Judge Daniel M. Crowley, Case Number: 22STCV06210, Date: 2023-10-17 Tentative Ruling

Defendant Sood Enterprises, Inc.’s motion to compel arbitration is denied as moot. The Court declines to dismiss Plaintiff’s underlying representative PAGA claims.

Defendant Sood Enterprises, Inc. (“SEI”) (“Defendant”) moves to compel Plaintiff Steven A. Medina (“Medina”) (“Plaintiff”) to arbitrate his individual claims and dismiss the underlying representative PAGA action. (Notice Compel Arbitration, pg. 2; C.C.P. §§1281 et seq., 1281.2; Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906.)

On February 17, 2022, Plaintiff filed his operative Complaint in the instant action Defendant alleging one cause of action for civil penalties pursuant to the Private Attorneys General Act (“PAGA”) (Lab. Code §§2698, et seq.). Plaintiff’s cause of action stems from Plaintiff’s employment by Defendant as a non-exempt employee. (Complaint ¶10.)

On April 21, 2023, Defendant filed the instant motion to compel arbitration. Plaintiff filed an opposition on October 5, 2023. Defendant filed its reply October 10, 2023.

Prior to the United States Supreme Court’s ruling in Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, 1916-1925 (“Viking River”), there was no “individual component to a PAGA action, because “every PAGA action is a representative action on behalf of the state.” (Kim v. Reins Int’l California, Inc. (2020) 9 Cal. 5th 73, 87, quoting Iskanian v. CLS Transportation Los Angeles LLC (2014) 59 Cal. 4th 348, 387). As a result, various courts have held that employers may not require employees to “split” PAGA actions in a manner that puts individual and non-individual components of a PAGA claim into bifurcated proceedings. (See, e.g., Perez v. U-Haul Co. of California (2016) 3 Cal.App.5th 408, 420-421; Williams v. Superior Court (2015) 237 Cal.App.4th 642, 649; Reyes v. Macy’s Inc. (2011) 202 Cal.App.4th 1119, 1123-1124; Adolph v. Uber Technologies, Inc. (July 17, 2023, No. S274671) 14 Cal.5th 1104.)

Viking River has now determined that “the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. Thus, the arbitration of a plaintiff’s individual claims in a PAGA action is now permitted. (Viking River, 142 S. Ct. at pg. 1924.)

The Court agrees with Plaintiff’s position that because Plaintiff is not pursuing his individual PAGA claims, Defendant’s motion should be denied as moot. (See Decl. of Medina ¶6.) Arbitration of Plaintiff’s representative PAGA claims is not required, and any such determination of whether Plaintiff meets the statutory definition of an “aggrieved employee” would be accomplished at the time of trial, as is the usual course in PAGA actions.

Defendant’s argument that Plaintiff must maintain an individual PAGA claim in order to maintain the representative portion of this action is unavailing. The PAGA statute does not require such a showing. Adolph has made clear that the PAGA statute only requires two things (1) that plaintiff alleges the he or she is someone who was employed by the alleged violator and (2) is someone against whom one or more of the alleged violations was committed. (Adolph, 14 Cal.5th at pg. 1120.)

In Adolph, the California Supreme Court held that “where a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court. This “is the interpretation of PAGA that best effectuates the statute’s purpose, which is ‘to ensure effective code enforcement.’” (Adolph, 14 Cal.5th at pg. 1123, citations omitted.) Therefore, under the PAGA statute, 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, 14 Cal.5th at pg. 1128.) For these reasons, the requested dismissal of this action is improper.

With regard to standing, the language of the PAGA statute and the California Supreme Court’s rulings in Adolph and Kim are binding upon the Court in determining standing and support the conclusion that Plaintiff’s representative PAGA claims can still proceed.

In Kim, the California Supreme Court noted that statutory standing in California “rests on the [statute’s] language, its underlying purpose, and the legislative intent.” The Kim Court held that for PAGA standing, Labor Code §2699(c) only imposed two requirements for being an “aggrieved employee”: the plaintiff must be someone who was “‘employed by the alleged violator’ and ‘against whom one or more of the alleged violations was committed.’” (Kim, 9 Cal.5th at pgs. 83-84.) Kim made no distinction between individual versus PAGA claims, instead expressly holding “the [California] Legislature defined PAGA standing in terms of violations, not injury. Kim became an aggrieved employee, and had PAGA standing, when one or more Labor Code violations were committed against him. (See § 2699(c).) Settlement did not nullify these violations.” (Kim, 9 Cal.5th at pg. 84.) Therefore, the statutory framework of PAGA authorizes pursuit of civil penalties by employees suffering no individual injury and even when the employee’s individual injuries were resolved by other means. (Id. at pgs. 90-91.)

Accordingly, Defendant’s motion to compel arbitration is denied as moot, and Defendant’s request that this Court dismiss Plaintiff’s representative PAGA claims is denied.

Defendant’s motion to compel arbitration is denied as moot, and the Court declines to dismiss Plaintiff’s representative PAGA claims.

Hon. Daniel M. Crowley

Judge of the Superior Court