Judge Christian R. Gullon, Case Number: 24PSCV01690, Date: 2024-09-19 Tentative Ruling

Judge: Christian R. Gullon, Case: 24PSCV01690, Date: 2024-09-19 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling.

Counsel may submit on the tentative rulings by calling the clerk in Dept. O at 909-802-1126 before 8:30 the morning of the hearing. Submission on the tentative does not bind the court to adopt the tentative ruling at the hearing should the opposing party appear and convince the court of further modification during oral argument.

The Tentative Ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question. No such filing will be considered by the Court in the absence of permission first obtained following ex-parte application therefore.

Defendant National Distribution Centers, LLC’s (“NDC”) Motion to Compel Arbitration and to Stay Proceedings is TBD; this is not a PAGA action because no relief or remedy is sought for individual claims.

On May 23, 2024, Plaintiff JOSEPH GRANADOS, on behalf of all other Aggrieved Employees only, filed suit against Defendant NATIONAL DISTRIBUTION CENTERS, LLC for Violation of California Labor Code § 2698, et seq. (California Labor Code Private Attorneys General Act of 2004).

Defendant asks the court to take judicial notice of an ‘Order Granting Defendant’s Motion to Compel Arbitration issued by Judge Jessica Morgan of San Bernardino Superior Court in the matter of Enrique Rocco v. National Distribution Centers, et al. (Case No. CIVSB2304978)’ dated October 3, 2023.

Pursuant to Evidence Code section 452(d), a court is authorized to take judicial notice of “[r]ecords of . . . any court of record of the United States . . . .” (Kilroy v. State (2004) 119 Cal. App. 4th 140, 145].) When the Court is requested by a party to take judicial notice and is supplied with sufficient information and the party gives each adverse party sufficient notice of the request, taking judicial notice becomes mandatory. (Cal. Evid. Code § 453.)

Here, the court DENIES the RJN because the order does not provide the tentative ruling (i.e., the analysis) to render the order relevant nor does it pertain to the same plaintiff. (See also Bolanos v. Superior Court (2008) 169 Cal.App.4th 744, 761 [“Shortly after filing the petition, Bolanos requested that we judicially notice a minute order issued by a trial court in an unrelated case involving a Medi–Cal lien. Bolanos does not explain the relevance of the order. To the extent she offers it as legal authority supporting her position, the request is improper. Even assuming for the sake of argument that the case in question involves the same issue as the case before us (a point disputed by the Department), a written trial court ruling has no precedential value.”].)

Based on the papers, the threshold issue is whether Plaintiff has standing for a PAGA action when he is not bringing an individual claim against his employer/Defendant?[2]

For reasons to be discussed below, based on binding authority and plain language of Labor Code section 2699, Plaintiff does not have standing because a plaintiff cannot elect to file a PAGA lawsuit that excludes his own grievances. The court will discuss the main triad of cases: Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639 (Viking River), Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 11014 (Adolph), and Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533.

PAGA authorizes any “aggrieved employee” to initiate a civil action against a former employer “on behalf of the employee and other current or former employees against whom a violation of the same provision was committed” to recover civil penalties for violations of the Labor Code ordinarily “assessed and collected by the Labor and Workforce Development Agency." (Labor Code section 2699, subd. (a), emphasis added.)

In Viking River, the United States Supreme Court held that a rule against bifurcated proceedings for individual and non-individual claims under PAGA frustrates the Federal Arbitration Act (FAA) by defeating the parties’ ability to contractually determine which claims are subject to arbitration and which are not. (Viking River, supra, 596 U.S. at pp. 660-662.)[3] With that, the Court a plaintiff whose individual claims have been sent to arbitration no longer has standing under PAGA to advance non-individual claims in court, and the non-individual claims must therefore be dismissed. (Ibid.) That said, as observed in Justice Sotomayor’s concurrence, "if this Court's understanding of state law is wrong, California courts, in an appropriate case, will have the last word.” (Viking River, supra, 596 U.S. at p. 664 (conc. Opn. of Sotomayor, J.)

And in Adolph, the California Supreme Court effectively said the high court got California law wrong. The state’s Supreme Court in Adolph reached the opposition conclusion as Viking River holding that once a court has ordered arbitration of an employee's individual claims under PAGA, the employee retains standing to pursue non-individual claims in court. (Adolph, supra, 14 Cal.5th at pp. 1119-1123.)[4]

In sum, the rule is that a plaintiff’s individual claims can be arbitrated—unless the arbitration agreement is unenforceable on some other ground—and there is no limitation precluding the non-individual PAGA claims from being arbitrated in the same proceeding as the individual PAGA claims.

Here, however, there are no individual claims. And that, is the “death knell” to Plaintiff’s attempt at proceeding on a representative basis. (Reply p. 2:24-25.) "[F]or Plaintiff to have standing, Plaintiff’s individual PAGA claim must exist, either implied or explicit... If the Court finds Defendant’s instant motion moot on the grounds that Plaintiff is not alleging an individual PAGA claim, Defendant will seek to file a motion for judgment on the pleadings, inter alia, based on theory that Plaintiff lacks standing." (Motion p. 8, fn. 1.) Indeed, it is abundantly clear that every PAGA action is properly understood as a combination of two claims: an individual claim arising from the Labor Code violations suffered by the plaintiff themselves and non-individual claims arising from violations suffered by other employees. (See Motion p. 14, citing Arias v. Superior Ct. (2009) 46 Cal. 4th 969, 986; Reply p. 3 citing Piplack v. In-N-Out Burgers (2023) 88 Cal.App.5th 1281, 1288-1289.)[5]

To the extent that Plaintiff relies upon Balderas to argue he need not allege individualized claims, Plaintiff misconstrues Balderas. (Reply pp. 4-5.)

First and foremost, Balderas did not involve a motion to compel arbitration but rather an appeal from the trial court sua sponte striking the plaintiff’s complaint. This is of import as the relevant cases (Viking River, Adolph, etc.) discuss the issue of whether an aggrieved employee who has been compelled to arbitrate individual claims premised on Labor Code violations sustained by the plaintiff (i.e., individual claims) maintains statutory standing to pursue non-individual PAGA claims arising out of events involving other employees (i.e., non-individual claims). (See e.g., Adolph, supra, 14 Cal.5th at p. 1119.)

Second, Plaintiff’s contention that “[l]ike the plaintiff-employee in Balderas, Plaintiff in this action is pursuing representative-only claims misrepresents the facts of Balderas. (Opp. p. 3:23-25.) In Balderas, the plaintiff’s complaint alleged that she is “not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, INCLUDING HERSELF and other aggrieved employees.” (Balderas, supra, 101 Cal.App.5th at p. 536, emphasis, capitalization, and underline added.) The trial court “ruled Balderas lacked standing to bring a representative PAGA action on behalf of other employees because she did not allege ‘an individual claim’ in the action.” (Balderas, supra, 101 Cal.App.5th at p. 536.) But the plaintiff did allege individual claims. Here, however, Plaintiff’s complaint makes it clear that although Plaintiff has suffered "at least one labor code violation,” he "does NOT seek any redress or remedy for any of his individuals claims." (Complaint ¶6, emphasis and capitalization added.)[6] Effectively, the court agrees with Defendant that because the plaintiff in Balderas never sought to proceed only on non-individual claims, the case’s discussion of PAGA concepts constitutes dicta.[7]

Therefore, as Plaintiff does not seek redress for labor code violations on behalf of himself (which is a necessary condition of the statute), it appears no valid complaint exists rendering any decision about arbitration moot (i.e., no controversy exists). The court is inclined to strike the complaint sua sponte.

[1] Defendant also references Lira v. National Distribution Centers, LLC, et al., No. 5:21-cv-00672-JGB-KK, 2021 U.S. Dist. LEXIS 251955 at *212 (C.D. Cal. 2021) as another case that upheld Defendant’s arbitration agreement. However, the case appears irrelevant as it does not concern the threshold issue of PAGA standing.

[2] Individual PAGA claims are those that the plaintiff personally experienced whereas non-individual PAGA claims are those other employees experienced. (See Reply p. 4, citing Diaz v. Macys West Stores, Inc. (9th Cir. 2024) 101 F.4th 697, 699, fn.1.)

[3] Viking River left intact the rule set forth in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 against agreements that compel waiver of non-individual claims. (Viking River, supra, 596 U.S. at p. 662.)

[4] But if the arbitrator determines that a plaintiff is not an aggrieved employee, then the plaintiff can no longer prosecute his non-individual claims due to lack of standing. (Reply p. 3, citing Adolpha, supra, 14 Cal.5th at pp. 1123-1124; see also Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, 76-77.)

[5] The statute uses the conjunction “and” not “or” such that the plain language of the statute provides that “PAGA was designed to authorize aggrieved employees to pursue enforcement actions on behalf of themselves and their current and former coworkers.” (Adolph, supra, 14 Cal.4th at p. 1125, emphasis added.)

[6] See also Opp. 3. [Header A ["Plaintiff Does Not Seek Individualized Relief"].)

[7] (See Estrada v. Superior Court (2023) 93 Cal.App.5th 915, 924 [“[D]ictum consists of general observations of law which go beyond the facts and issues of the case.”].) And dictum, unlike ratio decidendi which “constitutes the basis of the decision and creates binding precedent,” dictum “has no force as precedent.” (United Steelworkers of America v. Board of Education (1984) 162 Cal.App.3d 823, 834.) In further demonstration that Plaintiff is relying upon dicta, the Balderas court cited to Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924 for the proposition that “employee need not bring an individual claim against her employer to have standing to pursue a PAGA claim; it is sufficient to allege the employee suffered a Labor Code violation.” (Balderas, supra, 101 Cal.App.5th at p. 539.) But Johnson dealt with the specific question of “whether an employee, whose individual claim is time-barred, may still pursue a representative claim under PAGA.” (Johnson, supra, 66 Cal.App.5th at p. 929, emphasis added.) Here, the statute of limitations is not at issue, and that issue carried a different analysis and considerations. That issue aside, the Johnson court reversed the trial court’s ruling of sustaining the demurrer to the plaintiff’s complaint by relying upon the seminal case of Kim v. Reins International California, Inc. (2020) 99 Cal.4th 73. (Johnson, supra, 66 Cal.App.5th at p. 926 [“Relying on [Kim], we reverse.”].) In Kim, the employer argued that because with the individual claims were sent to arbitration, the dismissal of the employee’s individual claims meant he was no longer an aggrieved employee with PAGA standing. (Kim, supra, 99 Cal.4th at p. 82.) The state’s high court “rejected the contention that a plaintiff loses standing by settling individual Labor Code claims and accepting ‘compensation for his injury.’” (Id. at p. 929, emphasis added.) Effectively, though the Kim court “clarified that PAGA standing does not depend on maintaining an individual Labor Code claim” (id. at p. 930, emphasis added), a plaintiff, at the very list, must still allege/assert relief for his own Labor Code claims.