Marselian v. Wells Fargo and Company

• Court: District Court, N.D. California
• Decided: January 20, 2021
• Docket: 4:20-cv-03166
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 SETO MARSELIAN, et al., Case No. 20-cv-03166-HSG

8 Plaintiffs, ORDER GRANTING MOTION TO COMPEL ARBITRATION 9 v. Re: Dkt. No. 24 10 WELLS FARGO AND COMPANY, et al., 11 Defendants.

12 13 Pending before the Court is the motion to compel arbitration filed by Defendants Wells 14 Fargo & Company and Wells Fargo Bank, N.A. Dkt. No. 24. The Court held a hearing on 15 December 10, 2020. For the reasons detailed below, the Court GRANTS the motion to compel. 16 I. BACKGROUND 17 In response to the COVID-19 pandemic, Congress enacted the Coronavirus Aid, Relief, 18 and Economic Security Act, Pub. L. No. 116-136, 134 Stat. 281 (Mar. 27, 2020) (“CARES Act”). 19 As relevant to these two cases, the CARES Act amended the Small Business Act (“SBA”), 15 20 U.S.C. § 636, and established the Paycheck Protection Program (“PPP”) to help small businesses 21 meet payroll and cover expenses. See CARES Act, § 1102. Under the PPP, participating lenders 22 were authorized to make loans to eligible small businesses, and the loans, in turn, were guaranteed 23 by the SBA. See id. 24 Plaintiff Seto Marselian filed the above-captioned putative class action against Defendants. 25 Plaintiff alleges that (1) he submitted a PPP loan application to Defendants; and (2) at least at the 26 time he filed the complaint, he had not received PPP loan proceeds from Defendants. See Dkt. 27 No. 1 (“Compl.”) at ¶¶ 77–82, 87. Plaintiff alleges that this delay was due to Defendants’ decision 1 processing them “on a first-come, first-served basis.” See Compl. at ¶¶ 15, 19. Doing so, Plaintiff 2 alleges, benefited Defendants who could “maximize” their commissions if they “process[ed] the 3 largest dollar value loans” first. See id. at ¶¶ 15, 17, 19, 22, 42–46, 68, 70. But when Defendants 4 announced their participation in the PPP, they allegedly “represented that [they] would focus 5 [their] efforts on ‘nonprofits and businesses with fewer than 50 employees.’” See id. at ¶ 36; see 6 also id. at ¶¶ 40–41. Plaintiff explains that had Defendants disclosed how they were actually 7 processing the PPP loans, Plaintiff would have submitted PPP applications to other financial 8 institutions. See id. at ¶¶ 22–23. He further alleges that “[a]s a result of Wells Fargo’s unfair 9 business practices . . . thousands of small businesses that were entitled to loans under the PPP did 10 not receive the critical loan proceeds they needed while most at risk.” Id. at ¶ 24. 11 Based on these facts, Plaintiff asserts causes of action for violation of California Civil 12 Code § 1710; violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code 13 §§ 17200, et seq.; violation of California’s False Advertising Law, Cal. Bus. & Prof. Code 14 §§ 17500, et seq.; unjust enrichment; and accounting. See id. at ¶¶ 95–140. Plaintiff also seeks to 15 represent a class defined as “[a]ll individuals and small businesses in the United States that met 16 the criteria for receiving a loan under the PPP and who timely applied for a PPP loan through 17 Wells Fargo, but whose applications were not processed and/or who were not issued loans by 18 Wells Fargo.” See Compl. at ¶ 88. 19 Defendants now move to compel arbitration, or in the alternative to dismiss the claims 20 under Rule 12(b)(6). 21 II. LEGAL STANDARD 22 The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1 et seq., sets forth a policy favoring 23 arbitration agreements and establishes that a written arbitration agreement is “valid, irrevocable, 24 and enforceable.” 9 U.S.C. § 2; Epic Sys. Corp. v. Lewis, 138 S. Ct. 1612, 1621 (2018) (noting 25 federal policy favoring arbitration); Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 26 U.S. 1, 24 (1983) (same). The FAA allows that a party “aggrieved by the alleged failure, neglect, 27 or refusal of another to arbitrate under a written agreement for arbitration may petition any United 1 for in such agreement.” 9 U.S.C. § 4. This federal policy is “simply to ensure the enforceability, 2 according to their terms, of private agreements to arbitrate.” Volt Info. Sciences, Inc. v. Bd. of 3 Trustees of Leland Stanford Jr. Univ., 489 U.S. 468, 476 (1989). Courts must resolve any 4 “ambiguities as to the scope of the arbitration clause itself . . . in favor of arbitration.” Id. 5 When a party moves to compel arbitration, the court must determine (1) “whether a valid 6 arbitration agreement exists” and (2) “whether the agreement encompasses the dispute at issue.” 7 Lifescan, Inc. v. Premier Diabetic Servs., Inc., 363 F.3d 1010, 1012 (9th Cir. 2004). The 8 agreement may also delegate gateway issues to an arbitrator, in which case the court’s role is 9 limited to determining whether there is clear and unmistakable evidence that the parties agreed to 10 arbitrate arbitrability. See Brennan v. Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). In either 11 instance, “before referring a dispute to an arbitrator, the court determines whether a valid 12 arbitration agreement exists.” Henry Schein, Inc. v. Archer & White Sales, Inc., 139 S. Ct. 524, 13 530 (2019) (citing 9 U.S.C. § 2). 14 III. DISCUSSION 15 Defendants first move to compel Plaintiff’s claims to arbitration. See Dkt. No. 24 at 4–7. 16 In support of the motion to compel arbitration, Defendants contend that Plaintiff signed a Wells 17 Fargo Business Account Application, and in doing so, “agree[d] to be bound by” the Wells Fargo 18 “account agreement that includes the Arbitration Agreement.” See Dkt. No. 24-1, Ex. 1 at 5. On 19 page five of the Business Account Application, it states in bold: 20 The Customer’s use of any Wells Fargo Bank, N.A. (“Bank”) 21 deposit account, product or service will confirm the Customer’s receipt of, and agreement to be bound by, the Bank’s 22 applicable . . . account agreement that includes the Arbitration Agreement under which any dispute between the Customer and 23 the Bank relating to the Customer’s use of any Bank deposit account, product or service will be decided in an arbitration 24 proceeding before a neutral arbitrator as described in the Arbitration Agreement and not by a jury or court trial. 25 26 Id. The arbitration agreement within the Wells Fargo account agreement further explains that 27 Plaintiff agrees: 1 to submit to binding arbitration all claims, disputes, and controversies 2 between or among Wells Fargo and [Plaintiff] . . . whether in tort, contract or otherwise arising out of or relating in any way to 3 [Plaintiff’s] account(s) and/or service(s), and their negotiation, execution, administration, modification, substitution, formation, 4 inducement, enforcement, default, or termination. 5 6 Id., Ex. 8 at 6. Defendants also proffer a declaration from a Wells Fargo Operational Risk 7 Consultant, who explains that at the time Plaintiff submitted his Business Account Application, 8 Defendants provided him with a “New Account Kit.” See id., Dkt. No. 30-1 at ¶ 4. And included 9 in this New Account Kit were the account agreement and arbitration agreement. Id. Defendants 10 also note that the account agreement is available on the Wells Fargo website. See Dkt. No. 30 at 11 9; see also Dkt. No. 30-1 at ¶ 5. 12 Plaintiff’s response is twofold. First, Plaintiff challenges that he entered into an arbitration 13 agreement at all. Plaintiff contends that Defendant Wells Fargo & Company, a holding company, 14 is not a signatory to the arbitration agreement, and as a separate entity cannot compel arbitration. 15 See Dkt. No. 29 at 4–5. And Plaintiff urges that in any event, Defendants have not established that 16 Plaintiff had notice of the arbitration agreement. Second, Plaintiff contends that the arbitration 17 agreement is not otherwise enforceable. See id. at 6–11. 18 A. Existence of Agreement to Arbitrate 19 As an initial matter, Defendants do not appear to dispute that only Defendant Wells Fargo 20 Bank, N.A., and not the holding company, is a signatory to the arbitration agreement. See Dkt. 21 No. 30 at 2–3. However, even as Plaintiff has alleged, the holding company is not a lender for 22 purposes of the PPP. Plaintiff acknowledges in the complaint that “[t]he [holding] company’s 23 subsidiaries provide various banking and financial services to businesses and consumers.” 24 Compl. at ¶ 31 (emphasis added). Throughout the complaint, Plaintiff refers collectively to 25 Defendants as “Wells Fargo,” and does not attempt to distinguish the holding company’s conduct 26 versus the bank’s conduct. See generally Compl. 27 // 1 Courts applying California law1 have routinely found that “[w]hen charges against a parent 2 company and its subsidiary are based on the same facts and are inherently inseparable, a court may 3 refer those claims against the parent to arbitration . . . even if the parent is not formally a party to 4 the arbitration agreement.” See Naria v. Trover Sols., Inc., 967 F. Supp. 2d 1332, 1339 (N.D. Cal. 5 2013); see also Wilmot v. McNabb, 269 F. Supp. 2d 1203, 1208 (N.D. Cal. 2003) (same). Under 6 similar circumstances, the California Court of Appeal ruled that a signatory to an arbitration 7 agreement could not “avoid the arbitration obligation imposed by its underlying agreement with [a 8 subsidiary]” by suing the parent company, reasoning that “[h]e who takes the benefit must bear the 9 burden.” See Metalclad Corp. v. Ventana Envtl. Organizational P’ship, 109 Cal. App. 4th 1705, 10 1718–19 (Cal. Ct. App. 2003) (citing Cal. Civ. Code § 3521); see also NORCAL Mut. Ins. Co. v. 11 Newton, 84 Cal. App. 4th 64, 76 (Cal. 2000) (“The common thread [in holding nonsignatories 12 bound by arbitration contracts] is the existence of an agency or similar relationship between the 13 nonsignatory and one of the parties to the arbitration agreement.”). As the Fifth Circuit aptly 14 explained, “[i]f the parent corporation was forced to try the case, the arbitration proceedings would 15 be rendered meaningless and the federal policy in favor of arbitration effectively thwarted.” Sam 16 Reisfeld & Son Import Company v. S.A. Eteco, 530 F.2d 679, 681 (5th Cir. 1976); accord J.J. 17 Ryan & Sons, Inc. v. Rhone Poulenc Textile, S.A., 863 F.2d 315, 321 (4th Cir. 1988). 18 Plaintiff next suggests that he did not receive adequate notice of the arbitration agreement, 19 and therefore cannot be bound by it. See Dkt. No. 29 at 6–8. Plaintiff points to his own 20 declaration in which he states that when he met with Defendants to open his business account “[a]t 21 no time during the meeting did anyone tell [him] about any arbitration agreement” and that he 22 “do[es] not recall reading anything regarding arbitration in the application.” See Dkt. No. 29-1 at 23 ¶¶ 2–3. In addition, he stated that he “ha[s] never read any Deposit Account Agreements or any 24 arbitration clauses in such agreements.” Id. at ¶ 4; see also Dkt. No. 34, Exs. 1–3. Plaintiff 25 further notes that he only signed the Business Account Application, and not the separate 26 arbitration agreement, and says there is no evidence that he received the arbitration agreement. 27 1 See Dkt. No. 29 at 6. 2 “In determining the validity of an agreement to arbitrate, federal courts ‘should apply 3 ordinary state-law principles that govern the formation of contracts.’” See Ferguson v. 4 Countrywide Credit Indus., Inc., 298 F.3d 778, 782 (9th Cir. 2002) (quoting First Options of 5 Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). “An essential element of any contract is the 6 consent of the parties or mutual assent.” See Donovan v. RRL Corp., 26 Cal. 4th 261, 270 (Cal. 7 2001); see also Civ. Code §§ 1550, 1565. Mutual assent “is determined under an objective 8 standard applied to the outward manifestations or expressions of the parties, i.e., the reasonable 9 meaning of their words and acts, and not their unexpressed intentions or understandings.” Deleon 10 v. Verizon Wireless, LLC, 207 Cal. App. 4th 800, 813 (Cal. Ct. App. 2012) (quotation omitted); 11 see also Civ. Code § 1639 (“When a contract is reduced to writing, the intention of the parties is to 12 be ascertained from the writing alone, if possible . . . .”). “[A] party’s subjective intent, or 13 subjective consent, therefore is irrelevant” to the question of mutual consent. See Stewart v. 14 Preston Pipeline Inc., 134 Cal. App. 4th 1565, 1587 (Cal. Ct. App. 2005) (quotation omitted). 15 “[O]rdinarily one who signs an instrument which on its face is a contract is deemed to assent to all 16 its terms” and “cannot avoid the terms of a contract on the ground that he or she failed to read it 17 before signing.” Marin Storage & Trucking, Inc. v. Benco Contracting & Eng’g, Inc., 89 Cal. 18 App. 4th 1042, 1049 (Cal. Ct. App. 2001), as modified (June 8, 2001). 19 By signing the Business Account Application, Plaintiff manifested his assent to the terms 20 in that document. See Marin Storage, 89 Cal. App. 4th at 1049. And his apparent failure to read 21 the six-page document does not undermine his assent. Id. “If a party could get out of a contract 22 by arguing that he did not recall making it, contracts would be meaningless.” See Blau v. AT & T 23 Mobility, No. C 11-00541 CRB, 2012 WL 10546, at *4 (N.D. Cal. Jan. 3, 2012). Accordingly, in 24 the absence of any alleged fraud, overreaching, or excusable neglect, Plaintiff is deemed to have 25 assented to all of the agreement’s terms, whether or not he actually understood or even read them. 26 These terms included the arbitration agreement. 27 Under California law, “parties may incorporate by reference into their contract the terms of 1 Ct. App. 1997). “For the terms of another document to be incorporated into the document 2 executed by the parties the reference must be clear and unequivocal, the reference must be called 3 to the attention of the other party and he must consent thereto, and the terms of the incorporated 4 document must be known or easily available to the contracting parties.” Id. This is readily 5 satisfied here where the Business Account Application itself states that Plaintiff “confirm[s] [his] 6 receipt of, and agreement to be bound by, the Bank’s applicable . . . account agreement that 7 includes the Arbitration Agreement . . . .” See Dkt. No. 24-1, Ex. 1 at 5 (emphasis added). 8 Moreover, the Business Account Application explains the key provisions of the arbitration 9 agreement: Plaintiff agrees that “any dispute between [Plaintiff] and the Bank relating to 10 [Plaintiff’s] use of any Bank deposit account, product or service will be decided in an arbitration 11 proceeding before a neutral arbitrator” and “not by a jury or court trial.” Id. Defendants further 12 proffer evidence that they provided Plaintiff with the arbitration agreement, see id., Dkt. No. 30-1 13 at ¶ 4, and that it is also available on the Wells Fargo website. See Dkt. No. 30 at 9; see also Dkt. 14 No. 30-1 at ¶ 5. “If Plaintiff had not received the [arbitration] agreement and was concerned about 15 being bound to terms []he had not read, []he could have asked to see it before signing it.” Al- 16 Thani v. Wells Fargo & Co., No. C 08-1745 CW, 2009 WL 55442, at *6 (N.D. Cal. Jan. 7, 2009). 17 Plaintiff’s cases are inapposite. See Dkt. No. 29 at 7–8. None involves circumstances 18 where the plaintiff physically signed an agreement, as Plaintiff did here. In Lee v. Intelius, 737 19 F.3d 1254 (9th Cir. 2013), and Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1175 (9th Cir. 20 2014), for example, the Ninth Circuit considered whether a binding agreement could be formed 21 through websites where (1) a user is presented with the terms and conditions and must click on a 22 button or box to indicate that he agrees before he may continue (“clickwrap”) or (2) the website’s 23 terms and conditions are provided to users via a hyperlink at the bottom of a webpage and a user’s 24 assent to the terms is assumed by his continued use of the website (“browsewrap”).2 In Knutson v. 25 Sirius XM Radio, Inc., 771 F.3d 559 (9th Cir. 2014), the Ninth Circuit found lack of mutual assent 26

27 2 The Court further notes that in Lee v. Intelius, the Ninth Circuit was applying Washington state 1 where the plaintiff purchased a car from Toyota that came with a trial subscription to Sirius XM 2 satellite radio, but did not receive any documents from Sirius XM to indicate that he was entering 3 into a contractual relationship with that entity until a month later. See id. at 566. And similarly, in 4 Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279 (9th Cir. 2017), the Ninth Circuit found 5 lack of mutual assent where the plaintiff purchased a Samsung Galaxy S4 phone that contained an 6 arbitration provision embedded in a warranty brochure included in the phone box. Id. at 1281–90. 7 In doing so, the Ninth Circuit noted that in general “silence or inaction does not constitute 8 acceptance of an offer,” and the Court further noted that the contractual nature of the document 9 was not apparent. See id. at 1284–86. 10 Here, the contractual nature of the Business Account Application is obvious on its face and 11 its language is clear. See Dkt. No. 24-1, Ex. 1. As already noted above, on page five of the 12 agreement, it states in bold that Plaintiff “confirm[s] [his] receipt of, and agreement to be bound 13 by, the Bank’s applicable . . . account agreement that includes the Arbitration Agreement . . . .” 14 See Dkt. No. 24-1, Ex. 1 at 5. Defendants have therefore established that the parties formed an 15 agreement to arbitrate. 16 B. Delegation of Arbitrability 17 Next, Plaintiff raises several issues concerning the enforceability of the arbitration 18 agreement, including whether it violates the California Supreme Court’s opinion in McGill v. 19 Citibank N.A., 2 Cal. 5th 945 (Cal. 2017). See Dkt. No. 29 at 8–11. Defendants contend that the 20 parties agreed to arbitrate such issues, and further disagrees that the arbitration agreement violates 21 McGill. See Dkt. No. 30 at 7–9. 22 Parties to an arbitration agreement “can agree to arbitrate ‘gateway’ questions of 23 ‘arbitrability,’ such as whether the parties have agreed to arbitrate or whether their agreement 24 covers a particular controversy.” Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68–69 (2010). 25 “[W]hether the court or the arbitrator decides arbitrability is ‘an issue for judicial determination 26 unless the parties clearly and unmistakably provide otherwise.’” Oracle Am., Inc. v. Myriad Grp. 27 A.G., 724 F.3d 1069, 1072 (9th Cir. 2013) (quoting Howsam v. Dean Witter Reynolds, Inc., 537 1 arbitrability. See Momot v. Mastro, 652 F.3d 982, 987–88 (9th Cir. 2011). “[C]lear and 2 unmistakable ‘evidence’ of agreement to arbitrate arbitrability might include . . . a course of 3 conduct demonstrating assent . . . or . . . an express agreement to do so.” Id. at 988. The Supreme 4 Court has clarified: 5 When the parties’ contract delegates the arbitrability question to an 6 arbitrator, a court may not override the contract. In those circumstances, a court possesses no power to decide the arbitrability 7 issue. That is true even if the court thinks that the argument that the arbitration agreement applies to a particular dispute is wholly 8 groundless. 9 10 Henry Schein, 139 S. Ct. at 529. 11 The arbitration agreement in this case states that any dispute regarding “a disagreement 12 about th[e] Arbitration Agreement’s meaning, application, or enforcement” is subject to 13 arbitration, and that the arbitration will be conducted in accordance with the American Arbitration 14 Association (“AAA”) “commercial dispute resolution procedures.” See Dkt. No. 24-1, Ex. 8 at 6– 15 7. The AAA Commercial Arbitration Rules, in turn, further provide that “[t]he arbitrator shall 16 have the power to rule on his or her own jurisdiction, including any objections with respect to the 17 existence, scope, or validity of the arbitration agreement or to the arbitrability of any claim or 18 counterclaim.” See AAA Commercial Arbitration Rules and Mediation Procedures R-7(a).3 In 19 response, Plaintiff suggests in passing that the delegation language here is not as “clear” or 20 “specific” as in other cases. See Dkt. No. 29 at 10–11. Yet Plaintiff fails to explain this 21 conclusory assertion. Id. And even if the specific language in the arbitration agreement were 22 somehow insufficient evidence on its own, the agreement also incorporates the AAA Commercial 23 Rules. The Ninth Circuit has held that “incorporation of the AAA rules constitutes clear and 24 unmistakable evidence that contracting parties agreed to arbitrate arbitrability.”4 See Brennan v. 25 3 See American Arbitration Association, 26 http://www.adr.org/sites/default/files/CommercialRules_Web.pdf (last visited Jan. 8, 2021). 4 Although the Ninth Circuit in Brennan left open the question of whether its holding only applies 27 to sophisticated parties and commercial contracts, it noted that “the vast majority of the circuits 1 Opus Bank, 796 F.3d 1125, 1130 (9th Cir. 2015). The Court therefore finds that the parties’ 2 arbitration agreement expressly delegates questions of the arbitrability of any dispute and the 3 enforceability of the arbitration agreement to the arbitrator. 4 Plaintiff also suggests that the arbitration agreement violates the California Supreme 5 Court’s opinion in McGill v. Citibank N.A., 2 Cal. 5th 945 (Cal. 2017), and the agreement is 6 therefore unenforceable. See id. In McGill, the California Supreme Court held that arbitration 7 provisions are invalid and unenforceable if they purport to waive a plaintiff’s statutory right to 8 seek public injunctive relief in any forum. See 2 Cal. 5th 945 (Cal. 2017). In McGill, the plaintiff 9 brought claims under California’s Consumer Legal Remedies Act, UCL, and false advertising 10 laws, and sought an injunction prohibiting the defendant from continuing to engage in its allegedly 11 illegal and deceptive practices. Id. at 952. The defendant sought to compel arbitration, and the 12 Court held that the arbitration provision was unenforceable because it waived the plaintiff’s right 13 to seek public injunctive relief under these statutes in any forum. Id. at 954. The Ninth Circuit 14 has since held that the “McGill rule” is a contract defense that is not preempted by the FAA. See 15 Blair v. Rent-A-Center, Inc., 928 F.3d 819, 830–31 (9th Cir. 2019). Plaintiff in this case invokes 16 McGill, and argues that public injunctive relief is available to redress his UCL and false 17 advertising claims, but that such relief is otherwise precluded under the arbitration agreement. See 18 Dkt. No. 29 at 10. 19 Plaintiff appears to suggest that the Court—and not the arbitrator—should decide whether 20 the arbitration agreement is invalid and unenforceable under McGill. See id. at 10–11. The 21 Supreme Court has held that “[a]n agreement to arbitrate a gateway issue is simply an additional, 22 antecedent agreement [that] the party seeking arbitration asks the federal court to enforce, and the 23 FAA operates on this additional arbitration agreement just as it does on any other.” See Rent-A- 24 Center, 561 U.S. at 69–70. “Accordingly, unless [Plaintiff] challenge[s] the delegation provision 25 specifically, [the Court] must treat it as valid under § 2 [of the FAA], and must enforce it under 26 §§ 3 and 4, leaving any challenge to the validity of the [a]greement as a whole for the arbitrator.” 27 1 Id. at 72. In Rent-a-Center, for example, the Supreme Court noted that the plaintiff had “opposed 2 the motion [to compel arbitration] on the ground that ‘the arbitration agreement in question is 3 clearly unenforceable in that it is unconscionable,’” id. at 66, and that “[n]owhere in his opposition 4 to [the defendant’s] motion to compel arbitration did he even mention the delegation provision,” 5 id. at 72. The Court therefore upheld the delegation provision. See id. at 72–76. Here too, 6 although Plaintiff’s invocation of the McGill rule is directed to the arbitration agreement in 7 general, he does not specifically challenge the delegation provision at all. 8 And the application of the “McGill rule” is a gateway issue that may be delegated to the 9 arbitrator. Accord Dekker v. Vivint Solar, Inc., No. C 19-07918 WHA, 2020 WL 1429740, at *3– 10 4 (N.D. Cal. Mar. 24, 2020), vacated on other grounds, No. C 19-07918 WHA, 2020 WL 4732194 11 (N.D. Cal. Aug. 14, 2020); Cooper v. Adobe Sys. Inc., No. 18-CV-06742-BLF, 2019 WL 12 5102609, at *7 (N.D. Cal. Oct. 11, 2019); Revitch v. Uber Techs., Inc., No. 18-CV-2974-PSG- 13 GJS, 2018 WL 6340755, at *5 (C.D. Cal. Sept. 5, 2018); DeVries v. Experian Info. Sols., Inc., No. 14 16-CV-02953-WHO, 2017 WL 733096, at *8–9 (N.D. Cal. Feb. 24, 2017). In McGill, the parties 15 agreed that the scope and effect of the provision at issue was to waive the right to relief in any 16 forum, and the California Supreme Court considered only that waiver. See McGill, 2 Cal 5th at 17 956. Not so here. The parties appear to dispute (1) whether Plaintiff’s claims based on his PPP 18 application fall within the scope of the arbitration agreement; (2) whether Plaintiff has sought—or 19 even can seek—public injunctive relief for his claims; (3) whether the arbitration agreement in fact 20 bars all claims for public injunctive relief in violation of McGill; and (4) assuming the arbitration 21 agreement runs afoul of McGill, the impact on the enforceability of the arbitration agreement as to 22 Plaintiff’s claims. Compare Dkt. No. 29 at 10–11 with Dkt. No. 30 at 8–9. The arbitration 23 agreement in this case delegates such questions about the “meaning, application, and enforcement” 24 of the arbitration agreement to the arbitrator. See Dkt. No. 24-1, Ex. 8 at 6–7. The Court therefore 25 “possesses no power to decide [such] arbitrability issue[s].”5 See Henry Schein, 139 S. Ct. at 529; 26 5 Plaintiff relies heavily on Lotsoff v. Wells Fargo Bank, N.A., No. 18-CV-02033-AJB-JLB, 2019 27 WL 4747667, at *4 (S.D. Cal. Sept. 30, 2019), to conclude that the arbitration agreement runs 1 see also Kum Tat Ltd. v. Linden Ox Pasture, LLC, 845 F.3d 979, 983 (9th Cir. 2017) (“Although 2 || challenges to the validity of a contract with an arbitration clause are to be decided by the 3 arbitrator, challenges to the very existence of the contract are, in general, properly directed to the 4 || court.”) (citing Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 445 (2006)). 5 Because the arbitrability of this dispute is itself a question for an arbitrator, it is neither 6 || necessary nor appropriate for the Court to consider the parties’ positions regarding the scope and 7 validity of the arbitration agreement. 8 IV. CONCLUSION 9 Accordingly, the Court GRANTS the motion to compel arbitration and STAYS the case 10 || pending completion of arbitration. The parties are directed to file a joint status report regarding the 11 status of the arbitration proceeding 120 days from the date of this order and every 120 days 12 || thereafter unless otherwise ordered. The clerk is directed to administratively close the case. 5 13 IT IS SO ORDERED. S 14 || Dated: 1/20/2021

2 HAYWOOD S. GILLIAM, JR. = 16 United States District Judge

19 20 21 22 23 24 25 26 27 28