Judge Lynne M. Hobbs, Case Number: 23STCV29510, Date: 2025-01-07 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV29510, Date: 2025-01-07 Tentative Ruling

Case Number: 23STCV29510 Hearing Date: January 7, 2025 Dept: 61

JAILYNE ASTORGA vs LOTTE GLOBAL LOGISTICS (NORTH AMERICA) INC., A CALIFORNIA CORPORATION, et al.

TENTATIVE

Defendant Prospects Employment Services, LLC’s Motion to Compel Arbitration is DENIED.

Plaintiff Jailyne Astorga’s Motion for Leave to File First Amended Complaint is GRANTED.

Plaintiff to provide notice.

ANALYSIS:

I. MOTION TO COMPEL ARBITRATION

On petition of a party to an arbitration agreement to arbitrate a controversy, a court must order the petitioner and respondent to arbitrate the controversy if it determines the arbitration agreement exists, unless (1) the petitioner has waived its right to arbitrate; (2) grounds exist for the revocation of the agreement; or (3) “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.” (Code Civ. Proc., § 1281.2.)

“[T]he party moving to compel arbitration bears the burden of establishing the existence of a valid agreement to arbitrate, and the party opposing arbitration bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. The role of the trial court is to sit as a trier of fact, weighing any affidavits, declarations, and other documentary evidence, together with oral testimony received at the court's discretion, to reach a determination on the issue of arbitrability.” (Hotels Nevada v. L.A. Pacific Center, Inc. (2006) 144 Cal.App.4th 754, 758.)

Defendants Lotte Global Logistics (North America) Inc. (Lotte) and Prospects Employment Services, LLC (Prospect, or collectively “Defendants”) move for arbitration of the claims of Plaintiff Jailyn Astorga (Plaintiff) based on an arbitration agreement executed by Plaintiff in July 2022. (Verdin Decl. Exh. A.) The agreement requires arbitration for “any all disputes or claims . . . relating to Employee’s recruitment to or employment with the Company, or the termination of that employment.” (Ibid.)

Plaintiff in opposition argues that arbitration of her claims is barred by the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFAA), enacted at 9 U.S.C. § 402. That statute prevents the enforcement of arbitration agreements for a “sexual harassment dispute,” and further states that “no predispute arbitration agreement . . . shall be valid or enforceable with respect to a case which is filed under Federal, Tribal, or State law and relates to the . . . sexual harassment dispute.” (9 U.S.C. § 402, subd. (a).)

The operative Complaint pleads no claim for sexual harassment. But Plaintiff brings a motion seeking leave to file a First Amended Complaint (FAC) alleging such a claim. The proposed FAC includes allegations that, among other coworkers and supervisors for Defendants, one employee named Hyuk Dae Kwon or “HD” knew that Plaintiff was pregnant during her tenure with Defendants. (Proposed FAC ¶ 13.) HD during this time accused Plaintiff of working slower than certain male employees. (Proposed FAC ¶ 14.) Plaintiff alleges that HD called her “slow,” “stupid,” and “dumb,” blaming her for mistakes made by Plaintiff’s male coworkers. (Proposed FAC ¶ 14.) Plaintiff alleges that this conduct occurred at least once per week. (Proposed FAC ¶ 15.) It is alleged that HD was Plaintiff’s direct supervisor. (Proposed FAC ¶ 66.) The current, operative complaint contains allegations that Plaintiff filed a workplace complaint based on HD calling her “dumb” and “stupid,” but does not include allegations that HD was her supervisor, that his insults were the product of bias, or the legal theory of FEHA harassment.

Prospect in reply argues that federal law does not apply to this arbitration agreement. (Reply at pp. 3–4.) But Prospect’s own arbitration agreement expressly states that it is governed by the Federal Arbitration Act. (Verdin Decl. Exh. A [“Governing Law”].) There is little reason to find that the arbitration agreement is within the reach of the FAA but not the EFAA

Prospect also argues that even if the harassment claim is not arbitrable, the other claims should still go to arbitration. (Reply at pp. 3–4.) This argument too is unpersuasive. The prohibitory force of 9 U.S.C. § 402 applies not just to harassment claims, but to any “arbitration agreement” offered against “a case . . . [that] relates to the sexual assault dispute or the sexual harassment dispute.” (9 U.S.C. § 402, subd. (a), italics added.) “[T]he text of § 402(a) makes clear that its invalidation of an arbitration agreement extends to the entirety of the case relating to the sexual harassment dispute, not merely the discrete claims in that case that themselves either allege such harassment or relate to a sexual harassment dispute.” (Johnson v. Everyrealm, Inc. (S.D.N.Y. 2023) 657 F.Supp.3d 535, 559.) The severance that Defendant seeks is therefore unavailable.

Resolution of the motion to compel arbitration thus requires resolution of Plaintiff’s motion for leave to amend, because if Plaintiff is permitted to add a cause of action for sexual harassment under FEHA, then the EFAA will bar arbitration of Plaintiff’s case.

II. MOTION FOR LEAVE TO AMEND

Code Civ. Proc. section 473 subd. (a)(1) states that:

The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.

“The trial court has discretion to permit or deny the amendment of the complaint, but instances justifying the court's denial of leave to amend are rare.” (Armenta ex rel. City of Burbank v. Mueller Co. (2006) 142 Cal.App.4th 636, 642.)

“Although courts are bound to apply a policy of great liberality in permitting amendments to the complaint at any stage of the proceedings, up to and including trial [Citations], this policy should be applied only ‘[w]here no prejudice is shown to the adverse party . . .’ [Citation.] A different result is indicated ‘[w]here inexcusable delay and probable prejudice to the opposing party’ is shown. [Citation.]” (Magpali v. Farmers Group, Inc. (1996) 48 Cal.App.4th 471, 487.)

Pursuant to California Rule of Court Rule 3.1324, “[a] motion to amend a pleading before trial must: (1)Include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) State what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and (3)State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.”

Such a motion must include a supporting declaration stating, “(1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reasons why the request for amendment was not made earlier.” (CRC Rule 3.1324, subd. (b).)

As noted above in relation to Defendants’ motion to compel arbitration, Plaintiff Jailyn Astorga seeks leave to add a cause of action for FEHA harassment, based on her supervisor’s weekly insults, offered against her but not her male employees. Defendants in opposition contend that Plaintiff fails to offer any reason why the addition of this legal theory was not included in the original complaint, and further that the additional facts fail to plead a cause of action. (Opposition at pp. 5–7.)

Defendants’ argument as to the legal insufficiency of the proposed cause of action is unpersuasive. Prospect argues only that the alleged perpetrator of the harassment, one “HD,” was an employee of Lotte, “outside the control of Prospects.” (Motion at pp. 5–6.) Yet the proposed Complaint alleges that Plaintiff complained about HD’s behavior to one Rayo Garcia, “Prospects’ “on-site director.” (FAC ¶ 14.) The FAC does not disclose that HD’s behavior and Plaintiff’s employment circumstances were beyond Prospect’s control. *

Nor does the motion fail for undue delay or prejudice to Defendants. It is true that the motion does not disclose the circumstances justifying the inclusion of the new cause of action. Plaintiff’s counsel states only that he notified Defendants of his intention to seek leave to amend on November 4, 2024. (Panitz Decl. ¶ 2.) Yet the circumstances that prompt this proposed amendment are obvious: Prospect filed its motion to compel arbitration on September 30, 2024, and Plaintiff seeks by the addition of the new cause of action to defeat arbitration.

Defendants present no authority suggesting that the belated inclusion of such a cause of action constitutes prejudice justifying denial of a well-pleaded harassment claim. Prejudice may come in the form of “delay in trial, loss of critical evidence, or added costs of preparation.” (Bidari v. Kelk (2023) 90 Cal.App.5th 1152, 1173.) This case was filed on December 4, 2023, and the motion to compel arbitration was filed on September 30, 2024. To the extent the foreclosing of arbitration constitutes prejudice, that same prejudice would have existed if the claim had been included in the complaint from the outset of the case. The only prejudice resulting from granting the amendment is the labor already incurred by the filing and opposing of the motions now under consideration. Trial in this matter is not yet set, and the parties will have ample opportunity to investigate the new claim before trial commences. Thus granting the motion will cause no cognizable prejudice to Defendants.

The motion for leave to amend is therefore GRANTED, and the motion to compel arbitration is DENIED.
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* Even if the claim were pleaded only against Lotte, this would not necessarily permit Prospect to proceed with arbitration of the claims alleged against it, since the EFAA applies to “predispute arbitration agreement[s] . . . with respect to a case which . . . relates to the. . . . sexual harassment dispute.” (9 U.S.C. § 402, subd. (a).) Such allegations against Lotte alone would also raise questions of conflicting rulings under Code of Civil Procedure § 1281.2, subd. (c).