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Hofer v. Emley

United States District Court, N.D. California

September 20, 2019

BRIAN HOFER, et al., Plaintiffs,
v.
KYLE EMLEY, et al., Defendants.

          ORDER RE: DEFENDANT GETAROUND, INC.’S MOTION TO COMPEL ARBITRATION AND DISMISS OR STAY LITIGATION; DEFENDANTS’ MOTIONS TO DISMISS Re: Dkt. Nos. 17, 43, 45, 46

          Jacqueline Scott Corley United States Magistrate Judge.

         Brian Hofer and Jonathan Hofer sue City of San Jose (“San Jose” or “the City”), County of Contra Costa (“the County”) and Deputy Sheriffs Kyle Emley, Brandon Gant, and William Odom (collectively, “Contra Costa Defendants”), Getaround, Inc. (“Getaround”), and Vigilant Solutions, LLC (“Vigilant”), alleging civil rights violations and state law tort claims arising out of a November 2018 traffic stop.[1] (Dkt. No. 38.) [2] Now before the Court are Getaround’s motion to compel arbitration and dismiss or stay litigation, (Dkt. No. 17), Contra Costa Defendants’ motion to dismiss, (Dkt. No. 43), San Jose’s motion to dismiss, (Dkt. No. 45), and Vigilant’s motion to dismiss, (Dkt. No. 46). After careful consideration of the parties’ briefing, and having had the benefit of oral argument on September 12, 2019, the Court: GRANTS Getaround’s motion to compel arbitration and STAYS this action as to Getaround; GRANTS in part and DENIES in part Contra Costa Defendants’ motion to dismiss; GRANTS San Jose’s motion to dismiss; and GRANTS Vigilant’s motion to dismiss.

         BACKGROUND

         I. The Parties

         A. Plaintiffs

         Plaintiffs Brian Hofer (“Brian”) and Jonathan Hofer (“Jonathan”) are brothers. (Dkt. No. 38 at ¶ 15.) They both reside in Oakland, California. (Id. at ¶¶ 2-3.) Brian is “a surveillance reform activist and Chair of the City of Oakland’s Privacy Commission.” (Id. at ¶ 31.)

         B. Defendants

         The County is a municipality that “owns, operates, manages, directs, and controls the Contra Costa County Sheriffs Office, ” which employed Deputy Sheriffs Kyle Emley, Brandon Gant, and William Odom “at all times relevant to this action.” (Id. at ¶ 8.) San Jose is a municipality that administers the San Jose Police Department (“SJPD”). (Id. at ¶ 9.) Getaround “is a car sharing platform” that facilitates car rentals between “private vehicle owners” and “other private parties.” (Id. at ¶ 11.) “Getaround also provides its own vehicles to the platform for rental by private parties.” (Id.) Vigilant manufactures an automated license plate reader (“ALPR”) used by the Contra Costa County Sheriffs Office. (Id. at ¶ 10.)

         II. Complaint Allegations

         Brian rented a Getaround-owned car from Getaround on November 21, 2018 to travel with Jonathan “to visit family for the Thanksgiving holiday.” (Id. at ¶¶ 11, 15.) On November 25, 2018, Plaintiffs were returning to Oakland in the rental car when they were stopped near San Pablo, California by Contra Costa Sheriffs Deputy Brandon Gant, who had tailed Plaintiffs “for a period of time” before turning on his overhead lights and directing Plaintiffs “over the loudspeaker to exit the freeway.” (Id. at ¶ 16.) Plaintiffs complied and pulled into a shopping center. (Id. at ¶ 17.)

         Contra Costa Sheriffs Deputies Kyle Emley and William Odom then arrived on the scene; their vehicles “surrounded” Plaintiffs’ car. (Id. at ¶ 18.) Deputy Gant directed the driver, Brian, to exit the vehicle, “place his hands behind his head, and walk backwards towards the sound of [Deputy] Gant’s voice.” (Id. at ¶ 23.) Brian noticed that Deputies Emley and Gant had their guns drawn and pointed at him. (Id.) Brian complied with all of Deputy Gant’s instructions. (Id. at ¶¶ 20-24.) Deputy Gant handcuffed Brian and placed him in the back of Deputy Gant’s vehicle. (Dkt. No. 38 at ¶¶ 24-25.) Before doing so, Deputy Gant did not check Brian’s identification or ask him any questions about the rental car. (Id. at ¶ 24.)

         Deputies Emley and Gant then directed Jonathan to exit Plaintiffs’ car “in a similar manner as Brian.” (Id. at ¶ 26.) Brian noticed that the three deputies “all had their guns drawn and pointed at Jonathan.” (Id.) “Jonathan complied with the officers’ directions, walking backwards slowly and non-threateningly towards [Deputy] Emley.” (Id. at ¶ 27.) Deputy Emley then screamed at Jonathan and pushed him to his knees. (Id. at ¶ 28.) Deputy Emley pointed his gun at the back of Jonathan’s head and then injured Jonathan by slamming him “forward to the ground.” (Id.) Deputy Emley handcuffed Jonathan and placed him in the back of Deputy Emley’s vehicle. (Id. at ¶ 29.) While seated in the back of Deputy Gant’s vehicle, Brian “noticed a Vigilant screen” on the vehicle’s computer. (Id. at ¶ 31.)

         None of the deputies made an “attempt to identify Brian or Jonathan, or to communicate any information about why they were [being detained].” (Id. at ¶ 30.) The deputies searched the rental car, opened the trunk, and Deputy Gant “unzipped the suitcases in the trunk and examined the contents of the luggage.” (Id. at ¶ 32.) Plaintiffs did not consent to the warrantless searches. (Id. at ¶ 33.)

         After searching the rental car and Plaintiffs’ luggage, Deputy Gant asked for and obtained Brian’s identification, and Deputy Emley did the same regarding Jonathan’s identification. (Id. at ¶¶ 34-35.) Deputy Gant “presumably called dispatch” to check Brian’s identification, and then Deputy Gant stated to Brian that “the ALPR registered the car’s license plate as a ‘hit’ against a stolen vehicle ‘hot list.’” (Id. at ¶¶ 34, 36.) “Brian explained that he had rented the car from Getaround, which presumably would not have rented him a stolen vehicle.” (Id. at ¶ 37.) Deputy Gant asked Brian for the rental agreement, and Brian explained “that he booked the rental through an application on his smartphone, which was still in the [rental car].” (Id.) Deputy Gant retrieved Brian’s phone and “demanded] the passcode.” (Id. at ¶ 38.) Brian initially refused to provide the code and asked instead “to enter it himself.” (Id.) Deputy Gant denied Brian’s request and told Brian that he “had ‘no choice’” but to give Deputy Gant the code. (Id.) Brian “reluctantly” complied. (Dkt. No. 38 at ¶ 38.) “Neither [Deputy] Gant nor the other officers on the scene had a warrant to search Brian’s phone.” (Id. at ¶ 39.) Further, none of the Deputies intervened “to stop the other officers’ excessive use of force or illegal searches.” (Id. at ¶ 47.)

         Brian directed Deputy Gant to the Getaround application, which “showed an active car rental.” (Id. at ¶ 40.) Deputy Gant took Brian’s unlocked phone and “talk[ed] to the other officers” before calling Getaround. (Id. at ¶¶ 40-41.) “Getaround confirmed to [Deputy] Gant that Brian had rented the car as he claimed.” (Id. at ¶ 41.)

         Deputies Gant and Emley then removed Brian and Jonathan from the deputies’ respective vehicles and “took off [Plaintiffs’] handcuffs.” (Id. at ¶ 42.) Deputy Gant did not allow Plaintiffs to leave the scene, however, because “he was waiting on his supervisor, Doe 1, to bring some paperwork.” (Id. at ¶ 44.) Deputy Gant’s supervisor asked Brian to sign a form “acknowledging that he had been detained for longer than 15 minutes.” (Id. at ¶ 45.) The supervisor did not present a similar form to Jonathan. (Id.) Plaintiffs left the scene “and returned the vehicle to the Getaround lot in Oakland.” (Id. at ¶ 48.) Thereafter, Plaintiffs “timely and properly filed government code claims against the County and San Jose pursuant to California Government Code § 910 et seq.” (Id. at ¶ 49.)

         III. The Stolen Vehicle Report

         On October 20, 2018, prior to Brian Hofer’s rental, the subject rental car was reported as stolen. (Id. at ¶ 54.) SJPD put the rental car “on a list of stolen vehicles, such that an alert was apparently sen[t] to police agencies and APLR vendors like Vigilant.” (Id.) The rental car was subsequently recovered and SJPD “apparently received some information provided on behalf of Getaround [3] by text and telephone from someone requesting an incident report number that the car was either not, in fact, stolen or had been returned.” (Dkt. No. 38 at ¶ 55.) Despite being notified that the car was not stolen or had been recovered, SJPD “failed to remove the car from the list of stolen vehicles, ” or alternatively, “Vigilant failed to update its list of stolen vehicles, ” and the car “remained in Vigilant’s database until at least November 25, 2018, when Brian and Jonathan were pulled over.” (Id. at ¶¶ 56, 63.)

         IV. Procedural History

         Plaintiffs filed their original complaint on April 24, 2019, bringing six causes of action against the same Defendants noted above arising out of the November 2018 traffic stop. (See generally Dkt. No. 1.) Plaintiffs then filed an amended complaint on July 22, 2019, bringing the following seven claims: (1) 42 U.S.C. § 1983 for violation of the Fourth Amendment (against the County); (2) 42 U.S.C. § 1983 for violation of the Fourth Amendment (against Deputies Emley, Gant, and Odom, and Doe 1); (3) violation of California’s Bane Act, California Civil Code § 52.1, (against Contra Costa Defendants and Doe 1); (4) assault and battery (against Contra Costa Defendants); (5) false imprisonment (against Contra Costa Defendants); (6) intentional infliction of emotional distress (against Contra Costa Defendants); and (7) negligence (against Contra Costa Defendants, San Jose, Vigilant, Getaround, and Does 2-50). (Dkt. No. 38.)

         Getaround filed the instant motion to compel arbitration on July 10, 2019. (Dkt. No. 17.) The motion is fully briefed, (see Dkt. Nos. 42 & 51). On August 5, 2019, Contra Costa Defendants, San Jose, and Vigilant filed their respective motions to dismiss the amended complaint. (See Dkt. Nos. 43, 45, 46.) The motions are fully briefed, (see Dkt. Nos. 54-58, 60), and the Court heard oral argument on all motions on September 12, 2019.

         MOTION TO COMPEL ARBITRATION

         Getaround moves to compel arbitration of Plaintiffs’ negligence claim pursuant to the mandatory arbitration provision contained in Getaround’s Terms of Service (the “Agreement”) requiring “the use of arbitration on an individual basis to resolve disputes.” (Dkt. No. 22-4, Ex. B at 12, 29-30.) The arbitration provision states, in its entirety:

READ THIS SECTION CAREFULLY BECAUSE IT REQUIRES THE PARTIES TO ARBITRATE THEIR DISPUTES AND LIMITS THE MANNER IN WHICH YOU CAN SEEK RELIEF FROM COMPANY. For any dispute with Company, you agree to first contact us at [email] and attempt to resolve the dispute with us informally. In the unlikely event that Getaround has not been able to resolve a dispute it has with you after attempting to do so informally, we each agree to resolve any claim, dispute, or controversy (excluding any Getaround claims for injunctive or other equitable relief) arising out of or in connection with or relating to this Agreement, or the breach or alleged breach thereof (collectively, “Claims”), by binding arbitration by the American Arbitration Association (“AAA”) in City and County of San Francisco, California under the commercial rules then in effect for the AAA, except as provided herein. The award rendered by the arbitrator shall include costs of arbitration, reasonable attorneys’ fees and reasonable costs for expert and other witnesses, and any judgment on the award rendered by the arbitrator may be entered in any court of competent jurisdiction. Nothing in this Section shall be deemed as preventing Getaround from seeking injunctive or other equitable relief from the courts as necessary to protect any of Getaround’s proprietary interests.

(Id. at 30 (emphasis added).) The Agreement further provides that “any arbitration conducted pursuant to the terms of [the Agreement] shall be governed by the Federal Arbitration Act (9 U.S.C. §§ 1-16).” (Id. at 29.)

         I. Legal Standard

         The Federal Arbitration Act (“FAA”) provides that arbitration agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for revocation of any contract.” 9 U.S.C. § 2. Under the FAA, “arbitration agreements [are] on an equal footing with other contracts, ” and therefore courts must “enforce them according to their terms.” Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 67 (2010) (internal citations omitted). A party may petition a court to compel “arbitration [to] proceed in the manner provided for in such agreement.” 9 U.S.C. § 4.

         The United States Supreme Court recognizes a “liberal policy favoring arbitration agreements.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011); see also Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24-25 (1983) (noting that “as a matter of federal law, any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration”). Thus, courts must direct parties to proceed to arbitration should it determine: (1) that a valid arbitration agreement exists; and (2) that “the agreement encompasses the dispute at issue.” Kilgore v. KeyBank Nat’l Ass’n, 718 F.3d 1052, 1058 (9th Cir. 2013); see also Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) (noting that “[i]f the response is affirmative on both counts, then the [FAA] requires the court to enforce the arbitration agreement in accordance with its terms”). However, the liberal federal policy favoring arbitration does not apply to the question of “whether a particular party is bound by the arbitration agreement.” Rajagopalan v. Noteworld, LLC, 718 F.3d 844, 847 (9th Cir. 2013) (internal quotation marks and citation omitted); see also AT&T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 648 (1986) (“[A]rbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit.”) (internal quotation marks and citation omitted).

         II. Discussion

         As the party seeking to compel arbitration, Getaround has the initial burden of demonstrating that a valid agreement exists to arbitrate the claims at issue. See Bridge Fund Capital Corp. v. Fastbucks Franchise Corp., 622 F.3d 996, 1005 (9th Cir. 2010) (noting that the party seeking to compel arbitration “bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence”) (internal quotation marks and citation omitted). The party opposing arbitration then “bears the burden of proving by a preponderance of the evidence any defense” to enforcing the agreement. Serafin v. Balco Props. Ltd., LLC, 235 Cal.App.4th 165, 172-73 (2015). Getaround has met its burden, and Plaintiffs fail to show that the Agreement is otherwise unenforceable as to either Plaintiff.

         A. Existence of a Valid Agreement that Covers the Dispute at Issue

         Courts must apply state contract law in determining whether a valid agreement to arbitrate exists. Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630-31 (2009); see also Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (“To evaluate the validity of an arbitration agreement, federal courts should apply ordinary state-law principles that govern the formation of contracts.”). Here, the Agreement is governed by California law. (See Dkt. No. 22-4, Ex. B at 29 (providing that the “Agreement shall be governed by the internal substantive laws of the State of California”).) Plaintiffs do not dispute that Brian Hofer accepted the Agreement, nor do they dispute the existence of the Agreement’s arbitration provision. [4] (See Dkt. No. 42 at 3 (“Brian had contracted to use Defendant Getaround’s car rental service, accepting the company’s Terms of Service . . . on July 12, 2018.”).) The arbitration provision’s coverage for “any claim . . . arising out of or in connection with or relating to this Agreement” includes Plaintiffs’ negligence claim against Getaround. (See Dkt. No. 38 at ¶ 92 (alleging that “Getaround breached its duty to update the San Jose police department that the car [Getaround] rented to Brian and Jonathan was not stolen or had been returned”).) Getaround has satisfied its burden of demonstrating the existence of a valid agreement to arbitrate the claim at issue, at least as to the signatory-Brian Hofer.

         Plaintiffs oppose Getaround’s motion to compel arbitration on the grounds that: (1) Jonathan Hofer cannot be compelled to arbitrate because he is not a party to the Agreement; (2) California Civil Code § 1281.2(c) applies and gives the Court discretion to not enforce the arbitration provision because Plaintiffs’ negligence allegations against all defendants are interrelated creating a possibility of conflicting rulings on common issues of law or fact; and (3) the FAA does not preempt application of Section 1281.2(c) because the Agreement “is not ‘a contract evidencing a transaction involving commerce’ within the meaning of the FAA.” (Dkt. No. 42 at 3-6.)

         The Court addresses each argument in turn.

         1. The Arbitration Provision Applies to Nonsignatory Jonathan Hofer

         As previously discussed, courts must look to “principles of state contract law” to determine whether a party has agreed to arbitrate. See Carlisle, 556 U.S. at 630 (noting that “principles of state contract law regarding the scope of agreements (including the question of who is bound by them)” apply in cases governed by the FAA); see also Knutson v. Sirius XM Radio, Inc., 771 F.3d 559, 565 (9th Cir. 2014) (“State contract law controls whether parties agreed to arbitrate.”). Here, it is undisputed that Jonathan Hofer is not party to the Agreement and generally “a nonsignatory is not bound by an arbitration clause.” Comer v. Micor, Inc., 436 F.3d 1098, 1103-04 (9th Cir. 2006). Nonetheless, “traditional principles of state law allow a contract to be enforced by or against nonparties to the contract through assumption, piercing the corporate veil, alter ego, incorporation by reference, third-party beneficiary theories, waiver[, ] and estoppel.” Carlisle, 556 U.S. at 631.

         The doctrine of equitable estoppel “precludes a party from claiming the benefits of a contract while simultaneously attempting to avoid the burdens the contract imposes.” Comer, 436 F.3d at 1101 (internal quotation marks and citation omitted); see also Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1179 (9th Cir. 2014) (discussing the “doctrine of direct benefits estoppel” and noting that “Federal courts recognize that the obligation to arbitrate under the FAA does not attach only to one who has personally signed the arbitration”). As the California Court of Appeal has explained:

The California cases binding nonsignatories to arbitrate their claims fall into two categories. In some cases, a nonsignatory was required to arbitrate a claim because a benefit was conferred on the nonsignatory as a result of the contract, making the nonsignatory a third party beneficiary of the arbitration agreement. In other cases, the nonsignatory was bound to arbitrate the dispute because a preexisting relationship existed between the nonsignatory and one of the parties to the arbitration agreement, making it equitable to compel the nonsignatory to also be bound to arbitrate his or her claim.

Cty. of Contra Costa v. Kaiser Found. Health Plan, Inc., 47 Cal.App.4th 237, 242 (1996).

         Getaround asserts that the Agreement’s arbitration provision applies to Jonathan Hofer under a theory of direct benefits estoppel because he was a passenger in the rental car and as such, “received direct and substantial benefits from [Brian Hofer’s] rental . . . through the Getaround application” and Brian Hofer’s required consent to the Agreement’s terms. (Dkt. No. 51 at 9.) The parties cite no California case with similar facts (i.e., a nonsignatory passenger of a rental car asserting the same claim as the signatory driver against the signatory rental car company), and the Court’s research reveals none. That said, the Court agrees that the doctrine of direct benefits estoppel applies and compels Jonathan Hofer to arbitrate his negligence claim against Getaround.

         The complaint suggests that Jonathan Hofer was an active participant in renting the car, and at the very least aware that his brother rented the car from Getaround. (See Dkt. No. 38 at ¶ 15 (“Brian rented a car from Getaround so that he and his brother Jonathan could travel north to visit family for the Thanksgiving holiday. They rented the car without incident.”) (emphasis added).) Taking those allegations as true, Jonathan Hofer knowingly received a direct benefit as a result of the Agreement-the ability to travel as a passenger in a rental car to visit family for Thanksgiving. The benefit conferred on Jonathan is the exact benefit conferred on the signatory, Brian Hofer; indeed, the ability to travel in a rental car is the only benefit conferred by the Agreement. Thus, Jonathan Hofer as a nonsignatory knowingly received benefits flowing directly from the Agreement. See NORCAL Mut. Ins. Co. v. Newton, 84 Cal.App.4th 64, 81-82 (2000) (holding that nonsignatory was equitably estopped from avoiding arbitration where she sought and derived a direct benefit from the agreement).

         Further, Plaintiffs bring a negligence claim against Getaround based on the same facts and allege a breach of duty that Getaround owed to both Plaintiffs pursuant to the Agreement. (See Dkt. No. 38 at ¶ 60 (alleging that Getaround “breached its duty to renters of its vehicles and their passengers to update information it provides to police agencies regarding the status of its vehicles that were reported stolen”) (emphasis added); see also Id. at ¶ 92 (“Getaround breached its duty to update the San Jose police department that the car it rented to Brian and Jonathan was not stolen or had been returned.”) (emphasis added).) There are no allegations that Getaround owed either Plaintiff a duty absent “the car it rented to Brian and Jonathan.” By alleging negligence based on the same duty Getaround owed to Brian as the signatory to the Agreement, Jonathan Hofer as a nonsignatory seeks to rely upon the Agreement to prosecute his action against Getaround, “but disavow the applicability of the arbitration provision.” See NORCAL, 84 Cal.App.4th at 82. Such conduct is impermissible under the doctrine of equitable estoppel. See Id. (“No person can be permitted to adopt that part of an entire transaction which is beneficial to him/her, and then reject its burdens.”) (internal quotation marks and citation omitted).

         In sum, because Jonathan Hofer knowingly received a direct benefit from the Agreement and seeks to exploit the benefits of the Agreement by alleging breach of a duty that arose from that Agreement, the doctrine of direct benefits estoppel applies. See NORCAL, 84 Cal.App.4th at 81-82. [5]

         The calculus might be different if Jonathan Hofer was a passive bystander injured as a result of Getaround’s negligence and had no connection to Brian or Getaround and no knowledge of the contractual relationship between the two that gave rise to the direct benefit Jonathan received. See Brown v. Comcast Corp., ED CV 16-00264-AB (SPx), 2016 WL 9109112, at * 7 (C.D. Cal. Aug. 12, 2016) (finding that nonsignatory “was a passive participant” to the agreement and could not be compelled to arbitrate because “[t]here is nothing in the record to suggest that [p]laintiff knew about or inquired into the agreement between [d]efendant and [signatory]” and thus plaintiff “could not have knowingly exploited the agreement when he was not even aware there was an agreement in the first place”). That is not the case here, however. The allegations instead support a finding that Jonathan Hofer was at least aware that his brother Brian rented the car so that both Plaintiffs could travel to visit family; thus, Jonathan Hofer was not an entirely passive participant to the Agreement and he knowingly received the only direct benefit flowing from the Agreement.

         For similar reasons, Plaintiffs’ reliance on Comer fails to persuade. The plaintiff in Comer participated in “ERISA plans operated by [defendant] Micor, Inc.” 436 F.3d at 1099. The defendant trustees of the plans retained defendant Smith Barney “to provide investment advice” regarding the plans. Id. at 1099-1100. In doing so, the trustees and Smith Barney entered into “investment management agreements” that contained arbitration provisions requiring that “‘all claims or controversies’ between the trustees and Smith Barney ‘concerning or arising from’ any of the trustees’ accounts managed by Smith Barney must be submitted to binding arbitration.” Id. at 1100. The plaintiff sued Smith Barney under ERISA for breach of fiduciary duty, and the district court denied Smith Barney’s petition to compel arbitration. Id.

         On appeal, Smith Barney argued that the plaintiff was “bound by the arbitration clauses” in part and as relevant here “as a matter of equitable estoppel.” Id. at 1101. The Ninth Circuit rejected that argument and affirmed the district court’s ruling. In doing so, the court noted that the “insurmountable hurdle for Smith Barney” was the lack of evidence that the plaintiff “knowingly exploit[ed] the agreement[s] containing the arbitration clause[s] despite never having signed the agreement[s].” Id. at 1102 (internal quotation marks and citation omitted) (alterations in original). The court explained:

Prior to his suit, Comer was simply a participant in trusts managed by others for his benefit. He did not seek to enforce the terms of the management agreements, nor otherwise to take advantage of them. Nor did he do so by bringing this lawsuit, which he bases entirely on ERISA, and not on the investment management agreements.

Id. Thus, the court concluded that “Smith Barney’s attempt to shoehorn Comer’s status as a passive participant in the plans into his knowing[ ] exploit[ation] of the investment management agreements fails.” Id. (internal quotation marks omitted) (alterations in original).

         Unlike the plaintiff in Comer, however, Jonathan Hofer was not merely a “passive participant” to the agreement at issue. (See Dkt. No. 38 at ¶ 15 (“Brian rented a car from Getaround so that he and his brother Jonathan could travel north to visit family for the Thanksgiving holiday. They rented the car without incident.”) (emphasis added).) Taking those allegations as true, Jonathan Hofer had knowledge of the Agreement before receiving the benefit that flowed directly from that Agreement. There are no similar facts in Comer. See 278 F.Supp.2d 1030, 1032 (N.D. Cal. 2003) (noting that plaintiff was a participant in the ERISA plans under which he sued from 1994 to 2003 and the trustees for those plans entered into the agreements with Smith Barney containing the arbitration provisions in 1999). Also unlike the plaintiff in Comer, Jonathan Hofer seeks to knowingly exploit the benefits of the Agreement by alleging that Getaround breached a duty that arose, at least in part, from the Agreement. (See Dkt. No. 38 at ¶ 92 (alleging negligence because “Getaround breached its duty to update the San Jose police department that the car it rented to Brian and Jonathan was not stolen or had been returned”) (emphasis added).) Conversely, the plaintiff’s suit in Comer was “base[d] entirely on [a fiduciary duty owed under] ERISA, and not on the investment management agreements” containing the arbitration provisions. See 436 F.3d at 1102.

         Accordingly, the Court concludes that the Agreement’s arbitration provision applies to Jonathan Hofer’s negligence claim against Getaround.

         2. California Civil Code Section 1281.2(c) Does Not Apply

         California Civil Code Section 1281.2(c) provides that a court shall grant a petition to compel arbitration unless, among other things, it determines that:

A party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.

         Cal. Code Civ. Proc. § 1281.2(c). [6] “Section 1281.2(c) addresses the peculiar situation that arises when a controversy also affects claims by or against other parties not bound by the arbitration agreement, ” and “giv[es] the court discretion not to enforce the arbitration agreement under such circumstances.” Mount Diablo Med. Ctr. v. Health Net of California, Inc., 101 Cal.App.4th 711, 726 (2002). Plaintiffs assert that if their negligence claim against Getaround is compelled to arbitration but the negligence claim against San Jose is not, there is a possibility of conflicting rulings from the arbitrator and the Court on a common issue of law or fact because the claim against San Jose involves allegations arising out of the same transaction or series of related transactions as the claim against Getaround, . Plaintiffs thus urge the Court to exercise its discretion under Section 1281.2(c) to not compel Plaintiffs to arbitrate their claims against Getaround.

         The FAA does not permit a court to decline to enforce a valid arbitration provision, even if some claims arising from the same transaction or occurrence cannot be compelled to arbitration. 9 U.S.C. § 4. Under such circumstances the FAA “requires piecemeal resolution when necessary to give effect to an arbitration agreement.” Moses H. Cone, 460 U.S. at 20 (emphasis removed). “Nevertheless, parties may agree that the FAA will not govern their arbitration even if the contract involves interstate commerce.” Mastick v. TD Ameritrade, Inc., 209 Cal.App.4th 1258, 1263 (2012). “Parties may agree to state law rules for arbitration even if such rules are inconsistent with those set forth in the [FAA].” Id. (citing Volt Info. Servs., Inc. v. Bd. of Trs. of Lelland Stanford Jr. Univ., 489 U.S. 468, 479 (1989) (noting that parties may “specify by contract the rules under which the arbitration will be conducted”)). Parties must, however, “clearly evidence their intent to be bound by such rules.” Sovak v. Chugai Pharmaceutical Co., 280 F.3d 1266, 1269 (9th Cir. 2002) (citing Mastrobuono v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 61-62 (1995)); see also Cape Flattery Ltd. v. Titan Maritime, 647 F.3d 914, 921 (9th Cir. 2011) (instructing that “courts should apply federal arbitrability law absent ‘clear and unmistakable evidence’ that the parties agreed to apply non-federal arbitrability law”). Thus, if Plaintiffs and Getaround agreed that California law controls the arbitration, then California Civil Code section 1281.2(c) applies and this Court has discretion to decline to compel Plaintiffs to arbitrate their claims against Getaround.

         Plaintiffs insist that the Agreement’s Governing Law provision supplies the unmistakable evidence that the parties intended for California law to supplant the FAA. The provision states:

This Agreement shall be governed by the internal substantive laws of the State of California, without respect to its conflicts of laws principles. Notwithstanding the preceding sentences with respect to the substantive law, any arbitration conducted pursuant to the terms of [this Agreement] shall be governed by the Federal Arbitration Act (9 U.S.C. §§ 1-16).

(Dkt. No. 22-4, Ex. B at 29.) The Court disagrees that this provision evinces an intent to supplant the FAA. Both federal and state caselaw support application of the FAA over section 1281.2(c) because the choice of California substantive law without deference to California’s conflicts of laws principles does not demonstrate the parties’ intent to apply California rules governing arbitration instead of the FAA.

         In Wolsey Ltd. v. Foodmaker, Inc., the Ninth Circuit addressed application of Section 1281.2(c) in similar circumstances and expressly rejected the same argument set forth by Plaintiffs; specifically, that Section 1281.2(c) supplants the FAA based only on a “general choice-of-law clause” stating that the contract “shall be interpreted and construed under the laws of the State of California.” See Wolsey Ltd. v. Foodmaker, Inc., 144 F.3d 1205, 1209-13 (9th Cir. 1998) (holding that “the district court erred in applying . . . § 1281.2(c) to deny [defendant’s] motion to compel arbitration” pursuant to the FAA because “general choice-of-law clauses do not incorporate state rules that govern the allocation of authority between courts and arbitrators”) (citing Mastrobuono, 514 U.S. at 63-64 (holding that a general choice-of-law provision does not override the default application of the FAA)); see also Chiron, 207 F.3d at 1131 (rejecting argument that general choice-of-law provision incorporated state law rules for arbitration) (citing Wolsey and Mastrobuono); Sovak, 280 F.3d at 1270 (noting that “a general choice-of-law clause within an arbitration provision does not trump the presumption that the FAA supplies the rules for arbitration, ” and interpreting such a clause “as simply supplying state substantive, decisional law, and not state law rules for arbitration”).

         District courts in this circuit have relied on Wolsey in concluding that a general choice-of-law provision does not incorporate California procedural rules governing arbitration and specifically, Section 1281.2(c). See e.g., Diamond Foods, Inc. v. Hottrix, LLC, No. 14-cv-03162-BLF, 2018 WL 3008562, at *6 (N.D. Cal. June 15, 2018) (finding Wolsey “directly on point with respect to the applicability of [Section] 1281.2(c)”); Golden v. O’Melveny & Meyers LLP, No. CV 14-8725 CAS, 2016 WL 4168853, at *13 (C.D. Cal. Aug. 3, 2016) (same); Bitstamp Ltd. v. Ripple Labs Inc., No. 15-cv-01503-WHO, 2015 WL 4692418, at *3 (N.D. Cal. Aug. 6, 2015) (“A boilerplate choice-of-law clause does not overcome the presumption that federal arbitration law applies”); BioMagic, Inc. v. Dutch Bros. Enters., LLC, 729 F.Supp.2d 1140, 1146 (C.D. Cal. 2010) (citing Wolsey and Mastrobuono and holding that “a general choice of law clause, without more, does not show that the parties intended to incorporate state procedural rules on arbitration”). Based on the plain terms of the Agreement and the federal caselaw on this issue, the Agreement’s choice-of-law provision does not evince an intent to incorporate California rules governing arbitration such that Section 1281.2(c) supplants application of the FAA.

         Plaintiffs’ citation to Volt Info. Servs., Inc. v. Bd. of Trs. of Lelland Stanford Jr. Univ.,489 U.S. 468 (1989) does not counsel a different result. In Volt, the United States Supreme Court reviewed a California Court of Appeal decision in which the appellate court held that Section 1281.2(c) applied to stay arbitration based on a choice-of-law provision in the parties’ agreement “specifying that their contract would be governed by ‘the law of the place where the project is located, ’” which was California. 489 U.S. at 471-72. The appellate court found that the choice-of-law provision evinced the parties’ agreement to “incorporate[ ] the ...


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