Limon v. ABM Industry Groups, LLC et al, No. 3:2018cv00701 - Document 15 (S.D. Cal. 2018)
Court Description: ORDER Granting 9 Motion to Compel Arbitration and Staying Action. The Court grants Defendant's motion to compel arbitration and stays this action pending completion of arbitration. The parties are directed to file a notice with the Court regarding the outcome of the arbitration proceedings within 14 calendar days of the issuance of the arbitrator's decision. Signed by Judge Michael M. Anello on 7/31/2018. (rmc)
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Limon v. ABM Industry Groups, LLC et al Doc. 15 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 Case No.: 3:18-cv-00701 MARIA LIMON, Plaintiff, 12 13 v. 14 ABM INDUSTRY GROUPS, LLC, a Delaware limited liability company, 15 ORDER GRANTING MOTION TO COMPEL ARBITRATION AND STAYING ACTION [Doc. No. 9] Defendant. 16 17 18 19 20 21 Plaintiff Maria Limon (“Plaintiff”) brings this action against Defendant ABM 22 Industry Groups, LLC (“Defendant”) asserting seven causes of action arising from her 23 employment with Defendant. Defendant moves to compel arbitration of Plaintiff’s 24 claims pursuant to the Federal Arbitration Act. See Doc. No. 9. Plaintiff filed an 25 opposition to Defendant’s motion, to which Defendant replied. See Doc. Nos. 12, 13. 26 The Court found the matter suitable for decision without oral argument pursuant to Civil 27 Local Rule 7.1.d.1. For the reasons set forth below, the Court GRANTS Defendant’s 28 motion to compel arbitration. 1 3:18-cv-00701 Dockets.Justia.com 1 BACKGROUND 2 On November 3, 2015, Plaintiff began working as a cleaner for Defendant’s 3 Janitorial Services division. That same day, Plaintiff initialed and signed a document 4 entitled “Mutual Arbitration Agreement.” Doc. No. 9-2, Ex. A. The Arbitration 5 Agreement, a three-page document, provides in pertinent part: 6 The Company and I agree as follows … Final and binding arbitration before a single, neutral arbitrator shall be the exclusive remedy for any “Covered Claim” … A “Covered Claim” is any claim (except a claim that by law is non-arbitrable) that arises between me and the Company, its past, present and future: parent(s), subsidiaries, affiliates, and/or their respective past, present and future: officers, directors and/or employees, including but not limited to claims arising and/or relating in any way to my hiring, my employment with, and/or the severance of my employment with, the Company. … 7 8 9 10 11 12 13 Arbitration will occur in the county in the United States in which I reside at the time the claim is filed by any of the parties to this agreement reside. Arbitration will be conducted pursuant to the AAA Employment Arbitration Rules and Mediation Procedures (the “AAA Rules”), except as expressly set forth herein or where such rules are not in compliance with applicable state or federal law. A copy of the AAA rules is available for review through the Company by submitting a request to the Legal Department, by contacting AAA at telephone number 888-774-6904, or at AAA’s website at www.adr.com. 14 15 16 17 18 19 20 Id. at 5. 21 On February 15, 2017, while working for Defendant, Plaintiff struck the side 22 of her head on a counter. A few days later, after experiencing significant pain, 23 Plaintiff went to the emergency room at Scripps Mercy hospital, where she was 24 informed she injured her sciatic nerve. Due to her injury, Plaintiff was put on light 25 work duty. As a result of being on light work duty, Plaintiff alleges she was 26 mistreated by her employer, and was eventually terminated on March 6, 2018. 27 This lawsuit ensued. 28 // 2 3:18-cv-00701 1 2 LEGAL STANDARD The Federal Arbitration Act (“FAA”) permits “[a] party aggrieved by the alleged 3 failure, neglect, or refusal of another to arbitrate under a written agreement for arbitration 4 [to] petition any United States District Court … for an order directing that … arbitration 5 proceed in the manner provided for in [the arbitration] agreement.” 9 U.S.C. § 4. Upon a 6 showing that a party has failed to comply with a valid arbitration agreement, the district 7 court must issue an order compelling arbitration. Id. 8 The Supreme Court has stated that the FAA espouses a general policy favoring 9 arbitration agreements. See AT&T Mobility v. Concepcion, 563 U.S. 333, 339 (2011). 10 Federal courts are required to rigorously enforce an agreement to arbitrate. See id. 11 Courts are also directed to resolve any “ambiguities as to the scope of the arbitration 12 clause itself … in favor of arbitration.” Volt Info. Scis., Inc. v. Bd. Of Trs. Of Leland 13 Stanford Jr. Univ., 489 U.S. 468, 476-77 (1989). 14 In determining whether to compel a party to arbitration, the Court may not review 15 the merits of the dispute; rather, the Court’s role under the FAA is limited “to 16 determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether 17 the agreement encompasses the dispute at issue.” Cox v. Ocean View Hotel Corp., 533 18 F.3d 1114, 1119 (9th Cir. 2008) (internal quotations and citation omitted). If the Court 19 finds that the answers to those questions are “yes,” the Court must compel arbitration. 20 See Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). If there is a genuine 21 dispute of material fact as to any of these queries, a district court should apply a 22 “standard similar to the summary judgment standard of [Federal Rule of Civil Procedure 23 56].” Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004). 24 Agreements to arbitrate are “valid, irrevocable, and enforceable, save upon such 25 grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. 26 Court must apply ordinary state law principles in determining whether to invalidate an 27 agreement to arbitrate. See Ferguson v. Countrywide Credit Indus., 298 F.3d 778, 782 28 (9th Cir. 2002). As such, arbitration agreements may be invalidated by generally 3 3:18-cv-00701 1 applicable contract defenses, such as fraud, duress, or unconscionability. Concepcion, 2 563 U.S. at 339-41. 3 4 5 DISCUSSION A. Evidentiary Objections As a preliminary matter, Defendant objects to evidence submitted in support of 6 Plaintiff’s opposition, see Doc. Nos. 13-2, 13-3, including a copy of Defendant’s offer to 7 compromise with Plaintiff regarding this action, and portions of Plaintiff’s declaration. 8 Defendant objects to the submission of its offer to compromise with Plaintiff on 9 the grounds that it is irrelevant. See Doc. No. 13-3 at 2. The Court ultimately did not 10 rely on the offer to compromise to reach its disposition. As such, this objection is moot. 11 Defendant also objects to Plaintiff’s declaration on the grounds that, inter alia, her 12 statements have not been properly authenticated. See Doc. No. 13-2, at 2-5. Defendant 13 argues that the declaration lacks proper authentication of testimony translated from 14 Spanish. Written translations must be properly authenticated. See Fed. R. Evid. 901(a). 15 As such, “[w]itness testimony translated from a foreign language must be properly 16 authenticated and any interpretation must be shown to be an accurate translation done by 17 a competent translator.” Jack v. Trans World Airlines, Inc., 854 F. Supp. 654, 659 (N.D. 18 Cal. 1994) (citing Fed. R. Evid. 604 & 901). Plaintiff’s declaration is submitted without 19 a translator’s verification or sufficient indication that the testimony was accurately 20 translated. The declaration is therefore not properly authenticated. See Consejo de 21 Desarrollo Economico de Mexicali, AC v. United States, 438 F. Supp. 2d 1207, 1226 (D. 22 Nev. 2006) (sustaining objection to declarations that appeared to have been written 23 originally in Spanish and later translated into English, absent any indication that the 24 English versions of the declarations were true and correct translations). Accordingly, the 25 Court SUSTAINS Defendant’s objection to Plaintiff’s declaration. 26 B. Defendant’s Motion to Compel 27 28 Defendant moves to compel arbitration, arguing that Plaintiff agreed to arbitrate all disputes arising out of her employment with ABM. In opposition, Plaintiff argues that 4 3:18-cv-00701 1 the Arbitration Agreement is procedurally and substantively unconscionable. Moreover, 2 Plaintiff asserts that “the Arbitration Agreement does not allow for adequate discovery.” 3 Doc. No. 12 at 2. The Court addresses the parties’ arguments in turn. 4 1. A Valid Agreement to Arbitrate Exists 5 The Court first considers whether there is a valid agreement to arbitrate between 6 the parties. See Cox, 533 F.3d at 1119. A party moving to compel arbitration must prove 7 the existence of a valid arbitration agreement by a preponderance of the evidence. See 8 Olvera v. El Pollo Loco, Inc., 93 Cal. Rptr. 3d 65, 71 (Cal. Ct. App. 2009). When 9 determining the existence of valid arbitration agreements, “federal courts ‘should apply 10 ordinary state-law-principles that govern the formation of contracts.” Ingle v. Circuit 11 City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (quoting First Options of Chi., Inc. 12 v. Kaplan, 514 U.S. 938, 944 (1995)). 13 Here, the Court finds that a valid agreement to arbitrate exists. Defendant presents 14 the Arbitration Agreement, bearing the signature of “Maria Limon,” as well was the 15 initials “ML.” See Doc. No. 9-2, Ex. A. Plaintiff does not dispute that she signed the 16 Arbitration Agreement. Accordingly, the Court finds that Defendant has met its burden 17 of proving the existence of a valid arbitration agreement by a preponderance of the 18 evidence. See Owens v. Intertec Design, Inc., 38 Cal. App. 4th 72, 75 (Cal. Ct. App. 19 1995) (holding “the arbitration agreement must be enforced as a matter of law” where the 20 plaintiff “presented no evidence, by declaration or otherwise, in support of the ‘facts’ 21 underlying his arguments in opposition to the [motion to compel arbitration.]”). 22 Second, the Court must consider whether the Arbitration Agreement encompasses 23 Plaintiff’s claims. See Cox, 553 F.3d at 1119. The Arbitration Agreement expressly 24 provides that the Plaintiff agrees to “arbitrate claims between [Plaintiff and ABM],” 25 “arising from and/or relating in any way to any aspect of my hiring, my employment 26 and/or the severance of my employment.” See Doc. No. 9-2, Ex. A at 2. All of 27 Plaintiff’s claims arise from her employment and termination of employment with 28 5 3:18-cv-00701 1 Defendant. Thus, the Arbitration Agreement’s language clearly encompasses Plaintiff’s 2 employment-related claims against Defendant. 3 2. The Arbitration Agreement is Not Unconscionable 4 Plaintiff argues that even if a valid agreement to arbitrate exists, the Arbitration 5 Agreement is procedurally and substantively unconscionable. See Doc. No. 12 at 2. 6 Plaintiff asserts that the agreement is procedurally unconscionable because of its adhesive 7 nature, and that it was provided in a language she does not understand, without an 8 attachment of the AAA rules. See id. Additionally, Plaintiff contends that the 9 Arbitration Agreement is substantively unconscionable because it contains a “PAGA 10 waiver.”1 See id. at 7. 11 A contract defense of “unconscionability … may operate to invalidate arbitration 12 agreements.” Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002). The 13 party asserting that an arbitration agreement is unconscionable bears the burden of proof. 14 See Sanchez v. Valencia Holding Co., LLC, 353 P.3d 741, 749 (Cal. 2015). Both 15 procedural and substantive unconscionability must be present for a court to refuse to 16 enforce a contract. See Armendariz v. Found Health Psychcare Servs., 6 P.3d 669, 690 17 (Cal. 2000). In California, courts apply a sliding scale: “the more substantively 18 oppressive the contract terms, the less evidence of procedural unconscionability is 19 required to come to the conclusion that the term is unenforceable, and vice versa.” Id. 20 However, courts cannot apply principles of unconscionability in a way that undermines 21 the FAA’s objective “to ensure the enforcement of arbitration agreements according to 22 their terms so as to facilitate streamlined proceedings.” Concepcion, 563 U.S. at 344. 23 Instead, courts should give “due regard to the federal policy in favor of arbitration.” 24 Wagner v. Stratton Oakmont, Inc., F.3d 1046, 1049 (9th Cir. 1996). 25 26 27 28 1 See Doc. No. 9-2, Ex. A (“Mutual Arbitration Agreement”) (“As to any Covered Claim, each party waives to the maximum extent permitted by law the right to jury trial and to bench trial, and the right to bring, maintain or participate in any class, collective, or representative proceeding, including but not limited to under the PAGA or any other applicable law.”). 6 3:18-cv-00701 1 With respect to procedural unconscionability, Plaintiff contends that: (a) she was 2 given a contract of adhesion; (b) she does not read, speak, or understand English; and (c) 3 she was never given a copy of AAA Arbitration rules. The Court addresses these 4 arguments in turn. 5 The procedural unconscionability analysis focuses on the circumstances 6 surrounding the creation of a contract, and the presence of “oppression or surprise.” 7 Gatton v. T-Mobile USA, Inc., 61 Cal. Rptr. 3d 344, 352 (Cal. Ct. App. 2007) (citations 8 omitted). Oppression results from “an inequality in bargaining power that results in no 9 real negotiation and an absence of meaningful choice.” Id. (citing Flores v. 10 Transamerica HomeFirst, Inc., 113 Cal. Rptr. 2d 376, 381 (Cal. Ct. App. 2001)). 11 Whereas surprise arises when the “agreed-upon terms of the bargain are hidden in the 12 prolix printed form drafted by the party seeking to enforce the disputed terms.” Id. 13 (citing Stirlen v. Supercuts, Inc., 60 Cal. Rptr. 2d 138, 145 (Cal. Ct. App. 1997). 14 a. The Adhesion Contract, by itself, is Insufficient to Show Procedural 15 16 Unconscionability Plaintiff argues that the Arbitration Agreement is adhesive, deeming it 17 procedurally unconscionable. See Doc. No. 12 at 5-6. Defendant contends that there is 18 no evidence the Agreement was provided on a take-it-or-leave it basis, and even if it was, 19 it does not render the Arbitration Agreement unconscionable. See Doc. No. 13 at 6. 20 An “[u]nconscionability analysis begins with an inquiry into whether the contract 21 is one of adhesion.” Armendariz, 6 P.3d at 689. A contract of adhesion is a 22 “standardized contract, imposed upon the subscribing party without an opportunity to 23 negotiate the terms.” Flores, 113 Cal. Rptr. 2d at 381. When a party in a weaker 24 bargaining position is given a standardized agreement and “told to take it or leave it 25 without the opportunity for meaningful negotiation, oppression, and therefore procedural 26 unonscionability, are present.” Szetela v. Discover Bank, 118 Cal. Rptr. 2d 862, 867 27 (Cal. Ct. App. 2002) (internal quotations omitted). A higher degree of scrutiny is 28 reserved for contracts of adhesion that also show signs of “sharp practices” such as lying, 7 3:18-cv-00701 1 duress or other manipulation. Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1245 2 (2016). However, “[i]n the employment context, if an employee must sign a non- 3 negotiable employment agreement as a condition of employment but there is no other 4 indication of oppression or surprise, then the agreement will be enforceable unless the 5 degree of substantive unconscionability is high.” Poublon, 846 F.3d 1251, 1261 (9th Cir. 6 2017) (internal quotations and citation omitted). 7 The Court finds that the Arbitration Agreement is a contract of adhesion. There 8 was a significant imbalance in bargaining power between Plaintiff and Defendant as 9 ABM is a large limited liability company with locations throughout the nation. See 10 Compl. at 2. The Arbitration Agreement was imposed and drafted by ABM, did not 11 contain an opt-out provision, and Plaintiff signed it on the day she was hired. See Doc. 12 No. 9-2, Ex. A. Thus, based on the standardized, take-it-or-leave it nature of the 13 agreement, the Court finds that the agreement is a contact of adhesion. The Court 14 therefore finds that Plaintiff has established some degree of procedural unconscionability. 15 However, to discern the degree of procedural unconscionability, the Court must also 16 analyze other circumstances of the Arbitration Agreement. See Poublon, 846 F.3d at 17 1261 (“the California Supreme Court has not adopted a rule that an adhesion contract is 18 per se unconscionable” (internal citations and quotations omitted)). 19 20 21 b. Plaintiff’s Alleged Inability to Comprehend English does not Render the Arbitration Agreement Unconscionable Plaintiff next argues that the Arbitration Agreement was procedurally 22 unconscionable because she “does not speak, understand, read or write in English.” Doc. 23 No. 12 at 4. Defendant contends that Plaintiff cannot escape liability of the agreement 24 she signed on the ground that she did not read it. See Doc. No. 13 at 7. 25 Here, the Court finds that the Arbitration Agreement is not procedurally 26 unconscionable based upon Plaintiff’s purported inability to comprehend English. 27 Plaintiff relies on Perez v. Maid Brigade to argue that because the Arbitration Agreement 28 was only provided to Plaintiff in English, and Plaintiff only understands Spanish, the 8 3:18-cv-00701 1 Agreement was unconscionable. No. C 07-3473 SI, 2007 WL 2990368 (N.D. Cal. Oct. 2 11, 2007). Although the Plaintiff in Perez had similar employment and did not speak 3 English, the Court finds this argument unpersuasive. Id. at *1. The Arbitration 4 Agreement in Perez is distinguishable from the Arbitration Agreement between Plaintiff 5 and Defendant because the agreement in Perez was on page sixty of a substantial 6 employment packet, and the Arbitration Agreement only was binding on the employee. 7 Id. at *6. Based upon the agreement being “one-sided and imposed by a strong employer 8 on a weak employee,” the Court held the agreement unconscionable. Id. By contrast, 9 here, the Arbitration Agreement was a separate, three-page document and was binding on 10 11 both the employer and employee. Plaintiff also relies on Samaniego v. Empire Today LLC to argue the Arbitration 12 Agreement was unconscionable. 205 Cal. App. 4th 1138 (2012); see also Doc. No. 12 at 13 5-6. The Court finds this case distinguishable as well. The plaintiffs in Samaniego 14 asked, and were denied access to a Spanish version of the agreement. Samaniego, 205 15 Cal. App. 4th at 1145. Further, the agreement in Samaniego was not flagged by 16 individual headings, nor did it require the plaintiff’s initials. Id. at 1145-46. Here, 17 Plaintiff does not claim that she requested a Spanish version of the Agreement. 18 Moreover, the Agreement required her to initial on each page, and was separate from her 19 employment packet. Thus, neither Perez nor Samaniego are entirely on point. 20 The Court finds the circumstances surrounding Plaintiff’s claims are most 21 analogous to those in Brookwood v. Bank of America, 45 Cal. App. 4th 1167 (1996). In 22 Brookwood, the plaintiff, an employee of Bank of America, argued an arbitration 23 agreement was unconscionable because she did not understand what it meant. Id. at 24 1673. However, the court in Brookwood rejected the plaintiff’s argument, indicating 25 “[r]eliance on an alleged misrepresentation is not reasonable when [a] plaintiff could 26 have ascertained the truth through the exercise of reasonable diligence. Reasonable 27 diligence requires the reading of a contract before signing it. A party cannot use his own 28 lack of diligence to avoid an arbitration agreement.” Id. at 1674. Here, if Plaintiff did 9 3:18-cv-00701 1 not understand and could not read the language of the Arbitration Agreement, she could 2 have requested a Spanish version or asked for a translation.2 Plaintiff failed to do so. 3 Plaintiff’s lack of diligence cannot now be used to avoid arbitration. See Brookwood, 45 4 Cal. App. 4th at 1674 (“Reasonable diligence requires the reading of a contract before 5 signing it.”). 6 c. Failure to Attach the AAA Arbitration Rules to the Agreement does not 7 Render it Unconscionable 8 Plaintiff further argues that because she was never given a copy of the AAA 9 arbitration rules upon executing the agreement, the Arbitration Agreement is procedurally 10 unconscionable. See Doc. No. 12 at 6. Plaintiff contends that “numerous cases have held 11 that the failure to provide a copy of the arbitration rules” support a finding of 12 unconscionablity. Id. Defendant argues that although it did not hand Plaintiff a copy of 13 the rules, the Agreement advised Plaintiff of three ways to access the rules. See Doc. No. 14 13 at 9. 15 Plaintiff does not assert that the AAA rules would result in unfair arbitration. See 16 Baltazar, 62 Cal. 4th at 1246 (“[Plaintiff’s] argument [that rules were not attached] might 17 have had force if her unconscionability challenge concerned some element of the AAA 18 rules of which she had been unaware when she signed the agreement.”); see also Peng, 19 219 Cal. App. 4th at 1472 (holding when a plaintiff does not identify any feature of the 20 AAA rules that prevent fair and full arbitration, failure to attach the rules is insufficient to 21 show procedural unconscionability). Instead, Plaintiff relies solely on the fact that the 22 rules were not physically attached to argue unconscionability. See Doc. No. 12 at 6. 23 Although the AAA rules were not attached to the agreement, the Agreement provides 24 Plaintiff with information to access a copy of the rules through the ABM legal 25 department, by phone, or through the internet, suggesting Defendant was not trying to 26 27 28 2 The Court notes all of Plaintiff’s employment documents were provided to her in English, and were fully and accurately filled out by Plaintiff. See Doc. No. 13-1, Ex. A-D. 10 3:18-cv-00701 1 hide the AAA rules from Plaintiff. See Doc. No. 9-2, Ex. A at 1. Standing alone, the 2 failure to attach the AAA rules is insufficient to show unconscionability. See Lucas v. 3 Gund, Inc., 450 F. Supp. 2d 1125, 1131 (C.D. Cal. 2006) (“while it may have been unfair 4 to have [Plaintiff] sign an agreement referencing rules which were not attached at the 5 time, it would only render the agreement unenforceable if those rules were substantively 6 unconscionable”). Thus, the Court finds that although failing to physically attach the 7 AAA rules may have been inconvenient to Plaintiff, it is inadequate to show the 8 Arbitration Agreement is unconscionable. 9 In sum, despite the adhesive nature of the employment contract, the Court finds 10 that Plaintiff fails to show that the agreement is substantively unconscionable.3 Thus, the 11 Arbitration Agreement is not unconscionable. 12 3. The Arbitration Agreement Allows for Adequate Discovery 13 Plaintiff further contends that the Arbitration Agreement does not allow for 14 adequate discovery, and is inconsistent with state and federal law. See Doc. No. 12 at 7- 15 8. Defendant argues the AAA rules which govern the Arbitration Agreement have 16 consistently been held to permit the parties in engage in adequate discovery. See Doc. 17 No. 13 at 14-15. The Court agrees. It has been frequently held that the AAA rules allow 18 for sufficient discovery under both California and federal standards. See Roman, 172 19 Cal. App. 4th at 1475-76 (“[t]here appears to be no meaningful difference between the 20 scope of discovery approved in Armendariz and that authorized by the AAA employment 21 dispute rules”); see also Lucas v. Gund, 450 F. Supp. 2d at 1133 (“The [AAA] rules do 22 not limit discovery other than to provide that only ‘necessary’ discovery shall be 23 24 25 26 27 28 3 The Court need not address Plaintiff’s argument that the Arbitration Agreement is substantively unconscionable due to the Agreement containing a PAGA waiver because Plaintiff does not allege a PAGA claim. Further, a PAGA waiver is consistent with the purpose of the FAA, “requiring the availability of class wide arbitration interferes with fundamental attributes of arbitration and thus creates a scheme inconsistent with the FAA.” Concepcion, 563 U.S. at 344; see also Poublon, 846 F.3d at 1264 (holding the unenforceability of the waiver of a PAGA representative action does not make an arbitration agreement substantively unconscionable). 11 3:18-cv-00701 1 conducted, but this is the same standard as applies in court: parties at trial cannot engage 2 in unfettered discovery.”) (citing Fed. R. Civ. P. 26(b)(2)). As such, the Court will 3 enforce the parties’ valid agreement and compel Plaintiff to arbitrate her claims against 4 Defendant. 5 CONCLUSION 6 Based on the foregoing, the Court GRANTS Defendant’s motion to compel 7 arbitration and STAYS this action pending completion of arbitration. See 9 U.S.C. § 3. 8 The parties are directed to file a notice with the Court regarding the outcome of the 9 arbitration proceedings within fourteen (14) calendar days of the issuance of the 10 11 12 13 14 arbitrator’s decision. IT IS SO ORDERED. DATE: July 31, 2018 _______________________________________ HON. MICHAEL M. ANELLO United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12 3:18-cv-00701
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