R. Mitchell v. U-Haul Company of California

Filing 40

Order by Hon. James Donato denying defendant UHCA's 9 Motion to Compel Arbitration and Dismiss Action. (jdlc2S, COURT STAFF) (Filed on 5/23/2017)

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1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 R. MITCHELL, Plaintiff, 8 9 10 United States District Court Northern District of California ORDER DENYING MOTION TO COMPEL ARBITRATION v. U-HAUL COMPANY OF CALIFORNIA, Re: Dkt. No. 9 Defendant. 11 12 Case No. 16-cv-04674-JD Pending before the Court is a motion by defendant U-Haul Co. of California (“UHCA”) to 13 compel arbitration pursuant to the Federal Arbitration Act, 9 U.S.C. §§ 1-16. Dkt. No. 9. In 14 deciding such a motion, “whether a valid agreement to arbitrate exists” is the first question the 15 Court must answer. Norcia v. Samsung Telecomm. Am., LLC, No. 14-cv-00582-JD, 2014 WL 16 4652332, at *4 (N.D. Cal. Sept. 18, 2014), aff’d, 845 F.3d 1279 (9th Cir. 2017). UHCA, as the 17 party seeking to compel arbitration, has the burden of proving the existence of an agreement to 18 arbitrate by a preponderance of the evidence. Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 19 (9th Cir. 2014). UHCA has not met that burden and so the Court denies the motion to compel 20 arbitration. 21 As the Court previously observed, UHCA initially sought to compel arbitration under a 22 “rental contract” with plaintiff, but it subsequently filed a reply brief that was directed entirely to a 23 different arbitration agreement contained in “UHCA’s Terms and Conditions” which were 24 referenced by hyperlink in emails to the plaintiff. See Dkt. No. 35. Because UHCA has 25 consequently abandoned any “rental contract” (as to which UHCA acknowledges it is “unable to 26 locate” a copy signed by plaintiff in any event, see Dkt. No. 9 at 4 n.1), the Court denies any 27 request to compel arbitration under that contract. 28 1 UHCA has further failed to meet its burden of proving the existence of an agreement to 2 arbitrate in the form of its “Terms and Conditions.” Under California law, which is the applicable 3 law here, “there is no contract until there is mutual consent of the parties. The manifestation of 4 mutual consent is generally achieved through the process of offer and acceptance.” Norcia, 2014 5 WL 4652332, at *4 (internal quotation omitted). It is critical that an offeree knows that an offer 6 has been made. See id. 7 Here, UHCA relies heavily on two form emails plaintiff received from UHCA on June 21, 2014. Dkt. No. 18 at 6. By UHCA’s own description, “at the end of” both emails there were 9 “links, inter alia, to view . . . UHCA’s Terms and Conditions.” Id. at 5; see also Dkt. No. 13, 10 Ex. 1. UHCA has submitted no evidence that plaintiff “had actual notice” of these Terms and 11 United States District Court Northern District of California 8 Conditions nor that she “was required to affirmatively acknowledge” them at any time. See 12 Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 1177 (9th Cir. 2014). And, similar to the 13 circumstances in Nguyen, the link was “buried” at the bottom of the email where recipients were 14 unlikely to see it. Id. The conclusion reached in Nguyen therefore applies here as well: plaintiff 15 had insufficient notice of UHCA’s Terms and Conditions, and thus she did not enter into any 16 arbitration agreement contained within those Terms and Conditions. See id. at 1180; see also 17 Norcia, 2014 WL 4652332, at *7 (concluding no arbitration agreement formed where “no 18 reasonable person would know that a proposal has been made to him”); Knutson, 771 F.3d at 567 19 (“when the writing does not appear to be a contract and the terms are not called to the attention of 20 the recipient . . . , no contract is formed with respect to the undisclosed term”). 21 Because UHCA has failed to carry its burden of proving the existence of an agreement to 22 arbitrate in the first place, the Court does not reach the question of whether that agreement would 23 have encompassed the dispute at issue in any event. Defendant’s motion to compel arbitration and 24 dismiss the action, Dkt. No. 9, is denied. 25 26 IT IS SO ORDERED. Dated: May 23, 2017 27 JAMES DONATO United States District Judge 28 2

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