerensees 15 ili FPDOCS 30097617.4 John Wiley & Sons, Inc. v. Livingston (1964) 376 U.S. 543 oeeesescesscsecseeccrescsessecsnesssesesssssssceseeeenssessesseeses 14 Keating v. Superior Court (1982) 31 Cal.3d 584 ooccccseseesscessesseesersesssseseseessessesessesssessessnens 8 Kinecta Alternative Financial Solutions, Inc. v. Superior Court (2012) 205 CalApp.4th 506 00... ec cesscseeseesesseseesersesssessesssssansseesseaes 18 Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115vceeeseecesseecessereeereees 8, 17, 18, 19 Opalinski v. Robert HalfInt'l, Inc. (3d Cir. July 30,2014) ==-F.3d_, 2014 U.S. App. LEXIS 14538 uuu... ecssccsssccecsscecsceetesesecesteeesestscsesesssesseessessseeoess 2, 14, 15 Oxford Health Plans LLC v. Sutter (2013) 569 US.133 S.Ct. 2064oecceesersseneecesenecnseseens 7,8 People v. Watson (1956) 46 Cal.2d 818 oo...eccscseectereneeesessceeseeesersesessseesenseeseusensessaeess 2 ReedElsevier, Inc. v. Crockett (6th Cir. 2013) 734 F.3d 594oeeesscsecseeseessesssessessssevsesesensessesees 2,15 Sky Sports, Inc. v. Superior Court (2011) 201 CalApp.4th 1363 occcescesecsecesceesssscssteesnesenees 12, 13, 14 Southern Communications Services, Inc. v. Thomas (11th Cir. 2013) 720 F.3d 1352oeceeessessessscessessseeseessensssseseseeseees 15 Stolt-Nielsen S.A. v. Animalfeeds Int’l (2010) 559 U.S. 662 .....eeeeeseeseeeeeeteeereeneeseeeceneees 2, 8, 11, 12, 13, 14, 17 Truly Nolen ofAmerica v. San Diego County (2012) 208 Cal.App.4th 487occcseecssesseesecesscssesessssssesessserseeneeeeseenes 8 Vernon v. Drexel Burnham & Co. (1975) 52 Cal.App.3d 706 0... cccccsssccsesssssesescssesssesnsssscereeesesseesenrenes 13 Volt v. Board ofTrustees ofLeland Stanford Junior Univ. (1989) 489 U.S. 468 ooceeeesseeesesesecseneeesssssseeseeseesnenseeeesesseaes 10, 11 iv FPDOCS 30097617.4 Statutes Business and Professions Code section 17200, and (3).........:csssesscseeeeeeees 4 Code ofCivil Procedure Section 475 .....cccccsccsscssceessesscecssessestessessenesenees 2, 16 BAA we ccsccscscsscccsscccsensassonsceeeeeseneecseeesseeeseeeessesaceeeeseseescesssessessseesensesseses 8, 11 Fair Employment and Housing Act (2)........ccccscssccsscesssesseeseessesseseeesseetseseas 4 Federal Arbitration Act ...........ccccccccccsccsssssscsseccssssseccessssessssesssssccesessecsees 11, 18 Other Authorities Article VI, Section 13 of the California Constitution ..............ccccescseseeeseeee 16 OPpn, at PP. 2-4... cceseccssesescessecessessecsnccsecsesensesessssesscsesseesscsscsssseessessseeeensees 5 Opn. at pp. 4-5, 9-16 ceeccssesssessesecseeecsseesenseceessesseeseseesseesasrsssetsseseneenes 5 ODN, At P. 5 eeeesessesssesseseesceeseeeeseeesaeeesanessneesesesseceseseseeeseesssssassssesesseseaeesseeeses 4 ODN, At P. 6 .eccesecccerccseessescencceecssceseseessegareesseessecssecenssesuescsessssssessessesseesseeses 4 Opn. at pp. Q-1S eee cessssesssceessseessnecsscccsseeesseesecsasesssesseecsasensescessesstecatecaeeeess 5 OPM. At Po LO reeecccescsccsssecsecescesecereceseseseessesessessessessesaeeeseseeseesesoessesersesscseeees 1 Opn. at Po UL ieee eesssesssensecctneessacesscesssceeseeeescessecsseesatessuecsassausassesssasseseesseesnees 5 Opn, at pp. 12-13eeeeseseseecnctsecessccenseeesscesscesseenseesseeeneseaeensseteeesenesseaeeses 15 Opn. at Pi 13 eceesceseseseceesessseeesecesseecsaeeeseeseseeseecseessnssesseesecarensessenseseneees 5,9 Vv FPDOCS 30097617.4 PETITION FOR REVIEW Defendant and Respondents LEBO AUTOMOTIVE, dba JOHN ELWAY’S MANHATTAN BEACH TOYOTA now known as MANHATTAN BEACH TOYOTA(“Respondent MBT”), JOHN ELWAY, MITCHELL D. PIERCE, JERRY L. WILLIAMS, and DARRELL SPERBER(collectively, “Respondents”) petition for review of a published decision by the Court of Appeal, Second Appellate District, Division Seven (“Second District”), which reverses an order of the Superior Court for the County of Los Angeles (“Superior Court”). The Superior Court’s order had compelled Plaintiff and Appellant TIMOTHY SANDQUIST (“Appellant”) to arbitrate his claims against Respondents on an individual basis. The Second District reversed that part of the trial court’s order prohibiting class arbitration of Appellant’s claims. The Second District opined that the arbitrator, not the Superior Court, should decide whether the arbitrator has jurisdiction to hear class claims even though the — arbitration agreement does not authorize class arbitration. A copy of the Second District’s opinion (“Opn.’’) is attached hereto as Exhibit “A.” ISSUES PRESENTED FOR REVIEW 1, Did the Second District erroneously determine that arbitrators, not the courts, should determine the scope of their own jurisdiction to hear class claims absent authorizing language in the arbitration agreement? 2. Even if the Superior Court erred by determining itself whether the arbitrator had jurisdiction to hear class claims, was that error harmless given that the Superior Court correctly determined that the arbitration agreements did not authorize the arbitrator to hear class claims? WHY REVIEW SHOULD BE GRANTED This Court should grant review in orderto resolve the issue, which the Second District below concedes is unsettled (Opn. at p. 10), of whether a court or an FPDOCS 30097617.4 arbitrator should determineifthe arbitrator has jurisdiction to hear class claims when the arbitration agreementis silent on the issue. In holding that an arbitrator should decide whetherto allow class claimsin the absence of authorizing language in the arbitration agreement, the Second District below reacheda result that is contrary to this Court’s decision in City ofLos Angeles v. Superior Court (2013) 56 Cal.4th 1086. The Second District’s decision is also at odds with decisions of the United States Supreme Court (Stolt-Nielsen S.A. v. Animalfeeds Int’l (2010) 559 U.S. 662) and the United States Courts of Appeals (Reed Elsevier, Inc. v. Crockett (6th Cir. 2013) 734 F.3d 594; Opalinski v. Robert HalfInt’l, Inc. (3d Cir. July 30, 2014) F.3d___, 2014 U.S. App. LEXIS 14538). In City ofLos Angeles, this Court held that an arbitrator has no authority to decide whether to hear certain claims unless the arbitration agreement expressly provides otherwise. Nevertheless, the Second District below contrarily held that an arbitrator is exclusively empowered to determine his or her own jurisdiction over class claims absent direction in the underlying arbitration agreementto the contrary. Not only did the Second District publish a decision that directly contradicts City of Los Angeles, it did so without even addressing that precedentin its analysis. Should this Court choose not to review the Second District’s decision, it should at the very least order the opinion below de-published to avoid the confusionit will cause vis-a- vis City ofLos Angeles. Finally, the Second District entirely failed to consider whether any purported error by the Superior Court in making the decision itself regarding the arbitrator’s jurisdiction was harmless. Consistent with CodeofCivil Procedure section 475, this Court held long ago in People v. Watson (1956) 46 Cal.2d 818, that an appellate court cannot reverse a trial court order unless the purported error is “prejudicial.” This Court further held in Cassim v. Allstate Insurance Company (2014) 33 Cal.4th 780, that prejudice cannot be foundin the abstract, but requires an examination of 2 FPDOCS30097617.4 each individual case. The Second District wholly neglected this duty, failing to even consider whether the purported error was harmless. This Court should grant review additionally to reinforce the requirement that appellate courts must conduct a harmless error analysis before reversing any trial court order, especially in the context of motions to compelarbitration. STATEMENTOF THE CASE A. TheParties Respondent MBT employed Appellant as a sales manager from September 2000 until Appellant’s voluntary resignation on January 7, 2011. 1 JA 52-80. Asalleged in the operative First Amended Complaint (“FAC”), Respondent MBTis located in Manhattan Beach, California, engaged in the sale and repair of Japanese-manufactured automobiles. Respondent Darrel Sperber is the General Manager of Respondent MBT, and was Appellant’s immediate supervisor. John Elway, Mitchell Pierce and Jerry Williams were corporate shareholders of Respondent MBT. B. The Parties’ Arbitration Agreements At the beginning of Appellant’s employment, the parties expressly agreed to resolve any employment-related dispute through arbitration. In pertinent part, the arbitration agreementread: I also acknowledge that the Companyutilizes a system of alternative dispute resolution which involves binding arbitration to resolve all disputes which may arise out of the employmentcontext. ... I and the Company both agree that any claim, dispute, and/or controversy ... which would otherwise require or allow resort to any court or other governmental dispute resolution forum between myself and the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans)arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employment by, or other association with the Company, whether based on tort, contract, statutory, or equitable law, or otherwise, (with the sole exception of claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical 3 FPDOCS 30097617.4 and disability benefits under the California Workers' Compensation Act, and Employment Development Department claims) shall be submitted to and determined exclusively by binding arbitration... .. Resolution of the dispute shall be based solely upon the law governing the claims and defenses pleaded, and the arbitrator may not invoke any basis (including but not limited to, notions of “just cause”) other than such controlling law. 1 JA 195. That same day, Appellant signed two additional arbitration agreements with Respondents containing similar language. 1 JA 197-198, 200-201. C. Procedural History Appellant filed his FAC in the Superior Court on February 1, 2012. 1 JA 52- 107. The FACasserts causes of action for (1) discrimination and harassment in violation of the Fair Employment and Housing Act, (2) violation of Business and Professions Code section 17200, and (3) common law constructive discharge. 1 JA 52-80. On March 12, 2012, Respondents filed a motion in the Superior Court to compel individual arbitration of all claims in the FAC, and to stay or dismiss proceedings in the Superior Court. 1 JA 176-177, 179-189. The Superior Court granted Respondents’ motion to compel arbitration on August 14, 2012, and it additionally dismissed without prejudice Appellant’s class claims “because there’s no basis, contractual basis, to compel [class] arbitration.” It granted Appellant 60 days to amend his complaint by bringing forth a new class representative who could support the class allegations. Opn. at p. 5. On September 28, 2012, Appellant’s counsel notified the Superior Court that they could not produce a new class representative who had not signed an arbitration agreement, and on October 5, 2012, the trial court dismissed the class claims with prejudice. Opn.at p. 6. On October 5, 2012, Appellant filed his Notice of Appeal challenging the Superior Court’s order. On June 25, 2014, the Second District rendered its opinion. In pertinent part, the Second District determined that the arbitrator, not the Superior Court, should determine his or her own jurisdiction to hear Appellant’s class claims. In turn, the Second District reversed and remanded that part of the order prohibiting 4 FPDOCS 30097617.4 Appellant from pursuing class claims in arbitration. Opn. at pp. 9-15. On July 22, 2014, the Second District published its opinion. LEGAL DISCUSSION I. THE SECONDDISTRICT FAILS TO ADDRESS THIS COURT’S CONTRADICTORY AND CONTROLLING PRECEDENTIN CITY OFLOSANGELES A. The Second District Creates _a Presumption that Arbitrators May Determine Their Own Jurisdiction To Decide Class Claims Absent Contractual Direction to the Contrary Appellant signed multiple arbitration agreements with the Respondents which provided “that any claim dispute, and/or controversy...arising from, related to, or having any relationship or connection whatsoever with [Appellant’s]... employment by, or other association with the [Respondents]... shall be submitted to and determined exclusively by binding arbitration....”_ Opn. at pp. 2-4. Nowhere do the arbitration agreements provide for arbitration of class claims or state that the arbitrator is empowered to decide whether class claims may be pursued. Theparties disputed whether the agreements empoweredthe arbitrator to hear class claims. Opn. at pp. 4-5, 9-16. In its decision below, the Second District first observed that the text of the arbitration agreements were silent on the issue. Opn. at p. 11. The Second District then decided it would purportedly “follow the plurality opinion in [Green Tree Financial Corp. v. Bazzle (2003) 539 U.S. 444 (“Bazzle”)] that the question whether the parties agreed to class arbitration in cases where the arbitration agreement is silent is determined by the arbitrator.” Opn. at p. 13. Accordingly, pursuant to the Second District’s decision, a court must presume that the arbitrator is empowered to 5 FPDOCS30097617.4 determine his or her own jurisdiction to hear class claims absent language in the arbitration agreement to the contrary. B. This Court Reached the Opposite Result in City ofLos Angeles Notably, the Second District’s opinion fails to address, or even mention, this Court’s decision last year in City ofLos Angeles v. Superior Court (2013) 56 Cal.4th 1086 — a decision that reached the exact opposite result. In City ofLos Angeles, the arbitration agreement authorized the arbitrator to determine “a/ny] dispute concerning the interpretation or application of this written MOU[which included the arbitration agreement]....” 56 Cal.4th at 1093 [emphasis added]. The parties disputed whether the arbitration agreement empowered the arbitrator to hear claims regarding furloughs. Jd. at 1091-1092. Despite the contractual language stating that “a/ny] dispute concerning the interpretation or application ofthis [arbitration agreement]” fell within the authority of the arbitrator, this Court nonetheless held: “Here, because the parties’ MOU did not expressly authorize the arbitrator to determine whether particular disputes were subject to arbitration, that determination was for the court to make.” Jd. at 1093 [emphasis added}. In other words, this Court just last year held that, absent express authorization in the arbitration agreement for the arbitrator to determine which types of disputes will be arbitrable, the courts must determine the jurisdiction of arbitrators, not the arbitrators themselves. Moreover, this Court in City ofLos Angeles maintained that for such express authorization to be found, a party must identify languagein the text of the arbitration agreement which expressly states to the effect: “The parties agree that the arbitrator is empowered to determine his or her own scope of authority.” Language stating merely “any dispute concerning the interpretation or application of the arbitration agreement,” is to be decided by the arbitrator is insufficient. 56 Cal.4th at 1093. FPDOCS 30097617.4 Indeed, the United States Supreme Court has likewise counseled against allowing arbitrators to determine their own jurisdiction because they have an inherent conflict of interest to expand the scope of their powers beyond those actually provided in the arbitration agreement. “The willingness of parties to enter into agreements would be drastically reduced ... if a labor arbitrator had the power to determine his own jurisdiction....” AT&T Technologies v. Communications Workers (1986) 475 U.S. 643, 651 [internal quotes omitted]. “Were this the applicable rule, an arbitrator would not be constrained to resolve only those disputes that the parties have agreed in advancetosettle by arbitration, but, instead, would be empowered to impose obligations outside the contract limited only by his understanding and conscience.” Ibid. [internal quotes omitted]. Moreover, these innately biased decisions of the arbitrator would not be subject to any judicial review to preserve the legitimacy ofthe arbitration process. Oxford Health Plans LLC v. Sutter (2013) 569 US. __, 133 S.Ct. 2064, 2068-2071 [decisions by an arbitrator regarding his or her own scope ofauthority are not subject to judicial review]. | Accordingly, not only does the Second District’s decision disregard the controlling authority of City ofLos Angeles, but it also fails to address the concerns raised by the United States Supreme Court about arbitrators’ inherent conflict of interest if they are allowed to determine their ownjurisdiction. I. THE SECOND DISTRICT ALSO DISREGARDED ESTABLISHED CALIFORNIA LAW BASED UPON AN INCORRECT INTERPRETATION OF BAZZLE A. California Law Has Long Empowered the Courts to Determine the Authority ofArbitrators to Hear Class Claims In Garcia v. Direct TV (2004) 115 Cal.App.4th 297, Division One of the Second Appellate District was confronted with the same question of whether 7 FPDOCS 30097617.4 arbitrators are empowered to determine their own jurisdiction in relation to hearing class claims. Citing both California Supreme Court and Court of Appeal precedent, the Garcia court acknowledgedthat “California law... vests jurisdiction in our trial courts to determine whether” there is an “absence of a class action waiver” in the underlying arbitration agreement; and if so, whether the arbitrator is empowered to hear a class action. /d. at 298. Indeed, in Keating v. Superior Court (1982) 31 Cal.3d 584, 613, this Court held: “Whether such an order [to permit the arbitrator to hear a class action in arbitration] would be justified in a case ofthis sort is a question appropriately left to the discretion of thetrial court.” However, misconstruing the plurality opinion in Bazzle, as well as its lack of binding effect, the Garcia court stated, “...[BJut no longer. The [United States] Supreme Court has spoken, and the foundational issue — whether a particular arbitration agreement prohibits class arbitrations — must (in FAA cases) henceforth be decided by the arbitrators, not the courts. (Green Tree Financial Corp. v. Bazzle [].)” 115 Cal.App.4th at 298 [brackets added]. Accordingly, as the Garcia court recognized, California law empowered courts to determine an arbitrator’s authority to hear class claims prior to Bazzle. However, the United States Supreme Court has since advised, twice, that the Bazzle plurality opinion was in fact not binding authority. Stolt-Nielsen, supra, 559 U.S. at 678-680; Oxford Health, supra, 133 S.Ct. at 2068, fn 2. In turn, the First Appellate District in Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1129, fn. 6, and Division One of the Fourth Appellate District in Truly Nolen ofAmerica v. San Diego County (2012) 208 Cal.App.4th 487, 515 fn. 4, have both rightfully rejected Garcia for its belief that Bazzle was controlling precedent. Finally, as demonstrated below, Garcia’s interpretation that the Bazzle plurality found “whether a particular arbitration agreement prohibits class arbitrations[] must ... henceforth be decided by the arbitrators,” is also erroneous. 8 FPDOCS 30097617.4 B. The Bazzle Plurality Solely Determined that the Strong Presumption Previously Employed by the United States Supreme Court in Favor of Courts Determining the Jurisdiction of Arbitrators Was Not Appropriate _on the Question of Whether _an Arbitrator Has the Authority to Hear Class Claims Similar to Garcia, the SecondDistrict believes that Bazzle found “the question whether the parties agreed to class arbitration in cases where the arbitration agreement is silent is determined by the arbitrator.” Opn. at p. 13. In fact, Bazzle never considered such a global issue. Rather, the Bazzle plurality first determined that the question of whether the courts or the arbitrator should determine the arbitrator’s jurisdiction to hear class claims is a question of contractual interpretation subject to the rules of the applicable state law. 539 U.S. at 447, 450, 454-455 [J. Stevens concurring]. In other words, courts should first look to the arbitration agreementitself to determine whodecides the question. The arbitration agreement in Bazzle read, in pertinent part: “all disputes, claims, or controversies arisingfrom or relating to this contract or the relationships which result from this contract” would be subject to arbitration. 539 U.S. at 451 [emphasis added]. The plurality determined that. “whether [the arbitration agreement] forbids the use of class arbitration procedures[] is a dispute ‘relating to this contract’ and the resulting ‘relationships.’” Jbid. Thus, based upon this contractual interpretation, the Bazz/e plurality opined that, “[h]ence the parties seem to have agreed that an arbitrator, not a judge, would answerthe relevant question.” Id. at 451-452. By contrast, the parties to the arbitration agreements at issue here only agreed to arbitrate disputes over Appellant’s employment, not disputes over the meaningofthe arbitration agreements. Next, the Bazzle plurality responded to an argument that its contractual interpretation analysis ran afoul of a rule previously established by the United States 9 FPDOCS 30097617.4 Supreme Court in AT&T Technologies, supra, 475 U.S. at 643. Bazzle, supra, 539 U.S. at 452; see also pp. 456-457 [C.J. Rehnquist dissenting, raising similar argumentciting First Options ofChicago, Inc. v. Kaplan (1995) 514 U.S. 938, 945]. AT&T Technologies held, in pertinent part, that courts shall presume that parties intend for the courts to determine the scope of an arbitrator’s jurisdiction in the absenceof “clear and unmistakable evidence” within the arbitration agreement to the contrary — a standard the language analyzed by the Bazzle plurality did not satisfy. 475 U.S. at 649. While recognizing the precedential authority of AT&T Technologies, the Bazzle plurality opined that the strong presumption discussed in that case only applied to controversies concerning an arbitrator’s authority to hear the type of underlying substantive claim — not an arbitrator’s authority to hear those types of substantive claims on a class basis. Bazzle, at 452-453. In short, the Bazzle plurality determined that its contractual analysis did not . run afoul ofAT&T Technologies after finding that the strong presumption established in that case did not apply to controversies over the jurisdiction of an arbitrator to hear class claims. ‘Given these considerations, along with the arbitration contracts’ sweeping language concerning the scope of the questions committed to arbitration, this matter ofcontract interpretation should be for the arbitrator, not the courts, to decide.” Bazzle, supra, 539 U.S. at 452-453 [emphasis added]. However, the plurality’s opinion that the AT&T Technologies strong presumption did not apply to such controversies does not equate into a determination that an equal but opposite presumption exists that arbitrators should determine their own jurisdiction to hear class claims. As discussed below, such a presumption would contradict the well- established rule that arbitration “is a matter of consent, not coercion,” and that a party cannot be compelled to submit to arbitration unless that party previously agreed toit. Volt v. Board of Trustees ofLeland Stanford Junior Univ. (1989) 489 U.S. 468, 479; Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83. 10 FPDOCS 30097617.4 Il. VOLTAND STOLT-NIELSENFORECLOSE ANY PRESUMPTIONIN FAVOR OF ARBITRATORS DETERMINING THEIR OWN SCOPE OF AUTHORITY In Volt, a party asked the United States Supreme Court to void certain provisions of an arbitration agreement as purportedly inconsistent with the Federal Arbitration Act (“FAA”), and inferentially institute alternate provisions that were not a part of the original agreement. 489 U.S. at 468. The Court soundly rejected the suggestion that a court could mandate provisions not contained within the original agreement. “Arbitration under the [FAA] is a matter of consent, not coercion, and parties are generally free to structure their arbitration agreement asthey seefit.” Jd. at 479. | Building upon this principle, Stolt-Nielsen rejected a proposed presumption that arbitrators had jurisdiction to hear class claims where the arbitration agreement wassilent on the issue. 559 U.S. at 662. Again, the Court explained that a party cannot be compelled to submit to arbitration unless there is a contractual basis for concluding that the party agreed to do so. Jd. at 684. “Nothing in the FAA authorizes a court to compel arbitration of any issues ... that are not already covered in the agreement.” Jd. at 683 [quoting EEOC v. Waffle House, Inc. (2002) 534 U.S. 279, 289]. “[AJrbitrators derive their authority to resolve disputes only because the parties have agreed in advance to submit such grievancesto arbitration.” Jd. at 682- 683 [quoting AT&T Technologies, supra, 475 U.S. at 648-649]. “Arbitration is simply a matter of contract between the parties; it is a way to resolve those disputes — but only those disputes — that the parties have agreed to submit to arbitration. /d. at 684 [emphasis in original, quoting First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 943]. 11 FPDOCS 30097617.4 The presumption proposed by the Second District that arbitrators should determine their own jurisdiction absent contractual language to the contrary potentially forces a party to arbitrate an issue that was not previously agreed upon — a result the United States Supreme Court has repeatedly rejected. “[O]ne can understand why courts might hesitate to interpret silence or ambiguity on the ‘who should decide arbitrability’ point as giving the arbitrators that power, for doing so might too often force unwilling parties to arbitrate” matters upon whichthey did not agree. First Options, supra, 514 U.S.at 945. IV. DETERMINING WHO WILL DECIDE WHETHER AN ARBITRATOR CAN HEAR CLASS CLAIMSIS NOT A PROCEDURAL QUESTION The Stolt-Neilsen Court noted that “parties that enter into an arbitration agreement implicitly authorize the arbitrator to adopt such procedures as are necessary to give effect to the parties’ agreement.” Stolt-Nielsen, supra, 559 U.S.at 684-685. The Second District below mis-cites Deposit Guaranty Nat. Bank v. Roper (1980) 445 U.S. 326, 331; Duran v. U.S. Bank Nat. Assn. (2014) 59 Cal.4th 1172; and Sky Sports, Inc. v. Superior Court (2011) 201 Cal.App.4th 1363, 1369, for the purported proposition that “a class action is a procedural device.” In actuality, Deposit Guaranty and Duran stand for the proposition that class certification motions — i.e., determining whether a claim may proceed on a class basis upon the plaintiff satisfying the requirements of commonality, adequate representation,etc., and in what manner the plaintiff may present class-wide issues at trial — present procedural questions. Deposit Guaranty, at 331; Duran, at *29-30. Nowhere does Deposit Guaranty or Duran analyze whether the jurisdictional question — i.e., whetherthe courts or the arbitrator will determine if the arbitrator can even entertain a class certification motion — is procedural. Indeed, neither Deposit Guaranty nor 12 FPDOCS 30097617.4 Duraninvolve arbitrations to any extent. Both cases involved class actions heard by civil courts. Deposit Guaranty, at 327-331; Duran, at *3-18. Similarly, in Sky Sports, the California Court of Appeal merely cited that part of Vernon v. Drexel Burnham & Co. (1975) 52 Cal.App.3d 706, 715-716 & fn 4 whichheld that the determination of whether an individual plaintiff has satisfied the generalcertification standards to proceed with a claim on a class basis, and whether the claims of the different class members will be consolidated into a class action, is a procedural question. 201 Cal.App.4th at 1369. Importantly, the Vernon court further held that even procedural certification questions such as whether a party “can fairly and adequately protect that class rests in the sound discretion ofthe trial court,” not the arbitrator. 52 Cal.App.3d at 715, fn 4. Stolt-Neilsen plainly distinguished procedural class certification questions from the issue of whether parties agreed to class arbitration. That Court maintained: “An implicit agreement to authorize class-action arbitration ... is not a term that the arbitrator may infer solely from the fact of the parties’ agreementto arbitrate. Thisis becauseclass-action arbitration changes the nature of the arbitrationto such a degree that it cannot be presumedthe parties consented to it by simply agreeing to submit their disputes to an arbitrator.” 559 U.S.at p. 685. The court continued: “In bilateral arbitration, parties forego the procedural rigor and appellate review of the courts in order to realize the benefits of private dispute resolution: lower costs, greater efficiency and speed, and the ability to choose expert adjudicators to resolve specialized disputes.” Jbid. Yet, noted the Court, “the relative benefits of class- action arbitration are much less assured, giving reason to doubt the parties’ mutual consentto resolve disputes through class-wide arbitration.” Jd. at 686-686. The United States Supreme Court has expressly held that “[t]he question whether the parties have submitted a particular dispute to arbitration, ie., the _ “question of arbitrability,” is “an issue for judicial determination unless the parties 13 FPDOCS 30097617.4 clearly and unmistakably provide otherwise.” Howsam, supra, 537 U.S. at 83 [emphasis in original]. The question presented in the instant appeal is one of arbitrability — whether the parties agreed to provide the arbitrator with the powerto determine whetherto allow a class action to proceed. As explained in Stolt-Nielsen, “The dissent minimizes these crucial differences by characterizing the question before the arbitrators as being merely what ‘procedural mode’ was available to present [the plaintiffs] claims. ... Contrary to the dissent, but consistent with our precedents emphasizing the consensual basis of arbitration, we see the question as being whether the parties agreed to authorize class arbitration. Here, where the parties stipulated that there was ‘no agreement’ on this question, it follows that the parties cannot be compelled to submit their dispute to class arbitration” 559 U.S. at 626 [emphasis in original]. The Second District, as evidenced by its reliance upon Deposit Guaranty, Duran and Sky Sports, failed to understandthis critical difference. Finally, the United States Supreme Court has long held that the question of whose claims an arbitrator is authorized to decide is a gateway question for the courts. John Wiley & Sons, Inc. v. Livingston (1964) 376 U.S. 543. As the Third U.S. Circuit Court of Appeals explained just this month: “By seeking classwide arbitration ... [plaintiffs] contend that their arbitration agreements empower the arbitrator to resolve not only their personal claims but the claims of additional individuals not currently parties to this action. The determination whether [defendant] must include absent individuals in its arbitrations with [plaintiffs] affects whose claims may be arbitrated and is thus a question of arbitrability to be decided by the court.” Opalinski, supra, at **10-11. Hf // H/ H 14 FPDOCS 30097617.4 V. THE SECOND DISTRICT MISCONSTRUES THE HISTORY OF FEDERAL CASES PREVIOUSLY REVIEWING THE QUESTION The Second District attempts to bolster its decision by asserting that “[m]ost courts have concluded that the question of class arbitrability is for the arbitrator.” Opn. at pp. 12-13. The Second District mischaracterizes the current judicial split, however. While several unpublished federal trial court opinions may support the Second District’s decision, only two U.S. Circuit Courts of Appeal have directly considered the question and both have found that the decision of whether class arbitration shall proceed is for the courts. Reed Elsevier, supra, 734 F.3d at 599 [Sixth Circuit]; Opalinski, supra, 2014 U.S. App. LEXIS, at **10-15 [Third Circuit].!_ Indeed, given the avalanche of United States Supreme Court precedent signaling a rejection of any presumption in favor of arbitrators determining their own scope of authority, the Sixth Circuit recently observed: “Although the Supreme Court’s puzzle of cases on this issue is not yet complete, the Court has sorted the border pieces and filled in much of the background. ... [R]ecently the Court has given every indication, short of an outright holding, that classwide arbitrability is a ' The First, Second and Eleventh Circuits have considered similar questions, but not the specific one at issue in this case. See Southern Communications Services, Inc. v. Thomas (11th Cir. 2013) 720 F.3d 1352; Fantastic Sam’s Franchise Corp. v. FSRO Association Ltd. (1st Cir. 2012) 683 F.3d 18; Jock v. Sterling Jewelers Inc. (2d Cir. 2011) 646 F.3d 113. The First Circuit’s decision in Fantastic Sam’s involved associational arbitration, not class arbitration, and expressly recognized that an “associational action . . . is [not] equivalent to a class action.” 683 F.3d at 23. In Jock, the Second Circuit noted repeatedly that the parties had submitted the question whethertheir contract allowed for classwide arbitration to the arbitrator, and so the “who decides” question was not before the Court. 646 F.3d at 116, 124. Similarly, the Eleventh Circuit in Southern Communications specifically advised that “[l]ike the Supreme Court, we also have not decided whether the availability of class arbitration is a question of arbitrability[.]” 720 F.3d at 1359 n.6. 15 FPDOCS30097617.4 gateway question rather than a subsidiary one” requiring judicial resolution. Reed Elsevier, Inc. v. Crockett (6th Cir. 2013) 734 F.3d 594, 597-598. Given the current proliferation of class actions, the question of whether the courts or an arbitrator has jurisdiction to determine whether a case may proceed in class arbitration where the arbitration agreementis silent is likely to arise in many additional cases. This Court should grant review in order to establish a precedent that will guide this State’s courts in the determination ofthis issue. VI. WHEREAS THE SUPERIOR COURT CORRECTLY DETERMINED THAT THE ARBITRATOR HAD NO AUTHORITY TO HEAR A CLASS ARBITRATION, ANY PURPORTED ERROR BY THE SUPERIOR COURT CHOOSING TO MAKE THAT CORRECT DECISION ITSELF WAS HARMLESS Even assuming arguendo that the Second District correctly determined that the arbitrator should have decided whether the arbitrator had jurisdiction to hear the class claims because such questions are purportedly “procedural” in nature, the appellate court still erred by reversing the Superior Court’s order without an analysis of whether that purported error was “prejudicial” or “harmless.” Article VI, Section 13 of the California Constitution expressly provides that “[nJo judgment shall be set aside ... on the ground of ... any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the [reviewing] court shall be of the opinion that the error complained of has resulted in a miscarriage of justice.” As this Court held in Cassim v. Allstate Ins. Co. (2004) 33 Cal.4th 780, 800, a “miscarriage ofjustice” will be declared only whenthe reviewing court, after examining the entire case, is of the opinion that “it is reasonably probable that a result more favorable to the appealing party would have been reached in the absence of the error.” [Emphasis added.] 16 FPDOCS 30097617.4 Likewise, Code of Civil Procedure section 475 provides: “The [reviewing] court must ... disregard any error, improper ruling, instruction, or defect, in the ... proceedings which, in the opinion of said [reviewing] court, does not affect the substantial rights of the parties. ... There shall be no presumption that error is prejudicial, or that injury was done if error is shown.” [Emphasis added.] Reviewing courts cannotclassify errors as “prejudicial” in the abstract. “No precise formula can be drawn for deciding whether there has been a miscarriage ofjustice.” Alarid v. Vanier (1958) 50 Cal.2d 617, 625. “Accordingly, errors in civil trials require that [reviewing courts] examine each individual case to determine whether prejudice actually occurred in light of the entire record.” Cassim, supra, 33 Cal.4th at 801-802. Even “substantial”errors by a Superior Court are considered harmless if the record demonstrates that no other ultimate decision could have been properly rendered. County of Monterey v. W.W. Leasing Unlimited (1980) 109 Cal.App.3d 636, 642 [citing Witkin, Cal. Procedures (2d ed. 1971) Appeal, § 315, p. 4293]. Accordingly, after the Second District below determined that the question of whether an arbitrator can hear class claims is for the arbitrator to decide, the State Constitution, the Code of Civil Procedure, and the binding precedents of this Court all required the appellate court to have analyzed if the purported “procedural” error of the Superior Court was harmless before ordering a reversal of that trial court’s order. Indeed, Appellant does not have a right to an erroneous decision by an arbitrator. If the Superior Court correctly decided the ultimate question of whether the arbitration agreements empoweredthe arbitrator to hear class claims, Appellant did not suffer any “miscarriage of justice” justifying reversal simply because the Superior Court made the correct decision rather than the arbitrator. The Superior Court did in fact correctly determine the ultimate issue that the arbitrator was not empoweredto hear class claims. Sto/t-Nielsen unequivocally holds that (1) class arbitration is only allowed where provided within the contract; and (2) 17 FPDOCS30097617.4 silence,itself, is not indicative of an agreement to provide for such class resolution. 559 U.S. at 682-685. In Nelsen, supra, 207 Cal.App.4th at 1128-1130, the California Court of Appeal correctly determined that where an arbitration agreementis silent on class arbitration, and the arbitration agreement limits the scope of arbitrability to disputes between the employee and the employer, the agreement does not provide for class arbitration. See also Kinecta Alternative Financial Solutions, Inc. v. Superior Court (2012) 205 Cal.App.4th 506, 517 (“Kinecta”). In Nelsen, employees (who were referred to as “team members”) signed an arbitration agreement which read, in pertinentpart: “I agree that any claim, dispute, or controversy ... which would otherwise require or resort [sic] to any court ... between myself and [the employer] (or its owners, partners, directors, officers, managers, team members, agents related companies, and parties affiliated with its team member benefit and health plans) ... shall be submitted to and determined exclusively by binding arbitration under the Federal Arbitration Act, in conformity with the procedures ofthe California Arbitration Act...” 207 Cal.App.4th at 1120. Finding that this language only addressed actions between the employee and the employer, the Nelsen court correctly held that the agreement did not provide for class arbitration. Jd. at pp. 1129-1130; see also Kinecta, supra, 205 Cal.App.4th at 517 [employing similar bilateral scope and lacking reference to third parties]. The arbitration agreements in the present case employ nearly identical language to the one in Nelsen. The agreementat issue here reads: “... Land the Companyboth agree that any claim, dispute, and/or controversy ... which would otherwise require or allow resort to any court ... between myself and the Company (or its owners, directors, officers, managers, employees, agents, and parties affiliated with its employee benefit and health plans) ... shall be submitted to and determined exclusively by binding arbitration.” 1 JA 195 [emphasis added]. Thus, consistent with the correct decision in Ne/sen, the 18 FPDOCS30097617.4 Arbitration Agreements in the instant matter also do not provide for class arbitration because they address only disputes between the employee and employer (e.g. “between myself and the Company”). Nelsen, supra, 207 Cal.App.4th at 1129-1130. In short, the Superior Court correctly held that the Arbitration Agreements do not empower the arbitrator to hear class claims. Thus, even assuming arguendothat the Second District correctly determined that the Superior Court erred by making the decision itself, rather than submitting it to the arbitrator, that purported error was harmless and not groundsfor reversal by the Second District. CONCLUSION For the reasonsset forth above, the Court should grant review on both issues raised in this Petition. DATED:August 26, 2014 Respectfully submitted FISHER & PHILLIPS LLP »ZAR cDONALD,JR. . HOROUPIAN mT ALE E. JOHNSON FISHER & PHILLIPS LLP Attorneys for Defendants and Respondents Lebo Automotive,Inc., etal. 19 FPDOCS30097617.4 CERTIFICATE OF COMPLIANCEWITH RULE8.204(c)(1) This brief complies with the length limitation of California Rule of Court 8.504(d)(1) because this brief contains 5720 words, excluding the parts of the brief exempted by California Rules of Court 8.504(d)(3). DATED:August 26, 2014 FISHER & PHILLIPS LLP JAMES J. MEDONALD,JR. GRACE Y. HOROUPIAN JIMMIE E. JOHNSON FISHER & PHILLIPS LLP Attorneys for Defendants and Respondents Lebo Automotive,Inc., et al. 20 FPDOCS30097617.4 Filed 6/25/14 Sandquist v. Lebo Automotive CA2/7 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS California Rules of Court, rule 8.1115(a), prohibits courts and arties from citing or relying on opinions notcertified for publication or ordered published, except as Specified by rule 8.1115(b). This opinion has not beencertified for publication or ordered published for purposesof rule 8.1115. IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA SECOND APPELLATEDISTRICT DIVISION SEVEN TIMOTHY SANDQUIST, B244412 Plaintiff and Appellant, (Los Angeles County Super. Ct. No. BC476523) v. LEBO AUTOMOTIVE,INC.et al., Defendants and Respondents. APPEALfrom an order of the Superior Court of Los Angeles County, Elihu M. Berle, Judge. Reversed with directions. Sanford Heisler, Janette Wipper and Felicia MedinaforPlaintiff and Appellant. Fisher & Phillips, James J. McDonald, Jr., and Grace Y. Horoupianfor Defendants and Respondents. INTRODUCTION In this class action, plaintiff Timothy Sandquist purports to appeal from thetrial court’s August 14, 2012 order granting defendants’ motion to compelhim to arbitrate his individual claims, as well as defendants’ motion to dismiss all class claims without prejudice. Although this order is not appealable, we liberally construe Sandquist’s notice of appeal to includethetrial court’s October 5, 2012 order dismissing his class claims with prejudice, which is appealable underthe death knell doctrine. Limiting our review to Sandquist’s challenges to the order dismissing the class claims, we agree with Sandquist that the trial court erred by deciding the issue whetherthe parties agreed to class arbitration, and that the court should have submittedthe issue to the arbitrator. Therefore, we reverse. FACTUAL AND PROCEDURAL BACKGROUND Sandquist began working in sales at Manhattan Beach Toyota in September 2000. Joel Rabe, Sandquist’s sales floor manager, provided Sandquist with a large amount of paperworkto fill out but did not discuss any of the documents with him. Rabe simply told Sandquist to complete the paperwork quickly so he could get out onto the sales floor. The paperwork consisted of about 100 pages, including an employee handbook. Sandquistfilled out the paperworkas best and as quickly as he could. Due to time constraints Sandquist did not review the documents and did not know he was signing multiple arbitration agreements. He signed the documents becausehe needed the job. Amongthe documents Sandquist signed was a documententitled “APPLICANT’S STATEMENT & AGREEMENT.” It provided in pertinent part: “I and the Company both agree that any claim dispute, and/or controversy (including, but notlimited to, any claims of discrimination and harassment, whether they be based on the California Fair Employment and Housing Act, as well as all other applicable state or federal laws or regulations) which would otherwise require or allow resort to any court or other 2 governmental dispute resolution forum between myself and the Company (or its owners, directors, officers, managers, employees, agents, andparties affiliated with its employee benefit and health plans) arising from, related to, or having any relationship or connection whatsoever with my seeking employment with, employmentby, or other association with the Company, whether based ontort, contract, statutory, or equitable law, or otherwise, (with the sole exception of claims arising under the National Labor Relations Act which are brought before the National LaborRelations Board, claims for medical anddisability benefits under the California Workers’ Compensation Act, and Employment Development Departmentclaims)shall be submitted to and determined exclusively by bindingarbitration... .” Sandquist also signed a separate document acknowledgingthat he was an “at will” employee and agreeing “that any claim, dispute, and/or controversy (including, but not limited to any claims of discrimination and harassment) which would otherwise require or allow resort to any court or other governmental dispute resolution forum, between me and the Company (or its owners, directors, officers, managers, employees agents, and parties affiliated with its employee benefits and health plans) arising from, related to, or having any relationship or connection whatsoever with my seeking employmentwith, employmentby, or other association with, the Company, whether based ontort, contract, statutory, or equitable law,or otherwise, shall be submitted to and determined exclusively by binding arbitration... .” Finally, Sandquist signed a document entitled “EMPLOYEE ACKNOWLEDGMENT AND AGREEMENT.” In addition to an acknowledgmentof receipt of the dealership’s employee handbook,the documentcontained the following arbitration provision: “I agree that any claim,or dispute, or controversy (including, but not limited to, any andall claims of discrimination and harassment) which would otherwise require or allow resort to any court or other governmental dispute resolution forum between myself and the Company(orits owners, directors, officers, managers, . employees, agents, andparties affiliated with its employee benefit and health plans) arising from, related to, or having any relationship or connection whatsoever with my 3 seeking employment with, employmentby, or other association with the Company, whether based ontort, contract, statutory, or equitable law, or otherwise, (with the sole exception of claims arising under the National Labor Relations Act which are brought before the National Labor Relations Board, claims for medical and disability benefits underthe California Workers Compensation Act, and Employment Development Departmentclaims), shall be submitted to and determine[d] exclusively by binding arbitration ....” All three arbitration provisions further specified that arbitration would be governed by the Federal Arbitration Act (FAA) in conformity with the proceduresofthe California Arbitration Act (Code Civ. Proc., § 1280 et seq.). Sandquist, who is African-American, filed this class action on January 9, 2012 against defendants Lebo Automotive, doing business as John Elway’s Manhattan Beach Toyota, John Elway, Mitchell D. Pierce, Jerry L. Williams, and Darrell Sperber, who had purchasedthe dealership in 2007. On February 1, 2012 Sandquistfiled his operativefirst amendedclass action complaintalleging violations of California’s Fair Employment and Housing Act (FEHA; Gov. Code, § 12940 et seq.) and Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.), and seeking injunctive and declaratory relief and damages. Sandquist asserted individual and class claims against the dealership forrace, color, national origin, and ancestry discrimination and against all the defendants for hostile work environment. Sandquist also alleged an individual claim against the dealership for constructive discharge. He alleged that despite his “enormous successat and loyalty to the dealership, [he] was passed over for promotions, denied salary increases, and harassed on thebasis of his race. [He] not only experienced discrimination on a routine basis, but he also witnessed” Elway, Pierce, and Williams “participate in, aid, abet, substantially assist, condone,or ratify discrimination and harassmentin the face of widespread complaints that GM Sperber wasa ‘repeat harasser’ whofreely and openly harassed employees of color. After persevering for four years against the ongoing discrimination and hostile work environment that permeated”the dealership, Sandquist “was forced to resign in 2011.” On March 20, 2012 defendantsfiled a motion to compelindividualarbitration pursuant to Code of Civil Procedure section 1281.2 and to stay or dismiss the proceedings with the trial court retaining jurisdiction to enforce any arbitration award. In support of their motion defendantsrelied on the three arbitration agreements signed by Sandquist on his first day of work. On August 14, 2012 the trial court granted the motion. Thetrial court concluded that the FAA applied and that the agreement was not unconscionable, finding no substantive unconscionability and a “low”level of procedural unconscionability.! With regard to the class claimsthetrial court ruled: “And to clean up any procedural details with regard to . . . class allegations, the Court is going to dismissorstrike the class allegationsas being irrelevant, false or an improper matter in the complaint under Code of Civil Procedure section 43611 because there’s no basis, contractual basis, to compel [class] arbitration. [{] Since theplaintiff himself is now going to be subjectto individual arbitration, there would no longer be any representative in the lawsuit that would be able to adequately represent a class action to pursue the claimsthat are asserted by plaintiff.” The trial court further stated that it would “dismiss the class allegations without prejudice and set a timelimit of 60 days for plaintiff to amend. Andif plaintiff does not amend to bring forth a class representative that could support this class action to reinstitute the class allegations, then the defendant may request the dismissal of the case with prejudice.” 1 Theparties do not dispute the trial court’s determination that the FAA, which applies in cases involving interstate commerce, governsthis case. In fact, all three arbitration provisions specify that the arbitration is governed by the FAA. ~ 2 Codeof Civil Procedure section 436 provides: “The court may, upon a motion made pursuant to Section 435,or at any timein its discretion, and upon termsit deems proper: [§] (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. [{] (b) Strike outall or any part of any pleading not drawnorfiled in conformity with the laws ofthis state, a court rule, or an order of the court.” On September 28, 2012 counsel for Sandquist advised thetrial court that they had been unable to locate an employee ofthe dealership who had notsigned the arbitration agreements. In the absenceofa substitute class representative thetrial court stated it would dismiss the class claims with prejudice. On October 5, 2012 thetrial court signed an order dismissing the class claims with prejudice. The court’s order noted that Sandquist “was provided upto and including September 18, 2012 to amend his Complaint in order to bring forth a class representative that could support Plaintiff's class action to reinstate the class allegations. Plaintiff having failed to amend his complaint by September18, 2012, IT IS HEREBY ORDEREDthatPlaintiffs class claims are dismissed with prejudice.” That same day, October5, 2012, Sandquist filed a notice of appeal from the August 14, 2012 order granting defendants’ motion to compelarbitration and dismissing class claims without prejudice, and attached a copy of the August14 orderto his notice of appeal. Sandquist did not includein the notice of appeal the October 5, 2012 order entered that same day. DISCUSSION A. —Appealability Because“‘the question of appealability goes to our jurisdiction, we are dutybound to consider it on our own motion.’” (deSaulles v. Community Hospital ofthe Monterey Peninsula (2014) 225 Cal.App.4th 1427, 1435, quoting Olson v. Cory (1983) 35 Cal.3d 390, 398; see Koshak v. Malek (2011) 200 Cal.App.4th 1540, 1544 [“because [appealability] implicates our jurisdiction, we review the issue on our own motion”].) In his opening brief Sandquist states that “[t]his appeal arises from the August 14, 2012 and October 5, 2012 orders of the Los Angeles Superior Court.” In his notice of appeal, however, Sandquistonly listed the August 14, 2012 order. Therefore, as a preliminary matter, we must decide whetherthetrial court’s August 14, 2012 orderis appealable and, if not, whether Sandquist’s failure to include the court’s October 5, 2012 order in his notice of appeal requires dismissal of his appeal. 6 Anordergranting a motion to compelarbitration is not appealable. (Code Civ. Proc., § 1294, subd. (a); Goldman v. Sunbridge Healthcare, LLC (2013) 220 Cal.App.4th 1160, 1164, fn. 2; Nelsen v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1121 (Nelsen).) Rather, it is reviewable on appeal from the final judgmententered after confirmation ofthe arbitration award. (Nelsen, supra, at pp. 1121-1122; Kinecta Alternative Financial Solutions, Inc. v. Superior Court (2012) 205 Cal.App.4th 506, 513.) In his opening brief Sandquist acknowledgesthat “orders granting motions to compel arbitration are not ordinarily appealable” butasserts that “the instant appeal is authorized under the ‘death knell’ doctrine,” which “allows appeal from any orderthat is ‘tantamountto a dismissal of the action as to all members of the class other than the plaintiff.’” “The death knell doctrine is applied to orders in class actions that effectively terminate class claims, such as orders denyingclass certification or decertifying a class, while allowing individual claimsto persist. [Citations.] The doctrine is animated by the concern ‘that an individualplaintiff may lack incentive to pursue his individual claims to judgment, thereby foreclosing any possible appellate review of class issues.’ [Citation.| To preserve appellate review ofclass issues, the death knell doctrine permits appeal from ‘an order that ... amounts to a de facto final judgment for absentplaintiffs, under circumstances where . . . the persistence of viable but perhaps de minimis individual plaintiff claims creates a risk noformal final judgmentwill ever be entered.’ [Citation.] Underthis doctrine, an order compelling a plaintiff to pursue his or her claim in arbitration and dismissing the action as to all other members ofthe class has been held to be immediately appealable. [Citation.]” (Phillips v. Sprint PCS (2012) 209 Cal.App.4th 758, 766; see In re Baycol Cases I & II (2011) 51 Cal.4th 751, 758 [“only an orderthat entirely terminates class claims is appealable”]; Daarv. Yellow Cab Co. (1967) 67 Cal.2d 695, 699 [order that “is tantamount to a dismissalofthe action as to all membersofthe class other than plaintiff” is appealable]; Elijahjuan v. Superior Court (2012) 210 Cal.App.4th 15, 19 [termination ofclass claimsis “a prerequisite for the death knell doctrine’’|.) Although the August 14, 2012 order compelled Sandquist to arbitrate his individual claims against the defendants,the trial court’s order did not finally terminate the class claims. By dismissing the class claims without prejudice the trial court left open the possibility that the class claims would continue with the substitution of a new class representative. Such an order wasnot final and appealable. (See Aleman v. Airtouch Cellular (2012) 209 Cal.App.4th 556, 586 [an order denyingclasscertification without prejudice is not appealable as “[t]he death knell has not yet sounded”].) Because the “death knell doctrine” applies only to “those orders that effectively terminate class claims but permit individual claimsto continue” (Jn re Baycol Cases I & I, supra, 51 Cal.4th at p. 754), this doctrine does not make the August 14 order appealable. Although Sandquist could have sought immediate review of the August 14 order byfiling a petition for writ of mandate, he did not do so. (See Phillips v. Sprint PCS, supra, 209 Cal.App.4th at p. 767 [‘‘immediate review of an order granting a motion to compelarbitration may be obtainedby a petition for writ of mandate’”]; Kinecta Alternative Financial Solutions, Inc. v. Superior Court, supra, 205 Cal.App.4th at p. 513 [same].) While we may treat a nonappealable order granting a motion to compelarbitration as a writ, we decline to do so here. “‘[W]rit review of orders compelling arbitration is proper . . . (1) if the matters ordered arbitrated fall clearly outside the scope of the arbitration agreementor (2) if the arbitration would appearto be unduly time consuming or expensive.’ [Citation.]” (Kinecta Alternative Financial Solutions, Inc.v. Superior Court, supra, 205 Cal.App.4th at p. 513, quoting Zembsch v. Superior Court (2006) 146 Cal.App.4th 153, 160; accord, Parada v. Superior Court (2009) 176 Cal.App.4th 1554, 1566.) Sandquist’s individual claims do not “fall clearly outside the scope”of the arbitration agreements, and nothingin the record indicates that arbitration of Sandquist’s individual claims would be unduly time consuming or expensive. Therefore, we do notat this time review the propriety ofthetrial court’s August 14, 2012 order, including the trial court’s determinationthat the arbitration provisions were not unconscionable. The question remaining is whether we may and should liberally construe Sandquist’s notice of appealto include an appeal from the October5, 2012 order 8 dismissing the class claims with prejudice. In Walker v. Los Angeles County Metropolitan Transportation Authority (2005) 35 Cal.4th 15, after the trial court had entered a judgmentin favor of the defendant, the plaintiff unsuccessfully moved for a newtrial. The plaintiff appealed from the nonappealable order denying his motionfor a newtrial but did not appeal from the existing judgment. The Walker court contrasted cases like Rodriquez v. Barnett (1959) 52 Cal.2d 154, where the appellant appeals from both an appealable judgment and a nonappealable order with cases where the appellant appeals only from a nonappealable order. (Walker, supra, 35 Cal.4th at pp. 19-20.) The Walker court noted that, in the latter category of cases, dismissal of the appeal from the nonappealable order would havetheeffect of completely denying appellate review. The Supreme Court held that “[b]ecause ‘[t]he law aspires to respect substance over formalism and nomenclature’ [citation], a reviewing court should construe a notice of appeal from an order denying a newtrial to be an appeal from the underlying judgment whenit is reasonably clear the appellant intended to appeal from the judgmentand the respondent would notbe misled or prejudiced.” (Jd. at p. 22, fn. omitted.) Here, Sandquistfiled his notice of appeal the same daythat the trial court entered its order dismissing the class claims with prejudice. Becausethis order effectively terminated the class claims, it was appealable under the death knell doctrine. (See Jn re Baycol Cases I & IT, supra, 51 Cal.4th at p. 754.) Wetherefore liberally construe Sandquist’s notice of appeal to encompassthe trial court’s October 5, 2012 order. B. The Determination of Whether an Arbitration Agreement Provides for Class Arbitration: Trial Court or Arbitrator Sandquist contendsthatthe trial court “wrongly conducted a clause construction analysis of the Acknowledgements and held that they contain an implied class action waiver.” Sandquist, citing Green Tree Fin. Corp. v. Bazzle (2003) 539 U.S. 444 [123 S.Ct. 2402, 156 L.Ed.2d 414] (Bazzle) and Garcia v. DIRECTY, Inc. (2004) 115 Cal.App.4th 297 (Garcia), arguesthat the arbitrator, not the court, determines whether the arbitration agreementprovidesfor class arbitration. Defendants argue that thetrial 9 court correctly relied on Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp. (2010) 559 US. 662 [130 S.Ct. 1758, 176 L.Ed.2d 605] (Stolt-Nielsen) in ruling that the court decidesthis issue. It turns out that this issue is notentirely settled. “<1A|rbitration is a matter of contract and a party cannot be required to submit to arbitration anydispute whichhehas not agreed so to submit.’ [Citations.]” (Howsamv. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 83 [123 S.Ct. 588, 154 L.Ed.2d 491] (Howsam); see Am. Express v. Italian Colors Rest. (2013) 570 U.S. ___ [133 S.Ct. 2304, 2306, 186 L.Ed.2d 417] [it is an “overarching principle that arbitration is a matter of contract”]; Oxford Health Plans LLCv. Sutter (2013) 569 U.S. __ [133 S.Ct. 2064, 2066, 186 L.Ed.2d 113] [“[c]lass arbitration is a matter of consent: [a]n arbitrator may ~ employ class proceduresonly if the parties have authorized them”].) In Howsam, supra, 537 U.S. 79, the United States Supreme Court explainedthat, although the Court has “long recognized and enforced a ‘liberal federal policy favoring arbitration agreements,’ [citation], it has made clear that there is an exception to this policy: The question whetherthe parties have submitted a particular dispute to arbitration,i.e., the ‘question ofarbitrability,’ is ‘an issue for judicial determination [uJnless the parties clearly and unmistakably provide otherwise.’ [Citations.]” (Jd.at p. 83.) The Supreme Court noted that “[{Iinguistically speaking, one might call any potentially dispositive gateway question a ‘question of arbitrability,’ for its answer will determine whetherthe underlying controversy will proceed to arbitration on the merits. The Court’s case law, however, makesclear that . . . the phrase ‘question ofarbitrability’ has a far morelimited scope. [Citation.] The Court has foundthe phrase applicable in the kind of narrow circumstance where contracting parties would likely have expected a court to have decided the gateway matter, where they are notlikely to have thoughtthat they had agreed that an arbitrator would do so, and, consequently, where reference of the gateway dispute to the court avoidsthe risk of forcing parties to arbitrate a matter that they may well not have agreedto arbitrate. 10 “Thus, a gateway dispute about whetherthe parties are bound by a given arbitration clause raises a ‘question of arbitrability’ for a court to decide. [Citations.] Similarly, a disagreement about whether an arbitration clause in a concededly binding contract applies to a particular type of controversy is for the court. [Citations.] “At the same time the Court has found the phrase ‘question ofarbitrability’ not applicable in other kinds of general circumstance where parties would likely expect that an arbitrator would decide the gateway matter. Thus “procedural” questions which grow out of the dispute and bearonits final disposition’ are presumptively not for the judge, but for an arbitrator, to decide. [Citation.] So, too, the presumptionis that the arbitrator should decide ‘allegations of waiver, delay, or a like defense to arbitrability.’ [Citation.]” (Howsam,supra, 537 U.S. at pp. 83-84.) A majority of the United States Supreme Court has yet to decide whetherthe determination of whetherthe parties agreedto class arbitration is a gateway question for the court or a question for the arbitrator where,as here, the arbitration agreementis silent on the issue of class arbitration. (See Oxford Health Plans LLCv. Sutter, supra, 569 U.S. atp. _ [133 S.Ct. at p. 2068,fn. 2] [this Court has not yet decided whetherthe availability of class arbitration is a question of arbitrability” and “this case gives us no opportunity to do so”].) In Bazzle, supra, 539 U.S. 444 a plurality of four justices of the United States Supreme Court concluded that, where the parties to an arbitration agreement agree to submitto the arbitrator “‘all disputes, claims, or controversies arising from orrelating to this contractor the relationships which result from this contract,’” the arbitrator decides whetherthe arbitration agreementallows or precludes class arbitration. (Id. at pp. 451-452.) Following Bazzle, the Court ofAppeal in Garcia stated that “[t]he Supreme Court has spoken, and the foundational issue—whethera particular arbitration agreementprohibits class arbitrations—must (in FAA cases) henceforth be decided by the arbitrators, not the courts.” (Garcia, supra, 115 Cal.App.4th at p. 298.) The Supreme Court in Bazzle, however, did not speak on this issue with five votes. In Stolt-Nielsen, supra, 559 U.S. 662, the United States Supreme Court noted that Bazzle “did not yield a majority decision” on the question whether the court or the arbitrator 1] should decide if the arbitration agreement contemplatesclass arbitration. (/d. at p. 679.) The Stot/-Nielsen court further observed: “Unfortunately, the opinions in Bazzle appear to have baffled the parties in this case at the time ofthe arbitration proceeding. For one thing, the parties appear to have believed that the judgment in Bazzle requires an arbitrator, not a court, to decide whether a contract permits class arbitration. ... In fact, however, only the plurality decided that question. But we need notrevisit that question here because the parties’ supplemental agreement expressly assignedthis issue to the arbitration panel, and no party argues that this assignment was impermissible.” (/d.at p. 680; see Truly Nolen ofAmerica v. Superior Court (2012) 208 Cal.App.4th 487, 515, fn. 4 [“as Stolt-Nielsen noted, Bazzle was a plurality decision on this point and is not binding authority”); Nelsen, supra, 207 Cal.App.4th at p. 1129,fn. 6 [same].) Asthe court in Nelsen noted, “some federal courts have decided issues of class arbitration are generally for the arbitrator to decide, at least when the arbitration agreement does not provide otherwise. (See, e.g., Guida v. Home Savings ofAmerica, Inc. (E.D.N.Y. 2011) 793 F.Supp.2d 611, 617-618, and cases collected therein.)” (Nelsen, supra, 207 Cal.App.4th pp. 1128-1129, fn. omitted.) Because the parties in Nelsen askedthe appellate court to decide the arbitrability issue, the Ne/sen court did not have to resolvethe issue of whetherthe court or the arbitrator should decideit. Courts that have decided the issue have reached conflicting conclusions. Most courts have concluded that the question ofclass arbitrability is for the arbitrator. (See, 3 The court in Nelsen observedthat “neither party has proposed weleave the question ofclass arbitration for the arbitrator. Both parties invite this court to decide the issue. [The defendant] asks that we find the arbitration agreement doesnotreflectits consent to class arbitration, while [the plaintiff] requests we either find the arbitration agreement unenforceable orinterpretit to allow class arbitration. In any event, for the reasons wewill discuss, we believeit is clear the agreement precludes class arbitration and do not think any reasonable arbitrator applying California law could find otherwise.” (Nelsen, supra, 207 Cal.App.4th at p. 1129.) The adoption ofthis “reasonable arbitrator” test allowed the Nelsen court to avoid the issue. Neitherside in this appeal advocates for a “reasonable arbitrator”test. 12 e.g., Quilloin v. Tenet HealthSystem Philadelphia, Inc. (3d Cir. 2012) 673 F.3d 221, 232; Inre A2P SMSAntitrust Litigation (S.D.N.Y., May 29, 2014, No. 12 CV 2656) F.Supp.2d___‘ [2014 WL 2445756, p. 10]; Lee v. JPMorgan Chase & Co. (C.D.Cal., Nov.14, 2013, SACV 13-511) ___—~F.Supp.2d__—« [2013 WL 6068601, pp. 2-4]; Guida v. Home Savings ofAmerica, Inc., supra, 793 F:Supp.2d at p. 615.) Some courts have concludedthat class arbitrability is a question for the court. (See, e.g., Reed Elsevier, Inc. v. Crockett (6th Cir. 2013) 734 F.3d 594, 598-599 (Reed Elsevier); Chassen v. Fidelity Nat. Financial, Inc. (D.N.J., Jan. 17, 2014, No. 09-291) 2014 WL 202763, p. 6.) Althoughthe plurality opinion in Bazzle is not binding,it is persuasive. (See Thalheimer v. City ofSan Diego (9th Cir. 2011) 645 F.3d 1109, 1127, fn. 5 [“we follow the [Supreme Court] plurality opinion as persuasive authority, though ‘not a binding precedent’”], quoting Texas v. Brown (1983) 460 U.S. 730, 737 [103 S.Ct. 1535, 75 L.Ed.2d 502].) We agree with the majority of cases that follow the plurality opinion in Bazzle that the question whetherthe parties agreed to class arbitration in cases where the arbitration agreementis silent is determined by the arbitrator. (See,e.g., Lee v. JPMorgan Chase & Co., supra, ___ F.Supp.2d at p.___ [2013 WL 6068601, p.4, fn. 4 [although Bazzie is a plurality opinion and thusis not binding it neverthelessis instructive].) Such rule is particularly appropriate in light of the fact that a class action is a procedural device. (See Deposit Guaranty Nat. Bank v. Roper (1980) 445 U.S.326, 331 [class action is a “procedural device”]; Duran v. U.S. Bank Nat. Assn. (May 29, 2014, $200923) —-Cal.4th ——s [2014 WL 2219042,p. 17]; Sky Sports, Inc. Superior Court (2011) 201 Cal.App.4th 1363, 1369 [“[a] class action is a procedural device”].) As GEESE noted, a majority of the United States Supreme Court hasstated that “‘“procedural” questions which grow outofthe dispute and bearonits final disposition’ are presumptively not for the judge, but for an arbitrator, to decide.” (Howsam, supra, 537 USS. at p. 84.) Those courts that have reached a contrary result have emphasized the Supreme Court’s statements about the “‘fundamental’” differences between bilateral and classwide arbitration. (See, e.g., Reed Elsevier, supra, 734 F.3d at p. 598,citing AT&TMobility 13 LLC v. Concepcion (2011) 563 U.S. __ [131 S.Ct. 1740, 1750, 179 L.Ed.2d 742] (Concepcion).)* As those courts that have concludedthe arbitrator decides whetherthe parties agreed to class arbitration have explained, however, these concerns are more relevant to the issue of whetherthe parties agreed to class arbitration rather than to the issue of whetherthe court or the arbitrator decides if an agreement contemplates class arbitration. (See Quilloin v. Tenet HealthSystem Philadelphia, Inc., supra, 673 F.3d at p. 232 [“the actual determination as to whether class action is prohibited is a question of interpretation and procedure forthe arbitrator”); Jn re A2P SMS Antitrust Litigation, supra, __ F.Supp.2datp.__ [2014 WL 2445756,p. 11] [“under Stolt-Nielsen [the] differences [betweenbilateral and class arbitration] are primarily relevant to deciding the availability of such class arbitration, not the antecedent question of whether that decision is assigned to the Court or the arbitrator”]; Lee v. JPMorgan Chase & Co., supra, ___ F.Supp.2d at p.__ [2013 WL 6068601, p. 4] [“[t]he only question, as in Bazz/e,is the interpretive one of whether or not the agreements authorize Plaintiffs to pursue their claims on class, collective, or representativebasis,” and “[t]hat question concerns the 4 The Reed Elsevier court listed several differences between bilateral and classwide arbitration: “First, arbitration’s putative benefits—‘lowercosts, greater efficiency and speed,’ et cetera—‘are much less assured’ with respect to classwide arbitration, ‘giving reason to doubtthe parties’ mutual consent’ to that procedure. Stolt-Nielsen|, supra, 559 U.S.] at [p.] 685; see also Concepcion, [supra, 563 U.S. at p. __] 131 S.Ct. at [p.] 1751.... Second, ‘[c]onfidentiality becomes more difficult’ in classwidearbitrations, {Concepcion, supra,| at [p.] 1750—thus‘potentially frustrating the parties’ assumptions whenthey agreed to arbitrate.’ Stolt-Nielsen, [supra,] at [p.] 686. Third, ‘the commercial stakes of class-action arbitration are comparable to those of class-actionlitigation’ ... ‘even though the scopeofjudicial review is much morelimited[.]’ Jd. at [pp.] 686- [6]87.” (Reed Elsevier, supra, 734 F.3d at p. 598.) The Reed Elsevier court also noted that “‘where absent class members have not been required to optin, it is difficult to see how anarbitrator’s decision to conduct class proceedings could bind absent class members whohavenot authorized the arbitrator to decide on a classwide basis which arbitration procedures are to be used.’ Oxford Health [Plans LLCv. Sutter], |supra, 569 U.S. atp.___] 133 S.Ct. at [pp.] 2071-[20]72 .... Thus, in sum, ‘[a]rbitration is poorly suited to the higher stakesofclass litigation.’ Concepcion, [supra, 563 U.S. atp.__] 131 S.Ct. at [p.] 1752.” (Reed Elsevier, supra, at p. 598.) 14 proceduralarbitration mechanismsavailable to Plaintiffs, and does not fall into the limited scope of this Court’s responsibilities in deciding a motion to compelarbitration”’]; Guida v. Home Savings ofAmerica, Inc., supra, 793 F.Supp.2d at p. 616, fn. omitted[in light of Stolt-Nielsen and Bazzle “the ability of a class to arbitrate a dispute where the parties contest whether the agreementto arbitrate is silent or ambiguousontheissueis a procedural question that is for the arbitrator to decide”’].) Wetherefore hold that the question whether the parties agreed to class arbitration wasfor the arbitrator rather than the court to decide, and that thetrial court erred by deciding that issue in this case. We do not reach, and leave for the arbitrator, the merits of whetherthe arbitration provisions Sandquist signed permit class arbitration. We also do not address, and leave for the arbitrator to consider, Sandquist’s argument that the trial court failed to consider extrinsic evidence demonstrating that the parties impliedly agreed to arbitrate on a class-wide basis.> 5 In correspondence dated April 22, 2014, counsel for Sandquistnotified this court that “Sandquist is rescinding the arguments outlined in Appellant’s Opening Brief and Reply brief concerning the viability of Gentry v. Superior Court [(2007)] 42 Cal.4th 443.” In Gentry the California Supreme Court held that class arbitration waivers in employmentarbitration agreements should not be enforcedifthe trial court, after considering specific factors, determines “that class arbitration would be a significantly more effective way of vindicating the rights of affected employees than individual arbitration.” (id. at pp. 450, 463.) At the time we received counsel for Sandquist’s correspondence, the question whether the United States Supreme Court’s decision in Concepcion, supra, 563 U.S. ___ [131 S.Ct. 1740], impliedly overruled Gentry was pending before the California Supreme Court in /skanian v. CLS Transportation ofLos Angeles, LLC, 8204032. On June 23, 2014 the Supreme Court issued its decision in Iskanian and concluded “in light of Concepcion that the FAA preempts the Gentry rule.” (Iskanian v. CLS Transp. Los Angeles, LLC (June 23, 2014, 8204032) —Cal4th [2014 WL 2808963,p. 6].) 15 DISPOSITION The order dismissing the class claims is reversed and the matter is remandedto the trial court with directions to vacate its order dismissing class claims and to enter a new order submitting the issue of whetherthe parties agreed to arbitrate class claimsto the arbitrator. Sandquist is to recover his costs on appeal. SEGAL,J." We concur: PERLUSS,P. J. WOODS,J. * Judge of the Los Angeles Superior Court assigned by the Chief Justice pursuantto article VI, section 6 of the California Constitution. 16 Filed 7/22/14 CERTIFIED FOR PUBLICATION IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA COURT OF APPEAL — SECONDDIST. FILED SECOND APPELLATE DISTRICT DIVISION SEVEN Jul 22, 2014 JOSEPHA. LANE,Clerk TIMOTHY SANDQUIST, B244412 Derrick Sanders _Deputy Clerk Plaintiff and Appellant, (Los Angeles County Super. Ct. No. BC476523) v. ORDER MODIFYING OPINION LEBO AUTOMOTIVE,INC.et al., AND CERTIFYING FOR PUBLICATION, Defendants and Respondents. NO CHANGEIN JUDGMENT THE COURT: It is ordered that the opinion filed herein on June 25, 2014, be modified as follows: On page 8, the second full paragraph,the first sentence beginning “While we may treat” is revised so the sentence now reads as follows: | While we may treat an appeal from a nonappealable order granting a motion to compelarbitration as a petition for a writ, we decline to do so here. There is no change in the judgment. The opinion in the above-entitled matter filed on June 25, 2014, was not certified for publication in the Official Reports. For good cause it now appears that the opinion should be published in the Official Reports and it is so ordered. PERLUSS,P. J. WOODS,J. SEGAL,J." * Judge ofthe Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution. State of California ) County ofIrvine ) PROOF OF SERVICE I, Susan Jackson, declare that I am employed in the County of Orange, State of California. I am over the age of eighteen years and not a party to the within action. I am employed with the law office of Fisher & Phillips LLP, and my business address is 2050 Main Street, Suite 1000, Irvine, CA 92614. On_ the below date, I caused to be served the attached DEFENDANTS’ AND RESPONDENTS’ PETITION FOR REVIEWas follows: Janette Wipper Clerk for the Hon. Elihu Berle SANFORDHEISLER LLP SUPERIOR COURT OF 555 Montgomery Street, Suite 1206 CALIFORNIA San Francisco, CA 94111 County of Los Angeles (Central Ph: (415) 795-2020 District) Fax: (415) 795-2021 Central Civil West Courthouse Attorney for Plaintiff/Appellant - 600 South Commonwealth Avenue Timothy Sandquist Los Angeles, California 90005 Trial Court Judge Copy(1 ) via Federal Express Copy (1) U.S. Mail Clerk of the Court Office of the Clerk California Court ofAppeal SUPREME COURT OF Second Appellate District, Division CALIFORNIA Seven 350 McAllister Street Ronald Reagan State Building San Francisco, California 94102-4797 300 South Spring Street, Second Floor Los Angeles, CA 90013 Electronically Submitted and Original and eight (8) copies delivered via Federal Express Copy (1) U.S. Mail By properly addressing wrapper in a Federal Express Official Depository, under the exclusive custody and care of Federal Express, within the State of California; by electronically serving the above-noted parties in accordance with the Rules stated above, and by causing to be delivered by messenger such envelope(s) by hand to the office of the addressee(s). I declare under penalty of perjury under the laws of the State of California that the above is true and correct. Executed on August (26, 2014 at Irvine, California. Susan Jackson [PRINT NAME] a mee FPDOCS30097617.4