Judge: Maurice A. Leiter, Case: 24STCV17375, Date: 2024-12-10 Tentative Ruling

Case Number: 24STCV17375    Hearing Date: December 10, 2024    Dept: 54

Hearing Date: December 10, 2024

Department 54, Judge Maurice A. Leiter

Motion to Compel Arbitration

Moving Party: Defendant Endless Pursuit Corporation

Responding Party: Plaintiff Michael Gordon

T/R:      DEFENDANT’S MOTION TO COMPEL ARBITRATION IS DENIED.

DEFENDANT TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On September 10, 2024, Plaintiff Michael Gordon filed the operative first amended complaint against Defendant Endless Pursuit Corporation, alleging representative PAGA claims.

ANALYSIS

“On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate a controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….”  (CCP § 1281.2.)  The right to compel arbitration exists unless the court finds that the right has been waived by a party’s conduct, other grounds exist for revocation of the agreement, or where a pending court action arising out of the same transaction creates the possibility of conflicting rulings on a common issue of law or fact.   (CCP § 1281.2(a)-(c).)  “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.”  (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

A. Existence of Arbitration Agreement

Defendant moves to compel arbitration based on the arbitration agreement executed by Plaintiff on July 21, 2020. (Decl. Zalazar, Exh. A.) The agreement requires the parties “to arbitrate any and all dispute, claims, or controversies (‘claims’) they may have against each other, . . . which arise from the employment relationship between Employee and Employer or the termination thereof.” (Id.) The agreement contains a class and representative waiver.

Defendant has met its burden to establish the existence of an agreement to arbitrate. The burden shifts to Plaintiff to establish any defenses to enforcement.

B. Enforceability

In opposition, Plaintiff asserts that the agreement is not enforceable against Plaintiff’s non-individual, representative PAGA claims. Courts have held that employees cannot be made arbitrate or to waive representative PAGA claims in arbitration agreements. (See Viking River Cruises, Inc. v. Moriana, 596 U.S. 639, 649 (2022); see DeMarinis v. Heritage Bank of Commerce (2023) 98 Cal.App.5th 776, 787; Barrera v. Apple American Group LLC (2023) 95 Cal.App.5th 63, 82 [“…even after Viking River, a contractual waiver of the right to prosecute PAGA claims is unenforceable as against California public policy”].)

Plaintiff also asserts that he will not pursue individual claims that are subject to arbitration. Plaintiff separately has filed a motion for leave to amend the complaint to abandon his individual Labor Code claims and proceed solely under PAGA.

In reply, Defendant argues that Plaintiff cannot separate his individual and representative PAGA claims, and the individual claims still must be adjudicated via arbitration. The Court of Appeal in Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533 addressed this issue and the implications of Viking River, supra, and the California Supreme Court case Adolph v. Uber (2023) 14 Cal.5th 1104,

The inability for an employee to pursue an individual PAGA claim does not prevent that employee from filing a representative PAGA action. California courts have consistently held that “ ‘[p]aring away the plaintiff's individual claims’ ” for one reason or another, “ ‘does not deprive the plaintiff of standing to pursue representative claims under PAGA.’ ” (Adolph, supra, 14 Cal.5th at p. 1122, 310 Cal.Rptr.3d 668, 532 P.3d 682.)

...

In Viking River Cruises v. Moriana (2022) 596 U.S. 639, 661-664, 142 S.Ct. 1906, 1924-26, 213 L.Ed.2d 179, 200-201 (Viking River), the United States Supreme Court wrote, “Under PAGA's standing requirement, a plaintiff can maintain non-individual PAGA claims in an action only by virtue of also maintaining an individual claim in that action.” (...) “When an employee's own dispute is pared away from a PAGA action, the employee is no different from a member of the general public, and PAGA does not allow such persons to maintain suit.” (Ibid...)

...

The Adolph court concluded that the Viking River requirement of having to file an individual PAGA cause of action to achieve standing to file a representative PAGA suit was incorrect. There are only two requirements for PAGA standing. “The plaintiff must allege that he or she is (1) ‘someone “who was employed by the alleged violator” ’ and (2) someone ‘ “against whom one or more of the alleged violations was committed.” ’ ” (Adolph, supra, 14 Cal.5th at p. 1120, 310 Cal.Rptr.3d 668, 532 P.3d 682.)

(Id. at 537-8.)

Under Balderas, Plaintiff may maintain this suit as a representative, rather than individual, PAGA action. Representative PAGA claims cannot be compelled to arbitration.

Defendant also asserts that Plaintiff released his ability to bring representative claims in the separation agreements executed by Plaintiff after his termination. This agreement goes to the merits of Plaintiff’s claims rather than whether they must be arbitrated.

Defendant’s motion to compel arbitration is DENIED.

Hearing Date: December 10, 2024

Department 54, Judge Maurice A. Leiter

Motion for Leave to Amend

Moving Party: Plaintiff Michael Gordon

Responding Party: Defendant Endless Pursuit Corporation

T/R:      PLAINTIFF’S MOTION FOR LEAVE TO AMEND IS GRANTED.

PLAINTIFF TO NOTICE.

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On September 10, 2024, Plaintiff Michael Gordon filed the operative first amended complaint against Defendant Endless Pursuit Corporation, alleging representative PAGA claims.

ANALYSIS

The Court may allow, in furtherance of justice, and “upon any terms as may be just, an amendment to any pleading or proceeding in other particulars….”  (CCP § 473(a)(1).)  A motion to amend a pleading before trial must be accompanied by a separate declaration that specifies (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(b).)

It is not an abuse of discretion of the court to grant the motion unless there is a “showing that actual unfairness or obvious prejudice has resulted from the allowance of such an amendment”.  (Posz v. Burchell (1962) 209 Cal.App.2d 324, 334.)  “Counsel on the firing line in an actual trial must be prepared for surprises, including requests for amendments of pleading.”  (Ibid.)  Absent a showing of prejudice, delay alone is insufficient grounds for denial.  (See Higgins v. Del Faro (1981) 123 Cal. App. 3d 558, 564–65.)

Plaintiff seeks to amend the Complaint to conform with Plaintiff’s intent to abandon his individual Labor Code claims and proceed solely under PAGA, on behalf of the State of California for all aggrieved employees, including himself and other aggrieved employees. A comparison of the operative First Amended Complaint and SAC confirms that the pleadings are materially identical in all other respects. In opposition, Defendant asserts that waiver of individual claims will waive the representative claims. As discussed in the Court’s ruling on Defendant’s motion to compel arbitration, this is incorrect under Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533.

The Court finds that amendment is in the interests of justice. Plaintiff’s motion is GRANTED.