Judge: Barbara M. Scheper, Case: 22STCV33925, Date: 2023-02-10 Tentative Ruling
Case Number: 22STCV33925 Hearing Date: February 10, 2023 Dept: 30
Dept. 30
Calendar No.
Rodriguez vs. Richard
Barton Enterprises, et. al., Case
No. 22STCV33925
Tentative Ruling
re: Defendant’s Motion to Compel
Arbitration
Defendant Richard Barton
Enterprises (Defendant) moves to compel Plaintiff Juan Rodriguez’s (Plaintiff)
individual claims under the Private Attorneys General Act (PAGA) to binding
arbitration, and to dismiss Plaintiff’s remaining representative PAGA claims.
The Court grants the motion as to Plaintiff’s individual claims, and stays this
action as to Plaintiff’s representative claims.
“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.” (Code Civ.
Proc. § 1281.2, subds. (a), (b).)
A proceeding to compel arbitration
is in essence a suit in equity to compel specific performance of a contract. (Freeman v. State Farm Mutual Auto Insurance
Co. (1975) 14 Cal.3d 473, 479.) Such enforcement may be sought by a party
to the arbitration agreement. (Code Civ. Proc., § 1280, subd. (e)(1).)
The
petition to compel arbitration functions as a motion and is to be heard in the
manner of a motion, i.e., the facts are to be proven by affidavit or
declaration and documentary evidence with oral testimony taken only in the
court’s discretion. (Code Civ. Proc., §1290.2; Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th
394, 413–414.) The petition to compel must set forth the provisions of the
written agreement and the arbitration clause verbatim, or such provisions must
be attached and incorporated by reference. (Cal. Rules of Court, rule 3.1330;
see Condee v. Longwood Mgmt. Corp.
(2001) 88 Cal.App.4th 215, 218 (Condee).)
Once
petitioners allege that an arbitration agreement exists, the burden shifts to
respondents to prove the falsity of the purported agreement, and no evidence or
authentication is required to find the arbitration agreement exists. (See Condee, supra, 88 Cal.App.4th at p. 219.) However, if the existence of the
agreement is challenged, “petitioner bears the burden of proving [the
arbitration agreement’s] existence by a preponderance of the evidence.” (Rosenthal v. Great Western Fin. Securities
Corp. (1996) 14 Cal.4th 394, 413; see also Espejo v. Southern California Permanente Medical Group (2016) 246
Cal.App.4th 1047, 1058–1060.)
Plaintiff was previously employed
as a “Driver” by Defendant, a corporation that operates the manufacturing and
distribution company California Packaging. (Comp. ¶ 18.) Plaintiff brings claims against Defendant
under PAGA based on Defendant’s alleged Labor Code violations relating to
overtime wages, meal and rest period policies, and reimbursement. (Comp. ¶¶ 3,
46.) Plaintiff alleges that Defendant’s violations affected both him and other
aggrieved employees. (Comp. ¶ 46.)
Defendant
seeks to compel Plaintiff’s claims to arbitration based on a “Mutual Arbitration Agreement” (the
Agreement) signed by Plaintiff on January 22, 2018. (Prager Decl. ¶ 6, Ex. A
[9].) The Agreement states that “CP [California Packaging] and Employee
(collectively, the ‘Parties’) agree that binding arbitration shall be the
exclusive remedy for all claims between them. Final and binding arbitration
before a single, neutral arbitrator shall be the exclusive remedy for any
covered claim.” The Agreement provides that it is governed by the FAA, and also
contains a waiver whereby Plaintiff agrees to “knowingly and voluntarily waive
the right to class, representative (to the extent permitted by law), and
collective procedures, and the right to trial by jury or judge for any covered
claim…” (Ibid.)
Plaintiff
does not dispute the existence of the Agreement, but argues that the Agreement
is unenforceable under California law, as a “wholesale” waiver of PAGA claims.
Defendant argues that Plaintiff’s “individual” PAGA claims are subject to
arbitration and that his “non-individual” PAGA claims should be dismissed for
lack of standing, pursuant to the recent decision of the United States Supreme
Court in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (Viking River). The
parties dispute the implications of the Court’s ruling in Viking River
for this Agreement.
In Viking River, the Court addressed
the issue of “whether the Federal Arbitration Act, 9 U.S.C. § 1 et seq.,
preempts a rule of California law that invalidates contractual waivers of the
right to assert representative claims under California's Labor Code Private
Attorneys General Act of 2004, Cal. Lab. Code § 2698 et seq.” (Id. at
1910.) The plaintiff had filed a PAGA action against her former employer, and
the employer sought to compel the claims to arbitration based on a mandatory
arbitration agreement in the plaintiff’s employment contract. (Ibid.) The
arbitration agreement contained both a “Class Action Waiver,” providing that
the parties could not bring any class, collective, or representative actions,
and a severability clause “specifying that if the waiver was found
invalid, any class, collective, representative, or PAGA action would
presumptively be litigated in court,” and that “if any ‘portion’ of
the waiver remained valid, it would be ‘enforced in arbitration.’” (Id at
1910.) California state courts had denied the defendant’s motion based
on a California rule prohibiting waivers of PAGA standing as contrary to public
policy, expressed in Iskanian v. CLS Transportation Los Angeles, LLC
(2014) 59 Cal.4th 348. (Ibid.)
The Court noted that all PAGA actions are “
‘representative’ in that they are brought by employees acting as
representatives—that is, as agents or proxies—of the State,” but that “PAGA
claims are also called ‘representative’ when they are predicated on code
violations sustained by other employees.” (Id. at 1916.) The Court thus distinguished
“‘individual’ PAGA claims, which are premised on Labor Code violations actually
sustained by the plaintiff, from ‘representative’ (or perhaps
quasi-representative) PAGA claims arising out of events involving other
employees.” (Ibid.) The Court ruled that the FAA preempted California
law “insofar as it precludes division of PAGA actions into individual and
non-individual claims through an agreement to arbitrate,” abrogating in part
the California Supreme Court’s decision in Iskanian. (Viking River,
142 S.Ct. at 1924.) As a result, the employer “was entitled to enforce the
agreement insofar as it mandated arbitration of [plaintiff’s] individual PAGA
claim.” (Id. at 1925.)
After finding that Plaintiff’s individual PAGA
claims were subject to arbitration, the Court considered whether the plaintiff
still possessed standing to maintain her non-individual claims, and concluded
that she did not: “[A]s we see it, PAGA provides no mechanism to enable a court
to adjudicate non-individual PAGA claims once an individual claim has been
committed to a separate proceeding. Under PAGA's standing requirement, a
plaintiff can maintain non-individual PAGA claims in an action only by virtue
of also maintaining an individual claim in that action.” (Id. at 1925.)
However, Justice Sotomayor’s concurrence
clarified that the issue of standing under PAGA was a question ultimately to be
decided by California courts:
The Court
concludes that the FAA poses no bar to the adjudication of respondent Angie
Moriana's “non-individual” PAGA claims, but that PAGA itself “provides no
mechanism to enable a court to adjudicate non-individual PAGA claims once an
individual claim has been committed to a separate proceeding.” … Thus,
the Court reasons, based on available guidance from California courts, that
Moriana lacks “statutory standing” under PAGA to litigate her “non-individual”
claims separately in state court. … Of course, if this Court's
understanding of state law is wrong, California courts, in an appropriate case,
will have the last word.
(Viking River, 142 S.Ct. at 1925.)
The
District Court for the Northern District of California in Dominguez v.
Sonesta International Hotels Corporation, 2023 WL 25707, provides the
following summary of decisions on this question issued since Viking River:
Since Viking
River was decided, at least one California court has found that the
Supreme Court's standing analysis was dicta but declined to reach whether its
reading of California law was correct. [Citation.] Two judges in this
district have compelled arbitration of individual PAGA claims while staying
–rather than dismissing – the non-representative claims. [Citation.].
A number of judges in other districts in California have compelled arbitration
of individual PAGA claims and dismissed the representative PAGA claims, finding
Viking River to be binding on the question of PAGA standing. [Citations.]
(Dominguez
v. Sonesta International Hotels Corporation (N.D. Cal., Jan. 3, 2023) 2023
WL 25707, at *7.)
Additionally, as Dominguez and
Plaintiff note, the California Supreme Court has taken up the issue of PAGA standing
in Adolph v. Uber Technologies, Inc., No. G059860, 2022 WL 1073583 (Cal.
Ct. App., Apr. 11, 2022), review granted (Cal. July 20, 2022).
Here, it is clear that Plaintiff’s
individual claims under PAGA are subject to arbitration pursuant to Viking
River. As with the arbitration agreement at issue in Viking River,
the Agreement is governed by the FAA and contains a waiver of representative
claims, “to the extent permitted by law.” (Prager Decl., Ex. A [9].) The
Agreement also contains a severability clause which provides that, “If any
provision in this Agreement is determined to be unenforceable, then the
remaining provisions shall remain in full effect.” (Ibid.) Defendant is
therefore “entitled to enforce the agreement insofar as it mandate[s]
arbitration of [Plaintiff’s] individual PAGA claim.” (Viking River, 142
S.Ct. at 1925.)
The only remaining issue is
whether Plaintiff retains standing to maintain his non-individual PAGA claims
after his individual claims have been compelled to arbitration. Defendant
argues that those claims should be dismissed, while Plaintiff argues that, if
the motion is not denied, it should be stayed pending the decision in Adolph.
The Court agrees with Plaintiff that a stay as to the representative claims is appropriate.
(Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489
[“Trial courts generally have the inherent power to stay proceedings in the
interests of justice and to promote judicial efficiency”].)
Accordingly,
the motion to compel arbitration is granted as to Plaintiff’s individual
PAGA claims. The action is stayed as to Plaintiff’s non-individual claims,
pending issuance of the California Supreme Court’s decision in Adolph.