1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 REYNA MCGOVERN, on behalf of Case No.: 18-CV-1794-CAB-LL herself and all others similarly situated, 11 ORDER DENYING MOTION FOR Plaintiff, 12 RECONSIDERATION v. 13 U.S. BANK N.A., [Doc No. 64] 14 Defendant. 15 16 17 On August 10, 2020, the Court granted Plaintiff’s motion for reconsideration of a 18 prior order granting Defendant’s motion to compel arbitration of Plaintiff’s individual 19 claims.1 [Doc. No. 54.] In that August 10 Order, the Court held: 20 1. Based on Blair v. Rent-A-Ctr., Inc., 928 F.3d 819, 831 (9th Cir. 2019), the public injunction waiver language in the arbitration provision in Plaintiff’s 21 Deposit Account Agreement is encompassed by McGill v. Citibank, N.A., 22 2 Cal. 5th 945 (2017), meaning that the public injunction waiver is invalid and unenforceable; and 23 2. Based on McArdle v. AT&T Mobility LLC, 772 F. App'x 575 (9th Cir. 24 2019), cert. denied, No. 19-1078, 2020 WL 2814785 (U.S. June 1, 2020), 25 the unambiguous non-severability clause in the Deposit Account Agreement invalidates the entire arbitration agreement section as a result 26 27 28 1 of the invalidity and unenforceability of the public injunction waiver provision therein. 2 The August 10 Order also noted that it was unnecessary reconsider whether Plaintiff has 3 Article III standing to seek public injunctive relief: 4 This conclusion does not require reconsideration of the Court’s analysis of 5 whether the relief Plaintiff seeks in this case qualifies as “public injunctive 6 relief” or whether Plaintiff has Article III standing to seek “public injunctive relief.” Based on the holding in Blair, the public injunction waiver provision 7 in the arbitration agreement here is invalid and unenforceable. Based on the 8 holding in McArdle, the invalidity of the public injunction waiver provision renders the entire arbitration provision null and void due to the non- 9 severability provision. In light of the binding authority of Blair, and the Ninth 10 Circuit’s application of that authority in McArdle, whether Plaintiff seeks “public injunctive relief” or has standing to do so are irrelevant to the 11 enforceability of the arbitration section of her Deposit Account Agreement. 12 See August 10 Order at note 2 [Doc. No. 54]. 13 Defendant U.S. Bank N.A. (“USB”) now moves for reconsideration of the August 14 10 Order in light of the Ninth Circuit’s holding in Stover v. Experian Holdings, Inc., 978 15 F.3d 1082 (9th Cir. 2020). USB contends that Stover stands for the proposition that to 16 avoid arbitration based on McGill, Plaintiff must first allege Article III standing to seek 17 public injunctive relief. The Court is not persuaded. The arbitration agreement in Stover 18 is different from the one in question here. 19 The Stover arbitration agreement required “that all disputes between the parties must 20 be submitted to arbitration to the fullest extent allowed by law.” Stover, 978 F.3d at 1086. 21 Thus, the Ninth Circuit first held that this language “does not flatly prohibit a plaintiff 22 seeking public injunctive relief in court. Instead, the agreement subjects to arbitration all 23 disputes to the fullest extent allowed by law—which would presumably exclude claims for 24 public injunctive relief in California. This means that the arbitration provision is not 25 facially unenforceable under Blair.” Id. at 1087. In light of this conclusion, the plaintiff 26 in Stover had to arbitrate all of her claims except any claim for public injunctive relief. 27 Thus, the only way the plaintiff could maintain any of her case in federal court was if she 28 had asserted a claim for public injunctive relief and had standing to do so. The Ninth 1 Circuit concluded she had not alleged Article III standing for a claim for public injunctive 2 relief, meaning that all of her claims had to be resolved in arbitration. 3 In other words, the Ninth Circuit considered Article III standing for public injunctive 4 relief only after determining that the agreement in question did not contain an 5 unenforceable public injunction waiver and instead permitted litigation of public injunctive 6 relief claims in court. USB essentially contends that Stover stands for the opposite 7 conclusion: that a Court must evaluate Article III standing for public injunctive relief 8 before it can consider whether a contract contains an unenforceable public injunction 9 waiver that renders an entire arbitration provision null and void because of a non- 10 severability clause. Stover does not stand for such a requirement. Instead, it stands for the 11 rather unremarkable propositions that: (1) to litigate a claim for public injunctive relief in 12 federal court, a plaintiff must have Article III standing to do so; and (2) that the existence 13 of an unenforceable public injunction waiver does not preclude arbitration of any other 14 claims if the arbitration agreement terms otherwise require arbitration of such claims. 15 Here, unlike in Stover, the Court has held that the public injunction waiver in the 16 Deposit Account Agreement is unenforceable under McGill and Blair. USB does not 17 appear to contest this conclusion in the instant motion. Nor did USB make such an 18 argument in its opposition to Plaintiff’s motion for reconsideration. [Doc. No. 52.] Instead, 19 USB argues that Plaintiff does not actually seek public injunctive relief and that Plaintiff 20 does not have Article III standing to seek public injunctive relief. Yet, whether Plaintiff 21 actually seeks public injunctive relief, or has Article III standing to do so, is irrelevant to 22 the unenforceability of the public injunction waiver in the Deposit Account Agreement, 23 which is strictly a question of law and contract interpretation. Even more significantly, 24 Article III standing, or lack thereof, is irrelevant to the nullification of the entire arbitration 25 provision in Plaintiff’s Deposit Account Agreement based on the non-severability clause. 26 To be absolutely clear and for the avoidance of all doubt going forward, the Court 27 has held, continues to hold, and finds no grounds to reconsider the holding, that Plaintiff 28 does not have (and cannot allege) Article III standing to seek public injunctive relief 1 || because public injunctive relief is categorically incompatible with Article II] standing. See 2 || Doc. No. 28 at 7-10 and August 10 Order at n.2; see also Rogers v. Lyft, Inc., 452 F. Supp. 3 904, 919 (N.D. Cal. 2020) (“[T]he question presented is whether the plaintiffs can 4 ||invoke federal-court jurisdiction to adjudicate only a request for a public injunction. The 5 || answer is no... . [plaintiffs] may not invoke state law to use the federal courts merely to 6 || pursue a generalized public grievance. No matter its reasons, the fact that a State thinks a 7 || private party should have standing to seek relief for a generalized grievance cannot override 8 baseline requirements of Article [JI.’’) Gnternal quotation marks and citation omitted). 9 || Plaintiff’s lack of Article III standing to seek public injunctive relief, however, does not 10 change the conclusion that the public injunction waiver in the Deposit Account Agreement 11 |/is unenforceable based on McGill and Blair, and that as a result, due to the non-severability 12 |/clause, the entire arbitration section is null and void. Stover does not compel a different 13 conclusion. 14 In sum, USB wants this Court to hold that the arbitration provision of Plaintiff’s 15 || Deposit Account Agreement requires individual arbitration of all of Plaintiff’s claims. But 16 |/the plain language of that arbitration provision, based on the unenforceable public 17 ||injunction waiver and non-severability clause, renders it null and void.
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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 SOUTHERN DISTRICT OF CALIFORNIA 9 10 REYNA MCGOVERN, on behalf of Case No.: 18-CV-1794-CAB-LL herself and all others similarly situated, 11 ORDER DENYING MOTION FOR Plaintiff, 12 RECONSIDERATION v. 13 U.S. BANK N.A., [Doc No. 64] 14 Defendant. 15 16 17 On August 10, 2020, the Court granted Plaintiff’s motion for reconsideration of a 18 prior order granting Defendant’s motion to compel arbitration of Plaintiff’s individual 19 claims.1 [Doc. No. 54.] In that August 10 Order, the Court held: 20 1. Based on Blair v. Rent-A-Ctr., Inc., 928 F.3d 819, 831 (9th Cir. 2019), the public injunction waiver language in the arbitration provision in Plaintiff’s 21 Deposit Account Agreement is encompassed by McGill v. Citibank, N.A., 22 2 Cal. 5th 945 (2017), meaning that the public injunction waiver is invalid and unenforceable; and 23 2. Based on McArdle v. AT&T Mobility LLC, 772 F. App'x 575 (9th Cir. 24 2019), cert. denied, No. 19-1078, 2020 WL 2814785 (U.S. June 1, 2020), 25 the unambiguous non-severability clause in the Deposit Account Agreement invalidates the entire arbitration agreement section as a result 26 27 28 1 of the invalidity and unenforceability of the public injunction waiver provision therein. 2 The August 10 Order also noted that it was unnecessary reconsider whether Plaintiff has 3 Article III standing to seek public injunctive relief: 4 This conclusion does not require reconsideration of the Court’s analysis of 5 whether the relief Plaintiff seeks in this case qualifies as “public injunctive 6 relief” or whether Plaintiff has Article III standing to seek “public injunctive relief.” Based on the holding in Blair, the public injunction waiver provision 7 in the arbitration agreement here is invalid and unenforceable. Based on the 8 holding in McArdle, the invalidity of the public injunction waiver provision renders the entire arbitration provision null and void due to the non- 9 severability provision. In light of the binding authority of Blair, and the Ninth 10 Circuit’s application of that authority in McArdle, whether Plaintiff seeks “public injunctive relief” or has standing to do so are irrelevant to the 11 enforceability of the arbitration section of her Deposit Account Agreement. 12 See August 10 Order at note 2 [Doc. No. 54]. 13 Defendant U.S. Bank N.A. (“USB”) now moves for reconsideration of the August 14 10 Order in light of the Ninth Circuit’s holding in Stover v. Experian Holdings, Inc., 978 15 F.3d 1082 (9th Cir. 2020). USB contends that Stover stands for the proposition that to 16 avoid arbitration based on McGill, Plaintiff must first allege Article III standing to seek 17 public injunctive relief. The Court is not persuaded. The arbitration agreement in Stover 18 is different from the one in question here. 19 The Stover arbitration agreement required “that all disputes between the parties must 20 be submitted to arbitration to the fullest extent allowed by law.” Stover, 978 F.3d at 1086. 21 Thus, the Ninth Circuit first held that this language “does not flatly prohibit a plaintiff 22 seeking public injunctive relief in court. Instead, the agreement subjects to arbitration all 23 disputes to the fullest extent allowed by law—which would presumably exclude claims for 24 public injunctive relief in California. This means that the arbitration provision is not 25 facially unenforceable under Blair.” Id. at 1087. In light of this conclusion, the plaintiff 26 in Stover had to arbitrate all of her claims except any claim for public injunctive relief. 27 Thus, the only way the plaintiff could maintain any of her case in federal court was if she 28 had asserted a claim for public injunctive relief and had standing to do so. The Ninth 1 Circuit concluded she had not alleged Article III standing for a claim for public injunctive 2 relief, meaning that all of her claims had to be resolved in arbitration. 3 In other words, the Ninth Circuit considered Article III standing for public injunctive 4 relief only after determining that the agreement in question did not contain an 5 unenforceable public injunction waiver and instead permitted litigation of public injunctive 6 relief claims in court. USB essentially contends that Stover stands for the opposite 7 conclusion: that a Court must evaluate Article III standing for public injunctive relief 8 before it can consider whether a contract contains an unenforceable public injunction 9 waiver that renders an entire arbitration provision null and void because of a non- 10 severability clause. Stover does not stand for such a requirement. Instead, it stands for the 11 rather unremarkable propositions that: (1) to litigate a claim for public injunctive relief in 12 federal court, a plaintiff must have Article III standing to do so; and (2) that the existence 13 of an unenforceable public injunction waiver does not preclude arbitration of any other 14 claims if the arbitration agreement terms otherwise require arbitration of such claims. 15 Here, unlike in Stover, the Court has held that the public injunction waiver in the 16 Deposit Account Agreement is unenforceable under McGill and Blair. USB does not 17 appear to contest this conclusion in the instant motion. Nor did USB make such an 18 argument in its opposition to Plaintiff’s motion for reconsideration. [Doc. No. 52.] Instead, 19 USB argues that Plaintiff does not actually seek public injunctive relief and that Plaintiff 20 does not have Article III standing to seek public injunctive relief. Yet, whether Plaintiff 21 actually seeks public injunctive relief, or has Article III standing to do so, is irrelevant to 22 the unenforceability of the public injunction waiver in the Deposit Account Agreement, 23 which is strictly a question of law and contract interpretation. Even more significantly, 24 Article III standing, or lack thereof, is irrelevant to the nullification of the entire arbitration 25 provision in Plaintiff’s Deposit Account Agreement based on the non-severability clause. 26 To be absolutely clear and for the avoidance of all doubt going forward, the Court 27 has held, continues to hold, and finds no grounds to reconsider the holding, that Plaintiff 28 does not have (and cannot allege) Article III standing to seek public injunctive relief 1 || because public injunctive relief is categorically incompatible with Article II] standing. See 2 || Doc. No. 28 at 7-10 and August 10 Order at n.2; see also Rogers v. Lyft, Inc., 452 F. Supp. 3 904, 919 (N.D. Cal. 2020) (“[T]he question presented is whether the plaintiffs can 4 ||invoke federal-court jurisdiction to adjudicate only a request for a public injunction. The 5 || answer is no... . [plaintiffs] may not invoke state law to use the federal courts merely to 6 || pursue a generalized public grievance. No matter its reasons, the fact that a State thinks a 7 || private party should have standing to seek relief for a generalized grievance cannot override 8 baseline requirements of Article [JI.’’) Gnternal quotation marks and citation omitted). 9 || Plaintiff’s lack of Article III standing to seek public injunctive relief, however, does not 10 change the conclusion that the public injunction waiver in the Deposit Account Agreement 11 |/is unenforceable based on McGill and Blair, and that as a result, due to the non-severability 12 |/clause, the entire arbitration section is null and void. Stover does not compel a different 13 conclusion. 14 In sum, USB wants this Court to hold that the arbitration provision of Plaintiff’s 15 || Deposit Account Agreement requires individual arbitration of all of Plaintiff’s claims. But 16 |/the plain language of that arbitration provision, based on the unenforceable public 17 ||injunction waiver and non-severability clause, renders it null and void. In effect, there is 18 || no arbitration provision in the Deposit Account Agreement, meaning Plaintiff may litigate 19 || any and all claims for which she has Article III standing in this Court. The motion for 20 |/reconsideration is therefore DENIED. Plaintiff shall file her opposition to the pending 21 ||motion to dismiss [Doc. No. 58] by December 14, 2020. USB shall file its reply by 22 December 21, 2020. The Court will then take the motion under submission and enter a 23 ||ruling in due course. 24 Itis SO ORDERED. 25 ||Dated: December 3, 2020 € □ 26 Hon. Cathy Ann Bencivengo 27 United States District Judge 28