Judge: Peter Wilson, Case: 2023-01313737, Date: 2023-07-27 Tentative Ruling
Defendant The Coca-Cola Company seeks an order sustaining its special demurrer to the Complaint based on abatement, or in the alternative, staying this action pursuant to the discretionary doctrine of exclusive concurrent jurisdiction pending final resolution of the earlier-filed class action between the parties, Nicole Fritch v. The Coca-Cola Company, Case No. 8:23-cv-00576 currently pending in the United States District Court, Central District of California (Class Action).
The Court GRANTS Defendant’s Request for Judicial Notice (ROA 15) of the Class Action Complaint [Ex. A] and the Class Action docket [Ex. B].
The Court DENIES Plaintiff’s Request for Judicial Notice [ROA 23] of the ruling in Allison Burch v. The GEO Group, Inc. dba GEO California, Inc., LASC Case No. 18STCV04489 as it is not relevant to the ruling on this matter.
The Court DENIES Defendant’s Supplemental Request for Judicial Notice [ROA 40] of various trial court rulings as not relevant to the ruling on this matter.
Meet and Confer: The parties adequately met and conferred prior to the filing of this demurrer. ROA 11, Sharma Decl., ¶¶2-4.
Mandatory Abatement.
A demurrer lies when there are two actions pending “between the same parties on the same causes of action.” (Code Civ. Proc. § 430.10(c).) “In determining whether the causes of action are the same for purposes of pleas in abatement, the rule is that such a plea may be maintained only where a judgment in the first action would be a complete bar to the second action.” (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 787-88.) “However, abatement is not appropriate where the first action cannot afford the relief sought in the second.” (Id. at 787.) The plea in abatement therefore “require[s] absolute identity of parties, causes of action or remedies sought in the initial and subsequent actions.” (Id., at 788. See also, Leadford v. Leadford (1992) 6 Cal.App.4th 571, 574; Code Civ. Proc. § 597)
Defendant argues that it is not necessary to have the identical parties to satisfy the identity of the parties requirement as long as there is overlap between the putative class and aggrieved employees, and because the putative class wholly subsumes the aggrieved employees, this requirement has been satisfied. ROA 13, Mem. Supp., pp. 10-11.
Plaintiff argues that this requirement has not been met because the State is the real party in interest in this action, not the aggrieved employees or named plaintiff. Plaintiff relies on Howitson v. Evans Hotels, LLC (2022) 81 Cal.App.5th 475, 488, which explained that where an individual files a Class and PAGA action, the parties are not the same because the State is the real party in interest in the PAGA action. (Id. 487-488.)
Since Plant Insulation Co., supra, required “absolute identity of the parties” and Defendant admits that absolute identity is not present, this requirement for a statutory plea in abatement has not been met.
As to identity of the causes of action, Defendant argues the class action claims and the PAGA claims in both actions arise from the same primary right, and are, therefore, the same cause of action.
Plaintiff’s arguments and reliance on Howitson to demonstrate that different primary rights are implicated in a class action and a PAGA action are persuasive. As explained in Adolph v. Uber Techs., Inc. (Cal. July 17, 2023) No. S274671, 2023 WL 4553702, at *3, “the Legislature enacted PAGA to create new civil penalties for various Labor Code violations and to allow aggrieved employees, acting as private attorneys general, to recover [those] penalties. … PAGA is designed primarily to benefit the general public, not the party bringing the action. (Internal citations and quotations omitted.)” Thus, the penalties recovered are largely for public use, and are not damages.
As explained in Howitson,
Claim preclusion is based in part on the primary rights theory, which defines the scope of a cause of action and bars a party (or the party's privy) from bringing a second lawsuit if that suit “seek[s] to vindicate the same primary right.” (Mycogen Corp. v. Monsanto Co. (2002) 28 Cal.4th 888, 904, 123 Cal.Rptr.2d 432, 51 P.3d 297 (Mycogen).) Under the primary rights theory, a cause of action is defined as: “(1) a primary right possessed by the plaintiff, (2) a corresponding duty imposed upon the defendant, and (3) a wrong done by the defendant which is a breach of such primary right and duty.” (Balasubramanian v. San Diego Community College District (2000) 80 Cal.App.4th 977, 991, 95 Cal.Rptr.2d 837 (Balasubramanian).) The cause of action is based on the harm suffered, not on the legal theory asserted or relief sought. (Ibid.)
Here, we conclude the “harm suffered” by Howitson in the First Lawsuit is not the same harm as that suffered by the state in the Second Lawsuit. “ ‘Damages are intended to be compensatory, to make one whole. [Citation.] Accordingly, there must be an injury to compensate. On the other hand, “Civil penalties, like punitive damages, are intended to punish the wrongdoer and to deter future misconduct.” [Citation.] An act may be wrongful and subject to civil penalties [under PAGA] even if it does not result in injury.’ ” (Kim, supra, 9 Cal.5th at p. 86, 259 Cal.Rptr.3d 769, 459 P.3d 1123.)
In the First Lawsuit, the harm suffered was to Howitson individually and to a putative class of former or current employees of Evans Hotel, for purported Labor Code violations to the employees themselves in which compensatory damages were sought. (See Kim, supra, 9 Cal.5th at pp. 85-86, 259 Cal.Rptr.3d 769, 459 P.3d 1123.) However, in the Second Lawsuit, the harm suffered for such violations is to the state and the general public, in which civil penalties are assessed even if there is no injury to the employees themselves. (See Kim, at p. 81, 259 Cal.Rptr.3d 769, 459 P.3d 1123 [“A PAGA claim is legally and conceptually different from an employee's own suit for damages and statutory penalties.”]; Iskanian, supra, 59 Cal.4th at p. 381, 173 Cal.Rptr.3d 289, 327 P.3d 129 [“The civil penalties recovered on behalf of the state under the PAGA are distinct from the statutory damages to which employees may be entitled in their individual capacities.”]; Arias, supra, 46 Cal.4th at p. 986, 95 Cal.Rptr.3d 588, 209 P.3d 923 [“In a lawsuit brought under [PAGA], the employee plaintiff represents the same legal right and interest as state labor law enforcement agencies—namely, recovery of civil penalties that otherwise would have been assessed and collected by the [LWDA].”].)
(Howitson v. Evans Hotels, LLC (2011) 81 Cal. App. 5th 475, 487-488, 297 Cal. Rptr. 3d 181, 190–91.)
Rocha v. U-Haul Co. of California (2023) 88 Cal.App.5th 65, which Defendant relies on, does not require a different conclusion. Rocha considered issue preclusion, not claim preclusion, and the preclusive effect on a plaintiff’s standing, not whether the same primary right is implicated.
Here, the Class Action and this action seek to redress different wrongs. Defendant has not demonstrated absolute identity of causes of action or remedies sought in the Class Action and this action.
The Demurrer for statutory abatement is DENIED.
Exclusive Concurrent Jurisdiction.
The rule of exclusive concurrent jurisdiction provides that “when two superior courts have concurrent jurisdiction over the subject matter and all parties involved in the litigation, the first to assume jurisdiction has exclusive and continuing jurisdiction over the subject matter and all parties involved until such time as all necessarily related matters have been resolved.” (Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 786-787, emphasis added). Although similar to the plea in abatement, the rule of exclusive concurrent jurisdiction is interpreted and applied more expansively and does not require absolute identity of the parties, causes of action or remedies. (Id. at 788.) The rule is designed to avoid the spectacle of the same parties litigating the same issues in two different courts at the same time, “including the real possibility of unseemly conflict between courts that might arise if they were free to make contradictory decisions or awards.” (Franklin & Franklin v. 7-Eleven Owners for Fair Franchising (2000) 85 Cal.App.4th 1168, 1175.)
However, the rule of exclusive concurrent jurisdiction does not apply where one tribunal is a state and the other a federal court as is the situation here. (Fowler v. Ross (1983) 142 Cal.App.3d 472, 476, 191 Cal.Rptr. 183, 185-186.) Therefore, the demurrer based on exclusive concurrent jurisdiction is DENIED.
The Motion to Stay is GRANTED.
When both federal and state court actions are pending, the California court “has the discretion but not the obligation” to stay the state proceedings in favor of the federal action. (Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal.App.4th 800, 804, 19 Cal.Rptr.2d 138, 140.)
“In exercising its discretion the court should consider the importance of discouraging multiple litigation designed solely to harass an adverse party, and of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced.” (Farmland Irrigation. Co. v. Dopplmaier, supra, 48 Cal.2d at p. 215, 308 P.2d 732.) The California Supreme Court also has isolated another critical factor favoring a stay of the state court action in favor of the Federal action, a factor which happens to be present in this case—the Federal action is pending in California not some other state. (Thomson v. Continental Ins. Co., supra, 66 Cal.2d at p. 747, 59 Cal.Rptr. 101, 427 P.2d 765.)
(Id. at 804.)
Here, the same Labor Code violations are in issue, and the Class Action matter is farther along as initial disclosures have been made, initial written discovery has been propounded, and motions are pending. By contrast, this matter is in the earliest stages and there is no trial date. See ROA 15, RJN, Ex. A and ROA 2, Complaint; ROA 25, Mukherjee Decl., ¶2; ROA 36, Ly Decl., ¶¶3-7. Since the same Labor Code violations are at issue in the Class Action and this action, if a judgment is entered in the Class Action, it may have preclusive effect in this action. In addition, if both matters proceed, there is the possibility of inconsistent rulings.
In order to avoid multiplicity of suits and because of the overlapping parties, issues, witnesses and evidence, the risk of conflicting judgments, and since the Class Action is pending in California, the Court exercises its discretion and GRANTS the stay.
This case is stayed pending further order of the court.
The Court sets a status conference on November 3, 2023 at 9 a.m. The parties are ordered to file a joint status report not later than October 27, 2023.
Defendant is ordered to give notice.