Judge: Malcolm Mackey, Case: 22STCV29468, Date: 2023-04-03 Tentative Ruling

Case Number: 22STCV29468    Hearing Date: April 3, 2023    Dept: 55

PAULI v. U.S. MERCHANTS FINANCIAL GROUP, INC.                  22STCV29468

Hearing Date:  4/3/23,  Dept. 55.

#5:   PETITION TO COMPEL ARBITRATION AND STAY PROCEEDINGS PENDING OUTCOME OF ARBITRATION.

 

Notice:  Okay

Opposition

 

MP:  Defendants

RP:  Plaintiff

 

 

Summary

 

On 9/9/22, Plaintiff KILISI PAULI filed a PAGA Complaint alleging that defendants failed to provide to employees prompt payments of wages, itemized wage statements, meal and rest periods, overtime wages, and minimum wages, and failed to maintain records.

 

 

MP Positions

 

Moving parties request an order compelling Plaintiff into arbitration staying or dismissing the proceedings, on grounds including the following:

 

·         Plaintiff signed a completely optional arbitration agreement, February 7, 2022, which requires him to submit any disputes related to his employment to individual arbitration.

·         Plaintiff voluntarily agreed to pursue any claims on an individual basis, and not as a representative action.

 

 

RP Positions

 

Opposing party advocates denying the motion, or staying the action, for reasons including the following:

 

·         As to Plaintiff’s representative PAGA claims, California law excludes PAGA representative claims from arbitration.

·         There is unsettled law concerning standing for representation of aggrieved employees under PAGA, as set forth in the case of Adolph v. Uber Technologies, Inc., Cal. Ct. App. Case No. G059860 (“Adolph”), scheduled to be heard by the California Supreme Court.

 

 

Tentative Ruling

 

The petition is granted.

Plaintiff and defendants shall arbitrate the controversies between them, including the entire Complaint, in accordance with their agreement to arbitrate. 

This entire case is dismissed.

The Iskanian opinion correctly decided a PAGA waiver is unenforceable as to non-individual claims, without any FAA preemption, but arbitration can be compelled as to individual plaintiffs’ waived claims, and the remaining claims of representative actions should be dismissed, due to lack of standing upon plaintiffs’ removal from the action and into arbitration.  Viking River Cruises v. Moriana    (2022) 142 S. Ct. 1906, 1924-25  (opinion after granting petition for writ of certiorari to the Court of Appeal of California).  “The viability of nonindividual PAGA claims after the individual claims are compelled to arbitration is an open question for further exploration by California courts.”   Lewis v. Simplified Labor Staffing Solutions, Inc. (2022) 85 Cal.App.5th 983, 1000 n. 8  (citing Gavriiloglou v. Prime Healthcare Management, Inc. (2022) 83 Cal.App.5th 595 (arbitration of individual PAGA claim does not preclude the employee from pursuing nonindividual PAGA claims.))

There is a rule against PAGA waivers and predispute arbitration agreements, notwithstanding the Federal Arbitration Act.  Contreras v. Sup. Ct. (2021) 61 Cal.App.5th 461, 471-72.  See also  Winns v. Postmates Inc. (2021) 66 Cal. App. 5th 803, 815 n. 4  (California cases never overruled Iskanian, although the Viking opinion was then anticipated to address Ikanian).

A case can be dismissed on the grounds that all issues are susceptible to arbitration by agreement and plaintiff did not attempt to exhaust arbitration. 24 Hour Fitness, Inc. v. Sup. Ct. (1998) 66 Cal. App. 4th 1199, 1208;  Charles J. Rounds Co. v. Joint Council of Teamsters (1971) 4 Cal.3d 888, 899. 

The Court exercises its discretion to decide and not delay the ruling pending a related decision--  Adolph v. Uber Techs., Inc., No. G059860, 2022 WL 1073583 (Cal. Ct. App. Apr. 11, 2022), rev. grt’d (July 20, 2022).  A trial court would not abuse discretion as to delaying litigation pending an appeal of a case involving the same issues.  California Canning Mach. Co. v. Sup. Ct. (1935) 3 Cal.2d 606, 608;  Reed v. Sup. Ct (2001) 92 Cal. App. 4th 448, 455.