Villegas v. US Bancorp et al
Filing
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ORDER by Judge Seeborg granting 45 Motion to Compel Arbitration (rslc1, COURT STAFF) (Filed on 6/20/2011)
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**E-filed 6/20/11 **
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IN THE UNITED STATES DISTRICT COURT
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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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SAN FRANCISCO DIVISION
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For the Northern District of California
United States District Court
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GLORIA VILLEGAS
Plaintiff,
v.
No. C 10-1762 RS
ORDER GRANTING MOTION TO
COMPEL ARBITRATION
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US BANCORP, et al.,
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Defendants.
____________________________________/
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In the wake of AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), defendants move to
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compel arbitration of named plaintiff Gloria Villegas’s claims in this action, and to stay the
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litigation pending such arbitration. Pursuant to Civil Local Rule 7-1(b), this matter is suitable for
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disposition without oral argument, and the hearing set for June 23, 2011 is vacated.
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The motion is granted. There is no dispute that the claims are within the scope of a written
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arbitration agreement between the parties. Villegas makes no claim that the arbitration agreement
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would generally be unenforceable on any grounds. The sole issue is whether defendants waived the
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right to arbitrate because they did not move to enforce the agreement until approximately 13 months
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after the complaint was filed. As stated in the authority offered by Villegas, “[a] party seeking to
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prove waiver of a right to arbitrate must demonstrate (1) knowledge of an existing right to compel
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arbitration; (2) acts inconsistent with that existing right; and (3) prejudice to the party opposing
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arbitration resulting from such inconsistent acts.”Britton v. Co-op Banking Group, 916 F.2d 1405,
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1412 (9th Cir. 1990). “The party arguing waiver of arbitration bears a heavy burden of proof.” Id.
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Here, although the arbitration provision at all times existed in the parties’ agreement,
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defendants cannot be said to have had “knowledge of an existing right to compel arbitration,” until
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the Concepcion decision issued. Prior to that date, defendants had every reason to believe that any
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motion to compel arbitration would have been soundly rejected, given then-governing California
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Supreme Court precedent that arbitration provisions purporting to waive class action rights were
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invalid under circumstances that cannot be meaningfully distinguished from those present here. See
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Discover Bank v. Superior Court, 36 Cal. 4th 148 (2005). Villegas’s attempt to argue that
defendants could and should have sought to compel arbitration of the class claims notwithstanding
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For the Northern District of California
United States District Court
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Discover Bank is not persuasive. Accordingly, because defendants brought this motion promptly
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after Concepcion effectively overruled Discover Bank, there is no basis to conclude that they waived
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their right to compel arbitration of the class claims.
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Villegas’s claim brought under California Civil Code section 1632, which she brought
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individually and not on behalf of a class, presents a somewhat closer call. Defendants have not
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responded to Villegas’s contention that nothing barred them from seeking to compel arbitration of
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that claim from the outset of this litigation. Nevertheless, even as to that claim Villegas has not met
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her heavy burden to show a waiver of the right to arbitrate.
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Although this action has been pending for a significant period of time, it remains in the early
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stages of litigation. Under Villegas’s own assertions, the majority of the parties’ resources
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expended to date have involved the class action issues. Moreover, assuming defendants technically
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would have had the right to force arbitration of the individual claim at an earlier time, their decision
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not to do so and thereby put Villegas to the burdens of proceeding in two fora simultaneously cannot
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be now held against them. Whatever prejudice Villegas may have suffered as a consequence of the
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fact that the law did not permit defendants to compel arbitration of the class claims until recently,
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she has not shown cognizable prejudice resulting from defendants’ earlier decision not to pursue
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arbitration of only the individual claim.
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Accordingly, all of Villegas’s claims are subject to arbitration. This action is hereby stayed
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pending completion of such arbitration. The Clerk is directed to close the file for administrative
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purposes. It may be reopened for such additional proceedings as may be appropriate and necessary
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upon conclusion of the arbitration. If the matter is resolved by settlement, or in the event Villegas
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elects not to pursue arbitration, she shall promptly file a dismissal of this action.
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IT IS SO ORDERED.
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RICHARD SEEBORG
UNITED STATES DISTRICT JUDGE
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For the Northern District of California
United States District Court
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Dated: June 20, 2011
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