Judge: Joel R Wohlfeil, Case: 37-2023-00032465-CU-OE-CTL, Date: 2023-10-27 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - October 25, 2023

10/27/2023  09:00:00 AM  C-73 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Joel R. Wohlfeil

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Civil - Unlimited  Other employment Motion Hearing (Civil) 37-2023-00032465-CU-OE-CTL GONZALEZ VS TACO BELL CORP [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion - Other, 09/18/2023

The Motion (ROA # 9) of Defendant Taco Bell Corp. ('Defendant') for an order compelling Plaintiff Marcos Gonzalez ('Plaintiff') to submit his individual PAGA claim to individual arbitration as required by the arbitration agreement between the parties and staying the non-individual PAGA claim pending completion of the individual arbitration, is MOOT IN PART and GRANTED IN PART.

The Motion seeking to compel arbitration is MOOT.

The concurrent Motion seeking to stay this action is GRANTED.

The Request (ROA # 14) for judicial notice is GRANTED.

The Request (ROA # 16) for judicial notice is GRANTED.

It is undisputed that the parties are in the process of entering into a stipulation to arbitrate Plaintiff's individual PAGA claim. Thus, the Court does not rule on this aspect of the Motion. The only remaining issue is whether the representative PAGA action should be stayed pending completion of the stipulated arbitration.

It is undisputed that federal law controls.

First, the subject 'Mutual Arbitration Agreement' expressly provides for the application of federal law. In accordance with choice-of-law principles, parties to an arbitration agreement may limit the trial court's authority to stay or deny arbitration under state law by adopting the more restrictive procedural provisions of the Federal Arbitration Act. Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal. App. 5th 337, 345.

Second, the agreement affects interstate commerce. The Federal Arbitration Act ('FAA,' 9 U. S. C. § 1, et seq.) governs if the underlying contract facilitates interstate commercial transactions, or directly or indirectly affects commerce between states. 9 U. S. C. § 2 and Knight, Chernick, Flynn and Quinn, Cal. Prac. Guide: Alternative Dispute Resolution (The Rutter Group 2022) at ¶ 5:51 (citing Bernhardt v. Polygraphic Co. of America (1956) 350 U S 198, 201 and Prima Paint Corp. v. Flood & Conklin Mfg. Co. (1967) 388 U S 395, 401, 402, fn. 7).

The contract at issue here concerns employment with a company that operates in multiple states.

Therefore, the FAA applies.

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3021644 CASE NUMBER: CASE TITLE:  GONZALEZ VS TACO BELL CORP [IMAGED]  37-2023-00032465-CU-OE-CTL Regarding a stay, the FAA provides: 'If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement ....' 9 U. S. C. § 3.

When an action includes arbitrable and nonarbitrable components, the resulting bifurcated proceedings are not severed from one another. Adolph v. Uber Technologies, Inc. (2023) 14 Cal. 5th 1104, 1125.

Instead, the Court may stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement. Id. (quoting 9 U. S. C. § 3 and citing Code Civ. Proc., § 1281.4).

The Adolph opinion also states: '.... Adolph explains that his PAGA action could proceed in the following manner if he were ordered to arbitrate his individual PAGA claim: First, the trial court may exercise its discretion to stay the non-individual claims pending the outcome of the arbitration pursuant to section 1281.4 of the Code of Civil Procedure. Following the arbitrator's decision, any party may petition the court to confirm or vacate the arbitration award under section 1285 of the Code of Civil Procedure. If the arbitrator determines that Adolph is an aggrieved employee in the process of adjudicating his individual PAGA claim, that determination, if confirmed and reduced to a final judgment (Code Civ. Proc., § 1287.4), would be binding on the court, and Adolph would continue to have standing to litigate his nonindividual claims. If the arbitrator determines that Adolph is not an aggrieved employee and the court confirms that determination and reduces it to a final judgment, the court would give effect to that finding, and Adolph could no longer prosecute his non-individual claims due to lack of standing ....

Uber makes no convincing argument why this manner of proceeding would be impractical or would require relitigating Adolph's status as an aggrieved employee in the context of his non-individual claims, and we see no basis for Uber's concern .....' Id. at 1123, 1124 (some internal citations omitted).

In addition, the subject arbitration agreement states: 'The Parties agree that if either party brings a claim that includes both claims subject to arbitration under this Agreement and claims that are not, all claims that are not subject to this Agreement shall be stayed, pursuant to 9 U. S. C. § 3, until the claims subject to arbitration are fully resolved.' Given this legal authority, there is no reason why the agreement between the parties should not be enforced. Thus, the non-arbitrable representative action will be stayed pending completion of the arbitration.

Plaintiff argues staying the representative action will harm the ability to investigate the merits of the action and will cause prejudice. However, this argument is speculative and conclusory. No evidence is provided documenting any potential prejudice. This not a sufficient basis on which to disregard the agreement of the parties.

The Court sets a Status Conference on Friday September 13, 2024 at 2:00 PM, the limited purpose of which is to track the disposition of the arbitration.

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