NextGear Capital, Inc. v. ICarz, Inc.

Opinion

KURT A. KAPPES – SBN 146384 LUPE R. LAGUNA – SBN 307156 JONATHAN K. OGATA – SBN 325914 GREENBERG TRAURIG, LLP 1201 K Street, Suite 1100 Sacramento, CA 95814-3938 Telephone: (916) 442-1111 Facsimile: (916) 448-1709 kappesk@gtlaw.com lagunal@gtlaw.com ogataj@gtlaw.com

Attorneys for Plaintiff NEXTGEAR CAPITAL, INC.

NEXTGEAR CAPITAL, INC., a Delaware ) CASE NO. 2:20-cv-00851-MCE-CKD Corporation, ) ) ORDER GRANTING PLAINTIFF Plaintiff, ) NEXTGEAR CAPITAL, INC.’S MOTION TO ) STRIKE ICARZ INC.’S JURY TRIAL v. ) DEMAND ) iCarz Inc., d/b/a LENDING CLUB AUTO d/b/a ) Date: August 6, 2020 LATINOS AUTO CENTER, California ) Time: 2:00 p.m. Corporation, ) Courtroom: 7, 14th Floor ) Defendant. ) ) ) ) The Court, having considered Plaintiff’s Motion to Strike iCarz Inc.’s Jury Trial Demand (ECF No. 20), Defendant’s Opposition (ECF No. 29), and Plaintiff’s Reply (ECF No. 31), hereby GRANTS Plaintiff’s Motion. THE COURT HEREBY FINDS THAT: Federal law controls the question of whether Defendant’s jury trial waiver is valid and enforceable. Granite State Ins. Co. v. Smart Modular Techs., 76 F.3d 1023, 1026-27 (9th Cir. 1996) (“federal law governs whether a party is entitled to a jury trial and if so, on what issues”). Under federal law, the factors wOASe 2 EUV OS LIVEN INES OPC VO Ee OY ee

intelligent, and therefore enforceable, include: (1) whether there was a gross disparity in bargaining powe between the parties; (2) the business or professional experience of the party opposing the waiver; (3 whether the opposing party had an opportunity to negotiate contract terms; and (4) whether the claus containing the waiver was inconspicuous. Century 21 Real Estate LLC y. All Prof'l Realty, Inc., No. 2:10 2751 WBS GGH, 2012 WL 2682761, at *2 (E.D. Cal. July 6, 2012). Defendant knowingly, voluntarily, and intelligently waived its right to a jury trial when it execute the Note that is the genesis of this dispute. In signing the jury trial waiver Defendant acknowledged that 1 had either consulted with counsel or had been given the opportunity to do so. Further, despite Defendan re-negotiating the terms of the Note multiple times, it never re-negotiated the scope or applicability of th jury trial waiver provision. Defendant does not dispute any of these points in its opposition; instead Defendant argues that state law should control whether the jury trial waiver is enforceable. But, as th Supreme Court has squarely held, whether a party is entitled to a jury trial in federal court is determinec by federal law, even where, as here, the Court is applying substantive state law in a diversity action. Se Simler v. Conner, 372 U.S. 221, 222 (1963) (holding “that the right to a jury trial in the federal courts is t be determined as a matter of federal law in diversity as well as other actions.”). Accordingly, Defendant’s demand for a jury trial is stricken. Dated: August 17, 2020 Eo { late rf LEK. SENIOR UNITED STATES DISTRICT JUDGE