United States District Court, E.D. California
NAOMI E. MOJADDIDI, Plaintiff,
GUSTAVO DIVENCENZO, et al., Defendants.
KENDALL J. NEWMAN, UNITED STATES MAGISTRATE JUDGE
pending before the court is plaintiff Naomi E.
Mojaddidi's self-styled “opposition to
defendants' motion to compel plaintiff to any further
arbitration hearings, ” which is properly understood as
a motion to lift stay. (ECF No. 16.) On April 27, 2017, the court
took this matter under submission on the briefs without oral
argument, pursuant to Local Rule 230(g). (ECF No. 18).
Defendants filed an opposition and plaintiff replied. (ECF
Nos. 21, 22.) The undersigned has fully considered the
parties' briefs and appropriate portions of the record.
For the reasons that follow, plaintiff's motion to lift
stay is DENIED.
who proceeds without counsel, filed this action on June 21,
2016, against her employer Olive Garden Italian Restaurant,
and other employees, raising various employment-related
claims. (ECF No. 1.) On November 4, 2016, the parties
stipulated that this matter “will proceed in accordance
with Defendant's [Dispute Resolution Process
(“DRP”)], ” which includes binding
arbitration. (ECF No. 14 at 2.) Pursuant to the
parties' stipulation, Judge John A. Mendez stayed the
case and ordered the parties into binding arbitration. (ECF
No. 15 at 3.) The parties were further ordered to file a
joint status conference report, no later than May 8, 2017
(Id.), which they have failed to do. Rather, each
filed an individual status report, indicating that they had
reached an impasse during the mediation portion of the DRP.
(See ECF Nos. 17, 19.)
Plaintiff's Motion to Lift Stay
April 26, 2017, plaintiff brought the present motion,
asserting that the arbitration provision in the DRP “is
procedurally and substantively unconscionable under
well-settled California law.” (ECF No. 16 at 2.) First,
plaintiff argues that the arbitration clause is procedurally
unconscionable because it is a contract of adhesion that she
had to sign, without adequate time to review, as a condition
of employment and because defendant failed to provide her
with copies of the rules of the American Arbitration
Association (“AAA”). (ECF No. 16 at 5-7.) Second,
plaintiff argues that the clause is substantively
unconscionable because it restricts her right to discovery
and because it imposes burdens on her to pay the arbitration
fees. (Id. at 9-10.)
federal law of arbitrability under the Federal Arbitration
Act (“FAA”) governs the allocation of authority
between courts and arbitrators.” Cox v. Ocean View
Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008)
(citing Chiron Corp. v. Ortho Diagnostic Sys., Inc.,
207 F.3d 1126, 1131 (9th Cir.2000)). “[T]he FAA limits
courts' involvement to determining ‘(1) whether a
valid agreement to arbitrate exists and, if it does, (2)
whether the agreement encompasses the dispute at
issue.'” Id.; see Howsam v. Dean
Witter Reynolds, Inc., 537 U.S. 79, 83 (2002). If a
valid agreement exists, “the FAA specifically directs
federal district courts to stay proceedings and compel
arbitration of ‘any issue referable to arbitration
under an agreement in writing for such
arbitration.'” Ziober v. BLB Res., Inc.,
839 F.3d 814, 817 (9th Cir. 2016), cert. denied, No.
16-1269, 2017 WL 1437638 (U.S. June 19, 2017)
(quoting 9 U.S.C. § 3).
party may challenge the validity or applicability of [an]
arbitration provision by raising the same defenses
‘available to a party seeking to avoid the enforcement
of any contract'” under the applicable state law.
Cox, 533 F.3d at 1121 (citations omitted).
California law, a contractual provision is unenforceable if
it is both procedurally and substantively
unconscionable.” Kilgore v. KeyBank, Nat.
Ass'n, 718 F.3d 1052, 1058 (9th Cir. 2013)
(citing Armendariz v. Found. Health Psychcare Servs.,
Inc., 24 Cal.4th 83, 114 (2000)). “The more
substantively oppressive the contract term, the less evidence
of procedural unconscionability is required to come to the
conclusion that the term is unenforceable, and vice
versa.” Id. At the same time, this doctrine
does not apply to arbitration clauses in all instances. The
Supreme Court has held that the FAA preempts state law
doctrines that “prohibit outright the arbitration of
a particular type of claim . . . [or] rely on the uniqueness
of an agreement to arbitrate as a basis for a state-law
holding that enforcement would be unconscionable.”
AT&T Mobility LLC v. Concepcion, 563 U.S. 333,
341 (2011) (citations omitted).
initial matter, plaintiff's arguments are undermined by
the fact that she stipulated to staying this matter and to
proceeding under the DRP. (See ECF Nos. 14, 15.)
Moreover, after stipulating, plaintiff actively engaged in
mediation-step 3 of the DRP-until an impasse was reached.
(See ECF No. 17.) It was not until after this
impasse that plaintiff asserted that she “has since
learned that the Arbitration proceeding[s] are not binding,
unconstitutional, and . . . filed a motion with the Court . .
. requesting termination of all future arbitration
hearings.” (Id. at 1-2.) Plaintiff does not
address whether her stipulation before the court, which
adopted the DRP, was somehow unconscionable. Neither does she
address whether her acquiescence to the DRP constitutes a
waiver of any challenge she may have raised, prior to her
stipulation and subsequent actions in furtherance of the DRP.
without deciding, that plaintiff did not waive her right to
challenge the DRP, her arguments fail on the merits. The DRP
is not unconscionable under California law. First, the
California Supreme Court held that an arbitration agreement
“offered on a take-it-or-leave-it basis, ” as a
condition of employment, is not procedurally unconscionable.
Baltazar v. Forever 21, Inc., 62 Cal.4th 1237, 1245
(2016). Similarly, the California Supreme Court determined
that failure to provide an employee with a copy of the AAA
rules referenced by, and governing, an arbitration agreement
does not constitute procedural unconscionability.
Id. at 1246 (“[Plaintiff's] argument . . .
might have force if her unconscionability challenge concerned
some element of the AAA rules of which she had been unaware
when she signed the arbitration agreement. But her challenge
to the enforcement of the agreement has nothing to do with
the AAA rules; her challenge concerns only matters that were
clearly delineated in the agreement she signed.
[Defendant's] failure to attach the AAA rules therefore
does not affect our consideration of [plaintiff's] claims
of substantive unconscionability.”).
the DRP's purported limits on discovery are not
substantively unconscionable. Even assuming that such an
agreement is unconscionable under California law, the Unites
States Supreme Court has held that the FAA preempts state law
on this issue. See AT&T Mobility LLC, 563 U.S.
at 341-42 (“[A] court may not rely on the uniqueness of
an agreement to arbitrate as a basis for a state-law holding
that enforcement would be unconscionable . . . An obvious
illustration of this point would be a case finding
unconscionable or unenforceable as against public policy
consumer arbitration agreements that fail to provide for
judicially monitored discovery.” (internal citations
and quotation marks omitted)). Additionally, plaintiff's
argument that the DRP imposes substantively unconscionably
burdens on her to pay the arbitration fees is unfounded. ...