Elliot Kreitenberg et al vs Lyft Inc et al

Case Number

23CV04345

Case Type

Hearing Date / Time

Mon, 04/29/2024 - 10:00

Nature of Proceedings

CMC; Motion: Stay

Tentative Ruling

Elliot Kreitenberg, et al. v. Lyft Inc., et al.       

Case No. 23CV04345  

Hearing Date: April 29, 2024                                      

HEARING:              Defendant Lyft Inc’s Motion to Compel Arbitration and Stay Proceedings

ATTORNEYS:        For Plaintiffs Elliot Kreitenberg, Brad Brandenburg, and Katelyn Rumbolz: John C. Carpenter and Alina S. Vulic

                                    For Defendant Lyft, Inc.: Megumi Horiuchi and Elmira Danielyan

                                    For Defendant Bertin Solis: No appearance

                                                           

TENTATIVE RULING:

Defendants’ Motion to Compel Arbitration is granted.  This action is ordered stayed pending the completion of arbitration.

Background:

This action commenced on October 3, 2023, by the filing of the Judicial Council Form Complaint by plaintiffs Elliot Kreitenberg, Katelyn Rumbolz, and Brad Brandenburg against defendant Lyft, Inc. alleging negligence as the result of a motor vehicle accident. Plaintiffs allege that on July 17, 2022, the Lyft driver, name unknown at the time of filing the original complaint, ran a red light at the intersection of E. Victoria Street and Santa Barbara Street, in Santa Barbara, and collided with another vehicle. The complaint alleges physical, mental, and emotional injuries to plaintiffs.

On February 20, 2024, driver Bertin Solis was substituted into the case in place of Doe 1.

Lyft now moves to compel arbitration against Lyft, and stay the proceedings pending the completion of arbitration, based on arbitration agreements between Lyft and plaintiffs.

Plaintiffs oppose the motion.

Analysis:

As an initial matter: Lyft cites to and provides copies of multiple opinions of other trial courts as well as unpublished cases. Another trial court’s statements or rulings . . . in an unrelated case have no bearing or precedential value to the present matter. (See Santa Ana Hospital Medical Center v. Belshe (1997) 56 Cal.App.4th 819, 831.) “Except as provided in (b), an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.” (Cal. Rules of Court, rule 8.1115(a).) The court will disregard any improperly cited authorities. This does not preclude the court from considering the persuasive authority of unpublished federal cases. “Although we may not rely on unpublished California cases, the California Rules of Court do not prohibit citation to unpublished federal cases, which may properly be cited as persuasive, although not binding, authority.” (Landmark Screens, LLC v. Morgan, Lewis & Bockius, LLP (2010) 183 Cal.App.4th 238, 251, fn. 6.)

            Existence of Valid Arbitration Agreements

“California law, like federal law, favors enforcement of valid arbitration agreements.” (Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 97.)

“Under both federal and California state law, arbitration is a matter of contract between the parties.” (Badie v. Bank of America (1998) 67 Cal.App.4th 779, 787.)

Arbitration agreements are valid and enforceable under both California and Federal Law. “A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract.” (Code Civ. Proc., § 1281.)

“General principles of contract law determine whether the parties have entered a binding agreement to arbitrate.” (Craig v. Brown & Root, Inc. (2000) 84 Cal.App.4th 416, 420.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

The preliminary question that must be addressed is the existence of the arbitration agreement.

Lyft has provided admissible evidence that their December 9, 2020 Terms of Service were in effect at the time of the July 17, 2022 incident. (McCachern Dec., ¶ 20.) Brandenburg accepted those Terms of Service on February 20, 2021, Kreitenberg accepted them on March 8, 2021, and Rumbolz accepted them on January 28, 2021. (Ibid.)

“ ‘A ‘ “browsewrap” ’ agreement is one in which an internet user accepts a website’s terms of use merely by browsing the site. A ‘ “clickwrap” ’ agreement is one in which an internet user accepts a website’s terms of use by clicking an ‘ “I agree” ’ or ‘ “I accept” ’ button, with a link to the agreement readily available. A ‘ “scrollwrap” ’ agreement is like a ‘ “clickwrap,” ’ but the user is presented with the entire agreement and must physically scroll to the bottom of it to find the ‘ “I agree” ’ or ‘ “I accept” ’ button. . . . ‘ “Sign-in-wrap” ’ agreements are those in which a user signs up to use an internet product or service, and the sign-up screen states that acceptance of a separate agreement is required before the user can access the service. While a link to the separate agreement is provided, users are not required to indicate that they have read the agreement’s terms before signing up.’ ” [Citations.] Instead, “ ‘the website is designed so that a user is notified of the existence and applicability of the site’s ‘ “terms of use” ' [usually by a textual notice] when proceeding through the website’s sign-in or login process.’ ” [Citation.]” (Sellers v. JustAnswer LLC (2021) 73 Cal.App.5th 444, 463-464 (Sellers).)

The Terms of Service applicable here appear to be a “scrollwrap” agreement. “When Plaintiffs accepted the operative December 9, 2020, Terms of Service, Plaintiffs (like all users) were presented directly on the screen of their Lyft App with the full text of those Terms of Service, including the arbitration provision. The Lyft App directed Plaintiffs to scroll through and read the entire Lyft Terms of Service at this time. At the bottom of the screen, immediately under the full text of the Lyft Terms of Service, the Lyft App presented Plaintiffs with a button that they were required to click to demonstrate their consent and agreement, respectively, to be bound by the Terms of Service and to proceed with use of the Lyft App. The process was the same for Plaintiff Brandenburg’s subsequent consent to the December 12, 2022, Lyft Terms of Service on February 11, 2023, and Plaintiff Rumbolz’s subsequent consent to the December 12, 2022, Lyft Terms of Service on January 15, 2023.” (McCachern Dec., ¶ 21.)

“The “ ‘wrap’ ” methods of online contract-formation provide varying degrees of notice to users, with browsewrap providing the least and scrollwrap providing the most.  [Citation.] Our court recognized in Sellers that California “ ‘and federal courts have reached consistent conclusions when evaluating the enforceability of agreements at either end of the spectrum, generally finding scrollwrap and clickwrap agreements to be enforceable and browsewrap agreements to be unenforceable.’ ” [Citation.]” (B.D. v. Blizzard Entertainment, Inc. (2022) 76 Cal.App.5th 931, 946.)

Relevant portions of the Terms of Service, that were in effect at the time of the motor vehicle collision, include:

“PLEASE BE ADVISED: THIS AGREEMENT CONTAINS PROVISIONS THAT GOVERN HOW CLAIMS BETWEEN YOU AND LYFT CAN BE BROUGHT (SEE SECTlON 17 BELOW). THESE PROVISIONS WILL, WITH LIMITED EXCEPTION, REQUIRE YOU TO SUBMIT CLAIMS YOU HAVE AGAINST LYFT TO BINDING AND FINAL ARBITRATION ON AN INDIVIDUAL BASIS, NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY CLASS, GROUP OR REPRESENTATIVE ACTION OR PROCEEDING. AS A DRIVER OR DRIVER APPLICANT, YOU HAVE AN OPPORTUNITY TO OPT OUT OF ARBITRATION WITH RESPECT TO CERTAIN CLAIMS AS PROVIDED IN SECTION 17.” (Exh. 7, p. 1.)

“17. DISPUTE RESOLUTIION AND ARBITRATION AGREEMENT

“(a) Agreement to Binding Arbitration Between You and Lyft.

YOU AND LYFT MUTUALLY AGREE TO WAIVE OUR RESPECTIVE RIGHTS TO RESOLUTION OF DISPUTES IN A COURT OF LAW BY A JUDGE OR JURY AND AGREE TO RESOLVE ANY DISPUTE BY ARBITRATION, as set forth below. This agreement to arbitrate (‘Arbitration Agreement’) is governed by the Federal Arbitration Act (‘FAA’); but if the FAA is inapplicable for any reason, then this Arbitration Agreement is governed by the laws of the State of Delaware, including Del. Code tit. 10, § 5701 et seq., without regard to choice of law principles. This Arbitration Agreement survives after the Agreement terminates or your relationship with Lyft ends. ANY ARBITRATION UNDER THIS AGREEMENT WILL TAKE PLACE ON AN INDIVIDUAL BASIS; CLASS ARBITRATIONS AND CLASS ACTIONS ARE NOT PERMITTED. Except as expressly provided below, this Arbitration Agreement applies to all Claims (defined below) between you and Lyft, including our affiliates, subsidiaries, parents, successors and assigns, and each of our respective officers, directors, employees, agents, or shareholders. This Arbitration Agreement also applies to claims between you and Lyft's service providers, including but not limited to background check providers and payment processors; and such service providers shall be considered intended third-party beneficiaries of this Arbitration Agreement.

“Except as expressly provided below, ALL DISPUTES AND CLAIMS BETWEEN US (EACH A ‘CLAIM’ AND COLLECTIVELY, ‘CLAIMS’) SHALL BE EXCLUSIVELY RESOLVED BY BINDING ARBITRATION SOLELY BETWEEN YOU AND LYFT. These Claims include, but are not limited to, any dispute, claim or controversy, whether based on past, present, or future events, arising out of or relating to: this Agreement and prior versions thereof (including the breach, termination, enforcement, interpretation or validity thereof), the Lyft Platform, the Rideshare Services, rental or use of bikes or scooters through the Lyft Platform, Lyft promotions, gift card, referrals or loyalty programs, any other goods or services made available through the Lyft Platform, your relationship with Lyft, the threatened or actual suspension, deactivation or termination of your User Account or this Agreement, background checks performed by or on Lyft's behalf, payments made by you or any payments made or allegedly owed to you, any promotions or offers made by Lyft, any city, county, state or federal wage-hour law, trade secrets, unfair competition, compensation, breaks and rest periods, expense reimbursement, wrongful termination, discrimination, harassment, retaliation, fraud, defamation, emotional distress, breach of any express or implied contract or covenant, claims arising under federal or state consumer protection laws; claims arising under antitrust laws, claims arising under the Telephone Consumer Protection Act and Fair Credit Reporting Act; and claims arising under the Uniform Trade Secrets Act, Civil Rights Act of 1964, Americans With Disabilities Act, Age Discrimination in Employment Act, Older Workers Benefit Protection Act, Family Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income Security Act of 1974 (except for individual claims for employee benefits under any benefit plan sponsored by Lyft and covered by the Employee Retirement Income Security Act of 1974 or funded by insurance), and state statutes, if any, addressing the same or similar subject matters, and all other federal and state statutory and common law claims. All disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement) shall be decided by the arbitrator, except as expressly provided below.

“BY AGREEING TO ARBITRATION, YOU UNDERSTAND THAT YOU AND LYFT ARE WAIVING THE RIGHT TO SUE IN COURT OR HAVE A JURY TRIAL FOR ALL CLAIMS, EXCEPT AS EXPRESSLY OTHERWISE PROVIDED IN THIS ARBITRATION AGREEMENT. This Arbitration Agreement is intended to require arbitration of every claim or dispute that can lawfully be arbitrated, except for those claims and disputes which by the terms of this Arbitration Agreement are expressly excluded from the requirement to arbitrate.” (Exh. 7, pp. 16-17.)

None of the three plaintiffs deny clicking the “I agree” button when presented to Lyft’s Terms of Service, or even agreeing to the Terms of Service, including the arbitration agreement. Rather, each of them has submitted a substantially identical declaration stating that they do not recall providing assent to arbitrate. Not recalling accepting the Terms of Service does not invalidate them. “Of course the mere fact that a contract term is not read or understood by the non-drafting party or that the drafting party occupies a superior bargaining position will not authorize a court to refuse to enforce the contract.” (A & M Produce Co. v. FMC Corp. (1982) 135 Cal.App.3d 473, 486.) “An arbitration clause within a contract may be binding on a party even if the party never actually read the clause.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012), supra, at p. 236.)

Lyft has met its burden of demonstrating the existence of a valid arbitration agreement with all three plaintiffs with respect to the Terms of Service as they existed on the day of the incident. The court does not find any post-incident consent, or lack thereof, relevant in deciding the present motion.

“The party seeking arbitration bears the initial burden of demonstrating the existence of an arbitration agreement. Once the moving party has satisfied its burden, the litigant opposing arbitration must demonstrate grounds which require that the agreement to arbitration not be enforced.” (Harris v. TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 380-381.)

As defendants have met their burden of demonstrating the existence of the agreement, the burden now shifts to plaintiff to demonstrate grounds which require that the agreement not be enforced.

            Delegation Clause

As set forth above, the arbitration agreement contains a delegation clause that provides: “All disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement) shall be decided by the arbitrator, except as expressly provided below.”

“[W]hen a party is claiming that an arbitration agreement is unenforceable, it is important to determine whether the party is making a specific challenge to the enforceability of the delegation clause or is simply arguing that the agreement as a whole is unenforceable. If the party’s challenge is directed to the agreement as a whole - - even if it applies equally to the delegation clause - - the delegation clause is severed out and enforced; thus, the arbitrator, not the court, will determine whether the agreement is enforceable. In contrast, if the party is making a specific challenge to the delegation clause, the court must determine whether the delegation clause itself may be enforced (and can only delegate the general issue of enforceability to the arbitrator if it first determines the delegation clause is enforceable). [Citation.]” (Malone v. Superior Court 92014) 226 Cal.App.4th 1551, 1559-1560.)

“The usual presumption is that a court, not an arbitrator, will decide in the first instance whether a dispute is arbitrable. [Citations.] The parties may agree to delegate authority to the arbitrator to decide arbitrability, but given the contrary presumption, evidence that the parties intended such a delegation must be “ ‘ “clear and unmistakable” ’ ” before a court will enforce a delegation provision. [Citations.]” (Gostev v. Skillz Platform, Inc. (2023) 88 Cal.App.5th 1035, 1048.)

Here, the delegation clause is clear and unmistakable. The parties all agreed that the arbitrator will decide disputes regarding arbitrability. Plaintiffs’ argument that the delegation clause is unenforceable is vague, conclusory, and lacking legal authority supporting the argument. Plaintiffs have not met their burden of showing that the delegation clause is unenforceable.

“[I]f the parties did form an agreement to arbitrate containing an enforceable delegation clause, all arguments going to the scope or enforceability of the arbitration provision are for the arbitrator to decide in the first instance.” (Caremark, LLC v. Chickasaw Nation (2022) 43 F.4th 1021, 1030.)

The issue of unconscionability as to the remainder of the arbitration agreement is, as agreed, to be decided by the arbitrator. The parties will be ordered to submit the matter to arbitration pursuant to the agreement. The matter, including the claims against Solis, will be stayed pending the completion of arbitration.