Judge Holly J. Fujie, Case Number: 24STCP00106, Date: 2024-03-25 Tentative Ruling

On September 27, 2019, Petitioner the City and the collective bargaining unit UFLAC, Local 112, on behalf of Respondent, Yasha Y. Vand and other represented bargaining unit members, entered into a written collective bargaining agreement entitled Memorandum of Understanding Regarding the Firefighters and Fire Captains Representation Unit (the “MOU” or the “Agreement”). [Petition to Vacate or, in the Alternative, to Modify Arbitration Award dated December 1, 2023 (the “Petition”), ¶ 1 and Declaration of Dexter Rappleye (“Rappleye Decl.”) in Support of Motion to Stay Proceedings on Petition to Vacate Arbitration Award (the “Motion”), ¶ 2.] In February of 2023, UFLAC filed a grievance alleging that the City had violated the MOU in connection with allegedly overdue payments, and on March 16, 2023, UFLAC invoked the arbitration procedure under the MOU. (Id. at ¶ 3.) Martin Henner was selected as arbitrator (the “Arbitrator”) and on September 7, 2023, the Arbitrator conducted the arbitration. (Id.)

On November 13, 2023, a group of City employees within the bargaining unit represented by UFLAC filed a lawsuit against the City in the U.S. District Court for the Central District of California, entitled Keeley Abram, et al. v. City of Los Angeles, Case No. 2:23-cv-09565-WLH-JPR (“Abram” or “the Federal Action”). (Id. at ¶ 4.) The initial Complaint in Abram sought relief for violations of the federal Fair Labor Standards Act, 29 U.S.C. §§ 201, et seq. (the “FLSA”), allegedly arising from the City’s failure to make payments required under the MOU. (Id.)

On December 1, 2023, the Arbitrator issued a final decision and award (the “Award”). (Id. ¶ 5 and Exhibit B.) On January 10, 2024, Plaintiffs in the Federal Action filed a first amended complaint, in which they added UFLAC as a party and added a new claim seeking enforcement of the Award pursuant to California Code of Civil Procedure, § 1287.4. (Id., Exhibit C.)

On January 11, 2024, the City filed the Petition in this action, in which the City sought to vacate or, in the alternative, modify the Award.

On January 29, 2024, UFLAC filed the Motion in this action, in which it sought to stay the proceedings in the instant case, including the Petition to vacate the Award. On March 12, 2024, the City filed its Opposition. On March 18, 2024, UFLAC filed its reply.

“Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33 Cal. App. 4th 1484, 1489 [citations omitted]). They also have the discretion to stay enforcement of judgments or orders, “whether or not an appeal will be taken from the judgment or order and whether or not a notice of appeal has been filed.” (Code Civ. Proc., § 918.) “When jurisdiction is, by the Constitution or this Code, or by any other statute, conferred on a Court or judicial officer, all the means necessary to carry it into effect are also given; and in the exercise of this jurisdiction, if the course of proceeding be not specifically pointed out by this Code or the statute, any suitable process or mode of proceeding may be adopted which may appear most conformable to the spirit of this Code.” (Code Civ. Proc., § 187.) “[W]e believe the power of a court to stay proceedings … was inherent at common law and is now vested in the superior courts of this State.” (Bailey v. Fosca Oil Co. (1963) 216 Cal.App.2d 813, 817.)¿¿

UFLAC argues that this matter should be stayed because the Federal Action involves a substantially similar subject matter to the within action and is pending before a federal court. UFLAC notes that this Court has inherent authority to stay a proceeding to ensure duplicative actions are not tried at the same time. “When a federal action has been filed covering the same subject matter as is involved in a California action, the California court has the discretion but not the obligation to stay the state court action. (Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal. App. 4th 800, 804 (“Caiafa”)). The Court recognizes that both actions include a claim for relief entitled Petition for Enforcement of Arbitration Award. (Rappleye Decl., Exhibit C; and Complaint in this action.)

In opposition, the City argues that UFLAC consented to bring all motions to enforce the arbitration agreement in state court because the parties’ arbitration agreement is governed by the California Arbitration Act and the arbitration was held within the state. (Opp. 5.) The City also argues that UFLAC’s petition to confirm raises purely state law questions which should be determined in the state courts. (Opp. 6.) The City further argues that an order of this Court regarding the conduct of arbitration will not impair the district court’s ability to rule on the merits of the alleged FLSA violation. (Id.) Additionally, the City contends that UFLAC is not part of the FLSA claim because it is a labor union. (Opp. 7.)

In reply, UFLAC argues that it has not consented to forego a federal forum to enforce its arbitration award because “the MOU does not include any forum-selection clause indicating that UFLAC must enforce arbitration awards in state court. Nor has the City identified any other statements or conduct by UFLAC that could support a waiver.” (UFLAC Reply, p. 3, lines 11-13.) UFLAC further argues that consenting to state court jurisdiction does not waive the right to invoke federal court jurisdiction in an appropriate case. (Id.)

When a federal action has been filed that covers the same subject matter as is involved in a California action, the judge in the California action has the discretion, but not the obligation, to stay that action. (Benitez v. Williams (2013) 219 Cal.App.4^th 270, 276; Farmland Irr. Co. v. Dopplmaier (1957) 48 Cal.2d 208, 215 (“Farmland”) (stay of the California proceedings “is not a matter of right, but within the sound discretion of the trial court.”) In this regard, courts should consider: (1) “the importance of discouraging multiple litigation designed solely to harass an adverse party, avoiding unseemly conflicts with the courts of other jurisdictions;” and (2) “whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced.” (Farmland, supra, 48 Cal.2d at 215.) Each of these factors weighs in favor of this Court’s exercising its discretion to grant the stay. ¿

The Federal Action involves the same parties and subject matter as are involved in the instance state case. The Federal Action is intertwined with UFLAC’s petition to enforce the Award, which provides for an audit to identify backpay owed to each affected employee. Therefore, the Court finds that the Federal Action includes the same parties and subject matter as the instant case because the Award is affected by the outcome of both cases.

The district court has acquired jurisdiction over UFLAC’s petition to enforce the Award, which involves the same subject matter as the City’s petition to vacate that same Award. UFLAC filed a Motion for Partial Judgment on the Pleadings in Abram seeking a ruling confirming the Award, and the City of Los Angeles filed a Motion to Dismiss UFLAC’s petition. The District Court can decide whether to exercise its supplemental jurisdiction over UFLAC’s petition. Both motions will be heard on April 12, 2024. Therefore, the Court finds that the pending hearings in the Federal Action weigh in favor of staying the proceedings.

UFLAC’s reliance on Caiafa is instructive because of its similarities to the present action. In Caiafa, an insurer filed a civil RICO suit against an attorney in federal court, alleging that the attorney defrauded the insurer by submitting padded legal bills and engaging in unnecessary work. (Caiafa, supra, at 15 Cal.App.4th 802-803.) The attorney subsequently filed a petition against the insurer in Los Angeles Superior Court to compel arbitration of a dispute over the insurer’s failure to pay the attorney’s fees that were at issue in the federal action. (Id. at 802-03.) The Court of Appeal upheld the trial court’s order staying all proceedings on the petition to compel arbitration. (Id. at 805.) Significantly, the Court of Appeal stated “[t]he federal court action which was pending at the time Caiafa filed the petition to compel arbitration in state court raised issues much broader than the amount of Cumis counsel fees. Yet the resolution of those broader issues almost certainly would determine whether Caiafa was entitled to Cumis fees at all and, if so, the proper amount of those fees.” (Id. at 806.) Similarly, in this case, UFLAC’s Arbitration Award is in dispute along with the broader FLSA claims but if the District Court grants supplemental jurisdiction, then it could determine the Arbitration Award issue.

The City argues that Caiafa is inapplicable because the federal case in Caiafa had been pending for nine months when the state action was filed, whereas the filings in this case “were days apart.” (Opp. 6.) As the court held in Mave Enters v. Travelers Indem. Co. (2013) 219 Cal.App.4th 1408, 1423-1424, however, a court acquires “subject matter jurisdiction when the [] action was filed.” Here, the Federal Action was filed on November 30, 2023, while the instant civil case was not filed until January 11, 2024. For all the reasons discussed above, the Court exercises its discretion and finds that a stay of the within action is appropriate as being in the interests of justice and to promote judicial efficiency.

The Motion for a Stay of the Proceedings is therefore GRANTED. The Court sets a Status Conference in this matter for May 31, 2024 at 8:30 a.m. The parties are ordered to each file a Status Report detailing the status of the Federal Action, to be filed at least seven (7) court days before the Status Conference.

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