Cohen v. CBR Systems, Inc.

CourtDistrict Court, N.D. California
DecidedSeptember 6, 2022
Docket4:21-cv-06527
StatusUnknown

This text of Cohen v. CBR Systems, Inc. (Cohen v. CBR Systems, Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cohen v. CBR Systems, Inc., (N.D. Cal. 2022).

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 AMY COHEN, et al., Case No. 21-cv-06527-HSG

8 Plaintiffs, ORDER GRANTING MOTION TO COMPEL ARBITRATION 9 v. Re: Dkt. No. 46, 51 10 CBR SYSTEMS, INC., et al., 11 Defendants.

12 13 Pending before the Court is Defendant CBR Systems, Inc.’s (“CBR”) motion to compel 14 arbitration, briefing for which is complete. See Dkt. Nos. 46 (“Mot.”), 59 (“Opp.”), 63 (“Reply”).1 15 Defendant GI Partners also moves to compel arbitration. See Dkt. Nos. 51 (“GI Partners Mot.”), 16 60 (“GI Partners Opp.”), and 62 (“GI Partners Reply”).2 For the reasons detailed below, the Court 17 GRANTS both motions. 18 I. BACKGROUND 19 Plaintiffs allege that Defendant CBR provides “newborn stem cell processing and 20 preservation services,” acting as a private cord blood bank and storage service. See Dkt. No. 38 21 (“SAC”) ¶¶ 3-5. According to Plaintiffs, Defendant GI Partners acquired Defendant CBR in 22 August 2018. Id. ¶ 6. Plaintiffs are clients who pay to store cord blood with CBR. Id. ¶¶ 8, 27- 23 29. They allege that CBR leads consumers to believe that the annual storage fee is a fixed fee but 24 then increases the annual fee over time and forces consumers to pay undisclosed costs. Id. ¶¶ 8, 25 13. Plaintiffs brings numerous causes of action against Defendants alleging breach of contract and 26

27 1 Plaintiffs also submitted two notices of supplemental authority. See Dkt. Nos. 66 and 71. 1 deceptive marketing and billing practices. See id. ¶¶ 155-374. 2 Defendants move to compel arbitration based on the mandatory arbitration provision 3 included in the contracts between CBR and Plaintiffs. See Mot. at 1; GI Partners Mot. at 9-10. 4 Each Plaintiff acknowledges that she entered into a contractual agreement with CBR governing 5 the terms of storage for her children’s cord blood. SAC ¶¶ 80-81, 90, 103, 120. Plaintiff Sirisha 6 Koneru entered into a contract with CBR in April 2011. SAC ¶ 120; Dkt. No. 47 Ex. 1 (“Koneru 7 Contract”); see also Dkt. 38-3.3 Plaintiff Amy Cohen initially entered into a contract with CBR in 8 October 2012, but the second contract she signed with CBR in November 2013 superseded “all 9 previous agreements . . . relating to the subject matter of [the second] Agreement.” SAC ¶ 103; 10 Dkt. 38-2 at 5-15 (“Second Cohen Contract”). Plaintiff Katharine Vaccarella entered into a 11 contract with CBR in January 2015. SAC ¶ 90; Dkt. 38-1 (“Vaccarella Contract”). 12 The Koneru Contract is four pages long and has the following arbitration provision on the 13 first page: “Any dispute or controversy arising between Client and CBR shall be 14 resolved by binding arbitration following the rules provided in Title 9 of the California Code of Civil Procedure. In the event of arbitration, 15 or any court proceedings, the court or arbitrator may award reasonable attorneys fees and costs to the prevailing party in addition to any other 16 relief to which the party is entitled. This Agreement will be governed by and construed in accordance with the laws of the State of 17 California without reference to its conflicts of law principles.”

18 Koneru Contract at 1. 19 The Second Cohen and Vaccarella Contracts are eleven pages long and have the following 20 arbitration provisions on page 4 under the bold section title, “Governing Law”: 21 “This Agreement shall be governed by and construed in accordance 22 with the laws of the State of California without reference to its conflicts of laws provisions. Any dispute or controversy arising 23 between or among you, the child, and CBR shall be finally and 24 3 Defendant CBR asks the Court to take judicial notice of the Koneru Contract under the 25 incorporation-by-reference doctrine. Dkt. No. 47. Unlike the Vaccarella and Cohen Contracts, which were attached in full to the SAC, Plaintiffs only submitted a copy of the last page of the 26 Koneru Contract. The Court finds that the Koneru Contract is incorporated by reference in Plaintiffs’ complaint because it is extensively referenced and forms the basis of Plaintiffs’ claims. 27 Khoja v. Orexigen Therapeutics, Inc., 899 F.3d 988, 1002 (9th Cir. 2018). The contract is conclusively resolved by binding arbitration following the rules 1 provided in Title 9 of the California Code of Civil Procedure. In the event of arbitration, or any court proceedings, the court or arbitrator 2 may award reasonable attorneys’ fees and costs to the prevailing party in addition to any other relief to which the party is entitled.” 3 Second Cohen Contract at 8; Vaccarella Contract at 4. 4 5 All of the contracts have a California choice of law provision. Koneru Contract at 1 (“This 6 Agreement will be governed by and construed in accordance with the laws of the State of 7 California without reference to its conflicts of law principles.”); Second Cohen Contract at 8 8 (“This Agreement shall be governed by and construed in accordance with the laws of the State of 9 California without reference to its conflicts of law provisions.”); Vacarrella Contract at at 4 10 (same). 11 12 II. LEGAL STANDARD 13 The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., sets forth a policy favoring 14 arbitration agreements and establishes that a written arbitration agreement is “valid, irrevocable, 15 and enforceable.” 9 U.S.C. § 2; Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (noting 16 federal policy favoring arbitration); Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 17 U.S. 1, 24 (1983) (same). The FAA allows that a party “aggrieved by the alleged failure, neglect, 18 or refusal of another to arbitrate under a written agreement for arbitration may petition any United 19 States district court . . . for an order directing that . . . arbitration proceed in the manner provided 20 for in such agreement.” 9 U.S.C. § 4. This federal policy is “simply to ensure the enforceability, 21 according to their terms, of private agreements to arbitrate.” Volt Info. Scis., Inc. v. Bd. of 22 Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 476 (1989). Courts must resolve any 23 “ambiguities as to the scope of the arbitration clause itself . . . in favor of arbitration.” Id. 24 When a party moves to compel arbitration, the court must determine (1) “whether a valid 25 arbitration agreement exists” and (2) “whether the agreement encompasses the dispute at issue.” 26 Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). The 27 agreement may also delegate gateway issues to an arbitrator, in which case the court’s role is 1 arbitrate arbitrability. See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). In either 2 instance, “before referring a dispute to an arbitrator, the court determines whether a valid 3 arbitration agreement exists.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 4 530 (2019) (citing 9 U.S.C. § 2). 5 III. DISCUSSION 6 A. A valid and enforceable arbitration agreement exists and applies to Plaintiffs’ claims against CBR.

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Bluebook (online)
Cohen v. CBR Systems, Inc., Counsel Stack Legal Research, https://law.counselstack.com/opinion/cohen-v-cbr-systems-inc-cand-2022.