Mendez v. Loanme, Inc
- Proceeding
- district
- Area
- civil
- Panel
- Cynthia Ann Bashant (author)
Analysis
Defendants moved ex parte for limited discovery of Plaintiff's arbitration opt-out letter prior to an evidentiary hearing, arguing the letter was necessary to determine the scope of evidence required. The Court granted the motion, ordering Plaintiff to produce the letter in native format by November 25, 2020.
| What the court decided | The model |
|---|---|
Granting Defendants' ex parte application for limited discovery of the arbitration opt-out letter“Accordingly, the Court GRANTS Defendants’ Application (ECF No. 16).” | agree with court The court correctly applies the Federal Arbitration Act (9 U.S.C. § 4) to allow discovery regarding the formation of the arbitration agreement, specifically the opt-out provision. The court also correctly applies the standard for ex parte relief, finding that the defendants did not create the circumstances (Plaintiff's non-response) and that irreparable harm would result from the inability to prepare for the hearing. The order is procedurally sound and supported by the cited authorities. |
The order itself: sound — The order is sound. It correctly identifies the legal standard for discovery in arbitration cases under the FAA and applies it to the specific fact that the existence of the opt-out letter is central to arbitrability. It also properly applies the local standard for ex parte applications, citing the specific showing required (lack of fault and irreparable harm). The reasoning is concise but complete for the type of motion.
Opinion
4 5 UNITED STATES DISTRICT COURT 6 FOR THE SOUTHERN DISTRICT OF CALIFORNIA 7 CAROLL KING MENDEZ, Case No. 20-cv-00002-BAS-AHG 8 Plaintiff, ORDER GRANTING DEFENDANTS’ 9 v. EX PARTE APPLICATION FOR LIMITED DISCOVERY 10 LOANME, INC., et al., [ECF No. 16] 11 Defendants. 12 13 On November 12, 2020, Defendants LoanMe, Inc. and Jonathan Williams moved ex 14 parte to conduct limited discovery relating to Plaintiff’s purported arbitration opt-out letter 15 before the evidentiary hearing on December 3, 2020. (ECF No. 16.) Defendants state that 16 they have requested the opt-letter from Plaintiff on multiple occasions but have received 17 no response. (Id. at 2.) The ex parte application is unopposed.1 18 Under Federal Rule of Civil Procedure 26(b)(1), any matter relevant to a claim or a 19 defense is discoverable. In the context of arbitration, however, the Federal Arbitration Act 20 (“FAA”) provides for discovery related to a motion to compel arbitration only if “the 21 making of the arbitration agreement or the failure, neglect, or refusal to perform the same 22 be in issue.” Simula, Inc. v. Autoliv, Inc., 175 F.3d 716 (9th Cir.1999) (citing 9 U.S.C. § 23 4). This also includes a party’s decision to opt out of an arbitration agreement. See Erwin 24 v. Citibank, N.A., No. 3:16-CV-03040-GPC-KSC, 2017 WL 1047575, at *4 (S.D. Cal. Mar. 25 20, 2017) (“[W]hether or not Plaintiff opted out of the 2015 Arbitration Agreement is 26 27 1 Ex parte applications that are not opposed within two Court days must be considered unopposed and may be granted on that ground. See Hon. Cynthia Bashant’s Standing Order for Civil Cases § 6. Plaintiff has 28 1 dispositive of the first gateway question of arbitrability—it goes to the very heart of 2 || whether an agreement to arbitrate exists.”’). 3 The Court finds it appropriate to grant Defendants’ request for limited discovery. 4 || The letter is directly related to whether an arbitration agreement was formed between the 5 ||parties. The authenticity of the letter, specifically the date of its creation, is central to 6 ||resolving whether or not Plaintiff timely opted out of the arbitration agreement. 7 ||Defendants require the letter itself to determine whether the testimony of an ESI expert 8 || will be necessary at the evidentiary hearing. This testimony, in turn, may be necessary to 9 || the Court’s determination of the sole underlying issue in this case. 10 Further, the Court finds it appropriate to grant this relief ex parte. See Mission Power 11 || Eng’g Co. v. Cont’l Cas. Co., 883 F. Supp. 488, 492 (C.D. Cal. 1995) (ex parte relief is 12 ||appropriate where moving party shows it will suffer irreparable harm if the motion is not 13 heard on an expedited schedule and that it did not create the circumstances warranting ex 14 parte relief). First, Defendants did not create the circumstances necessitating this 15 application. They have sufficiently demonstrated that they attempted to contact Plaintiff 16 || by telephone and email numerous times over a two-week period regarding production of 17 || the letter—and the filing of the instant application—but received no response. (Decl. of 18 || Elizabeth C. Farrell 9] 2-4, ECF No. 16; Ex. A to Farrell Decl.) Second, as stated above, 19 || Defendants will suffer irreparable harm if they are unable to determine what evidence will 20 || be necessary to carry their burden at the evidentiary hearing. 21 Accordingly, the Court GRANTS Defendants’ Application (ECF No. 16). 22 ||Defendants shall serve on Plaintiff, no later than November 19, 2020, a request for 23 || production of the opt-out letter referenced in Plaintiff’s Opposition to Defendants’ Motion 24 Compel (ECF No. 11), in native format (i.e., including any ESI), and any copies thereof. 25 || Plaintiff is ordered to respond to such request no later than November 25, 2020. 26 IT IS SO ORDERED. ) 27 || DATED: November 17, 2020 (yf yu li A! Hohe □□ □ 28 United States District Judge oO.