Smith v. Rent-A-Ctr., Inc.

LORENZO SMITH, Plaintiff, v. RENT-A-CENTER, INC., Defendant.

1:18-CV-01351 LJO JLT

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

July 9, 2019

MEMORANDUM DECISION AND ORDER GRANTING MOTION TO COMPEL ARBITRATION

(ECF No. 33)

I. INTRODUCTION

Before the Court is defendant Rent-A-Center, Inc.'s ("Defendant") renewed Motion to Compel Arbitration ("Motion to Compel Arbitration") of employment discrimination and related state law claims brought against it by plaintiff Lorenzo Smith ("Plaintiff"). ECF No. 33-1. Plaintiff opposes the motion. ECF No. 34. The Court finds it appropriate to rule on Defendant's motion without oral argument. See Local Rule 230(g). For the following reasons, the Court GRANTS the motion.

II. BACKGROUND

On October 1, 2018, Plaintiff filed a lawsuit against Defendant, his former employer, alleging violations of 42 U.S.C. § 1981, as well as California's Fair Employment and Housing Act, Labor Code, and public policy. ECF No. 1. In response to Plaintiff's suit, and after a default judgment was set aside, Defendant filed its Motion to Compel Arbitration on January 30, 2019 ("first motion"). ECF Nos. 14, 17. Plaintiff filed an Opposition to Defendant's Motion on February 13, 2019, arguing, among otherthings, that his alleged electronic signatures were not authenticated sufficiently by Defendant under California law. ECF No. 19 at 2. The Court ruled on March 21, 2019, denying Defendant's motion based on the Court's finding that Defendant had failed to authenticate Plaintiff's signatures on the purported agreements to arbitrate. The Court did not reach the enforceability of the agreements themselves.

On April 26, 2019, Defendant filed a second Motion to Compel Arbitration ("second motion"), which includes substantial documentation not included with its first motion. ECF Nos. 33-1 through 33-4. Plaintiff's Opposition, filed on May 7, 2019, argues jurisdictional and procedural issues, and has seemingly abandoned contestation of the signatures themselves. ECF No. 34. Defendant's reply was filed on May 21, 2019. ECF No. 37.

III. LEGAL STANDARD

The Federal Arbitration Act ("FAA," "the Act") was enacted "in response to widespread judicial hostility to arbitration agreements." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). Under the Act, "[a] written provision in ... a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract." 9 U.S.C. § 2. The FAA reflects "a liberal federal policy favoring arbitration." Moses H. Cone Memorial Hospital v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983).

Two provisions of the FAA establish procedures through which federal courts implement the substantive rule of the Act. Rent-A-Center, West, Inc. v. Jackson, 561 U.S. 63, 68 (2010). Under these provisions, courts may stay an action brought "upon any issue referable to arbitration under an agreement in writing for such arbitration," or order arbitration to proceed when a party is "aggrieved by the alleged failure, neglect, or refusal of another to arbitrate." 9 U.S.C. §§ 3, 4. However, "a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." Howsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 83 (2002) (quoting Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582 (1960)).

Fundamentally, "arbitration is a matter of contract." Rent-A-Center, West, Inc., 561 U.S. at 67. Courts are required to enforce arbitration agreements "according to their terms." Id. at 68. Because an agreement to arbitrate is a matter of contract, courts "generally ... apply ordinary state-law principles that govern the formation of contracts." First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995).

Importantly, courts are "limited to determining (1) whether a valid agreement to arbitrate exists, and, if it does, (2) whether a valid agreement encompasses the dispute at issue." Chiron Corp. v. Ortho Diagnostic Systems, Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). "If there is a genuine dispute of material fact as to any of these queries, a district court should apply a 'standard similar to the summary judgment standard of [Federal Rule of Civil Procedure 56]'." Lopez v. Terra's Kitchen, LLC, 331 F. Supp. 3d 1092, 1097 (S.D. Cal. 2018) (quoting Concat LP v. Unilever, PLC, 350 F. Supp. 2d 796, 804 (N.D. Cal. 2004)). "The district court, when considering a motion to compel arbitration which is opposed on the ground that no agreement to arbitrate had been made between the parties, should give to the opposing party the benefit of all reasonable doubts and inferences that may arise." Three Valleys Mun. Water Dist. V. E.F. Hutton & Co., Inc., 925 F.2d 1136, 1141 (9th Cir. 1991) (quoting Par-Knit Mills, Inc. v. Stockbridge Fabrics Co., 636 F.2d 51 (3d Cir. 1980)).

IV. ANALYSIS

Defendant seeks to compel arbitration at this time, based on the expanded record supplied to authenticate the validity of Plaintiff's electronic signatures on three documents, comprising two agreements to arbitrate. See generally ECF No. 33-1. Defendant asserts that any evidentiary deficiency in their previous motion is now cured. ECF No. 33-1 at 5. Plaintiff opposes Defendant's second motion on three grounds, contending that: 1) this Court lacks jurisdiction, as Defendant took an interlocutory appeal from the Court's previous decision; 2) Defendant's motion fails to comply with Local Rule 230(k) and Ninth Circuit precedent regarding motions for reconsideration; and 3) the affidavit of Defendant's Human Resource Director relies on hearsay and lacks foundation. See generally ECF No.34. For the following reasons, the Court GRANTS Defendant's second motion to compel arbitration, finding Plaintiff's opposition to be without merit and that the parties entered into two enforceable arbitration agreements.

A. Jurisdiction

Plaintiff contends that this Court does not have jurisdiction to review the instant motion because Defendant took an interlocutory appeal from the Court's decision in the first motion, which Plaintiff purports divested this Court of jurisdiction over Defendant's second motion. ECF No. 34 at 1-3. Defendant counters that this motion seeks a ruling on the ultimate question not reached by the Court in the previous motion—whether a binding agreement exists between parties that compels arbitration in this matter; whereas, the appeal concerns the Court's finding that Defendant's evidence authenticating an electronic signature in the previous motion was insufficient. ECF No. 37 at 2-4. Defendant asserts that this Court can consider its renewed motion to compel arbitration on a new body of evidence, or in the alternative, the Court can enter an indicative ruling under Rule 62.1. ECF No. 37 at 5-7.

When an interlocutory appeal is filed, trial courts are divested of jurisdiction only over "the precise issue appealed." United States v. Cheely, 814 F. Supp. 1430, 1434 (D. Alaska 1992) (citing Britton v. Co-op Banking Group, 916 F.2d 1405, 1412 (9th Cir. 1990)); see also Pipe Trades Council of N. Cal., U.A. Local 159 v. Underground Contractors Ass'n of N. Cal., 835 F.2d 1275, 1277 (9th Cir. 1987), opinion amended on denial of reh'g, (9th Cir. Dec. 12, 1988) (explaining district court denied second motion to compel arbitration for lack of jurisdiction, while first motion was on appeal, when second motion concerned the exact same underlying legal question). In this case, the precise subject matter on appeal is whether Defendant properly authenticated an electronic signature based on the evidence presented in its first motion. In the instant motion, Defendant is asking this Court to rule on the enforceability of an arbitration agreement purportedly entered into by the parties, supported by new evidence not previously presented to the Court. ECF No. 33-1. For that reason, the Court has not been divested of jurisdiction in relation to Defendant's second motion.

B. The Motion under Local Rules and Ninth Circuit Precedent

Plaintiff next contends that Defendant's second motion should be denied for failing to comply with Local Rule 230(k) and for failing to comport with Ninth Circuit precedent.¹ ECF No. 34 at 3-4. Both assertions rest on casting the instant motion as one for reconsideration, which Defendant contests. ECF No. 37 at 2-4. The instant motion is not one for reconsideration, according to Defendant, as the Court never ruled on the ultimate question of the last motion—whether the parties entered into an enforceable agreement that compels Plaintiff to arbitrate his claims. Id.

The motion before the Court is not correctly cast as a motion for reconsideration: the Court is not being asked to reconsider its previous ruling on the insufficiency of evidence authenticating Plaintiff's signature. Further, neither Rule 59 nor Rule 60 of the Federal Rules of Civil Procedure, each a vehicle for reconsideration requests, is appropriately applied in this case. Instead, this is a motion seeking to reach the ultimate question the Court did not reach in the last motion, as explained above. Defendant is correct that the Court's ruling on its previous motion did not preclude it from bringing the instant motion. This Court's conclusion is supported by other district court cases. See, e.g., Maxit Designs, Inc. v. Coville, Inc., No. CIV. S-05-1040 WBS DAD, 2006 WL 2734366 (E.D. Cal. Sept. 25, 2006); Lucas v. Hertz Corp., 875 F. Supp. 2d 991 (N.D. Cal. 2012) (denying first motion to compel for evidentiary problems and granting second motion); Bernal v. Southwestern & Pacific Specialty Finance, Inc., No. C 12-05797 SBA, 2014 WL 1868787 (N.D. Cal. May 6, 2014).

For these reasons, Local Rule 230(k) and Ninth Circuit precedent on the procedures and requirements for filing motions for reconsideration do not apply here.

C. The...