United States District Court, E.D. California
MARTIN STARACE, individually and on behalf of all others similarly situated, Plaintiff,
LEXINGTON LAW FIRM and DOES 1- 10, Defendants.
ORDER GRANTING DEFENDANT'S MOTION TO COMPEL
ARBITRATION (DOC. NO. 13)
matter is before the court on defendant's motion to
compel arbitration and to dismiss this putative class action
lawsuit. (Doc. No. 13.) A hearing on the motion was held on
June 4, 2019. Attorney Kelsey Kuberka appeared telephonically
on behalf of plaintiff, and attorneys Chad Fuller and Patrick
Dillard appeared telephonically on behalf of defendant. The
court has considered the parties' briefs and oral
arguments, and for the reasons set forth below, will grant
defendant's motion to compel arbitration and dismiss this
complaint plaintiff alleges the following. Defendant
Lexington Law Firm (“Lexington”) is a debt
collection company. (Doc. No. 1 (“Compl.”) at
¶ 7.) At some point in 2018, plaintiff contacted
Lexington in an attempt to repair his credit. (Id.
at ¶ 10.) Lexington required his debit card information
in order to provide its services. (Id. at ¶
11.) After plaintiff provided Lexington with the information,
Lexington-“without Plaintiff's knowledge or
consent”-“continued to deduct funds from [his]
account multiple times on a reoccurring basis, without
providing [him] a written authorization to do so.”
(Id. at ¶ 13.) Plaintiff alleges that he
“never provided Defendant with any authorization to
deduct these sums of money on a regular basis from [his]
banking account.” (Id. at ¶ 14.) Thus, on
November 19, 2018, plaintiff initiated this class action
against Lexington and Doe Defendants 1-10 on behalf of two
putative classes, alleging that defendants' conduct
violated the Electronic Funds Transfer Act
(“EFTA”), 15 U.S.C. § 1693 et seq.
(Id. at ¶¶ 16, 17, 19.)
April 10, 2019, Lexington filed the instant motion to compel
arbitration and dismiss this action, contending that
plaintiff executed an Engagement Agreement (the
“Agreement”) with Lexington in which he
“unmistakably agreed to arbitrate any claims between
him and Lexington Law” on an individual basis. (Doc.
No. 15 at 2, 11.) In support of its motion, Lexington offers
evidence that plaintiff was provided the Agreement via text
message, that he acknowledged receipt of the Agreement, and
that he agreed to its terms by text message. (Id. at
2, Ex. 1.) Lexington argues that, by assenting to the terms
of the Agreement, plaintiff also agreed to the arbitration
clause, which provides in relevant part:
You agree to arbitrate all disputes and claims between you
and Lexington on an individual basis only and not as part of
any class. You agree that, by entering into this Contract,
you are waiving the right to a trial by jury and you are
waiving all rights to participate in a class action law suit
or class action arbitration. . . . Lexington will reimburse
you up to $300 of your arbitration filing fee. The rules of
the American Arbitration Association shall govern the
arbitration and can be viewed online at www.adr.org
or by calling 1-800-778-7879.
(Doc. No. 15-1 at 16.) Based on this provision, Lexington
argues that this court must compel arbitration of
plaintiff's claims against it.
21, 2019, plaintiff filed his opposition to defendant's
motion. (Doc. No. 18.) On May 28, 2019, defendant filed its
reply thereto. (Doc. No. 19.)
written provision in any contract evidencing a transaction
involving commerce to settle a dispute by arbitration is
subject to the Federal Arbitration Act (“FAA”). 9
U.S.C. § 2. The FAA confers on the parties involved the
right to obtain an order directing that arbitration proceed
in the manner provided for in a contract between them. 9
U.S.C. § 4. In considering a motion to compel
arbitration, the “court's role under the Act . . .
is limited to determining (1) whether a valid agreement to
arbitrate exists and, if it does, (2) whether the agreement
encompasses the dispute at issue.” Chiron Corp.
v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th
Cir. 2000). The party seeking to compel arbitration bears the
burden to prove by a preponderance of the evidence the
existence of an agreement to arbitrate. Ashbey v.
Archstone Prop. Mgmt., Inc., 785 F.3d 1320, 1323 (9th
Cir. 2015); Knutson v. Sirius XM Radio Inc., 771
F.3d 559, 565 (9th Cir. 2014) (citing Rosenthal v. Great
W. Fin. Sec. Corp., 14 Cal.4th 394, 413 (1996)).
is an “emphatic federal policy in favor of arbitral
dispute resolution.” Mitsubishi Motors Corp. v.
Soler Chrysler-Plymouth, 473 U.S. 614, 631 (1985). As
such, “‘any doubts concerning the scope of
arbitrable issues should be resolved in favor of arbitration,
whether the problem at hand is the construction of the
contract language itself or an allegation of waiver, delay,
or a like defense to arbitrability.'” Id.
at 626 (quoting Moses H. Cone Mem'l Hosp. v. Mercury
Const. Corp., 460 U.S. 1 at 24-25 (1983)). An
arbitration agreement may only “be invalidated by
‘generally applicable contract defenses, such as fraud,
duress, or unconscionability,' but not by defenses that
apply only to arbitration or that derive their meaning from
the fact that an agreement to arbitrate is at issue.”
AT & T Mobility LLC v. Concepcion, 563 U.S. 333,
339 (2011) (quoting Doctor's Assocs., Inc. v.
Casarotto, 517 U.S. 681, 687 (1996)). Accordingly,
courts may not apply traditional contractual defenses, like
duress and unconscionability, in a broader or more stringent
manner to invalidate arbitration agreements and thereby
undermine FAA's purpose to “ensur[e] that private
arbitration agreements are enforced according to their
terms.” Id. at 344 (quoting Volt Info.
Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 478 (1989)).
argues that the court must compel arbitration and dismiss
this putative class action because: (1) plaintiff agreed to
individually arbitrate his claims against Lexington; and (2)
neither the Agreement nor its arbitration clause are
unconscionable. (Doc. No. 15 at 5-10.) Plaintiff counters
that the court cannot compel arbitration because Lexington
has not established the existence of a valid agreement
between the parties. (Doc. No. 18 at 10-12.) Plaintiff
further contends that, even if the parties entered into an
agreement containing an arbitration clause, the court should
deny Lexington's motion because the Agreement and/or the
arbitration clause are unconscionable. (Id. at
Whether the Parties Entered into an Agreement
compel arbitration, this court must determine whether a valid
agreement to arbitrate exists. Boardman v. Pac. Seafood
Grp., 822 F.3d 1011, 1017 (9th Cir. 2016);
Chiron, 207 F.3d at 1130. “The party seeking
to compel arbitration bears the burden of establishing that a
valid agreement to arbitrate exists by a preponderance of the
evidence.” Langell v. Ideal Homes LLC, No.
16-CV-00821-HRL, 2016 WL 8711704, at *4 (N.D. Cal. Nov. 18,
2016) (citing Knutson, 771 F.3d at 565), report
and recommendation adopted, 2016 ...