FILED NOT FOR PUBLICATION SEP 28 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ELIZABETH SANFILIPPO, No. 20-55819
Plaintiff-Appellant, D.C. No. 2:18-cv-08372-AB-JEM v.
MATCH GROUP LLC, MEMORANDUM*
Defendant-Appellee,
and
DOES, 1 through 20, inclusive,
Defendant.
Appeal from the United States District Court for the Central District of California Andre Birotte, Jr., District Judge, Presiding
Argued and Submitted August 12, 2021 San Francisco, California
Before: SILER,** CHRISTEN, and FORREST, Circuit Judges.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Eugene E. Siler, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. Plaintiff Elizabeth Sanfilippo appeals the district court’s order denying her
motion to remand to state court and granting defendant’s motion to compel
arbitration. We review de novo the district court’s (1) order denying the motion to
remand, Briggs v. Merck Sharp & Dohme, 796 F.3d 1038, 1047 (9th Cir. 2015);
(2) determination that diversity jurisdiction exists, Gonzales v. CarMax Auto
Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016); and (3) order compelling
arbitration, Cape Flattery Ltd. v. Titan Maritime, LLC, 647 F.3d 914, 917 (9th Cir.
2011). We review the district court’s factual findings for clear error. Gonzales,
840 F.3d at 648; Cape Flattery, 647 F.3d at 917. We have jurisdiction pursuant to
28 U.S.C. § 1291, and we affirm. Because the parties are familiar with the facts,
we recite them only as necessary to resolve the appeal.
1. Sanfilippo argues the district court erred by denying her motion to
remand to state court because the district court should have considered Tinder’s
citizenship. Sanfilippo contends Tinder continued to exist for a period of three
years following its merger with Match Group, Inc. and she urges us to adopt a rule
that, for diversity purposes, defunct corporations are citizens of their state of
incorporation and state of last principal place of business.
Delaware law provides that “[a]ll corporations, whether they expire by their
own limitation or are otherwise dissolved, shall nevertheless be continued, for a
2 term of 3 years from such expiration or dissolution . . . for the purpose of
prosecuting and defending suits, whether civil, criminal or administrative, by or
against them[.]” Del. Code Ann. tit. 8, § 278. But the evidence shows that Tinder
neither expired nor otherwise dissolved; it merged into Match Group, Inc. on July
13, 2017. In contrast to an expired or dissolved corporation, following a merger
“the separate existence . . . of all such constituent corporations except the one into
which the other or others . . . have been merged . . . shall cease and the constituent
corporations shall . . . be merged into 1 of such corporations.” Id. § 259 (emphasis
added). “[A]ll debts, liabilities, and duties of the respective constituent
corporations shall thenceforth attach to said surviving or resulting corporation, and
may be enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.” Id.
Accordingly, following Tinder’s merger with Match Group, Inc., Tinder
ceased to exist as a separate entity and all of Tinder’s liabilities attached to Match
Group, Inc. As part of the merger, Match Group, Inc. assigned all of Tinder’s
assets and liabilities to Match.com, L.L.C., which subsequently changed its name
to Match Group, LLC. Tinder continues to exist solely as an unincorporated
division of Match Group, LLC. Because “[a] division of a corporation . . . is not an
independent entity for jurisdictional purposes,” the district court did not err by
3 considering only Match Group, LLC’s citizenship for purposes of assessing its
jurisdiction. Breitman v. May Co. Cal., 37 F.3d 562, 564 (9th Cir. 1994) (citation
and internal quotation marks omitted). And because it is uncontested that Match
Group, LLC is a citizen of Delaware and Texas, the district court correctly
concluded that the parties are diverse.
2. Sanfilippo also contends the district court erred by granting Match
Group’s motion to compel arbitration for three reasons: (1) the arbitration
agreement is unconscionable; (2) the arbitration agreement does not apply
retroactively to encompass pre-existing claims; and (3) California law bars
retroactive application of the arbitration agreement. We disagree on each score.
To establish unconscionability pursuant to California law, Sanfilippo “must
demonstrate procedural and substantive unconscionability, but both ‘need not be
present in the same degree.’” Lim v. TForce Logistics, LLC, — F.4th —, 2021 WL
3557294 at *5 (9th Cir. 2021) (quoting Poublon v. C.H. Robinson Co., 846 F.3d
1251, 1260 (9th Cir. 2017)). “Instead, a sliding scale exists such that ‘the more
substantively oppressive the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the term is
unenforceable, and vice versa.’” Id. (quoting Poublon, 846 F.3d at 1260).
4 In the absence of any indication of oppression or surprise, the adhesive
nature of the arbitration agreement in this case “give[s] rise to a low degree of
procedural unconscionability at most.” Poublon, 846 F.3d at 1261–62 (citing
Baltazar v. Forever 21, Inc., 367 P.3d 6, 11 (Cal. 2016)). As for substantive
unconscionability, Sanfilippo points only to the fact that Match Group reserved the
right to unilaterally modify the terms of the agreement. There is no evidence
Match Group did unilaterally modify the arbitration agreement, and even assuming
the unilateral modification provision is substantively unconscionable, our court has
explained that an unconscionable unilateral modification clause in an arbitration
agreement does not “make[] the arbitration provision or the contract as a whole
unenforceable.” Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1033 (9th Cir. 2016)
(citing Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1179 and n.23 (9th Cir.
2003)). Because the arbitration agreement gives rise to a low degree of procedural
unconscionability and Sanfilippo did not establish any substantive
unconscionability that infects the arbitration agreement as a whole, the agreement
is enforceable.
The arbitration agreement applies to “all claims or controversies arising out
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FILED NOT FOR PUBLICATION SEP 28 2021 UNITED STATES COURT OF APPEALS MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
ELIZABETH SANFILIPPO, No. 20-55819
Plaintiff-Appellant, D.C. No. 2:18-cv-08372-AB-JEM v.
MATCH GROUP LLC, MEMORANDUM*
Defendant-Appellee,
and
DOES, 1 through 20, inclusive,
Defendant.
Appeal from the United States District Court for the Central District of California Andre Birotte, Jr., District Judge, Presiding
Argued and Submitted August 12, 2021 San Francisco, California
Before: SILER,** CHRISTEN, and FORREST, Circuit Judges.
* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable Eugene E. Siler, United States Circuit Judge for the U.S. Court of Appeals for the Sixth Circuit, sitting by designation. Plaintiff Elizabeth Sanfilippo appeals the district court’s order denying her
motion to remand to state court and granting defendant’s motion to compel
arbitration. We review de novo the district court’s (1) order denying the motion to
remand, Briggs v. Merck Sharp & Dohme, 796 F.3d 1038, 1047 (9th Cir. 2015);
(2) determination that diversity jurisdiction exists, Gonzales v. CarMax Auto
Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016); and (3) order compelling
arbitration, Cape Flattery Ltd. v. Titan Maritime, LLC, 647 F.3d 914, 917 (9th Cir.
2011). We review the district court’s factual findings for clear error. Gonzales,
840 F.3d at 648; Cape Flattery, 647 F.3d at 917. We have jurisdiction pursuant to
28 U.S.C. § 1291, and we affirm. Because the parties are familiar with the facts,
we recite them only as necessary to resolve the appeal.
1. Sanfilippo argues the district court erred by denying her motion to
remand to state court because the district court should have considered Tinder’s
citizenship. Sanfilippo contends Tinder continued to exist for a period of three
years following its merger with Match Group, Inc. and she urges us to adopt a rule
that, for diversity purposes, defunct corporations are citizens of their state of
incorporation and state of last principal place of business.
Delaware law provides that “[a]ll corporations, whether they expire by their
own limitation or are otherwise dissolved, shall nevertheless be continued, for a
2 term of 3 years from such expiration or dissolution . . . for the purpose of
prosecuting and defending suits, whether civil, criminal or administrative, by or
against them[.]” Del. Code Ann. tit. 8, § 278. But the evidence shows that Tinder
neither expired nor otherwise dissolved; it merged into Match Group, Inc. on July
13, 2017. In contrast to an expired or dissolved corporation, following a merger
“the separate existence . . . of all such constituent corporations except the one into
which the other or others . . . have been merged . . . shall cease and the constituent
corporations shall . . . be merged into 1 of such corporations.” Id. § 259 (emphasis
added). “[A]ll debts, liabilities, and duties of the respective constituent
corporations shall thenceforth attach to said surviving or resulting corporation, and
may be enforced against it to the same extent as if said debts, liabilities and duties
had been incurred or contracted by it.” Id.
Accordingly, following Tinder’s merger with Match Group, Inc., Tinder
ceased to exist as a separate entity and all of Tinder’s liabilities attached to Match
Group, Inc. As part of the merger, Match Group, Inc. assigned all of Tinder’s
assets and liabilities to Match.com, L.L.C., which subsequently changed its name
to Match Group, LLC. Tinder continues to exist solely as an unincorporated
division of Match Group, LLC. Because “[a] division of a corporation . . . is not an
independent entity for jurisdictional purposes,” the district court did not err by
3 considering only Match Group, LLC’s citizenship for purposes of assessing its
jurisdiction. Breitman v. May Co. Cal., 37 F.3d 562, 564 (9th Cir. 1994) (citation
and internal quotation marks omitted). And because it is uncontested that Match
Group, LLC is a citizen of Delaware and Texas, the district court correctly
concluded that the parties are diverse.
2. Sanfilippo also contends the district court erred by granting Match
Group’s motion to compel arbitration for three reasons: (1) the arbitration
agreement is unconscionable; (2) the arbitration agreement does not apply
retroactively to encompass pre-existing claims; and (3) California law bars
retroactive application of the arbitration agreement. We disagree on each score.
To establish unconscionability pursuant to California law, Sanfilippo “must
demonstrate procedural and substantive unconscionability, but both ‘need not be
present in the same degree.’” Lim v. TForce Logistics, LLC, — F.4th —, 2021 WL
3557294 at *5 (9th Cir. 2021) (quoting Poublon v. C.H. Robinson Co., 846 F.3d
1251, 1260 (9th Cir. 2017)). “Instead, a sliding scale exists such that ‘the more
substantively oppressive the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the term is
unenforceable, and vice versa.’” Id. (quoting Poublon, 846 F.3d at 1260).
4 In the absence of any indication of oppression or surprise, the adhesive
nature of the arbitration agreement in this case “give[s] rise to a low degree of
procedural unconscionability at most.” Poublon, 846 F.3d at 1261–62 (citing
Baltazar v. Forever 21, Inc., 367 P.3d 6, 11 (Cal. 2016)). As for substantive
unconscionability, Sanfilippo points only to the fact that Match Group reserved the
right to unilaterally modify the terms of the agreement. There is no evidence
Match Group did unilaterally modify the arbitration agreement, and even assuming
the unilateral modification provision is substantively unconscionable, our court has
explained that an unconscionable unilateral modification clause in an arbitration
agreement does not “make[] the arbitration provision or the contract as a whole
unenforceable.” Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1033 (9th Cir. 2016)
(citing Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1179 and n.23 (9th Cir.
2003)). Because the arbitration agreement gives rise to a low degree of procedural
unconscionability and Sanfilippo did not establish any substantive
unconscionability that infects the arbitration agreement as a whole, the agreement
is enforceable.
The arbitration agreement applies to “all claims or controversies arising out
of or in connection with [Sanfilippo’s] application with, employment with, or
termination from, the Company,” and the ADR Program explains that Match
5 Group and Sanfilippo “consent and agree to the resolution by arbitration of all
claims or controversies involving or in any way concerning [Sanfilippo’s]
application with, employment with, or termination from, the Company.” Because
Sanfilippo was already employed, the arbitration agreement’s reference to claims
arising out of or in connection with her application for employment necessarily
relates to and establishes an intent to cover claims that had accrued prior to the
effective date of the arbitration agreement. See Franco v. Greystone Ridge Condo.,
39 Cal. App. 5th 221, 223 (2019) (“[T]he agreement’s reference to claims relating
to ‘pre-hire’ matters expresses an intent to cover all claims, regardless of when
they accrued.”). Accordingly, we conclude Sanfilippo’s pre-existing claims fell
within the scope of the arbitration agreement. Cf. AT & T Techs., Inc. v.
Commc’ns. Workers of Am., 475 U.S. 643, 650 (1986) (“An order to arbitrate the
particular grievance should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that
covers the asserted dispute.”).
Sanfilippo relies on Avery v. Integrated Healthcare Holdings, Inc., 218 Cal.
App. 4th 50, (Ct. App. 2013), to argue California law bars Match Group from
“unilaterally forc[ing] an accrued employee claim to arbitration.” In Avery, the
court “den[ied] motions to compel arbitration because the moving party failed to
6 establish the plaintiff employees agreed to the specific arbitration agreement the
employer submitted to the trial court.” Franco, 39 Cal. App. 5th at 231. The
California Court of Appeal’s “analysis of the retroactive application of [the]
arbitration agreement to preexisting claims was in the context of the employer’s
attempt to enforce an arbitration agreement that it had unilaterally modified to
apply to preexisting claims.” Id. Thus, “in the context of unilateral modification
of an arbitration agreement, the implied covenant of good faith and fair dealing
requires an employer to provide reasonable and express notice to employees
regarding the applicability of such modifications to already existing claims.” Id. at
232. Unlike Avery, there is no dispute Sanfilippo agreed to the arbitration
agreement, nor is there any suggestion Match Group unilaterally modified the
agreement at any time. Instead, Match Group simply seeks to enforce the contract
as originally written.
AFFIRMED.