# Franklin v. Healthsource Global Staffing, Inc.

> District Court, S.D. California · March 11, 2024

URL: https://www.frixlaw.com/law-library/cases/10089171

## Case

- **Court:** District Court, S.D. California
- **Decided:** March 11, 2024
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/10089171

## How later opinions describe it (automated extraction)

- reasoning that if “all employment-related claims” are 19 covered, an “illustrative list of claims subject to the agreement is just that”
- explaining that, even when “evidence 16 of procedural unconscionability appears minimal,” courts are required “under California 17 law” to consider substantive unconscionability as well
- explaining that a potential recovery on a claim places that 14 amount “at stake,” “whatever the likelihood” that it will be realized
- finding no unconscionability in part because “there [was] an opportunity 7 to opt out of” the arbitration agreement “within 30 days”
- noting that defendants have “no duty to make further inquiry” if 20 the first removal window is not triggered

## Opinion text

1 NOT FOR PUBLICATION
2

UNITED STATES DISTRICT COURT
3
SOUTHERN DISTRICT OF CALIFORNIA
4
Isabelle FRANKLIN, et al., on behalf of Case No.: 23-cv-0662-AGS-DEB
5
all other similarly situated employees in
ORDER:
6 the State of California,

(1) DENYING REMAND MOTION
7 Plaintiffs,
(ECF 10)
8 v. (2) GRANTING IN PART
DEFENDANT’S MOTION TO
9 HEALTHSOURCE GLOBAL
COMPEL ARBITRATION,
STAFFING, INC., et al.,
10 STRIKE CLASS CLAIMS, AND
Defendants. DISMISS OR STAY ACTION
11
(ECF 5)
12

13 The current motions in this putative employment class action raise two key issues.
14 First, has the defense established the $5 million amount-in-controversy threshold for
15 federal jurisdiction (thereby defeating plaintiffs’ motion to remand to state court)? Second,
16 do valid arbitration agreements cover all of plaintiffs’ claims? The Court answers both
17 questions in the affirmative. Thus, the remand motion is denied, and the case is dismissed
18 in favor of arbitration.
19 BACKGROUND
20 Plaintiffs Isabelle Franklin and Siera Haboc are nurses who worked for defendant
21 HealthSource Global Staffing, Inc., as fill-in “[s]trikebreakers.” (ECF 1-2, at 5–6.) Those
22 seeking work through HealthSource use its secure online portal to nominate themselves for
23 short-term assignments. (ECF 5, at 11–13.) After self-nomination, applicants are presented
24 with various “pre-employment” documents, including the arbitration agreement at issue
25 here. (Id. at 13.) Applicants need not sign this agreement to be considered for assignments.
26 (Id.) If applicants do sign, HealthSource “does not request” that they sign it again for later
27 assignments, “although they may do so.” (Id. at 14.)
28
1 Plaintiff Franklin created an account on the HealthSource portal in 2010. (ECF 5,
2 at 14.) On May 1, 2018, she logged in and electronically signed an arbitration agreement
3 that covered all disputes arising from past and future employment relationships with
4 HealthSource. (Id.) Franklin says she was “hired” in 2019. (ECF 1-2, at 6.) Per
5 HealthSource, she worked a total of four assignments. (ECF 5, at 14.) By contrast, plaintiff
6 Haboc created her HealthSource account on May 6, 2021, and she logged in and signed the
7 arbitration agreement on August 9, 2021. (ECF 5, at 14.) Haboc worked only a single
8 assignment later in 2021. (ECF 1-2, at 6.) In late 2022, both purport to have “resigned”
9 from HealthSource by email. (Id.; see ECF 10-3, at 31.)
10 Soon thereafter, plaintiffs brought this putative class action against HealthSource in
11 state court, alleging multiple wage-and-hour claims as well as unfair business practices.
12 (ECF 1-2, at 9–10.) HealthSource removed the case here. (See ECF 1.)
13 DISCUSSION
14 Plaintiffs move to remand the case to state court (ECF 10), while HealthSource seeks
15 an order compelling arbitration, dismissing or alternatively staying the case, and striking
16 the class claims (see ECF 5).
17 MOTION TO REMAND
18 A matter is removable from state to federal court “if the federal court would have
19 original subject matter jurisdiction over the action.” Moore-Thomas v. Alaska Airlines,
20 Inc., 553 F.3d 1241, 1243 (9th Cir. 2009) (citing 28 U.S.C. § 1441). The Class Action
21 Fairness Act “gives federal courts jurisdiction over certain class actions” if, among other
22 things, “the amount in controversy exceeds $5 million.” Dart Cherokee Basin Operating
23 Co. v. Owens, 574 U.S. 81, 84–85 (2014) (citing 28 U.S.C. § 1332(d)(2)). Defendants
24 “need include only a plausible allegation” in their notice of removal that the jurisdictional
25 threshold is met. Id. at 89. There is “no antiremoval presumption” in cases invoking CAFA
26 jurisdiction. Id.
27 Plaintiffs seek remand on four separate theories: (1) removal was untimely
28 (ECF 10-1, at 8, 26); (2) HealthSource is forum shopping (id. at 8, 28–29);
1 (3) HealthSource inflated the class size and thus the amount in controversy (id. at 14–15);
2 and (4) HealthSource’s assumptions are “baseless,” “unreasonable,” and “speculative”
3 (id. at 16–26).
4 A. Timeliness of Removal
5 Certain circumstances trigger a 30-day deadline for a defendant to remove a putative
6 class action to federal court. Plaintiffs contend that the complaint itself—which was filed
7 and served in December 2022—started that 30-day clock here. By plaintiffs’ calculations,
8 then, the April 2023 removal was months late and thus invalid. (See ECF 1; ECF 10-1, at
9 9.) The defense believes the removal clock never started, so it was free to remove this case
10 at its leisure.
11 There are two different potential 30-day removal deadlines. The first is triggered
12 upon service of an initial pleading that “affirmatively reveals on its face the facts necessary
13 for federal court jurisdiction.” Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 691
14 (9th Cir. 2005); see 28 U.S.C. § 1446(b)(1). In the absence of such a clear-cut initial
15 pleading, a second 30-day window may later arise if the defendant receives “an amended
16 pleading, motion, order or other paper from which it may first be ascertained that the case
17 is one which is or has become removable.” Id. § 1446(b)(3). Both removal clocks are thus
18 initiated by defendant’s receipt of a document from the plaintiff or the state court—not by
19 any action of defendant.
20 If neither of these “thirty-day deadlines” applies, the defense may remove a case “on
21 the basis of its own information” at any time. Roth v. CHA Hollywood Med. Ctr., L.P.,
22 720 F.3d 1121, 1125 (9th Cir. 2013). This “bright-line approach” avoids both
23 “gamesmanship in pleading” and “collateral litigation over whether the pleadings
24 contained a sufficient ‘clue’” to removability. Harris, 425 F.3d at 697. Even if a defendant
25 “could have” demonstrated removability earlier based on its knowledge beyond the
26 pleadings, it is not “obligated to do so.” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d
27 1136, 1141 n.3 (9th Cir. 2013). Plaintiffs do not contend that the complaint or any “other
28 paper”—on its face and without reference to HealthSource’s own records—put
1 HealthSource on notice that the case was removable. That omission is dispositive on this
2 issue.
3 Plaintiffs seek to circumvent the established course by distinguishing
4 HealthSource’s “subjective knowledge,” into which they concede courts will not inquire,
5 from its “actual” knowledge, which they claim can be “objectively establish[ed].”
6 (ECF 10-1, at 26.) Specifically, plaintiffs point to two other lawsuits “within the past few
7 years” in which HealthSource alleged “this same exact lack of initial ascertainability for
8 this same group of putative class members.” (Id.) But plaintiffs cite no authority for the
9 proposition that the removal clock starts when a defendant can be shown—even
10 conclusively—to have “known” that a case is removable based on its independent
11 information. That is because this is not the rule.
12 True, defendants must apply “a reasonable amount of intelligence in ascertaining
13 removability,” which extends to “[m]ultiplying figures clearly stated in a complaint” to
14 estimate potential class-wide damages. Kuxhausen, 707 F.3d at 1140. But this complaint
15 provides no numerical estimations of class size, violation rates for any of its claims, or
16 estimates of damages. Without reference to materials outside the complaint’s four corners,
17 HealthSource was unable to perform any calculations at all. And in such a situation, the
18 law allows defendants to begin any investigation in their own time. See Harris, 425 F.3d
19 689, 694 (9th Cir. 2005) (noting that defendants have “no duty to make further inquiry” if
20 the first removal window is not triggered); Stiren v. Lowes Home Ctrs., LLC, No. SA CV
21 19-00157 JLS (KESx), 2019 WL 1958511, at *3 (C.D. Cal. May 2, 2019) (“[D]efendants
22 are not charged with any investigation, not even into their own records.”).
23 Nor is there evidence here of the sorts of “gamesmanship” the Ninth Circuit noted
24 might be problematic, like waiting to remove “until the state court has shown itself ill-
25 disposed to defendant, or until the eve of trial . . . .” Roth, 720 F.3d at 1126. Plaintiffs filed
26 the state-court complaint on December 6, 2022, and HealthSource removed the matter on
27 April 12, 2023—apparently before any motion practice or hearings even took place.
28 (ECF 10-1, at 10–11); see Gutierrez v. Stericycle, Inc., No. LA CV15-08187 JAK (JEMx),
1 2017 WL 599412, at *3, *11–12 (C.D. Cal. Feb. 14, 2017) (finding removal timely even
2 when defendant had “actively participated” in state-court litigation “for over a year”).
3 Removal at this preliminary stage raises no concerns about these warned-of sharp practices.
4 Plaintiffs’ request for remand on this basis is denied.
5 B. Forum Shopping
6 Plaintiffs insist they cannot conceive a reason—“outside of improper forum
7 shopping”—that HealthSource “would first remove this case and then file a motion to
8 compel arbitration.” (ECF 10-1, at 8.) They intuit that HealthSource wanted “to avoid filing
9 its motion to compel arbitration in state court,” and sense something nefarious about that
10 choice. (Id. at 29.) But they fail to articulate what that something might be.
11 Defendants need not give a reason for removing qualifying cases to federal court.
12 Congress has “afford[ed] defendants a right to remove as a general matter, when the
13 statutory criteria are satisfied.” Martin v. Franklin Cap. Corp., 546 U.S. 132, 133 (2005).
14 “Although occasionally stigmatized as ‘forum shopping,’ the desire for a federal forum is
15 assured by” federal law. First State Ins. Co. v. Callon, 113 F.3d 161, 162 (9th Cir. 1997).
16 Plaintiffs offer only the unsupported conclusion that HealthSource “[n]o doubt” “believes
17 it will receive a more favorable ruling” in federal court. (ECF 10-1, at 29.) Even if so, that
18 is not grounds for the “sanctions for improper forum shopping” plaintiffs seek. (Id.); see
19 R2B2, LLC v. Truck Ins. Exch., No. C21-5585 BHS, 2021 WL 6049552, at *2 (W.D. Wash.
20 Dec. 21, 2021) (“[Defendant] is no more guilty of forum shopping by removing than was
21 [plaintiff] by filing in state court.”). The forum-shopping accusations don’t support
22 remand, let alone the requested sanctions.
23 C. Class-Size Overstatement
24 Next, plaintiffs object that HealthSource inflated the class size to meet the $5 million
25 jurisdictional threshold. If defendant’s amount-in-controversy allegation is disputed, the
26 “parties may submit evidence outside the complaint, including affidavits or declarations,
27 or other summary-judgment-type evidence relevant to the amount in controversy at the
28 time of removal.” Ibarra v. Manheim Invs., Inc., 775 F.3d 1193, 1197 (9th Cir. 2015)
1 (quotation marks omitted). “[T]he burden is on the defendant to show, by a preponderance
2 of the evidence, that the amount in controversy” requirement is satisfied. Harris v. KM
3 Indus., Inc., 980 F.3d 694, 699 (9th Cir. 2020). The assumptions underlying the defense’s
4 “theory of damages exposure” “cannot be pulled from thin air but need some reasonable
5 ground underlying them.” Ibarra, 775 F.3d at 1198–99.
6 In estimating the class size, HealthSource disregarded the arbitration-agreement
7 qualification in the complaint’s proposed class definition. The full proposed definition is:
8 “All of Defendant’s non-exempt employees [who] were assigned to work for any of its
9 clients engaged in a labor dispute inside California during the Class Period and [who] did
10 not enter into valid and enforceable arbitration agreements . . . .” (ECF 1-2, at 9 (emphasis
11 added).) In other words, HealthSource based its calculations on the roughly “5,000 putative
12 class members” who worked in California for “at least one day” during the class period,
13 regardless of whether they signed an arbitration agreement. (ECF 1, at 5; ECF 20, at 12.)
14 Plaintiffs protest that, as a result, “all of its calculations of potential damages are hugely
15 inflated.” (ECF 10-1, at 15.)
16 But the parties will likely disagree on which agreements are “valid and enforceable”
17 for class-size purposes. (Indeed, plaintiffs are already doing so.) (See ECF 13.) And the
18 defense need not predict which side will win that legal argument. For removal jurisdiction,
19 HealthSource must forecast the amount “at stake”—that is, its damages exposure—not the
20 amount it will urge to a factfinder. In this context, a court might find that no valid and
21 enforceable arbitration agreements exist, “whatever the likelihood” of that outcome.
22 Chavez v. JPMorgan Chase & Co., 888 F.3d 413, 417 (9th Cir. 2018). The defense may
23 allow for that possibility.
24 For damages-exposure purposes, plaintiffs dispute the validity of at least some
25 arbitration agreements and seek to sweep within the class some employees who signed
26 them. This key point distinguishes this case from the main authority plaintiffs rely on:
27 Cartwright v. Envoy Air, Inc., No. 2:21-cv-05049-RGK (PDx), 2021 WL 4100287 (C.D.
28 Cal. Sept. 9, 2021). In Cartwright, the plaintiff had similarly excluded from his class
1 definition any employees subject to a “valid arbitration agreement.” Id. at *3. In its class-
2 size approximation, however, the removing defendant included “626 people who are
3 covered by an arbitration agreement,” on the theory that the “agreements are not valid”
4 because the defense “has not yet sought to enforce” them. Id. at *3 (quotation marks
5 omitted). The Cartwright court found that the “validity of those agreements” was not
6 seriously in dispute, and thus the defense had “overstate[d] the class size.” Id. Our facts are
7 entirely different. Unlike Cartwright, the validity of the arbitration agreements is very
8 much at issue here: plaintiffs signed arbitration agreements themselves, dispute the validity
9 of those agreements, and seek potential class recovery on behalf of others who signed them.
10 See, e.g., Francisco v. Emeritus Corp., No. CV 17-02871-BRO (SSx), 2017 WL 2541401,
11 at *8 (C.D. Cal. June 12, 2017) (including in class-size estimate, for removal purposes,
12 employees subject to arbitration agreements when “the scope and applicability of the
13 arbitration agreement remain[ed] in question”).
14 In sum, if plaintiffs’ legal arguments are successful, their class will include many
15 who signed arbitration agreements (albeit later deemed invalid). Thus, they cannot
16 reasonably fault the defense for considering damages from these potential class members
17 to be “at stake” in the litigation.
18 D. Amount-in-Controversy Assumptions
19 Finally, plaintiffs criticize HealthSource’s damages assumptions regarding wages
20 due for company-mandated transportation time as well as “waiting-time penalties” for
21 willful failure to pay wages, among other claims.
22 1. Transportation-Time Wages
23 HealthSource estimates that $842,592 is “at stake” for transportation-time wages.
24 The complaint alleges that “Strikebreakers” are “required to use company-provided
25 transportation to and from their assigned jobsites” because “crossing active, or potential
26 picket lines without the protection of company-provided shuttles would seriously
27 jeopardize the Strikebreakers’ health and safety.” (ECF 1-2, at 6.) HealthSource allegedly
28 has “a pattern and practice of not paying these Strikebreakers for their transportation time,
1 and the associated wait time. . . .” (Id. at 6–7.) Under California law, the time that
2 employees “are required to spend traveling on their employer’s buses is compensable . . . .”
3 Morillion v. Royal Packing Co., 995 P.2d 139, 141 (Cal. 2000), as modified (May 10,
4 2000). This is so because the employees are “subject to the control of an employer” during
5 both this “compulsory travel time” and the time spent waiting at a designated departure
6 point. Id. at 142, 147; cf. Overton v. Walt Disney Co., 38 Cal. Rptr. 3d 693, 699 (Ct. App.
7 2006) (finding time spent riding an optional shuttle non-compensable because “the key
8 factor is whether Disney required its employees . . . to park there and take the shuttle”), as
9 modified (Feb. 1, 2006). Both plaintiffs were required to wait for and use company
10 transportation, but were not compensated “at all for said time.” (Id. at 7.)
11 HealthSource reasonably interprets these claims as alleging two violations—one
12 coming and one going—on every single workday for every class member. After all,
13 plaintiffs aver that it was “compulsory” for employees to use a HealthSource shuttle to
14 access their worksites, which consumed time they were not paid for “at all.” (Id. at 6–7.)
15 Because there are no allegations about how much time this took, HealthSource estimates a
16 total of one hour of unpaid wages per assignment, rather than per shift, even though the
17 average assignment comprises four shifts (ECF 1, at 9; ECF 20, at 10, 17). Because shifts
18 were typically 12 hours long (ECF 1, at 6), HealthSource allocated half an hour to straight
19 time and the other half-hour to overtime (id. at 9).1 Class members earned an average of
20 $94 per hour for straight time and $141 for overtime. (Id. at 6–7.) HealthSource estimates
21 the total number of assignments as 7,171. (ECF 20, at 11.) Thus, it calculates that $337,037
22 is at stake for the straight-time portion ($94/hour x 0.5 hours x 7,171 assignments) and
23
24

25
1 HealthSource should have calculated the entire uncompensated time at an overtime
26
rate. Even if all travel occurred at the start of a given 12-hour shift, it would still have had
27 the effect of depriving employees of that same amount of overtime later that day.
Nevertheless, because this has no effect on the overall outcome, the Court accepts this
28
1 $505,555 for the overtime portion ($141/hour x 0.5 hours x 7,171 assignments), for a total
2 of $842,592. (Id. at 18.)
3 The assumption of a one-hour violation per assignment also appears reasonable.
4 Assignments typically last four days. (ECF 20, at 10.) On average, then, plaintiffs went
5 uncompensated for waiting and transport time on eight occasions per assignment—at the
6 start and finish of each of its four shifts. Dividing HealthSource’s estimated 60 minutes by
7 eight yields a modest average of 7.5 minutes per trip—which includes all necessary
8 waiting, loading, and transport time. Unless every pick-up spot was located one block from
9 each worksite and everyone involved was consistently punctual, it is difficult to imagine
10 7.5 minutes overstating the length of an average trip through “picket lines.” (ECF 1-2, at 6.)
11 Even if it does, any overstatement is harmless for purposes of determining whether the
12 overall amount in controversy exceeds $5 million. The key characteristic of this claim is
13 its universality and consistency. Even if each trip somehow took only one minute, the
14 wages for those minutes remain unpaid, subjecting HealthSource to the possibility of
15 enormous waiting-time penalties, as we shall shortly see.
16 Plaintiffs allege HealthSource had a “pattern and practice” of not paying for this time
17 (ECF 1-2, at 6), and the plaintiffs both claim they have not been paid “at all” for it (id. at
18 7). Plaintiffs nevertheless decry what they perceive as HealthSource’s use of a “100%
19 violation rate,” when their complaint alleges only a “pattern and practice” violation.
20 (ECF 10-1, at 20.) True, “a ‘pattern and practice’ of doing something does not necessarily
21 mean always doing something.” Ibarra, 775 F.3d at 1198–99. But when a plaintiff alleges
22 facts indicating that a defendant employer “universally, on each and every shift, violates
23 labor laws,” this can support finding a 100% violation rate. Id. at 1199. And here, plaintiffs
24 allege that using the transportation was “required” and “compulsory,” because
25 HealthSource “does not reimburse” employees for the cost of renting cars to commute to
26 work themselves. (ECF 1-2, at 6); see Garcia v. Acushnet Co., No. 21-cv-01581-BEN-
27 BGS, 2022 WL 1284820, at *5 (S.D. Cal. Apr. 29, 2022) (refusing to reduce violation rate
28 based on “pattern and practice” pleading when circumstances indicated that violations
1 occurred on every shift). So, HealthSource’s estimate of transportation-time damages are
2 well-supported.
3 2. Waiting-Time Penalties
4 At any rate, the other damages calculations are dwarfed by the potential penalties
5 for willfully unpaid wages, which HealthSource prices at over $21 million. Plaintiffs allege
6 that they “and some members of the Class have separated from Defendant as a result of
7 being discharged or having voluntarily resigned their employment.” (ECF 1-2, at 18.)
8 “If an employer willfully fails to pay” the wages of an employee who “is discharged or . . .
9 quits,” that employee’s wages “continue as a penalty” for up to 30 days. Cal. Labor Code
10 § 203(a). The “recovery of waiting time penalties does not hinge on the number of
11 violations committed.” Demaria v. Big Lots Stores - PNS, LLC, No. 2:23-cv-00296-DJC-
12 CKD, 2023 WL 6390151, at *7 (E.D. Cal. Sept. 29, 2023). Because HealthSource “failed
13 to pay all wages due,” plaintiffs allege that they and the class are owed these statutory
14 penalties. (ECF 1-2, at 18.)
15 HealthSource construed the complaint as potentially requesting waiting-time
16 penalties for every single assignment worked, on the theory that workers were discharged
17 from employment at the close of each one—or so a court could find. (See ECF 1, at 8;
18 ECF 20, at 23.) It thus estimated the number of opportunities for the accrual of waiting-
19 time penalties as being equal to the number of assignments over a three-year timeframe:
20 5,446. (See ECF 20, at 12 n.6.) And since at least some travel time remains unpaid for
21 every assignment, each putative discharge at the end of each assignment could trigger a
22 full 30 days’ wages in waiting-time penalty. (See ECF 20, at 25.) Class members earned
23 an average of $1,316 per day. (ECF 20, at 10–11.) Rather than credit the “100% violation
24 rate” that plaintiffs “really allege,” HealthSource opted for a conservative 10% estimate.
25 (ECF 1, at 8.) Thus, it calculates the amount at stake for waiting-time penalties as at least
26 $21,500,808 ($1,316/day x 30 days x 5,446 assignments x 10%). (ECF 20, at 25.)
27 Plaintiffs protest that “there was no plausible way for Defendant to interpret
28 Plaintiffs’ Complaint in a way that would assume that each of the . . . assignments triggered
1 waiting time penalties.” (ECF 10-1, at 19.) Plaintiffs point out that, for a “temporary
2 services employer,” “the assumption that employment ends with each staffing assignment
3 is contrary to California law.” (Id. at 18.) For such employers, a discharge “can only occur
4 when an employee is terminated from work with the temporary services employer, not
5 when an employee’s assignment with a client ends.” (Id. (citing Young v. RemX Specialty
6 Staffing, 308 Cal. Rptr. 3d 320, 324 (Ct. App. 2023)).)
7 But the complaint does not allege that HealthSource is a “temporary services
8 employer” (nor, for that matter, does it ever use the word “temporary”). It describes
9 HealthSource instead as “an employment staffing agency” that, among other things,
10 “provides replacement labor staffing for employers involved in labor disputes in
11 California.” (ECF 1-2, at 5.) While plaintiffs are indeed not obliged to lay out every legal
12 contour of their arguments in an initial pleading, a defendant has only those contours to
13 work with when assessing the amount in controversy. The Court certainly does not have
14 sufficient evidence before it to determine as a matter of law that HealthSource qualifies as
15 a temporary services employer under that statute, even if doing so were appropriate at this
16 stage.
17 In previous suits brought by other employees against HealthSource, courts have
18 found the jurisdictional threshold met and have denied remand on just this basis: the
19 potential for multiple waiting-time-penalty recoveries. See Louis v. HealthSource Glob.
20 Staffing, Inc., No. 22-CV-02436-JD, 2022 WL 4866543, at *2 (N.D. Cal. Oct. 3, 2022)
21 (finding it “reasonable for Health[S]ource to construe plaintiffs’ theory of recovery as
22 ‘a claim that each assignment worked represents a separate employment, requiring the
23 payment of final wages’”); Marron v. HealthSource Glob. Staffing, Inc., No. 19-CV-
24 01534-KAW, 2019 WL 4384287, at *6 n.4 (N.D. Cal. Sept. 13, 2019) (“Plaintiff’s
25 complaint can be fairly read as alleging that each new assignment represented a separate
26 employment, requiring the payment of final wages thereafter.”); Mackall v. HealthSource
27 Glob. Staffing, Inc., No. 16-CV-03810-WHO, 2016 WL 4579099, at *2 (N.D. Cal. Sept. 2,
28 2016) (agreeing with HealthSource that the “number of terminations” eligible for waiting-
1 time penalties should equal the number of completed assignments, “rather than the number
2 of class members”).
3 What plaintiffs have tried to do differently in this case is to plead that they “resigned”
4 their employment on dates long after their final assignments. (ECF 1-2, at 6.) This might
5 indeed be consistent with the position that their waiting-time claims are based only on a
6 single separation date, and that each class member is limited to at most a single waiting-
7 time penalty. But that is not the only possible interpretation. By leaving ambiguous their
8 position on whether HealthSource is a “temporary services employer,” plaintiffs are not
9 foreclosed from later contending that it isn’t one. For instance, they could readily argue
10 that those resignation emails merely represented withdrawal from consideration for future,
11 stand-alone employment engagements. This is at least within the realm of possibility,
12 which is what counts for purposes of determining the amount “at stake” in the litigation.
13 See Chavez, 888 F.3d at 417 (explaining that a potential recovery on a claim places that
14 amount “at stake,” “whatever the likelihood” that it will be realized).
15 Plaintiffs also quibble with HealthSource’s decision to “arbitrarily assume[] a 10%
16 violation rate” for waiting-time penalties. But as stated above, the Court views this choice
17 as conservative. If travel time went uncompensated for every shift, as plaintiffs allege, then
18 assuming a 100% violation rate per assignment would be appropriate—and would increase
19 HealthSource’s already sizeable damages estimate tenfold. See Marron, 2019 WL
20 4384287, at *6 (noting that “it would be reasonable to even assume a 100% violation rate,
21 rather than the 10% violation rate that Defendant relies upon” for waiting time penalties,
22 due to allegedly universal travel-time violations); Garcia, 2022 WL 1284820, at *5
23 (accepting 100% violation rate for all claims, including waiting-time penalties, when they
24 all depended on “core allegations” of unpaid travel time to and from break area). In any
25 event, almost any violation rate would push the suit well above the jurisdictional floor. See
26 Jauregui v. Roadrunner Transp. Servs., Inc., 28 F.4th 989, 996 (9th Cir. 2022) (rejecting a
27 “‘focus on the trees, not the forest’ approach” that, if pursued, “would result in remanding
28 cases where the real amount in controversy is clearly over the $5 million threshold”).
1 Because the Court finds the jurisdictional threshold met on the waiting-time claims
2 alone, it need not address defendant’s other arguments relating to the amount in
3 controversy. See Burgos v. Citibank, N.A., No. 23-CV-01907-AMO, 2023 WL 5532123,
4 at *5 (N.D. Cal. Aug. 28, 2023) (ending analysis when “proposed valuations” of claims
5 already examined “well exceed[ed] CAFA’s $5 million floor”); Alvarez v. Office Depot,
6 Inc., No. CV 17-7220 PSG (AFMx), 2017 WL 5952181, at *4 (C.D. Cal. Nov. 30, 2017)
7 (same).
8 Accordingly, plaintiffs’ remand motion is denied.
9 MOTION TO COMPEL ARBITRATION2
10 The Federal Arbitration Act “mandates that district courts shall direct the parties to
11 proceed to arbitration on issues as to which an arbitration agreement has been signed.”
12 Dean Witter Reynolds, Inc. v. Byrd, 470 U.S. 213, 218 (1985). The district court’s role is
13 “limited to determining (1) whether a valid agreement to arbitrate exists and, if it does,
14 (2) whether the agreement encompasses the dispute at issue.” Kilgore v. KeyBank, Nat’l
15 Assn., 673 F.3d 947, 955 (9th Cir. 2012), on reh’g en banc, 718 F.3d 1052 (9th Cir. 2013).
16 In making these determinations, “district courts rely on the summary judgment standard of
17 Rule 56,” since an “order compelling arbitration is in effect a summary disposition” of the
18 matter. Hansen v. LMB Mortg. Servs., Inc., 1 F.4th 667, 670 (9th Cir. 2021) (quotation
19 marks omitted). The proponent of arbitration must prove “the existence of an agreement to
20 arbitrate by a preponderance of the evidence.” Knutson v. Sirius XM Radio Inc., 771 F.3d
21 559, 565 (9th Cir. 2014). If it succeeds, “the opposing party must prove any contrary facts
22 by the same burden.” Franz v. Hyundai Motor Am., No. 8:23-CV-01640-NS-ADS,
23 2024 WL 176227, at *4 (C.D. Cal. Jan. 12, 2024).
24
25
26
2 As a preliminary matter, plaintiffs’ opposition to this motion was filed four
27 calendar days late. The Court will nonetheless consider plaintiffs’ response, as it does not
change the result. Whether the Court grants HealthSource’s motion on its merits or because
28
1 HealthSource has carried its burden to prove the existence of a valid agreement to
2 arbitrate, and that it encompasses the disputes at issue. HealthSource produced two
3 undisputed arbitration agreements electronically signed by Franklin and Haboc on May 1,
4 2018, and August 9, 2021, respectively. (ECF 6, at 8–10, 12–14.) The agreements provide
5 that “any and all disputes arising out of . . . [plaintiffs’] employment with HealthSource,
6 and any and all previous and future employment relationships with HealthSource, . . . shall
7 be submitted to binding arbitration before a neutral arbitrator.” (ECF 6, at 8, 12.) The
8 agreements also forbid both HealthSource and plaintiffs from “assert[ing] class action or
9 representative action claims against the other in arbitration or otherwise . . . .” (Id.) They
10 provide that the parties “shall only submit their own, individual claims in arbitration and
11 will not seek to represent the interests of any other person.” (Id.)
12 The foregoing language covers all 11 claims, since all are grounded in plaintiffs’
13 employment relationship(s) with HealthSource. See Sheppard v. Staffmark Inv., LLC,
14 No. 20-CV-05443-BLF, 2021 WL 690260, at *2–4 (N.D. Cal. Feb. 23, 2021) (compelling
15 arbitration upon finding that meal-period, rest-break, accurate-wage-statement, wages-at-
16 separation, and UCL claims arose out of the “employment relationship”); Shams v.
17 Revature LLC, 621 F. Supp. 3d 1054, 1058 (N.D. Cal. 2022) (failure to reimburse
18 business-related expenses); Bill-Flores v. Dolgen California LLC, No. SACV 16-02286
19 JVS (DFMx), 2017 WL 11634775, at *7 (C.D. Cal. Mar. 29, 2017) (unpaid overtime and
20 waiting-time penalties). Plaintiffs do not dispute this characterization of their claims.
21 Plaintiffs resist arbitration on five different grounds. None of their challenges gives
22 rise to a genuine dispute of material fact as to whether the arbitration agreements are valid
23 and binding.
24 A. Multiple Arbitration Agreements
25 Plaintiffs argue that HealthSource has not shown that the arbitration agreement it
26 produced “was the operative agreement in place at the time the causes of action arose”
27 here. (ECF 13, at 17.) They claim that HealthSource itself contends in its motion that
28 workers sign more than one arbitration agreement over the course of their employment
1 relationship. (ECF 13, at 7 (citing ECF 5, at 12–13).) But that motion actually states that,
2 once the arbitration agreement is signed, HealthSource “does not request” the applicant to
3 sign another one “when working later assignments, although they may do so.” (ECF 5,
4 at 14.) Plaintiffs also make much of HealthSource’s statement that it has no “record of any
5 attempt by [plaintiffs] to revoke the Arbitration Agreement, or any arbitration agreement,
6 [they] signed.” (ECF 13, at 7; see ECF 5, at 14.) Plaintiffs strain to construe this as an
7 affirmative admission that multiple arbitration agreements exist. But that is not a
8 reasonable reading. This statement merely means that, to the extent plaintiffs may assert
9 the existence of other agreements, HealthSource has no record of their attempting to revoke
10 those either. In fact, HealthSource avers that plaintiffs’ employment records “show neither
11 of them ever agreed to any other arbitration agreement.” (ECF 15, at 12.)
12 Plaintiffs press new evidence into their argument that other arbitration agreements
13 must be in play. First, Akimasia Walker, apparently a current HealthSource employee,
14 declares that she requested her “employment records” before this lawsuit commenced.
15 (ECF 13-5, at 2.) In the employment file she received was a document titled “Temporary
16 Employment Agreement,” electronically signed by her. (Id.) While that contract does
17 contain an arbitration clause, it also contains carve-out language: “this Agreement has no
18 effect on and does not supersede any arbitration agreement between [Walker] and
19 HealthSource.” (Id. at 10.) So, even if plaintiffs also signed this document—and there is
20 no evidence that they did—it would not affect the enforceability of the operative arbitration
21 agreement.
22 Second, plaintiff Haboc, visiting her HealthSource portal on an unspecified date,
23 says she “was able to view” a different arbitration agreement of unknown provenance.
24 (ECF 13-4, at 2.) She was able to take a screenshot of only the top of the agreement—
25 though it is unclear why she could not have scrolled down to capture the rest of the
26 document. (See id. at 7.) Even setting aside authentication issues, it is impossible to tell
27 whether this agreement also contained carve-out language, since only its top portion is
28 allegedly reproduced. In any event, Haboc says she “did not sign” the agreement. (Id. at 2.)
1 Based on this additional evidence, plaintiffs deduce that they must have signed
2 multiple arbitration agreements “with conflicting arbitration provisions” over the course of
3 their time with HealthSource. (ECF 13, at 8.) And HealthSource must have “cherry-
4 pick[ed] from its assortment of arbitration agreements” to argue now that plaintiffs “are
5 bound by whatever contract it has selected as most favorable.” (Id.) Yet Walker is not a
6 named plaintiff, and Haboc is emphatic that she “did not sign” the agreement she partially
7 captured on her phone. (ECF 13-4, at 2.) Plus, both plaintiffs claim they “do not recall”
8 signing any arbitration agreement at all. (ECF 13-3, at 2; ECF 13-4, at 2.)
9 Put simply, plaintiffs argue that the hypothetical existence of other agreements—
10 which plaintiffs probably did not sign, and which may have had carve-out language—
11 should defeat HealthSource’s attempt to enforce an arbitration agreement plaintiffs did
12 sign, and which covered all past and future work assignments. The Court declines to take
13 such a broad inferential leap. As a result, the Court need not address plaintiffs’ “lack of
14 mutual assent” argument, which is premised on the hypothetical existence of these
15 multiple, signed, conflicting arbitration agreements. (See ECF 13, at 18–19.)
16 B. Limited Agreements
17 Plaintiffs conclude that the arbitration agreements cannot apply to all their
18 assignments, and therefore cannot cover the entire dispute, because they read them as being
19 limited in scope to a single assignment. (ECF 13, at 17.) This is so, they claim, because the
20 phrase “for this assignment” appears three times in the agreement, so it is “clear it is
21 assignment-specific”—and therefore HealthSource has not shown that it applies to all the
22 disputes in controversy here. (ECF 13, at 12–13.) But as plaintiffs point out, the agreement
23 also states that it covers “all previous and future employment relationships with
24 HealthSource . . . .” (Id. at 13.) Although they acknowledge that this presents a “direct
25 conflict” with their preferred interpretation, plaintiffs resolve it by assuming the agreement
26 is an assignment-specific document with (presumably) an errantly inserted term—one that
27 is best ignored, since it clashes irreconcilably with their reading. (Id.)
28
1 “The whole of a contract is to be taken together, so as to give effect to every part, if
2 reasonably practicable, each clause helping to interpret the other.” Cal. Civ. Code § 1641.
3 The three references to “for this assignment” appear in paragraphs 1, 4, and 5 of the
4 agreements. (See ECF 6, at 8–9, 12–13.) Giving effect to the clause in paragraph 2
5 specifying that the agreement embraces “all previous and future employment
6 relationships,” the three “assignment-specific” clauses can readily be harmonized with the
7 contract as a whole.
8 Plaintiffs acknowledge that it is HealthSource’s business to “place health
9 professionals at hospitals across the United States,” exposing it to legal action nationwide.
10 (ECF 13, at 13.) An arbitration agreement of universal applicability would naturally be
11 expected to specify that disputes are to be resolved under the law and in the forum
12 applicable to their corresponding assignment. In this context, then, the three clauses are
13 most reasonably read as specifying the applicable jurisdiction, choice of law, or interim-
14 equitable-relief venue for any given dispute, based on where “the majority of work was
15 performed” for the assignment during which a dispute arose. (ECF 6, at 8–9; id. at 12–13.)
16 This is the most reasonable interpretation that gives effect to the agreement’s every part.
17 Alternatively, it is possible to construe paragraphs 1, 4, and 5 as specifying the
18 jurisdiction, choice of law, and venue for a single assignment. But even if such a reading
19 were accepted, it would not alter the terms of paragraph 2, which bind the parties to
20 arbitrating disputes arising from “all previous and future relationships”—regardless of any
21 assignment-specific provisions that may appear in other clauses. (See ECF 6, at 8, 12.)
22 In other words, while the clauses’ phrasing may not be a model of clarity, it is clear
23 enough—in the context of the contract as a whole—that the agreement was meant to cover
24 all the claims now at issue. To the extent clauses may be read to conflict, “it is the duty of
25 the court to reconcile the conflicting clauses so as to give effect to the whole of the
26 instrument, if that is possible within the framework of the general intent or predominant
27 purpose of the instrument.” In re Marriage of Williams, 105 Cal. Rptr. 406, 412 (Ct. App.
28 1972); see also Cal. Civ. Code § 1652.
1 Plaintiffs’ protest that “it was never their understanding that any of the
2 pre-employment documents would extend beyond any single assignment.” (ECF 13, at 18.)
3 But their subjective understanding is irrelevant. “When a contract is reduced to writing, the
4 intention of the parties is to be ascertained from the writing alone, if possible . . . .”
5 Cal. Civ. Code § 1639. It is possible here. For Haboc, who only ever worked one
6 assignment anyway, the issue is immaterial. For Franklin, the agreement she signed states
7 that it covers all past and future assignments. “Reasonable diligence requires the reading
8 of a contract before signing it. A party cannot use his own lack of diligence to avoid an
9 arbitration agreement.” Rowland v. PaineWebber Inc., 6 Cal. Rptr. 2d 20, 24 (Ct. App.
10 1992).
11 Even if the Court were inclined to look beyond the agreement itself, the evidence is
12 at best mixed for plaintiffs. Near the time each plaintiff signed, they “completed a number
13 of other items that applied generally to their HSG accounts which were not ‘assignment-
14 specific,’” casting further doubt on their purported expectations about the agreements’
15 duration. (ECF 15, at 12.) At any rate, the Court rejects plaintiffs’ narrow reading of the
16 arbitration agreements.
17 C. Unconscionability
18 Next, plaintiffs seek to void the arbitration agreement as unconscionable. In
19 California, unconscionability “has both a ‘procedural’ and a ‘substantive’ element, the
20 former focusing on ‘oppression’ or ‘surprise’ due to unequal bargaining power, the latter
21 on ‘overly harsh’ or ‘one-sided’ results.” Armendariz v. Foundation Health Psychcare
22 Servs., Inc., 6 P.3d 669, 690 (Cal. 2000) (cleaned up). While both elements must be present
23 to find unconscionability, “they need not be present in the same degree.” Id. “[T]he party
24 opposing arbitration bears the burden of proving any defense, such as unconscionability.”
25 Pinnacle Museum Tower Assn. v. Pinnacle Mkt. Dev. (US), LLC, 282 P.3d 1217, 1224–25
26 (Cal. 2012).
27
28
1 1. Procedural Unconscionability
2 “The threshold inquiry in California’s unconscionability analysis is whether the
3 arbitration agreement is adhesive.” Nagrampa v. MailCoups, Inc., 469 F.3d 1257, 1281
4 (9th Cir. 2006) (cleaned up). “[A]n arbitration agreement is not adhesive if there is an
5 opportunity to opt out of it.” Mohamed v. Uber Techs., Inc., 848 F.3d 1201, 1206, 1211
6 (9th Cir. 2016) (finding no unconscionability in part because “there [was] an opportunity
7 to opt out of” the arbitration agreement “within 30 days”). The agreement plaintiffs signed
8 here was not adhesive, because it had a conspicuous opt-out provision. (See ECF 6, at 9
9 (“You understand that you have thirty (30) days after you sign this agreement to revoke it
10 and, if you do so, neither HealthSource nor you will be bound by the terms of this
11 agreement.” (capitalization omitted)).) Thus, plaintiffs cannot show procedural
12 unconscionability.
13 Plaintiffs make a few other arguments, but each misses the mark. They claim that
14 Healthsource “routinely presented employees with other arbitration agreements that did not
15 contain opt-out provisions.” (ECF 13, at 23–24.) But, for the same reasons set out above,
16 plaintiffs have not adduced sufficient evidence to support this claim. See supra
17 section II.A. There is no evidence that either plaintiff signed another arbitration agreement
18 or, even if they did, that it would supersede the ones they did sign.
19 Their next argument fares no better. Plaintiffs claim HealthSource would
20 “sometimes” provide paperwork “on arrival to an assignment” that “applied to that specific
21 assignment only.” (ECF 13, at 9–10.) From that fact, and from some of the other paragraphs
22 in the arbitration agreement, they conjure a post hoc “understanding that any
23 pre-employment documents were assignment-specific.” (ECF 13, at 23–24.) But the
24 voluntarily signed arbitration agreements state that they apply to “any and all previous and
25 future employment relationships with HealthSource,” from which no reasonable reader
26 could infer impermanence. (ECF 6, at 8, 12.) And the arbitration agreement was not
27 presented to plaintiffs in a rush upon their arrival at an assignment; there is no question
28 they had a meaningful opportunity to read and understand it before signing. It was available
1 on HealthSource’s online portal for workers to read, ponder, and sign (or not) at their
2 leisure. (See ECF 5, at 13.)
3 Lastly, plaintiffs caution that “the employment context” presents special issues with
4 procedural unconscionability to which courts must be attuned. (ECF 13, at 23.) True, the
5 “economic pressure exerted by employers . . . may be particularly acute . . . .” Armendariz,
6 6 P.3d at 690. But such issues are of little concern here. After all, signing the agreement is
7 not even a requirement “for the applicant to be considered for assignment.” (ECF 5, at 13.)
8 And for those who do sign, the agreements state that choosing to later “opt out” will not
9 adversely affect their terms and conditions of employment. (ECF 6, at 10, 14.) These
10 circumstances do not herald the “high levels of both oppression and surprise” that plaintiffs
11 exhort. (ECF 13, at 24.)
12 If there is any evidence of procedural unconscionability, it appears minimal.
13 Nevertheless, because HealthSource both drafted the agreement and likely possessed
14 superior bargaining power, the Court will continue the analysis and assess substantive
15 unconscionability. See Nagrampa, 469 F.3d at 1284 (explaining that, even when “evidence
16 of procedural unconscionability appears minimal,” courts are required “under California
17 law” to consider substantive unconscionability as well).
18 2. Substantive Unconscionability
19 A finding of substantive unconscionability “requires a substantial degree of
20 unfairness beyond a simple old-fashioned bad bargain. . . . Not all one-sided contract
21 provisions are unconscionable; hence the various intensifiers in our formulations: ‘overly
22 harsh,’ ‘unduly oppressive,’ ‘unreasonably favorable.’” Baltazar v. Forever 21, Inc.,
23 367 P.3d 6, 12 (Cal. 2016) (cleaned up) (finding arbitration agreement was not
24 unconscionable when it imposed identical obligations on employer and employee).
25 Plaintiffs raise two main arguments regarding substantive unconscionability. First, they
26 point out that the arbitration agreement contains a class-action waiver, which they claim
27 subjects employees to “immeasurable” detriment. (ECF 13, at 21.) If enforced, employees
28 “might not be able to find legal counsel” to pursue their “meritorious, but costly (in time
1 and money) claims.” (Id.) Be that as it may, this Court is bound to “enforce arbitration
2 agreements according to their terms—including terms providing for individualized
3 proceedings.” Epic Sys. Corp. v. Lewis, 584 U.S. 497, 502 (2018); see also AT&T Mobility
4 LLC v. Concepcion, 563 U.S. 333, 344 (2011) (“Requiring the availability of classwide
5 arbitration . . . creates a scheme inconsistent with the [Federal Arbitration Act].”); Carter
6 v. Rent-A-Center, Inc., 718 F. App’x 502, 504 (9th Cir. 2017) (explaining that Concepcion
7 “foreclos[es] any argument” that “an arbitration agreement is unconscionable solely
8 because it contains a class action waiver”).
9 Second, plaintiffs contend that the agreements are improperly “one-sided,” relying
10 on Navas v. Fresh Venture Foods, LLC, 301 Cal. Rptr. 3d 423 (Ct. App. 2022).
11 (See ECF 13, at 21–22.) The Navas court found substantively unconscionable an
12 arbitration agreement that listed nine example “covered claims,” each of a type “that only
13 employees bring against employers.” 301 Cal. Rptr. 3d at 432. Although the agreement
14 was “valid for all legal claims,” the inclusion of the nine examples indicated that it was
15 “primarily one-sided in favor of” the employer. Id. By contrast, plaintiffs acknowledge that
16 the agreements here do not detail any specific “types of claims,” one-sided or otherwise.
17 (See ECF 13, at 22.) Moreover, Navas appears out of step with its controlling precedent.
18 See Baltazar, 367 P.3d at 14 (reasoning that if “all employment-related claims” are
19 covered, an “illustrative list of claims subject to the agreement is just that”).
20 In sum, plaintiffs’ arguments are unavailing. The Court discerns no “substantial
21 degree of unfairness” in this arbitration agreement that might raise concerns about
22 substantive unconscionability.
23 D. Lack of Consideration
24 Plaintiffs reckon that a mutual promise to arbitrate cannot constitute consideration,
25 “as mutuality is already legally required.” (ECF 13, at 20.) For this proposition, they cite
26 the voluminous Armendariz decision in its entirety. Perhaps they meant to reference that
27 case’s unconscionability analysis, which makes the unremarkable point that a contract
28 “lacking in mutual consideration” is illusory. Armendariz, 6 P.3d at 692. Plaintiffs are
1 correct that a valid contract requires mutuality of consideration. But “any prejudice
2 suffered, or agreed to be suffered, by [a promisee], other than such as he is at the time of
3 consent lawfully bound to suffer, as an inducement to the promisor, is a good consideration
4 for a promise.” Cal. Civ. Code § 1605. So, the parties’ mutual “promise to be bound by the
5 arbitration process itself serves as adequate consideration.” Circuit City Stores, Inc. v.
6 Najd, 294 F.3d 1104, 1108 (9th Cir. 2002); see also Garner v. Inter-State Oil Co., 265 Cal.
7 Rptr. 3d 384, 389 (Ct. App. 2020) (rejecting “lack of consideration” argument when
8 “mutual, obligating promises to arbitrate” had been made “in the formation of the
9 contract”).
10 E. Waiver of Arbitration Rights
11 Plaintiffs also contend that HealthSource waived its right to arbitration “by removing
12 the case to this Court based on its belief that this Court has original jurisdiction,” because
13 the removal was “coupled with participation in several months of litigation . . . .” (ECF 13,
14 at 16.) To their mind, this amounts to a “presumptive waiver of the right to arbitrate.” (Id.)
15 The proponent of waiver must show “(1) knowledge of an existing right to compel
16 arbitration; (2) acts inconsistent with that existing right; and (3) prejudice to the party
17 opposing arbitration resulting from such inconsistent acts.” United States v. Park Place
18 Assocs., 563 F.3d 907, 921 (9th Cir. 2009) (quotation marks omitted). Plaintiffs have failed
19 to make a showing of (at least) the second element.
20 To assess whether a party acted inconsistently with its arbitration right, courts take
21 “a holistic approach” and consider “the totality of the party’s actions.” Sequoia Benefits &
22 Ins. Servs., LLC v. Costantini, 553 F. Supp. 3d 752, 758 (N.D. Cal. 2021). A party’s
23 “extended silence and delay in moving for arbitration” could indicate a desire for a judicial
24 ruling on the merits, “which would be inconsistent with a right to arbitrate.” Martin v.
25 Yasuda, 829 F.3d 1118, 1125 (9th Cir. 2016). Such a delay, paired with “actively litigating”
26 the claim, can satisfy this element. Id. at 1126 (finding waiver after party litigated for
27 “seventeen months,” “conduct[ed] a deposition,” and filed a “motion to dismiss”); see also
28 Van Ness Townhouses v. Mar Indus. Corp., 862 F.2d 754, 759 (9th Cir. 1988) (finding
1 waiver when party “actively” litigated, filed “pleadings [and] motions,” “and did not move
2 to compel arbitration until more than two years” after suit commenced); Kelly v. Public
3 Util. Dist. No. 2, 552 F. App’x 663, 664 (9th Cir. 2014) (finding waiver when party
4 “conducted discovery and litigated motions, including a preliminary injunction and a
5 motion to dismiss” for “eleven months”). But “numerous courts have held that merely
6 removing a case to federal court, where the defendant has not engaged in protracted
7 litigation or obtained discovery, does not give rise to waiver of the right to arbitrate . . . .”
8 DeMartini v. Johns, No. 3:12-CV-03929-JCS, 2012 WL 4808448, at *5 (N.D. Cal. Oct. 9,
9 2012).
10 HealthSource’s actions indicate a desire for arbitration and little appetite for
11 litigation. After this case was brought in state court, HealthSource filed an answer that
12 specified “Arbitration Agreement” as its first defense. (See ECF 2, at 2; ECF 13, at 10–11.)
13 Later that month, HealthSource emailed the arbitration agreements to plaintiffs and asked
14 them to stipulate to arbitration, which they refused. (ECF 13, at 11.) The next month,
15 HealthSource objected to plaintiffs’ written discovery “on the grounds that ‘the discovery
16 is unauthorized because Plaintiffs’ claims are subject to individual arbitration . . . .’” (Id.)
17 It also resisted plaintiffs’ other contemporaneous attempts to engage it in discovery. (Id.
18 at 11–12.) A couple months later, HealthSource removed to federal court and promptly
19 moved to compel arbitration. (Id. at 12.) HealthSource has filed no other motions, and there
20 is no evidence that it ever sought discovery.
21 In short, HealthSource asserted its arbitration rights at nearly every turn. Its
22 unwavering pursuit of arbitration places it in a different category from the arbitration-
23 waiving defendants in the cases plaintiffs rely upon. See Hoover v. American Income Life
24 Ins., 142 Cal. Rptr. 3d 312, 316–18 (Ct. App. 2012) (affirming waiver of arbitration rights
25 due to defendant’s “15-month delay in petitioning for arbitration” and “active litigation,
26 including . . . [a] demurrer, an unsuccessful mediation, discovery disputes,” and the
27 defense’s propounding “special interrogatories and document requests” and noticing a
28 “deposition”); Adolph v. Coastal Auto Sales, Inc., 110 Cal. Rptr. 3d 104, 110–11 (Ct. App.
1 2010) (affirming arbitration waiver based on the defense’s “6 months of delay” before
2 seeking to compel arbitration and because it “filed two demurrers, accepted and contested
3 discovery request[s], engaged in efforts to schedule discovery, [and] omitted to mark or
4 assert arbitration in its case management statement”). Unlike those defendants,
5 HealthSource has preserved its right to arbitration.
6 Because HealthSource has met its burden of showing a valid and binding arbitration
7 agreement governs this case, and plaintiffs have not proven the contrary, the motion to
8 compel arbitration is granted.
9 MOTION TO DISMISS OR STAY
10 HealthSource also moves to dismiss or to stay this matter pending arbitration.
11 (ECF 5, at 23.) When a court is satisfied that a claim should be referred to arbitration, it
12 “shall on application of one of the parties” stay the action “until such arbitration has been
13 had in accordance with the terms of the [arbitration] agreement.” 9 U.S.C. § 3. The Ninth
14 Circuit has interpreted this statute to offer flexibility: “a district court may either stay the
15 action or dismiss it outright when . . . the court determines that all of the claims raised in
16 the action are subject to arbitration.” Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d
17 1072, 1074 (9th Cir. 2014). Because all claims here are to be arbitrated, the Court dismisses
18 this action without prejudice.
19 CONCLUSION
20 The Court orders as follows:
21 1. Plaintiffs’ remand motion is DENIED.

22
2. HealthSource’s motions to compel arbitration and dismiss are GRANTED. The
23 individual claims in the complaint are referred to arbitration, and the case is
24 DISMISSED without prejudice.

25
3. HealthSource’s motions to strike class claims and stay the action are DENIED
26
AS MOOT.
27
28
1 4. HealthSource’s motion for judicial notice of a California trial-court order is
7 GRANTED. (See ECF 8.)
3 5. The Clerk is directed to close this case.
4
5 || Dated: March 11, 2024

7 Andre . Schopler
United States District Judge
8
9
10
1]
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
25

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/10089171. Public record. Not legal advice.