Ashirwad v. Charter Communications, LLC

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JAGATH ASHIRWAD, an individual; Case No.: 21-cv-02101-AJB-DDL FERAIDOON ATHARI, an individual; 12 JAMES HOGAN, an individual; ERIC ORDER GRANTING DEFENDANTS’ 13 LOPEZ, an individual; JEREMIAH MOTION TO COMPEL MARCHESANO, an individual; ARBITRATION AS TO PLAINTIFFS 14 OSCAR MARTINEZ, an individual; JAGATH ASHIRWAD, ERIC LOPEZ, 15 EDWARD MOORE, an individual; and AND JEREMIAH MARCHESANO DAVID SHERVEY, an individual, 16 (Doc. No. 19) 17 Plaintiffs, 18 v. 19 CHARTER COMMUNICATIONS, 20 LLC, a Delaware Limited Liability Company; CHARTER 21 COMMUNICATIONS, INC., a 22 Delaware Corporation; and DOES 1 through 25, inclusive, 23

24 Defendants.

25 Before the Court is Defendants Charter Communications, LLC and Charter 26 Communications, Inc.’s (collectively, “Charter” or “Defendants”) motion to compel 27 arbitration as to Plaintiffs Jagath Ashirwad (“Ashirwad”), Eric Lopez (“Lopez”), and 28 1 Jeremiah Marchesano (“Marchesano”) (collectively, “Plaintiffs”). (Doc. Nos. 24, 26.) 2 Plaintiffs filed a response,1 to which Defendants replied. For the following reasons, the 3 Court GRANTS Defendants’ motion. (Doc. No. 19.) 4 I. BACKGROUND 5 Charter is a telecommunications company that employed Plaintiffs as sales 6 representatives in California. Ashirwad worked for Charter from 2009 until 2021, Lopez 7 from 2011 to 2018, and Marchesano from 2012 to 2017. 8 In October 2017, Charter announced to its employees that it would begin using a 9 dispute resolution program called Solution Channel to resolve employment-based legal 10 disputes. Charter made this announcement via an email that Charter’s Executive Vice 11 President of Human Resources, Paul Marchand, sent to all Charter employees’ email 12 accounts on October 6, 2017. The email announcement stated: 13 By participating in Solution Channel, you and Charter both waive the right to initiate or participate in court litigation (including class, collective and 14 representative actions) involving a covered claim and/or the right to a jury 15 trial involving any such claim. More detailed information about Solution Channel is located on Panorama. Unless you opt out of participating in 16 Solution Channel within the next 30 days, you will be enrolled. Instructions 17 for opting out of Solution Channel are also located on Panorama.

18 (Doc. No. 19-3 at 3 (italics in original).) 19 The email also contained a link to the Solution Channel webpage, which included a 20 reference and link to Charter’s Mutual Arbitration Agreement (“MAA”) and the Solution 21 Channel Program Guidelines. (Doc. Nos. 19-2 at 3; 19-4; 19-5.) The Solution Channel 22 webpage included instructions on how to opt out of the program and warned employees 23 that they would be automatically enrolled and considered to have consented to the MAA if 24 25 1 In challenging Defendants’ motion to compel, Plaintiffs filed a separate statement of objections in 26 violation of this Court’s chambers rules. (Doc. No. 29.) See Battaglia Civ. Case. Proc. § II.A (“Objections relating to the motion should be set forth in the parties opposition or reply. No separate statement of 27 objections will be allowed.”) (emphasis in original). The Court issued a Notice of Discrepancy, informing Plaintiffs of the violation and striking the objection from the record. (Id.) Plaintiffs chose not to seek 28 1 they did not opt out within designated time. (Doc. Nos. 19-2 at 3–4.) The opt-out instruction 2 included a link that routed to an opt-out webpage where an employee could enter their 3 name, check a box stating, “I want to opt out of Solution Channel[,]” and save their 4 selection. (Doc. No. 19-6 at 2.). Employees also had the ability to print the page for their 5 personal records. (Id.) 6 Plaintiffs (along with five others who opted out of the Solution Channel) filed a wage 7 and hour Complaint against Charter in San Diego County Superior Court. Charter 8 thereafter removed the case to federal court. Before the Court is Charter’s motion to compel 9 arbitration as to Plaintiffs Ashirwad, Lopez, and Marchesano only. This Order follows. 10 II. LEGAL STANDARD 11 The Federal Arbitration Act (“FAA”), 9 U.S.C. § 1 et seq., governs the enforcement 12 of arbitration agreements involving commerce. See Am. Express Co. v. Italian Colors Rest., 13 570 U.S. 228, 232–33 (2013).2 The Supreme Court has enunciated a “liberal federal policy 14 favoring arbitration.” AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339, 344 (2011) 15 (“The overarching purpose of the FAA . . . is to ensure the enforcement of arbitration 16 agreements according to their terms so as to facilitate streamlined proceedings.”). “The 17 FAA ‘leaves no place for the exercise of discretion by the district court, but instead 18 mandates that district courts shall direct the parties to proceed to arbitration on issues as to 19 which an arbitration agreement has been signed.’” Kilgore v. KeyBank, Nat. Ass’n, 718 20 F.3d 1052, 1058 (9th Cir. 2013) (quoting Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 21 218 (1985)) (emphasis in original). Accordingly, the court’s role under the FAA is to 22 determine “(1) whether a valid agreement to arbitrate exists, and if it does, (2) whether the 23 agreement encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 24 207 F.3d 1126, 1130 (9th Cir. 2000). 25 The party seeking to compel arbitration “has the burden of proving the existence of 26 an agreement to arbitrate by a preponderance of the evidence.” Knutson v. Sirius XM Radio 27 2 Unless otherwise indicated, all internal citations, quotations, and alterations are omitted from the 28 1 Inc., 771 F.3d 559, 565 (9th Cir. 2014). Arbitration is a matter of contract, and a party 2 “cannot be required to submit to arbitration any dispute which he has not agreed so to 3 submit.” Tracer Research Corp. v. Nat’l Envtl. Servs. Co., 42 F.3d 1292, 1294 (9th Cir. 4 1994) (citation omitted). 5 The FAA provides that arbitration agreements are unenforceable “upon such 6 grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. District 7 courts apply state law principles of contract formation and interpretation in determining 8 which contracts are binding and enforceable under the FAA, if that law governs the 9 validity, revocability, and enforceability of contracts generally. See Arthur Anderson LLP 10 v. Carlisle, 556 U.S. 624, 630–31 (2009); see also Wolsey, Ltd. v. Foodmaker, Inc., 144 11 F.3d 1205, 1210 (9th Cir. 1998). “Thus, generally applicable contract defenses, such as 12 fraud, duress, or unconscionability, may be applied to invalidate arbitration agreements 13 without contravening” federal law. Doctor’s Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 14 (1996). However, courts are directed to resolve any “ambiguities as to the scope of the 15 arbitration clause itself . . . in favor of arbitration.” Volt Info. Sciences, Inc. v. Bd. of 16 Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 476 (1989). 17 III. DISCUSSION 18 Defendants argue that Plaintiffs entered into an enforceable arbitration agreement 19 with Charter, and that the agreement covers the disputes at issue here. (Doc. No. 19-1 at 20 8.) Defendants therefore ask the Court to enforce the agreement and compel Plaintiffs to 21 arbitrate their claims. (Id.) Plaintiffs contend that Defendants have waived their right to 22 compel arbitration, that Defendants have not shown that Plaintiffs assented to the 23 agreement, and that the agreement is unenforceable because it is unconscionable. (Doc. 24 No. 24 at 5.) The Court discusses these arguments in turn. 25 A. Defendants Did Not Waive Their Right to Arbitration 26 “The right to arbitration, like other contractual rights, can be waived.” Martin v. 27 Yasuda, 829 F.3d 1118, 1124 (9th Cir. 2016). The Ninth Circuit has noted, however, that 28 “any examination of whether the right to compel arbitration has been waived must be 1 conducted in light of the strong federal policy favoring enforcement of arbitration 2 agreements.” Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1125 (9th Cir. 2008). 3 “Because waiver of the right to arbitration is disfavored, any party arguing waiver of 4 arbitration bears a heavy burden of proof.” Martin, 829 F.3d at 1124; accord St. Agnes 5 Med. Ctr. v. PacifiCare of California, 31 Cal. 4th 1187, 1195 (2003) (“Our [California] 6 state waiver rules are in accord. State law, like the FAA, reflects a strong policy favoring 7 arbitration agreements and requires close judicial scrutiny of waiver claims.”). 8 In Cox, the Ninth Circuit relied on California Supreme Court precedent to determine 9 whether arbitration has been waived. Cox, 533 F.3d at 1124 (citing St. Agnes, 31 Cal.4th 10 at 1196). To determine waiver in such cases, the court considers the following factors: 11 (1) whether the party’s actions are inconsistent with the right to arbitrate; (2) whether the litigation machinery has been substantially invoked and the 12 parties were well into preparation of a lawsuit before the party notified the 13 opposing party of an intent to arbitrate; (3) whether a party either requested arbitration enforcement close to the trial date or delayed for a long period 14 before seeking a stay; (4) whether a defendant seeking arbitration filed a 15 counterclaim without asking for a stay of the proceedings; (5) whether important intervening steps [e.g., taking advantage of judicial discovery 16 procedures not available in arbitration] had taken place; and (6) whether the 17 delay affected, misled, or prejudiced the opposing party.

18 Id. 19 In Plaintiffs’ view, Defendants acted inconsistently with the right to arbitrate 20 because they waited more than 8 months after the lawsuit was filed to compel arbitration, 21 filed an Answer, removed this case to federal court, served initial disclosures, participated 22 in case management conferences, and agreed to amending the scheduling orders in this 23 case. (Doc. No. 24 at 12.) The Court disagrees. 24 Applying the factors relied on in Cox, the Court does not find that any of them 25 support a finding of waiver in this case. To begin, Defendants’ actions were not 26 inconsistent with the right to arbitration. Removal to federal court does not generally evince 27 abandonment of arbitration rights. See Paxton v. Macy’s W. Stores, Inc., No. 28 118CV00132LJOSKO, 2018 WL 4297763, at *11 (E.D. Cal. Sept. 7, 2018). And although 1 Defendants did not file their motion to compel arbitration until 8 months after being served 2 with the Complaint, they raised the arbitration agreement as an affirmative defense in their 3 Answer to Plaintiffs’ Complaint. (Doc. No. 2 at 6.) Defendants thus promptly raised and 4 notified Plaintiffs of their right to demand arbitration. 5 As to Defendants’ exchange of initial disclosures, attendance in case management 6 conferences, and cooperation with Plaintiffs regarding scheduling matters, the Court also 7 does not find these acts inconsistent with the right to arbitrate. Defendants were obliged, 8 under the Local Rules, to proceed with the litigation process because of the five other 9 plaintiffs in this action who are not subject to the Solution Channel. Defendants also 10 submitted their counsel’s declaration, attesting to the following: 11 From the beginning of this lawsuit, Charter has consistently asserted it right to arbitration – in its answer, in the parties’ joint Rule 26(f) report, in its 12 confidential ENE brief, and at case scheduling conferences – and notified 13 Plaintiffs of its intent to move to compel early in the case if they would not stipulate to arbitration. 14

15 (Doc. No. 26-1 at 3.) Defendants have also “objected to responding to discovery or 16 producing documents regarding Ashirwad, Lopez, and Marchesano, and has only 17 responded and produced documents as to the five other plaintiffs who opted out of Solution 18 Channel.” (Id.) 19 Under these circumstances—where Defendants raised its right to arbitration in their 20 Answer and again in subsequent communications to Plaintiffs, engaged in other litigation 21 procedure only insofar as it was obligated to because of other plaintiffs who are not subject 22 to the arbitration agreement, and filed a motion to compel arbitration without seeking any 23 other relief on the merits—the Court finds Defendants have not undertaken acts 24 inconsistent with the right to arbitrate. 25 The Court also finds the remaining factors weigh in favor of finding that Defendants 26 have not waived their right to arbitrate. Factors 2 through 5, “which have to do with the 27 invocation of the litigation machinery and it use,” Cox, 533 F.3d at 1126, militate in favor 28 of Defendants because, as previously discussed, they promptly notified Plaintiffs of their 1 intent to compel arbitration and did not seek adjudication of the merits of the case prior to 2 filing the instant motion. Defendants also do not seek arbitration close to the trial date. 3 Indeed, no trial date is yet set. And to the extent Defendants have participated in discovery, 4 it has been limited to the other plaintiffs who are not subject to arbitration. For these same 5 reasons, the Court also finds Plaintiffs have not been prejudiced by the timing of 6 Defendants’ motion to compel. 7 Accordingly, upon consideration of the foregoing factors, the Court finds that 8 Defendants have not waived their right to enforce the arbitration agreement. 9 B. There Exists an Arbitration Agreement Between Plaintiffs and Defendants 10 Next, Plaintiffs assert that Defendants have not shown that Plaintiffs consented to 11 the arbitration agreement. Mutual consent is a necessary element to contract formation. 12 Cal. Civ. Code § 1550. Consent to an arbitration agreement can be express or implied in 13 fact. Craig v. Brown & Root, Inc., 84 Cal. App. 4th 416, 420 (2000). 14 Defendants argue that as to Ashirwad and Marchesano, they expressly consented to 15 binding arbitration when they submitted applications for other Charter positions. (Doc. No. 16 19-1 at 18–19.) In support, Defendants filed the Charter applications Ashirwad and 17 Marchesano submitted, which shows that they both affirmatively agreed to be bound to the 18 MAA. (Doc. Nos. 19-2 at 5–7; 19-14; 19-15.) Plaintiffs did not dispute these points in their 19 opposition, and thus, the Court deems the issue waived. See Jenkins v. Cnty. of Riverside, 20 398 F.3d 1093, 1095 n.3 (9th Cir. 2005) (holding that plaintiff “abandoned her other two 21 claims by not raising them in opposition to the [defendant]’s motion for summary 22 judgment”); Larson-Valentine v. Travelers Com. Ins. Co., No. 19-CV-1209-GPC-AGS, 23 2019 WL 3766562, at *1 (S.D. Cal. Aug. 9, 2019) (“Plaintiff did not file an opposition. 24 Therefore, Plaintiff’s failure to oppose constitutes a waiver or abandonment of the issues 25 raised in Defendant’s motion.”). There being no dispute that Ashirwad and Marchesano 26 expressly agreed to the MAA in their job applications, the Court finds mutual consent to 27 the MAA established here. 28 1 The remaining question then is whether Lopez also consented to the arbitration 2 agreement. Defendants argue that Lopez impliedly consented to the Solution Channel and 3 the MAA because he received the email announcement of the program but did not opt out 4 of the program within the specified time.3 (Doc. No. 19-1 at 15–18.) Plaintiffs contend that 5 the email announcement did not sufficiently incorporate by reference the MAA, and thus, 6 cannot be the basis for a valid contract. (Doc. No. 24 at 14.) In support, Plaintiffs cite Avery 7 v. Integrated Healthcare Holdings, Inc., which provides that for the terms of another 8 document to be incorporated into the one executed by the parties, “the reference must be 9 clear and unequivocal, the reference must be called to the attention of the other party and 10 he must consent thereto, and the terms of the incorporated document must be known or 11 easily available to the contracting parties.” 218 Cal. App. 4th 50, 66 (2013). 12 Application of Avery, however, guides the Court to find the MAA sufficiently 13 incorporated into the email announcement. First, the email announcement clearly and 14 unequivocally referenced the Solution Channel program. (Doc. No. 19-3 at 3.) It stated: 15 “In the unlikely event of a dispute not resolved through the normal channels, Charter has 16 launched Solution Channel, a program that allows you and the company to efficiently 17 resolve covered employment-related legal disputes through binding arbitration.” (Id. 18 (italics in original).) The program’s name stands out in the announcement, and its purpose 19 is plainly described. (Id.) 20 Second, the email called out the reference to the attention of the employees by 21 placing the program name in italics and clearly stating the consequence of failing to opt 22 out of the program within the deadline. (Id.) The announcement explained: “By 23 participating in Solution Channel, you and Charter both waive the right to initiate or 24 participate in court litigation (including class, collective and representative actions) 25 involving a covered claim and/or the right to a jury trial involving any such claim.” (Id.) 26

27 3 Defendants also argue that Ashirwad impliedly consented to the MAA on this basis. Although unnecessary, the Court nonetheless finds the analysis and findings in this section similarly applies to 28 1 The email also expressly warned that “[u]nless you opt out of participating in Solution 2 Channel within the next 30 days, you will be enrolled.” (Id.) During the 30-day opt-out 3 period, the Solution Channel webpage included instruction for opting out. (Doc. Nos. 19-2 4 at 4; 19-6 at 2.) 5 Third, the email contained a hyperlink to the Solution Channel webpage, which 6 included a reference and link to the MAA and Program Guidelines under the heading “Key 7 Documents”. (Doc. No. 19-4 at 3.) The email also informed employees that more details 8 and information about the program could be found in the hyperlinked webpage. (Doc. No. 9 19-1 at 3.) Because employees could access the additional information by simply clicking 10 links in the email and corresponding website, the Court finds the terms of the MAA “was 11 easily available to the contracting parties.” Avery, 218 Cal. App. 4th at 66. See also Fteja 12 v. Facebook, Inc., 841 F. Supp. 2d 829, 839 (S.D.N.Y. 2012) (describing hyperlinks as “the 13 twenty-first century equivalent of turning over” a document). 14 Plaintiffs’ argument that the email announcement does not sufficiently incorporate 15 the MAA because it does not contain the words “Mutual Arbitration Agreement” or 16 “MAA” is unavailing. (Doc. No. 24 at 14.) “The contract need not recite that it incorporates 17 another document, so long as it guides the reader to the incorporated document.” Avery, 18 218 Cal. App. 4th at 66. The Court finds, for the reasons outlined above, the email 19 adequately guides the reader to the MAA. See generally Johnmohammadi v. 20 Bloomingdale’s, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014) (enforcing arbitration where 21 agreement was in “a set of documents describing the company’s dispute resolution 22 program”). 23 Because Lopez did not opt out within the designated time, the Court finds—as other 24 courts reviewing this very email announcement and program have found—that he 25 impliedly consented to the Solution Channel and MAA. See Prizler v. Charter Commc’ns, 26 LLC, No. 3:18-CV-1724-L-MSB, 2019 WL 2269974, at *3 (S.D. Cal. May 28, 2019); 27 Harper v. Charter Commc’ns, LLC, No. 219CV01749WBSDMC, 2019 WL 6918280, at 28 *4 (E.D. Cal. Dec. 19, 2019). C. Whether the Agreement is Unconscionable is for the Arbitrator to Decide 2 Finally, Plaintiffs argue that the arbitration agreement is unenforceable because it is 3 || unconscionable. While Plaintiffs set forth arguments regarding the unconscionability of the 4 ||arbitration agreement, none are specific to the MAA’s delegation provision, which as 5 ||Defendants pointed out in their opening brief, requires that “all disputes related to the 6 || arbitrability of any claim or controversy” be submitted to arbitration. (Doc. No. 19-5 at 2.) 7 || As the MAA “clearly and unmistakably delegates arbitrability questions to the arbitrator, 8 only remaining question is whether the particular agreement to delegate arbitrability— 9 ||the Delegation Provision—is itself unconscionable.” Brennan v. Opus Bank, 796 F.3d 10 |} 1125, 1132 (9th Cir. 2015). Because Plaintiffs failed to “make any arguments specific to 11 |/the delegation provision, and instead argued that the [Arbitration Agreements] as a whole 12 ||[are] unconscionable, [the Court] need not consider that claim, because it is for the 13 |/arbitrator to decide in light of the parties’ clear and unmistakable delegation of that 14 || question.” /d. at 1133. Indeed, Plaintiffs failed to challenge Defendants’ invocation of the 15 || delegation provision, and thus, have appeared to concede the point. There being no dispute 16 || about the delegation provision, the Court finds the question of unconscionability is for the 17 || arbitrator to decide. 18 IV. CONCLUSION 19 For the reasons stated herein, the Court GRANTS Defendants’ motion to compel 20 || arbitration as to Plaintiffs Ashirwad, Lopez, and Marchesano. (Doc. No. 19.) Having found 21 ||there is a valid arbitration agreement that covers the disputes in their cases, the Court 22 ||STAYS this action, pursuant to 9 U.S.C. § 3, as to Plaintiffs Ashirwad, Lopez, and 23 || Marchesano only. The parties are ORDERED to provide this Court with a status report of 24 || the arbitration progress every 90 days from the date of this Order. 25 IT IS SO ORDERED. 26 || Dated: March 20, 2023 © 27 Hon, Anthony J.Battaglia 28 United States District Judge nm