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Case No. 17-CV-00613-LHK 

ORDER GRANTING IN PART AND DENYING IN PART MOTION TO COMPEL ARBITRATION

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Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

LUCIA RUIZ,

Plaintiff,

v.

ALLY FINANCIAL INC.,

Defendant.

Case No. 17-CV-00613-LHK 

ORDER GRANTING IN PART AND 

DENYING PART MOTION TO 

COMPEL ARBITRATION

Re: Dkt. No. 8

Plaintiff Lucia Ruiz (“Plaintiff”) sues Defendant Ally Financial Inc. (“Defendant”) for 

causes of action relating to Defendant’s alleged refusal to reinstate Plaintiff’s vehicle loan 

following the vehicle’s repossession. ECF No. 1. Before the Court is Defendant’s motion to 

compel arbitration. ECF No. 8. The Court finds this matter suitable for resolution without oral 

argument and hereby VACATES the motion hearing set for June 1, 2017, at 1:30 p.m. Having 

considered the parties’ argument, the relevant law, and the record in this case, the Court GRANTS 

in part and DENIES in part Defendant’s motion to compel arbitration. 

I. BACKGROUND

A. Factual Background

Plaintiff purchased a 2016 Jeep Compass from My Jeep Chrysler Dodge in Salinas, 

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ORDER GRANTING IN PART AND DENYING IN PART MOTION TO COMPEL ARBITRATION

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California on November 27, 2015. ECF No. 1 (“Compl.”), ¶ 6. That same day, Plaintiff signed a 

retail installment contract (“RIC”) with My Jeep Chrysler Dodge. See ECF No. 9, at 2. The RIC 

contained the following arbitration clause:

1. EITHER YOU OR WE MAY CHOOSE TO HAVE ANY 

DISPUTE BETWEEN US DECIDED BY ARBITRATION AND 

NOT IN COURT OR BY JURY TRIAL

2. IF A DISPUTE IS ARBITRATED, YOU WILL GIVE UP 

YOUR RIGHT TO PARTICIPATE AS A CLASS 

REPRESENTATIVE OR CLASS MEMBER ON ANY CLASS 

CLAIM YOU MAY HAVE AGAINST US INCLUDING ANY 

RIGHT TO CLASS ARBITRATION OR ANY CONSOLIDATION 

OF INDIVIDUAL ARBITRATIONS

3. DISCOVERY AND RIGHTS TO APPEAL IN ARBITRATION 

ARE GENERALLY MORE LIMITED THAN IN A LAWSUIT, 

AND OTHER RIGHTS THAT YOU AND WE WOULD HAVE IN 

COURT MAY NOT BE AVAILABLE IN ARBITRATION.

ECF No. 19-2, at 2; see also ECF No. 8, at 8. 1 In addition, the RIC’s arbitration clause contained 

the following language:

Any claim or dispute, whether in contract, tort, statute or otherwise 

(including the interpretation and scope of this Arbitration Provision, 

and the arbitrability of the claim or dispute), between you and us or 

our employees, agents, successors or assigns, which arises out of or 

relates to your credit application, purchase or condition of this 

vehicle, this contract or any resulting transaction or relationship 

(including any such relationship with third parties who do not sign 

this contract) shall, at your or our election, be resolved by neutral, 

binding arbitration and not by a court action. If federal law provides 

that a claim or dispute is not subject to binding arbitration, this 

Arbitration Provision shall not apply to such claim or dispute. Any 

claim or dispute to be arbitrated is to be arbitrated by a single 

arbitrator on an individual basis and not as a class action. You 

expressly waive any right you may have to arbitrate a class action.

ECF No. 19-2, at 2; see also ECF No. 10-1, at 2. My Jeep Chrysler Dodge subsequently assigned 

the RIC to Defendant. See ECF No. 9, at 2. 

 

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The copy of the RIC submitted by Defendant is illegible. The copy submitted by Plaintiff is 

clearer, but largely illegible. Both parties provide in their briefs the language quoted in this Order, 

and accordingly the Court relies on the parties’ representation that the quoted language is correct. 

To the extent that another provision in the RIC might conflict with the provisions quoted in this 

Order, the parties have not quoted any such provisions to the Court, and the Court has not found 

any such provisions in the portions of the RIC that are legible.

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ORDER GRANTING IN PART AND DENYING IN PART MOTION TO COMPEL ARBITRATION

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Plaintiff fell behind on her car payments, and Defendant repossessed Plaintiff’s vehicle in 

October 2016. Compl. ¶ 8. On October 25, 2016, Defendant provided to Plaintiff a “Notice of 

Plan to Sell Property” (hereinafter, “Notice”), which set out the requirements for Plaintiff to 

reinstate her loan and retrieve her vehicle. Id. ¶¶ 9–12. The Notice also provided Plaintiff with an 

“Extension Form” with which Plaintiff could obtain a ten-day extension of time for Plaintiff to 

fulfill these requirements. Id. ¶ 13. The Extension Form stated that Defendant “must receive the 

signed form by the end of the day on November 14, 2016.” Id. ¶ 16. 

Plaintiff mailed the Extension Form to the Dallas, Texas address provided by Defendant in 

the Extension Form. Id. ¶ 21–28. In addition, Plaintiff hired a courier in Dallas to hand deliver 

the documents at the address. Id. ¶ 25. However, the courier could not locate Defendant at the

address provided. Id. The courier investigated and eventually found a different Dallas, Texas 

address at which the courier could send the form to Defendant. Id. ¶ 27. The courier delivered the 

Extension Form one day late, on November 15, 2016. Id. ¶ 27–28. Although it received the 

Extension Form, Defendant sold Plaintiff’s vehicle on November 16, 2016. Id. ¶ 31–33.

B. Procedural History

Plaintiff filed suit against Defendant in this Court on February 7, 2017. Id. Plaintiff 

alleged five causes of action against Defendant for Defendant’s wrongful refusal to reinstate 

Plaintiff’s loan, and Defendant’s continuing attempt to collect from Plaintiff a deficiency balance 

on the loan. See id. Specifically, Plaintiff alleged that Defendant was liable for (1) conversion; 

(2) violation of the Rosenthal Fair Debt Collection Practices Act, Cal. Civ. Code § 1788; (3) 

violation of the California Consumer Credit Reporting Agencies Act, Cal. Civ. Code § 1785.1; (4) 

violation of the Fair Credit Reporting Act, 15 U.S.C. § 1681; and (5) violation of California 

Business and Professional Code §17200. See generally id.

On March 14, 2017, Defendant filed a “Motion to Compel Bilateral Arbitration and to Stay 

or Dismiss Proceedings Pursuant to the Federal Arbitration Act” (hereinafter, “motion”). See ECF 

No. 8 (“Mot.”). According to Defendant’s motion, although Plaintiff did “not contest 

[Defendant’s] right to compel arbitration,” Plaintiff refused to agree to Defendant’s proposed 

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stipulation to proceed to arbitration because Defendant’s proposed stipulation stated that “[t]he 

parties agree that the arbitrator shall have no authority to certify a class and that Plaintiff will not 

seek to certify a class in arbitration.” See Mot. at 6; ECF No. 10-1, at 5. Defendant moved to 

compel arbitration, and asked the Court to hold that the RIC precludes class arbitration. See Mot. 

at 1, 12–13.

On March 28, 2017, Plaintiff opposed Defendant’s motion. ECF No. 18 (“Opp.”). 

Plaintiff stated that Plaintiff agreed to arbitrate her claims, and that Plaintiff “would not oppose 

[Defendant’s] motion if that were all that were sought.” Id. at 1–2. Plaintiff opposed Defendant’s 

motion only because Defendant was asking the Court to “go[] further and rule[] on the speculative 

issue of whether class treatment is allowable [in arbitration], when plaintiff has not plead or 

sought class treatment” for her claims. Id. at 2. Plaintiff further argued that, even if Plaintiff did 

plead class claims, the issue of whether Plaintiff’s claims were arbitrable on a class-wide basis was 

an issue for the arbitrator to decide, not the Court. Id. at 4–5.

On April 4, 2017, Defendant filed a Reply to Plaintiff’s motion. ECF No. 21 (“Reply”). 

Defendant explained that its motion to compel was necessitated by “Plaintiff’s refusal to enter into 

an agreement expressly prohibiting the arbitration of her claims on a class-wide basis.” Id. at 2. 

According to Defendant, the availability of class arbitration was a gateway issue for the Court to 

decide. Id. at 2–3.

II. LEGAL STANDARD

The Federal Arbitration Act (“FAA”) applies to arbitration agreements in any contract 

affecting interstate commerce. See Circuit City Stores, Inc. v. Adams, 532 U.S. 105, 119 (2001); 9 

U.S.C. § 2. Under Section 3 of the FAA, “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, West, Inc. v. Jackson, 561 U.S. 63 (2010) (quoting 9 U.S.C. § 3). If 

all claims in litigation are subject to a valid arbitration agreement, the court may dismiss or stay 

the case. See Hopkins & Carley, ALC v. Thomson Elite, 2011 WL 1327359, at *7–8 (N.D. Cal. 

Apr. 6, 2011).

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The FAA states that written arbitration agreements “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. In deciding whether a dispute is arbitrable, a court must answer two 

questions: (1) whether the parties agreed to arbitrate, and, if so, (2) whether the scope of that 

agreement to arbitrate encompasses the claims at issue. See Chiron Corp. v. Ortho Diagnostic 

Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 2000). If a party seeking arbitration establishes these two 

factors, the court must compel arbitration. Id.; 9 U.S.C. § 4. “The standard for demonstrating 

arbitrability is not a high one; in fact, a district court has little discretion to deny an arbitration 

motion, since the [FAA] is phrased in mandatory terms.” Republic of Nicar. v. Std. Fruit Co., 937 

F.2d 469, 475 (9th Cir. 1991). In cases where the parties “clearly and unmistakably intend to 

delegate the power to decide arbitrability to an arbitrator,” the court’s inquiry is “limited . . . [to] 

whether the assertion of arbitrability is ‘wholly groundless.’” Qualcomm Inc. v. Nokia Corp., 466 

F.3d 1366, 1371 (Fed. Cir. 2006) (applying Ninth Circuit law). Nonetheless, “arbitration is a 

matter of contract and a party cannot be required to submit to arbitration any dispute which [s]he 

has not agreed so to submit.” AT & T Techs., Inc. v. Commc’ns Workers of Am., 475 U.S. 643, 

648 (1986) (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960)).

The FAA creates a body of federal substantive law of arbitrability that requires a healthy 

regard for the federal policy favoring arbitration and preempts state law to the contrary. Volt Info. 

Scis., Inc. v. Bd. of Trs. of Leland Stanford Junior Univ., 489 U.S. 468, 475–79 (1989) (“[T]he 

FAA must be resolved with a healthy regard for the federal policy favoring arbitration.”). 

However, “state law is not entirely displaced from federal arbitration analysis.” Ticknor v. Choice 

Hotels Int’l, Inc., 265 F.3d 931, 936–37 (9th Cir. 2001). When deciding whether the parties 

agreed to arbitrate a certain matter, courts generally apply ordinary state law principles of contract 

interpretation. First Options of Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995) (“Courts generally 

should apply ordinary state-law principles governing contract formation in deciding whether [an 

arbitration] agreement exists.”). Parties may also contract to arbitrate according to state rules, so 

long as those rules do not offend the federal policy favoring arbitration. Volt, 489 U.S. at 476, 

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478–79 (looking to whether state rules “offend[ed] the rule of liberal construction” in favor of 

arbitration). Thus, in determining whether parties have agreed to arbitrate a dispute, the court

applies “general state-law principles of contract interpretation, while giving due regard to the 

federal policy in favor of arbitration by resolving ambiguities as to the scope of arbitration in favor 

of arbitration.” Mundi v. Union Sec. Life Ins. Co., 555 F.3d 1042, 1044 (9th Cir. 2009) (quoting 

Wagner v. Stratton Oakmont, Inc., 83 F.3d 1046, 1049 (9th Cir. 1996)). “[A]s with any other 

contract, the parties’ intentions control, but those intentions are generously construed as to issues 

of arbitrability.” Mitsubishi Motors Corp. v. Soler Chrysler–Plymouth, Inc., 473 U.S. 614, 626 

(1985). If a contract contains an arbitration agreement, there is a “presumption of arbitrability,”

AT & T, 475 U.S. at 650, and “any doubts concerning the scope of arbitrable issues should be 

resolved in favor of arbitration,” Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp., 460 U.S. 

1, 24–25 (1983).

III. DISCUSSION

Defendant’s motion to compel arbitration comes to the Court in a unique posture. Both 

parties agree that the RIC contains a valid arbitration provision, and both parties agree that the 

arbitration clause governs the claims asserted in Plaintiff’s complaint. See Opp. at 2. 

Accordingly, both parties agree that the Court should compel arbitration, and that this case should 

be stayed or dismissed pending arbitration. See Mot. at 13; Opp. at 2. The only dispute between 

the parties is whether, in compelling arbitration, this Court must rule on whether the RIC 

precludes arbitration of Plaintiff’s claims on a class-wide basis. See Mot. at 12. For the reasons 

discussed below, the Court agrees with Plaintiff that the Court need not decide this issue.

First, the Court does not need to decide whether the RIC permits arbitration on a classwide basis because Plaintiff has brought only individual claims in her Complaint. See ECF No. 1. 

Plaintiff refused to sign Defendant’s proposed stipulation to compel arbitration only because 

Plaintiff—who agrees to arbitrate her claims—did not want to agree to the portion of Defendant’s 

stipulation that provided that the arbitrator “shall have no authority to certify a class” and that 

Plaintiff is precluded from seeking certification of a class in arbitration. ECF No. 10-1, at 5; see 

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Opp. As Plaintiff asserts, Plaintiff did not want to “sign a stipulation that rules on an issue which 

is not relevant to the pleadings.” Opp. at 4. Plaintiff’s refusal to stipulate to this language is 

understandable, and Defendant’s insistence that this Court rule on whether the RIC permits class 

arbitration—despite the absence of any class claims in the Complaint—is puzzling. Although

Defendant asserts that the issue of whether the RIC permits class arbitration is a “gateway 

question” that the Court must decide, see Mot. at 12, the only cases cited by Defendant are cases 

in which the Plaintiff actually brought class claims and sought to arbitrate on a class-wide basis. 

See Reply at 4; see DIRECTV, Inc. v. Imburgia, 136 S. C. 463, 471 (2015) (reviewing lower 

court’s decision finding class waiver unconscionable in case where plaintiffs had filed a class 

action complaint and a class had in fact been certified); AT&T Mobility, LLC v. Concepcion, 563 

U.S. 333 (2011) (reviewing lower court decision finding class waiver unconscionable in case 

where the plaintiff’s suit had been “consolidated with a class action”). That is not the case here, 

where there are no class allegations in Plaintiff’s complaint. This Court cannot rule on issues that 

are not presently before it. See Gladwell Gov’t Servs., Inc. v. Cty. of Marin, 2005 WL 2656964, at 

*3 (N.D. Cal. Oct. 17, 2005) (“This Court simply has no jurisdiction to provide an advisory 

opinion on a hypothetical set of facts.”).

Second, even assuming that the issue of whether the RIC permits class arbitration is 

properly before the Court, the Court agrees with Plaintiff that the parties have delegated the issue

to the arbitrator to decide. “It is well established that parties may be compelled to arbitrate only 

those disputes they have agreed to arbitrate, including the issue of arbitrability itself.” Yahoo! Inc. 

v. Iversen, 836 F. Supp. 2d 1007, 1011 (N.D. Cal. 2016). “When Courts decide whether the 

parties agreed to arbitrate arbitrability, ‘Courts should not assume that the parties agreed to 

arbitrate arbitrability unless there is ‘clear and unmistakable’ evidence that they did so.” Id. 

(quoting First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 943 (1995)). 

Here, the RIC contains the following language:

Any claim or dispute, whether in contract, tort, statute or otherwise 

(including the interpretation and scope of this Arbitration 

Provision, and the arbitrability of the claim or dispute), between 

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you and us or our employees, agents, successors or assigns, which 

arises out of or relates to your credit application, purchase or 

condition of this vehicle, this contract or any resulting transaction or 

relationship (including any such relationship with third parties who 

do not sign this contract) shall, at your or our election, be resolved 

by neutral, binding arbitration and not by a court action. 

See ECF No. 19-2, at 2 (emphasis added).

This language “clear[ly] and unmistakabl[y]” delegates to the arbitrator, Kaplan, 514 U.S. 

at 943, disputes about the “interpretation and scope of th[e] Arbitration Provision,” ECF No. 19-2, 

at 2. The issue of whether the RIC precludes class arbitration is a dispute regarding the scope of

arbitration. See Cobarruviaz v. Maplebear, Inc., 143 F. Supp. 3d 930, 942 (N.D. Cal. 2015)

(describing the availability of class arbitration as an issue of the “scope of the arbitration”). The 

parties do not provide, and the Court is not aware of, any other provision of the RIC that makes 

the above-quoted language ambiguous. Accordingly, because the parties have clearly and 

unmistakably delegated to the arbitrator disputes about whether the RIC precludes class 

arbitration, the issue is not for the Court to decide, even assuming Plaintiff actually asserted class 

claims. See Iversen, 836 F. Supp. 2d at 1013 (“[C]ourts and arbitrators are to ‘give effect to the 

contractual rights and expectations of the parties.’” (internal quotation marks omitted)). 

In sum, both parties agree that this case should proceed to arbitration. The parties’ only 

disagreement is whether this Court should decide whether class arbitration is allowable under the 

RIC. For the reasons discussed above, the Court agrees with Plaintiff that the issue is not for the 

Court to decide because (1) Plaintiff’s complaint does not contain any class claims, and (2) the 

parties have delegated to the arbitrator disputes about the scope of arbitration. Thus, to the extent 

that Defendant moves to compel arbitration between the parties, the Court GRANTS Defendant’s 

motion because the parties agree that Plaintiff’s claims should be arbitrated. However, to the 

extent that Defendant seeks an Order from this Court that the RIC precludes class-wide arbitration, 

the Court DENIES Defendant’s motion because the issue is not before this Court and because the 

parties have delegated to the arbitrator disputes about the scope of arbitration. See ECF No. 19-2, 

at 2.

IV. CONCLUSION

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For the foregoing reasons, Defendant’s motion to compel arbitration is GRANTED in part 

and DENIED in part. In light of the parties’ agreement that the claims in Plaintiff’s complaint are 

subject to arbitration, the parties shall proceed to arbitration. Plaintiff’s claims are hereby 

DISMISSED WITHOUT PREJUDICE so that the parties may pursue arbitration. See Sparling v. 

Hoffman Constr. Co., 864 F.2d 635, 638 (9th Cir. 1988) (explaining that dismissal is appropriate 

where “the arbitration clause [is] broad enough to bar all of the plaintiff’s claims”). The Clerk 

shall close the case file.

IT IS SO ORDERED.

Dated: May 26, 2017

______________________________________

LUCY H. KOH

United States District Judge

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