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Fambrough v. Green

United States District Court, W.D. Missouri, Western Division

September 26, 2019

WILLIAM L. FAMBROUGH, Plaintiff,
v.
LOGAN D. GREEN, CO-FOUNDER AND CHIEF EXECUTIVE OFFICER, LYFT, INC.; AND LYFT, INC., Defendants.

          ORDER

          ROSEANN A. KETCHMARK, JUDGE.

         Before the court is Defendants Logan D. Green and Lyft, Inc. (“Defendants”)’ Motion to Compel Arbitration. (Doc. 13.) Plaintiff William Fambrough (“Plaintiff”) filed a motion for oral argument to stay arbitration. (Doc. 15.)[1] The motions are fully briefed. (Docs. 13, 15, 17.) After careful consideration, Plaintiff’s request for oral argument to stay arbitration is DENIED and Defendants’ Motion to Compel Arbitration is GRANTED in part and DENIED in part.

         Background

         Lyft, Inc. (“Lyft”) is a two-sided marketplace platform (the “Lyft Platform”) that uses a mobile phone application to connect passengers who need rides with drivers who are willing to provide them. Plaintiff was a driver who had access to and used the Lyft Platform within Missouri and Kansas.

         Plaintiff filed his Complaint with this Court on March 5, 2019, alleging violations of 42 U.S.C. § 1983. (Doc. 4.) Plaintiff’s allegations arise out of Lyft’s suspension of Plaintiff’s privilege to drive for Lyft. (Id.) Defendants argue Plaintiff’s claims are governed by an arbitration agreement (the “Agreement”), signed by Plaintiff on multiple occasions. The Agreement states,

PLEASE BE ADVISED: THIS AGREEMENT CONTANS PROVISIONS THAT GOVERN HOW CLAIMS YOU AND LYFT HAVE AGAINST EACH OTHER CAN BE BROUGHT (SEE SECTION 17 BELOW). THESE PROVISIONS WILL, WITH LIMITED EXCEPTION, REQUIRE YOU TO SUBMIT CLAIMS YOU HAVE AGAINST LYFT TO BINDING AND FINAL ARBITRATION ON AN INDIVIDUAL BASIS, NOT AS A PLAINTIFF OR CLASS MEMBER IN ANY CLASS, GROUP OR REPRESENTATIVE ACTION OR PROCEEDING. AS A DRIVER OR DRIVER APPLICANT, YOU HAVE AN OPPORTUNITY TO OPT OUT OF ARBITRATION WITH RESPECT TO CERTAIN CLAIMS AS PROVIDED IN SECTION 17.

(Doc. 13-3, Ex. A.) Plaintiff was required to accept these terms before having access to the Lyft Platform. (See Doc. 13-3.) Plaintiff agreed to and accepted these terms on multiple occasions. (Doc. 13-2; Doc. 15.) Plaintiff makes two arguments for why arbitration should not be compelled: the Agreement was entered into under duress and Plaintiff’s claims are not covered by the Agreement. The Court finds both arguments to be without merit.

         Discussion

         Section 2 of the Federal Arbitration Act (FAA), its primary substantive provision, states: “A written provision in … a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” 9 U.S.C. § 2. “Under § 3, a party may apply to a federal court for a stay of the trial of an action ‘upon any issue referable to arbitration under an agreement in writing for such arbitration.’” Rent-A-Center, W., Inc. v. Jackson, 561 U.S. 63, 68 (2010) (quoting 9 U.S.C. § 3). “Under § 4, a party ‘aggrieved’ by the failure of another party ‘to arbitrate under a written agreement for arbitration’ may petition a federal court ‘for an order directing that such arbitration proceed in the manner provided for in such agreement.’” Id. (quoting 9 U.S.C. § 4). “These provisions reflect both a liberal federal policy favoring arbitration, and the fundamental principle that arbitration is a matter of contract.” Driver v. BPV Mkt. Place Inv'rs, L.L.C., No. 4-17-cv-1607-CAS, 2018 WL 3363795, *4 (E.D. Mo. July 10, 2018) (quoting AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011)) (other citation and internal quotation marks omitted).

         “Because arbitration is a matter of contract, whether an arbitration provision is valid is a matter of state contract law, and an arbitration provision may be invalidated by generally applicable contract defenses, such as fraud, duress, or unconscionability[.]” Torres v. Simpatico, Inc., 781 F.3d 963, 968 (8th Cir. 2015) (citations and internal quotation marks omitted). “If a valid and enforceable arbitration agreement exists under state-law contract principles, any dispute that falls within the scope of that agreement must be submitted to arbitration.” Torres, 781 F.3d at 968 (citing Faber v. Menard, 367 F.3d 1048, 1052 (8th Cir. 2004). When presented with a motion to compel arbitration, the Court's role is limited to two inquiries: “(1) whether there is a valid arbitration agreement and (2) whether the particular dispute falls within the terms of the agreement.” Robinson v. EOR-ARK, LLC, 841 F.3d 781, 783-84 (8th Cir. 2016) (citation and quotation mark omitted). “The party seeking to compel arbitration bears the burden of proving the existence of a valid and enforceable arbitration agreement.” Driver, 2018 WL 3363795, at *4 (citation and quotation marks omitted).

         Parties may also “agree to arbitrate ‘gateway’ questions of ‘arbitrability, ’ such as whether the parties have agreed to arbitrate or whether their agreement covers a particular controversy.” Rent-A-Center, 561 U.S. at 68-69 (citations omitted). “An agreement to arbitrate a gateway issue is simply an additional, antecedent agreement the party seeking arbitration asks the federal court to enforce, and the FAA operates on this additional arbitration agreement just as it does on any other.” Id. at 70. Agreements to arbitrate gateway issues are often called delegation provisions. See Id . at 71.

         I. The Delegation Provision in the February 6, 2018 Terms is Valid and Enforceable

         Defendants moves the Court to dismiss this case as all the claims are subject to arbitration. In support, Defendants argue the parties agreed to a valid arbitration provision, located in the February 6, 2018 Terms of Service, which control Plaintiff’s claims. Defendants further argue the arbitration agreement includes a delegation provision requiring gateway issues of arbitrability to be decided by an arbitrator. (Doc. 13-1.) Plaintiff argues the agreement is invalid due to duress and that his claims fall within exceptions to the arbitration provision. “There are two types of validity challenges under § 2” of the FAA:

One type challenges specifically the validity of the agreement to arbitrate, and [t]he other challenges the contract as a whole, either on a ground that directly affects the entire agreement (e.g., the agreement was fraudulently induced), or on the ground that the illegality of one ...

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