Myers v. Racerworld LLC

• Court: District Court, D. Arizona
• Decided: May 18, 2022
• Docket: 2:21-cv-01244
• Status: Unknown

Opinion

1 WO 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE DISTRICT OF ARIZONA

9 Nicole Myers, et al., No. CV-21-01244-PHX-MTL

10 Plaintiffs, ORDER

11 v.

12 Racerworld LLC, et al.,

13 Defendants. 14 15 Plaintiffs Nicole Myers and Emily Peters assert a collective and class action against 16 Racerworld, LLC d/b/a Bourbon Street, and other defendants (collectively “Bourbon 17 Street”), for alleged misclassification under the Fair Labor Standards Act (“FLSA”), 29 18 U.S.C. § 201 et seq., and related Arizona law. Plaintiffs are exotic dancers who claim that 19 Bourbon Street misclassified their status as independent contractors, required that they 20 pay rent, and compensated them solely with tips. Plaintiffs allege that they should have 21 been classified as employees and paid wages. (Doc. 1 ¶¶ 1–4.) Bourbon Street now moves 22 to dismiss and seeks enforcement of an arbitration clause in both Plaintiffs’ license 23 agreements. (Doc. 16.) 24 I. LEGAL STANDARD 25 The Federal Arbitration Act (“FAA”) was enacted in response to widespread 26 judicial hostility toward arbitration agreements. AT&T Mobility LLC v. Concepcion, 563 27 U.S. 333, 339 (2011). Section 2 of the FAA states that “[a] written provision in . . . a 28 contract evidencing a transaction involving commerce to settle by arbitration a controversy 1 thereafter arising out of such contract or transaction . . . shall be valid, irrevocable, and 2 enforceable, save upon such grounds as exist at law or in equity for the revocation of any 3 contract.” 9 U.S.C. § 2. The Supreme Court has described this provision of the FAA as 4 both a “liberal federal policy favoring arbitration,” and the “fundamental principle that 5 arbitration is a matter of contract.” Concepcion, 563 U.S. at 339 (citing Moses H. Cone 6 Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983); Rent-A-Center, W., Inc. v. 7 Jackson, 561 U.S. 63, 67 (2010)). 8 In line with these principles, courts must place arbitration agreements on equal 9 footing with other contracts and enforce them according to their terms. Concepcion, 563 10 U.S. at 339 (citations and quotations omitted); Chiron Corp. v. Ortho Diagnostic Sys., Inc., 11 207 F.3d 1126, 1130 (9th Cir. 2000). The FAA “leaves no place for the exercise of 12 discretion by a district court, but instead mandates that district courts shall direct the parties 13 to proceed to arbitration on issues as to which an arbitration agreement has been signed.” 14 Chiron Corp., 207 F.3d at 1130 (quoting Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 15 218 (1985)). The Court’s role under the FAA, therefore, is limited to determining “(1) 16 whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement 17 encompasses the dispute at issue.” Id. 18 “When evaluating a motion to compel arbitration, courts treat the facts as they 19 would when ruling on a motion for summary judgment, construing all facts and reasonable 20 inferences that can be drawn from those facts in a light most favorable to the non-moving 21 party.” Totten v. Kellogg Brown & Root, LLC, 152 F. Supp. 3d 1243, 1249 (C.D. Cal. 2016) 22 (internal citation omitted). Generally, “the party resisting arbitration bears the burden of 23 proving that the claims at issue are unsuitable for arbitration.” Green Tree Fin. Corp.- 24 Alabama v. Randolph, 531 U.S. 79, 91 (2000). But where the issue is whether there exists 25 an agreement to arbitrate, the party seeking to enforce an arbitration agreement bears the 26 burden of showing that it exists. See, e.g., Sanford v. Memberworks, Inc., 483 F.3d 956, 27 962–64 (9th Cir. 2007). Courts apply state-law principles to determine whether an 28 agreement to arbitrate is valid. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 1 (1995); Cir. City Stores, Inc. v. Adams, 279 F.3d 889, 892 (9th Cir. 2002). 2 II. BACKGROUND 3 Bourbon Street is an “adult entertainment club” that offers exotic dancing to its 4 patrons. Plaintiffs Myers and Peters allege that they worked as exotic dancers at Bourbon 5 Street from August 2017 to November 2019. (Doc. 1 ¶ 44.) They were classified as 6 independent contractors but aver that they and the putative class and collective members 7 should have been classified as employees. (Id. ¶¶ 50, 59.) The Complaint alleges that 8 Bourbon Street personnel “hired/fired, issued pay, supervised, directed, disciplined, and 9 performed all other duties generally associated with that of an employer with regard to the 10 dancers.” (Id. ¶ 60.) Bourbon Street, moreover, “required Plaintiffs and other exotic 11 dancers to perform private dances under the pricing guidelines, policies, procedures, and 12 promotions set exclusively by Defendants.” (Id. ¶ 59.) 13 Both plaintiffs executed contracts with Bourbon Street denominated as License 14 Agreements. The Agreements signed by Myers and Peters appear to be identical. Myers 15 signed her Agreement in October 2018, over one year after she began working at the 16 Bourbon Street premises. (Doc. 16-1 at 2.) Peters signed her agreement on August 18, 17 2017, about the time that she began working there. (Doc. 16-2 at 2.) 18 The Agreements indicate that each dancer is granted “a nonexclusive license . . . to 19 perform adult entertainment personal services for patrons . . . during the periods of time 20 the Premises is open to the general public.” (Doc. 16-1 at 2–3; Doc. 16-2 at 2–3.) The 21 Agreements also require that the Plaintiffs pay Bourbon Street a “License Fee” “in 22 exchange for the privilege of exercising the License” and they include a provision 23 disclaiming an employer-employee relationship. (Doc. 16-1 at 3, 4–5; Doc. 16-2 at 3, 4– 24 5.) 25 Both Agreements contain a “Binding Arbitration and Class Action Waiver” that 26 “applies to any dispute between you and [Bourbon Street] or anyone acting for and on 27 behalf of [Bourbon Street]” (the “Arbitration Agreement”). (Doc. 16-1 at 7; Doc. 16-2 at 28 7.) The term “dispute” is broadly defined as including “any dispute, action, or other 1 controversy between you and [Bourbon Street] concerning this Agreement, whether in 2 contract, warranty, tort, statute, regulation, ordinance, or any other legal or equitable basis.” 3 (Id.) When a dispute arises, the injured party must provide a written notice by certified 4 mail to the other party. Then, the parties must attempt to resolve the dispute through 5 informal negotiations for a period of 60 days. If the dispute is not resolved by the end of 6 that period, the injured party “may commence arbitration.”1 (Id.) Arbitration proceedings 7 shall “be conducted exclusively by individual binding arbitration governed by the [FAA]. 8 Class arbitrations aren’t permitted.” (Id.) The Arbitration Agreement continues, 9 Thus, by execution and delivery of this Agreement to [Bourbon 10 Street], you’re giving up your right to litigate disputes in court before a judge or jury (or participate in court as a party or class 11 member). Instead, all disputes will be resolved before a neutral 12 arbitrator, whose decision will be final except for a limited right of appeal under the FAA. 13 14 (Doc. 16-1 at 7–8; Doc. 16-2 at 7–8.) 15 The Arbitration Agreement further addresses the subject of class actions in a stand- 16 alone subparagraph entitled “Class Action Waiver.” That subparagraph provides, 17 Any proceedings to resolve or litigate any dispute in any forum 18 will be conducted solely on an individual basis. Neither you nor [Bourbon Street] will seek to have any dispute heard as a 19 class action, private attorney general action, or in any other 20 proceeding in which either party acts or proposes to act in a representative capacity. No arbitration or other proceeding will 21 be combined with another without the prior written consent of 22 all parties to all affected arbitrations or proceedings. 23 (Doc. 16-1 at 8; Doc. 16-2 at 8.) 24 Finally, under the heading “Claims or Disputes Must be Filed within One Year,” 25 the Arbitration Agreement specifies that, 26

27 1 Alternatively, an injured party may pursue litigation in the Maricopa County, Arizona, small claims court “if the dispute meets all requirements to be heard in such small claims 28 court.” (Doc. 16-1 at 7; 16-2 at 7.) This small-claims-court election does not require any party to engage in informal negotiation. (Id.) 1 To the extent permitted by law, any claim or dispute to which [the Arbitration Agreement] applies must be filed within one 2 year . . . in arbitration . . . . The one-year period begins when 3 the claim or Notice of Dispute first could be filed. If such a claim or dispute isn’t filed within one year, it’s permanently 4 barred. 5 (Id.) 6 Based on these provisions, Bourbon Street now moves to dismiss Plaintiffs’ 7 Complaint and seeks an order compelling arbitration. (Doc. 16.) 8 9 III. DISCUSSION 10 A. Validity of Arbitration Agreement 11 The Court’s initial task is to determine whether a valid arbitration agreement exists 12 between the parties. Ordinary contract law principles guide this inquiry. Estate of 13 Decamacho ex rel. Guthrie v. La Solana Care & Rehab, Inc., 234 Ariz. 18, 21 (App. 14 2014). To create a valid, enforceable contract, there must be “an offer, acceptance, 15 consideration, a sufficiently specific statement of the parties’ obligations, and mutual 16 assent.” Buckholtz v. Buckholtz, 246 Ariz. 126, 129 (App. 2019) (citations omitted). 17 Plaintiffs do not dispute that they signed the License Agreements. They instead offer 18 several arguments as to why, in their estimation, the Arbitration Agreement is 19 unenforceable—it is illusory for lack of consideration and mutuality, fails to meet 20 Plaintiffs’ reasonable expectations, is substantively unconscionable, and violates public 21 policy. None of Plaintiffs’ arguments are persuasive. 22 The Arbitration Agreement is supported by both mutuality and consideration. The 23 Agreement requires both parties to resolve their claims through arbitration, not just 24 Plaintiffs. (See Doc. 16-1 at 7.) Accordingly, the Arbitration Agreement is bilateral, not 25 unilateral. See Taylor v. Kingman Feldspar Co., 41 Ariz. 376, 381 (1933) (“Mutuality is 26 absent when one only of the contracting parties is bound to perform, and the rights of the 27 parties exist at the option of one only. And, conversely, a contract is not unilateral where 28 it contains mutual obligations binding on both parties.”). This bilateral, mutually binding 1 promise provides sufficient consideration to support the Arbitration Agreement. See 2 Carroll v. Lee, 148 Ariz. 10, 13 (“Clearly a promise for a promise constitutes adequate 3 consideration.”); see also Best Choice Fund, LLC v. Low & Childers, P.C., 228 Ariz. 502, 4 513 (App. 2011) (“When a contract contains mutual promises and is in writing, 5 consideration will almost always be adequate.” (quotation omitted)). While Plaintiffs 6 claim the Arbitration Agreement fails to bind Bourbon Street “because it allows 7 Defendants to change the [Agreement] at any time without notice” (Doc. 13 at 6), that is 8 not the case. Indeed, subparagraph 8.9 specifically provides that Plaintiffs “may reject 9 any change [Bourbon Street] makes to [the Arbitration Agreement] by sending [Bourbon 10 Street] notice within 30 days of the change.” (Doc. 16-1 at 8.) 11 Plaintiffs also contend the entire License Agreement is illusory because it grants 12 both sides the right to terminate the Agreement without notice: “The License granted to 13 Licensee pursuant to this License Agreement has no definite term and may be terminated 14 by Licensor or Licensee at any time without prior notice or other requirement.” (Doc. 16- 15 1 at 3.) This provision does not render the Agreement illusory. “An illusory promise is one 16 that is so indefinite that it cannot be enforced, or by its terms makes performance optional 17 or entirely discretionary on the part of the promisor.” Fagerstrom v. Amazon.com, Inc., 141 18 F. Supp. 3d 1051, 1065 (S.D. Cal. 2015); see also Allen D. Shadron, Inc. v. Cole, 101 Ariz. 19 122, 124 (1966). Accordingly, in general, “an agreement which permits one party to 20 withdraw at his pleasure is void.” Shattuck v. Precision-Toyota, Inc., 115 Ariz. 586, 588 21 (1977); see also Great W. Bank v. LJC Dev., LLC, 238 Ariz. 470, 476 (App. 2015) (“To 22 agree to do something and to reserve the right to terminate the agreement at will is no 23 agreement at all.” (cleaned up)). Nevertheless, employment-related contracts are often 24 terminable unilaterally without being illusory. See Demasse v. ITT Corp., 194 Ariz. 500, 25 504 (1999) (en banc) (“[A]t-will employment is for an indefinite term, and American courts 26 have come to hold it can be terminated at any time for good cause or no cause at the will 27 of either party.”); Mattison v. Johnston, 152 Ariz. 109, 112 (App. 1986) (finding continued 28 employment in an at-will relationship sufficient consideration for a restrictive covenant). 1 This is so because “[a]s long as the party with the reserved power to terminate is 2 irrevocably bound for any period of time or has materially changed any of its legal 3 relations or otherwise rendered some performance capable of operating as a consideration, 4 consideration has been given and the other’s promise is enforceable.” 13 Corbin on 5 Contracts § 68.9, at 247–48 (rev. ed. 1995). Although the Court declines to decide 6 whether Plaintiffs were in fact employees, the reasoning underlying the cited principle 7 nevertheless controls. The License Agreement is not illusory because both 8 parties rendered performance capable of operating as consideration. See Fagerstrom, 9 141 F. Supp. 3d at 1065 (“Here, both Plaintiffs and Amazon have incurred performance 10 obligations under the Agreement, and those performance obligations remain in place based 11 on the assent manifested by the parties and the consideration exchanged.”). For instance, 12 Plaintiffs agreed to perform at Bourbon Street and to arbitrate their claims, and Bourbon 13 Street promised in return to provide a place for Plaintiffs to perform and to also arbitrate 14 its claims. (See Doc. 16-1.) The parties’ relationship continued, uninterrupted, for years. 15 (Doc. 1 ¶¶ 8–9.) Thus, consideration has been exchanged and obligations have been 16 triggered on both sides. 17 Relatedly, the parties’ actions demonstrate that they believed they were entering 18 into a valid agreement. See 2 Corbin on Contracts § 5.32 (“When it appears to a court’s 19 satisfaction that the parties have believed themselves to be making a contract and to be 20 affecting their legal relations with each other, sound practical policy requires that their 21 mutual expressions be given an interpretation that will effectuate their belief and 22 intention.”). Accordingly, the Court declines to read the License Agreement in a 23 manner that will render the parties’ contractual obligations illusory. 24 Plaintiffs next argue that the doctrine of reasonable expectations precludes 25 enforcement of the Arbitration Agreement. In Arizona, courts begin with a presumption 26 that standard terms in a written contract are valid and binding on the parties. See 27 Harrington v. Pulte Home Corp., 211 Ariz. 241, 247 (App. 2005). In some cases, though, 28 the reasonable expectations doctrine may rebut that presumption. “Where [one] party has 1 reason to believe that the party manifesting . . . assent would not do so if he knew that the 2 writing contained a particular term, the term is not part of the agreement.” Darner Motor 3 Sales, Inc. v. Universal Underwriters Ins. Co., 140 Ariz. 383, 391 (1984) (quoting 4 Restatement (Second) of Contracts § 211). Critically, “it is only when ‘the other party has 5 reason to believe’ that the signing party would not accept the term that the term may 6 be struck from the agreement.” Harrington, 211 Ariz. at 247. This “reason to believe” may 7 be shown by the parties’ prior negotiations or inferred from the fact that the challenged 8 term is bizarre or oppressive, eviscerates the non-standard terms explicitly agreed to, or 9 eliminates the dominant purpose of the transaction. Darner, 140 Ariz. at 392. There are 10 no allegations in the Complaint suggesting that any of these indications are present in 11 this instance. 12 Plaintiffs do not claim the Agreement was inconsistent with the parties’ prior 13 negotiations. Nor do they plausibly suggest that the Agreement eviscerates the contract’s 14 non-standard terms or eliminates the contract’s dominant purpose. (To the contrary, the 15 Arbitration Agreement appears to be a fundamental element of the contract. See 16 Fagerstrom, 141 F. Supp. at 1065.) Plaintiffs do, however, argue that the Arbitration 17 Agreement contains terms that are “particularly bizarre and oppressive.” (Doc. 13 at 7.) 18 Plaintiffs object particularly to the Agreement’s provisions regarding arbitration costs. 19 The entire relevant subparagraph reads as follows: 20 The AAA rules will govern payment of filing fees and the AAA’s and arbitrator’s fees and expenses. The arbitrator will 21 determine the amount of fees, costs, and expenses unless you and [Bourbon Street] agree on them. [Bourbon Street] won’t 22 seek its attorney’s fees from you in any arbitration unless you request an award of attorney’s fees. Fees and expenses aren’t 23 counted in determining how much a dispute involves. 24 (Doc. 16-1 at 8.) Plaintiffs claim this subparagraph is oppressive because it saddles them 25 with the “entirety of the cost of administering arbitration.” (Doc. 13 at 6–7.) But that is 26 plainly not the case. The provision explicitly provides that fees, costs, and expenses will 27 be assessed by the arbitrator unless the parties agree otherwise. While the AAA rules do 28 indicate that the “filing fee shall be advanced by the party or parties making a claim or 1 counterclaim,” the rules also state, in line with the Arbitration Agreement, that the filing 2 fee is “subject to final apportionment by the arbitrator.” (See Doc. 13 at 7 n.5.) 3 Additionally, there are no allegations that Plaintiffs’ arbitration costs would be 4 prohibitive. Arizona law provides that “arbitration agreements are enforceable in 5 the absence of individualized evidence to establish that the costs of arbitration are 6 prohibitive.” Harrington, 211 Ariz. at 252; see also Green Tree Fin. Corp.-Ala. v. 7 Randolph, 531 U.S. 79, 91 (2000) (“The ‘risk’ that Randolph will be saddled with 8 prohibitive costs is too speculative to justify the invalidation of an arbitration agreement. 9 To invalidate the [arbitration] agreement on that basis would undermine the liberal 10 federal policy favoring arbitration.”). Thus, while the existence of overwhelming 11 arbitration costs could theoretically preclude Plaintiffs from effectively vindicating 12 their rights, see Randolph, 531 U.S. at 91, the Complaint contains no indication that 13 Plaintiffs will bear such oppressive costs. See id. (“[W]here, as here, a party seeks to 14 invalidate an arbitration agreement on the ground that arbitration would be prohibitively 15 expensive, that party bears the burden of showing the likelihood of incurring such costs.”). 16 Thus, the terms of the Arbitration Agreement are neither bizarre nor oppressive, and the 17 reasonable-expectations doctrine is inapplicable here. (Doc. 13 at 6–7.) 18 Plaintiffs next contend that the Arbitration Agreement is substantively 19 unconscionable and violates public policy. Substantive—as opposed to procedural— 20 unconscionability “concerns the actual terms of the contract and examines the relative 21 fairness of the obligations assumed.” Maxwell v. Fidelity Fin. Serv., Inc., 184 Ariz. 82, 22 89 (1995). “Indicative of substantive unconscionability are contract terms so one-sided as 23 to oppress or unfairly surprise an innocent party, an overall imbalance in the obligations 24 and rights imposed by the bargain, and significant cost-price disparity.” Id. 25 As discussed above, the Arbitration Agreement’s cost provisions are neither 26 oppressive nor preclude Plaintiffs from pursuing their statutory claims. Again, the 27 Agreement provides that the “arbitrator will determine the amount of fees, costs, and 28 expenses” (Doc. 16-1 at 8), and Plaintiffs have failed to demonstrate that their 1 arbitration costs would be prohibitively expensive. See Rizzio v. Surpass Senior Living, 2 LLC, 248 Ariz. 266, 273 (App. 2020) (“[T]he mere assertion that costs were prohibitive 3 was insufficient to establish substantive unconscionability.”); see also Am. Exp. Co. v. 4 Italian Colors Rest., 570 U.S. 228, 236 (2013) (“[T]he fact that it is not worth the 5 expense involved in proving a statutory remedy does not constitute the elimination of 6 the right to pursue that remedy.”). 7 The Agreement’s terms are also not so one-sided as to be fairly classified as 8 substantively unconscionable. The License Agreement was terminable by both parties at 9 will and the Arbitration Agreement was modifiable by Bourbon Street only with consent. 10 Additionally, Bourbon Street was, like Plaintiffs, explicitly bound by the Arbitration 11 Agreement, including the class action waiver.2 (See Doc. 16-1 at 8.) Thus, the License 12 Agreement, including the Arbitration Agreement, is neither substantively unconscionable 13 nor violative of public policy.3 14 Plaintiffs finally argue that the Arbitration Agreement is unenforceable under 15 Arizona law, which provides that the Arizona Revised Uniform Arbitration Act 16 (“RUAA”) “shall not apply to an agreement to arbitrate any existing or subsequent 17 controversy between an employer and employees or their respective representatives.” 18 A.R.S. § 12-3003(B)(1); see also North Valley Emergency Specialists, L.L.C. v. Santana, 19 208 Ariz. 301, 302 (2004) (holding that A.R.S. § 12–15174 exempts from the Arizona 20 2 To the extent Plaintiffs suggest that the Arbitration Agreement’s class action waiver is 21 unconscionable or unlawful (see Doc. 13 at 10 (citing Cooper v. QC Fin. Servs., Inc., 503 F. Supp. 2d 1266, 1288 (D. Ariz. 2007)), they are almost certainly mistaken. See Epic Sys. 22 Corp. v. Lewis, 584 U.S. ---, 138 S. Ct. 1612 (2018); Concepcion, 563 U.S. 333. 3 Plaintiffs argue in a single sentence that “the [Arbitration Agreement] also grossly 23 restricts the statute of limitations for which Plaintiffs have the right to bring their claims to a single year, [and] improperly shifts attorney’s fees and court costs in direct contravention 24 of the Plaintiffs’ rights under the FLSA and Arizona State law.” The Court declines to address these cursory arguments, which are entirely devoid of both legal citation and 25 adequate explanation. 4 A.R.S. § 12-1517 provides: “This article shall have no application to arbitration 26 agreements between employers and employees or their respective representatives.” A.R.S. § 12-3003(B)(1) has virtually identical language but applies to arbitration agreements 27 made after January 1, 2011. Because the parties executed the License Agreements well after that date, § 12-3003(B)(1) controls. See Shield Sec. & Patrol LLC v. Lionheart Sec. 28 & Consulting LLC, No. 1 CA-CV 16-0678, 2017 WL 4897460, at *1 n.2 (Ariz. App. Oct. 31, 2017) (unpublished). 1 Uniform Arbitration Act “all arbitration agreements between employers and employees”). 2 In this respect, the RUAA differs from the FAA which, aside from a few narrow 3 exceptions, applies to arbitration agreements in employment contracts. See Cir. City 4 Stores, Inc. v. Adams, 532 U.S. 105, 109 (2001); Hamblen v. Hatch, 242 Ariz. 483, 488 5 (2017). Despite Plaintiffs’ arguments to the contrary, the RUAA is irrelevant here. Even 6 assuming that § 12-3003(B)(1) is not preempted by the FAA,5 the FAA governs in this 7 case because the parties specifically agreed that it would: “If you and [Bourbon Street] 8 don’t resolve any dispute by information negotiation or in small claims court within 60 9 days from the date a Notice of Dispute is sent, any other effort to resolve the dispute will 10 be conducted exclusively by individual arbitration governed by the [FAA].”6 (Doc. 16-1 11 at 7.) Thus, because the FAA applies, the instant dispute is arbitrable, whether or not the 12 License Agreement is in fact an “employment agreement.” 13 B. Scope of Arbitration Agreement 14 Having decided that the Arbitration Agreement is valid, the Court must now 15 determine whether the instant dispute falls within the scope of the Agreement. Chiron 16 Corp., 207 F.3d at 1130. “The scope of an arbitration agreement is governed by federal 17 substantive law.” Tracer Rsch. Corp. v. Nat’l Env’t Servs. Co., 42 F.3d 1292, 1294 (9th 18 Cir. 1994). “[A]ny doubts concerning the scope of arbitrable issues should be resolved in 19 favor of arbitration.” Chiron, 207 F.3d at 1131 (quoting Moses H. Cone Mem’l Hosp., 460 20 U.S. at 24–25). 21 Plaintiffs concede that the bulk of their claims come within the scope of the 22 Arbitration Agreement. They claim, however, that Plaintiff Myers’ claims from prior to 23 5 A bold assumption, given the Supreme Court’s recent arbitration holdings. See, e.g., 24 Concepcion, 563 U.S. at 341 (“When state law prohibits outright the arbitration of a particular type of claim, the analysis is straightforward: The conflicting rule is displaced 25 by the FAA.”); see also Hamblen, 242 Ariz. at 488 (“[T]he FAA preempts state law and governs all written arbitration agreements involving interstate commerce, making such 26 agreements enforceable in both federal and state courts.” (quoting S. Cal. Edison Co. v. Peabody W. Coal Co., 194 Ariz. 47, 51 (1999))). 27 6 Although Plaintiffs assert that “the Agreement clearly states that it is governed by the laws of the State of Arizona” (Doc. 13 at 14), the paragraph they cite explicitly clarifies 28 that Arizona law governs “subject to the provisions of Section 8 with respect to mandatory arbitration and class action waivers.” (Doc. 16-1 at 9.) 1 October of 2018 are not governed by the Agreement because she “began working for 2 Defendants in August of 2017 and she did not sign the [License] Agreement until October 3 of 2018.” (Doc. 13 at 15.) Bourbon Street responds that Plaintiff Myers’ claims are 4 captured by the Arbitration Agreement because “(1) the Provision’s language does not 5 make clear that it only applies to claims that may arise going forward; and (2) the Provision 6 covers any dispute between the parties concerning the agreement, which governs the 7 entire licensee/licensor relationship.” (Doc. 14 at 8.) 8 By its terms, the Arbitration Agreement “applies to any dispute between [Plaintiffs] 9 and [Bourbon Street].” (Doc. 16-1 at 7.) “The term ‘dispute’ means any dispute, action, or 10 other controversy between [Plaintiffs] and [Bourbon Street] concerning this Agreement, 11 whether in contract, warranty, tort, statute, regulation, ordinance, or any other legal or 12 equitable basis. ‘Dispute’ will be given the broadest possible meaning allowable under 13 law.” (Id.) 14 Given the breadth of this language, the Court concludes that Myers’ claims, 15 even those predating her signing the License Agreement, come within the Arbitration 16 Agreement’s scope. While some courts have held that the choice of language in an 17 arbitration provision may suggest that the provision governs only present or future 18 conduct, the language here is not so limited. Cf. Morse v. ServiceMaster Glob. Holdings 19 Inc., No. 10-cv-00628, 2012 WL 4755035, at *5 (N.D. Cal. Oct. 4, 2012) (“The use of 20 the present participle ‘arising’ makes it clear that it applies to claims that may arise 21 going forward, not claims that have already accrued.”). Rather, it encompasses all 22 disputes between the parties concerning the License Agreement. The Agreement, which 23 governs the parties’ entire relationship, is unquestionably implicated by all of Myers’ 24 claims, even those predating her signing of the Agreement. Accordingly, all her claims 25 must go through arbitration. See Jones v. Deja Vu, Inc., 419 F. Supp. 2d 1146, 1150 26 (N.D. Cal. 2005) (“Where an arbitration provision does not contain a temporal limitation, 27 the parties may be compelled to arbitrate despite the fact that the challenged conduct 28 predates the signing of the agreement.”). 1 C. Arbitrability of Collective and Class Action 2 “While the interpretation of an arbitration agreement is generally a matter of state 3 law, the FAA imposes certain rules of fundamental importance, including the basic 4 precept that arbitration ‘is a matter of consent, not coercion.’” Stolt-Nielsen S.A. v. 5 AnimalFeeds Int’l Corp., 559 U.S. 662, 682 (2010) (quoting Volt Info. Sciences, Inc. v. Bd. 6 of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 479 (1989)). For that reason, 7 “[w]hether enforcing an agreement to arbitrate or construing an arbitration clause, courts 8 and arbitrators must ‘give effect to the contractual rights and expectations of the 9 parties.’” Id. (quoting Volt, 489 U.S. at 479). Parties are therefore “generally free to 10 structure their arbitration agreements as they see fit.” Id. at 683 (quoting Mastrobuono 11 v. Shearson Lehman Hutton, Inc., 514 U.S. 52, 57 (1995)). This means, among other 12 things, that “parties may specify with whom they choose to arbitrate their disputes.” Id. 13 “From these principles, it follows that a party may not be compelled under the FAA to 14 submit to class arbitration unless there is a contractual basis for concluding that the 15 party agreed to do so.” Id. at 684. 16 The parties did not agree to submit to class arbitration in this case. Indeed, the 17 Arbitration Agreement explicitly and specifically precludes the arbitration of class claims. 18 (See Doc. 16-1 at 8 (“Any proceedings to resolve or litigate any dispute in any forum will 19 be conducted solely on an individual basis.”).) This provision is valid and controlling, see 20 Epic Sys., 138 S. Ct. 1612; Concepcion, 563 U.S. 333, and must be given effect by this 21 Court. 22 D. Remedy 23 “A district court may dismiss an action, rather than stay it, when all of the issues 24 are arbitrable.” 2151 Michelson, L.P. v. Corp. of the Presiding Bishop of the Church of 25 Jesus Christ of Latter-Day Saints, 754 F. App’x 596, 597 (9th Cir. 2019) (citing Sparling 26 v. Hoffman Constr. Co., 864 F.2d 635, 638 (9th Cir. 1988). In this case, for the reasons 27 described above, all the claims are arbitrable. The Court will therefore dismiss the case 28 without prejudice and order that the parties submit to arbitration. IV. CONCLUSION 2 Accordingly, 3 IT IS ORDERED granting Defendants’ Motion to Compel Arbitration and 4|| Dismiss (Doc. 16). 5 IT IS FURTHER ORDERED directing the Clerk of the Court to dismiss this 6 || action without prejudice and close the case. 7 IT IS FINALLY ORDERED that the oral argument set for May 25, 2022, is 8 || vacated. The Court finds that the facts and legal arguments were adequately presented in 9|| the parties’ papers and in the record. The decisional process would not have been 10 || significantly aided by oral argument. See Partridge v. Reich, 141 F.3d 920, 926 (9th Cir. || 1998); see also LRCiv 7.2(f). 12 Dated this 18th day of May, 2022. 13 Wichad T. gibuade Michael T. Liburdi 16 United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28

-14-