Judge: Elaine Lu, Case: 22STCV29235, Date: 2023-07-20 Tentative Ruling
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Case Number: 22STCV29235 Hearing Date: July 20, 2023 Dept: 26
Superior Court of
California
|
erika
gonzalez, Plaintiff, v. OSI OPTOELECTRONICS,
INC.; OSI SYSTEMS, INC.; et al., Defendants. |
Case No.:
22STCV29235 Hearing Date: July 20, 2023 [TENTATIVE] order RE: defendants’ motion to compel arbitration |
Procedural
Background
On
September 8, 2022, Plaintiff Erika Gonzalez (“Plaintiff”) filed the instant class
action against Defendants OSI Optoelectronics, Inc. and OSI Systems, Inc.
(jointly “Defendants”) for various labor code violations.
On
November 15, 2022, Plaintiff filed the operative First Amended Complaint
(“FAC”) against Defendants. The FAC asserted
eight individual and class action causes of action for (1) Failure to Pay
Minimum Wages, (2) Failure to Pay Overtime Wages, (3) Failure to Provide Meal
Periods, (4) Failure to Permit Rest Breaks, (5) Failure to Provide Accurate
Itemized Wage Statements, (6) Failure to Pay Wages Timely During Employment, (7)
Failure to Pay All Wages Due Upon Separation of Employment, (8) Violation of
Business and Professions Code §§ 17200, et seq., and (9) Enforcement of
the Labor Code § 2698 et seq. (“PAGA”).
On December
16, 2022, Plaintiff requested dismissal of the class action and individual
claims. On December 20, 2022, the Court
– presided by the Honorable Lawrence P. Riff – granted the request, leaving only
the PAGA claim pending. (Order
12/20/22.)
On
January 5, 2023, the instant action was reassigned to the Honorable Malcolm
Mackey. (Minute Order 1/5/23.) Pursuant to a preemptory challenge, the
instant action was reassigned to the current department on January 12, 2023. (Minute Order 1/12/23.)
On April
6, 2023, Defendants filed the instant motion to compel arbitration of the
individual PAGA claims and to dismiss the remaining representative PAGA action. On July 7, 2023, Plaintiff filed an
opposition. On July 12, 2023, Defendants
filed a reply.
Request for
Judicial Notice
In
conjunction with the reply, Defendants request that the Court take judicial
notice of the following:
A.
Pages JA 78 to
JA 96 of the Joint Appendix filed on January 31, 2022 by petitioner Viking
River Cruises, Inc. with the United States Supreme Court in Viking River
Cruises, Inc. v. Moriana, No. 20-1573
As the court may
take judicial notice of court and state records, (See Evid. Code, §
452(c),(d)), the unopposed request for judicial notice is granted. However, the
Court will not take judicial notice of the truth of assertions within those
court records. (See Herrera v. Deutsche
Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375.)
Legal
Standard
California law incorporates many of the
basic policy objectives contained in the Federal Arbitration Act, including a
presumption in favor of arbitrability. (See Engalla v. Permanente Medical Group,
Inc. (1997) 15 Cal.4th 951, 971-72.) Under CCP § 1281, a “written agreement
to submit to arbitration an existing controversy or a controversy thereafter
arising is valid, enforceable and irrevocable, save upon such grounds as exist
for the revocation of any contract.”
“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.
(c) A party to the arbitration agreement
is also a party to a pending court action or special proceeding with a third
party, arising out of the same transaction or series of related transactions
and there is a possibility of conflicting rulings on a common issue of law or
fact. . . .” (CCP §1281.2.)
The right to arbitration depends upon
contract; a petition to compel arbitration is simply a suit in equity seeking
specific performance of that contract. (Marcus & Millichap Real Estate Inv.
Brokerage Co. v. Hock Inv. Co. (1998) 68 Cal.App.4th 83, 88.) When presented with a petition to compel
arbitration, the trial court's first task is to determine whether the parties
have in fact agreed to arbitrate the dispute.
(Id.)
“Rosenthal
v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394] explained:
‘[W]hen a petition to compel arbitration is filed and accompanied by prima
facie evidence of a written agreement to arbitrate the controversy, the court
itself must determine whether the agreement exists and, if any defense to its
enforcement is raised, whether it is enforceable. Because the existence of the agreement is a
statutory prerequisite to granting the petition, the petitioner bears the
burden of proving its existence by a preponderance of the evidence. If the party opposing the petition raises a
defense to enforcement—either fraud in the execution voiding the agreement, or
a statutory defense of waiver or revocation (see §1281.2(a), (b))—that party
bears the burden of producing evidence of, and proving by a preponderance of
the evidence, any fact necessary to the defense.’ (Rosenthal, supra, at 413.)
According to Rosenthal, facts
relevant to enforcement of the arbitration agreement must be determined ‘in the
manner . . . provided by law for the . . . hearing of motions.’ (Rosenthal, supra, at 413, quoting
§1290.2.) This ‘ordinarily mean[s] the
facts are to be proven by affidavit or declaration and documentary evidence,
with oral testimony taken only in the court’s discretion.’ (Rosenthal, supra, at 413–414; . .
.).” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th
754, 761-62.)
Discussion
Existence
of an Agreement to Arbitrate
Under both the Federal Arbitration Act and
California law, arbitration agreements are valid, irrevocable, and enforceable,
except on such grounds that exist at law or equity for voiding a contract. (Winter
v. Window Fashions Professions, Inc. (2008) 166 Cal.App.4th 943, 947.) In ruling on a motion to compel arbitration,
the court must first determine whether the parties actually agreed to arbitrate
the dispute, and general principles of California contract law help guide the
court in making this determination. (Mendez v. Mid-Wilshire Health Care Center
(2013) 220 Cal.App.4th 534, 541.) “With
respect to the moving party’s burden to provide evidence of the existence of an agreement to arbitrate,
it is generally sufficient for that party to present a copy of the contract to
the court.” (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152,
1160.)
Here, Defendants assert that Plaintiff
executed a pre-dispute arbitration agreement.
In support of this assertion, Defendants present the declaration of Glenn
Grindstaff, the Chief Human Resources Officer for Defendant OSI Systems, Inc. –
the parent company Defendant OSI Optoelectronics, Inc. (Grindstaff Decl. ¶¶ 2-3.) Grindstaff states that as Chief Human
Resources Officer, he has access to the employment and personnel files of
current and former employees of Defendant OSI Optoelectronics, Inc. such as
Plaintiff. (Grindstaff Decl. ¶ 5.) Grindstaff further states that he is familiar
with Defendant OSI Optoelectronics, Inc.’s onboarding process, which includes a
Mutual Agreement to Arbitrate Disputes.
(Grindstaff Decl. ¶ 7.) Plaintiff’s
personnel file includes – in relevant part – a signed a copy of Mutual
Agreement to Arbitrate Disputes.
(Grindstaff Decl. ¶ 7, Exh. A.)
The arbitration agreement provides in
relevant part that “[OSI Optoelectronics, Inc.] and [Plaintiff] voluntarily
agree that any claim, dispute, or controversy arising out of or relating to
[Plaintiff’s] employment with [OSI Optoelectronics, Inc.] or the separation of
that employment shall be submitted to final and binding arbitration in
accordance with the terms of this Mutual Agreement to Arbitrate Disputes. … [¶]
… This agreement applies to all claims that [OSI Optoelectronics, Inc.] may
have against [Plaintiff], as well as all claims that [Plaintiff] may have
against [OSI Optoelectronics, Inc.], including any of [OSI Optoelectronics,
Inc.’s] parents, subsidiaries, affiliates, successors, assigns, owners,
directors, officers, shareholders, employees, managers, members, and agents.
[¶] [Plaintiff] and [OSI Optoelectronics, Inc.] agree that this agreement to
arbitrate and any arbitration under this agreement shall be governed by the
Federal Arbitration Act (‘FAA’).” (Grindstaff
Decl. ¶ 7, Exh. A [italics].) The
arbitration agreement also appears to have been signed by Plaintiff. (Grindstaff Decl. ¶ 7, Exh. A.)
“[D]efendants
may meet their initial burden to show an agreement to arbitrate by attaching a
copy of the arbitration agreement purportedly bearing the opposing party’s
signature.” (Espejo v. Southern California Permanente Medical Group
(2016) 246 Cal.App.4th 1047, 1060; see also Bannister v. Marinidence Opco,
LLC (2021) 64 Cal.App.5th 541 [“The party seeking arbitration can meet
its initial burden by attaching to the petition a copy of the arbitration
agreement purporting to bear the respondent's signature.”].) Accordingly, Defendants have met their
initial burden by attaching an arbitration agreement bearing what appears to be
Plaintiff’s signature.
In opposition, Plaintiff does not dispute
that she signed an arbitration agreement or that the arbitration agreement covers
the claims raised in the FAC. Rather, Plaintiff
contends that the terms of the agreement prohibit arbitration of the PAGA
claims and that if Plaintiff’s individual PAGA claims are subject to
arbitration, the Court should not dismiss the representative PAGA claims.
Applicability of the Federal Arbitration Act
“A
party seeking to enforce an arbitration agreement has the burden of showing FAA
preemption.” (Lane v. Francis Capital
Mgmt. LLC (2014) 224 Cal.App.4th 676, 684.) California law provides that
parties may expressly designate that any arbitration proceeding should move
forward under the FAA's procedural provisions rather than under state
procedural law.[1] (Cronus
Investments, Inc. v. Concierge Services (2005) 35 Cal. 4th 376, 394). Otherwise, the FAA provides for enforcement
of arbitration provisions in any “‘contract evidencing a transaction
involving commerce.’ (9 USC § 2.)” (Allied-Bruce
Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 277.) Accordingly, “[t]he party asserting the FAA
bears the burden to show it applies by presenting evidence establishing the
contract with the arbitration provision has a
substantial relationship to interstate commerce[.]” (Carbajal v. CWPSC, Inc. (2016)
245 Cal.App.4th 227, 234, [italics added].)
Here,
the arbitration agreement specifically invokes the FAA. (Grindstaff Decl. ¶ 7, Exh. A., “[Plaintiff]
and [OSI Optoelectronics, Inc.] agree that this agreement to arbitrate and any
arbitration under this agreement shall be governed by the Federal Arbitration
Act (‘FAA’).”].) Moreover, Defendants are engaged in
interstate commerce as they provide “advanced optoelectronics and electronic
assemblies for a wide variety of industries including aerospace and defense,
medical and life sciences, automation and industrial production, and automotive
and consumer electronics both domestically throughout the United States and
internationally.” (Grindstaff Decl. ¶
4.) Accordingly,
the FAA applies to the instant arbitration agreement and preempts any
California law in conflict.
Arbitration
of Plaintiff’s Individual PAGA Claims
Plaintiff contends that because the
arbitration agreement provides that “[t]he arbitrator … may not otherwise
preside over any form of a representative, collective or class proceeding” (Grindstaff
Decl. ¶ 7, Exh. A), the Court must deny Defendants’ motion to compel arbitration. This contention fails to address the arbitrability
of Plaintiff’s individual PAGA claims, which the Supreme Court of the United
States (“SCOTUS”) has recently addressed.
In Iskanian v. CLS Transportation Los
Angeles, LLC (2014) 59 Cal.4th 348, the California Supreme Court held that
“an arbitration agreement requiring an employee as a condition of employment to
give up the right to bring representative PAGA actions in any forum is contrary
to public policy.” (Id. at p.
360.) Subsequently in Viking River Cruises, Inc. v. Moriana (2022)
142 S.Ct. 1906, SCOTUS abrogated Iskanian in part.
In Viking River Cruises,
“Petitioner Viking River Cruises, Inc. (Viking), [was] a company that offer[ed]
ocean and river cruises around the world.
When respondent Angie Moriana [Moriana] was hired by Viking as a sales
representative, she executed an agreement to arbitrate any dispute arising out
of her employment.” (Viking River
Cruises, Inc., supra, 142 S.Ct. at pp.1915–1916.) “After leaving her position with Viking,
Moriana filed a PAGA action against Viking in California court.” (Viking River Cruises, Inc., supra, 142
S.Ct. at p.1916.) “Viking moved to
compel arbitration of Moriana's ‘individual’ PAGA claim—here meaning the claim
that arose from the violation she suffered—and to dismiss her other PAGA
claims.” (Ibid.) The California trial court and appellate
court denied Viking’s motion to compel arbitration which “was dictated by the
California Supreme Court's decision in Iskanian.” (Viking River Cruises, Inc., supra, 142
S.Ct. at p.1916.) SCOTUS “granted
certiorari in [Viking River Cruises] to decide whether the [FAA]
preempts a rule of California law that invalidates contractual waivers of the
right to assert representative claims under [PAGA].” (Id. at p.1913.)
SCOTUS concluded “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.” (Viking River Cruises,
Inc., supra, 142 S.Ct. at p.1924.)
SCOTUS then concluded that “Viking [wa]s entitled to compel arbitration
of Moriana's individual claim.” (Id.
at p.1925.)
Pursuant to Viking River Cruises, the
Court found that there is an individual and a representative aspect to a PAGA
claim. (Id. at p.1924.) Only Plaintiff’s individual PAGA claims can
be compelled to arbitration. (Id.
at p.1925.) The representative portion of
Plaintiff’s PAGA claim cannot be compelled to arbitration. Nor do Defendants here seek to compel the
representative portion of Plaintiff’s PAGA claims. Instead, Defendants seek dismissal of the
representative portion of Plaintiff’s PAGA claims. Thus, Plaintiff’s reliance on the clause of the
arbitration agreement providing that “[t]he arbitrator … may not otherwise
preside over any form of a representative, collective or class proceeding” (Grindstaff
Decl. ¶ 7, Exh. A), is inapposite because in granting the instant motion to
compel arbitration, the Court will compel arbitration of only Plaintiff’s individual
PAGA claims, and the arbitrator will not be presiding over a representative
action.
Enforceability of Agreement
“Once such
a document is presented to the court, the burden shifts to the party opposing
the motion to compel, who may present any challenges to the enforcement of the agreement
and evidence in support of those challenges.”
(Baker v. Italian Maple Holdings, LLC (2017) 13 Cal.App.5th 1152,
1160.)
“California
courts analyze unconscionability as having a procedural and a substantive
element.” (Kinney v. United Healthcare
Services, Inc. (1999) 70 Cal.App.4th 1329.) “[B]oth elements must be
present before a contract or contract provision is rendered unenforceable on
grounds of unconscionability.” (Id.)
The doctrine of unconscionability refers to “an absence of meaningful choice on
the part of one of the parties together with contract terms which are
unreasonably favorable to the other party.” (Sonic-Calabasas A, Inc. v.
Moreno (2013) 57 Cal.4th 1109, 1133.) It consists of procedural and
substantive components, “the former focusing on oppression or surprise due to
unequal bargaining power, the latter on overly harsh or one-sided results.” (Ibid.)
Although both components of unconscionability must be present to invalidate an
arbitration agreement, they need not be present in the same degree. (Armendariz
v. Found Health Psychcare Servs., Inc. (2000) 24 Cal.4th 83, 114.)
“Essentially a sliding scale is invoked which disregards the regularity of the
procedural process of the contract formation, that creates the terms, in
proportion to the greater harshness or unreasonableness of the substantive
terms themselves. [Citations.] In other words, the more substantively
unconscionable the contract term, the less evidence of procedural
unconscionability is required to come to the conclusion that the term is
unenforceable, and vice versa.” (Ibid.) “The party resisting arbitration
bears the burden of proving unconscionability.” (Pinnacle Museum Tower Assn.
v. Pinnacle Market Dev. (US), LLC (2012) 55 Cal.4th 223, 247.)
Here, Plaintiff’s opposition fails
to raise any issue of unconscionability.
Accordingly, Plaintiff fails to meet her burden in showing that the
arbitration agreement is unconscionable.
Therefore, Plaintiff’s individual PAGA claims are subject to arbitration,
and the Court hereby grants Defendants’ motion to compel Plaintiff’s individual
PAGA claims to arbitration.
The Representative PAGA Claims cannot be
Dismissed
Defendant
contends that the Court should dismiss Plaintiff’s representative PAGA claims because
(1) Plaintiff will no longer be an aggrieved employee after arbitration, and (2)
res judicata will preclude Plaintiff from pursuing the representative portion
of the PAGA claim. These arguments are against the clear weight of
binding authority.
In Viking River Cruises, after holding that the plaintiff’s
individual PAGA claims were to be compelled to arbitration, Justice Alito’s
opinion turned to the “remaining question [of] what the lower courts should
have done with Moriana’s non-individual claims.
Under [SCOTUS’s] holding in [Viking River Cruise], those claims
may not be dismissed simply because they are ‘representative,’” since “Iskanian’s
rule remains valid to that extent.” (Viking
River Cruises, Inc., supra, 142 S.Ct. at p.1925.) SCOTUS opined in section IV in Justice
Alito’s opinion that:
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.
See Cal. Lab. Code Ann. §§ 2699(a), (c). When an employee's own dispute is
pared away from a PAGA action, the employee is no different from a member of
the general public, and PAGA does not allow such persons to maintain suit. See Kim,
9 Cal.5th at 90, (“PAGA's standing requirement was meant to be a departure from
the ‘general public’ ... standing originally allowed” under other California
statutes). As a result, Moriana lacks statutory standing to continue to
maintain her non-individual claims in court, and the correct course is to
dismiss her remaining claims.
(Viking
River Cruises, Inc., supra, 142 S.Ct. at p..)
However, section IV of Justice
Alito’s majority opinion was not embraced by the majority of the Supreme
Court. In her concurrence, Justice
Barrett agreed with the judgment, agreeing that reversal was required because
PAGA’s procedure “is akin to other aggregation devices that cannot be imposed
on a party to an arbitration agreement.”
(Viking River Cruises, Inc., supra, 142 S.Ct. at p.1926 (conc.
opn. of Barrett, J.).) However, Justice
Barrett’s concurring opinion, joined by Justice Kavanaugh and Chief Justice
Roberts, expressly declined to join in the majority opinion’s further holding
that Moriana lacked statutory standing to continue to maintain her
non-individual claims. (Viking River
Cruises, Inc., supra, 142 S.Ct. at p. 1926 (conc. opn. of Barrett, J.
[“[t]he discussion in Parts II and IV of the Court’s opinion is unnecessary to
the result, and much of it addresses disputed state-law questions as well as
arguments not pressed or passed upon in this case.”]).)
In her concurrence, Justice Sotomayor,
observed that:
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.” Ante, at
1925. 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. Ibid. Of
course, if this Court's understanding of state law is wrong, California courts,
in an appropriate case, will have the last word. Alternatively, if this Court's
understanding is right, the California Legislature is free to modify the scope
of statutory standing under PAGA within state and federal constitutional
limits. With this understanding, I join the Court's opinion.
(Viking
River Cruises, Inc. v. Moriana (2022) 142 S.Ct. at p.1925, [conc. opn.
of Justice Sotomayor].) As Justice
Thomas dissented, only a minority of SCOTUS agreed with Justice Alito’s dicta
that the representative claims should be dismissed for lack of standing.
Regardless, as Justice Sotomayor
observed, SCOTUS lacks jurisdiction to make such a finding. “The state courts are the final arbiters of
their meaning and appropriate application, subject only to review by [SCOTUS]
if such construction or application is appropriately challenged on
constitutional grounds.” (Beal v.
Missouri Pac. R. R. Corp. (1941) 312 U.S. 45, 50; see Shams v.
Revature LLC (N.D. Cal. 2022) 621 F.Supp.3d 1054, 1059, [“Although the
Supreme Court suggests that under PAGA, Moriana lost standing to pursue her
non-individual PAGA claims, because the California Supreme Court is the final
arbiter of California law, this Court applies Kim’s interpretation
of PAGA standing to this case.”].)
Recently, the California Supreme Court has
definitively and conclusively answered this question in Adolph v. Uber
Technologies, Inc. (Cal., July 17, 2023, No. S274671) 2023 WL 4553702 ---
P.3d ---. In Adolph, the California
Supreme Court concluded that “a worker becomes an ‘aggrieved employee’ with
standing to litigate claims on behalf of fellow employees upon sustaining a
Labor Code violation committed by his or her employer. [Citations.] Standing
under PAGA is not affected by enforcement of an agreement to adjudicate a
plaintiff's individual claim in another forum.
Arbitrating a PAGA plaintiff's individual claim does not nullify the
fact of the violation or extinguish the plaintiff's status as an aggrieved employee…” (Adolph, supra, 2023 WL 4553702, at *6.) Thus, “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.”
(Adolph, supra, 2023 WL 4553702, at *8.)
Here, Plaintiff has alleged Labor
Code violations while working for Defendants. “[Plaintiff]'s allegations that
Labor Code violations were committed against h[er] while [s]he was employed by [Defendants]
suffice to confer standing to bring a PAGA action.” (Adolph, supra, 2023
WL 4553702, at *6.) The fact that the Court
is compelling Plaintiff’s individual PAGA claims to arbitration does not
deprive Plaintiff of standing. (Adolph,
supra, 2023 WL 4553702, at *8.)
Defendants’ second contention that res
judicata precludes Plaintiff from
pursuing the representative portion of the PAGA claim is equally unavailing.
“‘Res
judicata’ describes the preclusive effect of a final judgment on the merits.
Res judicata, or claim preclusion, prevents relitigation of the same cause of
action in a second suit between the same parties or parties in privity with
them. Collateral estoppel, or issue preclusion, ‘precludes relitigation of
issues argued and decided in prior proceedings.’” (Mycogen Corp. v. Monsanto
Co. (2002) 28 Cal.4th 888, 896.) Issue
preclusion applies only to issues that were actually litigated in the earlier
matter; whereas claim preclusion extends to all legal theories, proofs, and
demands for relief that might have been presented in the first matter, provided
both suits assert the same cause of action.
(Ferraro v. Camarlinghi (2008)
161 Cal.App.4th 509, 541, Fn. 21; Gottlieb
v. Kest (2006) 141 Cal.App.4th 110, 148; Mycogen Corp. v. Monsanto Corp. (2002) 28 Cal.4th 888, 897; Burdette v. Carrier Corp. (2008) 158
Cal.App.4th 1668, 1687.) “Res judicata [claim preclusion] bars the relitigation
not only of claims that were conclusively determined in the first action, but
also matter that was within the scope of the action, related to the subject
matter, and relevant to the issues so that it could have been raised” and
includes ‘matters which were raised or could have been raised, on matters
litigated or litigable.’” (Burdette v.
Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-1675; accord Mark v. Spencer (2008) 166 Cal.App.4th 219, 229 [bars claims that
parties had a fair opportunity to litigate].)
The
prerequisite elements for applying the doctrine to either an entire cause of
action or one or more issues are the same: (1) A claim or issue raised in the
present action is identical to a claim or issue litigated in a prior
proceeding; (2) the prior proceeding resulted in a final judgment on the
merits; and (3) the party against whom the doctrine is being asserted was a
party or in privity with a party to the prior proceeding. (Vandenberg
v. Superior Court (1999) 21 Cal.4th 815, 829.)
Here,
there is but one suit, and thus res, judicata is inapplicable. There can be no final judgment on the merits
until both the arbitration and the instant court proceeding have resolved. Moreover, there is no second action to which the
res judicata effect would apply. “When an action
includes arbitrable and nonarbitrable components, the resulting bifurcated
proceedings are not severed from one another; rather, the court may ‘stay
the trial of the action until such arbitration has been had in accordance with
the terms of the agreement.’ (9 U.S.C. § 3; see Code Civ. Proc., § 1281.4.)” (Adolph, supra, 2023 WL 4553702, at *9,
[italics added].) “‘Even though Viking
[River] requires the trial court to bifurcate and order individual PAGA
claims to arbitration when an appropriate arbitration agreement exists, the
individual PAGA claims in arbitration remain part of the same lawsuit as the
representative claims remaining in court. Thus, plaintiffs are pursuing a
single PAGA action “on behalf of [themselves] and other current or former
employees,” albeit across two fora.’ [Citation.]” (Adolph, supra, 2023 WL
4553702, at *10, [italics added].) “Indeed,
it is a regular and accepted feature of litigation governed by the FAA that the
arbitration of some issues does not sever those issues from the remainder of
the lawsuit.” (Adolph, supra, 2023
WL 4553702, at *9.)
Thus, res judicata would not apply
to prohibit Plaintiff from continuing this piecemeal litigation. Accordingly, the clear weight of binding authority
is against Defendants, and dismissal of the representative portion of
Plaintiff’s PAGA claim would be improper.
CONCLUSION
AND ORDER
Based on the foregoing, Defendants OSI Optoelectronics, Inc. and OSI
Systems, Inc.’s motion to compel arbitration is GRANTED as to Plaintiff’s
individual PAGA claims and DENIED as to Plaintiff’s
representative PAGA claims.
The Court orders
litigation of Plaintiff’s representative PAGA claims – the only portion of the
action that remains before this court – stayed in its entirety until completion
of the arbitration of Plaintiff’s individual PAGA claims pursuant to Code
of Civil Procedure section 1281.4. A
status conference regarding the progress of arbitration and the stay is set for
December 13, 2023 at 8:30 am.
Moving Parties are to give notice and file
proof of service of such.
DATED: July ___, 2023 ___________________________
Elaine
Lu
Judge
of the Superior Court
[1] “But the parties may ‘expressly
designate that any arbitration proceeding [may] move forward under the FAA's
procedural provisions rather than under state procedural law.’ [Citation.] Absent such an express designation, however,
the FAA’s procedural provisions do not apply in state court.” (Valencia v. Smyth (2010) 185
Cal.App.4th 153, 174; see also Rodriguez v. American Technologies, Inc. (2006)
136 Cal.App.4th 1110, 1122.)