Judge: Randall J. Sherman, Case: 2017-00933266, Date: 2022-09-02 Tentative Ruling

Defendant Bloomingdale’s, Inc.’s Motion to Compel Arbitration of Plaintiff’s Individual PAGA Claims and to Dismiss all Non-Individual PAGA Claims is granted in part and denied in part.  The motion is granted in that plaintiff’s individual PAGA claims are ordered to arbitration.  The motion is denied in that plaintiff’s representative PAGA claims will not be dismissed, but will be stayed pending completion of the arbitration and pending the California Supreme Court’s decision in Adolph v. Uber Technologies, Inc.  Plaintiff’s Request for Judicial Notice is denied as irrelevant.  Zucchet v. Galardi (2014) 229 Cal. App. 4th 1466, 1474 n.5.  The Status Conference set for today, and all future hearings in this case, are ordered off calendar.  A Post-Arbitration Review Hearing is set for March 3, 2023 at 9:00 a.m.  The parties must file a Joint Status Report at least a week before the hearing, and may request a continuance if arbitration is not yet complete.

The court concludes that there exists a valid agreement to arbitrate the individual PAGA claims asserted by plaintiff and that no grounds exist to bar enforcement of the agreement.  CCP §1281.2.  Plaintiff does not dispute that she signed the arbitration agreement.  The Federal Arbitration Act applies because defendant is engaged in interstate commerce, and the agreement provides that it is governed by the FAA.  Philadelphia Indemnity Ins. Co. v. SMG Holdings, Inc. (2019) 44 Cal. App. 5th 834, 840.  The Arbitration Agreement applies to plaintiff’s PAGA claims because they arise out of plaintiff’s employment.  Although plaintiff argues that the arbitration agreement applies only to Federated Department Stores, Inc., the contractual language includes Federated’s subsidiaries, and the Declaration of Cynthia Ripak asserts that the parent of Bloomingdales, Inc. is Macy’s, then known as Federated.  Plaintiff also argues that a PAGA action is not an employment dispute, but rather a law enforcement action, and that every PAGA claim is a dispute between an employer and the state.  However, the U.S. Supreme Court rejected these arguments in Viking River Cruises, Inc. v. Moriana (2022) 142 S. Ct. 1906, holding, “Although the terms of §2 limit the FAA’s enforcement mandate to agreements to arbitrate controversies that arise out of the parties’ contractual relationship, disputes resolved in PAGA actions satisfy this requirement.”  142 S. Ct. at 1919 n.4.

Defendant did not waive its right to seek arbitration.  The court in Fleming Distribution Co. v. Younan (2020) 49 Cal. App. 5th 73, 80, held, “Because the law favors arbitration, waiver will not be lightly inferred, and the party asserting waiver bears a heavy burden of proof, with any doubts to be resolved in favor of arbitration.”  Prior to the Viking River Cruises ruling, the Iskanian case would have prevented arbitration of the PAGA claims, and thus moving to compel arbitration earlier would have been futile.  Ironically, the court in Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348, 376, held that futility as grounds for delaying seeking arbitration is implicit in the general waiver principles that courts have endorsed.

Plaintiff also argues that Viking River Cruises is not retroactive.  However, the U.S. Supreme Court has held that when it applies a rule of federal law to the parties before it, that rule is the controlling interpretation of federal law, and must be given full retroactive effect in all open cases.  Harper v. Virginia Dept. of Taxation (1993) 509 U.S. 86, 97.

Although the lead opinion in Viking River Cruises concluded that a plaintiff lacks standing to bring non-individual PAGA claims, and that those claims should be dismissed, that conclusion is not controlling, and the California Supreme Court is set to decide that very issue in Adolph v. Uber Technologies, Inc.  The more prudent course is for this court to await that decision (although if defendant prevails at the arbitration, that issue presumably will be moot).

Defendant is ordered to give notice of the ruling unless notice is waived.