Judge Holly J. Fujie, Case Number: 24STCV20112, Date: 2025-01-27 Tentative Ruling

This is a Private Attorneys General Act (“PAGA”) action. On August 9, 2024, Plaintiff filed the operative complaint (the “Complaint”) against Defendant and Does 1 through 100 alleging a single PAGA cause of action.

On November 18, 2024, Defendant filed the instant motion to compel arbitration (the “Motion”). On January 13, 2025, Plaintiff filed an opposition (the “Opposition”). On January 17, 2025, Defendant filed a reply (the “Reply”).

The Federal Arbitration Act (“FAA”), while a federal statute, applies in California courts and requires state courts to enforce arbitration agreements as required by the federal common law developed under the FAA. (Southland Corp. v. Keating (1984) 465 U.S. 1, 15-16.) The FAA preempts and invalidates state law and state judicial decisions that disfavor arbitration or require arbitration provisions to pass higher scrutiny. (Southland Corp., supra (1984) 465 U.S. at 12; Perry v. Thomas (1987) 482 U.S. 483, 490.) If the parties designate the FAA applies, then California arbitration law is preempted. (Rodriguez v. American Techs., Inc. (2006) 136 Cal.App.4th 1110, 1121-1122.)

¿ A court’s inquiry is limited to a determination of (1) whether a valid arbitration agreement exists and (2) whether the arbitration agreement covers the dispute. (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostics Systems, Inc. (9th Cir. 2000) 207 F.3d 1126, 1130; Howsam v. Dean Witter Reynolds, Inc. (2002) 537 U.S. 79, 84; Simula, Inc. v. Autoliv, Inc. (9th Cir. 1999) 175 F.3d 716, 720 [if the finding is affirmative on both counts the FAA requires the Court to enforce the arbitration agreement in accordance with its terms]; Lacayo v. Cataline Restaurant Group Inc. (2019) 38 Cal.App.5th 244, 257 [Where moving party meets initial burden, “the party opposing arbitration must prove by a preponderance of the evidence any defense to the petition”].)

The FAA governs all agreements to arbitrate in contracts “involving interstate commerce.” (Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.) The term “involving” commerce “is broad and is indeed the functional equivalent of “affecting’ commerce.” (Allied-Bruce Terminix Companies, Inc. v. Dobson (1995) 513 U.S. 265, 273-274.) The U.S. Supreme Court has held that this broad interpretation includes employment contracts. (Circuit City Stores v. Adams (2001) 532 U.S. 105, 106.)

“Parties are not required to arbitrate their disagreements unless they have agreed to do so. A contract to arbitrate will not be inferred absent a ‘clear agreement.’ When determining whether a valid contract to arbitrate exists, we apply ordinary state law principles that govern contract formation. In California, a ‘clear agreement’ to arbitrate may be either express or implied in fact.” (Davis v. Nordstrom, Inc. (9th Cir. 2014) 755 F.3d 1089, 1092-93 [applying California law] [internal citations omitted].)

In support of the Motion, Defendant attaches a copy of the Employee Acknowledgement Form and At-Will Arbitration Agreement (the “Agreement”) executed by Plaintiff on March 7, 2022. (Chamoun Decl., Ex. 1.) Plaintiff does not dispute the existence or validity of the Agreement. Thus, Defendant has met its burden to show that an arbitration agreement exists.

Plaintiff argues that the Agreement does not apply to Plaintiff’s PAGA claims because at the time the Agreement was executed the law pursuant to Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 (Iskanian) was that PAGA claims could not be subject to arbitration. (Mot. p. 4:7-9) The Supreme Court decision in Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639 (Viking River) was not issued until three months after the parties signed the Agreement. (Mot. p. 4:10-12) Plaintiff argues that thus, the exception in the Agreement which states that it does not apply to “claims where mandatory arbitration is prohibited by law” should be interpreted based on the holding in Iskanian and not Viking River. (Mot. p. 4:13-23) Plaintiff argues that under Iskanian, Plaintiff’s PAGA claims could not be compelled to arbitration. (Mot. p. 5:12-15)

The task of interpreting statutory law, as the Supreme Court did with the FAA in the Viking River decision, is to clarify what the law has always meant, not to change the law. In Viking River, the Supreme Court held that the FAA preempts the rule established in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348. (Viking River, supra, 596 U.S. at p. 662.) The Supreme Court concluded that Iskanian’s prohibition against arbitration of the individual component of a PAGA claim was incorrect the moment it was decided (Id. [holding that this “result is incompatible with the FAA.”].) Thus, to apply the rule in Iskanian to the Agreement here would require the Court to misinterpret the FAA.

Plaintiff further argues that the Agreement lacks explicit language indicating that it is subject to “future legal developments” and that the Court should thus refrain from inferring or assuming any such provision. (Opp. p. 5:24-26.) The Court notes, however, that the Agreement equally lacks explicit language indicating that it is only subject to the current law at the time of execution. The Agreement states that it “is to be construed as broadly as is permissible under applicable law.” (Chamoun Decl., Ex. 1.) The Agreement states, in relevant part, that “any controversy, claim or dispute […] relating to or arising out of my employment or the cessation of that employment will be submitted to final and binding arbitration” (Chamoun Decl., ¶ 5, Exh. 1.) Upon review of the Complaint, Plaintiff’s PAGA claims all arise from her employment with Defendant. Thus, Defendant has met its burden to show that the Agreement covers the dispute between the parties.

Defendant’s Motion to Compel Arbitration is GRANTED. This action is stayed pending completion of arbitration. The Court sets a Status Conference re arbitration for October 15, 2025 at 8:30 am. The parties are ordered to file a joint Status Report re Arbitration at least seven 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