Judge: Lynne M. Hobbs, Case: 24STCV14168, Date: 2024-11-20 Tentative Ruling

Case Number: 24STCV14168    Hearing Date: November 20, 2024    Dept: 61

STEPHANIE LEON vs FULGENT THERAPEUTICS, LLC

TENTATIVE

Defendant Fulgent Therapeutics LLC’s Motion to Compel Arbitration is DENIED.

Plaintiff to provide notice.

DISCUSSION

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.)

Defendant Fulgent Therapeutics, LLC (Defendant) moves to compel mediation and arbitration of Plaintiff Stephanie Leon’s (Plaintiff) claims, based on an arbitration agreement executed by Plaintiff on August 14, 2020, which applies to “all Claims . . . between I and the Company . . . that may arise out of or relate in any way to Employee’s employment with the Company.” (Sui Decl. Exh. A.)

Defendant’s motion fails because the arbitration agreement does not apply to PAGA claims, which are the only claims that Plaintiff brings in this action. The agreement states, “Claims under the Private PAGA are not waived and may not be arbitrated.” (Sui Decl. Exh. A, ¶ 7.)

Defendant’s arguments for not applying this language are unpersuasive. Defendant points to allegations in the Complaint where Plaintiff alleges that she “brings this action on an individual basis and on a representative basis on behalf of other Aggrieved Employees and the State of California, in Plaintiff’s capacity as a private attorney general pursuant to the Private Attorneys General Act of 2004.” (Complaint ¶ 30; Motion at pp. 10–11.) But Defendant does not contest that Plaintiff brings only PAGA claims in this action, which under the agreement “are not waived and may not be arbitrated.” (Sui Decl. Exh. A, ¶ 7.) Whether these claims are characterized as individual or representative PAGA claims, they are specifically excluded from arbitration.

Defendant notes that the agreement contains a waiver of representative claims, followed by language stating that “any class, collective, and/or representative action deemed non-waivable shall be litigated in court,” indicating an intent to arbitrate all claims capable of arbitration, including Plaintiff’s individual PAGA claims. (Motion at pp. 11–12; Sui Decl. Exh. A, ¶ 7.) But again, the agreement specifically excludes PAGA claims from either waiver or arbitration. (Sui Decl. Exh. A, ¶ 7.) “[S]pecific terms and exact terms are given greater weight than general language.” (Restatement (Second) of Contracts § 203 (1981).) The contract’s specific exclusion for PAGA claims controls over broader language regarding representative claims in general.

The motion is therefore DENIED.