Jodi Duval v. Costco Wholesale Corporation

• Court: District Court, N.D. California
• Decided: June 5, 2023
• Docket: 3:22-cv-02338
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 JODI DUVAL, Case No. 22-cv-02338-TSH

8 Plaintiff, ORDER RE: MOTION TO COMPEL ARBITRATION AND FOR STAY 9 v. PENDING COMPLETION OF ARBITRATION 10 COSTCO WHOLESALE CORPORATION, Re: Dkt. No. 42 11 Defendant.

12 13 I. INTRODUCTION 14 Pending before the Court is Costco Wholesale Corporation’s (“Costco”) Motion to Compel 15 Arbitration and for Stay Pending Completion of Arbitration. ECF No. 42. Plaintiff Jodi Duval 16 filed opposition (ECF No. 45) and Costco filed a Reply (ECF No. 46). Having considered the 17 parties’ positions, relevant legal authority, and the record in this case, the Court GRANTS the 18 motion for the following reasons.1 19 II. BACKGROUND 20 Plaintiff Jodi Duval filed this lawsuit against Costco, Kurt “Doe,” and Does 1-25, alleging 21 negligence and premises liability based on a slip-and-fall at a Costco store. See ECF No. 42-2 22 (Complaint). On April 14, 2022, the proceeding was removed to federal court. ECF No. 1. 23 On March 30, 2023, Costco filed the instant Motion to Compel Arbitration. ECF No. 42. 24 Duval failed to timely file opposition pursuant to California Northern District Local Rule 7-3, and 25 on March 30, 2023, this Court ordered Duval to show cause as to why the case should not be 26 compelled to arbitration. ECF No. 44. On April 25, 2023, Duval filed a response to the Court’s 27 1 order. ECF No. 45. On May 2, 2023, the Costco filed a reply. ECF No. 46. 2 According to Plaintiff’s testimony in her February 10, 2023 deposition, she was at Costco 3 at the time of the incident picking up items as part of an Instacart assignment. See ECF No. 42-3 4 122:23-123:7. Instacart is a technology company through which customers can purchase 5 consumer goods from retail partners and arrange for personal shoppers to deliver the goods. See 6 ECF No. 42-5 ¶¶ 3-4. Instacart hires independent contractors who provide personal shopping to 7 customers. Id. ¶ 4. Costco is a retail partner of Instacart. Id. ¶ 3. 8 Costco has proffered a copy of an “Independent Contractor Agreement” that it says Duval 9 agreed to as part of the process of becoming an Instacart employee. ECF Nos. 42-5, 42-6 (the 10 “Agreement”). The Agreement contains an arbitration clause wherein the parties agreed to final 11 and binding arbitration by a neutral arbitrator for “any and all disputes and claims between you 12 and any third party retailer arising out of or related to the Services performed under this 13 Agreement.” Id. ¶ 8.1, 8.3. According to the terms of the Agreement, the arbitration is to be 14 administrated under JAMS procedures, and the Agreement is governed by the Federal Arbitration 15 Act (“FAA”). Id. ¶ 8.1, 8.7. 16 The last page of the Agreement states that “by virtue of signing this Agreement you 17 acknowledge that you have carefully read this Agreement, that you understand its terms including 18 the Arbitration Provision, and that you enter into this Agreement voluntarily. You agree to sign 19 this Agreement electronically and that your signature below is valid.” Id. at 6. Under this 20 acknowledgment, Plaintiff’s name follows. Id. at 7. 21 III. LEGAL STANDARD 22 As an initial matter, Plaintiff argues that the Federal Arbitration Act (“FAA”) is not the 23 applicable law. ECF No. 45 at 7. The Court finds the FAA governs here. The FAA applies to 24 contracts “evidencing a transaction involving commerce.” 9 U.S.C. § 2. The Supreme Court has 25 interpreted “involving commerce” “as the functional equivalent of the more familiar term 26 ‘affecting commerce’ -- words of art that ordinarily signals the broadest permissible exercise of 27 Congress’ Commerce Clause power.” Citizens Bank v. Alafabco, Inc., 539 U.S. 52, 56 (2003) (per 1 in interstate commerce, the FAA applies ‘if in the aggregate the economic activity in question 2 would represent a general practice . . . subject to federal control. Only that general practice need 3 bear on interstate commerce in a substantial way.’” Kin Wah Kung v. Experian Info. Sols., Inc., 4 No. C 18-00452 WHA, 2018 WL 2021495, at *2 (N.D. Cal. May 1, 2018) (quoting Citizens Bank, 5 539 U.S. at 56-57). 6 Instacart is Delaware corporation, Plaintiff is a California resident, and the relevant 7 contract addresses shopping for goods in third-party retailers, such as Costco, a Washington 8 corporation. See ECF Nos. 42-2 ¶¶ 1-2, 42-5 ¶ 3. See also Sanchez v. Gruma Corp., No. 19-CV- 9 00794-WHO, 2019 WL 1545186, at *3 (N.D. Cal. Apr. 9, 2019) (finding FAA applies where 10 defendant was incorporated in Nevada, plaintiff was a resident of California and hired to perform 11 work in California, and broader company work was international). Further, Instacart is a 12 technology company and the services provided by Plaintiff to customers involve a virtual 13 marketplace through a smartphone application or website. See United States v. Sutcliffe, 505 F.3d 14 944, 953 (9th Cir. 2007) (“[A]s both the means to engage in commerce and the method by which 15 transactions occur, the Internet is an instrumentality and channel of interstate commerce.”); Hofer 16 v. Emley, No. 19-CV-02205-JSC, 2019 WL 4575389, at *12 (N.D. Cal. Sept. 20, 2019) (finding 17 agreement affected interstate commerce and the FAA applied because plaintiff had to access the 18 internet using his smartphone in order to engage with the company); S.S. by & through Stern v. 19 Peloton Interactive, Inc., 566 F. Supp. 3d 1019, 1042 (S.D. Cal. 2021) (finding that contract 20 affected interstate commerce because it related to company’s services and use of those services 21 “require[d] use of the Internet, the Agreement would involve interstate commerce.”). Finally, the 22 Agreement expressly states that the FAA applies. See Williams v. Eaze Sols., Inc., 417 F. Supp. 23 3d 1233, 1238 (N.D. Cal. 2019) (applying the FAA where interstate commerce was involved and 24 the contract stated the FAA governed). 25 Under the FAA, courts are required to enforce contractual arbitration agreements except 26 “upon such grounds as exist at law or in equity for the revocation of any contract.” Epic Sys. 27 Corp. v. Lewis, 138 S. Ct. 1612, 1616 (2018). The FAA “reflect[s] both a liberal federal policy 1 Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (citations and internal quotations omitted). 2 The Court’s role is to decide: “(1) whether there is an agreement to arbitrate between the parties; 3 and (2) whether the agreement covers the dispute.” Brennan v. Opus Bank, 796 F.3d 1125, 1130 4 (9th Cir. 2015). “If the response is affirmative on both counts, then the Act requires the court to 5 enforce the arbitration agreement in accordance with its terms.” Chiron Corp. v. Ortho Diagnostic 6 Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). “[A]ny doubts concerning the scope of arbitrable 7 issues should be resolved in favor of arbitration.” Id. at 1131. 8 IV. DISCUSSION 9 A. Contract Formation 10 Plaintiff argues that there was no agreement to arbitrate because Costco has failed to 11 authenticate her signature and the Agreement is unconscionable. See ECF No. 45. Plaintiff does 12 not otherwise contend that her claims are outside the scope of the arbitration clause of the 13 Agreement. 14 “When deciding whether the parties agreed to arbitrate a certain matter (including 15 arbitrability), courts generally . . . should apply ordinary state-law principles that govern the 16 formation of contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). In 17 California, “[a] party petitioning the court to compel arbitration bears the burden of proving by a 18 preponderance of evidence the existence of an arbitration agreement.” Olvera v. El Pollo Loco, 19 Inc., 173 Cal. App. 4th 447, 453 (2009) (citation omitted), abrogated on other grounds by AT&T 20 Mobility LLC, 563 U.S. at 339. Because “arbitration is a matter of contract,” the FAA cannot 21 require a party “to submit to arbitration any dispute which he has not agreed so to submit.” United 22 Steelworkers of Am. v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960). Under California law, 23 a contract requires (1) parties capable of contracting; (2) consent; (3) a lawful object; and (4) 24 consideration. Cal. Civ. Code § 1550. 25 1. Authentication of the Agreement 26 Duval argues that Costco has not sufficiently authenticated the Agreement, in particular 27 Duval’s signature. ECF No. 45 at 7-12. Costco argues it has met its burden. ECF No. 46 at 2-11. 1 finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment 2 of such facts by any other means provided by law.” Ruiz v. Moss Bros. Auto Grp., 232 Cal. App. 3 4th 836, 843 (2014). A defendant may meet its “initial burden to show an agreement to arbitrate 4 by attaching to their petition a copy of the purported arbitration agreement purportedly bearing 5 [plaintiff’s] electronic signature. Once [plaintiff] challenge[s] the validity of that signature in his 6 opposition, defendants [are] then required to establish by a preponderance of the evidence that the 7 signature [is] authentic.” Espejo v. S. California Permanente Med. Grp., 246 Cal. App. 4th 1047, 8 1060 (2016). “The act of the person may be shown in any manner, including a showing of the 9 efficacy of any security procedure applied to determine the person to which the electronic record 10 or electronic signature was attributable.” Cal. Civ. Code § 1633.9(a). The “burden of 11 authenticating an electronic signature is not great.” Ruiz, 232 Cal. App. 4th at 844. 12 The Court finds that Costco has met the relatively low threshold to authenticate Duval’s 13 signature. Jerica Sunga attests that she is the Litigation Operations Lead for Instacart, that she has 14 personal knowledge of the matters set forth in her declaration, and that the relevant documents are 15 maintained in the regular course of Instacart’s business. ECF No. 42-5 ¶ 2. She attests that 16 prospective Instacart shoppers follow a sign-up process on Instacart’s website, download the 17 Instacart shopper application and sign paperwork, including the Agreement, a privacy policy, and 18 a W-9. Id. ¶ 5. She attests that Duval completed the sign-up process and signed the relevant 19 documents on September 1, 2019. Id. ¶ 6. Notably, the W-9 form requires personal information, 20 such as Duval’s social security number. See ECF No. 42-6 at 10. See also Gonzalez v. Ceva 21 Logistics U.S., Inc., No. 16-CV-04282-WHO, 2016 WL 6427866, at *3-4 (N.D. Cal. Oct. 31, 22 2016) (finding the fact that the application process “required applicants to fill out detailed personal 23 information that only the applicant would know” was sufficient to show that no one else could 24 have completed the agreement); De La Vega v. Sterling Jewelers Inc., No. 25 SACV17440JVSKESX, 2017 WL 10605190, at *4 (C.D. Cal. July 7, 2017) (finding relevant in 26 authenticating signature on arbitration agreement that “[o]ther portions of the job application 27 requested De La Vega’s personal information, such as address, telephone number, social security 1 trail” provided to the Court with the Agreement shows the same phone number and IP address 2 accessing and signing the W-9 form, privacy policy, and Agreement within one minute of each 3 other. See ECF No. 42-6 at 14; Taft v. Henley Enterprises, Inc., No. SACV151658JLSJCGX, 4 2016 WL 9448485, at *3 (C.D. Cal. Mar. 2, 2016) (“An audit trail documents the steps that Taft 5 took in her onboarding process in reverse chronological order, and it demonstrates that she 6 electronically reviewed and signed the arbitration agreement on September 4, 2014.”). Based on 7 this circumstantial evidence and the relatively light burden, the Court finds Plaintiff’s signature 8 sufficiently authenticated. 9 Further, Duval does not actually state that she never signed the Agreement. Duval declares 10 that she does not recall ever being presented with the exhibits presented with Costco’s motion, 11 which would include the Agreement. See ECF No. 45-1 ¶ 7. Duval also states that she would 12 never have agreed to arbitration with Costco. Id. ¶ 8. However, most of Duval’s other statements 13 fail to address the relevant issue – whether she signed the Agreement with Instacart. Her 14 statement that she never signed any paperwork with Costco, for example, is not an attestation that 15 she never signed the Agreement. Id. ¶ 3. Duval does not contest that the phone number provided 16 in the audit trail is hers. Without more specific facts from Duval, there is not a sufficient dispute 17 as to the authenticity of the signature. See Taft, 2016 WL 9448485 at *4 (finding plaintiff’s 18 declaration that she does not remember signing the agreement, without more, fails to adequately 19 rebut defendant’s evidence). 20 Plaintiff’s reliance on Iyere v. Wise Auto Group, is misplaced, as that case supports that a 21 plaintiff’s failure to remember providing an electronic signature is sufficient to shift the burden to 22 defendant to authenticate the signature by a preponderance of evidence. 87 Cal. App. 5th 747, 757 23 (2023), review denied (Apr. 26, 2023). Gamboa v. Ne. Cmty. Clinic, similarly, discusses burden- 24 shifting when a plaintiff comes forward with facts contesting the arbitration agreement. 72 Cal. 25 App. 5th 158 (2021). To the extent Plaintiff cites Gamboa, and argues that the declaration of 26 Jerica Sunga is insufficient, Plaintiff does not actually provide any objections upon which the 27 Court may rule. Plaintiff states she has lodged numerous objections in an “Objection to 1 Finally, the case Bannister v. Marinidence Opco, LLC, is distinguishable, as there plaintiff 2 presented evidence specifically refuting that she signed the arbitration agreement, describing a 3 scenario where a human resources employee filled out plaintiff’s information as part of the 4 onboarding process but never actually showed plaintiff the computer nor provided copies of any of 5 the documents completed. 64 Cal. App. 5th 541, 546 (2021), as modified (May 21, 2021). Again, 6 Plaintiff fails to attest that she did not sign the Agreement or provide other evidence from which 7 the Court can understand a specific factual dispute to exist. As such, the Court finds Costco has 8 met its burden to authenticate the Agreement. 9 2. Unconscionability of the Agreement 10 Plaintiff argues that the arbitration provision in the independent contractor agreement is 11 unconscionable because “click” agreements are disfavored and unconscionable. ECF No. 45 at 12 13-15. Defendant argues that the agreement is not “clickwrap” in nature. ECF No. 46 at 12-13. 13 “Unconscionability refers to ‘an absence of meaningful choice on the part of one of the 14 parties together with contract terms which are unreasonably favorable to the other party.’” Ingle v. 15 Cir. City Stores, Inc., 328 F.3d 1165, 1170 (9th Cir. 2003) (quoting A & M Produce Co. v. FMC 16 Corp., 135 Cal. App. 3d 473, 486 (Cal. Ct. App. 1982)). “Because unconscionability is a 17 generally applicable defense to contracts, California courts may refuse to enforce an 18 unconscionable arbitration agreement.” Id.; Kinney v. United HealthCare Servs., Inc., 70 Cal. 19 App. 4th 1322, 1328-29 (1999). The party seeking to establish an unconscionability defense must 20 do so by a preponderance of the evidence. Peng v. First Republic Bank, 219 Cal. App. 4th 1462, 21 1468 (2013), as modified (Oct. 2, 2013); Serafin v. Balco Properties Ltd., LLC, 235 Cal. App. 4th 22 165, 173 (2015). 23 The Court finds Plaintiff’s arguments unavailing and inapplicable, and that she has 24 therefore failed to meet her burden. Plaintiff argues that courts have been hostile to “browsewrap” 25 agreements. ECF No. 45 at 14. She also argues that the “Uber Defendants” have presented a 26 “clickwrap” adhesion contract. Id. “A ‘browsewrap’ agreement is one in which an internet user 27 accepts a website’s terms of use merely by browsing the site. A ‘clickwrap’ agreement is one in 1 button, with a link to the agreement readily available.” Sellers v. JustAnswer LLC, 73 Cal. App. 2 5th 444, 463 (2021), reh’g denied (Jan. 18, 2022), review denied (Apr. 13, 2022) (emphasis in 3 original). There are no particular allegations or facts indicating that the Agreement is a clickwrap 4 || or browsewrap agreement. Plaintiff’s reference to “Uber” in this section of her opposition 5 suggests she is referring to another agreement and another proceeding entirely. Under the 6 circumstances, the Court finds Plaintiff has not met her burden to establish that the Agreement in 7 || this matter is unconscionable. 8 Vv. CONCLUSION 9 The motion to compel is GRANTED and this action is STAYED pending arbitration of all 10 || claims determined by an arbitrator to be subject to the parties’ arbitration agreement. The parties 11 are directed to provide the Court with joint status updates on the arbitration proceedings every 90 12 days from the date of this order. 13 IT IS SO ORDERED.

15 Dated: June 5, 2023 16 7 LU \ : Lj-~— 5 7 Ueee S. HIXSON nited States Magistrate Judge 18 19 20 21 22 23 24 25 26 27 28