Tonakan Sargsyan et al. v. Rivian Automotive, LLC

Plaintiffs executed a Purchase Agreement with Rivian, LLC. (Motion to Compel Arbitration [“MTCA”] at p. 2:6-7.) The purchase agreement contains an Arbitration Agreement in bold, capitalized letters as follows: THIS AGREEMENT REQUIRES THE USE OF ARBITRATION ON AN INDIVIDUAL BASIS TO RESOLVE DISPUTES, RATHER THAN JURY TRIALS OR CLASS ACTIONS. PLEASE REFER TO SECTION 16 FOR ADDITIONAL DETAILS. (Id. at p. 2:10-13.) Section 16 of the Arbitration Agreement, contained within a border provides: 16. DISPUTE RESOLITION—ARBITRATION, CLASS ACTION WAIVER Binding Arbitration.

To the fullest extent permitted by law and except for small claims or if You choose to opt-out as provided below, You and Rivian agree to resolve any claims, demands, disagreements, or disputes between us whether based in contract, tort, or statute or otherwise arising from or related to this Agreement or Our relationship, including advertising and other communications between You and Rivian, Rivian products or services, and as applicable, Your credit application, or the purchase or condition of the Vehicle (a “Dispute”) by binding arbitration conducted by the American Arbitration Association (“AAA”) in accordance with the AAA Consumer Arbitration Rules, unless You and We agree otherwise.

For more information on arbitration and to access the AAA Consumer Arbitration Rules, please visit www.adr.org. If the AAA Consumer Arbitration Rules conflict with this Agreement, then this Agreement shall control. You and We understand that we are both waiving our rights to go to court (other than small claims court, as provided below), to present our claims to a jury and to have claims resolved by a jury trial, and also that judicial appeal rights, if any, are more limited in arbitration than they would be in court.

(Id. at p. 2:16-24.) As noted above, Plaintiffs were free to opt-out of the Arbitration Agreement. The Arbitration Agreement also delegates questions related to arbitrability to the arbitrator: Arbitrator’s Powers. The arbitrator, and not any federal, state, or local court or agency, shall have exclusive authority to resolve all disputes arising out of or relating to the interpretation, applicability, enforceability, or formation of this Section, including but not limited to any claim that all or part of this Section is void or voidable, whether a claim is subject to arbitration or the question of waiver by litigation conduct. (Id. at p. 3:4-7.)

The Purchase Agreement provided that the Subject Vehicle was sold with warranties and incorporates the Warranty Guide. (MTCA at p. 3:20-28.) The warranties are provided by Defendant Rivian Automotive, LLC, a wholly-owned indirect subsidiary of Rivian, LLC. (Id. at p. 4:3-4.) The Warranty Guide provides that the Arbitration Agreement contained in the Purchase Agreement applies to any dispute between Plaintiffs and Rivian Automotive, LLC. (Id. at p 4:7-8.) The Arbitration Agreement is reproduced within the Warranty Guide in the same manner as in the Purchase Agreement. (Id. at p. 4:8-11.)

Defendant now moves to compel arbitration pursuant to the Purchase Agreement and the Warranty Guide, as the former incorporates the latter. Defendant argues it may enforce the Arbitration Agreement based on principles of equitable estoppel, direct benefits estoppel, and third-party beneficiaries, but that nevertheless these issues are delegated to the arbitrator. Plaintiffs argue Defendant has waived its right to arbitration, the Magnuson-Moss Warranty Act (MMWA) precludes binding arbitration of warranty disputes, and that principles of estoppel do not apply.

Having considered the Arbitration Agreement, the court agrees with Defendant and grants the motion. LEGAL STANDARD Defendant maintains the Federal Arbitration Act (FAA) governs the dispute because the lease here affects interstate commerce as the transaction involved the lease of a car. (Mtn. to Compel Arbitration at p. 5, fn. 2.) “The Arbitration Agreement expressly provides that it is governed by the Federal Arbitration Act (the ‘FAA’’).” (Id. at p. 4:28-5:1.) Under the FAA, the

court’s role is limited to determining “(1) whether a valid agreement to arbitrate exists and, if it 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.) To determine “whether a valid contract to arbitrate exists,” courts apply “ordinary state law principles that govern contract formation.” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1093 [citations omitted]; see also Ingle v. Circuit City Stores, Inc. (9th Cir. 2003) 328 F.3d 1165, 1170.)

ANALYSIS The MMWA Does Not Preclude Binding Arbitration As noted above, Plaintiffs argue the MMWA precludes binding arbitration of warranty disputes. The Ninth Circuit withdrew its opinion interpreting the MMWA to prohibit pre-dispute mandatory binding arbitration clauses in warranty agreements. (Kolev v. Euromotors West/The Auto Gallery (2012) 676 F.3d 867.) In the absence of binding authority, the Court looks to other jurisdictions for guidance. The Fifth Circuit Court of Appeals has found that the MMWA does not preclude binding arbitration. (See, e.g., Walton v.

Rose Mobile Homes LLC (5th Cir. 2002) 298 F.3d 470, 473-479.) The court noted that “binding arbitration is not normally considered to be an ‘informal dispute settlement procedure,’ and it therefore seems to fall outside the bounds of the MMWA and of the FTC’s power to prescribe regulations.” (Id. at p. 476.) The court concluded that the text, legislative history, and purpose of the MMWA do not show a congressional intent to bar arbitration of MMWA written warranty claims. (Id. at pp. 478-479.) The Eleventh Circuit Court of Appeals has likewise held that the MMWA allows for the enforcement of otherwise valid arbitration agreements. (Davis v.

Southern Energy Homes, Inc. (11th Cir. 2002) 305 F.3d 1268, 1271-1272.) Similarly, California favors arbitration as a matter of public policy. (Code Civ. Proc. § 1280 et seq.) Thus, arbitration is not precluded by the MMWA. There is a Clear and Unmistakable Delegation Clause The Court first considers whether the threshold issues of waiver and whether nonsignatories can be bound by the Agreements should be delegated to the arbitrator. The question of whether the parties agreed to arbitrate a particular dispute is generally to be decided by the

court. (AT & T Technologies, Inc. v. Communications Workers of America (1986) 475 U.S. 643, 649.) The parties may, however, agree to submit the arbitrability question itself to arbitration. (First Options of Chicago, Inc. v. Kaplan (1995) 514 U.S. 938, 943.) Courts should find that the parties agreed to arbitrate arbitrability only where there is clear and unmistakable evidence that they did so, resolving any ambiguity in favor of a finding that the issue is for the court to determine. (Id. at pp. 944-45.)

In the Purchase Agreement, Plaintiffs have clearly and unmistakably assented to resolving the issue of waiver through an arbitrator. (MTCA at p. 3:4-7.) In any event, Plaintiffs do not contest the existence of the delegation clause, and thereby concede any arguments made thereto. (See Moulton Nigel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215 [“Contentions are waived when a party fails to support them with reasoned argument and citations to authority.”].) Thus, the Court need not decide the issue.

As for whether non-signatories can be bound by the Agreements, generally, “[i]n the Ninth Circuit, gateway issues can be expressly delegated to the arbitrator if the parties ‘clearly and unmistakably’ agree to such delegation.” (Shiber v. Have a Heart Compassion Care, Inc. (C.D. Cal. Oct. 14, 2020) 2:20-cv-05441-SVW-SHK, U.S. Dist. LEXIS 215582 at p. *14.) However, “when the existence of an agreement to arbitrate between relevant parties is disputed, the issue must be decided by a court and not an arbitrator.

This is because the delegation of ‘gateway’ questions of ‘arbitrability’ to the arbitrator ‘presupposes the existence of an agreement between the parties, which the court necessarily ha[s] to decide before it [can] enforce any such delegation.” (Consumer Advocacy Group v. Walmart Inc. (2025) 112 Cal.App.5th 679, 691.) Moreover, “although a non-signatory can be compelled to arbitrate, California case law is clear that ‘an arbitrator has no power to determine the rights and obligations of one who is not a party to the arbitration agreement. [Citation.]

The question of whether a non-signatory is a party to an arbitration agreement is one for the trial court in the first instance.” (Benaroya v. Willis (2018) 23 Cal.App.5th 462, 469 (Benaroya) [internal citations and quotations omitted].) An Agreement to Arbitrate Exists

At issue here is whether there is a valid agreement to arbitrate between the parties. Plaintiffs are signatories to the Purchase Agreement, which incorporates by reference the Warranty Guide. Defendant is a signatory to the Warranty Guide, but not the Purchase Agreement. At issue is whether Plaintiff has assented to the Warranty Guide by signing the Purchase Agreement which incorporates it, and whether Defendant may invoke the Purchase Agreement by way of its reference to the warranty. Defendant has set forth the terms of the Arbitration Agreement in its motion. (Gamboa v.

Northeast Community Clinic (2021) 72 Cal.App.5th 158 [noting that a party can meet its burden on a motion to compel arbitration by “setting forth the agreement’s provisions in the motion.”].) 1 “Whether an arbitration agreement is binding on a third party (e.g. a non-signatory) is a question of law subject to de novo review.” (Benaroya, supra, 23 Cal.App.5th at p. 468.) “There are circumstances in which non-signatories to an agreement containing an arbitration clause can be compelled to arbitrate under that agreement.

As one authority has stated, there are six theories by which a non-signatory may be bound to arbitrate ‘(a) incorporation by reference; (b) assumption; (c) agency; (d) veil-piercing or alter ego; (e) estoppel; and (f) third party beneficiary.’” (Id. at p. 469 [citing Suh v. Superior Court (2010) 181 Cal.App.4th 1504, 1513].) Here, the Warranty Guide is incorporated by reference in the Purchase Agreement signed by Plaintiff. (MTCA at pp. 3:20-4:11.) “For the terms of another document to be incorporated into the document executed by the parties the reference must be clear and unequivocal, the reference must be called to the attention of the other party and he must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties.” (Williams Constr.

C. v. Standard-Pacific Corp. (1967) 254 Cal.App.2d 442, 454.) The Arbitration Agreement explicitly incorporates by reference the written warranty and includes a hyperlink to it. Plaintiffs do not dispute that they signed the Purchase Agreement containing the arbitration clause and incorporating the written warranty. The Warranty Guide is, therefore, part

1 To the extent Defendant refers to the Declaration of Justin Harden, that declaration was previously rejected by the

Court. No declaration has been submitted with the instant motion; thus the Court cannot consider it.

and parcel of the Purchase Agreement. Even though Plaintiffs did not sign the Warranty Guide, they were made aware of the Guide through the Purchase Agreement. (Id. at p. 3:22-28.) By signing the Purchase Agreement, Plaintiffs acknowledged receipt of the Warranty Guide. (See Kostandian v. American Honda Motor Co., Inc. (2026) 120 Cal.App.5th 872, 876 [finding a valid agreement to arbitrate existed under a warranty booklet where the lease agreement included a final inspection at delivery sheet that the respondent signed and initialed confirming receipt of the owner’s manual and warranty information]; see also Harris v.

TAP Worldwide, LLC (2016) 248 Cal.App.4th 373, 381 [employee’s acknowledgment of receipt of employee handbook containing arbitration provision was sufficient to demonstrate an agreement to arbitrate].) This is sufficient for establishing Plaintiff’s assent to the Warranty Guide. This case is distinguishable from the Ford Motor Warranty Cases (2025) 17 Cal.5th 1122, 1136 relied on by both parties because the sales contract there included no warranty and instead disclaimed any warranties on the part of the contracting dealers.

The Court concluded the plaintiffs’ claims were not “intimately founded in and intertwined with the contractual terms.” (Id. at p. 1137.) Here, on the other hand, the warranty is expressly part of the Purchase Agreement and thus intertwined with the contractual terms. The theory of incorporation by reference is sufficient grounds for finding the non-signatories bound by the agreement to arbitrate. The court need not consider alternate theories of estoppel, direct benefits estoppel, or third party beneficiary set forth by Defendant.

Those issues, along with unconscionability, are in any event reserved for the arbitrator based on the delegation clause referenced above. The Court is only tasked with determining whether an agreement to arbitrate exists and concludes that it does. Plaintiffs are, therefore, bound by the Warranty Guide and Defendant may invoke the Purchase Agreement. An agreement to arbitrate exists under both these instruments. For these reasons, the Motion to Compel Arbitration is GRANTED. CONCLUSION The Motion to Compel Arbitration is GRANTED.

This action is hereby STAYED pending the outcome of arbitration.

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