N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT

R IZW A N ALI, Pla i ntiff - Appe lle e , v. J.P. M OR G AN C HASE B A NK, N.A., De fe nda n t - Appe lla

nt. No. 14-15076

D.C . No. 3:13-c v-01184-JSW
M EM O R ANDUM *

Appe a l from

the Unite d

Stat e s Distric t C ourt for the Northe rn Distric t of C a lifornia Je ffre y S. White , Distric t Judge , Pre siding Argue d a nd Subm itte d Fe brua

ry 11, 2016 San Fran c isc o , C a lifornia B e fore : SILVER

M AN, FISHER

and TALLM AN, C irc uit Judge s. J.P. M orga

n C ha se B an k

(JPM C ) a

ppe a l s the distric t c ourt’ s orde r de ny ing its m otion to c o m

pe l a rbitra t i on. W e have jurisdic tion unde r 9 U.S.C
. § 16(a )(1)(B ). R e vie wing de novo, se e K ilgore v . K e y B ank , N at’l Ass’n , 718 F.3d 1052, 1057 (9th C ir. 2013) (e n ba nc ), we a ffirm in pa

rt, re ve rse in pa

rt a nd re m and with instruc tion to c om

pe l a rbitration. 

# FIL ED
APR 07 2016 M OLLY C. DW Y ER, CLERK U

. S

. CO URT O F APPEALS

* This disposition is not a ppropria te for public a tion a

nd is not pre c e de nt e xc e pt a s provide d

by 9th C ir. R . 36-3.1. The distric t c ourt prope rly c onc lude d the arbitrat ion a gre e m e nt wa s
a dhe sive , a

nd thus a t le a s t m inim a lly

proc e dura lly unc onsc iona ble . The a gre e m e nt gove rning va

rious a spe c ts of Ali’ s e m

ploy m e n t with JPM C , of whic h the “ B inding Arbitra tion Agre e m e nt” (“ B AA” ) wa s pa rt, wa s a dhe sive be c a

use it wa s offe re d

“ on e sse ntia lly

a ‘ t ake it or le a

v e it’ ba sis.” Sanc he

z v . Vale nc ia Holding C

o., LLC , 353 P.3d 741, 762 (C a l . 2015). Adhe sive c ontra c ts a re at le a st m inim a lly proc e d ura lly unc onsc iona

ble unde r C a lifornia

la w. S e e Baltazar v . Fore v e r 21, Inc

. , No. S208345, 2016 W L 1176599, a

t *3 (C a l. M ar. 28, 2016) (c iting Ge ntry v . Supe rior C

ourt , 165 P.3d 556, 573 (C a l . 2007)). 2. The distric t c ourt e rre d in c onc luding it is substa n tive ly unc onsc iona

ble for the B AA to e xc lude from its c ove ra g e c e rta in a c tions se e king only provisiona l injunc tive re lie f. This c arve -out “ doe s no m ore tha n re c ite the proc e dura l prote c tions a lre a dy se c ure d by [C a l ifornia

C ode of C ivil Proc e dure ] se c tion 1281.8(b), whic h e xpre ssly pe rm its pa

rtie s to a n a rbitration to se e k pre lim ina ry injunc tive re lie f during the pe nde nc y of the arbitration.” Id. at *5. A provision

“ whic h doe s no m ore tha

n re s tate e xisting la

w doe s not re nde r the a gre e m e n t
unc onsc i ona

b le .” Id. a t *1 (c ita

tion om i tte d). 1

1 The distric t c ourt did not ha ve the be ne fit of the C a lifornia Supre m e C ourt’ s re c e nt de c ision in Baltazar
. 23. The distric t c ourt a lso e rre d in c onc luding the B AA’ s initia t ion provision is substa n tive ly un c onsc iona

ble . Although this provision la c k s m utua lity , substa ntive unc onsc iona

bility “ turns not only on a one -side d re sult, but also on a n
a bse nc e of justific a tion for it.” Arme ndariz v . Found. He alth Psy c hc are Se rv s. , 6 P.3d 669, 692 (C a l. 2000) (quoting A & M Produc e C o. v . FMC

C orp. , 186 C a l. R ptr. 114, 122 (C t. App. 1982)) (interna l quota t ion m arks om itte d). The initia tion provision is na

rrowly de signe d to a c c om

m odate JPM C ’ s le ga l obliga tion to pa y a ll
c osts unique

to a rbitration, a

nd thus ha s a

“ re a sona ble justific at ion . . . ba s e d on

‘ b usine ss re a litie s.’ ” Se eArme n dariz , 6 P.3d a t 687-89, 691. 4. The distric t c ourt prope rly c onc l ude d the B AA’ s c onfide ntia lity provision is not substa

ntive ly unc onsc iona

ble . Ali sugge sts, in a

brie f an d c onc lusory
argum e nt a

nd without c iting a

ny a uthority , tha

t the c o nfide ntia lity

provision is unfa irly o ne -side d be c a

use “ having the he aring c lose d be n e fits C ha se , not the Pla i ntiff a s it pre ve n ts othe rs from obse rving a

nd le arning of C ha s e ’ s ille ga l polic ie s a nd pra c tic e s.” Ali doe s not a rgue he would be unfa i rly disa d va nta ge d in
re solving his own dispute with JPM C ; rathe r, his c onc e rn a ppe ars to be sole ly

for othe r, pote ntia l pla intiffs. This “ c onc e rn[] ha [s] nothing to sa y a bout the fa irne ss or de sira bility of a se c re c y provision with re spe c t to the pa rtie s the m se l ve s .” W oodside Home s of C a l ., Inc . v . Supe rior C

ourt , 132 C a l . R

ptr. 2d 35, 42 (C t. App. 32003). “ [A] provision whic h favors one side is not substa ntive ly unc onsc iona

ble if the a dva

nta ge is c om

ple te ly c olla te ra l to the issue s surrounding a fa ir re solution of the dispute .” Id. at 42 n.11. 2 5. None of the othe r provisions in the B AA a re substa ntive l y
unc onsc i ona

b le . The B AA’ s disc ove ry “ guide line s ” m ay

be e xpa nde d or re stric te d in the arbitrator’ s “ re a sona ble disc re t ion” and the B AA e xpre s sly re quire s disc ove ry “ c onsiste nt with . . . gene ra l sta nda rds of due proc e s s [a

nd] the R ule s of AAA.” Se e Dotson v . Amge n, Inc

. , 104 C a l. R ptr. 3d 341, 349 (C t. App. 2010) (e nforc ing a

n a rbitrat ion disc ove ry

lim ita tion be c a u se “ the a g re e m e nt give s the

2 W e have re c ogniz e d tha t c onfide ntia lity

provisions in a

n a rbitration a gre e m e nt a

re not pe r se unc onsc iona ble unde r C a l ifornia la

w . Se e Dav is v
. O’Me lv e ny

& My e rs , 485 F.3d 1066, 1079 (9th C ir. 2007) (c iting Me rc uro v . Supe rior C

ourt , 116 C a l. R

ptr. 2d 671, 679 (C t . App. 2002); se e also Baltazar , 2016 W L 1176599, a

t *7 (“ Agre e m e nts to prote c t se nsitiveinform a tion a re a re gula r fe a ture of m ode rn litiga

tion, a nd the y c arry with the m

no inhe re nt unfa irne ss.” ). B ut we have a lso he ld tha t a c onfide ntia lity

provision is “

w ritte n too broa dly ,” and thus substa ntive ly unc onsc iona

ble , whe n, for e xam

ple , it “pre c lude s e ve n m e ntion to a

ny one ‘ not dire c tly

involve d in the m e diation or a

rbitration’ of . . . e ve n ‘ the e xiste nc e of a c o n trove rsy and the fa c t tha t the re is a

m e diation or a

n arbitration proc e e d i ng’ ” be c a use “ [s] uc h re stric tion[] would pre ve nt a n e m ploy e e from c onta c ting othe r e m

ploy e e s to a ssist in litiga

ting (or a rbitrating) a

n e m ploy e e ’ s c a se .” Dav is , 485 F.3d a t 1078. Ali ha s not, howe v e r, c onte nde d the c onfide ntia lity

provision he re “ would ha ndic a p [or] stifle [his] a

bility to inve stiga

te and e nga g e in disc ove ry .” Id. Ali re m a ins fre e to a rgue to the arbitrator tha

t the c onfide ntia lity

provision is une

nforc e a ble a s a pplie d in his c a s e . Se e K

ilgore , 718 F.3d at 1059 n.9 (“ [T] he e nforc e a bility of the c onfide ntia lity c l a use is a m a tte r distinc t from

the e nforc e a

bility of the arbitration c la

use in ge ne ra l. Pla intiffs a re fre e to a rgue during a

rbitration tha

t the c o n fide ntia lity

c la use is not e nforc e a

ble .” ). 4arbitrator the broa d disc re tion c onte m plate d by the AAA rule s to orde r the disc ove ry ne e de d to suffic ie ntly

litiga te the pa rtie s’ c l a im s” ). The B AA’ s unila te ra l m odific a tion c la

use is subje c t

to “ the funda

m e nta l lim it . . . im

pose d by the c ove na

nt of good fa ith a

nd fa ir de a ling im

plie d in e ve ry c ontra c t.” Se rpa v . C al. Sur. Inv e

stigations, Inc

. , 155 C a l. R ptr. 3d 506, 514 (C t . App. 2013). It is not inhe re ntly unfa ir for the B A A to a

uthoriz e an

arbitrat or to rule on sum

m ary judgm e nt m otions. Se e Little v . Auto Stie

gle r, Inc

. , 63 P.3d 979, 986 n.1 (C a l. 2003) (“ To the e xte nt tha t the ava ila

bility of dispositive

pre -arbitration m otions fa vor [sic ] [the e m

ploy e r] a s de fe n da

nt, the y c onfe r no m ore of a

n a dva nta ge tha n would be the c a se ha d the a c tion be e n brought in c ourt.” ). 6. In sum , be c a

u s e the B AA is not substa ntive ly unc onsc iona

ble , the distric t
c ourt e rre d in fa iling to e nforc e it. Se e C hav arria v . Ralphs Groc e ry C o. , 733 F.3d 916, 922 (9th C ir. 2013) (“ Unde r C a l ifornia la w, a c ontra c t m

ust be both proc e d ura lly an d substa

ntive ly unc onsc iona

ble to be re n de re d inva lid.” (c iting Arme n dariz , 6 P.3d a

t 690)). Ac c o rdingly , we re ve rse the distric t c ourt’ s orde r,
and re m and with theinstruc tion to c om pe l a rbitrat ion. AFFIRM E D IN PART , RE V E RSE D IN PART AND RE M ANDE D
. The pa rtie s sha ll be ar the ir own c osts on a ppe a l.

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