Guillermo Beltran v. Inter-Con Security Systems, Inc.

• Court: District Court, C.D. California
• Decided: September 13, 2021
• Docket: 2:21-cv-04927
• Status: Unknown

Opinion

JS-6 1 2 UNITED STATES DISTRICT COURT 3 CENTRAL DISTRICT OF CALIFORNIA

5 6 Guillermo Beltran, et al., 7 Case No. 2:21-cv-04927-VAP-(AFMx) Plaintiffs, 8 Order DENYING Plaintiff’s v. 9 Motion to Remand (Dkt. 13) Inter-Con Security Systems, Inc. et and GRANTING Defendant’s 10 Motion to Dismiss (Dkt. 24) al., 11 Defendants. 12 13 14 Plaintiffs Guillermo Beltran, et al. (“Beltran”) filed a Motion to Remand 15 (“Motion to Remand”) on June 29, 2021. (See Doc. No. 13-1.) Defendants 16 Inter-Con Security Systems, Inc. et al. (“Inter-Con”) filed opposition on 17 August 23, 2021 (see Doc. No. 26), and Beltran replied on August 30, 2021 18 (see Doc. No. 30.) 19 20 Inter-Con filed a Motion to Dismiss (“Motion to Dismiss”) on August 9, 21 2021. (See Doc. No. 24-1.) Beltran filed opposition on August 23, 2021 (see 22 Doc. No. 27), and Inter-Con replied on August 30, 2021 (see Doc. No. 31.) 23 24 After considering all the papers filed in support of, and in opposition 25 to, both motions, the Court deems this matter appropriate for resolution 26 1 1 without a hearing pursuant to Local Rule 7–15. The Court DENIES the 2 Motion to Remand and GRANTS the Motion to Dismiss. 3 4 I. BACKGROUND 5 Beltran filed this putative class action in Los Angeles Superior Court 6 against Inter-Con. (See Doc. No. 1-2.) Beltran and other putative class 7 members worked as Armed Nuclear Security Officers for Inter-Con at San 8 Onofre Nuclear Generating Station (“SONGS”) located in Camp Pendleton, 9 California. (See Doc. No. 22.) The First Amended Complaint alleges that 10 Inter-Con failed to pay overtime wages and failed to provide rest periods to 11 Beltran and other putative class members. (See id.) Accordingly, Beltran 12 asserts labor law claims and unfair business practices claims against Inter- 13 Con. (See id.) 14 15 On June 16, 2021, Inter-Con timely removed the Complaint to this 16 Court based on federal question jurisdiction by asserting the federal enclave 17 doctrine. (See Doc. No. 1-1.) 18 19 II. LEGAL STANDARD 20 A. Motion to Remand 21 A civil action may be removed to the district court where the action is 22 pending if the district court has original jurisdiction over the action. 28 23 U.S.C. § 1441(a). “The burden of establishing federal jurisdiction is on the 24 party seeking removal, and the removal statute is strictly construed against 25 removal jurisdiction.” Prize Frize, Inc. v. Matrix (U.S.) Inc., 167 F.3d 1261, 26 1265 (9th Cir. 1999), superseded by statute on other grounds as stated in 2 1 Abrego v. The Dow Chem. Co., 443 F.3d 676, 681 (9th Cir. 2006). There is 2 a strong presumption against removal jurisdiction, and federal jurisdiction 3 “must be rejected if there is any doubt as to the right of removal in the first 4 instance.” Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) (citation 5 omitted). A “defendant always has the burden of establishing that removal 6 is proper.” Id. “If at any time before final judgment it appears that the 7 district court lacks subject matter jurisdiction, the case shall be remanded.” 8 28 U.S.C. § 1447(c). 9 10 B. Motion to Dismiss 11 Federal Rule of Civil Procedure 12(b)(6) allows a party to bring a 12 motion to dismiss for failure to state a claim upon which relief can be 13 granted. Rule 12(b)(6) is read along with Rule 8(a), which requires a short, 14 plain statement upon which a pleading shows entitlement to relief. Fed. R. 15 Civ. P. 8(a)(2); Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). When 16 evaluating a Rule 12(b)(6) motion, a court must accept all material 17 allegations in the complaint—as well as any reasonable inferences to be 18 drawn from them—as true and construe them in the light most favorable to 19 the non-moving party. See Doe v. United States, 419 F.3d 1058, 1062 (9th 20 Cir. 2005); ARC Ecology v. U.S. Dep’t of Air Force, 411 F.3d 1092, 1096 (9th 21 Cir. 2005); Moyo v. Gomez, 32 F.3d 1382, 1384 (9th Cir. 1994). “The court 22 need not accept as true, however, allegations that contradict facts that may 23 be judicially noticed by the court.” Schwarz v. United States, 234 F.3d 428, 24 435 (9th Cir. 2000). 25 26 3 1 To survive a motion to dismiss, a plaintiff must allege “enough facts to 2 state a claim to relief that is plausible on its face.” Twombly, 550 U.S. at 3 570; Ashcroft v. Iqbal, 556 U.S. 662 (2009). “The plausibility standard is not 4 akin to a ‘probability requirement,’ but it asks for more than a sheer 5 possibility that a defendant has acted unlawfully. Where a complaint pleads 6 facts that are ‘merely consistent with’ a defendant’s liability, it stops short of 7 the line between possibility and plausibility of ‘entitlement to relief.’” Iqbal, 8 556 U.S. at 678 (quoting Twombly, 550 U.S. at 556). 9 10 Although the scope of review is limited to the contents of the 11 complaint, the Court may also consider exhibits submitted with the 12 complaint, Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 1542, 13 1555 n.19 (9th Cir. 1990), and “take judicial notice of matters of public 14 record outside the pleadings.” Mir v. Little Co. of Mary Hosp., 844 F.2d 646, 15 649 (9th Cir. 1988). 16 17 18 III. DISCUSSION 19 A. Motion to Remand 20 1. Federal Question Jurisdiction 21 Beltran argues the Court lacks federal question subject matter 22 jurisdiction and thus remand is warranted. Beltran contends he alleges only 23 state law claims and therefore a federal defense, like the federal enclave 24 doctrine, fails to create federal question jurisdiction. (See Doc No. 13-1.) 25 26 4 1 Beltran’s arguments fail. “Federal courts have federal question 2 jurisdiction over tort claims that arise on ‘federal enclaves.’” Durham v. 3 Lockheed Martin Corp., 445 F.3d 1247, 1250 (9th Cir. 2006); see also 28 4 U.S.C. § 1331. Land is a federal enclave when the United States acquires it 5 by purchase or condemnation for any of the purposes mentioned in Article I, 6 section 8, clause 17 of the U.S. Constitution, within the borders of a State. 7 Paul v. United States, 371 U.S. 245, 264 (1963). 8 9 As a threshold matter, SONGS, located within Camp Pendleton, is a 10 federal enclave. As in other similar cases, the Court takes judicial notice 11 that the United States acquired Camp Pendleton “no later than December 12 31, 1942.” Stiefel v. Bechtel Corp., 497 F. Supp. 2d 1138, 1144–45 (S.D. 13 Cal. 2007)1; see also Abikar v. Bristol Bay Native Corp., 300 F. Supp. 3d 14 15 1 Stiefel outlines the history of SONGS as a federal enclave: 16 “In 1939, California consented to allow the United States to acquire by 17 purchase or condemnation any track of land within the state for the pur- pose of erecting forts or other needful buildings. See Cal. Stats.1939, 18 ch. 710, § 1, p. 2231 (Decl. Thomas M. McInerney Supp. Def.'s Mot. Req. Judicial Notice, Ex. D). In 1942, the United States acquired Camp 19 Pendleton through condemnation. See Law Enforcement at San Onofre 20 Nuclear Generation Plant, 1 Op. Off. Legal Counsel 204, 204-05 (1977); see also Letter from James Forrestal, Under Secretary of the Navy, to 21 Earl Warren, California Governor (Sept. 8, 1943) (on file in Official Re- corder's Office of San Diego County, California) (Decl. Thomas M. McIn- 22 erney Supp. Def.'s Mot. Req. Judicial Notice, Ex. E) (“The United States of America became vested with valid title to certain lands in San Diego 23 County, California on December 31, 1942 . . . . [F]or the establishment 24 of Camp Joseph H. Pendleton . . . .”). 25 In 1963, Congress authorized the Secretary of the Navy to grant an easement allowing Southern California Edison Company and San Diego 26 Gas and Electric Company to construct, operate, and maintain a nuclear electric generating station in Camp Pendleton Naval Reservation. See 5 1 1092, 1002 (S.D. Cal. 2018); Cooper v. S. Cal. Edison Co., 170 F. App’x 2 496, 497 (9th Cir. 2006). 3 4 Further, although the parties do not raise it, the Court notes that under 5 40 U.S.C. section 3112, the Undersecretary of the Navy James Forrestal’s 6 letter establishes the date that the United States acquired federal 7 jurisdiction. See 40 U.S.C. § 3112(b). Under section 3112(b), an authorized 8 officer of the United States must accept jurisdiction “by filing a notice of 9 acceptance with the Governor of the State or in another manner prescribed 10 by the laws of the State where the land is situated.” 40 U.S.C. § 3112(b). 11 As required by statute, Undersecretary of the Navy James Forrestal, an 12 authorized officer of the United States, formally accepted jurisdiction of 13 Camp Pendleton as of December 31, 1942, in his letter to then-California 14 Governor Earl Warren. (See Ex. B, Caitlin R. Johnson Declaration 15 (“Johnson Decl.”), Doc. No. 25-1.) Accordingly, although Beltran asserts 16 only state law claims, the claims arise on the federal enclave of Camp 17 Pendleton, and the Court therefore has federal question jurisdiction over 18 Beltran’s claims. See Durham, 445 F.3d at 1250. 19

20 Act of July 30, 1963, Pub.L. No. 88-82, 77 Stat. 115. The U.S. Depart- 21 ment of Justice has confirmed that SONGS is the nuclear generating plant authorized by Congress . . . 22 Furthermore, it is generally known in the community that Camp Pend- 23 leton is a United States Marine Corp Base under the jurisdiction of the federal government. Accordingly, the Court takes judicial notice of the 24 fact that SONGS is located within the federal enclave of Camp Pend- leton, which was acquired by the United States no later than December 25 31, 1942.” 26 Stiefel, 497 F.Supp.2d 1138, 1145-46. 6 1 2. Subclass of Employees 2 Beltran next argues that, even assuming the federal enclave doctrine 3 applies, federal jurisdiction extends to only the subclass of employees who 4 worked at the federal enclave and not those who worked elsewhere. (See 5 Doc No. 13-1.) 6 7 Beltran’s argument again is unavailing. The Complaint’s other 8 proposed subclass also includes those who worked on the federal enclave. 9 (See Doc. No. 1-1, ¶ 38) (“All persons who worked for Defendants . . .”). In 10 other words, Beltran fails to identify a subclass of only those who worked 11 exclusively outside the federal enclave. Accordingly, original jurisdiction 12 extends to all subclasses because they include employees who worked at 13 SONGS. 14 15 For the above reasons, the Court has original jurisdiction over 16 Beltran’s action. 17 18 B. Motion to Dismiss 19 Beltran argues that his state labor law claims are not barred because 20 the California statutes, upon which the Complaint is based, preceded the 21 date that SONGS became a federal enclave. (See Doc. No. 27.) The FAC 22 alleges, in part, violations of California Labor Code sections 226, 226.7, and 23 512(a), as well as Business and Professions Code sections 17200, et seq. 24 (See Doc. No. 22). 25 26 7 1 Beltran’s argument lacks merit. Only state laws in effect at the time of 2 cession or transfer of jurisdiction can continue in operation. See James 3 Stewart & Co. v. Sadrakula, 309 U.S. 94, 100 (1940). Laws enacted by the 4 state after transfer of jurisdiction do not apply in the federal enclave unless 5 they come within a reservation of jurisdiction or are adopted by Congress. 6 See id.; Paul v. United States, 371 U.S. 245, 268 (1963). 7 8 As described above, SONGS is located within the federal enclave of 9 Camp Pendleton, which the United States acquired in 1942. California 10 Labor Code section 226 was enacted in 1943, section 226.7 was adopted in 11 2000, section 512(a) was enacted in 1999, and the Business and 12 Professions Code sections 1700, et seq. were enacted in 1977. (See Doc. 13 No 24-1.) Accordingly, these sections were enacted or adopted after 1942 14 and thus do not apply to Beltran’s claims. See James Stewart & Co., 309 15 U.S. at 100. The Court therefore dismisses the claims asserted under 16 California Labor Code sections 226, 226.7, and 512(a), as well as Business 17 and Professions Code sections 17200, et seq. 18 19 C. Arbitration Agreement 20 The Court now addresses whether the remaining claims are subject to 21 arbitration. Beltran challenges the validity of the electronic signatures on 22 the arbitration agreements (“Agreements”) and, alternatively, argues that the 23 Agreement is unenforceable. (See Doc. No. 27.) Further, Beltran contends 24 Inter-Con waived its right to arbitrate by litigating the merits of the claims in 25 court. (See id.) 26 8 1 1. Validity of Electronic Signatures 2 The Court addresses first the validity of the electronic signatures. 3 Beltran does not contest the validity of the wet signatures for named- 4 plaintiffs Guillermo Beltran (see Ex. C, Johnson Decl., Doc. No. 24-2), Luis 5 Jimenez (see Ex. G, Johnson Decl., Doc. No. 24-2), Louis Dawkins (see Ex. 6 E, Johnson Decl., Doc. No. 24-2), and Rudy Delao (see Ex. F, Johnson 7 Decl., Doc. No. 24-2). Beltran does, however, contest the validity of the 8 electronic signatures for named-plaintiffs Frank Anicoche, Jr., Paganini 9 Louissaint, and Joshua Bolden (see Ex. J, Johnson Decl., Doc. No. 31-1.) 10 11 Beltran specifically challenges the authenticity of the exhibits attached 12 to the declaration of Caitlin R. Johnson, counsel for Inter-Con. (See 13 Johnson Decl., Doc. No. 31-1.) Beltran relies on Ruiz v. Moss Bros. Auto 14 Grp., Inc., 232 Cal. App. 4th 836 (2014) to attack the authenticity of the 15 exhibits. (See Doc. No. 27.) The Ruiz court held that the declaration 16 accompanying the electronic signatures failed to explain how the declarant 17 concluded that plaintiff had signed the document after plaintiff averred he 18 did not recall electronically signing the document. 232 Cal. App. 4th at 844- 19 45. 20 21 Beltran’s arguments are unpersuasive. Whether a valid electronic 22 signature exists, and thus whether a valid arbitration agreement exists, is a 23 question of contract formation. See Acevedo v. Russell Cellular, Inc., No. 24 20-01440, 2021 WL 973949, at *6 (E.D. Cal. March 16, 2021). Accordingly, 25 federal courts apply state law in determining whether a valid arbitration 26 agreement exists. See Arthur Andersen LLP v. Carlisle, 556 U.S. 624, 630- 9 1 31 (2009). In California, the Uniform Electronic Transaction Act provides 2 that a “signature may not be denied legal effect or enforceability solely 3 because it is in electronic form[,]” or “because an electronic record was used 4 in its formation.” Cal. Civ. Code § 1633.7(a). A defendant may meet its 5 “initial burden to show an agreement to arbitrate” merely “by attaching a 6 copy of the arbitration agreement purportedly bearing the opposing party's 7 signature” to the motion to compel arbitration. Espejo v. S. Cal. Permanente 8 Med. Grp., 246 Cal. App. 4th 1047, 1060 (Cal. Ct. App. 2016). Once a 9 plaintiff “challenge[s] the validity of that signature in his opposition,” a 10 defendant is “then required to establish by a preponderance of the evidence 11 that the signature [is] authentic.” Id. 12 13 Beltran’s challenge to the sufficiency of Johnson’s declaration 14 authenticating the electronic signature fails. Johnson, who is familiar with 15 Inter-Con’s hiring practices and policies, has personal knowledge of Inter- 16 Con’s secure internet portal, hosted by Taleo and Paycom, where new 17 applicants apply for positions. (Johnson Decl., Doc. No. 31-1 at ¶ 4.) 18 According to Johnson, each job candidate creates “a username and 19 password” to which “only the applicant has the password.” (See id. at ¶ 5.) 20 The declaration explains that applicants use their password-protected 21 account to review and sign all initial hiring documents, including the 22 Agreement, prior to employment. (See id. at ¶¶ 6-7.) The declaration 23 further explains that for plaintiffs to complete the arbitration agreement, 24 applicants were required to enter their full name, “username, password, and 25 the date of signing, and then click a button that says ‘e-Sign it!’” (See id.) 26 Johnson explains also that the system creates a unique “Esign ID” that the 10 1 system produces only if the signer’s password verified his or her electronic 2 signature. (See id. at ¶¶ 6-8.) Unlike the unsuccessful declarant in Ruiz, 3 Johnson describes in detail the steps of the initial hiring process, clarifying 4 that the process could be completed only with signer’s private password, 5 and that plaintiffs completed the initial hiring process only by signing the 6 arbitration agreement. See Smith v. Patina Restaurant Group, LLC, No. 19- 7 4441, 2019 WL 6434697, at *4 (C.D. Cal. Aug. 20, 2019). Finally, Beltran 8 does not argue plaintiffs did not sign the agreements and thus Ruiz is 9 distinguishable. Inter-Con therefore properly authenticated plaintiffs’ 10 electronic signatures on the Agreement. 11 12 2. Class Action Waiver 13 Beltran next argues that, even assuming the electronic signatures are 14 authenticated, the Agreement is unenforceable because plaintiffs had no 15 meaningful opportunity to opt out of the Agreement. (See Doc. No. 27.) 16 17 Beltran falls short of demonstrating the Agreement is unenforceable. 18 Under the Federal Arbitration Act, an arbitration agreement is valid and 19 enforceable unless grounds exist at law or in equity for revocation. 9 U.S.C. 20 § 2. Federal courts apply state law in determining whether a valid 21 arbitration agreement exists. See Arthur Andersen LLP, 556 U.S. at 630-31. 22 “General contract defenses such as fraud, duress, or unconscionability, 23 grounded in state contract law, may operate to invalidate arbitration 24 agreements.” Circuit City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 25 2002). In California, a contract is unenforceable if it is both procedurally and 26 substantively unconscionable. Armendariz v. Found. Health Psychcare 11 1 Servs., Inc., 24 Cal. 4th 83, 114 (2000) (citation omitted). Procedural 2 unconscionability focuses on oppression or surprise due to unequal 3 bargaining power. Id. Substantive unconscionability is concerned with 4 overly harsh or one-sided results. Id. “Because unconscionability is a 5 contract defense, the party asserting the defense bears the burden of 6 proof.” Sanchez v. Valencia Holding Co., LLC, 61 Cal. 4th 899, 911 (2015) 7 (citation omitted). 8 9 Even assuming for the purpose of this motion that Beltran had no 10 meaningful opportunity to opt out, this would show only procedural 11 unconscionability. As Beltran fails to make substantive unconscionability 12 arguments, and both procedural and substantive unconscionability need to 13 exist for an unconscionability defense, the Court finds the Agreement is 14 enforceable. 15 16 3. Arbitration Waiver 17 Beltran asserts that Inter-Con waived its right to arbitrate by removing 18 the action to federal court and by filing motions to dismiss Beltran’s claims. 19 (See Doc. No. 27.) 20 21 “Under federal law, waiver is the intentional relinquishment or 22 abandonment of a known right. A party seeking to prove that the right to 23 compel arbitration has been waived must carry the heavy burden of 24 demonstrating: (1) knowledge of an existing right to compel arbitration; (2) 25 intentional acts inconsistent with that existing right; and (3) prejudice to the 26 12 1 person opposing arbitration from such inconsistent acts.” Newirth v. Aegis 2 Senior Cmtys., LLC, 931 F.3d 935, 940 (9th Cir. 2019). 3 4 Inter-Con knows of its right to compel arbitration, satisfying the first 5 element. As to the second element, Inter-Con’s acts are wholly consistent 6 with an intent to seek arbitration. Inter-Con’s pre-motion communications 7 with Beltran demonstrate its intention to enforce the Agreement requiring 8 arbitration. (See Exs. 1-1, 1-2, 1-3, Johnson Decl., Doc. No. 24-2). Further, 9 Inter-Con’s Motion to Dismiss contends “[Inter-Con] does not intend to, and 10 expressly does not, waive its right to enforce the Agreements by first 11 seeking a dismissal of the above-referenced claims pursuant to the federal 12 enclave doctrine, which is the purpose of the concurrent Motion to Dismiss 13 filed herein.” (See Doc. No. 24 at 19 n.9). Finally, as there is no 14 inconsistent conduct, there is no prejudice. See Ironshore Specialty 15 Insurance Company v. Kling Consulting Group, Inc., No. 19-05787, 2020 16 WL 3978080, at *5 (C.D. Cal. May 27, 2020) (“As the Court finds no 17 inconsistent conduct, it thus follows there is no prejudice resulting from 18 inconsistent conduct.”). Inter-Con therefore has not waived arbitration. 19 20 The Court therefore finds the Agreement is enforceable and requires 21 Beltran to arbitrate his remaining claims not dismissed above. 22 23 IV. CONCLUSION 24 For the reasons stated above, the Court DENIES Beltran’s Motion to 25 Remand and GRANTS Inter-Con’s Motion to Dismiss with prejudice as to 26 claims asserted under California Labor Code sections 226, 226.7, and 13 | | 512(a), as well as Business and Professions Code sections 17200, et seq. 2 | All remaining claims also are dismissed against Inter-Con without prejudice 3 | and are compelled to arbitration. 4 5 | ITIS SO ORDERED. 6 7) Dated: 9/13/21 Vigo QO, Ph. “at 8 Virginia A. Phillips 9 nited States District Judge

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