Judge Lynette Gridiron Winston, Case Number: 24STCV11391, Date: 2024-09-18 Tentative Ruling

Judge: Lynette Gridiron Winston, Case: 24STCV11391, Date: 2024-09-18 Tentative Ruling

Case Number: 24STCV11391 Hearing Date: September 18, 2024 Dept: 6

CASE NAME: Matthew Murray v. Ninth Avenue Foods, LLC, et al.

Defendants Ninth Avenue Foods, LLC and Heritage Distributing Company d/b/a Ninth Avenue Foods, LLC’s Motion to Compel Arbitration of Individual PAGA Claim and Stay Representative Action

TENTATIVE RULING

The Court GRANTS the motion to compel arbitration of Plaintiff’s individual PAGA claims and stay this action with respect to Plaintiff’s representative PAGA claims pending completion of arbitration.

Defendants are ordered to give notice of the Court’s ruling within five calendar days of this order.

BACKGROUND

This is a PAGA action. On May 6, 2024, plaintiff Matthew Murray, individually, and on behalf aggrieved employees pursuant to the Private Attorneys General Act (Plaintiff) filed this action against defendants Ninth Avenue Foods, LLC, Heritage Distributing Company d/b/a Ninth Avenue Foods (collectively, Defendants), and Does 1 through 100, alleging the sole cause of action for violation of Labor Code § 2698 et seq., entailing failure to pay minimum and overtime wages, failure to provide meal periods and rest breaks, failure to timely pay wages during employment, failure to timely pay wages upon termination, failure to provide complete and accurate wage statements, failure to reimburse business expenses, and penalties.

On August 21, 2024, Defendants moved to compel arbitration of Plaintiff’s individual PAGA claims and stay the representative action. On September 5, 2024, Plaintiff opposed the motion. On September 11, 2024, Defendants replied.

LEGAL STANDARD

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿(Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.) A party moving to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-357.) A party seeking to compel arbitration meets their initial burden of establishing the existence of a valid arbitration agreement by attaching a copy to the motion or petition to compel arbitration. (Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060 (Espejo).)

“California has a strong public policy in favor of arbitration and any doubts regarding the arbitrability of a dispute are resolved in favor of arbitration.” (Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 686.) “This strong policy has resulted in the general rule that arbitration should be upheld unless it can be said with assurance that an arbitration clause is not susceptible to an interpretation covering the asserted dispute.” (Ibid. [internal quotations omitted].) This is in accord with the liberal federal policy favoring arbitration agreements under the Federal Arbitration Act (“FAA”), which governs all agreements to arbitrate in contracts involving interstate commerce. (9 U.S.C. § 2, et seq.; Higgins v. Superior Court (2006) 140 Cal.App.4th 1238, 1247.)

REQUESTS FOR JUDICIAL NOTICE

The Court GRANTS Defendants’ request for judicial notice. (Evid. Code § 452, subd. (d).) However, the Court takes judicial notice only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)

OBJECTION

The Court OVERRULES Plaintiff’s objection to the declaration and exhibit included with Defendants’ Reply. The Court finds that the declaration and exhibit respond directly to arguments raised in Plaintiff’s opposition and would not have been required to meet the burden of proof on the motion to compel arbitration.

DISCUSSION

FAA v. CAA

“[T]he FAA's procedural provisions do not apply unless the contract contains a choice-of-law clause expressly incorporating them. [T]he question is not whether the parties adopted the CAA’s procedural provisions: The state's procedural statutes apply by default because Congress intended the comparable FAA sections to apply in federal court. The question, therefore, is whether the parties expressly incorporated the FAA’s procedural provisions into their agreements.” (Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 345 (Victrola 89), internal citations omitted and italics in original.) “[P]revious cases have held that when an arbitration agreement provides that its ‘enforcement’ shall be governed by California law, the [CAA] governs a party's motion to compel arbitration. It follows that when an agreement provides that its ‘enforcement’ shall be governed by the FAA, the FAA governs a party's motion to compel arbitration.” (Id., at p. 346.)

The subject arbitration agreement provides that it is “governed by and enforceable under, the Federal Arbitration Act.” (Compendium, Ex. A, ¶ 4.) Accordingly, the FAA governs this motion to compel arbitration. (See Victrola 89, supra, 46 Cal.App.5th at p. 345.)

Valid Arbitration Agreement and Covered Claims

Defendants move to compel arbitration based on the subject arbitration agreement entitled, “Mutual Agreement to Arbitration Claims.” (Compendium, Ex. A (the Arbitration Agreement).) Defendants attached a copy of the Arbitration Agreement to their moving papers and therefore met their initial burden of establishing the existence of an arbitration agreement between the parties. (Espejo, supra, 246 Cal.App.4th at p. 1060.) The burden now shifts to Plaintiff to challenge the validity of the Arbitration Agreement.

Plaintiff’s opposition does not challenge the existence of the Arbitration Agreement or dispute that it covers Plaintiff’s claims. Plaintiff instead contends that he is exempt from the FAA under 9 U.S.C. section 1 because it is a contract of employment and he is a transportation worker. Plaintiff contends he is a transportation worker because he and other forklift drivers loaded trucks which carried Defendants’ dairy products across state lines. Plaintiff also contends the Arbitration Agreement is a contract of employment because it was presented with Defendants’ other onboarding documents and covers claims between Plaintiff as an employee and Ninth Avenue. Plaintiff contends that California law applies here, which means he cannot waive his right to pursue a PAGA claim on behalf of the State of California before the claim arises, and that his representative PAGA claim cannot be split into an arbitrable individual claim and a non-arbitrable representative claim.

In reply, Defendants contend that the transportation worker exemption to the FAA is narrow and does not apply here. Defendants contend Plaintiff was employed as a warehouse associate during his employment, and any forklift operations were part of his broader duties as a warehouse associate. Defendants contend none of Plaintiff’s essential job duties involved the actual transportation of dairy goods or beverages across state lines. Defendants then contend the Arbitration Agreement was not a contract of employment because Plaintiff was an at-will employee and did not work for Defendants according to any employment contract. They contend that the Arbitration Agreement only requires arbitration of claims between the parties, and it does not call for any performance of work by Plaintiff.

Defendants further contend the purported onboarding process in which Plaintiff claims to have received multiple documents along with the Arbitration Agreement and Plaintiff’s state of mind at that time is unavailing because Plaintiff was not required to sign the Arbitration Agreement at that moment. Defendants contend Plaintiff had time to review the Arbitration Agreement and ask questions before he signed it. Defendants also note the clear language indicating it was an agreement to arbitrate claims. Defendants also argue Plaintiff is required to arbitrate his PAGA claim on an individual basis under the Arbitration Agreement.

The Court finds Defendants are entitled to compel arbitration of Plaintiff’s individual PAGA claims. First, the Court disagrees with Defendants that the Arbitration Agreement does not necessarily constitute a contract of employment for purposes of Section 1 of the FAA. The term “contracts of employment” is not a term of art, but simply means work. (New Prime Inc. v. Oliveira (2019) 586 U.S. 105, 114-116.) Additionally, Defendants concede that Plaintiff was an at-will employee, which is just an employment agreement without a fixed duration. (Reply, 6:7-8; Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 355.) Plaintiff was given several documents when he was hired, including the arbitration agreement, which he was required to sign as part of the onboarding process. (Trujillo Decl., ¶ 4.)

However, the Court does not find persuasive Plaintiff’s arguments that he is a transportation worker within the meaning of Section 1 of the FAA. Plaintiff’s declaration indicates that Defendants’ company is not a transportation company or a company that distributes its own products. (Murray Decl., ¶ 3.) His declaration also indicates that the transportation of goods was contracted out to J.B. Hunt Trucking Company. (Murray Decl., ¶ 3.) The Court finds this significant because the cases in which the transportation worker exemption applied were cases involving transportation companies or companies that distribute their products themselves. (See, e.g., Southwest Airlines Co. v. Saxon (2022) 596 U.S. 450, 455-456 [airline ramp supervisor who was regularly required to load and unload cargo off and on commercial airplanes]; Bisonette v. LePage Bakeries Park St., LLC (2024) 601 U.S. 246, 252-256 [franchisees for Wonder Bread and related bread companies who also drove trucks to distribute baked goods]; Rittmann v. Amazon.com, Inc. (9th Cir. 2020) 971 F.3d 904, 919 [truck drivers for Amazon.com].) Plaintiff’s job duties were limited to working in the warehouse, which did not entail delivering products or working as a truck driver. (Trujillo Reply Decl., ¶ 4.)

Given the foregoing, the Court does not find Plaintiff is exempt from the FAA, which means the Arbitration Agreement is enforceable against Plaintiff’s individual PAGA claims. (Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1123.) With respect to Plaintiff’s representative PAGA claims, the Court exercises its discretion to stay this action pending the completion of the arbitration of Plaintiff’s individual PAGA claims. (Id., at pp. 1124-1125.)

The Court notes that Plaintiff does not otherwise challenge the validity of the Arbitration Agreement, which the Court construes as a tacit admission that Defendants’ arguments are otherwise meritorious. (Sexton v. Superior Court (1997) 58 Cal.App.4th 1403, 1410; C. Opposing the Motion—and Rebutting the Opposition, Cal. Prac. Guide Civ. Pro. Before Trial Ch. 9(I)-C, ¶ 9:105.10; see also Moulton Niguel Water Dist. v. Colombo (2003) 111 Cal.App.4th 1210, 1215 [“Contentions are waived when a party fails to support them with reasoned argument and citations to authority. [Citation.]”])

Based on the foregoing, the Court GRANTS the motion.

CONCLUSION

Defendants are ordered to give notice of the Court’s ruling within five calendar days of this order.