Rissi v. T-Mobile USA, Inc.

[7] 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA [10] 11 EMILY DOCKHAM RISSI, an Case No.: 24-cv-00267-AJB-KSC individual, [12] ORDER GRANTING DEFENDANT 13 Plaintiff, NEXTGEN GLOBAL RESOURCES, LLC’S MOTION TO COMPEL [14] v. ARBITRATION [15] T-MOBILE USA, INC., a Delaware (Doc. No. 16) [16] Corporation; NextGen Global Resources, 17 LLC, a Delaware limited liability company; KINETICOM, INC., a Delaware [18] Corporation; and DOES 1 through 20, 19 inclusive, [20] Defendants. [23] Before the Court is Defendant NextGen Global Resources, LLC’s (“NextGen” or [24] “Defendant”) motion to compel arbitration and to stay action pending arbitration in [25] Plaintiff Emily Dockham Rissi’s (“Plaintiff”) civil action for alleged employment [26] violations. (Doc. No. 16.) The motion is fully briefed. (Doc. Nos. 16, 19, 21.) Pursuant to [28] 1 Local Civil Rule 7.1.d.1, the Court finds the matter suitable for disposition without oral 2 argument. For the reasons set forth below, the Court GRANTS Defendant’s motion. 3 I. BACKGROUND 4 This case concerns Plaintiff’s allegations of wrongful termination at her 5 employment. (See Doc. No. 1-2, “Compl.” at 10–27.) Plaintiff’s Complaint alleges nine 6 causes of action against Defendants T-Mobile USA, Inc. (“T-Mobile”), NextGen, 7 Kineticom Inc. (“Kineticom”)1, and Does 1 through 20 (collectively, “Defendants”). 8 Plaintiff brings five claims specifically against NextGen: (1) unjust enrichment, (2) failure 9 to pay earned wages in violation of Cal. Labor Code § 204 , (3) waiting time penalties 10 pursuant to Cal. Labor Code § 203 , (4) intentional misrepresentation, and (5) unfair 11 business practices in violation of Cal. Bus. & Prof. Code §§ 17200 , et seq. (Id. ¶¶ 76–89, 12 98–128, 139–45.) 13 In May 2021, Plaintiff accepted a full-time position with T-Mobile in San Diego. 14 (Id. ¶¶ 21, 27.) As T-Mobile transitioned back to in-person work following the COVID-19 15 pandemic, Plaintiff obtained special dispensation from T-Mobile to work remotely. (Id. 16 ¶ 27.) In May 2022, Plaintiff relocated from San Diego to Portland, Oregon for her 17 partner’s career. (Id. ¶ 29.) To allow Plaintiff to continue remotely working for T-Mobile 18 with the same San Diego team, T-Mobile negotiated Plaintiff’s employment with a third19 party company, NextGen, where Plaintiff would be a contract employee performing work 20 for T-Mobile while employed and paid by NextGen. (Id. ¶ 35.) 21 On July 14, 2022, Plaintiff signed NextGen’s Employment Agreement, which 22 contains the Arbitration Provision at issue here. (Id. ¶ 40; Doc. No. 16-1 ¶¶ 6, 20; Doc. No. 23 16-1 Ex. A § 6, “Arbitration Provision.”) Under the Arbitration Provision, Plaintiff and 24 NextGen agreed: “in the event of any dispute or claim relating to or arising out of our 25 employment relationship . . . all such disputes/claims (including, without limitation, any [27] 1 Plaintiff and Kineticom have reached a settlement agreement, and Kineticom has been dismissed from [28] 1 claims for wrongful termination . . . wage and hour, or employee benefits) shall be fully 2 and finally resolved by confidential, binding arbitration conducted in Chicago, IL, or such 3 other location as we may agree, by a single, neutral arbitrator agreed upon by [Plaintiff] 4 and [NextGen].” (Doc. No. 16-1 § 6(a).) Plaintiff and NextGen also agreed that any 5 arbitration be conducted in accordance with the American Arbitration Association 6 (“AAA”) rules and procedures. (Id.) Further, Plaintiff and NextGen “each waive[d] [their] 7 respective rights to have any such disputes/claims tried by a judge or a jury” and agreed 8 that the chosen arbitrator would be “empowered to award all remedies otherwise available 9 in a court of competent jurisdiction.” (Id.) The Arbitration Provision further stipulated that 10 NextGen “will bear the costs of the arbitration, including the AAA administrative fees and 11 the arbitrator’s fees” but that “[e]ach party shall bear its own respective attorneys’ fees and 12 costs . . . except to the extent otherwise provided by law and awarded by the arbitrator.” 13 (Id. § 6(b).) Finally, Plaintiff and NextGen agreed not to bring claims against the other “in 14 any purported class action or other representative proceeding” and that the Arbitration 15 Provision “shall remain in effect at all times during and after [Plaintiff’s] employment . . . 16 .” (Id. § 6(c).) 17 Plaintiff filed her Complaint against Defendants in San Diego County Superior 18 Court on December 29, 2023. (See Compl.) T-Mobile removed the case to this Court on 19 February 9, 2024. (Doc. No. 1.) NextGen now moves to compel arbitration and to stay the 20 action pending arbitration. (Doc. No. 16.) 21 II. LEGAL STANDARD 22 The Federal Arbitration Act (“FAA”) applies to contracts “evidencing a transaction 23 involving commerce.” 9 U.S.C. § 2 ; Brennan v. Opus Bank, 796 F.3d 1125, 1129 (9th Cir. 24 2015). The Supreme Court has enunciated a “liberal federal policy favoring arbitration.” 25 AT&T Mobility LLC v. Concepcion, 563 U.S. 333 , 339, 344 (2011) (“The overarching 26 purpose of the FAA . . . is to ensure the enforcement of arbitration agreements according 27 to their terms so as to facilitate streamlined proceedings.”). The FAA “leaves no place for 28 the exercise of discretion by the district court, but instead mandates that district courts shall 1 direct the parties to proceed to arbitration on issues as to which an arbitration agreement 2 has been signed.” Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). 3 Accordingly, under the FAA, the court must, as a general matter, determine “two 4 ‘gateway’ issues: (1) whether there is an agreement to arbitrate between the parties; and 5 (2) whether the agreement covers the dispute.” Brennan, 796 F.3d at 1130 . If the two 6 factors are met, the court must enforce the arbitration agreement in accordance with its 7 precise terms. Kilgore v. KeyBank, Nat. Ass’n, 673 F.3d 947, 955 (9th Cir. 2012), on reh’g 8 en banc, 718 F.3d 1052 (9th Cir. 2013). These gateway issues, however, “can be expressly 9 delegated to the arbitrator where ‘the parties clearly and unmistakably provide 10 otherwise.’” Brennan, 796 F.3d at 1130 (emphasis added) (quoting AT&T Techs., Inc. v. 11 Commc’ns Workers of Am., 475 U.S. 643, 649 (1986)). 12 The party seeking to compel arbitration “has the burden of proving the existence of 13 an agreement to arbitrate by a preponderance of the evidence.” Knutson v. Sirius XM Radio 14 Inc., 771 F.3d 559, 565 (9th Cir. 2014). In determining whether a valid agreement exists, 15 district courts apply applicable state law principles of contract formation. See Arthur 16 Anderson LLP v. Carlisle, 556 U.S. 624 , 630–31 (2009). “Thus, generally applicable 17 contract defenses, such as fraud, duress, or unconscionability, may be applied to invalidate 18 arbitration agreements without contravening” federal law. Doctor’s Assocs., Inc. v. 19 Casarotto, 517 U.S. 681, 687 (1996). “[T]he party opposing arbitration bears the burden 20 of proving any defense, such as unconscionability.” Pinnacle Museum Tower Assn. v. 21 Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012). “Any doubts about the scope 22 of arbitrable issues, including applicable contract defenses, are to be resolved in favor of 23 arbitration.” Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1022 (9th Cir. 2016). 24 III. REQUEST FOR JUDICIAL NOTICE 25 In conjunction with NextGen’s motion to compel arbitration, NextGen requests 26 judicial notice of the AAA Employment Arbitration Rules & Mediation Procedures. (Doc. 27 No. 16-3 at 1–2.) Federal Rule of Evidence 201 states a “court may judicially notice a fact 28 that is not subject to reasonable dispute because it: (1) is generally known within the trial 1 court’s territorial jurisdiction; or (2) can be accurately and readily determined from sources 2 whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). 3 Here, judicial notice of the AAA Employment Arbitration Rules & Mediation 4 Procedures is proper because the contents of the rules are not reasonably subject to dispute 5 and can be accurately and readily determined from sources whose accuracy cannot 6 reasonably be questioned. See Fischer v. Kelly Servs. Glob., LLC, No. 23-CV-1197 JLS 7 (JLB), 2024 WL 382181 , at *7 (S.D. Cal. Jan. 31, 2024); Kag W., LLC v. Malone, No. 158 CV-03827-TEH, 2015 WL 6693690 , at *3 n.2 (N.D. Cal. Nov. 3, 2015). Accordingly, the 9 Court GRANTS NextGen’s request for judicial notice. 10 IV. DISCUSSION 11 Plaintiff does not dispute that she received and signed the NextGen Employment 12 Agreement containing the Arbitration Provision and her claims fall within the scope of the 13 Arbitration Provision. (Doc. No. 19-2 ¶¶ 15–16; Doc. No. 21 at 2.) Rather, Plaintiff argues 14 that the Arbitration Provision is procedurally and substantively unconscionable, and 15 therefore unenforceable. (Doc. No. 19 at 12–23.) The Court first considers the arbitrability 16 of the Arbitration Provision. 17 A. Arbitrability 18 “Under California law, it is presumed the judge will decide arbitrability, unless there 19 is clear and unmistakable evidence the parties intended the arbitrator to decide 20 arbitrability.” Dennison v. Rosland Cap. LLC, 47 Cal. App. 5th 204 , 209 (2020). Here, both 21 NextGen and Plaintiff agree that this Court must decide the validity and enforceability of 22 the Arbitration Provision. (Doc. No. 19 at 11; Doc. No. 21 at 3.) Indeed, the Arbitration 23 Provision provides, “the authority to determine the enforceability of this Section remains 24 solely with the trial court of competent jurisdiction in the state where the arbitration 25 proceeding is pending.” (Doc. No. 16-1 § 6(a).) The language stipulating that the “authority 26 to determine . . . enforceability . . . remains solely with the trial court” demonstrates the 27 parties’ intent for this Court to determine the enforceability of the Arbitration Provision. 28 Because the Arbitration Provision lacks “clear and unmistakable evidence” of the parties’ 1 intent for an arbitrator to decide arbitrability, this Court will proceed with an arbitrability 2 analysis. 3 B. Enforceability of the Arbitration Agreement 4 Plaintiff argues that Arbitration Provision is unenforceable because it is 5 unconscionable. (Doc. No. 19 at 12.) Defendant responds that the Arbitration Provision is 6 procedurally and substantively fair, but if any portion is found to be unconscionable, the 7 Court may sever the unconscionable portion and enforce the remainder of the Arbitration 8 Provision. (Doc. No. 21 at 6–7.) 9 Arbitration agreements may be invalidated by “generally applicable contract 10 defenses, such as fraud, duress, or unconscionability.” Concepcion, 563 U.S. at 339. For a 11 court to exercise its discretion not to enforce a contract clause under the doctrine of 12 unconscionability, “[p]rocedural and substantive unconscionability must both be present” 13 but “they need not be present in the same degree.” Armendariz v. Found. Health Psychcare 14 Servs., Inc., 24 Cal. 4th 83, 114 (2000). Instead, they are evaluated on “a sliding scale.” Id. 15 The party opposing arbitration bears the burden of proving unconscionability. Lim v. 16 TForce Logistics, LLC, 8 F.4th 992 , 999 (9th Cir. 2021). 17 1. Procedural Unconscionability 18 Procedural unconscionability measures the degree of “oppression” or “surprise” 19 during contract formation. See Flores v. Transamerica HomeFirst, Inc., 93 Cal. App. 4th 20 846, 853 (2001). “Oppression arises from an inequality of bargaining power that results in 21 no real negotiation and an absence of meaningful choice. Surprise involves the extent to 22 which the supposedly agreed-upon terms are hidden in a prolix printed form drafted by the 23 party seeking to enforce them.” Id. Plaintiff does not raise a “surprise” challenge, but she 24 asserts that the Arbitration Provision is procedurally unconscionable because it is contained 25 within a contract of adhesion and was presented on a “take-it-or-leave-it” basis. (Doc. No. 26 19 at 14.) Plaintiff further asserts that she had no opportunity to negotiate the terms and 27 she was not required to sign, initial, or acknowledge the specific Arbitration Provision, 28 further illustrating some degree of procedural unconscionability. (Id.) Defendant does not 1 dispute that the Arbitration Provision was presented in a contract of adhesion. (Doc. No. 2 21 at 3–4.) Rather, NextGen argues that an adhesion contract is still enforceable unless the 3 provision falls outside the reasonable expectations of the weaker party, or the provision is 4 unduly oppressive or unconscionable, neither of which apply here. (Id. (citing Bigler v. 5 Harker Sch., 213 Cal. App. 4th 727 , 736–37 (2013). 6 Because NextGen, the party of superior bargaining strength, offered its 7 Employment Agreement containing the Arbitration Provision on a “take it or leave it” 8 basis, the Arbitration Provision was adhesive. See Capili v. Finish Line, Inc., 699 F. App’x 9 620, 622 (9th Cir. 2017); see also Ronderos v. USF Reddaway, Inc., 114 F.4th 1080 , 1089 10 (9th Cir. 2024) (“A contract of adhesion is a standardized contract [that is] imposed and 11 drafted by the party of superior bargaining strength and gives the subscribing party only 12 the opportunity to adhere to the contract or reject it.”) (internal quotation marks and citation 13 omitted). Given the adhesive nature of the Arbitration Provision, and because Plaintiff did 14 not have an opportunity to negotiate the terms or opt out of the Arbitration Provision, the 15 Court finds some degree of procedural unconscionability. See Sanchez v. Valencia Holding 16 Co., LLC, 61 Cal. 4th 899, 915 (2015) (“[T]he adhesive nature of” an arbitration agreement 17 “is sufficient to establish some degree of procedural unconscionability.”); Capili, 699 F. 18 App’x at 622 (“Adhesive contracts are at least minimally procedurally unconscionable 19 under California law.”) By contrast, Plaintiff has not established any element of surprise. 20 While the Arbitration Provision appears at Section 6, at the bottom of page four of the 21 single-spaced Employment Agreement, the Arbitration Provision appears in bold and 22 capitalized font under its own separate heading, mitigating any surprise that the Arbitration 23 Provision exists. (See Doc. No. 16-1 § 6.) 24 Because Plaintiff has demonstrated a low degree of procedural unconscionability 25 based on the Arbitration Provision’s adhesive nature, Plaintiff must demonstrate a 26 significant degree of substantive unconscionability to successfully challenge the 27 Arbitration Provision’s enforceability. 28 / / / 1 2. Substantive Unconscionability 2 “Substantive unconscionability examines the fairness of a contract’s terms.” Lim, 8 3 F.4th at 1001 (quoting OTO, L.L.C. v. Kho, 8 Cal. 5th 111, 129 (2019)). “[T]he standard 4 for substantive unconscionability—the requisite degree of unfairness beyond merely a bad 5 bargain—must be as rigorous and demanding for arbitration clauses as for any contract 6 clause.” Sanchez, 61 Cal. 4th at 912 . “The substantive element looks to the actual terms of 7 the parties’ agreement to ensure that contracts, particularly contracts of adhesion, do not 8 impose terms that have been variously described as overly harsh, unduly oppressive, so 9 one-sided as to shock the conscience or unfairly one-sided.” Magno v. The Coll. Network, 10 Inc., 1 Cal. App. 5th 277 , 287–88 (2016) (internal quotation marks omitted). 11 “[T]he paramount consideration in assessing conscionability is mutuality.” 12 Abramson v. Juniper Networks, Inc., 115 Cal. App. 4th 638, 657 (2004). “Agreements to 13 arbitrate must contain at least ‘a modicum of bilaterality’ to avoid unconscionability.” Id. 14 (quoting Armendariz, 24 Cal. 4th at 119 ). “[A]n arbitration agreement imposed in an 15 adhesive context lacks basic fairness and mutuality if it requires one contracting party, but 16 not the other, to arbitrate all claims arising out of the same transaction or occurrence or 17 series of transactions or occurrences.” Armendariz, 24 Cal. 4th at 120 . “Courts have found 18 one-sided employer-imposed arbitration provisions unconscionable where they provide 19 that employee claims will be arbitrated, but the employer retains the right to file a lawsuit 20 in court for claims it initiates, or where only the types of claims likely to be brought by 21 employees (wrongful termination, discrimination etc.) are made subject to arbitration.” 22 Serafin v. Balco Props. Ltd., 235 Cal. App. 4th 165, 181 (2015) (citing cases). 23 Plaintiff asserts the Arbitration Provision is substantively unconscionable because 24 the forum selection clause and fee-shifting provision lack mutuality. (Doc. No. 19 at 15– 25 20.) Plaintiff additionally argues that Arbitration Provision’s class action waiver and 26 California Private Attorney General Act (“PAGA”) waiver are unconscionable. (Id. at 20– 27 21.) 28 / / / 1 a. Forum Selection Clause 2 The Arbitration Provision’s forum selection clause stipulates that “all such 3 disputes/claims . . . shall be fully and finally resolved by confidential binding arbitration 4 conducted in Chicago, IL, or such other location as [the parties] may agree . . . [.]” (Doc. 5 No. 16-1 § 6(a).) Plaintiff argues that the forum selection clause is substantively 6 unconscionable because pursuing her claims in Chicago, Illinois would be cost-prohibitive, 7 (Doc. No. 19-2 ¶¶ 25, 26), and the permissive language stating that NextGen “may agree” 8 to arbitrate in a different forum still has the chilling effect of dissuading employees from 9 pursuing their claims where no certainty exists that NextGen would agree to a more 10 convenient location, (Doc. No. 19 at 16–17). In response, NextGen asserts that it previously 11 communicated to Plaintiff that it would consider an alternative location to arbitrate other 12 than Chicago, Illinois, and that there is no substantive unconscionability where the 13 Arbitration Provision permits the parties to agree to a convenient arbitration location. (Doc. 14 No. 21 at 5–6.) 15 To demonstrate substantive unconscionability of a forum selection clause, “[p]arties 16 opposing a forum selection clause must . . . show that the forum is ‘unavailable or unable 17 to accomplish substantial justice’. . . [.]” Capili, 699 F. App’x at 622 (quoting Tompkins, [18] 840 F.3d at 1029 ). “Inconvenience and additional expense are not sufficient, unless 19 proceeding in the selected forum will be ‘so gravely difficult and inconvenient that [the 20 plaintiffs] will for all practical purposes be deprived of [their] day in court.’” Id. In 21 assessing the place and manner provisions in an arbitration clause, the court “must take 22 into account the respective circumstances of the parties.” Lim, 8 F.4th at 1002 (internal 23 quotation marks and citation omitted). 24 To assess the validity of the Arbitration Provision’s forum selection clause, Capili 25 v. Finish Line, Inc., 699 F. App’x 620 (9th Cir. 2017) is instructive. In Capili, the Ninth 26 Circuit found that a forum selection clause that required arbitration occur in Indianapolis, 27 Indiana, where the plaintiff employee worked thousands of miles away in Daly City, 28 California, was not substantively unconscionable where the employer agreed to hold the 1 arbitration in San Francisco, California. 699 F. App’x at 622–23. The Ninth Circuit 2 explained, “[g]iven the selected forum was not shown to be unavailable or unable to 3 accomplish substantial justice, the forum selection provision was not substantively 4 unconscionable.” Id. By contrast, in Lim v. TForce Logistics, LLC, 8 F.4th 992 (9th Cir. 5 2021), the Ninth Circuit found a forum selection clause unconscionable where it required 6 the plaintiff employee, who resided in Southern California, to arbitrate in Dallas, Texas, 7 and the plaintiff could not afford to travel to Dallas, Texas and leave his daughter and work 8 for a significant period. See Lim, 8 F.4th at 1003 (emphasis added). 9 Here, NextGen’s forum selection clause is less onerous than the forum selection 10 clauses in Capili and Lim because it permits the parties to agree to an alternative arbitration 11 location other than Chicago, Illinois. As expressly permitted by the Arbitration Provision, 12 the parties do not dispute that NextGen agreed to consider an alternative location other than 13 Chicago, Illinois to arbitrate. (Doc. No. 19-1 ¶ 9.) Although no specific location has been 14 agreed upon, Plaintiff has not shown that her preferred forum to arbitrate is “unavailable 15 or unable to accomplish substantial justice,” Tompkins, 840 F.3d at 1029 . Accordingly, she 16 has not proven that the forum selection clause is substantively unconscionable. See Capili, 17 699 F. App’x at 622–23. 18 b. Attorneys’ Fees 19 Next, Plaintiff takes issue with the Arbitration Provision’s fee clause regarding 20 attorneys’ fees, which states: 21 Each party shall bear its own respective attorneys’ fees and costs of the arbitration, except to the extent otherwise provided by law and awarded by [22] the arbitrator. [23] 24 (Doc. No. 16-1 § 6(b).) Plaintiff argues that the fee clause precludes Plaintiff from asserting 25 her rights to recover attorneys’ fees and costs upon prevailing, to which Plaintiff would be 26 entitled under the California Labor Code. (Doc. No. 19 at 18 (citing Lim, 8 F.4th at 1002– 27 04 (“We have similarly held, applying California law, that substantive unconscionability 28 exists when a fee-shifting clause creates for employees a ‘greater financial risk in 1 arbitrating claims than they would face if they were to litigate those same claims in federal 2 court.’”) (quoting Tompkins, 840 F.3d at 1026 ))). NextGen responds that the fee clause 3 permits an award of attorneys’ fees as “provided by law and awarded by the arbitrator,” 4 and concedes that to the extent Plaintiff prevails on certain claims where California law 5 allows for recovery of attorneys’ fees, the Arbitration Provision “expressly permits the 6 awarding of such fees.” (Doc. No. 21 at 6.) 7 Here, both parties agree that California law applies. (Doc. No. 16 at 15–16; Doc. No. 8 19 at 18.) In California, “courts have repeatedly held that statutory attorneys’ fees may not 9 be limited by arbitration agreements.” Alvitre v. Colonial Life & Accident Ins. Co., No. CV 10 22-6289-DMG (SKX), 2023 WL 3549743 , at *4 (C.D. Cal. Mar. 2, 2023). Because 11 California law dictates that statutory attorneys’ fees may not be limited by an arbitration 12 agreement, the next question is whether the savings clause “saves” the attorneys’ fee 13 provision from Plaintiff’s unconscionability argument. 14 The Ninth Circuit has found no substantive unconscionability of fee-sharing 15 provisions where it is clear which state law would apply, the fee-sharing provision would 16 not be enforced against plaintiff, and where the plaintiff “fails to address or counter” the 17 argument that the savings clause makes the fee-sharing provision valid. Compare Jackson 18 v. Rent-A-Ctr. W., Inc., 581 F.3d 912, 919 (9th Cir. 2009) (finding no substantive 19 unconscionability where “the agreement itself effectively states that the fee-sharing 20 provision is inapplicable if it unconscionable under [applicable state] law[,]” which 21 plaintiff did not dispute), rev’d on other grounds, 561 U.S. 63 (2010), with Ronderos v. 22 USF Reddaway, Inc., 114 F.4th 1080, 1093 (9th Cir. 2024) (finding cost-splitting provision 23 “substantively opaque” where agreement was ambiguous about which state’s law would 24 control the enforceability of the cost-splitting provision’s default rule and cost-splitting 25 default rule could be enforced against plaintiff). Here, as Defendant NextGen concedes, 26 because California law applies, the savings clause enables Plaintiff to recover attorneys’ 27 fees if she prevails on any California claims that permit recovery of attorneys’ fees. 28 Additionally, unlike the unconscionable fee-shifting provision at issue in Lim, which 1 impermissibly allowed an employer to recover attorneys’ fees from an employee in 2 contravention of California law, Lim, 8 F.4th at 1003, here, Plaintiff is not exposed to 3 paying NextGen’s attorneys’ fees. Accordingly, as was the case in Rent-A-Center, the 4 attorneys’ fee provision is not substantively unconscionable because the savings clause 5 enables Plaintiff to recover attorneys’ fees to the extent she prevails on any California 6 claims permitting the recovering of attorneys’ fees. See Rent-A-Ctr. W., Inc., 581 F.3d at 7 919. 8 c. “Individual Arbitration Only” Provision 9 Plaintiff’s final unconscionability argument is that the Arbitration Provision’s 10 “Individual Arbitration Only” section, which waives her right to bring a class action or 11 claim under the California Private Attorney General Act (“PAGA-claim”) is substantively 12 unconscionable. (Doc. No. 19 at 20–21.) This argument fails for two reasons. 13 First, “the Ninth Circuit has held that while a PAGA-claim waiver in an agreement 14 is unenforceable, such a waiver does not render an arbitration provision in the agreement 15 substantively unconscionable.” Peterson v. Lyft, Inc., No. 16-CV-07343-LB, 2018 WL 16 6047085, at *5 (N.D. Cal. Nov. 19, 2018) (citing Poublon v. C.H. Robinson Co., 846 F.3d 17 1251, 1264 (9th Cir. 2017)); see also Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 , 18 662 (2022) (“[Employer] was entitled to enforce the [arbitration] agreement insofar as it 19 mandated arbitration of [employee’s] individual PAGA claim.”); see also Ligman v. Med 20 For America, Inc., No. CVPS2204511, 2023 WL 6889057 , at *4 (Cal.Super. July 18, 2023) 21 (compelling arbitration of individual claims and staying non-individual PAGA claims until 22 after arbitration). Further, the Ninth Circuit has found that the Supreme Court’s decision, 23 “Concepcion[,] weighs sharply against holding that the waiver of other representative, 24 collective or class action claims . . . is unconscionable.” Poublon, 846 F.3d at 1264 25 (referencing Concepcion, 563 U.S. at 339, 344). 26 Second, Plaintiff has not brought a class action or pleaded a PAGA claim “and thus 27 lacks standing to challenge a PAGA waiver provision that is not being applied to [her].” 28 Peterson, 2018 WL 6047085 , at *5; see also Limon v. ABM Indus. Groups, LLC, No. 3:181 CV-00701, 2018 WL 3629369 , at *6 (S.D. Cal. July 31, 2018) (“The Court need not 2 address Plaintiff’s argument that the Arbitration Agreement is substantively 3 unconscionable due to the Agreement containing a PAGA waiver because Plaintiff does 4 not allege a PAGA claim.”) Plaintiff similarly lacks standing to challenge the class action 5 waiver because she is not pursuing any claims on behalf of a class. Accordingly, the Court 6 finds that the Arbitration Provision does not permeate unconscionability or that any 7 provision must be severed for the Arbitration Provision to be enforced. 8 C. Waiver to Arbitrate 9 Irrespective of the enforceability of the Arbitration Provision, Plaintiff asserts that 10 NextGen waived compelling arbitration by waiting nearly five months after the filing of 11 the Complaint to file the instant motion. (Doc. No. 19 at 23.) NextGen responds that waiver 12 is an issue for the arbitrator to decide, but regardless, its motion to compel arbitration is 13 timely because NextGen was “meeting and conferring with Plaintiff for five months in an 14 effort to avoid having to file” its motion to compel, and NextGen has acted consistently 15 with its right to arbitrate. (Doc. No. 21 at 9–10.) 16 As an initial matter, Defendant NextGen does not cite to any portion of the 17 Arbitration Provision or Federal Arbitration Act stipulating that an arbitrator must decide 18 the issue of waiver, (Doc. No. 21), so the Court will proceed to address the merits of 19 Plaintiff’s waiver argument. See Ensambles Hyson, S.A. de C.V. v. Sanchez, 718 F. Supp. 20 3d 1258, 1270 (S.D. Cal. 2024) (“As Petitioners fail to identify any provision in the 21 Agreement, AAA Rules, or JAMS Rules that delegates waiver questions, the Court will 22 proceed to address the merits of Respondent’s contention.”) Because the Arbitration 23 Provision stipulates that the parties must resolve any employment related disputes 24 “pursuant to the Federal Arbitration Act,” (Doc. No. 16-1 § 6(a)), federal law applies. See 25 Davis v. Shiekh Shoes, LLC, 84 Cal. App. 5th 956 , 963 (2022) (“Courts have recognized 26 that where the FAA applies, whether a party has waived a right to arbitrate is a matter of 27 federal, not state, law.”) The California Supreme Court has recently summarized Supreme 28 Court precedent that “under federal law, a court must apply the same rules that apply to 1 any other contract when determining whether a party to an arbitration agreement has lost 2 the right to enforce the agreement.” Quach v. California Com. Club, Inc., 16 Cal. 5th 562 , 3 569 (2024) (referencing Morgan v. Sundance, Inc., 596 U.S. 411 (2022)). Accordingly, 4 this Court will determine whether Defendant NextGen has waived its right to enforce the 5 Arbitration Provision “as it would any other contract, without applying any special rules 6 based on a policy favoring arbitration.” Id. at 583; see also Hill v. Xerox Bus. Servs., LLC, [7] 59 F.4th 457, 468 (9th Cir. 2023). 8 “[T]he test for waiver of the right to compel arbitration consists of two elements: 9 (1) knowledge of an existing right to compel arbitration; and (2) intentional acts 10 inconsistent with that existing right.” Id. “[T]he party opposing arbitration . . . bears the 11 burden of showing waiver,” but that burden is not especially “heavy” where Plaintiff is no 12 longer required to demonstrate prejudice. Armstrong v. Michaels Stores, Inc., 59 F.4th 13 1011, 1014 (9th Cir. 2023). Here, the parties do not appear to dispute the first element— 14 that Defendant NextGen was aware of its arbitration agreement with Plaintiff. In fact, 15 NextGen represents that on February 9, 2024, NextGen’s counsel emailed Plaintiff’s 16 counsel, requesting that Plaintiff stipulate to arbitration pursuant to the Arbitration 17 Provision. (Doc. No. 16-2 at 2). Accordingly, the Court will focus on whether Plaintiff 18 establishes the second element: whether NextGen acted inconsistently with its right to 19 arbitrate. See Ensambles Hyson, S.A. de C.V., 718 F. Supp. 3d at 1271; see also Anderson 20 v. Starbucks Corp., No. 20-CV-01178-JD, 2022 WL 797014 , at *3 (N.D. Cal. Mar. 16, 21 2022). 22 “[T]here is no ‘concrete test’” in evaluating the second element. Armstrong, 59 F.4th 23 at 1015 (quoting Hill, 59 4th at 471). Rather, courts must “consider the totality of the 24 parties’ actions,” Hill, 59 4th at 471, and “ask whether those actions holistically ‘indicate 25 a conscious decision . . . to seek judicial judgment on the merits of the arbitrable claims, 26 which would be inconsistent with a right to arbitrate,’” Armstrong, 59 F.4th at 1015 27 (quoting Hill, 59 4th at 473 n.19). In the Ninth Circuit, “a party generally ‘acts 28 inconsistently with exercising the right to arbitrate when it (1) makes an intentional 1 decision not to move to compel arbitration and (2) actively litigates the merits of a case for 2 a prolonged period of time in order to take advantage of being in court.’” Id. (quoting 3 Newirth ex rel. Newirth v. Aegis Senior Cmtys., LLC, 931 F.3d 935, 940 (9th Cir. 2019)). 4 Neither factor is met here. First, Plaintiff argues, but does not offer any authority in 5 support, that NextGen acted inconsistently with its right to arbitrate by failing to oppose 6 removal and by moving the Court “to buy itself extra time.” (Doc. No. 19 at 23.) The Court 7 is unaware of why failing to oppose removal would indicate NextGen’s decision not to 8 move to compel arbitration. 9 Second, NextGen has not actively litigated the merits of the case. NextGen has 10 neither filed an answer, nor asked the Court to weigh in on the merits of Plaintiff’s claims. 11 (Doc. No. 21-1 ¶ 6.) It has not propounded any discovery, except for its initial disclosures, 12 nor has it served any discovery requests or participated in depositions. (Id. ¶ 5). NextGen 13 also represents that it attended the Early Neutral Evaluation where it highlighted the 14 Arbitration Provision, which is consistent with its right to compel arbitration. (Id. ¶ 7.) 15 Collectively, the Court does not find that NextGen “actively litigate[d] the merits” of the 16 case to support a finding a waiver. Compare Martin v. Yasuda, 829 F.3d 1118, 1126 (9th 17 Cir. 2016) (party waived the right to arbitration when it filed a motion to dismiss “on a key 18 merits issue,” and received an adverse ruling before moving to compel arbitration a year 19 after litigating in federal court), with Armstrong, 59 F.4th at 1016 (rejecting waiver where 20 defendant “never s[ought] or obtain[ed] a ruling on the merits” and sought only “limited 21 discovery requests”). 22 Given this context, the Court does not find NextGen’s five-month delay in filing a 23 motion to compel arbitration after the filing of the Complaint sufficient to justify waiver, 24 where the “length of delay is just one factor that gives color to the totality of Defendant’s 25 conduct . . . .” Sywula v. Teleport Mobility, Inc., No. 21-CV-01450-BAS-SBC, 2023 WL 26 4630620, at *7 (S.D. Cal. July 18, 2023); see also Ensambles Hyson, S.A. de C.V., 718 F. 27 Supp. 3d at 1271 (no waiver after filing motion to compel arbitration ten months after 28 service); Ashirwad v. Charter Commc’ns, LLC, No. 21-CV-02101-AJB-DDL, 2023 WL 1 3564938, at *3 (S.D. Cal. Mar. 20, 2023) (no waiver despite that defendants had “waited 2 more than 8 months after the lawsuit was filed to compel arbitration, filed an Answer, 3 removed th[e] case to federal court, served initial disclosures, participated in case 4 management conferences, and agreed to amending the scheduling orders in th[e] case”); 5 Armstrong, 59 F.4th at 1016 (no waiver where defendant had “mov[ed] to compel 6 arbitration within a year after [the plaintiff had] filed the complaint”). In sum, Plaintiff has 7 not demonstrated that NextGen waived its right to compel arbitration. 8 D. Fairness 9 Finally, Plaintiff asserts that because the other remaining Defendant, T-Mobile, did 10 not move to compel arbitration, “Plaintiff would be unfairly forced to simultaneously 11 prosecute its claims in civil [c]ourt and arbitration, if [NextGen’s] [m]otion [to compel 12 arbitration] is granted.” (Doc. No. 19 at 23). The case Plaintiff cites in support, Nitsch v. 13 DreamWorks Animation SKG Inc., 100 F. Supp. 3d 851, 869 (N.D. Cal. 2015), is 14 inapposite. There, the Court rejected the argument that it would be “unfair” for an arbitrator 15 to decide factual and legal questions as to one defendant’s alleged participation in an 16 anticompetitive conspiracy, while the court would resolve the same issues with respect to 17 the remaining defendants who were not subject to the arbitration clause. Nitsch, 100 F. 18 Supp. 3d at 869. As was the case in Nitsch, here, Plaintiff “confuse[s] efficiency for 19 fairness.” Id. Because the Court finds that NextGen and Plaintiff agreed to arbitrate, the 20 scope of the Arbitration Provision encompasses Plaintiff’s claims against NextGen, the 21 Arbitration Provision is enforceable, and NextGen did not waive its right to arbitrate, the 22 Court is required to enforce the terms of the Arbitration Provision. 23 V. CONCLUSION 24 Accordingly, for the reasons stated herein, the Court GRANTS Defendant’s motion 25 to compel arbitration for all claims and prayers for relief against NextGen to be held at a 26 location convenient for Plaintiff. (Doc. No. 16.) Pursuant to 9 U.S.C. § 3 , the action 27 between Plaintiff and NextGen is STAYED pending arbitration. [28] 1 The Parties are ordered to confer, through counsel, and seek agreement within 30 2 of this order on the place for the arbitration. If agreement cannot be reached in the 3 30 days, then the arbitration will proceed in Chicago, Illinois as stated in the 4 || Employment Agreement. 5 Counsel are ordered to file a Joint Status Report with the Court every 90 days 6 || hereafter describing the status of the arbitration proceedings. [7] 8 IT IS SO ORDERED. 9 Dated: January 15, 2025 © □ 10 Hon. Anthony J. attaglia 11 United States District Judge