Judge: Glenda Sanders, Case: 2021-01238846, Date: 2022-09-16 Tentative Ruling
1. Motion to Compel Arbitration
2. Status Conference (Continued to June 14, 2023)
Defendant Tuttle-Click Ford, Inc’s motion to compel Plaintiff Christian Ramirez to arbitrate the individual PAGA claim is GRANTED. The remainder of the case is stayed pending the outcome of the arbitration. To the extent the motion seeks an order dismissing Plaintiff’s non-individual PAGA claim, the Motion is denied without prejudice to Plaintiff’s right to renew its motion to compel when the stay is lifted.
In anticipation that the arbitration will not be completed before June 2023, the court continues the status conference to June 14, 2023. If one or more of the parties wishes to advance that conference, they may call or email the clerk (CX101@occourts.org).
Legal Authority
A party moving to compel arbitration under Code Civil Procedure Section 1281.2 must prove by a preponderance of the evidence that: (1) The parties entered into a written agreement to arbitrate; (2) One or more of the claims at issue are covered by that agreement; and (3) The responding party refused a prior demand for arbitration under the agreement of the claims at issue. (Code Civ. Proc., § 1281.2; Villacreses v. Molinari (2005) 132 Cal.App.4th 1223, 1230.) If the moving party meets this burden, the burden shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud or unconscionability). (Villacreses, 132 Cal.App.4th at 1230.)
Merits
Defendant has its initial burden under CRC 3.1330 to prove the existence of an agreement to arbitrate. Two valid arbitration agreements purporting to bear Plaintiff’s signature have been offered into evidence. (Ashley Decl. Exs. A, B.) Plaintiff has provided no evidence or argument to the contrary. Accordingly, the Court finds a valid agreement to arbitrate exist.
The agreement includes the following relevant terms:
“I and the Company agree to utilize binding arbitration as the sole and exclusive means to resolve all disputes that may arise out of or be related in any way to my employment or my application for employment. I and the Company each specifically waive and relinquish our respective rights to bring a claim against
the other in a court of law and to have a trial by jury. Both I and the Company agree that any claim, dispute, and/or controversy that I may have against the Company (or its owners, directors, officers, managers, employees, or other agents), or the Company may have against me, shall be submitted to and
determined exclusively by binding arbitration under the Federal Arbitration Act (“FAA”)…”
(Ashley Decl. [ROA 43] Ex. A.)
“I agree that any claims brought under this binding arbitration Agreement shall be brought in the individual capacity of myself or the
Company. This binding arbitration agreement shall not be construed to allow or permit the consolidation or joinder of claims of other claimants, or permit such claims to proceed as a class or collective action. No arbitrator shall have the authority under this agreement to order any such class or collective action.
…
By signing this agreement, I am agreeing to waive any substantive or procedural rights that I may have to bring or participate in an
action brought on a class or collective basis. If under applicable law a representative claim under the California Private Attorneys General Act (“PAGA”) is found to be unwaivable and such an action is pursued in court, I and the Company agree that any such PAGA claim will be severed and stayed pending resolution of claims that are arbitrable.”
(Ashley Decl. [ROA 43] Ex. B.)
Applicability of FAA
The parties’ agreement states that the FAA governs. Plaintiff offers no evidence or argument to the contrary. Accordingly, the Court finds the FAA applies.
PAGA Waiver
In Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, the United States Supreme Court overruled Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 to the extent its holding was preempted by the FAA and concluded that (1) a PAGA claim could be split into “individual” and “representative” portions, and (2) the individual portion could be compelled to arbitration. However, Viking River Cruises did not overrule Iskanian to the extent it precludes “a wholesale waiver of PAGA claims.” (Id. at 1924-25.) By “wholesale waiver”, the Supreme Court was referring to a waiver of both the individual and representative PAGA claims. In short, the Supreme Court did not overrule Iskanian to the extent it precluded a waiver of the “non-individual” or “representative” PAGA claim.
Plaintiff argues the “current law” language creates an express PAGA carve out because, in 2020 when the agreements were executed, Iskanian prohibited claim-splitting and PAGA-waivers. The Court disagrees.
Plaintiff cites no authority for the contention that the use of “current law” in a contract means law forever fixed at the time of its execution, and the Court is aware of no such authority. Viking River’s holding, which expressly permits PAGA claim splitting, is a statement of what the FAA has always meant in the interplay with PAGA claims. (See Rivers v. Roadway Express, Inc., 511 U.S. 298, 312–313 (1994) [“A judicial construction of a statute is an authoritative statement of what the statute meant before as well as after the decision of the case giving rise to that construction.”].) Furthermore, the interpretation of “current law” to mean at the time the dispute arises and is ripe for resolution, is more logical because a dispute is what triggers arbitration in the first place. This interpretation also avoids the unreasonable requirement for the Court to apply bad or at the very least, superseded law.
Accordingly, under Viking River Cruises, Plaintiff may be compelled to arbitrate the individual portion of the PAGA claim.
Stay
Under the FAA, the California Arbitration Act, and the at-issue agreements, this case must be stayed pending completion of Plaintiff’s arbitration. (9 U.S.C. § 3; CCP § 1281.4; Ashley Decl. Ex. B.)
While Defendant urges dismissal of the non-individual PAGA claim, this argument overlooks the fact that the California Supreme Court recently granted review in Adolph v. Uber Technologies, S274671, to answer the question “[w]hether an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) that are ‘premised on Labor Code violations actually sustained by’ the aggrieved employee [citation] maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ [citation] in court or in any other forum the parties agree is suitable.”
Accordingly, were the Court to dismiss the representative PAGA claims now only for the California Supreme Court to reach a different conclusion in Adolph than the Supreme Court reached in Viking River, both the Court’s and the parties’ resources would be needlessly taxed.
Also, the arbitrator may decide that Plaintiff did not suffer any Labor Code violation and, it is arguable that such a determination would strip Plaintiff of PAGA standing, irrespective of the outcome in Adolph.
For these reasons, the Court denies the request to dismiss the non-individual portion of the PAGA claim without prejudice to Defendant’s right to renew its motion to compel that claim after the arbitration is completed.
Plaintiff to give notice.
If the parties submit on the tentative, no appearance is required at the September 16, 2022 hearing.