Brown v. Automobile Club of So. Cal. CA2/1 ( 2013 )

Filed 7/31/13 Brown v. Automobile Club of So. Cal. CA2/1
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
PEGGY BROWN, B241995
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC476762)
v.
AUTOMOBILE CLUB OF SOUTHERN
CALIFORNIA,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Los Angeles County, Steven J.
Kleifield, Judge. Affirmed in part and reversed in part.
Frieda A. Taylor for Defendant and Appellant.
The Mirroknian Law Firm, Reza Mirroknian and Pedram A. Javanmardi for
Plaintiff and Respondent.
___________________________________________
Plaintiff filed this action against her former employer, alleging that the termination
of her employment violated the Fair Employment and Housing Act (FEHA) (Gov. Code,
§§ 12900–12996) and the California Unfair Competition Law (UCL) (Bus. & Prof. Code,
§§ 17200–17210). Plaintiff also alleged common law claims for wrongful termination in
violation of public policy and intentional infliction of emotional distress.
The employer filed a motion to compel arbitration of plaintiff’s causes of action
based on a 2002 arbitration agreement and a successor arbitration agreement purportedly
effective on January 1, 2005. Plaintiff opposed the motion to compel arbitration, arguing
that the 2002 arbitration agreement was the applicable agreement, but both agreements
were procedurally and substantively unconscionable.
The trial court found that the 2002 arbitration agreement was the operative
agreement and that it was unconscionable. The court denied the motion to compel
arbitration.
On appeal, the employer contends that plaintiff’s causes of action were subject to
arbitration under the 2002 arbitration agreement, the agreement is governed by the
Federal Arbitration Act (9 U.S.C. §§ 1–16), and the trial court erred in finding the
agreement to be unconscionable.
We conclude that, although the arbitration agreement is procedurally
unconscionable, none of its terms is substantively unconscionable. Nevertheless, we also
conclude that, in accordance with Cruz v. PacifiCare Health Systems, Inc. (2003)
30 Cal. 4th 303, any request by plaintiff for “public injunctive” relief is not subject to
arbitration. Accordingly, we reverse the trial court’s order with the exception of any
request for a “public injunction.”
I
BACKGROUND
The facts and allegations in this appeal are taken from the complaint and the
papers submitted in connection with the motion to compel arbitration.
2
A. Complaint
On January 10, 2012, plaintiff, Peggy Brown, filed this action. The complaint
alleged as follows.
On or about February 19, 2002, plaintiff commenced employment with defendant
Automobile Club of Southern California (Auto Club) as a “claims representative.” At the
time of hire, plaintiff was around 48 years old. Throughout her employment, plaintiff
received written performance reviews rating her as an excellent employee. She also
received pay raises.
In or around October 2005, plaintiff was promoted to the “Special Investigative
Unit” in Los Angeles. In 2007, she was transferred to the Valencia office. She continued
to receive excellent performance reviews. In March 2010, plaintiff received her last
written performance review, which indicated she “‘fully achieves’” the objectives of her
job and praised her for “‘assist[ing] her teammates’” and for “‘the level of maturity she
brings.’”
Beginning in late 2009, plaintiff requested intermittent time off under the state
Moore–Brown–Roberti Family Rights Act (CFRA) (Gov. Code, §§ 12945.1–12945.2,
19702.3) and the federal Family and Medical Leave Act of 1993 (29 U.S.C. §§ 2601–
2654). More specifically, plaintiff had blacked out and fainted at work, requiring that she
take some time off to recover. She returned to work after an absence of a few weeks.
In or around April 2010, plaintiff began experiencing “psychiatric disabilities and
complications” resulting from adverse treatment at work by her supervisor. Plaintiff
complained about her supervisor’s conduct, but the Auto Club took no action in response.
In May 2010, plaintiff was placed on a disability leave of absence by her physician.
During her leave of absence, plaintiff developed shingles in one of her ears, which
eventually led to a diagnosis of Ramsay Hunt syndrome, an illness similar to Bell’s palsy.
The Auto Club was kept informed of plaintiff’s medical condition. On January 10, 2011,
one of plaintiff’s physicians opined that plaintiff was gradually improving.
3
On or about January 14, 2011—approximately seven months after plaintiff began
her medical leave—plaintiff received a letter from the Auto Club stating her employment
had been terminated. She was 58 years old when discharged.1
The complaint contained eight causes of action: (1) employment discrimination
based on disability or medical condition, in violation of the FEHA; (2) failure to engage
in a timely, good faith interactive process to determine effective reasonable
accommodations, in violation of the FEHA; (3) failure to provide reasonable
accommodations, in violation of the FEHA; (4) retaliation for engaging in activities
protected under the FEHA and the CFRA; (5) failure to take reasonable steps necessary
to prevent discrimination, in violation of the FEHA; (6) wrongful termination in violation
of public policy; (7) intentional infliction of emotional distress; and (8) violation of the
UCL. The complaint prayed for compensatory damages, including backpay and front
pay, punitive damages, injunctive relief under the UCL, and attorney fees.
B. Motion to Compel Arbitration
On March 9, 2012, the Auto Club filed a motion to compel arbitration of
plaintiff’s causes of action. The motion was based on (1) an arbitration agreement dated
February 18, 2002, bearing the signature, “Peggy Brown,” and (2) a subsequent
arbitration agreement, purportedly effective on January 1, 2005, which did not have a
signature line for employees. The Auto Club argued: (1) both arbitration agreements
satisfied the requirements set forth in Armendariz v. Foundation Health Psychcare
Services, Inc. (2000) 24 Cal. 4th 83 (Armendariz); (2) the Federal Arbitration Act (FAA)
(9 U.S.C. §§ 1–16) governed the interpretation and enforcement of the arbitration
agreements; and (3) the litigation should be stayed pending the completion of arbitration.
1 Inits opening brief, the Auto Club states that it terminated plaintiff’s
employment because it “could no longer reasonably accommodate her complete absence
for an indefinite amount of time and [plaintiff] was unable to return to work with or
without accommodation.”
4
On April 24, 2012, plaintiff filed opposition papers, contending: (1) both
arbitration agreements were unconscionable; (2) the 2005 arbitration agreement did not
apply to her; and (3) the request for injunctive relief under the UCL was not subject to
arbitration because an injunction under the UCL benefits the public at large and does not
redress harm to a plaintiff (see Cruz v. PacifiCare Health Systems, Inc., supra, 30 Cal. 4th
303). Plaintiff also submitted a declaration reciting that she was required to sign the 2002
arbitration agreement as a condition of employment and that she was not given an
opportunity to negotiate any of its terms.
On May 7, 2012, the motion came on for hearing. The trial court expressed its
view that the 2002 arbitration agreement, not the 2005 agreement, was applicable. The
trial court then raised a legal issue that the parties had not briefed, noting that the 2002
arbitration agreement vested the arbitrator with the “exclusive authority to resolve any
dispute relating to the interpretation, applicability, enforceability or formation of this
Agreement.” The trial court indicated that, under such a clause, the arbitrator, not the
court, might be the proper decision maker on the issue of unconscionability. The court
requested that the parties submit additional briefing on this issue and continued the
hearing on the motion to June 4, 2012. The parties filed supplemental briefs.
At the hearing on June 4, 2012, the trial court stated that the arbitration clause did
not authorize the arbitrator to determine whether the arbitration agreement was
unconscionable because the parties had not delegated that question to the arbitrator
through “‘clear and unmistakable’” language. The trial court went on to explain that it
found the arbitration agreement to be procedurally and substantively unconscionable. On
the subject of substantive unconscionability, the trial court faulted the agreement’s
discovery provision, which states: “Each party shall have the right to take the deposition
of one individual and any expert witness designated by another party. Each party also
shall have the right to make requests for production of documents to any party and to
subpoena documents from third parties. Requests for additional discovery may be made
to the Arbitrator . . . . The Arbitrator shall grant an order for such requested additional
discovery that the Arbitrator finds the party requires to adequately arbitrate a claim,
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taking into account the parties’ mutual desire to have a fast, cost-effective dispute
resolution mechanism.”
By order signed on August 27, 2012, the trial court denied the motion to compel
arbitration, reciting that the 2002 arbitration agreement was the “operative” agreement,
and that the agreement was unconscionable because it was a contract of adhesion and
contained overly harsh discovery limitations. The Auto Club appealed.
II
DISCUSSION
The parties agree on appeal that the 2002 arbitration agreement is the applicable
agreement. Plaintiff contends that the 2002 agreement is governed by the California
Arbitration Act (CAA) (Code Civ. Proc., §§ 1280–1294.2), not the FAA. She also
contends the agreement is procedurally and substantively unconscionable.
We conclude that the agreement is governed by the FAA and that it is procedurally
unconscionable. We further conclude, however, that none of the agreement’s provisions
is substantively unconscionable. In addition, any request by plaintiff for public injunctive
relief under the UCL is exempt from arbitration. (See Cruz v. PacifiCare Health
Systems, Inc., supra, 30 Cal.4th at pp. 312, 315–316.)
A. Applicability of the FAA
Plaintiff argues that the FAA does not govern the arbitration agreement because
the Auto Club failed to produce any evidence in the trial court that her employment or a
pertinent transaction involved interstate commerce. But the agreement had a choice-of-
law clause, stating: “[T]he Federal Arbitration Act shall govern the interpretation,
enforcement and all proceedings pursuant to this Agreement.”
In Countrywide Financial Corp. v. Bundy (2010) 187 Cal. App. 4th 234, the
arbitration agreement contained a choice-of-law clause identical to the one here, stating:
“‘[T]he Federal Arbitration Act shall govern the interpretation, enforcement and all
proceedings pursuant to this Agreement’” (id. at p. 247). As the Court of Appeal
concluded in Countrywide: “[T]he parties have unambiguously agreed to enforcement of
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the awards under the Federal Arbitration Act and we enforce their choice of law
determination.” (Ibid., italics added.)
We therefore honor the parties’ choice-of-law clause mandating the application of
the FAA. (See Rodriguez v. American Technologies, Inc. (2006) 136 Cal. App. 4th 1110,
1116, 1121–1122; Peleg v. Neiman Marcus Group, Inc. (2012) 204 Cal. App. 4th 1425,
1445–1448; see generally Valencia v. Smyth (2010) 185 Cal. App. 4th 153, 162–179.)
Under the FAA, we apply the unconscionability doctrine adopted by California courts.
(See Peleg, at pp. 1466–1467; Lagatree v. Luce, Forward, Hamilton & Scripps (1999)
74 Cal. App. 4th 1105, 1118–1119; see also Perry v. Thomas (1987) 482 U.S. 483, 492,
fn. 9 [107 S. Ct. 2520].)
B. Doctrine of Unconscionability
“In 1979, the Legislature enacted Civil Code section 1670.5, which codified the
principle that a court can refuse to enforce an unconscionable provision in a contract. . . .
As section 1670.5, subdivision (a) states: ‘If the court as a matter of law finds the
contract or any clause of the contract to have been unconscionable at the time it was
made the court may refuse to enforce the contract, or it may enforce the remainder of the
contract without the unconscionable clause, or it may so limit the application of any
unconscionable clause as to avoid any unconscionable result.’ Because unconscionability
is a reason for refusing to enforce contracts generally, it is also a valid reason for refusing
to enforce an arbitration agreement under [the California Arbitration Act], which . . .
provides that arbitration agreements are ‘valid, enforceable and irrevocable, save upon
such grounds as exist for the revocation of any contract.’ The United States Supreme
Court, in interpreting the same language found in section 2 of the FAA (9 U.S.C. § 2),
recognized that ‘generally applicable contract defenses, such as fraud, duress, or
unconscionability, may be applied to invalidate arbitration agreements . . . .’ . . .
“. . . ‘[U]nconscionability has both a “procedural” and a “substantive” element,’
the former focusing on ‘“oppression”’ or ‘“surprise”’ due to unequal bargaining power,
the latter on ‘“overly harsh”’ or ‘“one-sided”’ results. . . . ‘The prevailing view is that
[procedural and substantive unconscionability] must both be present in order for a court
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to exercise its discretion to refuse to enforce a contract or clause under the doctrine of
unconscionability.’ . . . But they need not be present in the same degree. . . . [T]he more
substantively oppressive the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the term is unenforceable,
and vice versa.” (Armendariz, supra, 24 Cal.4th at p. 114, citations omitted; accord,
Bruni v. Didion (2008) 160 Cal. App. 4th 1272, 1288–1289.) “The party resisting
arbitration bears the burden of proving unconscionability.” (Pinnacle Museum Tower
Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal. 4th 223, 247.)
“‘The procedural element of unconscionability focuses on two factors: oppression
and surprise. . . . “‘Oppression’ arises from an inequality of bargaining power which
results in no real negotiation and ‘an absence of meaningful choice.’” . . . “‘Surprise’
involves the extent to which the supposedly agreed-upon terms of the bargain are hidden
in a prolix printed form drafted by the party seeking to enforce the disputed terms.” . . .’”
(Bruni v. Didion, supra, 160 Cal.App.4th at p. 1288.)
“Of course, simply because a provision within a contract of adhesion is not read or
understood by the nondrafting party does not justify a refusal to enforce it. The
unbargained-for term may only be denied enforcement if it is also substantively
unreasonable. . . . Substantive unconscionability focuses on whether the provision is
overly harsh or one-sided and is shown if the disputed provision of the contract falls
outside the ‘reasonable expectations’ of the nondrafting party or is ‘unduly oppressive.’
. . . Where a party with superior bargaining power has imposed contractual terms on
another, courts must carefully assess claims that one or more of these provisions are one-
sided and unreasonable.” (Gutierrez v. Autowest, Inc. (2003) 114 Cal. App. 4th 77, 88,
citations omitted.)
“Substantive unconscionability pertains to the fairness of an agreement’s actual
terms and to assessments of whether they are overly harsh or one-sided. . . . A contract
term is not substantively unconscionable when it merely gives one side a greater benefit;
rather, the term must be ‘so one-sided as to “shock the conscience.”’” (Pinnacle Museum
Tower Assn. v. Pinnacle Market Development (US), LLC, supra, 55 Cal.4th at p. 246,
8
citations omitted, italics added.) Simply put, the contract term must be either (1) overly
harsh or (2) so one-sided as to shock the conscience. (See id. at p. 248, citing 24 Hour
Fitness, Inc. v. Superior Court (1998) 66 Cal. App. 4th 1199, 1213 [“substantive element
. . . traditionally involves contract terms that are so one-sided as to ‘shock the
conscience,’ or that impose harsh or oppressive terms” (italics added)].)
1. Procedural Unconscionability
Because plaintiff was required to sign the 2002 arbitration agreement as a
condition of employment and was unable to negotiate its terms, the agreement was
oppressive and procedurally unconscionable. (See Ajamian v. CantorCO2e, L.P. (2012)
203 Cal. App. 4th 771, 796; Martinez v. Master Protection Corp. (2004) 118 Cal. App. 4th
107, 114.) But the arbitration agreement was not “‘“hidden in a prolix printed form”’”
(Bruni v. Didion, supra, 160 Cal.App.4th at p. 1288, italics added) and therefore did not
involve an element of surprise. On the contrary, the arbitration agreement was a stand-
alone document that addressed only one subject: the submission of disputes to binding
arbitration.
2. Substantive Unconscionability
Plaintiff contends the arbitration agreement is substantively unconscionable in
three respects. We discuss them in turn.
a. The discovery restrictions
The arbitration agreement states that both parties have the right to take the
deposition of one individual as well as the deposition of any expert witness designated by
the opposing party. Each party also has the right to make “requests for production of
documents” and to “subpoena documents from third parties.” But these limitations are
not etched in stone. Either party can request that the arbitrator permit “additional
discovery,” and the request must be granted if the requested discovery is “require[d] to
adequately arbitrate a claim.” Nevertheless, plaintiff asserts that this discovery provision
is unconscionable because of the limitation on the number of depositions. We disagree.
Limitations on discovery must be scrutinized because, in many cases, “‘the
employer already has in its possession many of the documents relevant to an employment
9
discrimination case as well as having in its employ many of the relevant witnesses.’”
(Fitz v. NCR Corp. (2004) 118 Cal. App. 4th 702, 716.) In the present case, however, it
cannot be said that plaintiff has a greater need for discovery than the Auto Club. Plaintiff
already possesses the relevant documents about her medical condition. She also has
personal knowledge of the events leading up to her termination. Given the Auto Club’s
stated reason for terminating plaintiff’s employment—it could not wait indefinitely for
her to return to work, and she could not return to work with or without accommodation—
neither party should find it necessary to conduct extensive discovery.
In Armendariz, supra, 24 Cal. 4th 83, the Supreme Court recognized that “a
limitation on discovery is one important component of the ‘simplicity, informality, and
expedition of arbitration.’” (Id. at p. 106, fn. 11.) The court held that employees “are at
least entitled to discovery sufficient to adequately arbitrate their [FEHA] claim,
including access to essential documents and witnesses, as determined by the arbitrator(s)
. . . .” (Id. at p. 106, italics added.) And “[t]he arbitrator . . . must balance th[e] desirable
simplicity [of arbitration] with the requirements of the FEHA in determining the
appropriate discovery . . . .” (Id. at p. 106, fn. 11.)
In Roman v. Superior Court (2009) 172 Cal. App. 4th 1462, the arbitration
agreement incorporated the 1997 rules of the American Arbitration Association (AAA)
for employment disputes. The AAA rule governing discovery provided: “‘[T]he
arbitrator shall have the authority to order such discovery, by way of deposition,
interrogatory, document production, or otherwise, as the arbitrator considers necessary to
a full and fair exploration of the issues in dispute, consistent with the expedited nature of
the arbitration.’” (Id. at p. 1475.) The Court of Appeal rejected the employee’s
contention that the AAA rule was unconscionable, saying, “There appears to be no
meaningful difference between the scope of discovery approved in Armendariz and that
authorized by the AAA employment dispute rules . . . .” (Roman, at p. 1476.)
Similarly, in Dotson v. Amgen, Inc. (2010) 181 Cal. App. 4th 975, an appendix to
the arbitration agreement contained a discovery provision, stating: “‘Each party shall
have the right to take the deposition of one individual and any expert witness designated
10
by another party. Each party also shall have the right to make requests for production of
documents to any party. . . . [“[E]ach party shall have the right to subpoena witnesses and
documents for the arbitration”] . . . . Additional discovery may be had where the
Arbitrator selected pursuant to this Agreement so orders, upon a showing of need.” (Id.
at p. 982, italics added.)
In rejecting the employee’s unconscionability argument, the Court of Appeal
explained: “The trial court found the [discovery] provision unconscionable because . . .
‘[t]he arbitration agreement allows each side the deposition of one natural person, and all
expert witnesses. Beyond that, additional depositions are subject to a showing of “need”
to the arbitrator. It is with this provision that the court finds a substantive flaw. . . .’
“We disagree with the trial court for two reasons. First, arbitration is meant to be
a streamlined procedure. Limitations on discovery, including the number of depositions,
is one of the ways streamlining is achieved. In Armendariz, the court stated that the
parties are entitled to discovery sufficient to vindicate their claims. . . . The [Armendariz]
court also acknowledged that discovery limitations are an integral and permissible part of
the arbitration process. . . . ‘“[A]dequate”’ discovery does not mean ‘unfettered’
discovery. . . . Armendariz specifically recognized that parties may agree to something
less than the full panoply of discovery permitted under the California Arbitration Act
. . . .” (Dotson v. Amgen, Inc., supra, 181 Cal.App.4th at pp. 982–983.)2
We find that the discovery provision here is valid for the reasons given in Roman
and Dotson. Further, the provision is virtually identical to the discovery language
approved in Armendariz. (See Armendariz, supra, 24 Cal.4th at p. 106.) We reject
plaintiff’s assertion that the provision is invalid under Fitz v. NCR Corp., supra,
2 Under the CAA, the parties have the same rights to discovery as in a civil action.
(See Code Civ. Proc., § 1283.05, subd. (a); id., §§ 1985–1997 [addressing use of
subpoenas]; id., §§ 2016.020–2036.050 [addressing methods of discovery in civil
actions].)
11
118 Cal. App. 4th 702, and Ontiveros v. DHL Express (USA), Inc. (2008) 164 Cal. App. 4th
494.)
In Fitz, the discovery provision stated: “‘[T]he employee [has] the right to take
the sworn deposition statements of two individuals and, in addition, any expert witnesses
expected to testify at the hearing. All documents to be used as exhibits and a list of all
potential witnesses will be exchanged at least two weeks in advance of the hearing. No
other “discovery” ( i.e., depositions or demands for documents/information) will be
permitted unless the arbitrator finds a compelling need to allow it. In determining
whether a compelling need exists, the arbitrator will balance the interests of fairness and
expediency; the arbitrator will only override the goal of achieving a prompt and
inexpensive resolution to the dispute if a fair hearing is impossible without additional
discovery.’” (Fitz v. NCR Corp., supra, 118 Cal.App.4th at p. 709, italics added &
omitted.)
The Court of Appeal concluded that the discovery provision was unconscionable
because “[g]ranting the arbitrator discretion to determine whether additional discovery is
necessary . . . is an inadequate safety valve. In deciding whether to allow additional
discovery, the arbitrator is constrained by an ‘impossibility’ standard. [The employer]
attempts to analogize this impossibility standard to the Armendariz command that
employees ‘are at least entitled to discovery sufficient to adequately arbitrate their
statutory claim.’ . . . However, the arbitration clause does not permit discovery necessary
to make a fair hearing possible, as [the employer] claims. It limits discovery to the
depositions of two individuals and expert witnesses. To gain access to any additional
information, a party must overcome the [arbitration] policy’s constraint on the arbitrator,
which permits him to ‘only override the goal of achieving a prompt and inexpensive
resolution to the dispute if a fair hearing is impossible without additional discovery.’”
(Fitz v. NCR Corp., supra, 118 Cal.App.4th at p. 717, citation omitted, italics added in
Fitz.)
In Ontiveros v. DHL Express (USA), Inc., supra, 164 Cal. App. 4th 494, the
discovery provision read: “‘[E]ach party shall have the right to take the deposition of one
12
individual and any expert witness designated by another party. Each party also shall have
the right to make requests for production of documents to any party. The [parties’ “right
to subpoena witnesses and documents for the arbitration”] shall be applicable to
discovery pursuant to this paragraph. Additional discovery may be had only where the
Arbitrator selected pursuant to this Agreement so orders, upon a showing of substantial
need.’” (Id. at p. 511, italics added.)
In concluding that this discovery provision was unconscionable, the Court of
Appeal explained: “[T]he [arbitration] agreement permits plaintiff to take the deposition
of only one individual while plaintiff’s trial counsel has estimated that plaintiff will need
to take at least 15 to 20 depositions, given that ‘[t]he case involves harassing conduct
directed at plaintiff at two job sites’ and that ‘the conduct took place from approximately
2000 to 2004 and involved numerous employees.’ [The employer] has not disputed
counsel’s estimate. Moreover, the burden the agreement places on plaintiff to obtain
further discovery is quite high, permitting additional discovery only by order of the
arbitrator upon a showing of ‘substantial need.’” (Ontiveros v. DHL Express (USA), Inc.,
supra, 164 Cal.App.4th at p. 513, italics added.)
Here, the arbitrator must grant a request for additional discovery if he or she “finds
the party requires [the requested discovery] to adequately arbitrate a claim.” This
standard is not overly burdensome and is significantly different from the “compelling
need” test in Fitz and the “substantial need” test in Ontiveros. Plaintiff “assume[s] that
the arbitrator would not be fair in determining whether additional [discovery is]
needed. . . . Indeed, it is quite the opposite. We assume that the arbitrator will operate in
a reasonable manner in conformity with the law.” (Dotson v. Amgen, Inc., supra,
181 Cal.App.4th at p. 984.)
Plaintiff not only takes issue with the limitation on the number of depositions but
also complains that the discovery provision does not permit the use of written methods of
discovery such as interrogatories and requests for admission. We do not read the
discovery provision so narrowly. The arbitrator is authorized to grant a party’s request
for “additional” discovery. “Additional” means “joining or uniting one thing to another.”
13
(Black’s Law Dict. (6th ed. 1990) p. 38, col. 1; accord, Webster’s Third New Internat.
Dict. (2002 ed.) p. 24, col. 2 [defining “addition”].) This definition is sufficiently broad
to permit the arbitrator to increase the number of depositions and to permit methods of
discovery other than the two expressly mentioned—depositions and requests for
production of documents.
b. Scope of arbitration provision
Plaintiff relies on Murphy v. Check ’N Go of California, Inc. (2007)
156 Cal. App. 4th 138, 144–145, and Ontiveros v. DHL Express (USA), Inc., supra,
164 Cal.App.4th at pages 503 to 505, for the proposition that an arbitration agreement is
unconscionable if it delegates to the arbitrator the question of whether the agreement is
unconscionable. We acknowledge that Murphy and Ontiveros reached that conclusion.
Plaintiff asserts that, under Murphy and Ontiveros, the Auto Club engaged in
unconscionable conduct by attempting to draft an arbitration agreement that would
authorize an arbitrator, not a court, to determine whether the agreement was
unconscionable. Although the trial court raised this question at the first hearing on the
motion to compel arbitration and requested supplemental briefing on the issue, the court
ultimately concluded that the arbitration agreement did not delegate the question of
unconscionability to the arbitrator.
But regardless of what the Auto Club may have attempted to do, plaintiff cites no
authority supporting a challenge to the arbitrability clause that was eventually adopted by
the Auto Club. Also, under the FAA, the parties may vest the arbitrator, not a court, with
the authority to decide whether an arbitration agreement is unconscionable as long as the
parties do so in “clear and unmistakable” terms. (See Rent-A-Center, West, Inc. v.
Jackson (2010) 561 U.S. ___ [130 S. Ct. 2772, 2777–2779 & fn. 1].) Both Murphy and
Ontiveros were decided before the United States Supreme Court filed its opinion in Rent-
A-Center. Because the arbitration agreement in this case is governed by the FAA, the
decision in Rent-A-Center is applicable, and the parties could have agreed that an
arbitrator had exclusive jurisdiction to determine whether the arbitration agreement was
unconscionable.
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c. Selection of neutral arbitrator
The arbitration agreement provides that “[t]he arbitration will be held under the
auspices of a sponsoring organization, either the American Arbitration Association
(‘AAA’) or Judicial Arbitration & Mediation Services (‘JAMS’), with the designation of
the sponsoring organization to be made by the party who did not initiate the claim.”
(Italics added.) According to plaintiff, this provision allows the Auto Club, when the
responding party, to choose the sponsoring organization that has provided it with
“favorable” service. Plaintiff reads this option as permitting the Auto Club to select an
arbitrator who is biased against employees.
Plaintiff’s argument ignores the provision in the arbitration agreement that
describes how an arbitrator, as opposed to a sponsoring organization, is chosen.
Regardless of whether the AAA or JAMS is the organization that will administer a claim,
“[t]he sponsoring organization shall give each party a list of eleven (11) arbitrators drawn
from its panel of employment dispute arbitrators. Each party shall have ten (10) calendar
days from the postmark date on the list to strike all names on the list it deems
unacceptable. If only one common name remains on the lists of the parties, that
individual shall be designated the Arbitrator. If more than one common name remains on
the lists of all parties, the parties shall strike names alternately from the list of common
names until only one remains. The party who did not initiate the claim shall strike first.
If no common name exists on the lists of all parties, the sponsoring organization shall
furnish an additional list of eleven (11) arbitrators from which the parties shall strike
alternately, with the party initiating the claim striking first, until only one name remains.
That person shall be designated as the Arbitrator.”
Plaintiff offers no legal authority or statistical evidence to support her contention
that the arbitrator selection process will allow the Auto Club to choose an arbitrator who
is biased against employees. The contention is therefore without merit.
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C. Request for Public Injunctive Relief Under the UCL
In the complaint, plaintiff requests injunctive relief against the Auto Club under
the UCL to prohibit it from discriminating against employees because of their age,
disability status, health condition, or application for workers’ compensation benefits.
Plaintiff correctly points out that in Cruz v. PacifiCare Health Systems, Inc.,
supra, 30 Cal. 4th 303, the Supreme Court held that a request for “public injunctive” relief
under the UCL is not subject to arbitration. When a plaintiff seeks a “public injunction”
under the UCL, the request must be determined in a judicial forum.
As the Supreme Court explained: “‘[T]here are two factors taken in combination
that make for an “inherent conflict” between arbitration and the underlying purpose of the
[UCL]’s injunctive relief remedy. First, that relief is for the benefit of the general public
rather than the party bringing the action.’ . . . In reaching this conclusion, we distinguish[]
requests for public injunctions from other sorts of actions, such as antitrust suits, in which
the public benefit is incidental to the plaintiff’s award of damages; unlike private suits for
damages, in a public injunction action a plaintiff acts in the purest sense as a private
attorney general. . . . ‘Second, the judicial forum has significant institutional advantages
over arbitration in administering a public injunctive remedy, which as a consequence will
likely lead to the diminution or frustration of the public benefit if the remedy is entrusted
to arbitrators.’ . . . [A]n arbitrator lack[s] the institutional continuity and the appropriate
jurisdiction to sufficiently enforce and, if needed, modify a public injunction. . . . ‘Given
this inherent conflict, we will presume, absent indications to the contrary, that the
Legislature did not intend that the injunctive relief claims be arbitrated.’ . . . We discern[]
no such legislative intent.” (Cruz v. PacifiCare Health Systems, Inc., supra, 30 Cal.4th at
pp. 312–313, citations & fn. omitted; see id. at pp. 315–316.) The court also concluded
that the “public injunction” exception to arbitration was not preempted by the FAA. (See
id. at pp. 313–315.)
The Auto Club asserts that plaintiff is not seeking, and will not seek, “public”
injunctive relief but, instead, will pursue injunctive relief of benefit primarily to herself.
As noted, in Cruz, the Supreme Court recognized an exception to arbitration for “public”
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injunctions. “Whatever the individual motive of the party requesting injunctive relief, the
benefits of granting [public] injunctive relief by and large do not accrue to that party, but
to the general public in danger of being victimized by the same [unlawful] practices as
the plaintiff suffered.” (Broughton v. Cigna Healthplans (1999) 21 Cal. 4th 1066, 1080.)
If plaintiff seeks injunctive relief other than a “public” injunction, the request must be
presented to the arbitrator. (See Kilgore v. KeyBank, Nat. Ass’n (9th Cir., Apr. 11, 2013,
Nos. 09-16703, 10-15934) ___ F.3d ___ [2013 WL 1458876, p. *5].)
Finally, the Auto Club states without elaboration that “[plaintiff’s] UCL claims . . .
are arbitrable,” citing AT&T Mobility LLC v. Concepcion (2011) 563 U.S. ___ [131 S. Ct.
1740]. Apparently, by way of that statement, the Auto Club is asserting that Cruz has
been overruled by Concepcion. If that is so, we deem the point forfeited for lack of a
developed legal argument. (See Kurinij v. Hanna & Morton (1997) 55 Cal. App. 4th 853,
865; Landry v. Berryessa Union School Dist. (1995) 39 Cal. App. 4th 691, 699–700.)
In sum, the trial court erred in denying the motion to compel arbitration with the
exception of any request by plaintiff for public injunctive relief under the UCL.
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III
DISPOSITION
The order denying defendant’s motion to compel arbitration is reversed with the
exception of any request by plaintiff for public injunctive relief under the California
Unfair Competition Law (UCL) (Bus. & Prof. Code, §§ 17200–17210). As to any
request by plaintiff for public injunctive relief under the UCL, the order is affirmed.
Defendant is entitled to costs on appeal.
NOT TO BE PUBLISHED.
MALLANO, P. J.
We concur:
CHANEY, J.
JOHNSON, J.
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