1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 SAN JOSE DIVISION 7 MARIO AZEVEDA, 8 Case No. 5:19-cv-01225-EJD Plaintiff, 9 AMENDED ORDER DENYING v. MOTION TO REMAND; GRANTING 10 MOTION TO COMPEL ARBITRATION COMCAST CABLE COMMUNICATIONS 11 LLC, et al., Re: Dkt. Nos. 19, 20 12 Defendants.
13 Plaintiff moves for this case to be remanded claiming this Court lacks subject-matter 14 jurisdiction. Defendants separately move to compel arbitration and dismiss the putative class 15 action because Plaintiff agreed to arbitrate employment-related disputes with Defendants 16 individually. The Court finds this motion suitable for consideration without oral argument. See 17 N.D. Cal. Civ. L.R. 7-1(b). Having considered the Parties’ papers, the Court DENIES the motion 18 to remand and GRANTS the motion to compel arbitration. 19 I. BACKGROUND 20 A. Factual Background 21 On January 30, 2019, Mario Azeveda (“Plaintiff”) filed this putative class action in the 22 Santa Clara County Superior Court of the State of California asserting that Comcast Cable 23 Communications, LLC and Comcast Cable Communications Management, LLC (“Defendants”) 24 violated federal and state laws. Notice of Removal to Federal Court, Ex. 1 (“Compl.”), Dkt. 1. 25 Plaintiff worked for Defendants, in California, from February 2005 through May 2016. Id. ¶¶ 8, 26 23; Declaration of Lynn Collins (“Collins Decl.”) ¶ 5, Dkt. 19. 27 Case No.: 5:19-cv-01225-EJD 1 2 1. Claims 3 Plaintiff alleges violations of the Fair Credit Reporting Act (“FCRA”), which occurred 4 when Defendants obtained background checks for Plaintiff’s employment. He asserts analogous 5 California state law claims under Investigative Consumer Reporting Agencies Act (“ICRAA”), 6 Consumer Credit Reporting Agencies Act (“CCRAA”), and unfair competition law (“UCL”). 7 Plaintiff also included claims that Defendants failed to provide meal periods, rest periods, pay 8 hourly and overtime wages, accurate written wage statements, and timely pay all final wages. 9 Plaintiff claims that Defendants routinely acquired consumer, investigative, and credit 10 reports (i.e., credit and background reports) to conduct background checks on Plaintiff and other 11 prospective, current, and former employees. Compl. ¶ 2. Defendants then used information from 12 the reports in their hiring process without providing or obtaining proper disclosures/authorizations 13 in compliance with federal and state law. Id. 14 Plaintiff alleges two FCRA claims. First, that Defendants disclosures did not meet the 15 “clear and conspicuous” and “stand alone” writing requirement. Id. ¶¶ 48–63. Second, that 16 Defendants failed to give proper “summary of rights” as required by 15 U.S.C. § 1681d(a)(1) and 17 15 U.S.C. § 1681g(c). Id. ¶¶ 66–76. These violations caused Plaintiff to have his “privacy and 18 statutory rights invaded in violation of the FCRA.” Id. ¶¶ 62, 65. He seeks “all available 19 remedies” including “statutory damages and/or actual damages.” Id. ¶¶ 63, 65. Plaintiff then 20 alleges analogous violations of California privacy law and other labor laws, and contends he lost 21 “money or property” as a result of Defendants’ misconduct. Id. ¶ 181. 22 2. Arbitration Program 23 In September 2013, Defendants “rolled out” an alternative dispute resolution program 24 called “Comcast Solutions” to California region employees, including Plaintiff. Collins Decl. ¶ 3. 25 Comcast Solutions is designed to make it easier for employees to resolve legal claims. It specifies 26 a three-step procedure for resolving disputes between Comcast and its employees. Id., Ex. 1 at 2; 27 Case No.: 5:19-cv-01225-EJD 1 Ex. 2 at 4; Ex. 10 at 5. First, an internal “Comcast Solutions Lead” reviews the claim to determine 2 if it is a covered legal claim. Id., Ex. 2 at 4. Covered legal claims include “[m]ost claims that 3 assert a violation of law relating to [] employment.” Id., Ex. 3 at 3; see also id. (listing a non- 4 exhaustive list of covered claims). Claims, however, pertaining to the unauthorized use or 5 disclosure of confidential, trade secret or private information under statutory or common law are 6 not covered claims (under this 2013 agreement). Id. at 4. Comcast Solutions covers claims 7 brought against both Defendants. Id., Ex. 2 at 1. If it is a covered claim, the Comcast Solutions 8 lead will work with the employee and Comcast Cable representatives to develop a satisfactory 9 solution. Id., Ex. 2 at 4–5. 10 Second, if an employee is unsatisfied with the proposed solution, they may seek non- 11 binding mediation through an outside, professional dispute resolution organization, such as the 12 Judicial Arbitration and Mediation Services organization (“JAMS”) or the American Arbitration 13 Association (“AAA”). Id., Ex. 2 at 5. The employee does not have to pay any fees in connection 14 with mediation and both sides have input into selecting the mediator. Id., Ex. 3 at 3. 15 Finally, if the employee is still not satisfied, they may request a binding, two-day 16 arbitration hearing through JAMS or the AAA before a mutually selected arbitrator. Id., Ex. 2 at 17 6. The employee is required to pay (at most) a $150 arbitration initiation fee, which is refunded if 18 they prevail on any portion of their claim. Id., Ex. 2 at 7. 19 Comcast provided employees information about this program in both hard-copy and 20 electronic form and reminded employees about the opt-out deadline (see infra). Id., Ex. 5–8. 21 Plaintiff received these materials. See id., Ex. 6 (mailing form sent to Plaintiff by first-class mail); 22 Id., Ex. 7 (email sent to Plaintiff regarding program); Ex. 8 (electronic “read-receipt” indicating 23 receipt of program materials). Plaintiff did not opt out of the program; thus, he agreed to 24 participate in it. Id. ¶ 13; see also Supplemental Declaration of Lynn Collins (“Supp. Decl.”) ¶ 2, 25 Dkt. 29-1 (detailing the number of people that have opted out). 26 In late 2015, Comcast revised certain aspects of the program. Id., Ex. 11. These changes 27 Case No.: 5:19-cv-01225-EJD 1 were published on the internal employee website, which all employees can access. Among other 2 things, the change allowed employees more flexibility as it let them skip the first two steps before 3 pursuing arbitration. Id. It also removed the exception about excluding claims “for breach of data 4 privacy.” Id., Ex. 10 at 3. Employees were advised that if they wished to remain under the 2013 5 Program Terms, they should contact Comcast Solutions by phone or email. Id., Ex. 11 (“If you 6 need additional time to review the enclosed documentation and make your decision, no problem! 7 Just contact the Comcast Solutions Team . . . .”). Plaintiff did neither. Id. ¶ 16. 8 In January 2016, Comcast issued a revised Employee Handbook. Id. ¶ 17. Employees 9 were required to review the Handbook and related content concerning the 2015 Program changes. 10 Id. Employees were required to electronically acknowledge that they had read and understood the 11 changes. Id.; see also id., Ex. 12 at 2. Plaintiff acknowledged reading and understanding the 2016 12 Employee Handbook and 2015 Program changes. Id. ¶ 17. 13 The relevant terms of the agreement are as follows: 14 1. Class Action Waiver. The Comcast Solutions Program includes a class action waiver, 15 which, in the 2013 agreement, is set apart from the other text and bolded. It states
16 If you agree to participate in the program, both you and the company waive the right to bring a civil action or have a jury 17 trial for any covered legal claims. You also waive the right to bring or participate in a class action or collective or 18 representative action on covered legal claims. All covered claims will be handled through the three-step Comcast Solutions 19 process; both you and the company will be bound by the final decision of the arbitrator. 20 Id., Ex. 1 at 8; see also id., Ex. 2 at 7 (“As part of this Program . . . [you] waive the right 21 to . . . file, bring, or maintain any Claims covered by the Program on a class action basis, 22 collective action basis, or representative action basis.”); Id., Ex. 10 at 9. 23 2. Arbitrability. To the extent there is a question about whether an issue is arbitrable, the 24 Program specifies that the arbitrator will decide the issue. It states: 25 Any issue concerning arbitrability of a particular issue or claim 26 pursuant to the arbitration agreement . . . shall be resolved by the Arbitrator, not the court. 27 Case No.: 5:19-cv-01225-EJD 1 Id., Ex. 2 at 8. 2 3. Opt-Out. If an employee does not want to participate in Comcast Solutions, they can “opt 3 out” by submitting an Opt Out Request Form by a certain date (about five weeks after 4 notification of the program). Collins Decl. ¶¶ 7, 13, 16. 5 Before filing this motion, Defendants’ counsel sent an arbitration demand letter to 6 Plaintiff’s counsel describing Comcast Solutions and requesting Plaintiff honor his commitment to 7 arbitrate this dispute. Declaration of Daryl S. Landberg (“Landy Decl.”) ¶ 2, Ex. 13. The parties 8 met and conferred by phone, during which Plaintiff’s counsel expressed that Plaintiff was not 9 willing to arbitrate his claims because: (1) Comcast Solution’s three-step dispute resolution 10 process is substantively unconscionable; (2) Comcast Solutions does not encompass the FCRA 11 and related state law claims because the program excludes “[c]laims for . . . unauthorized use or 12 disclosure of confidential, trade secret or private information under statutory or common law;”1 13 and (3) Comcast Solutions’ provision that waives an employee’s right to bring a representative 14 action includes claims under the California Private Attorneys General (“PAGA”)2, rendering the 15 agreement substantively unconscionable. Id., Ex. 14; Arbitration Mot. at 8. 16 B. Procedural Background 17 On March 5, 2019, Defendants removed this action to federal court, invoking federal- 18 question jurisdiction over the FCRA claims and supplemental jurisdiction over the other state-law 19 claims.3 See Dkt. 1. Plaintiff moves to remand, arguing that because he lacks Article III standing 20 for his FCRA claim, removal was improper as this Court lacks subject-matter jurisdiction. See Pl. 21
22 1 Notably, the 2015 amendments to the Program removed language that excluded claims for 23 unauthorized use or disclosure of confidential, trade secret, or private information. Landy Decl., Ex. 15. 24 2 This Court does not address this argument because no PAGA claims are presented. Arbitration Reply at 13; Alvarado v. Lowe’s Ctrs., LLC, 2018 WL 6697181, at *3 (N.D. Cal. Dec. 20, 2018) 25 (noting that because Plaintiff did not allege a PAGA claim, it is irrelevant whether a PAGA waiver is unconscionable). 26 3 Defendants also invoked Class Action Fairness Act (“CAFA”) jurisdiction. See 28 U.S.C. § 1332(d). Because this Court concludes it has federal-question and supplemental jurisdiction, it 27 does not reach any CAFA arguments. Case No.: 5:19-cv-01225-EJD 1 Motion to Remand (“Remand Mot.”); Dkt. 20. On June 28, 2019, Defendants filed their 2 opposition to the motion to remand. Opposition to Remand (“Remand Opp.”), Dkt. 28. Finally, 3 on July 12, 2019, Plaintiff filed a reply regarding his motion to remand. Reply re Motion to 4 Remand (“Remand Reply”), Dkt. 30. 5 Defendants moved on June 6, 2019, to compel arbitration on an individual basis and to 6 dismiss the putative class claims, pursuant to its arbitration agreement with Plaintiff. Motion to 7 Compel Arbitration (“Arbitration Mot.”), Dkt. 19. Plaintiff filed an opposition to this motion on 8 June 27, 2019. Opposition re Motion to Compel Arbitration (“Arbitration Opp.”), Dkt. 26-1. 9 Defendant filed a reply on July 11, 2019. Reply re Motion to Compel Arbitration (“Arbitration 10 Reply”), Dkt. 29. 11 II. MOTION TO REMAND 12 A. Legal Standard 13 Removal of a civil action from state to federal court is appropriate only if the federal court 14 has subject-matter jurisdiction over the matter. 28 U.S.C. § 1444(a). If a case is improperly 15 removed, “the federal court must remand the action because it has no subject-matter jurisdiction to 16 decide the case.” ARCO Envtl. Remediation, LLC v. Dep’t of Health & Envtl. Quality of the State 17 of Mont., 213 F.3d 1108, 1113 (9th Cir. 2000); see also 28 U.S.C. 1447(c). The burden to 18 establish that jurisdiction exists rests upon the party asserting jurisdiction. Hunter v. Philip Morris 19 USA, 582 F.3d 1039, 1042 (9th Cir. 2009). The “strong presumption” against removal jurisdiction 20 means that the court “resolves all ambiguity in favor of remand to state court.” Id. (quoting Gaus 21 v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (per curiam)). 22 Article III of the United States Constitution limits federal courts’ subject-matter 23 jurisdiction to actual “cases” and “controversies.” U.S. Const. art. III, § 2. To satisfy the case-or- 24 controversy requirement, a plaintiff must have standing to bring a claim. See, e.g., Lexmark Int’l, 25 Inc. v. Static Control Components, Inc., 572 U.S. 118, 125 (2014); Spokeo, Inc. v. Robins, 136 S. 26 Ct. 1540, 1547 (2016). Article III standing requires that a plaintiff have: (1) suffered an injury in 27 Case No.: 5:19-cv-01225-EJD 1 fact, (2) that is fairly traceable to the challenged conduct of the defendant, and (3) is likely to be 2 redressed by a favorable judicial decision. Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 3 (1992). To establish an injury in fact required for Article III standing, “a plaintiff must show that 4 he or she suffered an invasion of a legally protected interest that is concrete and particularized and 5 actual or imminent.” Spokeo, 136 S. Ct. at 1548. For an injury to be “particularized” it “must 6 affect the plaintiff in a personal and individual way.” Id.; see also Valley Forge Christian Coll. v. 7 Ams. United for Separation of Church and State, 454 U.S. 464, 472 (1982) (standing requires that 8 the plaintiff “‘personally has suffered some actual or threatened injury’”). A “concrete” injury 9 must be “de facto;” it must be “real” and “actually exist.” Spokeo, 136 S. Ct. at 1548. 10 B. Discussion 11 Here, Plaintiff moves to remand this case on the grounds that there is no subject-matter 12 jurisdiction because Plaintiff failed to sufficiently allege Article III standing. Remand Mot. at 8– 13 9. Plaintiff contends he has only asserted a “bare procedural violation,” and thus has not asserted 14 any concrete injury as to his FCRA (or other) claims. Id. at 8. 15 Plaintiff’s first cause of action concerns a violation of FRCA Section 1681b(b)(2)(A), 16 which “prohibits an employer from obtaining an applicant’s consumer report without first 17 providing the applicant with a standalone, clear and conspicuous disclosure of its intention to do 18 so.” Gilberg v. Cal. Check Cashing Stores, 913 F.3d 1169, 1173 (9th Cir. 2019); see also Compl. 19 ¶¶ 43–63. His second cause of action concerns a violation of FRCA Sections 1681d and 1681g(c). 20 Compl. ¶¶ 66–67. Section 1681d requires the consumer be notified that she may make a written 21 request for the report. 15 U.S.C. § 1681d. Section 1681g(c) requires the provision of a “summary 22 of rights.” Id. § 1681g(c). 23 Generally, pleading a “bare procedural violation” of the FCRA, divorced from “any 24 concrete harm,” is insufficient to satisfy the injury-in-fact requirement. Syed v. M-I, LLC, 853 25 F.3d 492, 499 (9th Cir. 2017) (quoting Spokeo, 136 S. Ct. at 1549). At the pleading stage, 26 however, “general factual allegations of injury resulting from the defendant’s conduct may suffice, 27 Case No.: 5:19-cv-01225-EJD 1 for on a motion to dismiss we ‘presum[e] that general allegations embrace those specific facts that 2 are necessary to support the claim.’” Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011) 3 (quoting Lujan, 405 U.S. at 561) (alteration in original). Economic injury is “clearly a sufficient 4 basis for standing.” Id. at 1069 (“[Economic injury] is a quintessential injury-in-fact.”); San 5 Diego Cty. Guns Rights Comm. v. Reno, 98 F.3d 1121, 1130 (9th Cir. 1996). 6 Defendants contend, and the Court agrees, that Plaintiff has alleged an injury-in-fact 7 because his UCL claim, which is premised on the FCRA violations, asserts an economic injury, 8 i.e. “Plaintiff lost money or property as a result of the aforementioned unfair competition.” 9 Remand Opp. at 8 (citing Compl. ¶ 181) (emphasis added); see also Maya, 658 F.3d at 1068. The 10 UCL prohibits “unfair competition;” meaning “any unlawful, unfair, or fraudulent business act or 11 practice.” Cal. Bus. & Prof. Code § 17200. Plaintiff asserts that Defendants violated the UCL 12 because they violated “[f]ederal and California laws requir[ing] certain disclosures and proper 13 authorization before conducting background checks and obtaining information from credit and 14 background reports in connection with a hiring process.” Compl. ¶ 177. Plaintiff alleges this 15 unlawful conduct amounted to “unfair competition.” See, e.g., id. ¶¶ 181–82. Plaintiff expressly 16 alleges he “lost money or property as a result of the aforementioned unfair competition,” which 17 includes both FCRA claims. Id. ¶ 181. Accordingly, while Plaintiff alleges only “bare procedural 18 harm” in his FCRA causes of action,4 he has re-alleged that he suffered an economic injury from 19 the violations within the UCL section of the Complaint. See Rodriguez v. U.S. Healthcare, Inc., 20 388 F. Supp. 3d 1095, 1102 (N.D. Cal. 2019) (concluding, under identical circumstances, 21 complaint plead an injury-in-fact). 22 The Court thus holds that because Plaintiff has pled Article III standing as to the FCRA 23
24 4 This conclusion accords with other decisions from this District. See, e.g., Williams v. Nichols Demos, Inc., 2018 WL 3046507 (N.D. Cal. June 20, 2018) (holding only bare procedural violation 25 of FCRA pled because failed to allege any concrete harm flowing from the violation). The decisions, like Williams, which Plaintiff cites, do not address the UCL claim realleging an injury- 26 in-fact for the FCRA violations. Cf. Remand Mot. at 9–10; Remand Reply at 6–8. Accordingly, the case law Plaintiff cites as support is unhelpful in this context because the complaints in those 27 cases were drafted such that Plaintiff did not plead an injury in fact. See Remand Opp. at 9–10. Case No.: 5:19-cv-01225-EJD 1 claims, this Court has federal-question jurisdiction. Further, because the economic injury alleged 2 relates to all causes of action asserted, Plaintiff has pled standing as to the other related state-law 3 claims. Because these claims “arise out of the same case or controversy” as the FCRA claim, the 4 Court also has supplemental jurisdiction over Plaintiff’s state law claims. See 28 U.S.C. 5 § 1367(a); see also Swamy v. Title Source, Inc., 2017 WL 3021042, at *4 (N.D. Cal. July 17, 6 2017) (finding supplemental jurisdiction because claims all arose “out of a cohesive narrative: 7 defendant’s conduct towards plaintiff in his capacity as an employee”). Accordingly, Plaintiff’s 8 motion to remand is DENIED. 9 III. MOTION TO COMPEL ARBITRATION 10 A. Legal Standard 11 The Federal Arbitration Act (“FAA”) governs the agreement between the Parties. Collins 12 Decl., Ex 2 at 7. Under the FAA, written arbitration agreements “shall be valid, irrevocable, and 13 enforceable, save upon such grounds as exist at law or in equity for the avoidance of any 14 contract.” 9 U.S.C. § 2. The FAA removes the district court’s discretion and mandates that courts 15 direct the parties to “proceed to arbitration on issues as to which an arbitration agreement has been 16 signed.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) 17 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985)). The FAA establishes a 18 “liberal federal policy favoring arbitration agreements.” Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 19 1621 (2018). Courts must “rigorously . . . enforce arbitration agreements according to their terms, 20 including terms that specify with whom the parties choose to arbitrate their disputes and the rules 21 under which the arbitration will be conducted.” Id. Any doubts must be resolved in favor of 22 arbitration. Green Tree Fin. Corp. v. Bazzle, 539 U.S. 444, 452 (2003). 23 The Court’s role is limited to deciding (1) whether is there a valid agreement to arbitrate 24 and (2) if yes, whether the agreement encompasses the dispute at issue. Chiron Corp., 207 F.3d at 25 1130. If both are answered in the affirmative, the court must compel arbitration. 9 U.S.C. §§ 2–4. 26 B. Discussion 27 Case No.: 5:19-cv-01225-EJD 1 Plaintiff argues that the arbitration agreement is unenforceable because the 2013 agreement 2 is procedurally and substantively unconscionable. He further argues that the 2015 Program cannot 3 apply retroactively and eradicate the alleged unconscionability of the 2013 agreement. As an 4 initial matter, therefore, the Court must determine which agreement governs the Parties. 5 1. The 2015 Program Covers Plaintiff’s Claims 6 Plaintiff argues that California law, which this Court must use to determine whether an 7 arbitration agreement exists, does not permit retroactive changes to an arbitration agreement. 8 Arbitration Opp. at 22; First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995) 9 (“[C]ourts . . . should apply ordinary state-law principles that govern the formation of contracts.”). 10 Plaintiff further contends that even if California law allows retroactive application, the 2015 11 modifications are inapplicable because they “do not expressly provide for retroactivity.” Id. at 23. 12 Plaintiff states that in this district, for an arbitration agreement to apply retroactively, it must have 13 “clear and unambiguous language specifically stating that it applied retroactively.” Id. (citing 14 Trudeau v. Google LLC, 349 F. Supp. 3d 869, 877 (N.D. Cal. 2018)). 15 Plaintiff misunderstands Trudeau; there, the court, opposite to Plaintiff’s contention, held 16 that an arbitration agreement “need not apply retroactively in order to cover previously accrued 17 claims.” 349 F. Supp. 3d at 878. The parties were disputing the application of Section 13(A) of 18 the agreement. Id. at 877. Section 12 of the agreement stated, “other than changes made under 19 Section 13(G), the changes to the Terms will not apply retroactively.” Id. The plaintiff argued 20 that Section 12 thus meant amendments to the agreement outside Section 13(G) did not apply 21 retroactively. Id. Instead of reading Section 13(A) in light of Section 12, Judge Freeman looked 22 to “the plain language of [Section 13(A)].” Id. at 878; see also id. (noting using terms like 23 retroactive application” only “muddies” the determination of whether the arbitration provision 24 applies). The plain language of Section 13(A) expressly covered “claims that arose before” the 25 section was amended. Id. (emphasis added). Thus, in order for amendments to an arbitration 26 agreement to apply retroactively, they need not explicitly use the term “retroactively.” Id. 27 Case No.: 5:19-cv-01225-EJD 1 Likewise, here, the 2015 Comcast Solutions Program covers claims that arose before the 2 2015 amendments: it covers “claims related to or arising from any aspect of the employment 3 relationship.” Collins Decl., Ex. 10 at 2 (emphasis added); see also Sanfilippo v. Tinder, Inc., 4 2018 WL 6681197, at *5 (C.D. Cal. Dec. 18, 2018) (“[T]he addition of ‘in connection with’ after 5 the initial clause ‘arising out of’ seems to extend the scope of the Agreement well beyond present 6 or future disputes.” (emphasis added)). The language “arising out of relating to” and “any dispute 7 or controversy” make the Program’s coverage of the employment relationship “very broad and 8 inclusive.” Smith v. Vmware, Inc., 2016 WL 54120, at *6 (N.D. Cal. Jan. 5, 2016). The 2015 9 Program, like the one in Trudeau, is open-ended; it has no temporal limitation on the scope of 10 claims. See Jones v. Deja Vu, Inc., 419 F. Supp. 2d 1146, 1150 (N.D. Cal. 2005) (“Where an 11 arbitration provision does not contain a temporal limitation, the parties may be compelled to 12 arbitrate despite the fact that the challenged conduct predates the signing of the agreement.”). 13 Therefore, by its plain terms, the 2015 Program applies to claims accrued prior to its enactment 14 and covers the claims asserted herein.5 15 2. There Is a Valid Arbitration Agreement 16 Plaintiff does not argue the 2015 Program is unconscionable. To the contrary, Plaintiff 17 spends pages analyzing why the 2013 agreement is unconscionable as compared to the 2015 18 Program. See Arbitration Reply at 2 (“Plaintiff dedicates multiple pages of his Opposition to why 19 the 2015 Comcast Solutions Program passes muster.” (citing Arbitration Opp. at 19–22)). 20 Plaintiff bears the burden of proving the agreement is both procedurally and substantively 21 unconscionable. Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1108 (9th Cir. 2002). To the 22
23 5 Plaintiff’s citation to Peleg v. Neiman Marcus Group, Inc., 140 Cal. Rptr. 3d 38 (Ct. App. 2012) and Cobb v. Ironwood Country Club, 183 Cal. Rptr. 3d 282 (Ct. App. 2015) is unavailing. 24 Remand Opp. at 22. As the Trudeau court noted, these cases were concerned with “potentially illusory contract terms by which an employer could change the terms of the arbitration provision 25 at any time, even after a dispute had arisen.” 349 F. Supp. 3d at 880. The cases were inapplicable because Google notified plaintiffs of proposed changes and thus did not “unilaterally change” the 26 arbitration agreements. Id. at 881. Likewise, here, Defendants notified employees of the proposed changes and allowed them a reasonable opportunity to opt-out of the changes. Collins Decl. 27 ¶¶ 15–16. Case No.: 5:19-cv-01225-EJD 1 extent Plaintiff even addresses unconscionability of the 2015 Program, he cannot meet his burden 2 of showing both. He was given meaningful opportunity to opt out of the agreement and certified 3 that he had read the agreement. See, e.g., Kilgore v. KeyBank Nat’l Ass’n, 718 F.3d 1052, 1059 4 (9th Cir. 2013) (holding arbitration provision not procedurally unconscionable if signatories able 5 to opt out). Accordingly, because Plaintiff cannot show procedural unconscionability, the 6 agreement is valid.6 7 3. Plaintiff’s Claims Are Within the Scope of the Agreement7 8 Having decided the 2015 Program applies, Plaintiff’s argument that the FCRA and 9 analogous state-law claims are outside the agreement is not persuasive. Arbitration Mot. at 18. 10 The 2015 Program removed the exclusion of “[c]laims for . . . unauthorized use or disclosure of 11 confidential, trade secret or private information under statutory or common law.” Collins Decl., 12 Ex. 10 at 2–3. Now, by its terms, the 2015 Program covers the exact federal and state violations 13 claimed. Id. Further, the claims excluded is an exhaustive list, and the claims at hand do not 14 appear on that list. Id. at 3. Accordingly, Plaintiff’s claims are within the scope of the 2015 15 Program. 16 Finally, Plaintiff argues he is not covered by this 2015 Program because he did not consent 17 to it. Arbitration Opp. at 2–3 (“There is no evidence that Plaintiff actually reviewed the contents 18 of the revised Comcast Solutions program. . . . Although Plaintiff acknowledged that he 19 ‘reviewed’ and ‘understood’ the [2015 Program], he did not expressly consent to it.”). Plaintiff 20 misunderstands the standard. Through his electronic acknowledgment, he did expressly consent to 21 the Program and agreed to the updated arbitration provisions. Craig v. Brown & Root, Inc., 100 22
23 6 To this extent, Plaintiff also cannot show substantive unconscionability because the three steps are no longer required and thus Defendants cannot get a “sneak peek” at Plaintiff’s claims. See 24 Arbitration Opp. at 17–18. 7 The Court acknowledges Defendants’ argument that the terms of the arbitration agreement 25 delegate to the arbitrator the issue of claim coverage. Arbitration Reply at 5. The test established by the Ninth Circuit, however, sets forth a two-step inquiry: (1) is there a valid agreement and (2) 26 are the claims at hand within the scope of that agreement. Chiron Corp., 207 F.3d at 1130. This Court does not view this case as the appropriate case to determine whether the second part of this 27 test can be contracted around. Case No.: 5:19-cv-01225-EJD ] Cal. Rptr. 2d 818, 821 (Ct. App. 2000) (holding binding arbitration agreement when employer 2 |} mailed documents to employee’s home and they had not been returned despite employee’s 3 || protestations that she had not received it); Nghiem v. NEC Elec., Inc., 25 F.3d 1437, 1439-40 (9th 4 || Cir. 1994) (holding arbitration agreement binding because put in employee handbook). Further, 5 || by his continued employment, he implicitly accepted the terms. Davis v. Nordstrom, Inc., 755 6 || F.3d 1089, 1093 (9th Cir. 2014) (“Where an employee continues in his or her employment after 7 || being given notice of the changed terms or conditions, he or she has accepted those new terms or 8 conditions.”). Accordingly, Plaintiff is bound by the 2015 Program. 9 4. The Class Action Waiver is Enforceable 10 Plaintiff waived his right to bring a class action. Collins Decl., Ex. 10 at 9. Class action 11 waivers are enforceable where an employee has an opportunity to opt out. Garcia v. Comcast 12 Cable Commc’n Mgmt. LLC, 2017 WL 1210044, at *4 (N.D. Cal. Mar. 31, 2017). 13 Here, Plaintiff had the option to opt out. Collins Supp. Decl. 2. Despite having five- 14 || weeks to opt-out, Plaintiff never opted out of the Program. Id. Accordingly, because Plaintiff had 3 15 an opt-out option, the class action wavier is enforceable. 16 IV. CONCLUSION 17 For the foregoing reasons, Plaintiff's motion to remand is DENIED and Defendants’ Z 18 || motion to compel arbitration is GRANTED. Plaintiff shall arbitrate his claims on an individual 19 || basis, rather than on a class, collective, or representative basis. This case is STAYED pending 20 || resolution of the arbitration proceedings. The Clerk shall administratively close the file. The 21 Parties shall notify the Court within seven days of an arbitration ruling. 22 IT ISSO ORDERED. 23 Dated: October 11, 2019 24 EDWARD J. DAVILA 25 United States District Judge 26 a Case No.: 5:19-cv-01225-EJD 28 AMENDED ORDER DENYING MOTION TO REMAND; GRANTING MOTION TO