Judge: Peter Wilson, Case: 2022-01239675, Date: 2022-09-15 Tentative Ruling

Defendant Sun West Mortgage Co.’s motion to compel Plaintiff Cameron Santa Cruz to arbitrate his individual PAGA claim is GRANTED. The remainder of the case is stayed pending the outcome of the arbitration. To the extent the motion seeks an order dismissing Plaintiff’s non-individual PAGA claim, the Motion is DENIED WITHOUT PREJUDICE.

A party moving to compel arbitration under Code Civil Procedure Section 1281.2 must prove by a preponderance of the evidence that: (1) The parties entered into a written agreement to arbitrate; (2) One or more of the claims at issue are covered by that agreement; and (3) The responding party refused a prior demand for arbitration under the agreement of the claims at issue.  (Code Civ. Proc., § 1281.2; Villacreses v. Molinari (2005) 132 Cal.App.4th 1223, 1230.)  If the moving party meets this burden, the burden shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud or unconscionability). (Villacreses, 132 Cal.App.4th at 1230.)

Defendant has met its initial burden under CRC 3.1330 to prove the existence of an agreement to arbitrate. Two valid, substantively identical arbitration agreements purporting to bear Plaintiff’s signature have been offered into evidence. (Frommert Decl. Exs. A, B.) Plaintiff has provided no evidence or argument to the contrary.

The agreement includes the following relevant terms: The parties “agree that any and all disputes, claims or controversies between the parties, including . . . the employment relationship between the parties, . . . shall be resolved by final and binding arbitration by a neutral arbitrator.” (Frommert Decl. Ex. B at 1.)

Plaintiff also agreed to resolve disputes exclusively “ON AN INDIVIDUAL BASIS OR CAPACITY, AND MAY NOT BRING, PURSUE OR ACT AS A PLAINTIFF OR CLASS MEMBER IN ANY PURPORTED CLASS OR COLLECTIVE PROCEEDING. YOU AND THE COMPANY WAIVE THE RIGHT TO PARTICIPATE IN OR RECEIVE MONEY OR ANY OTHER RELIEF FROM ANY CLASS, COLLECTIVE, OR REPRESENTATIVE PROCEEDING.” (Id. at 2)

“If any provision of this Agreement is determined to be illegal or unenforceable, such determination shall not affect the balance of this Agreement, which shall remain in full force and effect and such invalid provision shall be deemed severable.” (Id. at 4.)

The parties’ agreement states that the FAA governs. (Frommert Decl. Ex. B at 1.) Plaintiff offers no evidence or argument to the contrary.

In Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906, the United States Supreme Court overruled Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348 to the extent its holding was preempted by the FAA and concluded that (1) a PAGA claim could be split into “individual” and “representative” portions, and (2) the individual portion could be compelled to arbitration. However, Viking River Cruises did not overrule Iskanian to the extent it precludes “a wholesale waiver of PAGA claims.” (Id. at 1924-25.)

Plaintiff contends the class, collective, and representative action waiver in the agreement does not include the PAGA claim or, to the extent it does, is an unenforceable wholesale waiver of PAGA claims. The Court disagrees. Per the severability provision, the waiver applies only to the extent permitted by applicable law. (Frommert Decl. Ex. B at 4.) The agreement at issue in Viking River Cruises had both a wholesale PAGA waiver and a severability clause, and the United States Supreme Court read those provisions together to avoid the wholesale PAGA waiver forbidden by Iskanian. (Viking River Cruises, Inc., 142 S.Ct. at 1924-25.) Accordingly, under Viking River Cruises, Plaintiff may be compelled to arbitrate the individual portion of the PAGA claim.

Under both the FAA and the California Arbitration Act, this case must be stayed pending completion of Plaintiff’s arbitration. (9 U.S.C. § 3; CCP § 1281.4.) In its Reply, Defendant has agreed to a stay rather than press for dismissal. (Reply at 9–11.)

As the parties acknowledge, the California Supreme Court recently granted review in Adolph v. Uber Technologies, S274671, to answer the question “[w]hether an aggrieved employee who has been compelled to arbitrate claims under the Private Attorneys General Act (PAGA) that are ‘premised on Labor Code violations actually sustained by’ the aggrieved employee [citation] maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ [citation] in court or in any other forum the parties agree is suitable.”

Accordingly, were the Court to dismiss the representative PAGA claims only for the California Supreme Court to reach a different conclusion in Adolph than the Supreme Court reached in Viking River Cruises, both the Court’s and the parties’ resources would be needlessly taxed. Additionally, the arbitrator may decide that Plaintiff did not suffer any of the Labor Code violations alleged and therefore would lack PAGA standing, irrespective of the outcome in Adolph. For these reasons, the Court denies the request to dismiss the non-individual portion of the PAGA claim, without prejudice.

Plaintiff’s Request for Judicial Notice: The Court declines to rule as Exs. 1–7 (ROA 72) were not material to its ruling.

Plaintiff to give notice, including to the LWDA and to file proof of service.