Case: Vo v. Technology Credit Union - 6DCA reverses order denying motion to compel arbitration; arbitration agreement provided arbitrator with authority to permit nonparty discovery

Decided: 2/4/2025

Docket

Case Overview:

Procedural posture: Appeal from the superior court’s order denying defendant’s motion to compel arbitration

Plaintiff-respondent: Thomas Vo

Defendant-appellant: Technology Credit Union

Sixth District Court of Appeal case no.: H051619

Appeal from: Santa Clara Superior Court (Chung, J.)

Advocates: Robert King for Vo; Jonathan Cohen, Robyn Callahan, and Chancellor Tseng for Technology Credit Union

Questions:

(1) The JAMS rules incorporated into an arbitration agreement allowed both parties to take one deposition of the opposing party or individual under the opposing party’s control, without the arbitrator’s approval. The rules also gave the arbitrator the authority to expand discovery. But if a third party refused to comply with the arbitrator’s discovery order, the incorporated JAMS rules would not give the arbitrator the authority to enforce compliance with the order. Is such an arbitration agreement substantively unconscionable?

(2) Did the trial court abuse its discretion by denying the defendant’s request for judicial notice of JAMS rules that were not in effect when the parties signed their arbitration agreement in 2020?

Answers:

(1) No. In Aixtron, Inc. v. Veeco Instruments Inc., 52 Cal. App. 5th 360 (2020), a different panel of the Sixth District Court of Appeal held that an arbitrator could not compel prehearing third-party discovery when the arbitration agreement failed to explicitly authorize discovery from nonparties or failed to incorporate the statutes then in effect that authorized prehearing discovery. While Aixtron involved the same JAM rules effective July 1, 2014, as those in Vo’s case, the Aixtron Court did not consider whether the arbitration agreement was unconscionable. Aixtron simply considered the arbitrator’s authority to order and compel discovery from a nonparty where that nonparty objected to the arbitrator’s order.

The July 2014 JAMS rules do provide the arbitrator with authority to make available additional nonparty discovery if necessary to allow fair arbitration of the claim. While, under Aixtron and the July 2014 JAMS rules, a third party might refuse to comply with the arbitrator’s discovery order, the court reviews “an arbitration agreement for unconscionability at the time of formation.” “The possibility of a recalcitrant third party witness does not preclude a holding that the discovery available under the provision is adequate and the agreement valid.”

(2) No. The trial court reasonably denied the defendant’s request to take judicial notice of irrelevant JAMS rules and procedures that postdated the parties’ arbitration agreement. However, the court of appeal took judicial notice of the relevant JAMS rules on its own motion. The relevant JAMS rules were “not reasonably subject to dispute and can be immediately and accurately determined by resorting to the JAMS rules archival website.”

Facts:

Plaintiff Thomas Vo signed an employment arbitration agreement with defendant Technology Credit Union (TCU), requiring both parties to arbitrate disputes related to Vo’s employment, including claims for discrimination, harassment, and wrongful termination. The agreement specified that a neutral JAMS arbitrator would oversee arbitration per JAMS rules, which were not attached.

Vo contracted COVID-19 and developed long-term health issues. TCU eventually terminated Vo. Vo sued TCU, alleging multiple violations of the Fair Employment and Housing Act (FEHA) and wrongful termination.

TCU moved to compel arbitration. Vo opposed TCU’s motion, arguing the agreement was procedurally and substantively unconscionable. Vo contended it was an adhesion contract and lacked an express provision incorporating the California Arbitration Act’s third-party discovery rights. TCU countered that the agreement allowed sufficient discovery through JAMS rules, though TCU only requested judicial notice of those rules in its reply brief, which the trial court rejected.

The trial court denied TCU’s motion to compel arbitration. The trial court found the agreement both procedurally and substantively unconscionable. The court determined the agreement was an adhesion contract. In “a close factual and legal call,” the trial court concluded that the agreement did not grant the arbitrator the authority to compel third-party discovery, relying on precedent from Aixtron. The trial court determined that this limitation improperly prevented Vo from obtaining the third-party discovery necessary to arbitrate his case. TCU timely appealed from the order denying TCU’s motion to compel.

Outcome:

The Sixth District Court of Appeal reversed the superior court’s order denying TCU’s motion to compel arbitration, and directed the superior court to enter a new order granting TCU’s motion and staying the litigation under California Code of Civil Procedure § 1281.4.

Justice Greenwood authored the opinion, joined by Justices Grover and Danner.

Links:

Westlaw: 2025 WL 384496