Case Number: 19SMCV00847 Hearing Date: January 15, 2020 Dept: P

Patricia Stanger v. Luxe Worldwide Hotels, LLC et al., Case No. 19SMCV00847

Cross-Defendant ThinkFactory’s Motion to Compel Arbitration and Seal Exhibits

Hearing Date: 1/15/2020

TENTATIVE RULING

Plaintiff Patricia Stanger alleges certain possessions were stolen from defendants/cross-complainants’ Luxe Worldwide Hotels, LLC, Luxe Collection, LLC, 360 North Rodeo Drive, LP, and E.H. Summit (“Luxe entities”) hotel while she was working on a television show produced by cross-defendant ThinkFactory Media, LLC. The Luxe entities cross-complained against ThinkFactory.

ThinkFactory moves to compel arbitration of the Luxe entities’ claims pursuant to the terms of a Location Agreement between ThinkFactory and E.H. Summit. ThinkFactory also moves to seal its unredacted Location Agreement (a redacted version has been filed), its settlement agreement with Stanger and the unredacted memorandum of points and authorities in support of its motion to compel arbitration.

When a party to an arbitration agreement is also a party to a pending court action or special proceeding with a third party arising out of the same transaction and there is a possibility of conflicting rulings on common questions of law or fact, the court will not order arbitration of the controversy. Cal. Code of Civ. Proc. §128.2.

The Location Agreement between ThinkFactory and E.H. Summit contains an arbitration provision. Silvestri Decl., Exh. A ¶¶ 16, 17. The majority of claims in the cross-complaint arise out of the Location Agreement, so do fall within the scope of the arbitration clause. The Luxe entities are parties to Stanger’s lawsuit, which arises out of the alleged theft, but dispute that the non-signatory entities are bound as “affiliates” of E.H. Summit. The court makes no finding on this issue, as Stanger is not a party to the Location Agreement or its arbitration clause. Thus, she cannot be compelled to arbitrate her claims. Additionally, as cross-defendant Jaime Ruvalcava is not a party to the Location Agreement, there is no contractual or other basis to order him to arbitration.

If the cross-complaint is ordered to arbitration, there is a risk of inconsistent rulings. Both the Stanger litigation and an arbitration of the cross-complaint require resolution of shared questions of law and fact, including determination of whether ThinkFactory and/or the Luxe entities were responsible for the thefts. This should be resolved in a single forum to avoid potentially inconsistent rulings. Motion DENIED.

Motion to Seal

The court may order a record to be filed under seal if: (1) there exists an overriding interest that overcomes the right of public access to the record; (2) the overriding interest supports sealing; (3) a substantial probability exists that the overriding interest will be prejudiced if the record is not sealed; (4) the proposed sealing is narrowly tailored; and (5) no less restrictive means exist to achieve the overriding interest. Cal. Rules of Court, Rule 2.550. Courts have held confidential proprietary documents and settlement agreements frequently meet the criteria for a court order to seal. See, e.g. Universal City Studios, Inc. v. Superior Court (2003) 110 Cal.App.4th 1273, 1283.

ThinkFactory seeks to seal the unredacted Location Agreement, the confidential settlement agreement between Stanger and ThinkFactory and the Motion to Compel Arbitration’s unredacted memorandum of points and authorities. The Luxe entities do not object.

These are narrowly-tailored redaction requests. ThinkFactory establishes an interest in maintaining the confidentiality of these exhibits, arguing it could be harmed in future negotiations if these agreements were public. Finally, there is no identifiable public interest in the redacted contents of the two agreements. The motion to seal the limited, requested portions of the exhibits is GRANTED.