Judge Glenda Sanders, Case 2021-01237742 2022-11-17 Tentative Ruling

Judge: Glenda Sanders, Case: 2021-01237742, Date: 2022-11-17 Tentative Ruling

When this matter was before the Court on October 13, 2022, the Court issued a tentative ruling granting the motion to compel arbitration. Because certain new matter was raised for the first time in Reply, the Court permitted supplemental briefing, which it has received and considered.

Having considered all of the papers filed in support of, and opposition to, the motion, and the applicable law, the Court DENIES the motion to compel arbitration, for the reasons set forth below.

Defendant Express Services, Inc. (ESI) moves to compel Plaintiff to binding arbitration of his individual PAGA claims and seeks dismissal of his representative PAGA claims. Defendant Jellco Container, Inc. (Jellco) joins in the Motion.

The Court SUSTAINS ESI’s objections (ROA 70) to the ROA 62, Sorroza Declaration as to the portion of his statement “containing materials shipped and received all throughout the United States.”

As for ESI’s objections (ROA 82) to the ROA 78, Supp. Sorroza Declaration, the Court SUSTAINS Objection Nos. 6, 8, 12 and 13, and OVERRULES Objection Nos. 1-5, 7, 9, 10 and 11. Specifically regarding the hearsay objections, the Court admits the evidence (1) not for a hearsay purpose, but as circumstantial evidence regarding the movement of the materials in question (Hart v. Keenan Properties, Inc. (2020) 9 Cal.5^th 442) (Objections 7, 9) and/or (2) as statements by the opposing party (Objections 10, 11.)

Plaintiff admits he was required to sign the Arbitration Agreement as a condition of employment (ROA 60, Opp., p. 2:7-8), but disputes he should be compelled to arbitration. Plaintiff contends his claims are exempt from the FAA because he falls within a class of workers engaged in interstate commerce.

Plaintiff Is Not Required to Arbitrate His Individual PAGA Claims. The Arbitration Agreement applies to “all legal disputes and claims … includ[ing] without limitation all claims pertaining to Individual’s employment or other relationship with the Company (including application for or termination of employment or other relationship) and all claims of … wages, overtime, benefits, or other compensation; …” ROA 39, Homsey Decl., Ex. A, ¶1.

Paragraph 2 of the Arbitration Agreement provides that actions to compel arbitration are “covered and governed by Section 2 of the Federal Arbitration Act, 9 U.S.C. § 2, and not any state law.”

Plaintiff argues that because his duties for Defendants included loading and unloading materials in the shipping and receiving department from flatbeds and forklifts, he is a part of a class of workers who are “engaged in foreign or interstate commerce” and is exempt from the FAA. Plaintiff relies on Southwest Airlines Co. v. Saxon (2022) 142 S.Ct. 1783 (Saxon).

Here, Plaintiff loaded and unloaded flat beds (ROA 62, Sorroza Decl., ¶3), he saw that the logistics trucks had Arizona business labels and Arizona license plates (ROA 78, Supp. Sorroza Decl., ¶7), and he saw that the shipping receipts given to him by the driver of the truck "would inform that the load came from Phoenix, Arizona." (ROA 78, Supp. Sorroza Decl., ¶7). Specifically to enable him to do his job, he was "often told where the product was traveling to, because that is how we knew to complete and prioritize our tasks." (ROA 78, Supp. Sorroza Decl., ¶8). Notwithstanding that Defendants filed a declaration by manager Ralph Ramirez (ROA 83) in direct response to the supplemental declaration by Mr. Sorroza, Mr. Ramirez does not once challenge Mr. Sorroza on the subject of what he saw or what he was told. Instead, Mr. Ramirez, in apparently seeking to further clarify Mr. Sorroza’s duties, simply confirmed that Mr. Sorroza "did perform forklift duties" and his duties were "not limited to loading and unloading product from trucks." (ROA 83, Ramirez Decl., ¶5.) (Italics added.)

The Court finds that Plaintiff has shown his direct role in the flow of goods across borders (Saxon, supra, 142 S.Ct. at 1790) and he is accordingly exempt from the FAA.

The motion to compel arbitration is accordingly DENIED.

A status conference is scheduled for February 10, 2023 at 9:00 a.m., and the parties are ordered to file a joint status report not later than February 3, 2023.

ESI is ordered to give notice.