Judge Randolph M. Hammock, Case Number: 23STCV03817, Date: 2023-09-18 Tentative Ruling

Judge: Randolph M. Hammock, Case: 23STCV03817, Date: 2023-09-18 Tentative Ruling

Plaintiff Ramon Chavez brings this PAGA action on behalf of the State of California and all other Aggrieved Employees against his former employers, Defendants Arakelian Enterprises, Inc., and Athens Disposal Company. Plaintiff alleges Defendants’ failed to pay Plaintiff and other aggrieved employees for all hours worked, committed meal and rest period violations, provided inaccurate wage statements, and failed to produce employment records, among other things.

Defendants Arakelian Enterprises, Inc., and Athens Disposal Company now move for a stay of the case pending arbitration of Plaintiff Ramon Chavez’s individual claims under the Private Attorneys General Act. Plaintiff opposed.

Defendants’ Motion to Stay Proceedings is GRANTED. This action remains stayed pending the results of the arbitration, or until as may be further ordered.

The CMC is off calendar, to be reset as may be needed. A Status Review/OSC re: Lifting of Stay/OSC re: Dismissal is set for September 18, 2024, at 8:30 a.m. If there are no appearances at that time, this case may be dismissed without prejudice.

The parties are currently engaged in binding arbitration of Plaintiff’s individual PAGA claims against these same Defendants. (Sullivan Decl. Exhs. A, C; Fellion Decl. ¶ 4.) Defendants move for a stay of this action pending arbitration of those claims. Defendants argue “because Plaintiff’s individual claims are being arbitrated, and because the resolution of those individual PAGA claims is a threshold issue that must be decided before he may proceed with non-individual PAGA claims in the instant civil action, this action should be stayed pending arbitration.” (Mtn. 8: 8-11.)

There is no dispute that Plaintiff executed an arbitration agreement calling for application of the Federal Arbitration Act. (See Sullivan Decl., ¶ 2, Ex. B, p. 4, § 18; see also Davis v. Shiekh Shoes, LLC (2022) 84 Cal. App. 5th 956, 963 [finding the FAA applies “if it is so stated in the agreement.”].)

It is now settled in California that where a Plaintiff’s individual PAGA claims are sent to arbitration, the Plaintiff maintains standing to litigate the non-individual claims in court. (See Adolph v. Uber Techs., Inc. (2023) 14 Cal. 5th 1104, 1123.) Defendants contend a stay of those non-individual claims is mandatory under both the FAA and California Code of Civil Procedure. Section 3 of the FAA provides:

If any suit or proceeding be brought in any of the courts of the United States upon any issue referable to arbitration under an agreement in writing for such arbitration, the court in which such suit is pending, upon being satisfied that the issue involved in such suit or proceeding is referable to arbitration under such an agreement, shall on application of one of the parties stay the trial of the action until such arbitration has been had in accordance with the terms of the agreement, providing the applicant for the stay is not in default in proceeding with such arbitration.

If a court of competent jurisdiction, whether in this State or not, has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.

Importantly, Plaintiff voluntarily submitted his individual claims to arbitration. This court never compelled nor otherwise ordered arbitration of those claims. This is important, because section 1281.4 requires a stay only where a court “has ordered arbitration of a controversy.” (CCP § 1281.4.) (Emphasis added.)

Although the FAA is less clear, it also suggests the mandatory stay applies only after a court has compelled claims to arbitration. Parsing the language, Section 3 applies to “any suit or proceeding” which is “brought in any court” and “referable to arbitration.” (9 U.S.C. § 3.) Only then must a court “stay the trial of the action until such arbitration has been had.” (Id.)

Although the court appreciates Defendants’ argument that this is a distinction without a difference, it is a court’s job to look to the “plain meaning of the statutory language.” (MacIsaac v. Waste Mgmt. Collection & Recycling, Inc. (2005) 134 Cal. App. 4th 1076, 1082.) Doing so here, the court cannot find a stay is mandatory under the FAA or California law.

Defendant next argues that even if the FAA and the California law do not require that the action be stayed, judicial economy also weighs in favor of staying this action pending completion of arbitration. The court absolutely agrees with that argument.

“’[A] court ordinarily has inherent power, in its discretion, to stay proceedings when such a stay will accommodate the ends of justice.’ (People v. Bell (1984) 159 Cal.App.3d 323, 329.) As the Court in Landis v. North American Co. (1936) 299 U.S. 248, 254, explained, ‘the power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants.” (OTO, L.L.C. v. Kho (2019) 8 Cal.5th 111, 141; see also Frieberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1481, 1489 [“Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.”].)

Here, arbitration of Plaintiff’s individual claims will involve similar issues to the litigation of his non individual claims. A stay will avoid duplicative proceedings of the same or similar issues, preserve authority of the arbitrator, and conserve the time and resources of the parties and this court.

Finally, this court need not determine whether arbitration of the individual claims may or may not have preclusive effect on the claims before this court as that issue is irrelevant to this decision.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.