Carrasco vs. Del Taco LLC

Plaintiffs shall give notice of all of the above. 107 Carrasco vs. Del Taco LLC

2025-01479192 1. Motion to Compel Arbitration 2. Case Management Conference

The right to arbitration depends upon contract; a petition to compel arbitration is simply a suit in equity seeking specific performance of that contract. Little v. Pullman (2013) 219 Cal.App.4th 558, 565. The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. Id.; Perry v. Thomas (1987) 482 U.S. 483, 492 n.9 (State law applicable to contracts generally governs whether a valid arbitration agreement exists.)

While the burden of persuasion is always on the moving party, the burden of production may shift in a three-step process. First, the moving party must present “prima facie evidence of a written agreement to arbitrate the controversy”, which is satisfied by attaching a copy of the arbitration agreement purporting to bear the opposing party’s signature. Gamboa v. Ne. Cmty. Clinic (2021) 72 Cal.App.5th 158, 164–67. At this step, a movant need not follow the normal procedures of document authentication. Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218-219.

If the moving party meets its initial burden, and the opposing party disputes the agreement, then the burden shifts to the opposing party to challenge the authenticity of the agreement.

Finally, if plaintiff presents evidence that no agreement exists, the burden shifts back to the moving party to present admissible evidence of a valid arbitration agreement between the parties by a preponderance of the evidence. Gamboa, supra, 72 Cal.App.5th at 164–67.

Defendant has presented undisputed evidence that on 04-22-2025, plaintiff electronically signed the stand-alone “Dispute Resolution Agreement” (the “DRA”) that was required for her employment. ROA 36 Ex. A; ROA 32 ¶ 4. Accordingly, defendant has met its initial burden of demonstrating the existence of an arbitration agreement between the parties.

While she does not specifically recall doing so, plaintiff does not deny she signed the DRA. ROA 58 ¶¶ 16, 20. Plaintiff’s lack of recollection is immaterial to formation. See, e.g., Randas v. YMCA of Metro. Los Angeles (1993) 17 Cal.App.4th 158, 163 (“one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it”). Accordingly, plaintiff has not presented evidence to shift the burden back to defendant and the court thus finds the parties formed an agreement to arbitrate.

Application of Federal Arbitration Act

The DRA is expressly governed by the Federal Arbitration Act (“FAA”). ROA 36 Ex. A at 2. Defendant also provides undisputed evidence it is engaged in interstate commerce. ROA 32 ¶ 2. Plaintiff does not dispute the application of the FAA. The court therefore finds the FAA governs.

Relevant Terms and Whether the Agreement Covers the Dispute

The DRA broadly “applies to disputes and claims for relief Employee or Company may now or in the future have against each other...in any way related to Employee's employment or termination of employment...” ROA 36 Ex. A at 1. The DRA precludes arbitration on a class class or representative basis “to the full extent permitted under the law.” Id. at 2. If the waiver is “deemed invalid or unenforceable, then that part of the prohibition on class, collective, or non-individual representative arbitration shall be severed from the agreement and the surviving portions of this section will remain in force.”

Id. Additionally, in the event a dispute includes arbitrable and non-arbitrable claims, “the parties agree that the arbitrable claims shall be resolved first and the non-arbitrable claims shall be stayed pending completion of the arbitration proceedings.” Id. at 3. Arbitration is the sole and exclusive remedy for covered claims between the parties. Id. at 3. The DRA also contains a severability provision. Id. at 6. The DRA “supersedes any prior or contemporaneous oral or written understanding on the subject.”

Id. at 6.

Plaintiff does not dispute her claims are encompassed by the DRA.

Application of California Civil Code Section 1642

Plaintiff argues that Civ. Code § 1642 requires the court to consider the DRA with the “Confidentiality Agreement” (“CA”) (ROA 59 Ex. 2) and “Code of Ethical Standards, Business Practices and Conduct (“COE”) (Id. Ex. 3) because the documents were among plaintiff’s onboarding documents and electronically signed in the span of 34 seconds. See Civ. Code § 1642 (“Several contracts relating to the same matters, between the same parties, and made as parts of substantially one transaction, are to be taken together.”). The court examines the documents separately.

A. Confidentiality Agreement

Plaintiff relies on Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482. Regarding the relationship of a confidentiality agreement with an arbitration agreement, the Alberto court stated:

“ ‘Under Civil Code section 1642, it is the general rule that several papers relating to the same subject matter and executed as parts of substantially one transaction, are to be construed together as one contract [citation].’ ” (IMO Development Corp. v. Dow Corning Corp. (1982) 135 Cal.App.3d 451, 463, 185 Cal.Rptr. 341.) According to that rule, documents executed as part of a single transaction are construed together, even if they do not expressly refer to one another. (Boyd v. Oscar Fisher Co. (1989) 210 Cal.App.3d 368, 378, 258 Cal.Rptr. 473; Cadigan v. American Trust Co. (1955) 131 Cal.App.2d 780, 786–787, 281 P.2d 332 [“it [is] unnecessary for either instrument to refer to the other”].)

Here, we have no difficulty concluding that the Arbitration Agreement and the Confidentiality Agreement should be read together. They were executed on the same day. They were both separate aspects of a single primary transaction— Alberto’s hiring. They both governed, ultimately, the same issue—how to resolve disputes arising between Alberto and Cambrian arising from Alberto’s employment. Failing to read them together artificially segments the parties’ contractual relationship. Treating them separately fails to account for the overall dispute resolution process the parties agreed upon.

So, unconscionability in the Confidentiality Agreement can, and does, affect whether the Arbitration Agreement is also unconscionable.

Id. at 490–91.

There are factual differences between Alberto and the present case. Specifically, the DRA contains an integration clause. The Alberto court did not discuss the impact of an integration clause, and it is not clear whether either or both of the agreements the court examined in that case contained integration clauses. Accordingly, it offers incomplete insight.

Whether two agreements constitute a single contract, made as parts of substantially one transaction, so as to be taken together, depends on the circumstances and intent of the parties. See Subaru of America, Inc. v. Putnam Automotive, Inc. (2021) 60 Cal.App.5th 829, 842-43. As stated by other courts, while it does not preclude application of Civ. Code § 1642, “the inclusion of an integration clause weighs against reading contracts together.” Silva v. Cross Country Healthcare, Inc. (2025) 111 Cal.

App. 5th 1311, 1326; accord Grey v. Am. Mgmt. Servs. (2012) 204 Cal. App. 4th 803, 807 (“The crucial issue in determining whether there has been an integration is whether the parties intended their writing to serve as the exclusive embodiment of their agreement...The existence of an integration clause is a key factor in divining that intent.”). While the Silva court ultimately read the two agreements together, applying its reasoning does not produce the same result here. The Silva court held “[w]here the contract being construed (here, the Arbitration Agreement) is not the one containing the integration clause and hence not the contract purporting to embody the sum total of the parties’ agreement, substantial evidence supports the trial court’s decision to read the Arbitration Agreement in conjunction with the Employment Agreement.”

Silva, supra, 111 Cal. App. 5th at 1326. In other words, the Silva court found the two agreements should not be treated separately “because the Employment Agreement explicitly provides that it ‘supersedes all prior and contemporaneous agreements,’ which logically includes the contemporaneously executed Arbitration Agreement.” Id. Here, unlike in Silva, it is the arbitration agreement that contains the integration clause. ROA 36 Ex. A at 6 (The DRA “constitutes the complete agreement of the parties on the subject of arbitration of employment related disputes...[and] supersedes any prior or contemporaneous oral or written understanding on the subject.”).

However, the DRA’s integration clause is narrower than that in Silva and thus the case is of limited value.

Significantly, defendant does not dispute the DRA and the CA should be read together. Furthermore, because the court finds both the CA and DRA govern the same issue, i.e., dispute resolution between the parties arising from plaintiff’s employment, the court will consider the DRA and CA together pursuant to Civil Code section 1642. Alberto, 91 Cal.App.5th at 490-491.

B. Code of Ethical Standards, Business Practices and Conduct

Relying on a footnote in Silva v. Cross Country Healthcare, Inc. (2025) 111 Cal. App. 5th 1311, plaintiff argues “[b]ecause section 1642 codifies a common-law interpretive rule, it applies not only to separate ‘contracts,’ but also to related ‘instruments or writings.’” Opp. at 6. As explained above, the Silva court read the arbitration agreement and the employment agreement together based on the integration clause in the employment agreement and the absence of one in the arbitration agreement.

Silva, 111 Cal. App. 5th at 1323. As the court found both agreements were contracts, Silva’s statement that section 1642 includes “other instruments or writings” was dicta. Silva, 111 Cal. App. 5th at 1322 n.9. Moreover, in the case the Silva court cited for the point, the court found that the agreements should not be read together because “clear and unequivocal” evidence the parties intended to do so was lacking, primarily because one of the agreements contained an integration clause. R.W.L. Enters. v.

Oldcastle, Inc., (2017) 17 Cal. App. 5th 1019, 1028 (“instruments do not show a ‘clear and unequivocal’ intention to incorporate each other”). Notably, R.W.L. Enters. did not involve arbitration at all. Id. Significantly, as Silva and a number of other cases explain, section 1642 “codifies a broader ‘common law principle[]’ and serves as a tool for ‘ascertaining the intention of the parties’ when their intent is ‘otherwise doubtful.’” Silva, 111 Cal. App. 5th at 1322; accord Subaru of America, Inc. v.

Putnam Automotive, Inc. (2021) 60 Cal.App.5th 829, 841 (“Civil Code section 1642 is simply one of the rules referred to in Civil Code section 1637 for aiding in the interpretation of a contract when the intent of the parties is otherwise doubtful”). For the reasons explained below, the court does not find the intent of the parties as to the COE doubtful and section 1642 is thus inapplicable.

As an initial matter, plaintiff fails to cite any authority in which a code of conduct such as the COE was read together with an arbitration agreement pursuant to section 1642. This is unsurprising because a company’s internal policies and procedures like the COE do not generally create contractual obligations as might an employment or other bilateral agreement. Indeed, the COE makes that disclaimer express. “This Code of Ethics does not create any contract of employment or express or imply a promise that employment may be terminated only for the reasons stated herein.”

ROA 59 Ex. 3 § XI(G). Instead, the COE expressly concerns “ethical standards, business practices, and conduct.” ROA 59 Ex. 3 at 1. It does not purport to provide a dispute resolution mechanism as “[a]ll questions regarding the interpretation, scope, and application of the policies set forth in this Code shall be referred to the Company's Ethics Review Officer for resolution.” Id. § XI(H). It refers to internal “sanctions” and “disciplinary action.” Id. § XI(F). Additionally, the policies therein are expressly subject to change without notice as the company may establish “additional personnel policies and procedures or accounting and financial polices and procedures to monitor, enforce, enhance, remind, and to test compliance with this Code of Ethics.”

Id. § XI(D).

The court finds that reading the DRA and COE together is not supported by the language of the COE or the authorities plaintiff relies upon. The Alberto court read the confidentiality agreement and the arbitration agreement together because it found “both governed, ultimately, the same issue—how to resolve disputes arising between Alberto and Cambrian arising from Alberto's employment.” Alberto, 91 Cal.App.5th at 490-491. Here, there is no basis to conclude the DRA and the COE “govern[], ultimately, the same issue.”

Additionally, by way of analogy, when courts have examined arbitration agreements contained in employee handbooks, they have found those arbitration agreements non-binding precisely because the handbooks also contained language similar to the COE, i.e., disclaiming the creation of a contract, stating the purpose of the document was to provide an understanding of company policies, and that the company reserved the right to modify the policies at any time. Esparza v. Sand & Sea, Inc. (2016) 2 Cal.

App. 5th 781, 784; Mendoza v. Trans Valley Transp. (2022) 75 Cal. App. 5th 748, 781–82; see also Harris v. TAP Worldwide, LLC (2016) 248 Cal. App. 4th 373, 385 (“A contract is unenforceable as illusory when one of the parties has the unfettered or arbitrary right to modify or terminate the agreement or assumes no obligations thereunder.”). Accordingly, the court need not examine the COE in order to determine whether it renders the DRA unconscionable as Civ. Code section 1642 does not apply.

Unconscionability

In OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, the California Supreme Court recognized that notwithstanding the strong public policy favoring arbitration, “‘generally applicable contract defenses, such as . . . unconscionability, may be applied to invalidate arbitration agreements without contravening” the FAA’ or California law.” Id. at 125; accord AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.

“Unconscionability analysis begins with an inquiry into whether the contract is one of adhesion. [Citation.] ‘The term [contract of adhesion] signifies a standardized contract, which, imposed and drafted by the party of superior bargaining strength, relegates to the subscribing party only the opportunity to adhere to the contract or reject it.’ [Citation.] If the contract is adhesive, the court must then determine whether ‘other factors are present which, under established legal rules—legislative or judicial—operate to render it [unenforceable].’” Armendariz v. Foundation Health Psychcare Services, Inc. (2000) 24 Cal.4th 83, 113. 113.

To declare an agreement unenforceable, a court must find both procedural and substantive unconscionability. Procedural unconscionability focuses on oppression or surprise due to unequal bargaining power; substantive unconscionability looks at overly harsh or one-sided results. Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243; see also OTO, L.L.C., supra, 8 Cal.5th at 129-30. “[T]he 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, supra, 24 Cal.4th at 114. Plaintiff bears the burden to demonstrate that the arbitration agreement is procedurally and substantively unconscionable. Sanchez v. Carmax Auto Superstores California, LLC (2014) 224 Cal.App.4th 398, 402.

A. Procedural Unconscionability

Defendant concedes the DRA was adhesive and thus procedurally unconscionable because assent was a mandatory condition of employment. By itself however, this results in a low amount of procedural unconscionability and does not render the DRA unenforceable. See, e.g., Samaniego v. Empire Today, LLC (2012) 205 Cal.App.4th 1138, 1145 (procedural unconscionability presumptively low absent evidence the defendant actively interfered with plaintiff’s ability to review and understand the arbitration clause).

Plaintiff argues that the circumstances of formation show “more than bare adhesion” and thus this case “involves more than minimal unconscionability.” Opp. at 5. Plaintiff cites no authority to support the argument, as it lacks merit. Id. As stated above, it is immaterial whether the DRA was explained, read, or understood. Randas v. YMCA of Metro. Los Angeles (1993) 17 Cal.App.4th 158, 163 (“one who accepts or signs an instrument, which on its face is a contract, is deemed to assent to all its terms, and cannot escape liability on the ground that he has not read it”).

Accordingly, the evidence, at most, demonstrates a low amount of procedural unconscionability based on the adhesive nature of the DRA.

B. Substantive Unconscionability

Substantive unconscionability examines the fairness of a contract’s terms to ensure that a contract of adhesion does not impose terms that are overly harsh, unduly oppressive, or unfairly one-sided. OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 129-30. The court focuses on terms that unreasonably favor the more powerful party, impair the integrity of the bargaining process, contravene public interest or policy, or attempt to impermissibly alter fundamental legal duties. This includes unreasonable or harsh terms or ones that undermine the non-drafting party’s reasonable expectations. Id. at 130.

1. Forum Advantage

To the extent plaintiff argues the DRA and CA create “ambiguity as to the forum,” the argument is meritless. The CA includes a provision providing that, to the extent “Employee is party to an arbitration agreement with the Company, the dispute shall be resolved as provided in the arbitration agreement.” ROA 59 Ex. 2 at 1-2. In other words, the provision does not carve out a different forum or render the dispute resolution forum ambiguous. Instead, it confirms all employment-related disputes between the parties must be resolved in arbitration.

2. Mutuality

Plaintiff argues the DRA lacks mutuality because the CA provides defendant certain advantages with respect to establishing its claims whereas plaintiff has no such advantage establishing her claims. In relevant part, the CA provides:

Employee recognizes and agrees that a violation of this Agreement will result in substantial injury and damage to the Company for which there is no adequate remedy at law and by reason thereof, in the event of a violation of this Agreement, the Company shall be entitled, in addition to any other remedies and damages available, to injunctive or other equitable relief to restrain the violation hereof by Employee and his/her representatives.

ROA 59 Ex.2 at 2. Specifically, plaintiff contends the CA requires her advanced consent that breach of the CA will cause defendant damage for which there is no adequate remedy at law and that defendant shall be entitled to injunctive or equitable relief. Plaintiff thus argues this consent permits defendant to obtain injunctive relief without proving all the essential elements such as irreparable injury and waives an adequacy of damages defense. Opp. at 7.

While defendant is correct that any injunctive relief must be obtained in arbitration and that, in order to do so, defendant must post a bond, the court agrees with plaintiff that, on balance, this provision lacks mutuality and thus demonstrates substantive unconscionability. Specifically, the court interprets the CA’s provision that plaintiff “agrees” that defendant’s injury is one “for which there is no adequate remedy at law,” as substantially or entirely dispensing with defendant’s need show irreparable harm.

While it is true other courts have analyzed agreements with more non-mutual components in the injunctive relief context, that does not neutralize the unlawful component present here. See Alberto, supra, 91 Cal. App. 5th at 492 (provisions that waive the employer’s need to obtain a bond before seeking an injunction, waive the employer’s need to show irreparable harm, and require an employee to consent to an immediate injunction are substantively unconscionable); Silva v. Cross Country Healthcare, Inc. (2025) 111 Cal.

App. 5th 1311; Lange v. Monster Energy Company (2020) 46 Cal.App.5th 436, 451 (“An arbitration provision lacks mutuality and is substantively unconscionable when it authorizes the stronger party to obtain injunctive relief without establishing all of the essential elements for the issuance of an injunction.”); Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 250 (“arbitration provision lacks mutuality and is substantively unconscionable when it authorizes the stronger party to obtain injunctive relief without establishing all of the essential elements for the issuance of an injunction”).

The court thus finds the DRA demonstrates substantive unconscionability based on the injunctive relief provision in the CA.

3. PAGA Waiver

Plaintiff asserts the DRA is substantively unconscionable because it includes a wholesale PAGA waiver. A wholesale waiver of a PAGA claim is unquestionably unlawful. Adolph v. Uber Technologies, Inc. (2023) 14 Cal. 5th 1104, 1125 (representative portions of PAGA claims cannot be waived). However, per Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, the FAA allows a PAGA claim to be split into individual and representative portions, which the DRA provides:

To the full extent permitted under the law, the Parties agree to arbitrate solely on an individual basis. This Agreement does not permit class arbitration. To the full extent permitted under the law, this Agreement does not allow any claims brought as a plaintiff, class member or participant in any class or nonindividual representative arbitration proceeding.

ROA 36 Ex. A at 2. In other words, the DRA precludes only the arbitration of a “non-individual representative” PAGA claim, but allows such a claim to proceed in court, and requires arbitration of the individual PAGA claim. Id. In such cases, the DRA provides that the individual PAGA claim is arbitrated first while the non-individual PAGA claim is stayed. Id. at 3 (“the parties agree that the arbitrable claims shall be resolved first and the nonarbitrable claims shall be stayed pending completion of the arbitration proceedings”).

This procedure is consistent with California and Federal law. Following Viking River, the California Supreme Court held “a plaintiff who files a PAGA action with individual and non-individual claims does not lose standing to litigate the non-individual claims in court simply because the individual claims have been ordered to arbitration.” Adolph, 14 Cal. 5th at 1125. In such cases, the representative PAGA claim should be stayed and the individual PAGA claim should be ordered to arbitration. See 9 U.S.C. § 3; C.C.P. § 1281.4. The PAGA waiver is thus not substantively unconscionable.

4. Discovery

Plaintiff argues the DRA is substantively unconscionable based on a lack of adequate discovery. The argument is meritless.

The DRA requires the arbitrator to “order such discovery as the Arbitrator considers necessary to a full and fair exploration of the issues in dispute.” ROA 36 Ex. A at 4. The DRA then provides several illustrations of the “general” components of such discovery and that the arbitrator may order additional discovery upon a showing of substantial need. Id. As an initial matter, the arbitrator’s discretion as to the scope of discovery is not unconscionable. The applicable JAMS Employment Dispute Resolution Rules (the “JAMS Rules”) provide for the arbitrator’s discretion to determine what discovery is reasonably necessary.

JAMS Rule 17. The California Supreme Court has found a similar provision rendered the discovery limitations valid and “eliminates any unconscionability.” Ramirez v. Charter Communications, Inc. (2024) 16 Cal. 5th 478, 506-07 (provision giving arbitrator the authority to resolve “all discovery disputes” in a manner that allows “a full and equal opportunity” was not unconscionable). Other courts have reached the same conclusion. See, e.g., Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 692 (provision giving arbitrator authority to order discovery for the “full and fair exploration of the issues in dispute” was sufficient).

Significantly, adequate discovery in arbitration does not equal unfettered discovery, and parties may agree to something less than what is available under the Code of Civil Procedure. Sanchez v. Carmax Auto Superstores Cal, LLC (2014) 224 Cal.App.4th 398, 404 (citing Armendariz v. Foundation Health Psycare Servs., Inc. (2000) 24 Cal.4th 83, 105-060). “[A]rbitration is meant to be a streamlined procedure. Limitations on discovery...is one of the ways streamlining is achieved.” Dotson v. Amgen, Inc. (2010) 181 Cal.App.4th 975, 983. “In striking the appropriate balance between the desired simplicity of limited discovery and an employee’s statutory rights, courts assess the amount of default discovery permitted under the arbitration agreement, the standard for obtaining additional discovery, and whether the plaintiffs have demonstrated that discovery limitations will prevent them from adequately arbitrating their statutory claims.”

De Leon v. Pinnacle Property Management Services, LLC (2021) 72 Cal.App.5th 476, 487. Plaintiff has made no such demonstration here. The court does not find the DRA unconscionable as to the discovery provision.

5. Onboarding Packet

Plaintiff appears to argue the “April 22, 2025 rehire packet” results in substantive unconscionability, but provides no argument or authority why the court should consider these documents. Opp. at 13-14. Accordingly, the court declines to examine these documents in this analysis as neither Civ. Code section 1642 nor any other authority of which the court is aware applies.

Severance

Plaintiff argues the Agreement is so permeated with unconscionability the court should not sever any unconscionable provisions in the interest of justice as it would condone the bad faith of defendant in forcing plaintiff to enter the one-sided arrangement. The court does not agree.

California law supports severing unconscionable terms from an agreement if the agreement can still function without them. Civ. Code § 1599 (“Where a contract has several distinct objects, of which one at least is lawful, and one at least is unlawful, in whole, or in part, the contract is void as to the latter and valid as to the rest.”); Civ. Code § 1670.5(a) (“If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.”).

More than one unconscionable provision does not preclude severance. Lange v. Monster Energy Company (2020) 46 Cal.App.5th 436, 454. “The strong legislative and judicial preference is to sever the offending term and enforce the balance of the agreement”. Ramirez v. Charter Communications, Inc. (2024) 16 Cal.5th 478, 513.

The court does not find that unconscionability permeates the DRA. As explained above, the DRA contains a minimal amount of procedural unconscionability based on its adhesive nature. It contains one instance of substantive unconscionability based on the CA’s injunctive relief provision. Accordingly, the court exercises its discretion to sever the following substantively unconscionable provision from the CA and to enforce the DRA:

“for which there is no adequate remedy at law”

ROA 59 Ex. 2 at 2 ¶ 1. To the extent the injunctive relief provision may, even as severed, provide some nonmutual advantage to defendant, it has been recognized that some one-sidedness in this context is justified by the “legitimate commercial need to protect ... valuable trade secrets and[] confidential information.” Baltazar v. Forever 21, Inc. (2016) 62 Cal. 4th 1237, 1250.

Based on the above, the DRA (as modified through severance of the CA) is enforceable and plaintiff is ordered to individually arbitrate her claims against defendant. Additionally, the class claims shall be dismissed, pursuant to the class action waiver. Both the Federal Arbitration Act and California law provide for a stay of proceedings pending arbitration. 9 U.S.C. § 3; CCP §1281.4. As such, the action shall be stayed, pending the completion of arbitration.

Class Action Waiver

The class action waiver is enforceable because the agreement is subject to the Federal Arbitration Act. Epic Systems Corp. v. Lewis (2018) 138 S. Ct. 1612, 1616; Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348, 364. When an arbitration agreement does not authorize class arbitration of disputes, case law provides for dismissal without prejudice of the class claims. Epic Systems, supra, 138 Sup. Ct. 1612; Stolt-Nielsen S.A. v. AnimalFeeds Int’l Corp. (2010) 559 U.S. 662, 686; Kinecta Alternative Financial Solutions, Inc. v. Superior Court (2012) 205 Cal. App. 4th 506, 510-11. Accordingly, plaintiff’s class claims are dismissed without prejudice.

Defendant is ordered to give notice of the ruling.

108 Dempsey vs. La Jolla Group, Inc.

2024-01416569 Motion for Approval of Class Settlement

The Court has reviewed the supplemental materials provided by Class Counsel and finds that with two exceptions, they adequately address the previously identified issues. Accordingly, Jaime Dempsey; Jane Doe on behalf of her minor child J.D.; and Kaitlyn Vargas’s Motion for Preliminary Approval of Class Action Settlement is CONDITIONALLY GRANTED, pending submission of a further amendment to the long-form class notice and a further amended proposed order, as discussed below.

This is a data breach class action.

On 7/29/2024, Plaintiff Jaime Dempsey, individually and on behalf of all others similarly situated, filed a class action complaint against Defendant La Jolla Group, Inc. (ROA #2.)

The operative complaint is the first amended complaint (FAC), filed on 10/9/2024. (ROA #16.) The FAC added two Plaintiffs: (1) Jane Doe, on behalf of her minor child J.D.; and (2) Kaitlyn Vargas. The FAC alleges 8 causes of action, as follows:

1. Negligence; 2. Invasion of Privacy; 3. Breach of Implied Contract; 4. Breach of Fiduciary Duty; 5. Breach of Confidence; 6. Violation of California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq.--Unfair Business Practices; 7. Violation of the California Customer Records Act (“CCRA”) Cal. Civ. Code § 1798.80, et seq.; and 8. Violation of the California Consumer Privacy Act (“CCPA”) Cal. Civ. Code § 1798.150, et seq.

Defendant answered on 4/25/2025. (ROA #50.)

On 12/5/2025, Plaintiffs filed the instant Motion for Preliminary Approval of the Class Action Settlement, and submitted the Settlement Agreement and Release and various forms of class notice for the Court’s review. On