SPEARS vs TESLA, INC., A DELAWARE CORPORATION

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

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***NOTICE: EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G. ST. SACRAMENTO, CA. ALL MOTIONS NOTICED FOR DEPARTMENT 25 WILL BE HEARD IN DEPARTMENT 8D OF THE NEW COURTHOUSE. ALL PAPERS FOR THIS DEPARTMENT MUST BE FILED AT THIS NEW LOCATION AND WILL NOT BE ACCEPTED AT THE HALL OF JUSTICE. ALL HEARINGS WILL TAKE PLACE AT THIS NEW LOCATION****

TENTATIVE RULING

Defendant Tesla, Inc.’s (“Defendant”) Motion to Compel Arbitration of Plaintiff Derek Spears’s (“Plaintiff”) claims is ruled upon as follows.

Factual Background

Plaintiffs filed this action on April 1, 2026, alleging three causes of action for violations of the Song-Beverly Consumer Warranty Act pertaining to the 2024 Tesla Cybertruck vehicle he purchased (the “Vehicle”) on December 14, 2024. Plaintiff alleges he received written warranties and express and implied warranties from Defendant in connection with the purchase of the vehicle and that the complaint arises from the warranty obligations. (Compl., ¶¶ 10-17.)

On March 16, 2026, Defendant requested that Plaintiffs stipulate to arbitration, but Plaintiff did not agree. (Ameripour Decl. ¶ 3.)

As part of the vehicle purchase, Plaintiffs signed a Motor Vehicle Order Agreement (“Order Agreement”) and a Retail Installment Sales Contract (“RISC”). (Kim Decl. ¶¶ 3-4 and Exs. 1, 2.)

The Order Agreement arbitration provision provides:

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

Agreement to Arbitrate. Please carefully read this provision, which applies to any dispute between you and Tesla, Inc. and its affiliates, (together “Tesla”).

If you have a concern or dispute, please send a written notice describing it and your desired resolution to resolutions@tesla.com.

If not resolved within 60 days, you agree that any dispute arising out of or relating to any aspect of the relationship between you and Tesla will not be decided by a judge or jury but instead by a single arbitrator in an arbitration administered by the American Arbitration Association (AAA) under its Consumer Arbitration Rules. This includes claims arising before this Agreement, such as claims related to statements about our products. You further agree that any disputes related to the arbitrability of your claims will be decided by the court rather than an arbitrator, notwithstanding AAA rules to the contrary.

To initiate the arbitration, you will pay the filing fee directly to AAA and we will pay all subsequent AAA fees for the arbitration, except you are responsible for your own attorney, expert, and other witness fees and costs unless otherwise provided by law. If you prevail on any claim, we will reimburse you your filing fee. The arbitration will be held in the city or county of your residence. To learn more about the Rules and how to begin an arbitration, you may call any AAA office or go to www.adr.org.

The arbitrator may only resolve disputes between you and Tesla, and may not consolidate claims without the consent of all parties. The arbitrator cannot hear class or representative claims or requests for relief on behalf of others purchasing or leasing Tesla vehicles. In other words, you and Tesla may bring claims against the other only in your or its individual capacity and not as a plaintiff or class member in any class or representative action. If a court or arbitrator decides that any part of this agreement to arbitrate cannot be enforced as to a particular claim for relief or remedy, then that claim or remedy (and only that claim or remedy) must be brought in court and any other claims must be arbitrated.

If you prefer, you may instead take an individual dispute to small claims court.

You may opt out of arbitration within 30 days after signing this Agreement by sending a letter to: Tesla, Inc.; P.O. Box 15430; Fremont, CA 94539-7970, stating your name, Order Number or Vehicle Identification Number, and intent to

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

opt out of the arbitration provision. If you do not opt out, this agreement to arbitrate overrides any different arbitration agreement between us, including any arbitration agreement in a lease or finance contract.

(Kim Decl., ¶ 3, Ex. 1, p. 3.)

Plaintiffs did not opt out of the agreement to arbitrate. (Kim Decl. ¶ 7.)

The RISC also contains an arbitration provision, which states, in relevant part:

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. 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.

(Kim Decl., ¶ 3, Ex. 2, p. 5 [emphasis original].)

Defendant now moves to compel arbitration pursuant to the Order Agreement and the RISC. Plaintiffs oppose.

Legal Standard

Under California law, arbitration must be compelled where there is a valid, binding arbitration agreement unless the opposing party proves the agreement is unenforceable on unconscionability or other grounds. (See, e.g., Armendariz v. Foundation Health

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

(2000) 24 Cal.4th 83, 96-100, 114; Gatton v. T-Mobile USA (2007) 152 Cal.App.4th 571, 579.) In fact, Code of Civil Procedure §1281.2 specifically provides, in pertinent part:

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that:

(a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement.

(Underline added for emphasis.)

Section 2 of the Federal Arbitration Act (“FAA”) is essentially the same:

A written provision in any contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction or an agreement in writing to submit to arbitration an existing controversy shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.

(Underline added for emphasis.) The court’s role under the FAA is limited to “determining (1) whether a valid agreement to arbitrate exists and, it if does, (2) whether the agreement encompasses the dispute at issue.” (Chiron Corp. v. Ortho Diagnostic Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130.)

“Under both federal and state law, the threshold question presented by a petition to compel arbitration is whether there is an agreement to arbitrate.” (Sparks v. Del Mar Child and Family Svcs. (2012) 207 Cal.App.4th 1511, 1517.) “In a petition to compel arbitration, the party seeking to compel arbitration bears the burden of proving the existence of a valid arbitration agreement by a preponderance of the evidence. [Citation.] The party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense, including that an arbitration provision is invalid or otherwise not enforceable.” (Brinkley v. Monterey Financial Servs., Inc. (2015) 242 Cal.App.4th 314, 325.)

“The burden of persuasion is always on the moving party to prove the existence of an arbitration agreement with the opposing party by a preponderance of the evidence.” (Gamboa v. Northeast Community Clinic (Gamboa) (2021) 72 Cal.App.5th 158, 164.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

“However, the burden of production may shift in a three-step process.” (Id. at p. 165.) The moving party meets the initial burden by attaching to the moving papers a copy of the alleged arbitration agreement or setting forth its terms verbatim. (Ibid.; Cal. Rules of Court, Rule 3.1330.) “For this step, ‘it is not necessary to follow the normal procedures of document authentication.’” (Ibid., quoting Candee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 218.) Once the moving party meets its initial prima facie burden, the opposing party bears the burden of producing evidence to challenge the authenticity of the agreement. (Ibid.) If the opposing party meets its burden, the moving party must then offer admissible evidence to demonstrate the arbitration agreement is valid. (Ibid.)

Normal principles of contract interpretation apply to the interpretation of contractual arbitration provisions. Included among these is the long-accepted rule that ambiguities in an arbitration agreement, as in any other type of contract, must be interpreted against the drafting party. Interpretation of ambiguous provisions requires application of the canons of construction - such as resolving ambiguities against the drafter. (Victoria v. Superior Court (1985) 40 Cal.3d 734, 739, 745-747.)

Objections to Evidence

Plaintiff’s objections to evidence are overruled.

Defendant’s unopposed request for judicial notice is granted for the purposes appropriate for judicial notice. (See Evid. Code § 452, subd. (d); see also Johnson & Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 768 [court may take judicial notice of the existence of court documents but not to the truth of the statements contained therein].)

Discussion

The Court notes that while Plaintiff argues that the arbitration provisions of the Order Agreement and the RISC are not the final, operative sales agreement, and thus are superseded by the warranty which was given to Plaintiff at the time he took possession of the vehicle, this agreement is not properly before the Court. Plaintiff has not provided a declaration attesting to how this document came to be in Plaintiff’s possession, whether Plaintiff signed it, and whether Plaintiff signed any other agreements in relation to this warranty document. Further, the document attached as Exhibit 1 to Plaintiff’s opposition does not bear any date or signatures indicating that a binding agreement was entered into. As a result, Plaintiff's argument that a separate warranty document supersedes the arbitration clause in the Agreement relied upon by Defendant fails.

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

Plaintiff further argues that his claims are outside the scope of the terms of the Order Agreement, and thus the arbitration clause contained therein. The Court finds this argument unconvincing. The arbitration clause is broad, covering “any dispute between you and Tesla, Inc. and its affiliates.' The Court concludes that this language covers Plaintiff's claims against Defendant concerning the vehicle which is the subject of the Agreement.

Finally, Plaintiff argues that the arbitration agreements found in the Order Agreement and the RISC are substantively unconscionable because the existence of three separate arbitration agreements with competing terms creates a high degree of substantive unconscionability.

The Court may refuse to enforce any contract determined to be unconscionable. (Civil Code, § 1670.5.) “One common formulation of unconscionability is that it refers to ‘an absence of meaningful choice on the part of one of the parties together with contract terms which are unreasonably favorable to the other party.’ ” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1133.) “As that formulation implicitly recognizes, the doctrine of unconscionability has both a procedural and a substantive element, the former focusing on oppression or surprise due to unequal bargaining power, the latter on overly harsh or one-sided results.” (Ibid.) “Although both must appear for a court to invalidate a contract or one of its individual terms [citations]; they need not be present in the same degree: '[T]he 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.” (Roman v.

Super. Ct. (2009) 172 Cal.App.4th 1462, 1469 [quoting Armendariz v. Foundation Health Psychare Services, Inc. (2000) 24 Cal.4th 83, 114]; accord Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1243- 1244.)

“The unconscionability doctrine ensures that contracts, particularly contracts of adhesion, do not impose terms that have been variously described as ‘overly harsh’ [citation], ‘unduly oppressive’ [citation], ‘so one-sided as to 'shock the conscience’ [citation], or 'unfairly one- sided.’” (Sonic-Calabasas A, Inc. v. Moreno (2013) 57 Cal.4th 1109, 1145 [internal citations omitted].) “These formulations ‘all mean the same thing.’” (Davis v. Kozak (2020) 53 Cal.App.5th 897, 910.) “Unconscionable terms ‘impair the integrity of the bargaining process or otherwise contravene the public interest or public policy’ or attempt to impermissibly alter fundamental legal duties.” (OTO, L.L.C. v.

Kho (2019) 8 Cal.5th 111, 130.) Such terms “may include fine-print terms, unreasonably or unexpectedly harsh terms regarding price or other central aspects of the transaction, and terms that undermine the nondrafting party's reasonable expectations.” (Ibid.)

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV008048: SPEARS vs TESLA, INC., A DELAWARE CORPORATION 06/15/2026 Hearing on Motion to Compel Arbitration in Department 8D

“Substantive unconscionability focuses on the actual terms of the agreement and evaluates whether they create overly harsh or one-sided results [citations], that is, whether contractual provisions reallocate risks in an objectively unreasonable or unexpected manner. [Citation.]” (Roman, supra, 172 Cal.App.4th at 1469-1470 [internal quotation marks omitted].)

The Court is not persuaded by Plaintiff’s argument that each of the arbitration agreements entered into with Defendant are unconscionable as a result of the conflicting arbitration terms. As noted by Defendant on reply, Plaintiff does not cite to any specific terms which are conflicting, nor does he cite to any evidence in support of his argument that Defendant is cherry-picking the arbitration provision which is most favorable to it.

In sum, the Court concludes that Plaintiff has not shown sufficient unconscionability to warrant invalidation of the arbitration agreement.

Disposition

For the stated reasons, Defendants’ petition to compel arbitration is GRANTED. The matter is ordered to arbitration, and the action is stayed pending arbitration.

The minute order is effective immediately. No formal order pursuant to California Rules of Court, rule 3.1312 or further notice is required.