Judge: Mark V. Mooney, Case: 21STCV15142, Date: 2022-10-14 Tentative Ruling

Case Number: 21STCV15142    Hearing Date: October 14, 2022    Dept: 68

RE THE PETITION OF DEFENDANT FOR ORDER COMPELLING BINDING CONTRACTUAL ARBITRATION:  GRANTED

DEFENDANT WEST LAKE SERVICES, LLC’S MOTION FOR PROTECTIVE ORDER:  DENIED AS MOOT

COMPEL ARBITRATION

Timely Petition

Defendant seeks an order compelling the arbitration of the individual PAGA claims asserted in this action.

The Court must address whether (1) Defendant waived its claim to arbitration; (2) the Viking River decision excuses Defendant’s delay; and (3) Defendant’s delay has prejudiced Plaintiffs.

In determining whether a party waived contractual arbitration rights by participating in litigation, courts usually consider the amount of litigation, the time elapsed from the commencement of litigation to the request for arbitration, the proximity of a trial date when arbitration is sought, and whether the party filing the lawsuit intended to elect a judicial forum rather than the arbitral tribunal. (Aviation Data, Inc. v. American Express Travel Related Services Co., Inc. (2007) 152 Cal.App.4th 1522.)

Defendant did not waive its claim to arbitration in light of Viking River. Although Plaintiffs claim that Defendant could have brought its petition to compel arbitration under Iskanian, since that case left open the possibility of bifurcating a PAGA case and submitting individual claims to arbitration while letting the representative claims remain in litigation, Plaintiffs fail to explain how this amounts to unreasonable delay. Defendant argues that when the Viking River decision came out, the arbitration agreement became enforceable in this case and they did not unreasonably delay in seeking petition to compel arbitration because it reserved the first available hearing date following the release of the decision. The Court finds Defendant’s argument to have merit. Finally, Plaintiffs have not made a sufficient showing that Defendant’s delay in seeking arbitration resulted in prejudice because if there were “efficiencies” to be gained through arbitration, Plaintiffs can seek them now. Additionally, Plaintiffs are not precluded from recovery if the Court grants Defendant’s petition.

Thus, Defendant timely petitioned to compel arbitration.

Scope of Arbitration Agreement

Plaintiffs claim as of July 31, 2019, in an updated arbitration agreement, the parties agreed that any PAGA claims would be excluded from arbitration: “Further, any binding arbitration must be brought in the employee’s name as an individual and not as a plaintiff or class member in any purported class or representative proceeding (with the exception of claims under the Labor Code Private Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).” (Douglas Decl., Exhibit E.)

In Reply, Defendant argues that this clause means that an employee may not bring an arbitration proceeding on a class or representative basis except for PAGA claims, in which the employee may bring representative claims.

The Court agrees with Defendant’s interpretation of the arbitration agreement and finds that Plaintiffs’ PAGA claims are not excluded from arbitration. The Court also finds that the action falls within the scope of the arbitration agreement because Plaintiffs’ individual PAGA claims relate to their employment with Defendant.

Thus, Plaintiffs’ individual PAGA claims are within the scope of the arbitration agreement.

The Court finds that Plaintiffs’ individual PAGA claims are subject to arbitration.

Individual and Representative PAGA Claims

The question of whether Plaintiffs shall have standing to assert the representative PAGA claim once the individual claim is resolved remains unclear.

In Viking River the U.S. Supreme Court suggested that once the plaintiff was compelled to arbitrate her individual claim, she would lack standing to pursue the nonindividual PAGA claim because she was no longer an aggrieved employee under Labor Code section 2699, subdivisions (a) and (c). (Id. at *34-35.)  However, while the determination of the arbitrability of the individual PAGA claims turns on construction of federal law, the standing of an individual to litigate representative PAGA claims turns on state law.  This Court is not bound by the analysis of the United States Supreme Court interpreting California law on standing under PAGA.  That question is to be determined by the California Supreme Court.

“In assessing standing, California courts are not bound by the ‘case or controversy’ requirement of article III of the United States Constitution . . . .” (Bilafer v. Bilafer (2008) 161 Cal.App.4th 363, 370; Grosset v. Wenaas (2008) 42 Cal.4th 1100, 1117, fn. 13 [“Article III of the federal Constitution imposes a ‘case-or-controversy limitation on federal court jurisdiction,’ requiring ‘ “the party requesting standing [to allege] ‘such a personal stake in the outcome of the controversy as to assure that concrete adverseness which sharpens the presentation of issues.’ ” ’ [Citation.] There is no similar requirement in our state Constitution.”]; see Cal. Const., art. VI, § 10 [trial courts have jurisdiction in “all other causes” brought before it]; National Paint & Coatings Assn. v. State of California (1997) 58 Cal.App.4th 753, 761 [rejecting federal cases for the standing requirement and stating that the California Constitution “contains no ‘case or controversy’ requirement.”].)

The question of whether plaintiffs have standing to maintain representative PAGA claims is currently pending before the California Supreme Court in Adolph v. Uber Technologies, Inc., Case Number S274671.  At this time the appropriate action is to STAY this action as it relates to the representative PAGA claims, not dismiss those claims.

REQUEST FOR JUDICIAL NOTICE

The Court DENIES all of Plaintiffs’ requests for judicial notice under Evidence Code section 452 (d).  There is nothing “relevant” in the decisions of other courts.  They are not citable decisions.

“Defendant requests us to take judicial notice of the record filed in the Court of Appeal in People v. Superior Court (Rowland), supra, 194 Cal.App.3d 11, 239 Cal.Rptr. 257. We may, of course, “take judicial notice” (Evid.Code, § 459, subd. (a)) of the “[r]ecords of ... any court of this state” (id., § 452, subd. (d)). We fail to see—and certainly, defendant fails to show—the relevance of the subject record. From all that appears, the court did not make any determination in light thereof. “Because ... no evidence is admissible except relevant evidence, it is reasonable to hold that judicial notice, which is a substitute for formal proof of a matter by evidence, cannot be taken of any matter that is irrelevant....” (2 Jefferson, Cal.Evidence Benchbook (2d ed. 1982) Judicial Notice, § 47.1, p. 1749.) Consequently, we deny the request.”  People v. Rowland (1992) 4 Cal.4th 238, 268 [14 Cal.Rptr.2d 377, 396, 841 P.2d 897, 916].

DEFENDANT WEST LAKE SERVICES, LLC’S MOTION FOR PROTECTIVE ORDER

Defendant has asked the Court to issue a protective order precluding and staying discovery in connection with the PAGA claims asserted against them, pending hearing and decision by this court on a contemplated Motion for Summary Adjudication related to the standing of Plaintiffs to proceed in this matter, and res judicata/collateral estoppel.

Alternatively, Defendant seeks a protective order that 1) limits discovery to that related to Plaintiff and excludes discovery related to non-exempt employees of the moving party Defendant; or 2) limits discovery other than that related to policies of the moving party Defendant; or 3) precludes and stays discovery that is unduly intrusive or invasive of third party rights to privacy, unduly burdensome and/or relate to contact information of non-exempt employees of the moving party Defendant.

In light of this Court’s determination that the individual PAGA claims are subject to arbitration, and the representative PAGA claims are to be stayed, the Court believes that the Motion for a Protective Order is moot and it is therefore DENIED as moot.

CONCLUSION

The Motion to Compel Arbitration of the individual PAGA claims is GRANTED.  The Court STAYS the representative PAGA claims in light of the pending Supreme Court case Adolph v. Uber Technologies, Inc., Case Number S274671.

The Motion for a Protective Order is DENIED as moot.