Joel Soileau v. Space Exploration Technologies Corp.

O

1

2

3

4

5

6

7

United States District Court

8

Central District of California

9

10

11 JOEL SOILEAU, Case No. 2:24-cv-06397-ODW (Ex)

12 Plaintiff,

ORDER DENYING MOTION TO

13 v. REMAND [15]; AND GRANTING

14 SPACE EXPLORATION MOTION TO COMPEL

TECHNOLOGIES CORP., ARBITRATION [18]

15

Defendant.

16

17 I. INTRODUCTION

18 Plaintiff Joel Soileau, proceeding pro se, filed this action against his former

19 employer, Defendant Space Exploration Technologies Corp. (“SpaceX”), in California

20 Superior Court. (Decl. Kara L. Jassy ISO Removal (“Jassy NOR Decl.”) Ex. A

21 (“Complaint” or “Compl.”), ECF No. 1-2.) SpaceX removed the case to federal court

22 based on alleged diversity jurisdiction. (Notice Removal (“NOR”) ¶ 1, ECF No. 1.)

23 Soileau now moves to remand and SpaceX moves to compel Soileau to arbitration.

24 (Mem. ISO Mot. Remand (“Mot. Remand”) 4–5, ECF No. 15-2; Mem. ISO Mot.

25 Compel (“Mot. Compel”) 6, ECF No. 18-1.) For the reasons below, the Court

26 DENIES the Motion to Remand and GRANTS the Motion to Compel Arbitration.1

27

28 1 After carefully considering the papers filed in connection with the Motions, the Court deemed the

matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.

1 II. BACKGROUND

2 SpaceX employed Soileau at its facility in Cape Canaveral, Florida. (Decl.

3 Sandrah Miloszewski ISO Mot. Compel (“Miloszewski Decl.”) ¶ 3, ECF No. 18-3.)

4 As a condition of employment, SpaceX requires all employees, including Soileau, to

5 sign an arbitration agreement (“Agreement”) that mandates binding arbitration for

6 covered disputes. (Id. ¶¶ 4–5, Ex. A (“Agreement”), ECF No. 18-4.) On June 6,

7 2022, Soileau signed the Agreement and thereafter continued to work at SpaceX until

8 his termination in May 2023. (Id. ¶ 4; Agreement 5; Compl. ¶ 7.)

9 Following his termination, Soileau filed a complaint with the California Civil

10 Rights Department (“CRD”), alleging that SpaceX unlawfully terminated his

11 employment. (Compl. ¶¶ 1, 7–14.) In May 2023, the California Department of Fair

12 Employment & Housing, and the U.S. Equal Employment Opportunity Commission

13 (“EEOC”) issued a discrimination charge against SpaceX and initiated an

14 investigation into Soileau’s termination. (See id. ¶ 8.) In July 2023, SpaceX informed

15 the CRD that Soileau was not a California employee because he was employed at

16 SpaceX’s Florida facility, and CRD could not investigate the charge. (Id. ¶ 9.)

17 Separately, the EEOC acknowledged that the appropriate state employment agency

18 would need to investigate the discrimination charge. (Id. ¶ 10.) In April 2024,

19 lacking such an investigation, the EEOC closed its proceedings. (Id. ¶ 11.)

20 After the EEOC closed its investigation, Soileau filed this action against

21 SpaceX in California state court. (See generally Compl.) Soileau alleges that SpaceX

22 misrepresented his employment location to the CRD when it reported he was a Florida

23 employee and not a California employee. (Id. ¶¶ 12–13.) He contends that, with this

24 false report to the CRD, SpaceX obstructed justice and caused the CRD to stop

25 investigating his charge. (Id.)

26 SpaceX removed Soileau’s case to federal court. (NOR.) SpaceX asked

27 Soileau to arbitrate his claim pursuant to the Agreement, but Soileau refused. (Decl.

28 Kara L. Jassy ISO Mot. Compel (“Jassy Compel Decl.”) ¶¶ 2–4, ECF No. 18-2.)

1 Accordingly, SpaceX now seeks to compel arbitration of Soileau’s claim per the

2 Agreement, or alternatively to dismiss for failure to state a claim. (Jassy Compel

3 Decl. ¶ 4; Mot. Compel.) Concurrently, Soileau moves to remand the case to state

4 court and seeks an award of fees and costs. (Mot. Remand 5.) The Motion to Remand

5 and the Motion to Compel (“Motions”) are both fully briefed. (Opp’n Remand, ECF

6 No. 192; Reply ISO Remand (“Reply Remand”), ECF No. 22; Opp’n Compel, ECF

7 No. 20; Reply ISO Compel (“Reply Compel”), ECF No. 21.)

8 III. MOTION TO REMAND

9 As the Court requires jurisdiction to decide the Motion to Compel, it begins

10 with Soileau’s Motion to Remand.

11 A. Legal Standard

12 Federal courts are courts of limited jurisdiction and possess only that

13 jurisdiction as authorized by the Constitution and federal statute. Kokkonen v.

14 Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Under 28 U.S.C. § 1441(a),

15 a party may remove a civil action brought in a state court to a district court only if the

16 plaintiff could have originally filed the action in federal court. Federal district courts

17 have original jurisdiction where an action arises under federal law, or where each

18 plaintiff’s citizenship is diverse from each defendant’s citizenship (i.e., diversity is

19 “complete”), and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331,

20 1332(a).

21 There is a strong presumption that a court is without jurisdiction until

22 affirmatively proven otherwise. Fifty Assocs. v. Prudential Ins. Co. of Am., 446 F.2d

23 1187, 1190 (9th Cir. 1970); see Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)

24

2 In connection with SpaceX’s opposition to Soileau’s Motion to Remand, SpaceX requests judicial

25 notice of certain facts in the decision of another District Court in the Central District:

Holland-Thielen v. Space Expl. Techs. Corp., No. 2:24-cv-06972-CAS (RAOx), 2024 WL 4652812

26 (C.D. Cal. Oct. 24, 2024). (Req. Judicial Notice, Ex. A, ECF Nos. 26, 26-1.) The Court need not

take judicial notice of other court decisions to consider them. See McVey v. McVey, 26 F. Supp. 3d

27

980, 984 (C.D. Cal. 2014). Nor must the Court take judicial notice of this decision for the purposes

28 of the Motion to Remand, as the Court resolves the motion on other grounds. Accordingly, the

Court DENIES SpaceX’s request for judicial notice.

1 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal

2 in the first instance.”). When an action is removed from state court, the removing

3 party bears the burden of demonstrating that removal is proper. Corral v. Select

4 Portfolio Servicing, Inc., 878 F.3d 770, 773 (9th Cir. 2017). Removal is strictly

5 construed, and any doubt as to removal is resolved in favor of remand. Id. at 773–74.

6 B. Discussion

7 SpaceX removed this case to federal court on the basis of federal diversity

8 subject matter jurisdiction, alleging the amount Soileau has put into controversy

9 exceeds $75,000 and the parties are completely diverse. (NOR ¶¶ 1, 10–21(b).)

10 Soileau moves to remand pursuant to the forum defendant rule, claiming that SpaceX

11 is a citizen of California and removal is improper. (Mot. Remand 4–5.)

12 1. Diversity Jurisdiction

13 Soileau does not dispute that the Court possesses diversity jurisdiction. (See

14 generally Mot. Remand.) However, courts have an independent obligation to

15 determine whether subject matter jurisdiction exists. See Ruhrgas AG v. Marathon

16 Oil Co., 526 U.S. 574, 583 (1999); see also Fed. R. Civ. P. 12(h)(3) (requiring the

17 court to dismiss the action if subject matter jurisdiction is lacking). As to amount in

18 controversy, Soileau seeks at least $7,672,494 in damages, easily exceeding the

19 jurisdictional threshold. (See Compl., Demand for Relief ¶¶ 1–3; NOR ¶¶ 15–21.)

20 Regarding diversity, a defendant’s notice of removal need only include

21 plausible allegations supporting complete diversity—i.e., an individual’s citizenship

22 based on their domicile and intent to remain, and a corporation’s citizenship based on

23 its states of incorporation and principal place of business. See Dart Cherokee Basin

24 Operating Co. v. Owens, 574 U.S. 81, 87 (2014); Kantor v. Wellesley Galleries, Ltd.,

25 704 F.2d 1088, 1090 (9th Cir. 1983) (defining individual citizenship); 28 U.S.C.

26 § 1332(c) (defining corporate citizenship).

27 SpaceX alleges that Soileau is domiciled in Florida, and that SpaceX is

28 incorporated and has a principal place of business in Texas. (NOR ¶¶ 11, 13.) While

1 Soileau does not dispute his domicile in Florida, he contends SpaceX is also a citizen

2 of California. (Mot. Remand 4.) Regardless of whether SpaceX is a citizen of

3 California or Texas, Soileau and SpaceX are completely diverse in citizenship.

4 Accordingly, SpaceX sufficiently establishes that the Court possesses diversity subject

5 matter jurisdiction.

6 2. Forum Defendant Challenge

7 Rather than challenge subject matter jurisdiction, Soileau invokes the forum

8 defendant rule to argue that removal is improper because SpaceX “is a citizen of

9 California.” (Mot. Remand 4–5.)

10 The forum defendant rule prohibits removal “if any of the parties in interest

11 properly joined and served as defendants is a citizen of the state in which such action

12 is brought.” 28 U.S.C. § 1441(b)(2). Once the removing party establishes a prima

13 facie case for removal, the burden shifts to the plaintiff to establish that an exception

14 like the forum defendant rule applies. Artisan & Truckers Cas. Co. v. Hyundai Motor

15 Am., No. 8:24-cv-01143-DOC (DFMx), 2024 WL 4454920, at *3 (C.D. Cal. Oct. 8,

16 2024). The removing party is only required to plead a “short and plain statement,” to

17 establish this prima facie case. See Dart Cherokee, 574 U.S. at 87; see also Kanter v.

18 Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“[D]efendants were merely

19 required to allege (not to prove) diversity . . . .”). However, when a defendant’s

20 removal allegations are challenged, “both sides submit proof and the court decides, by

21 a preponderance of the evidence,” whether removal was proper. Dart Cherokee,

22 574 U.S. at 88 (discussing challenge to removal based on amount in controversy).

23 Soileau submits no facts, evidence, or argument with his Motion to challenge

24 SpaceX’s allegation that it is a citizen of Texas, and offers only the unsupported

25 conclusion that SpaceX “is a citizen of California pursuant to 28 U.S.C. § 1332(c)(1).”

26 (Mot. Remand 4.) Section § 1332(c)(1) provides two bases for a corporation’s state of

27 citizenship: the state where it is incorporated and the state where it has its principal

28 place of business. In its Notice of Removal, SpaceX specifically alleges that it is

1 incorporated and has its principal place of business in Texas. (NOR ¶ 13 (alleging

2 “SpaceX’s principal place of business, i.e., the ‘nerve center’ where it performs

3 executive and administrative functions, is located in Texas” and “SpaceX’s CEO and

4 SpaceX’s President & COO are based in Texas.”).) These allegations are adequate on

5 removal to establish a prima facie showing that SpaceX is incorporated and holds its

6 principal place of business in Texas. See Hertz Corp. v. Friend, 559 U.S. 77, 90, 92–

7 93 (2010) (finding the principal place of business, often a corporation’s headquarters,

8 is where high-level officers and board members “direct, control and coordinate” the

9 corporation’s activities).

10 However, in his Motion, Soileau does not identify which basis for citizenship

11 he is challenging, i.e., whether he contends SpaceX is incorporated in California, or

12 has its principal place of business there, or both. (See generally Mot. Remand.) Nor

13 does Soileau acknowledge or address SpaceX’s specific allegations. (Id.)

14 Consequently, he fails to cast doubt on them. Absent any facts, evidence, or argument

15 contesting SpaceX’s specific allegations, Soileau fails to raise a challenge to SpaceX’s

16 assertion that it is a citizen of Texas based on its state of incorporation and principal

17 place of business.3 Consequently, Soileau fails to meet his burden to establish that

18 SpaceX is a California citizen such that the forum defendant rule bars removal.

19 As SpaceX establishes the Court’s diversity jurisdiction over this action, and as

20 Soileau fails to demonstrate that the forum defendant rule precludes removal, the

21 Court DENIES the Motion to Remand. (ECF No. 15.) The Court also DENIES

22 Soileau’s request for fees and costs because Soileau is pro se and SpaceX’s removal

23 was proper. See Elwood v. Drescher, 456 F.3d 943, 947 (9th Cir. 2006) (“[P]ro se

24

25 3 The Court declines to consider Soileau’s late-raised arguments and documents, as Soileau raises

them for the first time in his Reply. (See Reply Remand 2–4, Exs. A–D, ECF No. 22-1 to 22-4

26 (arguing for the first time that SpaceX’s principal place of business is in California).) “[A]rguments

raised for the first time in a reply brief are waived.” Graves v. Arpaio, 623 F.3d 1043, 1048 (9th Cir.

27

2010). Introducing new arguments at the reply stage denies the non-moving party “full notice and

28 opportunity to respond.” Avila v. L.A. Police Dep’t, No. 2:11-cv-01326-SJO (FMOx), 2012 WL

12886838, at *4 (C.D. Cal. Feb. 27, 2012).

1 litigants . . . cannot recover statutory attorneys’ fees.”), overruled in part on other

2 grounds by Citizens for Free Speech, LLC v. County of Alameda, 953 F.3d 655

3 (9th Cir. 2020); Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178, 1184 (9th Cir. 2015)

4 (reversing award of fees to plaintiff because defendant’s removal was proper).

5 IV. MOTION TO COMPEL

6 Having established that the Court possesses subject matter jurisdiction, the

7 Court turns to SpaceX’s Motion to Compel.

8 A. Legal Standard

9 The Federal Arbitration Act (“FAA”)4 provides that contractual arbitration

10 agreements “shall be valid, irrevocable, and enforceable, save upon such grounds as

11 exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “A party

12 aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a

13 written agreement for arbitration may petition” the court “for an order directing that

14 such arbitration proceed in the manner provided for” in the agreement. Id. § 4.

15 In deciding whether to compel arbitration, a court’s inquiry is generally limited

16 to “two ‘gateway’ issues: (1) whether there is an agreement to arbitrate between the

17 parties; and (2) whether the agreement covers the dispute.” Brennan v. Opus Bank,

18 796 F.3d 1125, 1130 (9th Cir. 2015) (quoting Howsam v. Dean Witter Reynolds, Inc.,

19 537 U.S. 79, 84 (2002)). “If the response is affirmative on both counts, then the

20 [FAA] requires the court to enforce the arbitration agreement in accordance with its

21 terms.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir.

22 2000).

23 B. Discussion

24 SpaceX seeks to compel Soileau to resolve his claim against SpaceX through

25 binding arbitration, based on the Agreement he signed at the outset of his

26 employment. (Mot. Compel 6.) SpaceX argues that the Agreement is (1) valid and

27 enforceable, and (2) covers Soileau’s claim. (Id. at 9–12.)

28

4 The Agreement is governed by the FAA. (Agreement ¶ 11.)

1 1. Existence of Valid and Enforceable Arbitration Agreement

2 SpaceX argues that the Agreement is valid and enforceable because Soileau

3 undisputedly signed it and acknowledged its enforceability. (Mot. Compel 10–12;

4 Jassy Compel Decl. ¶¶ 3–4.) Nevertheless, Soileau now claims the Agreement is

5 unenforceable. (Opp’n Compel 1.)

6 a. Validity

7 The party seeking to compel arbitration has the burden under the FAA to show

8 by a preponderance of the evidence that a valid, written agreement to arbitrate exists.

9 Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017). When

10 deciding whether a valid agreement to arbitrate exists, courts generally “apply

11 ordinary state-law principles that govern the formation of contracts.” First Options of

12 Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Under California law, “[t]he party

13 seeking arbitration bears the burden of proving the existence of an arbitration

14 agreement, and the party opposing arbitration bears the burden of proving any

15 defense.” Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th

16 223, 236 (2012).

17 “An essential element of any contract is the consent of the parties, or mutual

18 assent.” Donovan v. RRL Corp., 26 Cal. 4th 261, 270 (2001), as modified (Sept. 12,

19 2001). “A party’s acceptance of an agreement to arbitrate may be express, as where a

20 party signs the agreement,” or may be implied in fact. Pinnacle Museum Tower Ass’n,

21 55 Cal. 4th at 236. Under California law, “an electronic signature has the same legal

22 effect as a handwritten signature.” Ruiz v. Moss Bros. Auto Grp., 232 Cal. App. 4th

23 836, 843 (2014).

24 As a condition of employment, Soileau signed the Agreement. (Miloszewski

25 Decl. ¶ 4; Agreement 5.) Soileau does not dispute that he electronically signed the

26 Agreement, thereby consenting to its terms. (Jassy Compel Decl. ¶ 4; see generally

27 Opp’n Compel.) Indeed, in August 2024, during the meet and confer for SpaceX’s

28 Motion to Compel, Soileau acknowledged that he consented to the Agreement by

1 signing it. (Jassy Compel Decl. ¶ 4.) Accordingly, the Court finds that Soileau and

2 SpaceX formed a valid agreement to arbitrate covered claims.

3 b. Enforceability

4 Soileau contends the Agreement is unenforceable based on: (1) lack of

5 jurisdiction; (2) equitable estoppel; and (3) the Ending Forced Arbitration of Sexual

6 Assault and Sexual Harassment Act of 2021 (“EFAA”). (Opp’n Compel 1.) Soileau

7 is mistaken on all points.

8 First, Soileau contends that the Court lacks subject matter jurisdiction, and

9 therefore lacks the authority to rule on the Motion to Compel. (Opp’n Compel 1–3.)

10 However, as established above, the Court has diversity subject matter jurisdiction over

11 this matter. Accordingly, the Court has the authority to adjudicate the Motion to

12 Compel.

13 Next, Soileau argues that SpaceX should be equitably estopped from

14 compelling arbitration. (Id. at 3–6.) Equitable estoppel is “the doctrine by which a

15 person may be precluded by his act or conduct . . . from asserting a right which he

16 otherwise would have had.” Hass v. Darigold Dairy Prods. Co., 751 F.2d 1096, 1099

17 (9th Cir. 1985) (alteration in original).

18 So far as the Court can discern, Soileau’s equitable estoppel argument proceeds

19 as follows. The Agreement specifically lists a claim for employment discrimination or

20 harassment under California’s Fair Employment and Housing Act (“FEHA”) as a

21 “Covered Claim,” and because Soileau signed the Agreement, Soileau is deemed a

22 California employee and covered by California employment law. (Opp’n Compel 4–

23 5.) This means that the “CRD is the only agency to investigate [Soileau’s] charges of

24 harassment under the [A]greement.” (Id. at 5.) Pursuant to the Agreement, SpaceX

25 “intended to have the Plaintiff report violations [under FEHA] to the CRD,” and those

26 violations would thereafter be settled through arbitration. (Id. at 6.) However, by

27 reporting to the CRD that Soileau was not a California employee, SpaceX

28 misrepresented the terms of the Agreement and stopped the CRD investigation.

1 Therefore, SpaceX should be equitably estopped from enforcing the Agreement. (Id.

2 at 4–6.)

3 Soileau entirely miscomprehends the Agreement. The inclusion of California or

4 FEHA claims to define “Covered Claims” in the Agreement does not mean that FEHA

5 is applicable here. Rather, the FEHA claim is listed in the Agreement as an example

6 of a claim that will be subject to arbitration, only if it is raised. SpaceX’s report to the

7 CRD, that Soileau is not a California employee, is in no way contrary to the terms of

8 the Agreement because whether Soileau is a California employee in fact is wholly

9 unrelated to whether a California claim is subject to arbitration in the Agreement.

10 Equitable estoppel simply does not apply here.5

11 Finally, Soileau argues that the EFAA renders the Agreement unenforceable.

12 (Opp’n Compel 7.) The EFAA states that “no predispute arbitration

13 agreement . . . shall be valid or enforceable with respect to a case which . . . relates to

14 the sexual assault dispute or the sexual harassment dispute.” 9 U.S.C. § 402(a).

15 Soileau contends his claim to the CRD that SpaceX discriminated against him

16 involves allegations of sexual assault and harassment, and therefore renders the

17 Agreement unenforceable pursuant to the EFAA. (Opp’n Compel 7 (“The Charge of

18 Discrimination referred to in the initial complaint [to the EEOC and CRD] is in

19 relation to sexual assault and sexual harassment.”).) However, even accepting that

20 Soileau’s charge to the EEOC and CRD relates to a sexual assault or harassment

21 dispute, the claim in this case does not. Rather, in this case, Soileau asserts an

22 “Intentional Tort” alleging that SpaceX falsely reported Soileau’s employment

23 location as Florida and obstructed the CRD investigation. (Compl. ¶¶ 12–14.) As

24 such, the claim here does not “relate[] to [a] sexual assault dispute or [a] sexual

25 harassment dispute,” 9 U.S.C. § 402, and the EFAA does not apply here to prevent

26 enforcement of the Agreement.

27

5 To the extent Soileau raises additional arguments linked to equitable estoppel, the Court finds them

28 to similarly rest on starkly false premises or a fundamental misunderstanding of the Agreement’s

plain language. Accordingly, the Court declines to indulge them.

1 Accordingly, Soileau fails to meet his burden to show the Agreement is

2 unenforceable.

3 2. Scope of Arbitration Agreement

4 As the Agreement is valid and enforceable, the only remaining question is

5 whether the scope of the agreement covers Soileau’s claim against SpaceX. Brennan,

6 796 F.3d at 1130 (noting the two gateway issues are whether a valid agreement to

7 arbitrate exists and whether the agreement covers the dispute).

8 Through the Agreement, Soileau and SpaceX agreed to resolve “all Covered

9 Claims . . . through final, binding, and confidential arbitration.” (Mot. Compel 11;

10 Agreement ¶ 1.) A “Covered Claim” includes “claims of employment discrimination

11 and harassment,” and claims of “tortious conduct (whether intentional or negligent),

12 including defamation, misrepresentation, fraud, [or] infliction of emotional distress,”

13 among others. (Agreement ¶ 3.) Here, Soileau asserts a cause of action for

14 “Intentional Tort,” alleging that SpaceX obstructed the CRD’s investigation when it

15 misrepresented Soileau’s state of employment. (Compl. at 1, ¶¶ 12–14.) This

16 qualifies as a “Covered Claim,” as defined in the Agreement. Soileau does not

17 disagree. (See Jassy Compel Decl. ¶ 4; see generally Opp’n Compel.)

18 Therefore, the Court finds that the Agreement covers Soileau’s claim in this

19 case and his claim must be arbitrated. The Court GRANTS the Motion to Compel.

20 (ECF No. 18.) Consequently, the Court declines to reach SpaceX’s arguments for

21 dismissal.

22 V. CONCLUSION

23 For the reasons discussed above, the Court DENIES Soileau’s Motion to

24 Remand, (ECF No. 15), and GRANTS SpaceX’s Motion to Compel Arbitration,

25 (ECF No. 18). Pursuant to 9 U.S.C. § 3, the Court STAYS this action pending

26 completion of arbitration. Smith v. Spizzirri, 601 U.S. 472, 478–79 (2024). The

27 parties are ORDERED to file a joint status report every ninety (90) days, beginning

28 ninety (90) days after the date of this Order. The parties are also ORDERED to file a

1 || joint status report within ten (10) days of completion of the arbitration proceedings.

2 || All other dates and deadlines are VACATED.

3

4 IT IS SO ORDERED.

5

6 December 4, 2024

, \ a

8 bjde Hie

9 OTIS D. HT,

0 UNITED STATES DISTRICT JUDGE

1]

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28