Casement v. Soliant Health, Inc.

• Decision Date: 29 April 2020
• Docket Number: No. 1:19-cv-01262-DAD-JLT,1:19-cv-01262-DAD-JLT
• Court: U.S. District Court — Eastern District of California
• Parties: JAMES CASEMENT, on behalf of himself and others similarly situated, Plaintiff, v. SOLIANT HEALTH, INC., Defendant.

JAMES CASEMENT, on behalf of himself and others similarly situated, Plaintiff, v. SOLIANT HEALTH, INC., Defendant.

No. 1:19-cv-01262-DAD-JLT

UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF CALIFORNIA

April 29, 2020

ORDER GRANTING DEFENDANT'S MOTION TO COMPEL ARBITRATION

(Doc. No. 24)

This matter is before the court on defendant Soliant Health, Inc.'s ("Soliant") motion to compel arbitration. (Doc. No. 24.) A hearing on the motion was held on January 22, 2020. Attorneys Ashkan Shakouri and Nazo Koulloukian appeared telephonically on behalf of plaintiff James Casement, and attorney Elizabeth Murphy appeared telephonically on behalf of Soliant. Having considered the parties' briefs and oral arguments, and for the reasons set forth below, the court will grant defendant's motion to compel arbitration.

BACKGROUND

Plaintiff is a licensed nurse and a resident of California. (Doc. No. 27 at 3.) Soliant is an employment staffing agency, incorporated in Georgia with its principal place of business in Florida. (Id. at 4.) Soliant assigns healthcare professionals to work assignments throughout California. (Id.) At all relevant times, plaintiff was employed by Soliant. (Id. at 4-5.)

In this class action, plaintiff alleges that Soliant failed to: (1) provide reporting time pay; (2) pay employees for all hours worked; (3) pay overtime; (4) pay minimum wage; (5) authorize or permit meal breaks; (6) authorize or permit rest breaks; and (7) furnish accurate wage statements. (Id. at 15-22.) Plaintiff also asserts causes of action for waiting time penalties, breach of contract, negligent misrepresentation, and unfair business practices, as well as a cause of action under California's Private Attorney General Act. (Id. at 22-27.)

On December 10, 2019, Soliant moved to compel arbitration on an individual basis, relying on an arbitration provision ("the arbitration provision") which appears in Section 14 of the Professional Employment Agreement ("the employment agreement") that plaintiff entered into with Soliant. (Doc. No. 24 at 9.) That arbitration provision provides, in full, as follows:

Arbitration

14. Any dispute or difference between Soliant and Consultant arising out of or relating to this Agreement shall be settled by arbitration in accordance with the rules of the American Arbitration Association by a single arbitrator. [] Soliant and Consultant shall agree on an arbitrator. If Soliant and [] Consultant fail to agree on an arbitrator within thirty (30) days after notice of commencement of arbitration, the American Arbitration Association shall, upon the request of either party, appoint the arbitrator to constitute the panel. Arbitration proceedings hereunder may be initiated by either Soliant or Consultant by making a written request to the American Arbitration Association, together with any appropriate filing fee, at the office of the American Arbitration Association in Jacksonville, Florida. All arbitration proceedings shall be held in Jacksonville, Florida. Any order or determination of the arbitral tribunal shall be final and binding upon the parties to the arbitration and may be entered in any court having jurisdiction.

(Doc. No. 24-4 at 3.)

On January 7, 2020, plaintiff filed his opposition to the pending motion to compel arbitration, and on January 15, 2020, Soliant filed its reply. (Doc. Nos. 28, 30.)

LEGAL STANDARDS

A written provision in any contract evidencing a transaction involving commerce to settle a dispute by arbitration is subject to the Federal Arbitration Act ("FAA"). 9 U.S.C. § 2. The FAA confers on the parties involved the right to obtain an order directing that arbitration proceed in the manner provided for in a contract between them. 9 U.S.C. § 4. In deciding a motion tocompel arbitration, the court "is limited to determining (1) whether a valid agreement to arbitrate exists [within the contract] and, if it does, (2) whether the agreement encompasses the dispute at issue." Boardman v. Pacific Seafood Group, 822 F.3d 1011, 1017 (9th Cir. 2016) (citing Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000) (brackets in original)).

There is an "emphatic federal policy in favor of arbitral dispute resolution." Balen v. Holland America Line Inc., 583 F.3d 647, 652 (9th Cir. 2009) (quoting Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 631 (1985)). As such, "'any doubts concerning the scope of arbitrable issues should be resolved in favor of arbitration, whether the problem at hand is the construction of the contract language itself or an allegation of waiver, delay, or a like defense to arbitrability.'" Mitsubishi Motors Corp., 473 U.S. at 626 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1 at 24-25 (1983)); see also Balen, 583 F.3d at 652. An arbitration agreement may only "be invalidated by 'generally applicable contract defenses, such as fraud, duress, or unconscionability,' but not by defenses that apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011) (quoting Doctor's Assocs., Inc. v. Casarotto, 517 U.S. 681, 687 (1996)); see also Newirth by and through Newirth v. Aegis Senior Communities, LLC, 931 F.3d 935, 940 (9th Cir. 2019). Accordingly, courts may not apply traditional contractual defenses, like duress and unconscionability, in a broader or more stringent manner to invalidate arbitration agreements and thereby undermine FAA's purpose to "ensur[e] that private arbitration agreements are enforced according to their terms." Concepcion, 563 U.S. . at 344 (quoting Volt Info. Scis., Inc. v. Bd. of Trs., 489 U.S. 468, 478 (1989)).

DISCUSSION

Here, Soliant contends that the court must compel arbitration because plaintiff signed the employment agreement which contains an enforceable provision requiring plaintiff to individually arbitrate the claims he is asserting against Soliant in this action. (Doc. No. 24 at 7.) Plaintiff does not dispute that he signed the employment agreement, that it contains the arbitration provision, or that the provision covers his claims and requires him to arbitrate those claims individually. Plaintiff's sole argument in opposition to the pending motion is that theemployment agreement is unenforceable because it is both procedurally and substantively unconscionable. (Doc. No. 28 at 5-15.)

"[T]he party opposing arbitration bears the burden of proving any defense, such as unconscionability." Poublon v. C.H. Robinson Co., 846 F.3d 1251, 1260 (9th Cir. 2017) (quoting Pinnacle Museum Tower Assn. v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th 223, 236 (2012)). To establish unconscionability under California law,¹ the party opposing arbitration must demonstrate that the entire arbitration provision, or a specific clause in it, is both procedurally and substantively unconscionable. Poublon, 846 F.3d at 1260 (citing Sanchez v. Valencia Holding Co., 61 Cal. 4th 899, 910 (2015)). "The prevailing view is that procedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or clause under the doctrine of unconscionability . . . [b]ut they need not be present in the same degree." Sanchez, 61 Cal. 4th at 910. Courts generally view procedural and substantive unconscionability on a sliding scale, whereby "the 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 v. Found. Health Psychcare Servs., Inc., 24 Cal. 4th 83, 114 (2000); see also Poublon, 846 F.3d at 1260. Overall,"unconscionability requires a substantial degree of unfairness beyond a simple old-fashioned bad bargain," such as when a contract is "so one-sided as to 'shock the conscience.'" Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1210 (9th Cir. 2016) (quoting Baltazar v. Forever 21, Inc., 62 Cal. 4th 1237, 1245 (2016)). Finally, "when parties commit to arbitrate contractual disputes, it is a mainstay of the [FAA's] substantive law that attacks on the validity of the contract, as distinct from attacks on the validity of the arbitration clause itself, are to be resolved by the arbitrator in the first instance, not by a federal or state court." Nitro-Lift Tech., L.L.C. v. Howard, 568 U.S 17, 20-21 (2012) (quotation marks and citation omitted); see also Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 448-49 (2006) ("a challenge to the validity of the contract as a whole, and not specifically to the arbitration clause, must go to the arbitrator"). Accordingly, "an arbitration provision is severable from the remainder of the contract . . . and its validity is subject to initial court determination; but the validity of the remainder of the contract (if the arbitration provision is valid) is for the arbitrator to decide."² Nitro-Lift Tech., L.L.C., 568 U.S at 21 (quotation marks and citation omitted).

A. Whether the Arbitration Provision is Procedurally Unconscionable

"The procedural element of unconscionability focuses on 'oppression or surprise due to unequal bargaining power.'" Poublon, 846 F.3d at 1260 (quoting Pinnacle Museum Tower Ass'n, 55 Cal. 4th at 246)); see also Chavarria v. Ralphs Grocery Co., 733 F.3d 916, 922 (9th Cir. 2013) ("Procedural unconscionability concerns the manner in which the contract was negotiated and the respective circumstances of the parties at that time, focusing on the level of oppression and surprise involved in the agreement."). "Oppression addresses the weaker party's absence of choice and unequal bargaining power that results in no real negotiation," while "[s]urprise involves the extent to which the contract clearly discloses its terms as well as the reasonable expectations of the weaker party." Chavarria, 733 F.3d at 922 (internal quotation marks and citation omitted); see also Mohamed...