Dominguez v. Stone Brewing Co.
| Decision Date | 02 July 2020 |
| Docket Number | Case No.: 20-cv-251-WQH-BLM |
| Court | U.S. District Court — Southern District of California |
| Parties | JESSE DOMINGUEZ, individually, and on behalf of other members of the general public similarly situated, Plaintiff, v. STONE BREWING CO., LLC, a California limited liability company; and DOES 1 through 100, inclusive, Defendants. |
The matters before the Court are the Motion to Compel Bilateral Arbitration (ECF No. 8) and Motion to Dismiss (ECF No. 9) filed by Defendant Stone Brewing Co., LLC.
On December 23, 2019, Plaintiff Jesse Dominguez filed a Class Action Complaint in the Superior Court for the State of California, County of San Diego, against Defendants Stone Brewing Co., LLC ("Stone"), and Does 1 through 100, inclusive. (Ex. A, ECF No. 1-2). In the Complaint, Dominguez alleges that he applied for a job with Stone in April 2015. Dominguez alleges that the background investigation form in Stone's employment application improperly combined a background investigation disclosure and authorization in one document, contained "extraneous information," failed to include required disclosures, included an "evergreen consent" provision, failed to identify all consumer reporting agencies that may conduct background checks, and failed to identify a basis for requesting a consumer credit report. (Id. ¶¶ 27, 31-33). Dominguez alleges that Stone procured a consumer report, an investigative consumer report, and a consumer credit report based on the improper disclosure and authorization form while evaluating his employment application. Dominguez seeks to represent three classes and brings claims on behalf of himself and the class members against Stone for violations of the Fair Credit Reporting Act, 15 U.S.C. §§ 1681b(b)(2)(A) and 1681d(a); the Investigative Consumer Reporting Agencies Act, Cal. Civ. Code § 1786.16(a)(2) and (a)(2)(B)(iv); the Consumer Credit Reporting Agencies Act, Cal. Civ. Code § 1785.20.5(a); and California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200, et seq.
On February 10, 2020, Stone removed the action to this Court pursuant to 28 U.S.C. §§ 1331, 1367, and 1441. (ECF No. 1). On March 17, 2020, Stone filed a Motion to Compel Bilateral Arbitration (ECF No. 8) and a Motion to Dismiss (ECF No. 9). Stone seeks to compel binding arbitration of Dominguez's claims pursuant to the Federal Arbitration Act ("FAA"), 9 U.S.C. §§ 1, et seq., and to stay or dismiss any remaining claims. On April 6, 2020, Dominguez filed Oppositions to Stone's Motions. (ECF Nos. 12, 13). On April 13, 2020, Stone filed Replies. (ECF Nos. 14, 15).
On April 9, 2015, Dominguez completed a three-page "Application for Employment" ("Employment Application") for a warehouse position with Stone. (Ex. A, Declaration of Vickie Motte in Support of Stone's Motion to Dismiss and Motion to Compel Arbitration ("Motte Decl."), ECF No. 8-3 at 6-8). The third page of the Employment Application directed Dominguez to "[p]lease read carefully, initial each paragraph, and sign below." (Id. at 8). Below these directions were six individual paragraphs, each with a blank space for the applicant to initial. The third paragraph stated:
I hereby agree to submit to binding arbitration all disputes and claims arising out of the submission of this application. I further agree, in the event that I am hired by the company, that all disputes that cannot be resolved by informal internal resolution which might arise out of my employment with the company, whether during or after that employment, will be submitted to binding arbitration. This application contains the entire agreement between the parties with regard to dispute resolution, and there are no other agreements as to dispute resolution, either oral or written.
(Id.). Dominguez initialed the box next to the third paragraph and printed his name, signed, and dated the bottom of the Employment Application.
On April 13, 2015, Stone sent Dominguez a two-page letter offering him the position of "Warehouse Worker" ("Offer Letter"). (Ex. B, Motte Decl., ECF No. 8-3 at 10). The first paragraph of the Offer Letter stated, "This offer and your employment relationship will be subject to the terms and conditions of this letter." (Id.). The Offer Letter described warehouse worker job responsibilities, rate of pay, benefits, and terms of at-will employment. The Offer Letter stated that Stone's offer of employment was contingent upon Stone's verification of the information in Dominguez's Employment Application and upon Dominguez "[s]igning and abiding by Company's Confidentiality Agreement," complying with federal I-9 requirements, successfully completing a background check, and passing a drug and alcohol screening. (Id. at 11). The Offer Letter stated:
This letter, including the enclosed Confidential Agreement, constitutes the entire agreement between you and Company relating to this subject matter and supersedes all prior or contemporaneous agreements, understandings, negotiations or representations, whether oral or written, express or implied, on this subject. This letter may not be modified or amended except by a specific, written agreement signed by you and Company's President.
(Id.). The Offer Letter stated, "To indicate your acceptance of Company's offer on the terms and conditions set forth in this letter, please sign and date this letter in the space provided below . . . ." (Id.). Dominguez signed and dated the Offer Letter on April 27, 2015, below an acknowledgement that stated, "I have read this offer letter in its entirety and agree to the terms and conditions of employment." (Id.). Dominguez "was employedas a Warehouse employee and eventually promoted to a Warehouse Lead by Stone . . . from approximately 2015 to July, 2019." (Declaration of Jesse Dominguez in Support of Opposition to Motion to Compel Arbitration ("Dominguez Decl."), ECF No. 13-1 ¶ 2).
Stone contends that that the Employment Application contains a valid and binding arbitration agreement requiring Dominguez to individually arbitrate his claims. Stone contends that the Court determines whether the arbitration agreement allows for class arbitration, and the arbitration agreement in this case requires arbitration on an individual basis. Dominguez contends that no arbitration agreement exists between the parties. Dominguez contends that the Offer Letter supersedes the arbitration agreement in the Employment Application. Dominguez contends that the arbitration agreement is procedurally and substantively unconscionable. Dominguez contends that the arbitrator, not the Court, decides the issue of class-wide arbitration.
"The FAA was enacted in 1925 in response to widespread judicial hostility to arbitration agreements." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). Section 2 is "the 'primary substantive provision of the [FAA].'" Id. (quoting Moses H. Cone Mem'l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 24 (1983)). Section 2 of the FAA provides:
A written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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. Section 2 "reflect[s] both a liberal federal policy favoring arbitration and the fundamental principle that arbitration is a matter of contract." Concepcion, 563 U.S. at 339 (internal citations and quotation marks omitted). The FAA "leaves no place for the exercise of discretion by a district court, but instead mandates that district courts shall direct the parties to proceed to arbitration on issues as to which an arbitration agreement has beensigned." Dean Witter Reynolds Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C. §§ 3, 4). "The basic role for courts under the FAA is to determine '(1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.'" Kilgore v. KeyBank, N.A., 718 F.3d 1052, 1058 (9th Cir. 2013) (en banc) (quoting Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000)). "If the response is affirmative on both counts, then the [FAA] requires the court to enforce the arbitration agreement in accordance with its terms." Chiron Corp., 207 F.3d at 1130.
Stone contends that the Employment Application that Dominguez signed and submitted contains a valid and binding arbitration agreement. Stone contends that the Offer Letter does not supersede the arbitration agreement in the Employment Application because the Offer Letter's terms are limited to "Plaintiff's start date, job duties, rate of pay, benefits, the at-will nature of his employment, and contingencies upon which the offer was based." (ECF No. 15 at 9-10).
Dominguez contends that no arbitration agreement exists between Dominguez and Stone. Dominguez contends that the arbitration agreement in the Employment Application lacks mutual assent because Stone did not sign the Employment Application. Dominguez contends that Employment Application "make[s] clear that [Stone] did not intend the application and its provisions to be a binding contract with legally enforceable obligations between the parties." (ECF No. 13 at 10). Dominguez further contends that the subsequently-signed Offer Letter does not contain an arbitration provision and supersedes any other agreement between Dominguez and Stone.
District courts "'apply ordinary state-law principles that govern the formation of contracts' to decide whether an agreement to arbitrate exists." Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017) (quoting First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995)). In California, a valid contract requires 1) the parties' capacity to contract; 2) the parties' mutual...
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