Motion to Compel Arbitration
Plaintiff alleges that she was in possession, had the right to immediate possession, and was the owner with right to possession of personal identifying information and health information and Defendant permitted one or more unknown parties to access that property by failing to train employees and maintain a security system in compliance with industry standards. (Compl. ¶¶ 37-38.) She does not allege, however, any intention by Defendant to convert her personal information, exercise ownership over them, or prevent her from possession. Thus, the Court finds that this cause of action fails.
Fourth Cause of Action for Invasion of Privacy Defendant argues that this cause of action fails because unintentional access to personal information resulting from a breach or attack does not meet the high bar necessary to plead an invasion of privacy claim. Defendant further argues that Plaintiff has failed to allege that her information has been published or otherwise publicly disclosed.
“In order to state a cause of action for invasion of privacy, a party must establish (1) a legally protected privacy interest, (2) a reasonable expectation of privacy in the records, (3) a serious invasion of the privacy interest, and (4) damages caused by the invasion of the privacy interest.” (Rosales v. City of Los Angeles (2000) 82 Cal.App.4th 419, 428.) A common law invasion of privacy claim requires intentional conduct. (Marich v. MGM/UA Telecommunications, Inc. (2003) 113 Cal.App.4th 415, 421.) However, “ ‘[i]ntent is not . . . limited to consequences which are desired. If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the result.’ ” (Id. at p. 422.)
Here, Defendant’s argument that this cause of action is insufficient because it is based on an unintentional data breach fails, as allegations that Defendant knew or was substantially certain that a breach could occur as a result of its alleged failure to maintain sufficient security is enough to support the claim. Thus, Plaintiff’s allegations that Defendant failed to adequate secure Plaintiff’s private information from disclosure to third parties, and also failed to timely notify Plaintiff once Defendant possessed knowledge to a substantial certainty that a data breach occurred, are sufficient. Further, Defendant’s argument that Plaintiff has not alleged that her information has been published or publicly disclosed lacks merit, as Plaintiff alleges through her Complaint that her private information has been accessed by one or more unauthorized parties.
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In light of all the above, the Court OVERRULES the Demurrer to the first cause of action for negligence and fourth cause of action for invasion of privacy and SUSTAINS the Demurrer to the second cause of action under the CRA and the third cause of action for conversion, with 20 days leave to amend as to the third cause of action only.
Moving party to give notice.
2. 30-2025-01528592 1. Case Management Conference 2. Motion to Compel Arbitration Hold vs. Fortanix, Inc. Defendant Fortanix, Inc. (“Defendant”) moves to compel arbitration and stay the case pending arbitration.
Plaintiff Joseph Hold (“Plaintiff”) opposes the motion.
Here, the parties agree that there was an arbitration agreement between Plaintiff Joseph Hold (“Plaintiff”) and Defendant Fortanix, Inc. (“Defendant”). On July 5, 2023, Plaintiff filed a Statement of Claims with JAMS Orange County pursuant to the Mutual Arbitration Agreement between Plaintiff and his Defendant, who was his employer.
The parties disagree about whether Defendant waived its right to proceed with arbitration by failing to timely pay the initial arbitration invoice, which was due upon receipt of the 05/09/2025 invoice from JAMS.
Code of Civil Procedure section 1281.98 expressly states that “if the fees or costs required to continue the arbitration proceeding are not paid within 30 days after the due date, the drafting party is in material breach of the arbitration agreement, is in default of the arbitration, and waives its right to compel the employee or consumer to proceed with that arbitration as a result of the material breach.” (Code Civ. Proc., § 1281.98, subd. (a).)
Here, there is no question that Defendant failed to timely pay the arbitration fees. The invoice was sent on 05/09/2025 and stated that fees are “due upon receipt.” Pursuant to Code of Civil Procedure section 1281.98, failure to pay the fees by 06/09/2025 (30 days after the 05/09/2025 due date) placed Defendant in material breach of the arbitration agreement and in default of the arbitration, and constituted a waiver of Defendant’s its right to compel the employee or consumer to proceed with that arbitration as a result of the material breach.
The Court notes that JAMS sent at least nine follow up emails notifying Defendant of the outstanding and delinquent payment. Defendant repeatedly failed to pay the fees despite the nine plus notices of outstanding payment until 11/21/2026.
Still, however, once Defendant failed to pay the fees by 06/09/2025, Defendant waived its right to compel Plaintiff to proceed with the arbitration and Plaintiff gained the right to “[w]ithdraw the claim from arbitration and proceed in a court of appropriate jurisdiction.” Plaintiff exercised that right when he filed the original Complaint in this Court on 11/24/2025.
Defendant attempts to argue that JAMS extended the deadline to pay but that is not the case. JAMS merely stated that JAMS will not “proceed with the hearing or the administration of this case” and will “place this matter on administrative suspension.” This is not an extension. Moreover, the statute expressly states that “[a]ny extension of time for the due date shall be agreed upon by all parties” or as expressly stated in the applicable arbitration agreement.
Here, Defendant presents no evidence that Plaintiff agreed to extend the time for payment. Moreover, the arbitration agreement at issue does not contain a provision “stating the number of days in which the parties to the arbitration must pay any required fees or costs.”
Defendant also argues that section 1281.98 does not apply and that the FAA applies, Pursuant to the holding in Hohenshelt v. Superior Court (2025) 18 Cal.5th 310, 349, however, the Court finds that section 1281.98 is not preempted by the FAA and section 1281.98 applies to the motion at hand.
Given the above, the Motion to Compel Arbitration is DENIED. Plaintiff to give notice.