Judge: Anne Richardson, Case: 21STCV14631, Date: 2023-03-15 Tentative Ruling

Case Number: 21STCV14631    Hearing Date: March 15, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

MOVING PARTY:              Defendants Tank Holding Corp. and Rotational Molding, Inc.

OPPOSITION:                      Plaintiff Jahaziel Cabrera Cruz.

REPLY:                                 [None]

Background Allegations

Plaintiff Jahaziel Cabrera Cruz, individually, and on behalf of all others similarly situated, sues Defendants Tank Holding Corp. and Rotational Molding, Inc. pursuant to a single Private Attorneys General Act (“PAGA”) claim made in her First Amended Complaint, as grounded in allegations of (1) failure to pay minimum wages; (2) failure to pay overtime compensation; (3) failure to provide meal periods; (4) failure to authorize and permit rest breaks; (5) failure to timely pay final wages at termination; (6) failure to provide accurate itemized wage statements, and (7) unfair business practices.

On October 28, 2022, Defendants Tank Holding Corp. and Rotational Molding, Inc. (“Rotational Molding”) (collectively, “Defendants”) filed a Motion to Compel Binding Arbitration as to Plaintiff’s individual PAGA claims against Defendants and for dismissal against Plaintiff’s representative PAGA claims.

Plaintiff opposed the motion on January 11, 2023, to which Defendants failed to reply.

Motion to Compel Binding Arbitration: GRANTED in Part; DENIED in Part.

Arbitration of Individual PAGA Claims: GRANTED.

Defendants’ motion seeks arbitration of Plaintiff’s individual PAGA claims against Defendants and dismissal of Plaintiff’s representative PAGA claims.

Plaintiff’s January 11, 2023 opposition to Defendants’ motion does not dispute—though it fails to assent to—the arbitrability of Plaintiff’s individual PAGA claims, instead confining its argument to whether this entire proceeding should be stayed pending the outcome of a case before the California Supreme Court determining whether Plaintiff have standing to bring a PAGA representative action when a plaintiff’s individual claims are bound by a bilateral arbitration. (See Opp’n, 3:11-7:12.)

The United States Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, 1925 permits the arbitrability of individual PAGA claims. Therefore, to the extent that there is an arbitration agreement between the parties in this action, only individual PAGA claims are arbitrable.

A review of Exhibit A to the Leighton Declaration shows an agreement to arbitrate between Rotational Molding and Plaintiff as to “any and all disputes or claims by and between Employee … and Company, its parent, subsidiary, and affiliated corporations and entities, … arising from or relating to Employee’s recruitment, hiring, and employment, the termination of that employment, and any claims arising postemployment.” (Mot., Leighton Decl., Ex. A, pp. 1-4 [Spanish translation], pp. 1-3 [English translation; quoted language at page 1].)

In determining the enforceability of an arbitration agreement, the court considers “two ‘gateway issues’ of arbitrability: (1) whether there was an agreement to arbitrate between the parties, and (2) whether the agreement covered the dispute at issue.”¿(Omar v. Ralphs Grocery Co. (2004) 118 Cal.App.4th 955, 961.) If these issues are satisfied by the movant, the party opposing arbitration must prove by a preponderance of the evidence any defense to the petition. (Lacayo v. Cataline Restaurant Group Inc. (2019) 38 Cal.App.5th 244, 257.)

Rotational Molding has adequate grounds for invoking arbitration against Plaintiff based on their arbitration agreement. (See Mot., Leighton Decl., Ex. A.)

Though not raised by the parties, the Court notes that Tank Holding may also invoke the arbitration agreement through the doctrine of equitable estoppel. A nonsignatory defendant may invoke an arbitration clause to compel a signatory plaintiff to arbitrate its claims when the causes of action against the nonsignatory are “intimately founded in and intertwined” with the underlying contract obligations such that, by relying on contract terms in a claim against a nonsignatory, defendant a plaintiff may be equitably estopped from repudiating the arbitration clause contained in that agreement. (Felisilda v. FCA US LLC (2020) 53 Cal.App.4th 486, 495-96 [citing JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1237].) Here, the PAGA claim raised in Plaintiff’s FAC is equally directed at Tank Holding Corp. and Rotational Molding as Plaintiff’s employers. (FAC, 8:10-12 [header for PAGA claim showing claim directed equally at both defendants]; see FAC, 8:10-10:10 [full cause of action].) As a result, the claims against Tank Holding Corp. appear to be adequately “intimately founded in and intertwined” with the underlying contract obligations between Plaintiff and Rotational Molding as to permit Tank Holding Corp. to invoke the arbitration agreement.

Further, Plaintiff’s individual PAGA claims are within the scope of the arbitration agreement. “[T]he decision as to whether a contractual arbitration clause covers a particular dispute rests substantially on whether the clause in question is ‘broad’ or ‘narrow.’” (Bono v. David (2007) 147 Cal.App.4th 1055, 1067.) “‘A “broad” clause includes those using language such as “any claim arising from or related to this agreement”’ [Citation] or ‘arising in connection with the [a]greement’ [Citation.]” (Rice v. Downs (2016) 248 Cal.App.4th 175, 186 [italics omitted].)

Plaintiff’s individual PAGA claims against Rotational Molding and Tank Holding Corp. clearly fall within the scope of the parties’ arbitration agreement because they arise from or are related to Labor Code claims by Plaintiff against Defendants based on Plaintiffs’ employment with Defendants. (Mot., Leighton Decl., Ex. A, p. 1 [arbitration as to “any and all disputes or claims by and between Employee … and Company, its parent, subsidiary, and affiliated corporations and entities, … arising from or relating to Employee’s recruitment, hiring, and employment, the termination of that employment, and any claims arising postemployment”].)

Plaintiff’s opposition fails to present arguments for non-arbitrability of her individual PAGA claims against Defendants; instead, the opposition focuses on whether this entire action—including individual and representative PAGA claims—should be stayed pending the outcome of a case before the California Supreme Court. (See Opp’n, 3:11-7:12.) Plaintiff thus presents no defenses against arbitrability of her individual PAGA claims.

In light of (1) Viking River Cruises permitting the arbitrability of individual PAGA claims, (2) Defendants’ invocation the arbitration agreement as to Plaintiff’s individual PAGA claims, and (3) Plaintiff’s lack of defenses against arbitration of her individual PAGA claims, the Court GRANTS this motion insofar as it moves to compel arbitration of Plaintiff’s individual PAGA claims.

Dismissal or Staying of Representative PAGA Claims: DISMISSAL DENIED; STAY GRANTED.

Defendants’ motion also moves for dismissal of the representative PAGA claims brought by Plaintiff in her FAC.

Defendant relies on Viking River Cruises’s holding that because the employee’s individual PAGA claims were arbitrable, “[the employee] lack[ed] statutory standing to continue to maintain her non-individual claims in court, and the correct course [was] to dismiss her remaining [representative PAGA] claim.” (Viking River Cruises, Inc. v. Moriana, supra, 142 S. Ct. 1906, 1925.)

Plaintiff’s opposition argues that this proceeding should instead be stayed pending the outcome of a case before the California Supreme Court to determine whether Plaintiff have standing to bring a PAGA representative action when Plaintiff’s individual claims are bound by a bilateral arbitration. (Opp’n, 5:4-7:12.) Specifically, Plaintiff cites pendency of Adolph v. Uber Technologies, Inc. (Cal. Ct. App., Apr. 11, 2022, No. G059860) 2022 WL 1073583, which will decide whether an aggrieved employee, who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) premised on Labor Code violations, maintains statutory standing to pursue PAGA claims arising out of events involving other employees.

Plaintiff also relies by analogy on Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81, 84, which held that a plaintiff’s right to bring a representative action is not barred by settlement or dismissal of individual claims.

The Court finds in favor of Plaintiff. As explained by Galarsa v. Dolgen California, LLC (February 2, 2023, F082404) __ Cal.Rptr.3d ___, 2023 WL 2212196 *1, *8, “a plaintiff's PAGA standing does not evaporate when an employer chooses to enforce an arbitration agreement.” (See also Galarsa v. Dolgen California, at p. *7 fn. 3 [acknowledging publication of this decision pending superseding decision in Adolph].) This is because an “aggrieved employee” has standing to sue under PAGA. (Labor Code, § 2699, subd. (a).) An “aggrieved employee” is defined as someone “who was employed by the alleged violator” and “against whom one or more of the alleged violations was committed.” (Labor Code, § 2699, subd. (c).) This does not require an employee to actually maintain a claim against the employer to have standing because “[t]he remedy for a Labor Code violation, through settlement or other means, is distinct from the fact of the violation itself.” (Kim v. Reins International California, Inc., supra, 9 Cal.5th at p. 84.) “The Legislature defined PAGA standing in terms of violations, not injury. [Plaintiff] became an aggrieved employee, and had PAGA standing, when one or more Labor Code violations were committed against [her]. (See § 2699(c).) Settlement [would] not nullify these violations.” (Ibid.) By the same logic, arbitration of the individual claims in this action does not nullify violations of the Labor Code against Plaintiff, and therefore do not nullify her standing to bring representative PAGA claims.

This action is thus STAYED as to the representative PAGA claims until an arbitration is had in accordance with this order to arbitrate or until such earlier time as the Court specifies. (Code Civ. Proc., 1281.4.)

Conclusion

Defendants Tank Holding Corp. and Rotational Molding, Inc.’s Motion to Compel Binding Arbitration is GRANTED, in Part and DENIED, in Part:

(1) GRANTED as to compelling arbitration of Plaintiff’s individual PAGA claims; and

(2) DENIED as to dismissal of Plaintiff’s representative PAGA claims.

Proceedings are STAYED as to the Plaintiff’s representative PAGA claims until an arbitration is had in accordance with this order to arbitrate or until such earlier time as the Court specifies.