Monplaisir v. Integrated Tech Group, LLC

[5] 6 UNITED STATES DISTRICT COURT [7] NORTHERN DISTRICT OF CALIFORNIA [9] 10 PAUL MONPLAISIR, et al., 11 Plaintiffs, No. C 19-01484 WHA 12 v. 13 INTEGRATED TECH GROUP, LLC, et al., ORDER FINDING CALIFORNIA LAW APPROPRIATE FOR 14 Defendants. APPLICATION TO MOTION TO COMPEL ARBITRATION [15] 16 In this wage and hour putative class action, defendants moved to compel arbitration, 17 plaintiffs opposed, defendants replied, and both parties briefed the validity and enforceability 18 of the arbitration agreement under federal and California law (Dkt. Nos. 65, 67, 71). The 19 agreement states: 20 10. Substantive Law. The Arbitrator shall apply the substantive state or federal law (and the law of remedies, if applicable) as 21 applicable to the claim(s) asserted. Claims arising under federal law shall be determined in accordance with federal law. Common 22 law claims shall be decided in accordance with Florida substantive law, without regard to conflict of laws principles. [23] 24 A December 30 order asked the parties to either stipulate to California law, as briefed, or agree 25 to re-brief. The parties responded, but disagreed. Plaintiffs prefer California law; defendants 26 prefer Florida. So a January 6 order directed the parties to brief the issue, addressing in 27 particular: (1) whether the agreement’s validity was a common law matter; and (2) whether 1 defendants waived their right to assert a Florida choice of law provision by briefing California 2 law. Both parties filed timely briefs (Dkt. Nos. 131, 135, 136, 148, 149). 3 The parties agree that the validity of an arbitration agreement is governed by “ordinary 4 state-law principles,” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995), and 5 that unconscionability is a common law doctrine. Basulto v. Hialeh Automotive, 141 So. 3d 6 1145, 1157 (Fla. 2017); see also Davis v. O’Melveny & Meyers, 485 F.3d 1066, 1072 (9th Cir. 7 2007). But the parties disagree whether the purported choice of law provision governs this 8 dispute. This order finds that it does not. 9 In both California and Florida, contract interpretation begins with the plain language. 10 Bank of the West v. Sup. Ct., 833 P.2d 545, 552 (Cal. 1992); Columbia Bank v. Columbia 11 Developers, LLC, 127 So. 3d 670, 673 (Fla. 1st DCA 2013). Recall the provision here: 12 Claims arising under federal law shall be determined in accordance with federal law. Common law claims shall be decided in 13 accordance with Florida substantive law. 14 In context, the term “claim” means the claim for relief asserted between the parties to the 15 arbitration agreement, i.e. the basis for the suit. 16 Here, though, the contract’s validity or unconscionability is, strictly, not a claim, but a 17 defense. Indeed, defendants only invoked the arbitration agreement after plaintiffs raised their 18 claims for relief. And plaintiffs only challenged the enforceability of the agreement after 19 defendants invoked the arbitration agreement. The validity of the arbitration agreement didn’t 20 bring these parties into court. Plaintiffs articulated this argument in the joint statement (Dkt. 21 No. 135), yet defendants do not respond to it in their supplemental brief (Dkt. No. 149). 22 Moreover, defendants’ supplemental brief illustrates how to draft a choice of law provision 23 governing the interpretation and validity of an agreement: “This agreement shall be governed 24 by and construed in accordance with the laws of the State of [ ]” (Dkt. No. 149 at 6). 25 Defendants chose not to draft such a provision here and must live by that choice. 26 Absent an applicable choice of law provision, California’s own choice of law principles 27 apply. To start under California’s analysis, Florida law will only apply if it “materially differs 1 defendants already argued the arbitration provision is valid and enforceable under California 2 law (Dkt. Nos. 65, 71), and they presumably would argue the same under Florida law. 3 Defendants point to no material difference between California and Florida law on this issue. 4 In sum, the choice of law provision does not apply to the validity and enforceability of 5 the arbitration agreement. And California law dictates that California law governs this issue. 6 Thus, defendants’ motion to compel arbitration will be decided on the briefs submitted, under 7 California law. The hearing on defendants’ motion to compel arbitration (Dkt. No. 65) is reset 8 for THURSDAY, FEBRUARY 20 AT 10:30 A.M. [9] 10 IT IS SO ORDERED. [11] a 12 Dated: February 1, 2020. = ILLIAM ALSUP IS UNITED STATES DISTRICT JUDGE [16] = 17 Z 18