Court Opinion

ID: 4995359
Source: CourtListenerOpinion
Date Created: 2021-09-28 20:00:38.539626+00
Date Added: 2024-06-11T08:16:51.366949
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                               SEP 28 2021
                    UNITED STATES COURT OF APPEALS                         MOLLY C. DWYER, CLERK
                                                                            U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

ELIZABETH SANFILIPPO,                            No.   20-55819

              Plaintiff-Appellant,               D.C. No.
                                                 2:18-cv-08372-AB-JEM
 v.

MATCH GROUP LLC,                                 MEMORANDUM*

              Defendant-Appellee,

 and

DOES, 1 through 20, inclusive,

              Defendant.

                    Appeal from the United States District Court
                       for the Central District of California
                    Andre Birotte, Jr., District Judge, Presiding

                      Argued and Submitted August 12, 2021
                            San Francisco, California

Before: SILER,** CHRISTEN, and FORREST, Circuit Judges.

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
            The Honorable Eugene E. Siler, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
      Plaintiff Elizabeth Sanfilippo appeals the district court’s order denying her

motion to remand to state court and granting defendant’s motion to compel

arbitration. We review de novo the district court’s (1) order denying the motion to

remand, Briggs v. Merck Sharp & Dohme, 796 F.3d 1038, 1047 (9th Cir. 2015);

(2) determination that diversity jurisdiction exists, Gonzales v. CarMax Auto

Superstores, LLC, 840 F.3d 644, 648 (9th Cir. 2016); and (3) order compelling

arbitration, Cape Flattery Ltd. v. Titan Maritime, LLC, 647 F.3d 914, 917 (9th Cir.

2011). We review the district court’s factual findings for clear error. Gonzales,

840 F.3d at 648; Cape Flattery, 647 F.3d at 917. We have jurisdiction pursuant to

28 U.S.C. § 1291, and we affirm. Because the parties are familiar with the facts,

we recite them only as necessary to resolve the appeal.

      1.     Sanfilippo argues the district court erred by denying her motion to

remand to state court because the district court should have considered Tinder’s

citizenship. Sanfilippo contends Tinder continued to exist for a period of three

years following its merger with Match Group, Inc. and she urges us to adopt a rule

that, for diversity purposes, defunct corporations are citizens of their state of

incorporation and state of last principal place of business.

      Delaware law provides that “[a]ll corporations, whether they expire by their

own limitation or are otherwise dissolved, shall nevertheless be continued, for a

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term of 3 years from such expiration or dissolution . . . for the purpose of

prosecuting and defending suits, whether civil, criminal or administrative, by or

against them[.]” Del. Code Ann. tit. 8, § 278. But the evidence shows that Tinder

neither expired nor otherwise dissolved; it merged into Match Group, Inc. on July

13, 2017. In contrast to an expired or dissolved corporation, following a merger

“the separate existence . . . of all such constituent corporations except the one into

which the other or others . . . have been merged . . . shall cease and the constituent

corporations shall . . . be merged into 1 of such corporations.” Id. § 259 (emphasis

added). “[A]ll debts, liabilities, and duties of the respective constituent

corporations shall thenceforth attach to said surviving or resulting corporation, and

may be enforced against it to the same extent as if said debts, liabilities and duties

had been incurred or contracted by it.” Id.

      Accordingly, following Tinder’s merger with Match Group, Inc., Tinder

ceased to exist as a separate entity and all of Tinder’s liabilities attached to Match

Group, Inc. As part of the merger, Match Group, Inc. assigned all of Tinder’s

assets and liabilities to Match.com, L.L.C., which subsequently changed its name

to Match Group, LLC. Tinder continues to exist solely as an unincorporated

division of Match Group, LLC. Because “[a] division of a corporation . . . is not an

independent entity for jurisdictional purposes,” the district court did not err by

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considering only Match Group, LLC’s citizenship for purposes of assessing its

jurisdiction. Breitman v. May Co. Cal., 37 F.3d 562, 564 (9th Cir. 1994) (citation

and internal quotation marks omitted). And because it is uncontested that Match

Group, LLC is a citizen of Delaware and Texas, the district court correctly

concluded that the parties are diverse.

      2.     Sanfilippo also contends the district court erred by granting Match

Group’s motion to compel arbitration for three reasons: (1) the arbitration

agreement is unconscionable; (2) the arbitration agreement does not apply

retroactively to encompass pre-existing claims; and (3) California law bars

retroactive application of the arbitration agreement. We disagree on each score.

      To establish unconscionability pursuant to California law, Sanfilippo “must

demonstrate procedural and substantive unconscionability, but both ‘need not be

present in the same degree.’” Lim v. TForce Logistics, LLC, — F.4th —, 2021 WL

3557294 at *5 (9th Cir. 2021) (quoting Poublon v. C.H. Robinson Co., 846 F.3d

1251, 1260 (9th Cir. 2017)). “Instead, a sliding scale exists such that ‘the more

substantively oppressive the contract term, the less evidence of procedural

unconscionability is required to come to the conclusion that the term is

unenforceable, and vice versa.’” Id. (quoting Poublon, 846 F.3d at 1260).

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      In the absence of any indication of oppression or surprise, the adhesive

nature of the arbitration agreement in this case “give[s] rise to a low degree of

procedural unconscionability at most.” Poublon, 846 F.3d at 1261–62 (citing

Baltazar v. Forever 21, Inc., 367 P.3d 6, 11 (Cal. 2016)). As for substantive

unconscionability, Sanfilippo points only to the fact that Match Group reserved the

right to unilaterally modify the terms of the agreement. There is no evidence

Match Group did unilaterally modify the arbitration agreement, and even assuming

the unilateral modification provision is substantively unconscionable, our court has

explained that an unconscionable unilateral modification clause in an arbitration

agreement does not “make[] the arbitration provision or the contract as a whole

unenforceable.” Tompkins v. 23andMe, Inc., 840 F.3d 1016, 1033 (9th Cir. 2016)

(citing Ingle v. Circuit City Stores, Inc., 328 F.3d 1165, 1179 and n.23 (9th Cir.

2003)). Because the arbitration agreement gives rise to a low degree of procedural

unconscionability and Sanfilippo did not establish any substantive

unconscionability that infects the arbitration agreement as a whole, the agreement

is enforceable.

      The arbitration agreement applies to “all claims or controversies arising out

of or in connection with [Sanfilippo’s] application with, employment with, or

termination from, the Company,” and the ADR Program explains that Match

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Group and Sanfilippo “consent and agree to the resolution by arbitration of all

claims or controversies involving or in any way concerning [Sanfilippo’s]

application with, employment with, or termination from, the Company.” Because

Sanfilippo was already employed, the arbitration agreement’s reference to claims

arising out of or in connection with her application for employment necessarily

relates to and establishes an intent to cover claims that had accrued prior to the

effective date of the arbitration agreement. See Franco v. Greystone Ridge Condo.,

39 Cal. App. 5th 221, 223 (2019) (“[T]he agreement’s reference to claims relating

to ‘pre-hire’ matters expresses an intent to cover all claims, regardless of when

they accrued.”). Accordingly, we conclude Sanfilippo’s pre-existing claims fell

within the scope of the arbitration agreement. Cf. AT & T Techs., Inc. v.

Commc’ns. Workers of Am., 475 U.S. 643, 650 (1986) (“An order to arbitrate the

particular grievance should not be denied unless it may be said with positive

assurance that the arbitration clause is not susceptible of an interpretation that

covers the asserted dispute.”).

      Sanfilippo relies on Avery v. Integrated Healthcare Holdings, Inc., 218 Cal.

App. 4th 50, (Ct. App. 2013), to argue California law bars Match Group from

“unilaterally forc[ing] an accrued employee claim to arbitration.” In Avery, the

court “den[ied] motions to compel arbitration because the moving party failed to

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establish the plaintiff employees agreed to the specific arbitration agreement the

employer submitted to the trial court.” Franco, 39 Cal. App. 5th at 231. The

California Court of Appeal’s “analysis of the retroactive application of [the]

arbitration agreement to preexisting claims was in the context of the employer’s

attempt to enforce an arbitration agreement that it had unilaterally modified to

apply to preexisting claims.” Id. Thus, “in the context of unilateral modification

of an arbitration agreement, the implied covenant of good faith and fair dealing

requires an employer to provide reasonable and express notice to employees

regarding the applicability of such modifications to already existing claims.” Id. at

232. Unlike Avery, there is no dispute Sanfilippo agreed to the arbitration

agreement, nor is there any suggestion Match Group unilaterally modified the

agreement at any time. Instead, Match Group simply seeks to enforce the contract

as originally written.

      AFFIRMED.

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