Judge: Carolyn M. Caietti, Case: 37-2023-00017381-CU-OE-CTL, Date: 2023-10-06 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 05, 2023

10/06/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Other employment Motion Hearing (Civil) 37-2023-00017381-CU-OE-CTL ROMERO VS ANTIN SACHS INC [E-FILE] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 05/18/2023

Defendant Antin Sachs, Inc.'s Petition to Compel Arbitration and Motion to Stay Proceedings is GRANTED IN PART AND DENIED IN PART.

Preliminary Matters Defendant's request for judicial notice is granted and notice will be taken to the extent permitted. (See, Lockley v. Law Office of Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875, 882 ['while courts are free to take judicial notice of the existence of each document in a court file, including the truth of results reached, they may not take judicial notice of the truth of hearsay statements in decisions and court files.'].) Plaintiff's objection to the Declaration of Sheri Harvey is overruled.

Plaintiff's objection the Declaration of Carmine Pearl is overruled.

Defendant's objections to Plaintiff's Declaration is overruled.

The Civil Business Office rejected for filing at least one declaration of Carmine J. Pearl III filed on September 29, 2023. (ROA 29.) The Court did not review it.

Discussion Plaintiff's Complaint asserts one cause of action for violation of the Private Attorneys General Act.

Based on the evidence provided, including a copy of the parties' arbitration agreement, Defendant proved the existence of an arbitration agreement. (C.C.P., § 1281.2; ROA 11 – Declaration of Sheri Harvey, at Ex. A.) Plaintiff contends the dispute is not covered by the arbitration agreement and relies on a tentative ruling by another San Diego Superior Court with regard to her class action claims. Although the other court found 'the subject agreement does not expressly require the arbitration of administrative and PAGA claims,' the court made clear 'Plaintiff [did] not cite legal authority requiring an arbitration agreement to expressly exclude any claim that is potentially not subject to arbitration.' (ROA 13 - RFJN Ex. 1.) Plaintiff has not persuaded this Court that the other court's finding the arbitration agreement does not expressly exclude a PAGA claim makes this dispute not covered by the arbitration agreement.

Rather, the parties' arbitration agreement states the parties 'mutually consent to the resolution by arbitration of all claims [], whether or not arising out of Employee's employment (or its termination), that Calendar No.: Event ID:  TENTATIVE RULINGS

2974927  38 CASE NUMBER: CASE TITLE:  ROMERO VS ANTIN SACHS INC [E-FILE]  37-2023-00017381-CU-OE-CTL the Company may have against Employee or that Employee may have against the Company...' (Ex. A, at p. 22.) Further, a PAGA claim is not identified as a claim not covered by the agreement. (Id., at p. 23.) Plaintiff does not make any other argument as to whether this dispute is covered by the agreement.

Viking River & Adolph Under Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, Plaintiff must arbitrate her 'individual' PAGA claim, which arises from alleged Labor Code violations during her employment with Defendant.

Plaintiff did not address Viking River and whether the arbitration agreement contains an invalid and unenforceable PAGA waiver. Even if it did, it is severable due to the severability clause in the agreement. (Viking River Cruises, Inc., at p. 1925 ['Based on [the severability] clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana's individual PAGA claim.']; Ex. A, at p. 25 ['If any provision of this Agreement is adjudged to be void or otherwise unenforceable, in whole or in part, such adjudication shall not affect the validity of the remainder of the Agreement and any said illegal, invalid or unenforceable part, terms or provisions shall be deemed stricken and severed from this Agreement.'].) Plaintiff's 'non-individual' PAGA claim remains in court. Although Viking River indicated the 'correct course' is to dismiss the remaining non-individual PAGA claims due to a lack of standing, both concurrences acknowledged this to be a question of state law. (See, Viking River, supra, 142 S.Ct. at p. 1925-26 (conc. opn. of Sotomayor, J.); id., at p. 1926 (conc. opn. in part of Barrett, J., Kavanaugh, J., Roberts, C.J.).) On July 17, 2023, the California Supreme Court decided this state law question in Adolph v. Uber Technologies, Inc., holding '[w]here a plaintiff has brought a PAGA action comprising individual and non-individual claims, an order compelling arbitration of the individual claims does not strip the plaintiff of standing as an aggrieved employee to litigate claims on behalf of other employees under PAGA.' (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1114.) The Court further concluded, 'a plaintiff who files a PAGA action with individual and non-individual claims does not lose standing to litigate the non-individual claims in court simply because the individual claims have been ordered to arbitration.' (Adolph, supra, at p. 1104; see also, Barrera v. Apple American Group, LLC (2023) (Aug. 31, 2023, No. A165445) 2023 WL 5620678, at *13 (applying Adolph and concluding plaintiffs maintain standing to pursue non-individual PAGA claims in court).) In light of Adolph and Barrera, dismissal of Plaintiff's representative claims is improper. However, the Court can stay the non-individual PAGA claim pending the outcome of the arbitration pursuant to C.C.P. section 1281.4. (Adolph, supra, 14 Cal.5th at p. 1123-24 (approving this manner of proceeding).) The Agreement is Not Unconscionable Plaintiff has not met her burden to prove by a preponderance of evidence a ground for denial, in this case, unconscionability. (See, Rosenthal v. Great Western Fin'l Securities Corp. (1996) 14 Cal.4th 394, 413; Hotels Nevada v. L.A. Pacific Ctr., Inc. (2006) 144 Cal.App.4th 754, 758.) As the California Supreme Court explained in OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 125-26, the unconscionability doctrine has both a procedural and a substantive element. The procedural element addresses the circumstances of contract negotiation and formation, focusing on oppression or surprise due to unequal bargaining power. Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided. Both procedural and substantive unconscionability must be shown for the defense to be established, but they need not be present in the same degree. Instead, they are evaluated on a sliding scale. The ultimate issue in every case is whether the terms of the contract are sufficiently unfair, in view of all relevant circumstances, that a court should withhold enforcement.

A procedural unconscionability analysis 'begins with an inquiry into whether the contract is one of adhesion.' (OTO, supra, at p. 126, citing Armendariz v. Foundation Health Psychcare Service, Inc.

(2000) 24 Cal.4th 83, 113.) An adhesive contract is standardized, generally on a preprinted form, and Calendar No.: Event ID:  TENTATIVE RULINGS

2974927  38 CASE NUMBER: CASE TITLE:  ROMERO VS ANTIN SACHS INC [E-FILE]  37-2023-00017381-CU-OE-CTL offered by the party with superior bargaining power 'on a take-it-or-leave-it basis.' (Ibid. citing Baltazar v. Forever 21, Inc. (2016) 62 Cal.4th 1237, 1245.) Arbitration contracts imposed as a condition of employment are typically adhesive. (Ibid. citing Armendariz, at pp. 114-115 & Serpa v. California Surety Investigations, Inc. (2013) 215 Cal.App.4th 695, 704) The pertinent question, then, is whether circumstances of the contract's formation created such oppression or surprise that closer scrutiny of its overall fairness is required. (OTO, supra, citing Baltazar, at pp. 1245-1246.) 'Oppression occurs where a contract involves lack of negotiation and meaningful choice, surprise where the allegedly unconscionable provision is hidden within a prolix printed form.' (OTO, supra, citing Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 247.) Here, there is a measure of procedural unconscionability. It is an adhesive contract, presented by Defendant, the party with superior bargaining power, and imposed as a condition of employment. In addition, Plaintiff speaks limited English and Defendant presented documents on a take it or leave it basis and did not provide copies of the pertinent documents in Spanish. (ROA 16 - Declaration of Ana Maria Romero, at ¶¶ 3, 5, 8; Subcontracting Concepts (CT), LLC v. De Melo (2019) 34 Cal.App.5th 201, 211 (finding arbitration agreement procedurally unconscionable, where it was imposed as a condition of employment with no opportunity to negotiate, worker was not fluent in English to fully understand legal documents and clause referred to arbitration association but did not state what rules governed arbitration, nor was worker provided a copy of any governing rules).) Thus, like with most employment contracts, there is a measure of procedural unconscionability.

Substantive unconscionable is also required. Substantive unconscionability pertains to the fairness of an agreement's actual terms and to assessments of whether they are overly harsh or one-sided. (Pinnacle Museum Tower Assn., supra, 55 Cal.4th at p. 246.) Although a wide variety of factors may contribute to making an arbitration provision substantively unconscionable, the primary factor is lack of mutuality, and the key question is whether the contract terms are so one-sided or harsh as to lack basic fairness.

(Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1570.) In evaluating substantive unconscionability, courts often look to whether the arbitration agreement meets certain minimum levels of fairness. In Armendariz, the California Supreme Court instructed that, at a minimum, a mandatory employment arbitration agreement must (1) provide for neutral arbitrators, (2) provide for more than minimal discovery, (3) require a written award that permits limited judicial review, (4) provide for all of the types of relief that would otherwise be available in court, and (5) require the employer to pay the arbitrator's fees and all costs unique to arbitration. (Armendariz, supra, 24 Cal.4th at p. 102.) 'Elimination of or interference with any of these basic provisions makes an arbitration agreement substantively unconscionable.' (Wherry v. Award Inc. (2011) 192 Cal.App.4th 1242, 1248.) Here, the agreement requires mutuality of the claims, binding both sides to the same provisions and rules. (Ex. A., p. 22.) It also meets the Armendariz requirements. The arbitration is to be conducted through neutral arbitrators at JAMS. (Id., at p. 24.) The agreement allows the parties to conduct written and deposition discovery per the arbitration rules. (Id., at p. 24.) The agreement requires the arbitrator to issue a written award and opinion following the hearing and permits judicial review. (Id., at p. 25.) The agreement allows the arbitrator to award any form of individual relief that would be awarded in court. (Id., at p. 24.) And Defendant is required to bear full responsibility for all costs the employee would not incur if the matter was in superior court (ex. arbitrator and administration fees). (Id., at p. 23.) Plaintiff argues the agreement lacks mutuality because it provides a 'carve out' for claims for Defendant.

However, Plaintiff does not identify any provision showing a carve out. At most, Plaintiff refers to the provision that 'either party to this agreement may petition a court of competent jurisdiction for immediate injunctive or trade secrets or confidential information, in accordance with applicable law.' (Ex. A., at p. 23.) As stated in the legal authority cited by Plaintiff, 'provisions that allow employers to seek a preliminary injunction outside of arbitration for breach of a confidentiality agreement are not, by themselves, unconscionable, simply because they primarily benefit employers. (Alberto v. Cambrian Homecare (2023) 91 Cal.App.5th 482, 492.) 'But additional provisions that waive the employer's need to obtain a bond before seeking an injunction, waive the employer's need to show irreparable harm, and Calendar No.: Event ID:  TENTATIVE RULINGS

2974927  38 CASE NUMBER: CASE TITLE:  ROMERO VS ANTIN SACHS INC [E-FILE]  37-2023-00017381-CU-OE-CTL require an employee to consent to an immediate injunction are unconscionable.' (Ibid.) Plaintiff fails to point to any such waivers in this arbitration agreement.

In addition, Plaintiff argues the confidentiality clause renders the agreement substantively unconscionable. Provisions requiring all aspects of an arbitration to be maintained in strict confidence is substantively unconscionable. (Ramos v. Superior Court (2018) 28 Cal.App.5th 1042, 1067.) Here, the agreement states, 'The Parties agree that the information involved in an arbitration proceeding and/or award are highly confidential, and further agree not to disclose such information to any person or entity for any reason...' (Ex. A., at p. 25.) This would significantly limit Plaintiff's ability to investigate and conduct discovery, making the clause substantively unconscionable. However, it does not taint the entire contract with illegality and is merely collateral to the main purpose of the agreement to compel arbitration. (Ramos, supra, 28 Cal.App.5th at p. 1068.) The Court will sever the confidentiality clause.

So, while the agreement has a low degree of procedural unconscionability, there is no substantive unconscionability that cannot be severed from the agreement. Thus, Plaintiff did not meet her burden of proving a ground for denial.

Concluding Orders For these reasons, the motion to compel arbitration is GRANTED IN PART AND DENIED IN PART.

The confidentiality clause of the arbitration agreement is severed.

Plaintiff is ordered to arbitrate her individual PAGA claim.

Plaintiff's non-individual PAGA claim remains before this Court and is stayed pending the outcome of Plaintiff's individual PAGA claim.

The Court sets a status conference on April 5, 2024, at 9:15 a.m. in Department 70.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final order.

Defendant is ordered to serve written notice of the Court's final order on all appearing parties by October 10, 2023.

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