Michael Ashbey v. Archstone Property Management , 612 F. App'x 430 ( 2015 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS FILED
FOR THE NINTH CIRCUIT MAY 12 2015
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
MICHAEL ASHBEY, No. 12-55912
Plaintiff - Appellee, D.C. No. 8:12-cv-00009-DOC-
RNB
v.
ARCHSTONE PROPERTY MEMORANDUM*
MANAGEMENT, INC., a corporation,
Defendant - Appellant.
Appeal from the United States District Court
for the Central District of California
David O. Carter, District Judge, Presiding
Argued and Submitted March 4, 2014
Pasadena, California
Before: BYBEE, BEA, and CHRISTEN, Circuit Judges.
Defendant Archstone Communities LLC ('Archstone') appeals from the
district court's denial of its Motion to Compel Arbitration of Plaintiff Michael
Ashbey's claims. We reverse.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
A party seeµing to compel arbitration has the burden under the Federal
Arbitration Act to show (1) the existence of a valid agreement to arbitrate and, if it
exists, (2) that the agreement to arbitrate encompasses the dispute at issue. Cox v.
Ocean View Hotel Corp., 533 F.3d 1114, 1119 (9th Cir. 2008). State law governs
whether a valid agreement to arbitrate exists. Arthur Andersen LLP v. Carlisle,
556 U.S. 624, 630-31 (2009). The parties do not dispute that California law
applies to this case.
The district court erred in finding there was no valid agreement to arbitrate.
California law permits parties to form contracts by incorporating other documents
by reference; and 'an employee may agree to arbitrate claims against his or her
employer by signing an acµnowledgment form that incorporates the employer's
employee handbooµ and the arbitration policy it contains.' Avery v. Integrated
Heathcare Holdings, Inc., 159 Cal. Rptr. 3d 444, 457 (Ct. App. 2013). The
acµnowledgment Ashbey signed incorporated the terms contained in Archstone's
employment manual, which included the arbitration policy. And though the
acµnowledgment stated the manual did not 'create any contractual rights,'
that exclusion of contractual obligations is placed within two sentences dealing
only with the at-will employment relationship between Ashbey and Archstone.
The exclusion therefore serves only to reinforce that Ashbey has no contractually
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created rights beyond those created by at-will employment. See Dyna-Med, Inc. v.
Fair Emp't & Hous. Comm'n, 743 P.2d 1323, 1329 n.14 (Cal. 1987) (explaining
that under the canon of noscitur a sociis 'the meaning of a word may be enlarged
or restrained by reference to the object of the whole clause in which it is used.'
(internal quotation marµs omitted)); Antonin Scalia & Bryan A. Garner, Reading
Law: The Interpretation of Legal Texts 197-98 (2012) (explaining that associated
phrases should be read together under the canon of noscitur a sociis). To interpret
the language otherwise would also create an absurdity: Ashbey would have no
contractual rights to enforce the other provisions of Archstone's employment
manual, which included provisions outlining Ashbey's compensation, sicµ leave,
vacation and holidays, and retirement savings, among others.
The arbitration clause encompasses the dispute at issue because it applies to
'any dispute' arising out of or related to employment of the employee.
The agreement to arbitrate is not substantively unconscionable under
California law for any of the reasons urged by Ashbey, assuming those reasons are
not preempted by the Federal Arbitration Act. See AT&T Mobility LLC v.
Concepcion, 131 S. Ct. 1740, 1746 (2011). The agreement permits the imposition
on Archstone of arbitration fees 'where required by law' and attorneys' fees if
Ashbey is entitled to them 'under applicable law.' And, contrary to Ashbey's
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assertions otherwise, the arbitration clause binds Archstone to arbitrate its claims
against Ashbey too because the clause requires 'all . . . disputes between Employee
and the Company to be resolved only by an arbitrator through final and binding
arbitration and not by way of court or jury trial.' Finally, unilateral modification
provisions, such as the one in the acµnowledgment Ashbey signed, are not
substantively unconscionable because they are always subject to the limits
'imposed by the covenant of good faith and fair dealing implied in every contract.'
Serpa v. Cal. Sur. Investigations, Inc., 155 Cal. Rptr. 3d 506, 514 (App. 2013).
Ashbey has neither pleaded nor claimed that Archstone has acted unreasonably to
alter the terms of any policy contained in the manual, including the arbitration
clause, so as to breach the implied covenant of good faith and fair dealing. Under
California law, a contract is unconscionable only if it is both procedurally and
substantively unconscionable. See Peng v. First Republic Banµ, 162 Cal. Rptr. 3d
545, 550 (App. 2013). The contract here is not substantively unconscionable and
therefore we need not opine on its procedural validity. The contract is enforceable.
REVERSED.
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FILED
Ashbey v. Archstone Property Management, Inc., No. 12-55912 MAY 12 2015
MOLLY C. DWYER, CLERK
CHRISTEN, Circuit Judge, concurring: U.S. COURT OF APPEALS
I concur in the result reached by the court's memorandum disposition. I
write separately to stress that my concurrence is based on the specific facts of this
case, namely, the language of the acµnowledgment Ashbey signed and the
arguments Ashbey has raised concerning unconscionability.
Read in context, the acµnowledgment's disclaimer of contractual rights
refers only to the at-will employment relationship between Ashbey and Archstone.
The acµnowledgment is clear that by signing, Ashbey agreed 'to adhere to all of
the policies' contained in the employment manual, 'including the Dispute
Resolution Policy.' Under these circumstances, I agree that Ashbey entered into a
binding agreement to arbitrate. Cf. Sparµs v. Vista Del Mar Child & Family Servs.,
145 Cal. Rptr. 3d 318, 321-26 (Cal. Ct. App. 2012) (holding no agreement to
arbitrate formed where employment handbooµ wording suggested handbooµ was
informational rather than contractual, and acµnowledgment stated only, 'the
Handbooµ contains important information about [the employer's] general
personnel policies and on [the employee's] privileges and obligations as an
Employee . . . I understand that I am governed by the contents of the Handbooµ'
(internal quotation marµs omitted)).
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Because the district court concluded there was no valid agreement to
arbitrate, it did not reach the parties' arguments concerning unconscionability.
'Typically, 'a federal appellate court does not consider an issue not passed upon
below.'' Davis v. Nordstrom, Inc., 755 F.3d 1089, 1094 (9th Cir. 2014) (quoting
Ïuinn v. Robinson, 783 F.2d 776, 814 (9th Cir. 1986)). This is particularly true
with respect to issues involving questions of fact, see id. at 1094-95, which
unconscionability almost always does, see Sonic-Calabasas A, Inc. v. Moreno, 311
P.3d 184, 203 (Cal. 2013). In this case, however, both in the district court and on
appeal, Ashbey raised only four limited arguments with respect to
unconscionability, none of which involve disputed questions of fact. Under these
circumstances, I concur in the court's decision to address Ashbey's arguments, and
I agree his arguments are unavailing. Cf. Elite Logistics Corp. v. Hanjin Shipping
Co., 589 F. App'x 817, 818 & n.1 (9th Cir. 2014) (memorandum disposition) (no
error where district court held arbitration agreement unconscionable, without
conducting discovery, where parties agreed there were no material factual
disputes).
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