Case 2:24-cv-06397-ODW-E Document 27 Filed 12/04/24 Page 1 of 12 Page ID
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`United States District Court
`Central District of California
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`Plaintiff,
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`JOEL SOILEAU,
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`v.
`SPACE EXPLORATION
`TECHNOLOGIES CORP.,
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`
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`Defendant.
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`Case No. 2:24-cv-06397-ODW (Ex)
`
`ORDER DENYING MOTION TO
`REMAND [15]; AND GRANTING
`MOTION TO COMPEL
`ARBITRATION [18]
`
`I.
`INTRODUCTION
`Plaintiff Joel Soileau, proceeding pro se, filed this action against his former
`employer, Defendant Space Exploration Technologies Corp. (“SpaceX”), in California
`Superior Court. (Decl. Kara L. Jassy ISO Removal (“Jassy NOR Decl.”) Ex. A
`(“Complaint” or “Compl.”), ECF No. 1-2.) SpaceX removed the case to federal court
`based on alleged diversity jurisdiction. (Notice Removal (“NOR”) ¶ 1, ECF No. 1.)
`Soileau now moves to remand and SpaceX moves to compel Soileau to arbitration.
`(Mem. ISO Mot. Remand (“Mot. Remand”) 4–5, ECF No. 15-2; Mem. ISO Mot.
`Compel (“Mot. Compel”) 6, ECF No. 18-1.) For the reasons below, the Court
`DENIES the Motion to Remand and GRANTS the Motion to Compel Arbitration.1
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`1 After carefully considering the papers filed in connection with the Motions, the Court deemed the
`matters appropriate for decision without oral argument. Fed. R. Civ. P. 78; C.D. Cal. L.R. 7-15.
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`II.
`BACKGROUND
`SpaceX employed Soileau at its facility in Cape Canaveral, Florida. (Decl.
`Sandrah Miloszewski ISO Mot. Compel (“Miloszewski Decl.”) ¶ 3, ECF No. 18-3.)
`As a condition of employment, SpaceX requires all employees, including Soileau, to
`sign an arbitration agreement (“Agreement”) that mandates binding arbitration for
`covered disputes. (Id. ¶¶ 4–5, Ex. A (“Agreement”), ECF No. 18-4.) On June 6,
`2022, Soileau signed the Agreement and thereafter continued to work at SpaceX until
`his termination in May 2023. (Id. ¶ 4; Agreement 5; Compl. ¶ 7.)
`Following his termination, Soileau filed a complaint with the California Civil
`Rights Department (“CRD”), alleging that SpaceX unlawfully terminated his
`employment. (Compl. ¶¶ 1, 7–14.) In May 2023, the California Department of Fair
`Employment & Housing, and the U.S. Equal Employment Opportunity Commission
`(“EEOC”)
`issued a discrimination charge against SpaceX and
`initiated an
`investigation into Soileau’s termination. (See id. ¶ 8.) In July 2023, SpaceX informed
`the CRD that Soileau was not a California employee because he was employed at
`SpaceX’s Florida facility, and CRD could not investigate the charge. (Id. ¶ 9.)
`Separately, the EEOC acknowledged that the appropriate state employment agency
`would need to investigate the discrimination charge. (Id. ¶ 10.) In April 2024,
`lacking such an investigation, the EEOC closed its proceedings. (Id. ¶ 11.)
`After the EEOC closed its investigation, Soileau filed this action against
`SpaceX in California state court. (See generally Compl.) Soileau alleges that SpaceX
`misrepresented his employment location to the CRD when it reported he was a Florida
`employee and not a California employee. (Id. ¶¶ 12–13.) He contends that, with this
`false report to the CRD, SpaceX obstructed justice and caused the CRD to stop
`investigating his charge. (Id.)
`SpaceX removed Soileau’s case to federal court. (NOR.) SpaceX asked
`Soileau to arbitrate his claim pursuant to the Agreement, but Soileau refused. (Decl.
`Kara L. Jassy ISO Mot. Compel (“Jassy Compel Decl.”) ¶¶ 2–4, ECF No. 18-2.)
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`Accordingly, SpaceX now seeks to compel arbitration of Soileau’s claim per the
`Agreement, or alternatively to dismiss for failure to state a claim. (Jassy Compel
`Decl. ¶ 4; Mot. Compel.) Concurrently, Soileau moves to remand the case to state
`court and seeks an award of fees and costs. (Mot. Remand 5.) The Motion to Remand
`and the Motion to Compel (“Motions”) are both fully briefed. (Opp’n Remand, ECF
`No. 192; Reply ISO Remand (“Reply Remand”), ECF No. 22; Opp’n Compel, ECF
`No. 20; Reply ISO Compel (“Reply Compel”), ECF No. 21.)
`III.
`MOTION TO REMAND
`As the Court requires jurisdiction to decide the Motion to Compel, it begins
`with Soileau’s Motion to Remand.
`A. Legal Standard
`Federal courts are courts of limited jurisdiction and possess only that
`jurisdiction as authorized by the Constitution and federal statute. Kokkonen v.
`Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). Under 28 U.S.C. § 1441(a),
`a party may remove a civil action brought in a state court to a district court only if the
`plaintiff could have originally filed the action in federal court. Federal district courts
`have original jurisdiction where an action arises under federal law, or where each
`plaintiff’s citizenship is diverse from each defendant’s citizenship (i.e., diversity is
`“complete”), and the amount in controversy exceeds $75,000. 28 U.S.C. §§ 1331,
`1332(a).
`There is a strong presumption that a court is without jurisdiction until
`affirmatively proven otherwise. Fifty Assocs. v. Prudential Ins. Co. of Am., 446 F.2d
`1187, 1190 (9th Cir. 1970); see Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992)
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`2 In connection with SpaceX’s opposition to Soileau’s Motion to Remand, SpaceX requests judicial
`notice of certain facts in the decision of another District Court in the Central District:
`Holland-Thielen v. Space Expl. Techs. Corp., No. 2:24-cv-06972-CAS (RAOx), 2024 WL 4652812
`(C.D. Cal. Oct. 24, 2024). (Req. Judicial Notice, Ex. A, ECF Nos. 26, 26-1.) The Court need not
`take judicial notice of other court decisions to consider them. See McVey v. McVey, 26 F. Supp. 3d
`980, 984 (C.D. Cal. 2014). Nor must the Court take judicial notice of this decision for the purposes
`of the Motion to Remand, as the Court resolves the motion on other grounds. Accordingly, the
`Court DENIES SpaceX’s request for judicial notice.
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`(“Federal jurisdiction must be rejected if there is any doubt as to the right of removal
`in the first instance.”). When an action is removed from state court, the removing
`party bears the burden of demonstrating that removal is proper. Corral v. Select
`Portfolio Servicing, Inc., 878 F.3d 770, 773 (9th Cir. 2017). Removal is strictly
`construed, and any doubt as to removal is resolved in favor of remand. Id. at 773–74.
`B. Discussion
`SpaceX removed this case to federal court on the basis of federal diversity
`subject matter jurisdiction, alleging the amount Soileau has put into controversy
`exceeds $75,000 and the parties are completely diverse. (NOR ¶¶ 1, 10–21(b).)
`Soileau moves to remand pursuant to the forum defendant rule, claiming that SpaceX
`is a citizen of California and removal is improper. (Mot. Remand 4–5.)
`1.
`Diversity Jurisdiction
`Soileau does not dispute that the Court possesses diversity jurisdiction. (See
`generally Mot. Remand.) However, courts have an independent obligation to
`determine whether subject matter jurisdiction exists. See Ruhrgas AG v. Marathon
`Oil Co., 526 U.S. 574, 583 (1999); see also Fed. R. Civ. P. 12(h)(3) (requiring the
`court to dismiss the action if subject matter jurisdiction is lacking). As to amount in
`controversy, Soileau seeks at least $7,672,494 in damages, easily exceeding the
`jurisdictional threshold. (See Compl., Demand for Relief ¶¶ 1–3; NOR ¶¶ 15–21.)
`Regarding diversity, a defendant’s notice of removal need only include
`plausible allegations supporting complete diversity—i.e., an individual’s citizenship
`based on their domicile and intent to remain, and a corporation’s citizenship based on
`its states of incorporation and principal place of business. See Dart Cherokee Basin
`Operating Co. v. Owens, 574 U.S. 81, 87 (2014); Kantor v. Wellesley Galleries, Ltd.,
`704 F.2d 1088, 1090 (9th Cir. 1983) (defining individual citizenship); 28 U.S.C.
`§ 1332(c) (defining corporate citizenship).
`SpaceX alleges that Soileau is domiciled in Florida, and that SpaceX is
`incorporated and has a principal place of business in Texas. (NOR ¶¶ 11, 13.) While
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`Soileau does not dispute his domicile in Florida, he contends SpaceX is also a citizen
`of California. (Mot. Remand 4.) Regardless of whether SpaceX is a citizen of
`California or Texas, Soileau and SpaceX are completely diverse in citizenship.
`Accordingly, SpaceX sufficiently establishes that the Court possesses diversity subject
`matter jurisdiction.
`2.
`Forum Defendant Challenge
`Rather than challenge subject matter jurisdiction, Soileau invokes the forum
`defendant rule to argue that removal is improper because SpaceX “is a citizen of
`California.” (Mot. Remand 4–5.)
`The forum defendant rule prohibits removal “if any of the parties in interest
`properly joined and served as defendants is a citizen of the state in which such action
`is brought.” 28 U.S.C. § 1441(b)(2). Once the removing party establishes a prima
`facie case for removal, the burden shifts to the plaintiff to establish that an exception
`like the forum defendant rule applies. Artisan & Truckers Cas. Co. v. Hyundai Motor
`Am., No. 8:24-cv-01143-DOC (DFMx), 2024 WL 4454920, at *3 (C.D. Cal. Oct. 8,
`2024). The removing party is only required to plead a “short and plain statement,” to
`establish this prima facie case. See Dart Cherokee, 574 U.S. at 87; see also Kanter v.
`Warner-Lambert Co., 265 F.3d 853, 857 (9th Cir. 2001) (“[D]efendants were merely
`required to allege (not to prove) diversity . . . .”). However, when a defendant’s
`removal allegations are challenged, “both sides submit proof and the court decides, by
`a preponderance of the evidence,” whether removal was proper. Dart Cherokee,
`574 U.S. at 88 (discussing challenge to removal based on amount in controversy).
`Soileau submits no facts, evidence, or argument with his Motion to challenge
`SpaceX’s allegation that it is a citizen of Texas, and offers only the unsupported
`conclusion that SpaceX “is a citizen of California pursuant to 28 U.S.C. § 1332(c)(1).”
`(Mot. Remand 4.) Section § 1332(c)(1) provides two bases for a corporation’s state of
`citizenship: the state where it is incorporated and the state where it has its principal
`place of business. In its Notice of Removal, SpaceX specifically alleges that it is
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`incorporated and has its principal place of business in Texas. (NOR ¶ 13 (alleging
`“SpaceX’s principal place of business, i.e., the ‘nerve center’ where it performs
`executive and administrative functions, is located in Texas” and “SpaceX’s CEO and
`SpaceX’s President & COO are based in Texas.”).) These allegations are adequate on
`removal to establish a prima facie showing that SpaceX is incorporated and holds its
`principal place of business in Texas. See Hertz Corp. v. Friend, 559 U.S. 77, 90, 92–
`93 (2010) (finding the principal place of business, often a corporation’s headquarters,
`is where high-level officers and board members “direct, control and coordinate” the
`corporation’s activities).
`However, in his Motion, Soileau does not identify which basis for citizenship
`he is challenging, i.e., whether he contends SpaceX is incorporated in California, or
`has its principal place of business there, or both. (See generally Mot. Remand.) Nor
`does Soileau acknowledge or address SpaceX’s specific allegations.
` (Id.)
`Consequently, he fails to cast doubt on them. Absent any facts, evidence, or argument
`contesting SpaceX’s specific allegations, Soileau fails to raise a challenge to SpaceX’s
`assertion that it is a citizen of Texas based on its state of incorporation and principal
`place of business.3 Consequently, Soileau fails to meet his burden to establish that
`SpaceX is a California citizen such that the forum defendant rule bars removal.
`As SpaceX establishes the Court’s diversity jurisdiction over this action, and as
`Soileau fails to demonstrate that the forum defendant rule precludes removal, the
`Court DENIES the Motion to Remand. (ECF No. 15.) The Court also DENIES
`Soileau’s request for fees and costs because Soileau is pro se and SpaceX’s removal
`was proper. See Elwood v. Drescher, 456 F.3d 943, 947 (9th Cir. 2006) (“[P]ro se
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`3 The Court declines to consider Soileau’s late-raised arguments and documents, as Soileau raises
`them for the first time in his Reply. (See Reply Remand 2–4, Exs. A–D, ECF No. 22-1 to 22-4
`(arguing for the first time that SpaceX’s principal place of business is in California).) “[A]rguments
`raised for the first time in a reply brief are waived.” Graves v. Arpaio, 623 F.3d 1043, 1048 (9th Cir.
`2010). Introducing new arguments at the reply stage denies the non-moving party “full notice and
`opportunity to respond.” Avila v. L.A. Police Dep’t, No. 2:11-cv-01326-SJO (FMOx), 2012 WL
`12886838, at *4 (C.D. Cal. Feb. 27, 2012).
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`litigants . . . cannot recover statutory attorneys’ fees.”), overruled in part on other
`grounds by Citizens for Free Speech, LLC v. County of Alameda, 953 F.3d 655
`(9th Cir. 2020); Jordan v. Nationstar Mortg. LLC, 781 F.3d 1178, 1184 (9th Cir. 2015)
`(reversing award of fees to plaintiff because defendant’s removal was proper).
`IV.
`MOTION TO COMPEL
`Having established that the Court possesses subject matter jurisdiction, the
`Court turns to SpaceX’s Motion to Compel.
`A. Legal Standard
`The Federal Arbitration Act (“FAA”)4 provides that contractual 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. “A party
`aggrieved by the alleged failure, neglect, or refusal of another to arbitrate under a
`written agreement for arbitration may petition” the court “for an order directing that
`such arbitration proceed in the manner provided for” in the agreement. Id. § 4.
`In deciding whether to compel arbitration, a court’s inquiry is generally limited
`to “two ‘gateway’ issues: (1) whether there is an agreement to arbitrate between the
`parties; and (2) whether the agreement covers the dispute.” Brennan v. Opus Bank,
`796 F.3d 1125, 1130 (9th Cir. 2015) (quoting Howsam v. Dean Witter Reynolds, Inc.,
`537 U.S. 79, 84 (2002)). “If the response is affirmative on both counts, then the
`[FAA] requires the court to enforce the arbitration agreement in accordance with its
`terms.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir.
`2000).
`B. Discussion
`SpaceX seeks to compel Soileau to resolve his claim against SpaceX through
`binding arbitration, based on the Agreement he signed at the outset of his
`employment. (Mot. Compel 6.) SpaceX argues that the Agreement is (1) valid and
`enforceable, and (2) covers Soileau’s claim. (Id. at 9–12.)
`
`4 The Agreement is governed by the FAA. (Agreement ¶ 11.)
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`Existence of Valid and Enforceable Arbitration Agreement
`1.
`SpaceX argues that the Agreement is valid and enforceable because Soileau
`undisputedly signed it and acknowledged its enforceability. (Mot. Compel 10–12;
`Jassy Compel Decl. ¶¶ 3–4.) Nevertheless, Soileau now claims the Agreement is
`unenforceable. (Opp’n Compel 1.)
`a. Validity
`The party seeking to compel arbitration has the burden under the FAA to show
`by a preponderance of the evidence that a valid, written agreement to arbitrate exists.
`Norcia v. Samsung Telecomms. Am., LLC, 845 F.3d 1279, 1283 (9th Cir. 2017). When
`deciding whether a valid agreement to arbitrate exists, courts generally “apply
`ordinary state-law principles that govern the formation of contracts.” First Options of
`Chi., Inc. v. Kaplan, 514 U.S. 938, 944 (1995). Under California law, “[t]he party
`seeking arbitration bears the burden of proving the existence of an arbitration
`agreement, and the party opposing arbitration bears the burden of proving any
`defense.” Pinnacle Museum Tower Ass’n v. Pinnacle Mkt. Dev. (US), LLC, 55 Cal. 4th
`223, 236 (2012).
`“An essential element of any contract is the consent of the parties, or mutual
`assent.” Donovan v. RRL Corp., 26 Cal. 4th 261, 270 (2001), as modified (Sept. 12,
`2001). “A party’s acceptance of an agreement to arbitrate may be express, as where a
`party signs the agreement,” or may be implied in fact. Pinnacle Museum Tower Ass’n,
`55 Cal. 4th at 236. Under California law, “an electronic signature has the same legal
`effect as a handwritten signature.” Ruiz v. Moss Bros. Auto Grp., 232 Cal. App. 4th
`836, 843 (2014).
`As a condition of employment, Soileau signed the Agreement. (Miloszewski
`Decl. ¶ 4; Agreement 5.) Soileau does not dispute that he electronically signed the
`Agreement, thereby consenting to its terms. (Jassy Compel Decl. ¶ 4; see generally
`Opp’n Compel.) Indeed, in August 2024, during the meet and confer for SpaceX’s
`Motion to Compel, Soileau acknowledged that he consented to the Agreement by
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`signing it. (Jassy Compel Decl. ¶ 4.) Accordingly, the Court finds that Soileau and
`SpaceX formed a valid agreement to arbitrate covered claims.
`b. Enforceability
`Soileau contends the Agreement is unenforceable based on: (1) lack of
`jurisdiction; (2) equitable estoppel; and (3) the Ending Forced Arbitration of Sexual
`Assault and Sexual Harassment Act of 2021 (“EFAA”). (Opp’n Compel 1.) Soileau
`is mistaken on all points.
`First, Soileau contends that the Court lacks subject matter jurisdiction, and
`therefore lacks the authority to rule on the Motion to Compel. (Opp’n Compel 1–3.)
`However, as established above, the Court has diversity subject matter jurisdiction over
`this matter. Accordingly, the Court has the authority to adjudicate the Motion to
`Compel.
`Next, Soileau argues that SpaceX should be equitably estopped from
`compelling arbitration. (Id. at 3–6.) Equitable estoppel is “the doctrine by which a
`person may be precluded by his act or conduct . . . from asserting a right which he
`otherwise would have had.” Hass v. Darigold Dairy Prods. Co., 751 F.2d 1096, 1099
`(9th Cir. 1985) (alteration in original).
`So far as the Court can discern, Soileau’s equitable estoppel argument proceeds
`as follows. The Agreement specifically lists a claim for employment discrimination or
`harassment under California’s Fair Employment and Housing Act (“FEHA”) as a
`“Covered Claim,” and because Soileau signed the Agreement, Soileau is deemed a
`California employee and covered by California employment law. (Opp’n Compel 4–
`5.) This means that the “CRD is the only agency to investigate [Soileau’s] charges of
`harassment under the [A]greement.” (Id. at 5.) Pursuant to the Agreement, SpaceX
`“intended to have the Plaintiff report violations [under FEHA] to the CRD,” and those
`violations would thereafter be settled through arbitration. (Id. at 6.) However, by
`reporting to the CRD that Soileau was not a California employee, SpaceX
`misrepresented the terms of the Agreement and stopped the CRD investigation.
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`Therefore, SpaceX should be equitably estopped from enforcing the Agreement. (Id.
`at 4–6.)
`Soileau entirely miscomprehends the Agreement. The inclusion of California or
`FEHA claims to define “Covered Claims” in the Agreement does not mean that FEHA
`is applicable here. Rather, the FEHA claim is listed in the Agreement as an example
`of a claim that will be subject to arbitration, only if it is raised. SpaceX’s report to the
`CRD, that Soileau is not a California employee, is in no way contrary to the terms of
`the Agreement because whether Soileau is a California employee in fact is wholly
`unrelated to whether a California claim is subject to arbitration in the Agreement.
`Equitable estoppel simply does not apply here.5
`Finally, Soileau argues that the EFAA renders the Agreement unenforceable.
`(Opp’n Compel 7.)
` The EFAA
`states
`that “no predispute arbitration
`agreement . . . shall be valid or enforceable with respect to a case which . . . relates to
`the sexual assault dispute or the sexual harassment dispute.” 9 U.S.C. § 402(a).
`Soileau contends his claim to the CRD that SpaceX discriminated against him
`involves allegations of sexual assault and harassment, and therefore renders the
`Agreement unenforceable pursuant to the EFAA. (Opp’n Compel 7 (“The Charge of
`Discrimination referred to in the initial complaint [to the EEOC and CRD] is in
`relation to sexual assault and sexual harassment.”).) However, even accepting that
`Soileau’s charge to the EEOC and CRD relates to a sexual assault or harassment
`dispute, the claim in this case does not. Rather, in this case, Soileau asserts an
`“Intentional Tort” alleging that SpaceX falsely reported Soileau’s employment
`location as Florida and obstructed the CRD investigation. (Compl. ¶¶ 12–14.) As
`such, the claim here does not “relate[] to [a] sexual assault dispute or [a] sexual
`harassment dispute,” 9 U.S.C. § 402, and the EFAA does not apply here to prevent
`enforcement of the Agreement.
`
`5 To the extent Soileau raises additional arguments linked to equitable estoppel, the Court finds them
`to similarly rest on starkly false premises or a fundamental misunderstanding of the Agreement’s
`plain language. Accordingly, the Court declines to indulge them.
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`Accordingly, Soileau fails to meet his burden to show the Agreement is
`unenforceable.
`2.
`Scope of Arbitration Agreement
`As the Agreement is valid and enforceable, the only remaining question is
`whether the scope of the agreement covers Soileau’s claim against SpaceX. Brennan,
`796 F.3d at 1130 (noting the two gateway issues are whether a valid agreement to
`arbitrate exists and whether the agreement covers the dispute).
`Through the Agreement, Soileau and SpaceX agreed to resolve “all Covered
`Claims . . . through final, binding, and confidential arbitration.” (Mot. Compel 11;
`Agreement ¶ 1.) A “Covered Claim” includes “claims of employment discrimination
`and harassment,” and claims of “tortious conduct (whether intentional or negligent),
`including defamation, misrepresentation, fraud, [or] infliction of emotional distress,”
`among others. (Agreement ¶ 3.) Here, Soileau asserts a cause of action for
`“Intentional Tort,” alleging that SpaceX obstructed the CRD’s investigation when it
`misrepresented Soileau’s state of employment. (Compl. at 1, ¶¶ 12–14.) This
`qualifies as a “Covered Claim,” as defined in the Agreement. Soileau does not
`disagree. (See Jassy Compel Decl. ¶ 4; see generally Opp’n Compel.)
`Therefore, the Court finds that the Agreement covers Soileau’s claim in this
`case and his claim must be arbitrated. The Court GRANTS the Motion to Compel.
`(ECF No. 18.) Consequently, the Court declines to reach SpaceX’s arguments for
`dismissal.
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`V. CONCLUSION
`For the reasons discussed above, the Court DENIES Soileau’s Motion to
`Remand, (ECF No. 15), and GRANTS SpaceX’s Motion to Compel Arbitration,
`(ECF No. 18). Pursuant to 9 U.S.C. § 3, the Court STAYS this action pending
`completion of arbitration. Smith v. Spizzirri, 601 U.S. 472, 478–79 (2024). The
`parties are ORDERED to file a joint status report every ninety (90) days, beginning
`ninety (90) days after the date of this Order. The parties are also ORDERED to file a
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`joint status report within ten (10) days of completion of the arbitration proceedings.
`All other dates and deadlines are VACATED.
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`IT IS SO ORDERED.
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`December 4, 2024
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` ____________________________________
` OTIS D. WRIGHT, II
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` UNITED STATES DISTRICT JUDGE
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