Judge Daniel M. Crowley, Case Number: 23STCV23916, Date: 2024-10-18 Tentative Ruling

Defendant Simplified Labor Staffing Solutions, Inc.’s motion to confirm the automatic stay pending the appeal of this Court’s denial of Defendant’s motion to compel arbitration is denied.

Defendant Simplified Labor Staffing Solutions, Inc. (“SLSS”) (“Defendant”) moves to confirm the automatic stay pending the appeal of this Court’s denial of Defendant’s motion to compel arbitration. (Notice Motion, pgs. 2-3; 9 U.S.C. §16(a)(1)(B).) Defendant moves on the grounds that pursuant to the Federal Arbitration Act (FAA), as interpreted by Coinbase, Inc. v. Bielski (2023) 599 U.S. 736, further trial court proceedings in this action are automatically stayed pending resolution of Defendant’s appeal to the Court of Appeal of the State of California, Second Appellate District, from the Order entered March 21, 2024, denying Defendant’s Motion to Compel Arbitration and to Stay Action. (Notice Motion, pg. 2.) Defendant also moves on the grounds that California law also imposes an automatic stay of further trial court proceedings in this action pending resolution of the interlocutory appeal. (Notice Motion, pg. 2; see C.C.P. §916(a); Prudential-Bache Securities, Inc. v. Superior Court (1988) 201 Cal.App.3d 924, 925; Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189.)

Defendant also moves in the alternative on the basis that California law, due process and the interests of judicial economy require a stay of further trial court proceedings pending resolution of the appeal. (Notice Motion, pgs. 2-3; Landis v. North American Co. (1936) 299 U.S. 248, 254.)

On March 21, 2024, this Court denied Defendant’s motion to compel arbitration of Plaintiff’s claims. (3/21/24 Minute Order.)

On April 4, 2024, Defendant filed its Notice of Appeal of this Court’s March 21, 2024, ruling. (4/4/24 Notice of Appeal.)

Defendant filed the instant motion on July 16, 2024. Plaintiff filed her opposition on October 7, 2024. Defendant filed its reply on October 14, 2024.

Courts have broad discretion to stay cases in the interest of efficiency and justice. Every court has the “inherent power, in its discretion, to stay proceedings when such a stay will accommodate the ends of justice.” (See St. Paul Fire and Marine Insurance Company v. AmerisourceBergen Corp. (2022) 80 Cal.App.5th 1, 6-7.) The Code of Civil Procedure further empowers every court to “provide for the orderly conduct of proceedings before it.” (C.C.P. §128(a)(3); see C.C.P. §187 [conferring on courts and judicial officers “all the means necessary” to carry out their jurisdiction].)

Here, a stay is not warranted. The FAA does not mandate that a state court stay litigation pending an appeal concerning whether the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (“EFAA”) applies. Defendant relies heavily on Coinbase, Inc. v. Bielski, 599 U.S. 736, 741-747 (2023), which specifically addresses the procedures in federal district courts under the FAA. Coinbase, Inc. does not address the EFAA, nor does it specifically extend its requirements or language to state trial courts. The recent amendment to California law under C.C.P. §1294(a) empowers state courts to continue litigation even during such appeals. The amended statute now explicitly states that “[n]otwithstanding [C.C.P.] Section 916, the perfecting of such an appeal shall not automatically stay any proceedings in the trial court during the pendency of the appeal” when dealing with the denial or dismissal of a petition to compel arbitration. (C.C.P. §1294(a).) This legislative change eliminates the presumption of an automatic stay in cases like this one, where a petition to compel arbitration has been denied. The Legislature’s amendment to §1294(a) was aimed to curtail the abuse of the appeals process by defendants seeking to delay litigation without substantial justification. (2023 S.B. No. 365, California 2023-2024 Regular Session, pg. 1 of 12 [“Proponents of this bill argue that corporate defendants are abusing the automatic stay when a motion to compel arbitration is denied by the trial court and then appealed by the defendant, using it as a delay tactic causing real harm to consumers and workers. This bill provides that there shall be no stay of the proceedings when an order dismissing or denying a motion to compel arbitration is appealed.”].) Weighing public policy and the interests of justice in a case involving a sensitive issue like sexual harassment, this Court is disinclined to stay the instant matter.

Accordingly, Defendant’s motion to confirm the stay in this action pending the outcome of its appeal of this Court’s March 21, 2024, ruling is denied.

Defendant’s motion to confirm the stay this action pending the outcome of the appeal of this Court’s March 21, 2024, ruling is denied.

Hon. Daniel M. Crowley

Judge of the Superior Court