Silicon Valley Self Direct, LLC v. Paychex, Inc. et al, No. 5:2015cv01055 - Document 43 (N.D. Cal. 2015)
Court Description: ORDER denying 41 Motion for Leave to File Motion for Partial Reconsideration; denying Motion for Certification of Interlocutory Appeal. Signed by Judge Edward J. Davila on 8/24/2015. (ejdlc1S, COURT STAFF) (Filed on 8/24/2015)
Download PDF
<![CDATA[
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION 10 11 SILICON VALLEY SELF DIRECT, LLC, Case No. 5:15-cv-01055-EJD United States District Court Northern District of California Plaintiff, 12 v. 13 14 PAYCHEX, INC., et al., Defendants. 15 ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL Re: Dkt. No. 41 16 17 Plaintiff Silicon Valley Self Direct d/b/a California Labor Force (“CLF”) filed this action 18 for negligence, breach of contract and deceit against Defendants Paychex, Inc. and Paychex 19 Insurance Agency, Inc. (collectively, “Paychex”) alleging that Paychex caused CLF to lose its 20 workers’ compensation insurance coverage. Paychex moved, inter alia, to compel arbitration 21 based on the Paychex Productivity Services Agreement (“PPSA”), a contract Paychex claimed 22 governed its business relationship with CLF. See Docket Item No. 21. The court granted that 23 motion on July 20, 2015, but in doing so severed certain unconscionable portions of the PPSA’s 24 arbitration clause, including a requirement that the arbitration occur in Rochester, New York. See 25 Docket Item No. 40. 26 27 28 Paychex now moves for leave to file a motion for partial reconsideration. See Docket Item 1 Case No.: 5:15-cv-01055-EJD ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL 1 No. 41. Because it has not established a basis for such relief, that motion will be denied. 2 Paychex’s alternative request for certification of an interlocutory appeal will also be denied. 3 I. MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION 4 In this district, motions for reconsideration, partial or otherwise, may not be filed without 5 leave of court. Civ. L.R. 7-9(a) (“No party may notice a motion for reconsideration without first 6 obtaining leave of Court to file the motion.”). A request for leave must have two attributes. First, 7 the moving party must demonstrate at least one of the following grounds: 8 (1) That at the time of the filing the motion for leave, a material difference in fact or law exists from that which was presented to the Court before entry of the interlocutory order for which reconsideration is sought. The party also must show that in the exercise of reasonable diligence the party applying for reconsideration did not know such fact or law at the time of the interlocutory order; or 9 10 United States District Court Northern District of California 11 12 (2) The emergence of new material facts or a change of law occurring after the time of such order; or 13 (3) A manifest failure by the Court to consider material facts or dispositive legal arguments which were presented to the Court before such interlocutory order. 14 15 Civ. L.R. 7-9(b). 16 Second, the party may not repeat any oral or written argument previously made with 17 respect to the interlocutory order that the party now seeks to have reconsidered. Civ. L.R. 7-9(c). 18 Here, Paychex argues the court failed to consider two material facts and one dispositive 19 20 21 22 legal argument when it found unconscionable the situs designation included in the PPSA’s arbitration clause. As to facts, Paychex believes the court failed to address that (1) the “main witness” relied to CLF’s claims, at least as Paychex is concerned, is located in Rochester, New York, and (2) that CLF “failed to provide any facts” to substantiate the finding that an arbitration 23 in New York would be unaffordable or unreasonable. As to the dispositive legal argument, 24 25 Paychex contends the legal standard utilized by the court “was not based on controlling federal law.” 26 27 28 2 Case No.: 5:15-cv-01055-EJD ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL 1 These arguments are unpersuasive. As an initial matter, the court must observe that 2 Paychex presented little, if any, response to CLF’s unconscionability claims in the motion 3 briefing. These claims were raised by CLF in the opposition to Paychex’s motion to compel 4 arbitration. Paychex could have addressed unconscionability in its Reply, and could have made 5 each of the arguments it seeks to raise on reconsideration. Instead, it essentially left CLF’s claims 6 unopposed. Under these circumstances, Paychex must live with the result of its decision, no 7 matter the basis for it. Reconsideration does not allow party to raise arguments it should have 8 made earlier. See Civ. L.R. 7-9(b) (emphasizing that failure to consider material facts or legal 9 arguments only occurs when such facts or arguments were presented to the court in the first instance); see also Frietsch v. Refco, Inc., 56 F.3d 825, 828 (7th Cir. 1995) (“It is not the purpose 11 United States District Court Northern District of California 10 of allowing motions for reconsideration to enable a party to complete presenting his case after the 12 court has ruled against him. Were such a procedure to be countenanced, some lawsuits really 13 might never end, rather than just seeming endless.”). 14 Moreover, the court did not fail to consider anything that was presented in the motion 15 briefing. As the order demonstrates, the court was aware of the parties’ relative positions and 16 locations when it concluded that arbitration in New York was infeasible for CLF. And although 17 not explicitly stated, the order implies that regardless of where its employees are located, 18 arbitration in California is simply not as burdensome to Paychex. Paychex did not and has not 19 produced anything to contradict that finding other than the location of one employee who 20 negotiated a contract with a California company. 21 Similarly, it is untrue that CLF’s opposition to a New York arbitration was 22 unsubstantiated. The court cited to the declaration of Mauricio Mejia in the order. Mejia, as the 23 president of CLF, is qualified to comment on how an arbitration held on the opposite side of the 24 country would affect CLF’s business operations. The court accepted Mejia’s statement, which 25 was left unchallenged by Paychex. 26 27 28 Finally, Paychex’s contention concerning allegedly unconsidered “dispositive” legal 3 Case No.: 5:15-cv-01055-EJD ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL 1 arguments ignores its own briefing, explicit statements in the order, as well as the issue that was 2 decided. The court did not fail to account for anything stated in Manetti-Farrow, Inc. v. Gucci 3 America, Inc., 858 F.2d 509 (9th Cir. 1988), or Bremen v. Zapata Off-Shore Co., 407 U.S. 1 4 (1972), the two cases Paychex seeks to raise after the fact, because neither case was cited in 5 Paychex’s briefing. 6 In any event, the court explicitly demonstrated its awareness of the federal policy favoring 7 arbitration and the presumption of arbitrability accompanying that policy. But arbitration clauses 8 are still subject to contract defenses rooted in state law. See Pokorny v. Quixtar, 601 F.3d 987, 9 994 (9th Cir. 2010). That inquiry is distinct from the federal law that applies to arbitration 10 agreements and, in this case, was an issue that Paychex did not address. In sum, Paychex has not established what it must to bring a motion for leave to file a United States District Court Northern District of California 11 12 13 14 motion for partial reconsideration. II. MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL The district court may certify for interlocutory appeal an order involving (1) “a controlling 15 question of law,” (2) “as to which there is substantial ground for difference of opinion,” and (3) 16 “immediate appeal from the order may materially advance the ultimate termination of the 17 litigation.” 28 U.S.C. § 1292(b). The purpose of § 1292(b) is to “facilitate disposition of the 18 action by getting a final decision on a controlling legal issue sooner, rather than later” in order to 19 “save the courts and the litigants unnecessary trouble and expense.” United States v. Adam Bros. 20 Farming, Inc., 369 F. Supp. 2d 1180, 1182 (C.D. Cal. 2004). 21 Interlocutory certification is the exception, not the rule. “The policy against piecemeal 22 interlocutory review other than as provided for by statutorily authorized appeals is a strong one.” 23 Pac. Union Conference of Seventh-Day Adventists v. Marshall, 434 U.S. 1305, 1309 (1977) 24 (citing Liberty Mut. Ins. Co. v. Wetzel, 424 U.S. 737 (1976)). “Section 1292(b) is a departure 25 from the normal rule that only final judgments are appealable, and therefore must be construed 26 narrowly.” James v. Price Stern Sloan, Inc., 283 F.3d 1064, 1067 n.6 (9th Cir. 2002). The rule 27 4 Case No.: 5:15-cv-01055-EJD ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL 28 1 should only “be used in exceptional situations in which allowing an interlocutory appeal would 2 avoid protracted and expensive litigation.” In re Cement Antitrust Litig., 673 F.2d 1020, 1026 3 (9th Cir. 1982). Paychex believes the court should certify the following issue for interlocutory appeal: 4 5 “[w]hether a party challenging a forum selection clause on the grounds of substantive 6 unconscionability must show that the party will be effectively denied a meaningful day in court if 7 required to arbitrate in the contractually agreed-upon forum.” But for reasons similar to those 8 explained above, the court does not find this issue satisfies the applicable standard. First, the question presented by Paychex is not a “controlling” one for this case. Under § 9 1292(b), a question of law is “controlling” if “resolution of the issue on appeal could materially 11 United States District Court Northern District of California 10 affect the outcome of litigation in the district court.” Id. Regardless of how Paychex’s question is 12 answered, the “outcome” is the same as far as the district court is concerned: this case remains 13 stayed while CLF’s claims proceed to arbitration. At this point, the choice is not between claims 14 proceeding in court versus claims proceeding through arbitration. An arbitration will occur. Nor is there substantial ground for a difference of opinion under these circumstances. As 15 16 already noted, the court found the situs provision unconscionable based on an uncontradicted 17 statement by a qualified individual. There is not room for “substantial” disagreement. Furthermore, permitting an interlocutory appeal based on Paychex’s question does nothing 18 19 to “materially advance the ultimate termination of the litigation.” In fact, the opposite is true. 20 Again, the next step in this litigation is an arbitration of CLF’s claims. Inserting a time- 21 consuming and costly appeal into what should be a streamlined process will not delay rather than 22 advance an ultimate resolution of this action. Since this is not an exceptional situation requiring interlocutory direction from the 23 24 appellate court, Paychex’s question will not be certified for appeal. 25 III. 26 27 28 ORDER Based on the foregoing, Paychex’s Motion for Leave to File a Motion for Partial 5 Case No.: 5:15-cv-01055-EJD ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL 1 Reconsideration (Docket Item No. 41) is DENIED. Its request for certification of an interlocutory 2 appeal is also DENIED. 3 4 5 6 7 IT IS SO ORDERED. Dated: August 24, 2015 ______________________________________ EDWARD J. DAVILA United States District Judge 8 9 10 United States District Court Northern District of California 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6 Case No.: 5:15-cv-01055-EJD ORDER DENYING MOTION FOR LEAVE TO FILE MOTION FOR PARTIAL RECONSIDERATION; DENYING MOTION FOR CERTIFICATION OF INTERLOCUTORY APPEAL
]]>
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You
should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google
Privacy Policy and
Terms of Service apply.
