United States District Court, S.D. California
ORDER ON MOTION TO COMPEL ARBITRATION
TED MOSKOWITZ United States District Judge.
Nathan Hale filed this putative class action bringing claims
under the Telephone Consumer Protection Act against attorney
John Heath, doing business as Lexington Law Firm.
Hale’s claims depend on allegations that Heath called
him without his consent using an automatic telephone dialing
then filed a motion to compel arbitration. No class has been
certified, nor is a motion for class certification pending.
presents evidence that on March 11, 2015, Hale visited the
website web2carz.com, which he used to request a car loan.
After submitting his loan request, the evidence says, he was
directed to an acknowledgment web page, which asked if he
would like to contact or be contacted by a representative
from the Lexington Law Firm about credit repair. The evidence
also suggests he completed registration and clicked a button
marked “Get Your Free Consultation.” A link to
the arbitration clause that Heath now seeks to enforce.
only part of this evidence Heath disputes is whether he was
directed to the second web page - the one regarding credit
repair - and whether he completed and submitted the credit
repair registration. His primary arguments are that he never
entered into the agreement, or that it is unenforceable.
Specifically, he argues there was no mutual assent to the
agreement both because it was too inconspicuous and because
he did not intend to be bound by it. He also argues it is a
contract of adhesion that is both procedurally and
parties agree, as does the Court, that the agreement is
governed by the Federal Arbitration Act (FAA). Under the FAA,
arbitration agreements are just as valid and enforceable as
other contracts. See 9 U.S.C. § 2. If an
agreement falls under the FAA, the Court “must issue an
order compelling arbitration if the following two-pronged
test is satisfied: (1) a valid agreement to arbitrate exists;
and (2) that agreement encompasses the dispute at
issue.” United Computer Systems v. AT&T
Corp., 298 F.3d 756, 766 (9th Cir. 2002); see
also 9 U.S.C. §§ 2, 4.
embodies a “liberal federal policy favoring arbitration
agreements, ” and “any doubts concerning the
scope of arbitrable issues should be resolved in favor of
arbitration.” Moses H. Cone Memorial Hospital v.
Mercury Constr. Corp., 460 U.S. 1, 24-25 (1983). Any
ambiguities in the language of an agreement should be
resolved in favor of arbitration. EEOC v. Waffle House,
Inc., 534 U.S. 279, 294 (2002). But the policy favoring
arbitration does not apply to the question of whether there
is a valid arbitration agreement in the first place. See
Comer v. Micor, Inc., 436 F.3d 1098, 1104 n.11 (9th Cir.
2006). Rather, the Court applies ordinary state contract law
principles to make this determination. Waffle House.
534 U.S. at 293; Ingle v. Circuit City Stores, Inc.,
328 F.3d 1165, 1170 (9th Cir. 2003). Arbitration
agreements, therefore, are “subject to all defenses to
enforcement that apply to contracts generally.”
deciding any factual issues raised in a motion to compel
arbitration, the Court applies a summary judgment-like
standard. See Amaya v. Spark Energy Gas, LLC, 2016
WL 1410755, slip op. at *3 (N.D. Cal., Apr. 11, 2016). The
burden of proof falls on the party asserting jurisdiction and
contesting arbitration. See Shearson/Am. Express, Inc. v.
McMahon, 482 U.S. 220, 227 (1987).
State Law Governs the Contract
argues that the law of California, where he allegedly entered
into the contract, governs. Heath, citing the terms of
service, argues that federal or Utah law governs. Because
federal arbitration law generally looks to state contract
principles to determine if a contract was validly entered
into, this would mean the Court would apply Utah law.
the agreement was validly entered into is a threshold
question. If it was not, its choice of law provisions also
would not apply. The Court therefore initially assumes
California law applies. But, as discussed below, it does not