Duarte vs. Lyft, Inc.

On a motion to compel arbitration under the FAA, the court’s role is limited to deciding: “(1) whether there is an agreement to arbitrate between the parties; and (2) whether the agreement covers the dispute.” (Brennan v. Opus Bank (9th Cir. 2015) 796 F.3d 1125, 1130.) If these conditions are satisfied, the court is without discretion to deny the motion and must compel arbitration. (9 U.S.C. § 4; Dean Witter Reynolds, Inc. v. Byrd (1985) 470 U.S. 213, 218 [“By its terms, 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.”].)

In determining the validity or “the rights of parties to enforce an arbitration agreement within the FAA’s scope, courts apply state contract law while giving due regard to the federal policy favoring arbitration. [Citations.]” Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC, 55 Cal.4th 223, 236 (2012); Circuit City Stores, Inc. v. Najd, 294 F.3d 1104, 1108 (9th Cir. 2002). General principles of contract law apply to

determine whether the parties have entered into a binding agreement. Id. Generally, an arbitration agreement must be in writing, and a party’s acceptance of an agreement to arbitrate may be express or implied in fact. Id. “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” Id.

Here, Lyft meets its burden to show the existence of a written agreement to arbitrate as between Plaintiff and Lyft. Carr Decl., ¶¶ 15-18, Ex. 2, December 12, 2022 Terms of Service at p. 22, ¶ 17(a).

In opposition, Plaintiff contends that the agreement is not applicable to this dispute and that the agreement is unenforceable because it is unconscionable. Specifically, Plaintiff contends that the agreement is not applicable to this dispute because, “[w]hile Plaintiff was driving for Lyft at the time of the accident, Lyft is named in the lawsuit because Defendant Shang was driving for Lyft at the time of the accident. This is not an uninsured or underinsured claim where Plaintiff is seeking the benefit of his own coverage as a Lyft driver. He is seeking damages from Lyft solely in a third party claim.” (Oppn at 2:1-4.)

Delegation Clause Lyft contends that any challenges to arbitrability and scope/enforceability of the arbitration agreement have been delegated to the arbitrator.

Indeed, Section 17(a) of the agreement provides that “[a]ll disputes concerning the arbitrability of a Claim (including disputes about the scope, applicability, enforceability, revocability or validity of the Arbitration Agreement) shall be decided by the arbitrator, except as expressly provided below.” (Carr Decl., Ex. 2 at p. 23, ¶ 17(a).) The exceptions to the delegation clause involve representative actions and are not applicable here. (Carr Decl., Ex. 2 at pp. 24-25, ¶ 17(b)-(c).)

For a delegation clause to be effective two pre-requisites must be met: (1) the language of the clause must be clear and unmistakable, and (2) the delegation must not be revocable under state contract defenses such as such as fraud, duress, or unconscionability. (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 242.)

Here, the language is clear and unmistakable. However, Plaintiff contends that the delegation clause is unconscionable.

“A party opposing enforcement of a delegation provision under the FAA must ‘challenge [] the delegation provision specifically.’ [Citations.]” (J.R. v. Electronic Arts Inc. (2024) 98 Cal.App.5th 1107, 1114.) “Absent such a challenge, a court must treat the delegation provision as valid and enforce it, ‘leaving any challenge to the validity of [the arbitration agreement or] the [a]greement as a whole for the arbitrator.’ [Citation.]” (Ibid.)

Pursuant to Armendariz v. Foundation Health Psychcare Services, Inc., “unconscionability has both a 'procedural' and a 'substantive' element, the former focusing on 'oppression' or 'surprise' due to unequal bargaining power, the latter on 'overly harsh' or 'one-sided' results. [Citations.] 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. [Citations.] But they need not be present in the same degree. Essentially a sliding scale is invoked which disregards the regularity of the procedural process of the contract formation, that creates the terms, in proportion to the

greater harshness or unreasonableness of the substantive terms themselves. [Citations.] In other words, 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. Foundation Health Psychcare Services, Inc. (2000) 24 Cal. 4th 83, 115.

Plaintiff contends that the delegation clause is procedurally unconscionable because it was offered on a take-it-or-leave-it basis, with no opportunity to negotiate any provision. Further, the delegation clause is found in Section 17 of a 48 page document, presented on a mobile phone screen in a small font, scrollable interface. Further, the delegation provision was not separately highlighted. Additionally, Plaintiff contends that he was a rideshare driver economically dependent on access to the Lyft platform to his livelihood. (Oppn. at pp.4-5.)

Plaintiff claims that the delegation clause is substantively unconscionable because it eliminates the Court’s authority to decide fundamental gateway questions about this litigation and delegates those questions to a private arbitrator operating under rules of Lyft’s choosing. (Oppn. at pp. 5-6.) Plaintiff contends that the agreement is one sided, and that it shocks the conscience to delegate enforceability decisions regarding a one-sided agreement to an arbitrator. (Ibid.)

While there is a certain degree of procedural unconscionability due to the nature of this click-through agreement, Plaintiff has not demonstrated a high degree of procedural unconscionability. He does not contend, for example, that he was not given sufficient time to review the agreement. Not to mention, he signed the agreement two separate times before the incident. (Carr Decl. ¶ 12, Exs. 1-2, 5.)

Further, Plaintiff has not demonstrated any degree of substantive unconscionability specific to the delegation clause. The delegation clause binds both parties equally, providing the “modicum of bilaterality” required by California law. (Armendariz, sura, 24 Cal.4th at 117.) Moreover, the language in this clause is virtually identical to delegation clauses California courts have consistently found “clear and unmistakable.” (Tiri v. Lucky Chances, Inc. (2014) 226 Cal.App.4th 231, 242.) Moreover, delegation clauses in employment arbitration agreements are substantively unconscionable only if they impose unfair or one-sided burdens that are different from the clauses' inherent features and consequences. Here, Plaintiff has failed to demonstrate that the delegation clause imposes any such burdens.

Finally, Lyft asks the Court to stay Plaintiff’s claims against Lyft pending the outcome of arbitration. Plaintiff does not oppose this request, but requests that it be allowed to proceed with its claims against Defendant Shang prior to any arbitration with Lyft.

Under the FAA, “if a dispute presents multiple claims, some arbitrable and some not, the former must be sent to arbitration even if this will lead to piecemeal litigation.” (KPMG LLP v. Cocchi (2011) 565 U.S. 18, 19.) “From this it follows that state and federal courts must examine with care the complaints seeking to invoke their jurisdiction in order to separate arbitrable from nonarbitrable claims. A court may not issue a blanket refusal to compel arbitration merely on the grounds that some of the claims could be resolved by the court without arbitration. [Citation.]” (Ibid.) Where the FAA applies, Code of Civil Procedure section 1281.2(c) cannot be applied to deny enforcement of the arbitration clause. (Gloster v. Sonic Automotive, Inc. (2014) 226 Cal.App.4th 438, 446 [“Because the Federal Arbitration Act (9 U.S.C. § 1 et seq; FAA) contains no provision analogous to section

1281.2, subdivision (c), that subdivision cannot be applied to deny the enforcement of the arbitration clauses governed by the FAA. [Citation.]”.)

Accordingly, the Court STAYS the action only as to Defendant, Lyft, Inc. pending completion of arbitration. 9 U.S.C.A. § 3.

An ADR Review Hearing is set for December 10, 2026 at 10:30 a.m. in Dept. C34.

Defendant Lyft to give notice.

4. 30-2025-01453654 1. Case Management Conference 2. Order to Show Cause re: Appointment of Referee 400 Spectrum Holdings LLC vs. McSen Realty All parties should be ready to discuss appointment of a discovery referee and apportionment Corp. of the costs.

5. 30-2025-01492538 1. Motion to Compel Further Responses to Special Interrogatories 2. Motion to Compel Production Stradling Yocca Carlson & Rauth LLP cs. Enerra The Motion to Compel Supplemental Responses to Requests for Production and Special Corporation Interrogatories brought by the Plaintiff Stradling Yocca Carlson & Rauth LLP against Defendant Enerra Corporation is GRANTED.

As a preliminary matter, both parties agree that this motion may be heard notwithstanding the stay pending arbitration entered on November 6, 2025. (ROA 95.)

Code of Civil Procedure § 485.230 provides:

Where a right to attach order has been issued by the court, a plaintiff may discover, through any means provided for by, and subject to the protections included in, Title 4 (commencing with Section 2016.010) of Part 4, the identity, location, and value of property in which the defendant has an interest.

On September 2, 2025, this Court issued a right to attach order in favor of Plaintiff in the amount of $108,277.50. (ROA 86.) On that same date, the Court also enjoined Defendant from spending, transferring, encumbering, hypothecating or otherwise diminishing the value-- other than payment to Stradling-- of any and all monies received by Enerra Corporation or its affiliates: (a) in connection with Chubb/Federal Insurance Company Policy No. 8261-9093, (b) from "the Conti Parties' insurance company" pursuant to the settlement agreement dated February 6, 2025; or (c) in connection with any other insurance payments related to Enerra Corp. v. Conti Group LLC, et al., No. 3:23-cv-00194-L until the completion of arbitration relating to the fee dispute between these parties (that is, the dispute herein and any dispute relating to the alleged contingency agreement). (Ibid.)

Plaintiff now seeks further responses to special interrogatories Nos. 1-3 as well as the production of additional documents responsive to requests for production Nos. 1 and 2, for the purpose of learning the identity, location and value of the property in which Defendant has an interest.

In opposition, Defendant submits the declaration of its President, Sergio Perez, who declares that “the funds received by Enerra from Chubb/Federal Insurance and from the Conti partes’