Gilbert v. Bank of America, N.A. et al

Filing 142

ORDER REGARDING 137 THE PARTIES' JOINT DISCOVERY LETTER DATED NOVEMBER 24, 2014. Signed by Magistrate Judge Laurel Beeler on 11/26/2014.(lblc2, COURT STAFF) (Filed on 11/26/2014)

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UNITED STATES DISTRICT COURT

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Northern District of California

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San Francisco Division
SEAN L. GILBERT, et al.,

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For the Northern District of California

UNITED STATES DISTRICT COURT

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Plaintiffs,
v.

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No. C 13-01171 JSW (LB)
ORDER REGARDING THE PARTIES’
JOINT DISCOVERY LETTER DATED
NOVEMBER 24, 2014

BANK OF AMERICA, et al.,
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[Re: ECF No. 137]
Defendants.
_____________________________________/
The parties filed a joint discovery letter brief regarding Plaintiffs’ motion to take the deposition

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of non-party David Odell. (Letter Brief, ECF No. 137.) Mr. Odell, who is the President of non-

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party Summit Computer Solutions, filed a declaration in support of the Rare Moon Defendants’

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motion to compel arbitration. (Id. at 1, 11-14.1) In that declaration, he talks about Summit’s

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provision of information-technology services to Rare Moon Media, LLC and how customers such as

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the named Plaintiffs electronically filled out and signed the payday loan agreements that contained

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the arbitration clause at issue. (Id. at 12-14.) He purports to authenticate the loan agreements. (Id.)

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Plaintiffs’ counsel thinks he cannot do that because he cannot have first-hand knowledge of what

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and how customers signed. (Id.) The court held a hearing on November 26, 2014, and orders a

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three-hour deposition.

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The FAA “calls for a summary and speedy disposition of motions or petitions to enforce

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The Rare Moon Defendants are Rare Moon Media, LLC; Jeremy Shaffer; Brad Levine;
Lindsey Coker; and Josh Mitchem.
C 13-01171 JSW (LB)
ORDER

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arbitration clauses.” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 29 (1983).

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“It was ‘Congress’s clear intent, in the [FAA], to move the parties to an arbitrable dispute out of

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court and into arbitration as quickly and easily as possible.’” Bell v. Koch Foods of Miss., LLC, 358

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Fed. Appx. 498, 500-01 (5th Cir. 2009) (quoting Moses H. Cone Mem’l Hosp., 460 U.S. at 22). As

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part of the FAA’s strong policy favoring arbitration, the statute “provides for discovery and a full

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trial in connection with a motion to compel arbitration only if ‘the making of the arbitration

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agreement or the failure, neglect, or refusal to perform the same be in issue.’” Simula, Inc. v.

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Autoliv, Inc., 175 F.3d 716, 726 (9th Cir. 1999) (quoting 9 U.S.C. § 4). In other words, courts may

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consider only “issues relating to the making and performance of the agreement to arbitrate.” Id. at

mind, “[d]istrict courts in the Ninth Circuit and the Ninth Circuit itself have allowed a party

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For the Northern District of California

726 (citing Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395, 404 (1967)). With this in

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UNITED STATES DISTRICT COURT

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opposing a motion to compel arbitration to conduct discovery relevant to the issue of

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unconscionability.” Meyer v. T-Mobile USA Inc., 836 F. Supp. 2d 994, 1007 (N.D. Cal. 2011)

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(citing Hoffman v. Citibank (South Dakota), N.A., 546 F.3d 1078, 1085 (9th Cir. 2008) (remanding

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case to district court to expand the record on the issue of procedural unconscionability); Hamby v.

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Power Toyota Irvine, 798 F. Supp. 2d 1163, 1164-65 (S.D. Cal. 2011) (granting plaintiff’s ex parte

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application for arbitration-related discovery); Coneff v. AT & T Corp., No. C06–0944RSM, 2007

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WL 738612, at *2-3 (W.D. Wash. Mar. 9, 2007) (allowing discovery requests related to the issue of

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unconscionability but not the merits of the parties’ underlying dispute)).

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Here, Plaintiff challenges whether Mr. Odell really can authenticate the loan agreements.

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Discovery into that point is fair. Moreover, to the extent that Mr. Odell has information relevant to

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arguments about procedural unconscionability, discovery is relevant too. Some modest inquiry

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about the nature of his company’s relationship (both services provided and compensation received)

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is relevant for context and potential bias. The court does not intend the discovery to be a wide-

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ranging inquiry into the merits but thinks that the three-hour limit takes care of any concern that the

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Rare Moon Defendants might have. Moreover, Mr. Odell is a non-party, and the Rare Moon

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Defendants’ standing really is limited to issues of privilege, which they did not assert. That being

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said, the discovery process made sense to ensure the orderly taking of discovery given the pending

C 13-01171 JSW (LB)
ORDER

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motion. Also, the Rare Moon Defendants said at the hearing that they would work with Mr. Odell

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and his counsel to be sure he can be produced along the time line reflected in their pending

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stipulation before the district judge so that this litigation is not derailed further. As the court

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observed at the hearing, everyone has an interest in moving this issue along so that the district judge

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can decide the pending motion to compel arbitration.

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IT IS SO ORDERED.

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Dated: November 26, 2014

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_______________________________
LAUREL BEELER
United States Magistrate Judge

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For the Northern District of California

UNITED STATES DISTRICT COURT

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C 13-01171 JSW (LB)
ORDER

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