Opinion

1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 CAROLINA MADERA, Case No.: 3:23-cv-02124-RBM-BJW 13 Plaintiff, ORDER GRANTING EXPERIAN 14 v. INFORMATION SOLUTIONS, INC’S MOTION TO CONFIRM 15 COMENITY CAPITAL BANK; EXPERIAN ARBITRATION AWARD INFORMATION SOLUTIONS, INC., 16 Defendants. [Doc. 36] 17 18 19 20 21 Before the Court is Defendant Experian Information Solutions, Inc.’s (“Defendant” 22 or “Experian”) Motion to Confirm Arbitration Award (“Motion to Confirm”). (Doc. 36.) 23 Plaintiff Carolina Madera (“Plaintiff”) filed an Opposition to Defendant Experian’s Motion 24 to Confirm (“Opposition”). (Doc. 39.) Experian filed a Reply In Support of Motion to 25 Confirm (“Reply”). (Doc. 40.) 26 The Court finds this matter suitable for determination without oral argument under 27 Civil Local Rule 7.1(d)(1). Having reviewed the pleadings above, and for the reasons 28 below, the Motion to Confirm (Doc. 36) is GRANTED. 1 I. BACKGROUND 2 Plaintiff filed the Complaint against Defendants Experian and Comenity Capital 3 Bank on November 17, 2023, alleging that they violated the Fair Credit Reporting Act, 4 California’s Identity Theft Act, and California’s Consumer Credit Reporting Agencies Act. 5 (Doc. 1 ¶¶ 85–97.) In February 2024, the Parties jointly moved to stay the case and submit 6 their claims to arbitration. (Docs. 19–20.) The Court granted those motions, requiring the 7 Parties to submit joint status reports regarding the progress of arbitration every 180 days. 8 (Docs. 22, 28.) The Parties filed those joint status reports (see Docs. 29, 30, 34) until 9 Experian filed its Motion to Confirm on February 4, 2026 (Doc. 36). The Motion to 10 Confirm was fully briefed on March 2, 2026. (See Docs. 39–40.) 11 After this case was stayed, the Parties proceeded to arbitration. Arbitrator Kirk D. 12 Yake (“the Arbitrator”) scheduled an evidentiary hearing for April 23 and 24, 2025. 13 (Doc. 36-1 at 3.) Before this hearing, Experian served Plaintiff with an Offer of Judgment 14 (“the Offer”) pursuant to the Federal Arbitration Act (“the FAA”), Federal Rule of Civil 15 Procedure (“Rule”) 68, and/or California Code of Civil Procedure (“CCP”) § 998. (Doc. 16 36-3 at 24–26.) Under the Offer, Experian would pay Plaintiff $35,000 to settle her claim. 17 (Id.) The Offer stated that Plaintiff could accept the offer by “serv[ing] written notice of 18 acceptance . . . within 21 days of the date this offer is made.” (Id. at 25.) 19 Plaintiff did not accept the Offer, so the Arbitrator held the evidentiary hearing as 20 scheduled. On June 18, 2025, the Arbitrator issued an Interim Award in Experian’s favor, 21 finding “there was no reasonable basis to find liability against Experian in discharging its 22 duty to [Plaintiff] to adopt and follow reasonable procedures to assure maximum possible 23 accuracy of her credit report.” (Doc. 36-2 at 45–48.) On September 22, 2025, the 24 Arbitrator then issued a Final Award, directing Plaintiff to reimburse Experian $24,618.41 25 for non-expert costs incurred after the date of its Offer. (Id. at 43–44 (“The awarded 26 amount is $24,618.41, representing non-expert costs as set forth in [Experian’s] 27 Declaration, as amended to account for all AAA arbitration costs. Expert costs are denied, 28 as are attorney’s fees.”). 1 The Arbitrator reasoned that although Rule 68 “does not provide for cost-shifting 2 when the plaintiff . . . fails to obtain any positive net judgment,” CCP § 998 “has no similar 3 bar to recovery should plaintiff fail to exceed an offer to compromise.” (Id. at 44.) Indeed, 4 the Arbitrator continued, “‘[i]f an offer made by a defendant is not accepted and the 5 plaintiff fails to obtain a more favorable judgment or award, the plaintiff . . . shall pay the 6 defendant’s costs from the time of the offer.’” (Id. (quoting Cal. Code Civ. Proc. 7 § 998(c)(1)) (emphasis in original).) 8 II. LEGAL STANDARD 9 District courts have a limited role in reviewing arbitration awards. See United 10 Steelworkers of Am. v. Enter. Wheel & Car Corp., 363 U.S. 593, 596 (1960) (“The federal 11 policy of settling [ ] disputes by arbitration would be undermined if courts had the final say 12 on the merits of the awards.”). “Neither erroneous legal conclusions nor unsubstantiated 13 factual findings justify federal court review of an arbitral award under the statute, which is 14 unambiguous in this regard.” Bosack v. Soward, 586 F.3d 1096, 1102 (9th Cir. 2009). 15 Under § 9 of the FAA, “a court ‘must’ confirm an arbitration award ‘unless’ it is vacated, 16 modified, or corrected ‘as prescribed’ in §§ 10 and 11.” Id. (quoting 9 U.S.C. §§ 9–11). 17 Sections 10 and 11 “provide the FAA’s exclusive grounds for expedited vacatur and 18 modification.” Hall St. Assocs., L.L.C. v. Mattel, Inc., 552 U.S. 576, 583 (2008). These 19 grounds are: 20 (1) where the award was procured by corruption, fraud, or undue means; (2) where there was evident partiality or corruption in the arbitrators . . . ; 21 (3) where the arbitrators were guilty of misconduct in refusing to postpone the 22 hearing . . . or in refusing to hear evidence pertinent and material to the controversy . . . ; (4) where the arbitrators exceeded their powers, or so 23 imperfectly executed them that a mutual, final, and definite award upon the 24 subject matter submitted was not made; [5] where there was an evident material miscalculation of figures . . . ; [6] where the arbitrators have awarded 25 upon a matter not submitted to them . . . ; and [7] where the award is imperfect 26 in matter of form not affecting the merits of the controversy.

27 9 U.S.C. §§ 10–11. 28 1 III. DISCUSSION 2 Experian requests that the Court confirm the Final Award. (Doc. 36-1 at 2.) Plaintiff 3 argues that (1) the Court lacks jurisdiction to confirm the Final Award because the present 4 dispute is rooted solely in state law and (2) even if the Court has jurisdiction, it should 5 vacate the Final Award because the Arbitrator “entered a Final Award that was not 6 permitted by law, through the application of a defective [§] 998 offer.” (Doc. 39 at 6–13.) 7 A. Jurisdiction 8 Plaintiff represents that “[t]he fundamental question for this Court in this instant 9 Motion is whether . . . the Court has a basis of jurisdictional authority to confirm the 10 award.” (Id. at 5.) The Parties’ briefs discuss this issue at length. (See Doc. 36-1 at 5–6; 11 Doc. 39 at 4–7; Doc. 40 at 2–4.) However, after the Motion to Confirm was fully briefed, 12 the Supreme Court decided Jules v. Andre Balazs Properties, 146 S. Ct. 1209 (2026). In 13 Jules, the Supreme Court unanimously held that “a federal court that has previously stayed 14 claims in a pending action under § 3 of the [FAA] has jurisdiction to confirm or vacate a 15 resulting arbitral award as to those claims under § 9 and § 10.” Id. at 1214, 1220 (holding 16 that a district court that has granted a stay should “superintend the arbitration to the end, 17 including through confirmation or vacatur”). This is precisely the posture of the present 18 case. Therefore, the Court has jurisdiction to confirm or vacate the Final Award. 19 B. Legal Error 20 Plaintiff argues that the Court should vacate the Final Award because the Arbitrator 21 analyzed fee-shifting under CCP § 998, rather than Rule 68. (Doc. 39 at 11.) According 22 to Plaintiff, doing so exceeded the scope of the Arbitrator’s authority because the Federal 23 Rules, not California law, governed all procedural matters. (Id. at 9–11.) Experian argues 24 that the Arbitrator did not err because “[o]ffer of judgment rules such as [CCP] § 998 are 25 ‘substantive,’ as courts have repeatedly recognized in the Erie context.” (Doc. 36-1 at 7 26 (citations omitted).) Experian also argues that, even if the Arbitrator erred by applying 27 CCP § 998, the error was not so egregious that it constituted an arbitrator “exceeding [his] 28 powers.” (Id. (quoting 9 U.S.C. § 10).) The Court agrees with Experian. 1 “Arbitrators exceed their powers . . . not when they merely interpret or apply the 2 governing law incorrectly, but when the award is ‘completely irrational’ or exhibits a 3 ‘manifest disregard of law.’” Kyocera Corp. v. Prudential-Bache Trade Servs., Inc., 341 4 F.3d 987, 997 (9th Cir. 2003) (quoting Todd Shipyards Corp. v. Cunard Line, Ltd., 943 5 F.2d 1056, 1059–60 (9th Cir. 1991)). “The manifest disregard exception requires 6 something beyond and different from a mere error in the law or failure on the part of the 7 arbitrators to understand and apply the law.” Collins v. D.R. Horton, Inc., 505 F.3d 874, 8 879 (9th Cir. 2007) (citation modified). Rather, the moving party must “show the arbitrator 9 understood and correctly stated the law, but proceeded to disregard the same.” Id. (citation 10 modified). Furthermore, the “governing law alleged to have been ignored by the arbitrators 11 must be well defined, explicit, and clearly applicable.” Id. (citation omitted). 12 The Court need not determine whether the Arbitrator erred when he determined that 13 CCP § 998 should apply because, even if he did, “[t]he governing law alleged to have been 14 ignored . . . [was not] well defined, explicit, and clearly applicable.” Id. Plaintiff argues 15 that the Arbitrator exceeded his authority by applying California law, rather than the 16 Federal Rules, to fee shifting. The Court’s research indicates only two district courts within 17 the Ninth Circuit that have considered whether fee shifting is procedural or substantive. 18 See Zamani v. Carnes, No. C-03-00852-RMW, 2009 WL 2710108, at *2 (N.D. Cal. Aug. 19 25, 2009) (“Although [CCP] section 998 is a state rule, offer of judgment rules appear to 20 be substantive.”) (citation modified); Eaton v. FCA US, LLC, Case No. 5:23-cv-01707- 21 SRM-KSx, 2025 WL 1843245, at *3 (C.D. Cal. June 24, 2025) (noting that the Zamani 22 court made this determination “without much elaboration” and refraining from ruling). A 23 district court outside the Ninth Circuit found that “[a]lthough there is not substantial legal 24 authority on the issue, federal courts have treated a state offer of judgment statute creating 25 a right to attorney fees as substantive.” Scottsdale Ins. Co. v. Tolliver, 262 F.R.D. 606, 612 26 (N.D. Okla. 2009) (collecting cases from the Eleventh Circuit, the Seventh Circuit, and the 27 District of Rhode Island). Given the apparent dearth of case law, and Plaintiff’s failure to 28 cite authority to demonstrate that the Arbitrator was ignoring a “well defined, explicit, and | ||clearly applicable” law, the Court finds that the Arbitrator did not exceed his authority. 2 || Collins, 505 F.3d at 879 (finding that “the arbitrators could not manifestly disregard the 3 because no binding precedent existed”). 4||C. Defective Offer 5 Plaintiff also argues that the Court should vacate the Final Award because the Offer 6 || failed to comply with the procedural requirements of CCP § 998. (Doc. 39 at 11-13.) 7 || Specifically, Plaintiff argues that the Offer did not include the required “provision that 8 allows the accepting party to indicate acceptance of the offer by signing a statement that 9 || the offer is accepted.” (/d. at 12.) 10 The requirements of section 998 are not “overly formal.” Puerta v. Torres, 195 Cal. 11 4th 1267, 1273 (2011). “As long as a section 998 offer specifies the manner of 12 || acceptance, the steps for completing the acceptance may be implicit in the identified means 13 ||of acceptance.” Rouland v. Pac. Specialty Ins. Co., 220 Cal. App. 4th 280, 288 (2013) 14 (citation omitted); see also Puerta, 195 Cal. App. 4th at 1273 (“A sentence in the offer 15 stating that acceptance could be indicated by return letter might be equally acceptable.”). 16 ||Here, the Offer indicated: “To accept this offer, [Plaintiff] must serve written notice of 17 || acceptance thereof within 21 days of the date this offer is made.” (Doc. 36-3 at 25.) This 18 statement thus “specifies the manner of acceptance” and complies with § 998. □□□□□□□□□□ 19 || argument here is unavailing. 20 IV. CONCLUSION 21 For the foregoing reasons, the Stay in this case is LIFTED and Experian’s Motion 22 ||to Confirm Arbitration Award (Doc. 36) is GRANTED. The Clerk of Court is directed to 23 || CLOSE this case. 24 IT IS SO ORDERED. 25 ||DATE: August 19, 2026 Biter Merton 7 ON. RUTH BERMU@DEZ! MONTENEGRO UNITED STATES DISTRICT JUDGE 28