Judge Holly J. Fujie, Case Number: 21STCV16066, Date: 2024-04-23 Tentative Ruling

RESPONDING PARTIES: Defendants Amwest Inc., Russell Kingsford, and Jeffer Agoncillo

This action arises out of an employment relationship between Plaintiff and Defendants. Plaintiff’s Complaint alleges: (1) sexual harassment; (2) failure to prevent harassment; (3) retaliation; (4) wrongful constructive termination; (5) intentional infliction of emotional distress; and (6) representative action for civil penalties pursuant to the Private Attorney General Act (“PAGA”). With regard to Plaintiff’s PAGA claim, she alleges that she is an “aggrieved employee” within the meaning of Labor Code § 2699(c) and is the proper representative to pursue a PAGA claim on her own behalf and on the behalf of others. (Compl. ¶ 87.)

On November 29, 2021, the Court ruled on a motion to compel arbitration filed by Moving Defendants and ordered that Plaintiff’s non-PAGA claims be sent to binding arbitration on the basis that during her employment Plaintiff signed a valid and binding arbitration agreement (the “Arbitration Agreement”). On March 21, 2022, the Court granted Moving Defendants’ unopposed motion to stay the PAGA proceeding pending the U.S. Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (“Viking River Cruises”).

On September 9, 2022, Moving Defendants filed a motion to compel arbitration of Plaintiff’s personal PAGA claims in light of the U.S. Supreme Court’s decision in Viking River Cruises, in which the Court held that a plaintiff’s individual PAGA claims could be severed from their representative claims and ordered to arbitration. This motion additionally requested that the Court dismiss Plaintiff’s representative PAGA claims. In consideration of this motion, on October 4, 2022, the Court exercised its discretion in the interest of judicial economy and stayed the entire action pending the California Supreme Court decision in Adolph v. Uber Technologies, Case No. S27467.

On April 5, 2024, Plaintiff filed the instant motion to lift the stay on the ground that abatement of this action no longer exists and to compel the entire PAGA action to arbitration. Alternatively, Plaintiff requests that her individual PAGA claims proceed in arbitration and that the representative PAGA claims proceed in court.

On April 10, 2024, Defendants filed their opposition to the instant motion. On April 16, 2024, Plaintiff filed her reply.

Code of Civil Procedure § 1281.4 provides that “[i]f a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (Code Civ. Proc. § 1281.4.) The stay may be lifted prior to completion of the arbitration “only under circumstances in which lifting the stay would not frustrate the arbitrator’s jurisdiction.” (KJA, Inc. v. 123 Fit Franchising, LLC (2011) 191 Cal.App.4th 643, 660.)

Defendants argue that the Court should disregard the instant motion on the grounds that: 1) it was untimely served and service was improper (Opposition at pp. 1-2); and 2) the motion amounts to an untimely request for reconsideration of the Court’s November 29, 2021 order.

As to the second issue, the Court finds that the issues in this motion are not identical to those in the previous motions. Plaintiff now seeks to lift the stay previously imposed in order to pursue her entire PAGA claim in arbitration or, in the alternative, to pursue her representative claim in court. The Court does not find that the instant motion seeks reconsideration of a prior ruling.

Here, Plaintiff seeks to lift the stay issued on March 21, 2022 in order to pursue her entire PAGA claim in arbitration. Plaintiff contends that the representative PAGA claim may be compelled into arbitration along with her individual PAGA claim. (Motion at pp. 3-4, relying on Viking River, supra, 142 S.Ct, at 1916, Barrera v Apple (2023) 95 Cal 5th 63, 85-86, and Diaz v. Macy's West 2022 U.S. Dist. LEXIS 212825.

In opposition, Defendants argue that the Court lacks authority to determine whether Plaintiff’s representative PAGA claims should be compelled into arbitration because the arbitration agreement includes a delegation clause that expressly states that the arbitrator will determine what claims are encompassed within the agreement. (Opposition at pg. 5.)

In reply, Plaintiff contends that the delegation clause is not effective because it was not clear and unmistakable. (Reply at pg. 3, relying on First Options of Chi., Inc. v. Kaplan (1995) 514 U.S. 938, 944.) As to this argument, the Court finds that the opposite is true. The arbitration agreement between the parties expressly states: “The arbitrator shall have the exclusive authority to resolve any dispute relating to the formation, interpretation, applicability, or enforceability of this Agreement, including, without limitation, any Claim that all or any party of this Agreement is void or voidable.” (Hewgill Decl., Exh. A at pg. 2.) Thus, because the agreement states that the arbitrator has exclusive authority in determining the applicability of the agreement, the delegation was clear and unmistakable.

As noted above, there was no opposition to the motion that Plaintiff’s individual PAGA claims be compelled into arbitration as determined in Viking River Cruise. (See October 4, 2022.) Within its ruling, the Supreme Court did not reach a determination as to whether a plaintiff would lose standing to assert their representative claims if compelled to submit their individual PAGA claims to arbitration. (Viking River Cruises, Inc., supra, 142 S.Ct. at p.1925.)

In her concurring opinion, Justice Sotomayor observed that “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. (2023) 14 Cal.5th 1104.

As concluded by the California Supreme Court, “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, 14 Cal.5th at p.1121.) 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, 14 Cal.5th at p.1123.)

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, 14 Cal.5th at p.1121.) The fact that the individual PAGA claims were being compelled to arbitration does not deprive Plaintiff of standing to pursue her representative PAGA claims. (Adolph, supra, 14 Cal.5th at p.1123.)

As to the question of whether Plaintiff’s representative PAGA claims should be compelled into arbitration, Plaintiff relies on the unpublished federal district court decision in Diaz v. Macy's West 2022 U.S. Dist. LEXIS 212825 to achieve such a result because the arbitration agreement does not disavow PAGA or collective actions. (Motion at pp. 3-4.) Although Diaz is only persuasive authority, the Court will follow it because while the arbitration agreement in this case lacks a provision that Plaintiff expressly agrees to submit her claims to class arbitration, Plaintiff herself is seeking this relief and therefore has expressly agreed to submit her claims to class arbitration. Therefore, Plaintiff’s request to submit her representative PAGA claims to arbitration is GRANTED.

Based on the foregoing, the Court GRANTS in part Plaintiff’s motion to the extent that both her individual and representative PAGA claims are ordered compelled into arbitration. The Court sets a Status Conference re status of arbitration for October 23, 2024 at 8:30 a.m. The parties are ordered to file a Joint Status Report at least seven court days before that Status Conference date.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court