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Martin v. Yasuda

United States Court of Appeals, Ninth Circuit

July 21, 2016

Paige Martin, Sundae Worthy, Maria Ford, and Megan Tallerico, on behalf of themselves and classes of those similarly situated; Plaintiffs-Appellees,
v.
Gary Yasuda; Amarillo College of Hairdressing, Inc., DBA Milan Institute, DBA Milan Institute of Cosmetology, Defendants-Appellants.

          Argued and Submitted June 8, 2016 Pasadena, California

         Appeal from the United States District Court for the Central District of California Philip S. Gutierrez, District Judge, Presiding D.C. No. 5:13-cv-01961-PSG-DTB

          William M. Hensley (argued), Marc D. Alexander, and Jonathan M. Werner, Alvarado Smith, Santa Ana, California; Kirsten L. Clevenger, Matthew L. Hoppock, and Ronald L. Holt, Dunn & Davison LLC, Kansas City, Missouri; for Defendants-Appellants.

          Chaya M. Mandelbaum (argued) and Michelle G. Lee, Rudy, Exelrod & Zieff, LLP, San Francisco, California; Dana Sniegocki and Leon Greenberg, Law Office of Leon Greenberg, Las Vegas, Nevada; Adetunji Olude and Bryan J. Schwartz, Bryan Schwartz Law, Oakland, California; for Plaintiffs-Appellees.

          Before: Stephen Reinhardt and Kim McLane Wardlaw, Circuit Judges, and Mark W. Bennett, [*] Senior District Judge.

         Judge Reinhardt

         SUMMARY [**]

         Arbitration

         Affirming the district court's denial of defendants' motion to compel arbitration of labor law claims, the panel held that the defendants waived their right to arbitration by their litigation conduct.

         The panel held that the district court properly decided the waiver issue. The panel held that this question of arbitrability was presumptively for the court, rather than an arbitrator, to decide, and the broad nature of the parties' arbitration clause did not overcome the presumption.

         The panel held that the defendants waived their right to arbitration because they engaged in acts inconsistent with this right, and the plaintiffs were prejudiced.

          OPINION

          REINHARDT, Circuit Judge:

         Defendants Gary Yasuda and Amarillo College of Hairdressing appeal the district court's denial of their motion to compel arbitration. The district court found that the defendants waived their right to arbitration by their litigation conduct. We affirm.

         FACTUAL BACKGROUND

         Defendant Amarillo College of Hairdressing, Inc., doing business as "Milan Institute" and "Milan Institute of Cosmetology" (collectively "Milan"), is a group of nationally accredited private colleges offering career training in cosmetology. The plaintiffs are individuals who enrolled in a cosmetology program at Milan Institute. As part of their enrollment, each of the plaintiffs signed an Enrollment Agreement that contained a binding arbitration provision. The arbitration agreement provides, in relevant part:

[A]ny dispute arising from my enrollment at Milan Institute, no matter how described, pleaded or styled, shall be resolved by binding arbitration, under the substantive and procedural requirements of the Federal Arbitration Act, by a single arbitrator, conducted by the American Arbitration Association (AAA) at Milan Institute . . . under its Commercial Rules. All determinations as to the scope, enforceability and effect of this arbitration agreement shall be decided by the arbitrator, and not by a court. The award rendered by the arbitrator may be entered in any court having jurisdiction.

         In order to graduate from a cosmetology school, students must, among other things, complete 1600 hours of technical instruction and practical training. Cal. Code Regs. tit. 16, § 950.2(a). The students perform cosmetology, barbering, and manicure services for the college's paying clients. The students also clean, sweep, wash and fold laundry, set up and take down studios, clean pedicure bowls, sell retail products, schedule clients, and promote Milan's ...


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