Judge: Joseph Lipner, Case: 24STCV16027, Date: 2024-10-31 Tentative Ruling

Case Number: 24STCV16027    Hearing Date: October 31, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendant Sterling Jewelers Inc. moves for an order staying proceedings in this case pending the resolution of the case Jennifer J. Walter v. Sterling Jewelers Inc., Case No. 2:24-cv-05581 MWF(PVCx) (the “Federal Action”) in the United States District Court for the Central District of California.

The Court GRANTS Defendant’s motion and stay’s this action pending the outcome of the Federal Action.  The Court sets a status conference in the current action for December 18, 2025 at 8:30 a.m.

Background

This is a Private Attorney General Act (“PAGA”) case.

Plaintiff filed the Federal Action in the Los Angeles County Superior Court on April 17, 2024. (Defendant’s Request for Judicial Notice, Ex. A.)

Plaintiff filed this case on June 26, 2024, raising one claim for enforcement of Labor Code, sections 2698, et seq. The conduct complained of includes failure to timely pay all wages (including minimum wage and overtime wages); failure to provide meal periods; failure to permit rest breaks; failure to reimburse business expenses; failure to provide accurate itemized wage statements; failure to maintain accurate and complete records showing daily hours worked by and wages paid to employees; and failure to timely pay all earned wages upon separation.

Defendant removed the Federal Action to federal court on July 1, 2024. (Defendant’s Request for Judicial Notice, Ex. B.)

On August 19, 2024, Plaintiff filed an amended complaint (“FFAC”) in the Federal Action, which is currently the operative complaint in that proceeding. (Defendant’s Request for Judicial Notice, Ex. C.) The FFAC raises claims for (1) failure to pay minimum wages; (2) failure to pay overtime wages; (3) failure to provide meal periods; (4) failure to permit rest breaks; (5) failure to reimburse business expenses; (6) failure to provide accurate itemized wage statements; (7) failure to pay all wages due upon separation of employment; and (8) unfair competition.

Defendant filed this motion on September 17, 2024. Plaintiff filed an opposition and Defendant filed a reply.

Requests for Judicial Notice

The Court grants the parties’ requests for judicial notice and takes notice of the submitted public records.

Legal Standard

“[A] court ordinarily has inherent power, in its discretion, to stay proceedings when such a stay will accommodate the ends of justice.” (People v. Bell (1984) 159 Cal.App.3d 323, 329.)

“It is black letter law that, 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.) “ ‘In exercising its discretion the court should consider [1] the importance of discouraging multiple litigation designed solely to harass an adverse party, and [2] of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of [3] the nature of the subject matter, [4] the availability of witnesses, or [5] the stage to which the proceedings in the other court have already advanced.’ [Citation.] The California Supreme Court also has isolated another critical factor favoring a stay of the state court action in favor of the federal action, a factor which happens to be present in this case—[6] the federal action is pending in California not some other state.” (Ibid.)

Discussion

            As demonstrated by Defendant’s table comparing Plaintiff’s claims here against those in the Federal Action, Plaintiff’s claims in this case are almost entirely duplicative of those in the Federal Action. (Motion at p. 2:1-20.)

This is a routine employment collective action that can be competently handled by either state or federal court. Because the Federal Action is located in the Central District of California, the availability of witnesses and convenience to the parties is likely to be the same in either court. Because the two cases allege nearly identical conduct, there is a substantial risk of unseemly conflicts between the state and federal court. The two cases’ similarity also creates a high risk that Defendant will be unduly burdened by litigating the same issues in two courts. Finally, as stated above, the Federal Action is pending in California, and not some other state.

Furthermore, staying this action would prevent much duplicative litigation. While the two actions will ultimately need to be litigated separately, conducting them in sequence will reduce duplicative discovery and allow the parties to engage in more realistic settlement negotiations in the latter case.

Plaintiff contends that a stay is not appropriate because the two cases do not involve the same parties. Plaintiff argues that the cases do not involve the same parties because the State of California is the real party in interest in PAGA actions. Plaintiff cites Howitzon v. Evans Hotels, LLC (2022) 81 Cal.App.5th 475, 482-488, where the Court of Appeal permitted a plaintiff who had already settled a class action to proceed with a PAGA action on the same subject matter because the state, and not the plaintiff, was the real party in interest. (Id. at p. 488.) This case is distinguishable. First, Howitzon involved a resolved class action, and not a pending one, and did not address the issue of a stay at all. Second, the core issue in Howitzer was one of claim preclusion, not concurrent litigation. The Howitzer court dealt with the question of whether a resolved class action precluded a subsequent PAGA claim, finding that it did not. (Id. at pp. 487-488.) If anything, such a holding militates in favor of a stay, because it would permit the class action to be resolved while preserving the PAGA claims.

 Further, although the state is the real party in interest in a PAGA claim, the parties do not have to be absolutely identical for a stay to be appropriate.  Perfect symmetry of parties is not required – “ ‘[t]he assumption underlying most of these authorities is that the two related lawsuits are between the same or substantially identical parties.’ ” (Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co., supra, 15 Cal.App.4th 800, 807 fn. 5.) The same is true regarding Plaintiff’s argument that the legal rights in the two cases are distinct – the cases need only share the same subject matter for a stay to be permissible. (Id. at p. 804.)

Plaintiff argues that Defendant attempts to litigate the PAGA claims in a more favorable forum. However, Defendant has not attempted to remove this case to federal court. Presumably, the PAGA claims will be litigated here.

Plaintiff argues that a stay is improper because PAGA provides that “[n]othing in this part shall operate to limit an employee's right to pursue or recover other remedies available under state or federal law, either separately or concurrently with an action taken under this part.” (Lab. Code, § 2699, subd. (g)(1).)

Paragraph (g)(1), in full, reads as follows:

“Except as provided in paragraph (2), an aggrieved employee may recover the civil penalty described in subdivision (f) in a civil action pursuant to the procedures specified in Section 2699.3 filed on behalf of himself or herself and other current or former employees against whom one or more of the alleged violations was committed. Any employee who prevails in any action shall be entitled to an award of reasonable attorney's fees and costs, including any filing fee paid pursuant to subparagraph (B) of paragraph (1) of subdivision (a) or subparagraph (B) of paragraph (1) of subdivision (c) of Section 2699.3. Nothing in this part shall operate to limit an employee's right to pursue or recover other remedies available under state or federal law, either separately or concurrently with an action taken under this part.”

(Lab. Code, § 2699, subd. (g)(1).)

            Taken in its full context, the portion that Plaintiff quotes is a clarification that a PAGA claim does not replace any other claims an employee may have against their employer. It is not a rule against judicial stays.

            Based on its analysis of the Caiafa factors, the Court determines that it is in the interest of justice to stay this proceeding pending the outcome of the Federal Action.

            The Court grants Defendant’s motion and stay’s this action pending the outcome of the Federal Action.