Garcia v. Central Coast Restaurants, Inc.

N.D. California

Garcia v. Central Coast Restaurants, Inc.

District Court, N.D. California·Decided April 14, 2023·No. 3:18-cv-02370·Unknown

Opinion

1 2 3 4 5 6 9 JENNIFER GARCIA, 10 Case No. 18-cv-02370-RS Plaintiff, 11 v. ORDER LIMITING DISCOVERY 12 CENTRAL COAST RESTAURANTS, 13 INC., et al., 14 Defendants.

15 16 The parties have raised a question concerning the scope of discovery leading up to the 17 Federal Arbitration Act (“FAA”) “mini-trial” scheduled for September 19, 2023. Defendants argue 18 discovery must be limited “to facts relevant to the enforceability of three versions of arbitration 19 agreements at issue in this case,” Dkt. 131; Plaintiff opposes limiting discovery, see Dkt. 132. 20 Defendants’ position is correct. The focus of the mini-trial is “limited to determining (1) 21 whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 22 encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 23 1130 (9th Cir. 2000). While the FAA limits discovery when a motion to compel arbitration is 24 pending, see Laguna v. Coverall N. Am., Inc., No. 09cv2131-JM (BGS), 2011 WL 3176469, at *7 25 (S.D. Cal. July 26, 2011), its logic applies with equal force here, even though no such motions are 26 pending. See Dkt. 131, at 4 n.2. The enforceability of the arbitration agreements is a potentially 27 dispositive issue. If Plaintiff is unsuccessful, issues concerning the merits of her claim are, with 1 Inc. v. Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999). Discovery should not be extended to 2 encompass the merits until this critical question is resolved.! 3 For these reasons, discovery shall be limited to the issue of the enforceability of the 4 arbitration agreements at issue. Any discovery disputes pertaining to this question shall be referred 5 to the Magistrate Judge. Pursuant to the FAA, the parties must indicate their intent to request a 6 jury trial for the mini-trial no later than July 19, 2023. 7 8 ITISSO ORDERED. 9 10 Dated: April 14, 2023

RICHARD SEEBORG 12 Chief United States District Judge

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Z 18 19 20 21 22 23 24 ' Defendants separately argue that engaging in merits-based discovery at this stage would subject them to the risk of waiving their right to arbitrate. Dkt. 131, at 4-5 (citing Hill v. Xerox Bus. 25 Servs., LLC, 59 F.4th 457, 469 (9th Cir. 2023)). While a moot point in light of this order, Defendants’ concern is misplaced. Hill holds that the test for determining waiver is based on “the 26 totality of the parties’ actions.” 59 F.4th at 471. Here, the fact that Defendants’ have raised this point at all — that is, strenuously voicing their concern about waiver — is itself inconsistent with 27 the conclusion that they have waived their right to arbitrate. 28 ORDER LIMITING DISCOVERY CASE No. 18-cv-02370-RS

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1 2 3 4 5 6 9 JENNIFER GARCIA, 10 Case No. 18-cv-02370-RS Plaintiff, 11 v. ORDER LIMITING DISCOVERY 12 CENTRAL COAST RESTAURANTS, 13 INC., et al., 14 Defendants.

15 16 The parties have raised a question concerning the scope of discovery leading up to the 17 Federal Arbitration Act (“FAA”) “mini-trial” scheduled for September 19, 2023. Defendants argue 18 discovery must be limited “to facts relevant to the enforceability of three versions of arbitration 19 agreements at issue in this case,” Dkt. 131; Plaintiff opposes limiting discovery, see Dkt. 132. 20 Defendants’ position is correct. The focus of the mini-trial is “limited to determining (1) 21 whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 22 encompasses the dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 23 1130 (9th Cir. 2000). While the FAA limits discovery when a motion to compel arbitration is 24 pending, see Laguna v. Coverall N. Am., Inc., No. 09cv2131-JM (BGS), 2011 WL 3176469, at *7 25 (S.D. Cal. July 26, 2011), its logic applies with equal force here, even though no such motions are 26 pending. See Dkt. 131, at 4 n.2. The enforceability of the arbitration agreements is a potentially 27 dispositive issue. If Plaintiff is unsuccessful, issues concerning the merits of her claim are, with 1 Inc. v. Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999). Discovery should not be extended to 2 encompass the merits until this critical question is resolved.! 3 For these reasons, discovery shall be limited to the issue of the enforceability of the 4 arbitration agreements at issue. Any discovery disputes pertaining to this question shall be referred 5 to the Magistrate Judge. Pursuant to the FAA, the parties must indicate their intent to request a 6 jury trial for the mini-trial no later than July 19, 2023. 7 8 ITISSO ORDERED. 9 10 Dated: April 14, 2023

RICHARD SEEBORG 12 Chief United States District Judge

= 17

Z 18 19 20 21 22 23 24 ' Defendants separately argue that engaging in merits-based discovery at this stage would subject them to the risk of waiving their right to arbitrate. Dkt. 131, at 4-5 (citing Hill v. Xerox Bus. 25 Servs., LLC, 59 F.4th 457, 469 (9th Cir. 2023)). While a moot point in light of this order, Defendants’ concern is misplaced. Hill holds that the test for determining waiver is based on “the 26 totality of the parties’ actions.” 59 F.4th at 471. Here, the fact that Defendants’ have raised this point at all — that is, strenuously voicing their concern about waiver — is itself inconsistent with 27 the conclusion that they have waived their right to arbitrate. 28 ORDER LIMITING DISCOVERY CASE No. 18-cv-02370-RS

Garcia v. Central Coast Restaurants, Inc., (N.D. Cal. 2023).

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