1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 RICK D. FOX, No. 1-22-cv-01197-DAD-DB 12 Plaintiff, 13 v. ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION AND 14 EXPERIAN INFORMATION STAYING THE PROCEEDINGS PENDING SOLUTIONS, INC., et al., ARBITRATION 15 Defendants. (Doc. No. 46) 16
17 18 This matter is before the court on defendant’s motion to compel arbitration. (Doc. No. 19 46.) On September 27, 2023, the pending motion was taken under submission on the papers 20 pursuant to Local Rule 230(g) after it was reassigned to the undersigned. (Doc. Nos. 50, 53.) For 21 the reasons explained below, the court will grant defendant’s motion to compel arbitration. 22 BACKGROUND 23 On September 21, 2022, plaintiff Rick D. Fox initiated a consumer credit action against 24 defendants Experian Information Solutions, Inc. (“defendant”) and Trans Union, LLC.1 (Doc. 25 No. 1.) In his operative complaint, plaintiff asserts the following four causes of action against 26 defendant: (1) failing to establish and/or follow reasonable procedures in violation of 15 U.S.C. 27 1 On July 18, 2023, the court dismissed Trans Union, LLC as a named defendant in this action 28 with prejudice pursuant to stipulation by plaintiff and Trans Union, LLC. (See Doc. Nos. 41, 42.) 1 § 1681e(b); (2) failing to conduct a reasonable reinvestigation in violation of § 1681i; (3) failing 2 to establish and/or follow reasonable procedures in violation of California Civil Code § 1785.14; 3 and (4) failing to reasonably reinvestigate in violation of California Civil Code § 1785.16. (See 4 id.) 5 On August 22, 2023, defendant Experian filed the pending motion to compel arbitration, 6 contending that by signing up for “CreditWorks,” a credit monitoring service with defendant 7 Experian’s corporate affiliate, ConsumerInfo.com, Inc. (which does business as Experian 8 Consumer Services (“ECS”)), plaintiff had agreed to arbitrate any claims against defendant 9 Experian. (Doc. No. 46-1 at 8.)2 Defendant’s motion was accompanied by a declaration from 10 David Williams, the Vice President of Business Governance for ConsumerInfo.com, stating that 11 his review of enrollment data indicated that plaintiff enrolled in CreditWorks. (Doc. No. 46-2 at 12 ¶¶ 1, 3.) Mr. Williams also declared that every version of the Terms of Use that was in effect 13 during plaintiff’s enrollment in CreditWorks contained an arbitration provision (the “Arbitration 14 Agreement”). (Id. at ¶ 6.) At the time that plaintiff filed his lawsuit, the Arbitration Agreement 15 in effect stated that “ECS and you agree to arbitrate all disputes and claims between us arising out 16 of or relating to this Agreement to the maximum extent permitted by law” and: 17 The agreement to arbitrate includes, but is not limited to: claims arising out of or relating to any aspect of the relationship between us 18 arising out of any Service or Website, whether based in contract, tort, statute (including, without limitation, the Credit Repair 19 Organizations Act) fraud, misrepresentation or any other legal theory; claims that arose before this or any prior Agreement 20 (including, but not limited to, claims relating to advertising); claims that are currently the subject of purported class action litigation in 21 which you are not a member of a certified class; and claims that may arise after the termination of this Agreement. 22 23 (Id. at 46–47.) The Arbitration Agreement further provided that “[f]or purposes of this arbitration 24 provision, references to ‘ECS,’ ‘you,’ and ‘us’ shall include our respective parent entities, 25 subsidiaries, affiliates . . . .” (Id. at 47.) Based on these provisions, defendant argues that the 26 ///// 27 2 According to the Williams declaration, both ECS and defendant are wholly owned by Experian 28 Holdings, Inc. and share the same parent company, Experian plc. (Doc. No. 46-2 at ¶ 2.) 1 court must grant its motion to compel plaintiff to arbitrate his claims against it. (Doc. No. 46-1 at 2 12.) 3 On September 5, 2023, plaintiff filed his opposition to defendant’s motion, arguing that 4 defendant has waived its right to arbitrate. (Doc. No. 46.) On September 13, 2023, defendant 5 filed its reply thereto, arguing that there was no waiver and that the issue of waiver has been 6 delegated to an arbitrator under the agreement. (Doc. No. 51.) On October 10, 2023, plaintiff 7 filed a notice of supplemental authority to alert the court of the decision in Slaten v. Experian 8 Info. Sols., Inc., No. 21-cv-09045-MWF, 2023 WL 6890757 (C.D. Cal. Sept. 6, 2023). (Doc. No. 9 58.) On October 11, 2023, defendant filed a response to plaintiff’s notice of supplemental 10 authority. (Doc. No. 59.) 11 LEGAL STANDARD 12 A written provision in any contract evidencing a transaction involving commerce to settle 13 a dispute by arbitration is subject to the Federal Arbitration Act (“FAA”). 9 U.S.C. § 2. The 14 FAA confers on the parties involved the right to obtain an order directing that arbitration proceed 15 in the manner provided for in a contract between them. 9 U.S.C. § 4. In considering a motion to 16 compel arbitration, the “court’s role under the Act . . . is limited to determining (1) whether a 17 valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the 18 dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 19 2000). The party seeking to compel arbitration bears the burden of proving by a preponderance 20 of the evidence the existence of an agreement to arbitrate. Ashbey v. Archstone Prop. Mgmt., 21 Inc., 785 F.3d 1320, 1323 (9th Cir. 2015); Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 22 (9th Cir. 2014) (citing Rosenthal v. Great W. Fin. Sec. Corp., 14 Cal. 4th 394, 413 (1996)). 23 “Arbitration is a matter of contract, and the FAA requires courts to honor parties’ expectations.” 24 AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 351 (2011). However, parties may rely upon 25 generally applicable contract defenses to invalidate an agreement to arbitrate. See id. at 339. 26 There is an “emphatic federal policy in favor of arbitral dispute resolution.” Mitsubishi 27 Motors Corp. v. Soler Chrysler–Plymouth, 473 U.S. 614, 631 (1985). As such, “any doubts 28 concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Id. at 626 1 (quoting Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24–25 (1983)). 2 However, the Supreme Court has clarified that “the FAA’s ‘policy favoring arbitration’ does not 3 authorize federal courts to invent special, arbitration-preferring procedural rules.” Morgan v. 4 Sundance, Inc., 596 U.S. 411, 418 (2022). 5 DISCUSSION 6 Here, plaintiff does not challenge the validity or scope of the parties’ Arbitration 7 Agreement. Instead, he argues that he cannot be compelled to arbitrate his claims because 8 defendant has waived any right it may have to compel arbitration. (Doc. No. 49 at 3.) Under the 9 legal standard set forth above, the court will first address whether the issue of waiver can be 10 properly resolved by this court or whether it has been delegated to an arbitrator. Then, if 11 necessary, the court will determine whether defendant has waived its right to arbitration. Finally, 12 the court will decide whether it is appropriate to stay the action if it is found to be properly 13 submitted to arbitration. 14 A. Delegation of the Waiver Issue 15 As stated above, plaintiff argues that defendant waived its right to compel arbitration. 16 (Id.) In its reply, defendant argues that this court should not decide whether a waiver has 17 occurred because the issue of waiver has been delegated to an arbitrator. (Doc. No. 51 at 3–6.) 18 Whether a party has waived its right to arbitrate is “presumptively for a court and not an 19 arbitrator to decide.” Martin v. Yasuda, 829 F.3d 1118, 1123 (9th Cir. 2016). However, if parties 20 “intend that an arbitrator decide” the issue of waiver, the parties can rebut that presumption with 21 “clear and unmistakable language to that effect” in their arbitration agreement. Id. at 1124. 22 Defendant argues that the parties’ intent to delegate the waiver issue to arbitration is 23 evidenced by the clear and unmistakable language in the Arbitration Agreement stating that “[a]ll 24 issues are for the arbitrator to decide, including the scope and enforceability of this arbitration 25 provision.” (Doc. Nos. 51 at 4; 46-2 at 47.) However, the Ninth Circuit has previously found that 26 similar language appearing in an arbitration agreement is insufficient to overcome the 27 presumption and to demonstrate intent to have an arbitrator decide the issue of waiver. See 28 Martin, 829 F.3d at 1124 (holding that the district court did not err by deciding the waiver issue 1 where the arbitration agreement contained a scope provision stating that “[a]ll determinations as 2 to the scope, enforceability and effect of this arbitration agreement shall be decided by the 3 arbitrator, and not by a court”); Cox v. Ocean View Hotel Corp., 533 F.3d 1114, 1117 (9th Cir. 4 2008) (finding that the district court properly decided the waiver issue despite language in the 5 arbitration agreement stating that “[a]ny controversy . . . involving the construction or application 6 of the terms, provisions, or conditions of this Agreement or otherwise arising out of or related to 7 this Agreement shall likewise be settled by arbitration”). In light of binding Ninth Circuit 8 precedent, defendant’s reliance on out-of-circuit authority suggesting that such broad provisions 9 are sufficiently clear and unmistakable is unavailing. (See Doc. No. 51 at 3–5.) 10 Further, defendant argues that the Arbitration Agreement’s incorporation of American 11 Arbitration Association (“AAA”) rules evidences the clear and unmistakable intent to delegate 12 the question of waiver to an arbitrator. (Id. at 4–5.) The court also finds this argument to be 13 unpersuasive. While the Ninth Circuit has found that incorporating arbitration association rules 14 signals such intent, this holding has been limited to cases involving sophisticated parties. See 15 Oracle Am., Inc. v. Myriad Grp. A.G., 724 F.3d 1069, 1075 (9th Cir. 2013) (holding that “as long 16 as an arbitration agreement is between sophisticated parties to commercial contracts, those parties 17 shall be expected to understand that incorporation of the UNCITRAL rules delegates questions of 18 arbitrability”); Brennan v. Opus Bank, 796 F.3d 1125, 1131 (9th Cir. 2015) (noting that “as in 19 Oracle America, we limit our holding to the facts of the present case, which do involve an 20 arbitration agreement ‘between sophisticated parties’”) (citation omitted). Here, plaintiff is an 21 ordinary consumer and not a sophisticated party. See Brennan at 1131 (finding that the plaintiff 22 was a sophisticated party where he was “an experienced attorney and businessman . . . who 23 executed an executive-level employment contract”). Defendant does not address the issue of the 24 level of plaintiff’s sophistication in its briefing or attempt to argue otherwise. (Doc. No. 51 at 3– 25 6.) Accordingly, the court finds that defendant has not rebutted the presumption, with clear and 26 unmistakable language, that the issue of waiver should be decided by this court. 27 ///// 28 ///// 1 B. Merits of the Waiver Issue 2 As noted, the parties dispute whether defendant has waived its right to compel arbitration. 3 (Doc. Nos. 49 at 3–13; 51 at 3–6.) A party asserting a waiver in this context, here plaintiff, must 4 demonstrate: (1) defendant’s knowledge of an existing right to compel arbitration; and 5 (2) defendant’s intentional acts inconsistent with that existing right. In re Google Assistant Priv. 6 Litig., No. 19-cv-04286-BLF, 2024 WL 251407, at *3 (N.D. Cal. Jan. 23, 2024) (citing Hill v. 7 Xerox Bus. Servs., LLC, 59 F.4th 457, 468 (9th Cir. 2023)). Until recently, a party seeking to 8 prove waiver of a right to arbitrate was also required to demonstrate a third element, “prejudice to 9 the party opposing arbitration resulting from such inconsistent acts.” Britton v. Co-op Banking 10 Grp., 916 F.2d 1405, 1412 (9th Cir. 1990), abrogated on other grounds by Coinbase, Inc. v. 11 Bielski, 599 U.S. 736 (2023). Although plaintiff here advances arguments addressing the issue of 12 prejudice it has purportedly suffered, the Supreme Court has eliminated the third element of 13 prejudice and thereby lightened plaintiff’s burden here. See Morgan, 596 U.S. at 417 (holding 14 that, under the FAA, a court may not “condition a waiver of the right to arbitrate on a showing of 15 prejudice”). Since the Supreme Court’s decision in Morgan, “the party opposing arbitration still 16 bears the burden of showing waiver, [but] the burden is no longer ‘heavy.’” Armstrong v. 17 Michaels Stores, Inc., 59 F.4th 1011, 1014–15 (9th Cir. 2023) (explaining that “the burden for 18 establishing waiver of an arbitration agreement is the same as the burden for establishing waiver 19 in any other contractual context”). 20 In their arguments, the parties appear to agree that the first of the two elements is met 21 here. Plaintiff states that defendant was “aware of the existence of an allegedly applicable 22 arbitration agreement from the very start, evidenced by its reference to the same as an affirmative 23 defense in its Answer.” (Doc. No. 49 at 5; see also Doc. No. 13 at 22.) In its reply, defendant 24 agrees that it “pleaded arbitration as an affirmative defense in its Answer.” (Doc. No. 51 at 8.) 25 Thus, the court finds that the knowledge requirement is satisfied in this case. 26 The court then turns to whether plaintiff has established that defendant’s intentional acts 27 were inconsistent with it exercising its right to compel arbitration. In doing so, the court must 28 consider “the totality of the parties’ actions.” Armstrong, 59 F.4th at 1015 (citation omitted). 1 “[A] party generally ‘acts inconsistently with exercising the right to arbitrate when it (1) makes an 2 intentional decision not to move to compel arbitration and (2) actively litigates the merits of a 3 case for a prolonged period of time in order to take advantage of being in court.’” Id. (citation 4 omitted). Here, plaintiff argues that defendant has acted inconsistently with exercising the right 5 to arbitrate due to its delay in moving for arbitration and its participation in this federal action, 6 particularly the discovery phase of this litigation. (Doc. No. 49 at 4–13.) 7 “[A] party’s extended silence and delay in moving for arbitration may indicate a conscious 8 decision to continue to seek judicial judgment on the merits of [the] arbitrable claims, which 9 would be inconsistent with a right to arbitrate.” Martin, 829 F.3d at 1125 (internal citations and 10 quotations omitted). While the precise length of delay has not been specified as indicating such a 11 conscious decision, the Ninth Circuit has indicated that litigating in federal court for well over a 12 year in combination with the filing of substantive motions weighs in favor of a finding of waiver. 13 See Hill, 59 F.4th at 476 (finding that the defendant acted inconsistently with its right to compel 14 arbitration where it filed a motion for partial summary judgment as to a key issue in the case and 15 litigated the action for nearly five years); Martin, 829 F.3d at 1126 (finding the right to arbitration 16 waived where the defendant litigated in federal court for seventeen months, filed a motion to 17 dismiss on a key merits issue, received an adverse ruling, and then moved to compel arbitration); 18 Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 759 (9th Cir. 1988) (finding waiver 19 where defendant litigated in court for two years and filed a motion to dismiss on the merits). 20 Particularly relevant here, moving to compel arbitration within a year of the filing of plaintiff’s 21 complaint, in combination with never seeking or obtaining a ruling on the merits, has been found 22 by the Ninth Circuit to indicate no waiver of the right to arbitrate. Armstrong, 59 F.4th at 1016 23 (finding no waiver under these circumstances, despite the defendant’s propounding of limited 24 discovery requests). 25 In this case, defendant moved to compel arbitration within a year of the filing of plaintiff’s 26 complaint, and its motion to compel arbitration is the first substantive motion filed in this action. 27 (Doc. No. 51-1 at ¶ 13.) Accordingly, the court finds that defendant’s delay is insufficient to 28 establish waiver. See Capps v. JPMorgan Chase Bank, N.A., No. 2:22-cv-00806-DAD-JDP, 1 2023 WL 3030990, at *7 (E.D. Cal. Apr. 21, 2023) (finding that almost ten months of delay did 2 not establish waiver where “defendant Experian [did] not [seek] nor obtain[] any ruling from the 3 court on the merits of the action”).3 4 Plaintiff points to defendant’s other filings in this case during the period between the 5 filing of the complaint and defendant’s filing of the pending motion to compel arbitration. (Doc. 6 No. 49 at 5.) However, the court’s review of these filings (which include a motion for extension 7 of time to respond, a notice of interested parties, an answer, notices of appearance of counsel, a 8 joint scheduling report, a joint motion for entry of a protective order, a motion to amend the 9 parties’ stipulated protective order, and a joint stipulation to extend the discovery deadline), 10 reveals that none are indicative of waiver because none sought judicial resolution of plaintiff’s 11 claims on the merits and together they do not present “a clear narrative of . . . strategic choice to 12 engage the judiciary for resolution of the [] claims rather than to obtain a resolution from an 13 arbitrator.” Hill, 59 F.4th at 477; see also Newirth ex rel. Newirth v. Aegis Senior Cmtys., LLC, 14 931 F.3d 935, 941–42 (9th Cir. 2019) (distinguishing between seeking resolution “on the merits 15 of a key issue in a case” and other litigation activities, such as motions not addressing the merits, 16 that do not evince a decision to take advantage of the judicial forum), abrogated on other grounds 17 by Morgan v. Sundance, Inc., 596 U.S. 411 (2022). 18 As noted, plaintiff’s notice of supplemental authority directs this court to a recent decision 19 in which another California district court did find that the defendant had waived its right to 20 compel arbitration based upon its conduct in actively litigating the case before the court. (Doc. 21 No. 58) (citing Slaten v. Experian Info. Sols., Inc., No. 21-cv-09045-MWF, 2023 WL 6890757, at 22 *5 (C.D. Cal. Sept. 6, 2023)). However, in that case, the district court’s analysis discussed 23
24 3 Despite this conclusion, the court notes that under Ninth Circuit precedent, a party’s delay in moving to compel arbitration is more likely to be found reasonable when the moving party 25 provides an explanation for its delay. See Letizia v. Prudential Bache Sec., Inc., 802 F.2d 1185, 1187 (9th Cir. 1986) (finding no waiver where the “defendants did not seek arbitration until after 26 the close of discovery, nine months after their answer was filed . . . because such a move was 27 futile under the then-prevailing law in this circuit”). Defendant here has provided no explanation for its delay in moving to compel arbitration, contributing to this court’s sense that this is a close 28 case as to waiver. 1 various additional litigation activities that the defendant had engaged in, such as participating in 2 mediation and discovery conferences and the making of certain relevant representations to the 3 court. Id. (discussing the defendant’s “representations to the [c]ourt suggesting that it would not 4 seek to compel arbitration” and “that it ‘anticipates it may file a motion for summary judgment’ 5 on issues going to the merits of [the p]laintiff’s claims”). Here, the minimal substantive filings 6 and the eleven months that elapsed between the filing of plaintiff’s complaint and defendant’s 7 motion to compel arbitration, in the absence of other such indications of waiver, do not satisfy 8 plaintiff’s burden of demonstrating that defendant has acted inconsistently with exercising its 9 right to compel arbitration. 10 In further support of its waiver argument, plaintiff has filed a declaration wherein his 11 attorney James Ristvedt states that on March 23, 2023, defendant served 20 requests for 12 admission, 18 interrogatories, and 23 requests for production on plaintiff. (Doc. No. 49-1 at ¶ 2.) 13 Attorney Ristvedt explains that in response, plaintiff produced more than 800 pages of 14 documents. (Id.) He also states that about two months later, defendant sought supplemental 15 written discovery responses from plaintiff, which were provided thereafter. (Id.) In response, 16 defendant’s attorney, Jayce Gustafson, filed a declaration clarifying that plaintiff produced 776 17 pages of documents, over half of which consisted of consumer credit disclosures and other 18 communications from defendant’s affiliate, Experience Consumer Services. (Doc. No. 51-1 at ¶ 19 11.) Attorney Gustafson added that plaintiff’s counsel took one deposition, while defendant has 20 taken no depositions in this matter and has also note engaged in any third party discovery. (Id. at 21 ¶¶ 8, 12.) 22 The discovery activity in this case is somewhat troubling to the court in resolving the 23 pending motion. Defendant has provided no explanation for its decision to propound written 24 discovery, and to even go so far as to seek supplemental written discovery, all while admittedly 25 knowing that there was an arbitration agreement that bound the parties to conducting discovery 26 subject to AAA rules. (Doc. No. 46-2 at 48.) Further, defendant makes no argument that the 27 discovery conducted in this case was narrowly tailored, for example limited to determining the 28 existence or applicability of the arbitration provision or other procedural matters. Rather than 1 explaining why the court should not view the discovery activity as evidence of an intent to 2 litigate, defendant attempts to analogize the present facts to a past case in which this court found 3 that the same defendant had not waived its right to arbitrate. See Doc. No. 51 at 3, 6 (defendant 4 claiming three times that the facts of this case are “indistinguishable” from that of Capps, 2023 5 WL 3030990). However, the defendant’s engagement in discovery in Capps was far less 6 substantial than in the instant case. See Capps, 2023 WL 3030990 at *7 (noting that the parties 7 exchanged document requests, requests for admission, interrogatories, and deposition notices, but 8 defendant Experian filed its motion to compel arbitration before either party had responded to the 9 interrogatories or produced documents). 10 Despite defendant’s lack of explanation for its participation in discovery, the court finds 11 that the weight of the relevant authority suggests that the discovery activity in this case is shy of 12 being sufficient to establish a waiver. See Last v. M-I, L.L.C., No. 1:20-cv-01205-NODJ-EPG, 13 2024 WL 551948, at *8 (E.D. Cal. Feb. 12, 2024) (concluding that the defendant had not engaged 14 in intentional acts inconsistent with its right to compel arbitration despite discovery activity 15 including the conducting of five depositions); Palmer v. Omni Hotel Mgmt. Corp., No. 15-cv- 16 01527 JM-MDD, 2016 WL 816017, at *3–4 (S.D. Cal. Mar. 1, 2016) (finding no waiver on the 17 part of the plaintiff despite his engaging in written discovery, noticing multiple depositions, and 18 taking a deposition). Plaintiff has not been able to “cite any instance in which a court has 19 determined discovery requests alone—however extensive—are so inconsistent with a right to 20 arbitrate that they effect waiver.” Sywula v. Teleport Mobility, Inc., No. 21-cv-01450-BAS-SBC, 21 2023 WL 4630620, at *10 (S.D. Cal. July 18, 2023) (finding that the plaintiff did not meet his 22 burden to demonstrate waiver, despite the fact that the defendants deposed him and served him 23 with discovery requests that bled into the merits and required production of thousands of 24 documents). 25 Further, plaintiff has failed to direct the court to any case in which a court has found that a 26 similar level of engaging with the discovery process alone, without the filing of any substantive 27 motions, could amount to waiver. The court’s own review of cases in which a party was found to 28 have waived its right to arbitrate, despite no filing or discussion of substantive motions, suggests 1 that more substantial pursuit of discovery, and even court involvement in discovery, may be 2 required to find waiver of the right to arbitrate. See Augusta v. Keehn & Assocs., 193 Cal. App. 3 4th 331, 339 (2011) (finding that the plaintiff waived the right to arbitrate where he propounded 4 interrogatories, requests for admission, and document production, demanded supplemental 5 responses, filed two motions to compel, and sought monetary sanctions for discovery rule 6 violations, despite an arbitration clause prohibiting formal discovery); Guess?, Inc. v. Superior 7 Ct., 79 Cal. App. 4th 553, 558 (2000) (finding that the defendant acted inconsistently with its 8 right to arbitrate where it “fully participated in the discovery process” by sending “two sets of 9 lawyers” to the depositions, objecting “in court and out” to discovery demands, and “taking full 10 advantage of the opportunity to test the validity of [the plaintiff’s] claims, both legally and 11 factually”); see also Madrid v. Lazer Spot, Inc., No. 1:19-cv-00669-JLT, 2020 WL 4274218, at 12 *8 (E.D. Cal. July 24, 2020) (finding that the plaintiff acted inconsistently with his right to 13 compel arbitration where he propounded and responded to interrogatories and requests for 14 production, took four depositions, defended one deposition, and filed a discovery motion related 15 to the defendant’s “refusal to designate a deponent”). The discovery activity in this action has not 16 involved coming before the court on a motion to compel, a motion for sanctions, objections to 17 discovery demands, a motion under Federal Rules of Civil Procedure 30(b)(6), or the like. The 18 court thus concludes that plaintiff has not shown that the discovery activity engaged in here, 19 although not as limited as defendant suggests through analogy, is enough to lead to the conclusion 20 that the right to compel arbitration has been waived. 21 Lastly, plaintiff argues in conclusory fashion that defendant not only vigorously 22 participated in discovery before filing the pending motion to compel arbitration, but also 23 manipulated the judicial process by pursuing avenues in discovery likely not available to it in 24 arbitration. (Doc. No. 49 at 8, 10.) Such manipulation could indeed indicate the making of a 25 “strategic choice” for judicial rather than arbitral resolution. Hill, 59 F.4th at 477; see also Plows 26 v. Rockwell Collins, Inc., 812 F. Supp. 2d 1063 (C.D. Cal. 2011) (finding waiver where the 27 defendant pursued broader discovery than what would have been permissible in arbitration given 28 the arbitration agreement’s specific discovery limitations). However, here, plaintiff has not 1 identified discovery avenues that defendant has pursued in this action that would not be available 2 in arbitration, and he has not identified provisions in the Arbitration Agreement that conflict with 3 the discovery that has already been conducted in this action. The court’s own review of the AAA 4 rules for consumer actions suggests that a discovery process is available in arbitration and is not 5 specifically tailored such that the discovery exchanged here would necessarily be prohibited. See 6 American Arbitration Association Consumer Arbitration Rules (2014), at 20 (stating that “[i]f any 7 party asks or if the arbitrator decides on his or her own . . . the arbitrator may direct specific 8 documents and other information to be shared between the consumer and business”). Thus, while 9 the court questions defendant’s choice to engage in discovery before filing the pending motion, it 10 cannot find that plaintiff has demonstrated that the discovery conducted in this case is sufficient 11 evidence of an active litigation strategy by defendant resulting in waiver of its right to arbitrate. 12 Having considered plaintiff’s arguments regarding the totality of defendant’s actions in 13 this case, including its filings in this action, its discovery activities, and its delay in moving for 14 arbitration, the court finds that plaintiff has failed to establish that defendant’s intentional acts 15 were sufficiently inconsistent with the exercising of its right to compel arbitration. However, the 16 court again cautions defendant that it finds this to be a much closer case than what has previously 17 come before the court, in light of defendant’s many months of knowledge of the arbitration 18 provision, active participation in litigation activities before moving to compel arbitration, and the 19 lack of explanation for these actions. 20 C. Staying Proceedings Pending Resolution of Arbitration 21 Based on its consideration of the totality of the circumstances described above, the court 22 concludes that defendant has not waived its right to compel plaintiff into arbitration and will thus 23 grant the pending motion. In addition, as is undisputed between the parties, any disagreement 24 between them regarding the scope of the Arbitration Agreement and whether it covers the dispute 25 between them is a matter that has been clearly and unmistakably delegated to the arbitrator under 26 the terms of the Arbitration Agreement. (Doc. Nos. 46-1 at 21–22; 49 at 3–4.) 27 Within its motion to compel arbitration, defendant requests that the court stay further 28 litigation of this case pending resolution of arbitration. (Doc. No. 46-1 at 22.) In his opposition, 1 plaintiff does not address defendant’s stay request. (Doc. No. 49.) Under § 3 of the FAA, where 2 an issue involved in a proceeding is properly referred to arbitration, the district court “shall on 3 application of one of the parties stay the trial of the action until such arbitration has been had in 4 accordance with the terms of the agreement . . . .” 9 U.S.C. § 3. Accordingly, because the court 5 has concluded that this action will be referred to arbitration, the court also finds that it must stay 6 this action through the completion of arbitration pursuant to § 3 of the FAA.4 7 CONCLUSION 8 For the reasons explained above, 9 1. Defendant’s motion to compel arbitration (Doc. No. 46) is granted and both this 10 action and plaintiff’s asserted claims are stayed pending the completion of 11 arbitration; 12 2. Plaintiff and defendant are required to notify the court that arbitration proceedings 13 have concluded within fourteen (14) days of the issuance of the arbitrator’s 14 decision; and 15 ///// 16 ///// 17 ///// 18
19 4 Under Ninth Circuit precedent, there is an exception to the requirement that a court must stay litigation pending arbitration where “the court determines that all of the claims raised in the action 20 are subject to arbitration.” Forrest v. Spizzirri, 62 F.4th 1201, 1205 (9th Cir. 2023), cert. granted, Smith v. Spizzirri, No. 22-1218, 2024 WL 133822 (U.S. Jan. 12, 2024) (citing Johnmohammadi v. 21 Bloomingdale’s, Inc., 755 F.3d 1072, 1074 (9th Cir. 2014)). The Supreme Court recently granted the petition for certiorari in Forrest in order to decide whether the FAA allows for this exception. 22 Spizzirri, 2024 WL 133822, at *1. In the meantime, some district courts have taken the approach 23 of staying cases temporarily where arbitration is being compelled. See Rossi v. Purvis, No. 23- cv-04148-PCP, 2024 WL 319679, at *10 (N.D. Cal. Jan. 29, 2024) (“Given the possibility of a 24 change in this area of the law, the Court will stay this case until July 1, 2024. In the absence of new authority precluding dismissal, this case will be dismissed on that date.”); Last, 2024 WL 25 551948, at *13 (adopting the same approach with a July 15, 2024 dismissal date). However, the court has made no determination that all of the claims presented in the action are properly subject 26 to arbitration. As mentioned previously, the parties agree that the scope of the Arbitration 27 Agreement and the arbitrability of their claims is a matter delegated to the arbitrator. (Doc. Nos. 46-1 at 21–22; 49 at 3–4.) Thus, the court finds that the Ninth Circuit’s exception does not apply 28 to the instant case. 1 3. Because the action is now stayed pending the completion of arbitration, all dates 2 currently on the calendar in this case are vacated. 3 IT IS SO ORDERED. * | Dated: _ February 22, 2024 Dab A. 2, sxe 5 DALE A. DROZD ‘ UNITED STATES DISTRICT JUDGE 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14