Judge: Robert B. Broadbelt, Case: 22STCV38400, Date: 2023-10-18 Tentative Ruling

Case Number: 22STCV38400    Hearing Date: October 18, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendant CitiStaff Solutions Inc., joined by defendant California Farms Meat Company on February 27, 2023

RESPONDING PARTIES:     Plaintiffs Nubia Nava and Aida Ramos          

Motion to Compel Arbitration and Dismiss Non-Individual PAGA Claims

The court considered the moving, joinder, opposition, and reply papers filed in connection with this motion.

EVIDENTIARY OBJECTIONS

The court rules on plaintiffs Nubia Nava and Aida Ramos’s evidentiary objections as follows:

The court overrules Objections Nos. 1-8 and 10-11.

The court sustains Objection No. 9.

DISCUSSION

Defendant CitiStaff Solutions Inc. (“CitiStaff”), joined by defendant California Farms Meat Company (“California Farms”) (collectively, “Defendants”), move the court for an order  (1) compelling plaintiffs Nubia Nava (“Nava”) and Aida Ramos (“Ramos”), as aggrieved employees and on behalf of all other aggrieved employees under the Labor Code Private Attorneys General Act (collectively, “Plaintiffs”) to submit their individual claims under the Private Attorneys General Act of 2004 (Labor Code § 2698, et seq.) (“PAGA”) to binding arbitration, and (2) dismissing their non-individual PAGA claims.

1.     Existence of Written Agreement to Arbitrate

A written provision in any contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.¿ (9 U.S.C. § 2.)¿ The Federal Arbitration Act (“FAA”) requires courts to direct parties to proceed to arbitration on issues covered by an arbitration agreement upon a finding that the making of the arbitration agreement is not in issue.¿ (9 U.S.C. § 4; Chiron Corp. v. Ortho Diagnostic Sys. (9th Cir. 2000) 207 F.3d 1126, 1130.)¿ “The court’s role under the [FAA] is therefore limited to determining (1) whether a valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the dispute at issue.”¿ (Chiron Corp., supra, 207 F.3d at p. 1130.)¿ The FAA reflects “both a ‘liberal federal policy favoring arbitration,’ [citation], and the ‘fundamental principle that arbitration is a matter of contract,’ [citation].”¿ (AT&T Mobility LLC v. Concepcion (2011) 563 U.S. 333, 339.)¿ 

“‘ “The party seeking to compel arbitration bears the burden of proving the existence of an arbitration agreement, while the party opposing the petition bears the burden of establishing a defense to the agreement’s enforcement.” ’”¿ (Beco v. Fast Auto Loans (2022) 86 Cal.App.5th 292, 302.)¿ The burden of production as to this finding shifts in a three-step process.¿ (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.)¿ First, the moving party bears the burden of producing prima facie evidence of a written agreement to arbitrate, which can be met by attaching a copy of the arbitration agreement purporting to bear the opponent’s signature.¿ (Ibid.)¿ If the moving party meets this burden, the opposing party bears, in the second step, the burden of producing evidence to challenge its authenticity.¿ (Ibid.)¿ If the opposing party produces evidence sufficient to meet this burden, the third step requires the moving party to establish, with admissible evidence, a valid arbitration agreement between the parties.¿ (Ibid.)¿

A.    Arbitration Agreement Between Plaintiff Ramos and Defendants¿¿

First, the court finds that (1) Defendants have shown that the FAA governs the interpretation and enforcement of the arbitration agreement signed by plaintiff Ramos because they have presented evidence showing that Defendants are engaged in interstate commerce, and (2) Plaintiffs have not disputed that the FAA applies.  (9 U.S.C. § 2; Carbajal v. CWPSC, Inc. (2016) 245 Cal.App.4th 227, 238-239; Steriopol Decl., ¶¶ 1-2 [California Farms is a food processing company that distributes its products nationwide]; Cerdas Decl., ¶ 3 [CitiStaff’s customers are businesses in various industries, and their employees work on products and goods that are shipped and distributed nationwide].)

Second, the court finds that Defendants have met their burden to show the existence of a written agreement to arbitrate the controversy between defendant CitiStaff and plaintiff Ramos.

Defendants have submitted the “Mediation and Arbitration Agreement” dated August 25, 2016, which purports to bear the signatures of plaintiff Ramos and a representative for CitiStaff.  (Cerdas Decl., ¶ 6; Mot., Exs. 1 [arbitration agreement], 2 [Certified Translation of arbitration agreement and arbitration agreement].)  The agreement provides that CitiStaff and plaintiff Ramos agreed, in consideration of her employment with CitiStaff, that the parties would “submit exclusively to mandatory Mediation and binding Arbitration any and all disputes, claims, or controversies (‘claims’) they may have against others, including their current and former agents, owners, officials, directors, or employees, arising out of the employment relationship . . . or the termination thereof.”  (Mot., Ex. 2, Ramos Arbitration Agreement, ¶ 3.)  The agreement further specifies that claims under the California Labor Code relating to wages, meal and rest breaks, and wage disclosure notices are encompassed thereby.  (Id., ¶ 4.) 

Thus, the court finds that Defendants have shown that plaintiff Ramos and defendant CitiStaff entered into an agreement to arbitrate this controversy.  The court also finds that Ramos’s causes of action—arising under PAGA and relating to her employment with CitiStaff—are encompassed by the arbitration agreement.

Third, the court finds that defendant California Farms has met its burden to show that it may enforce the arbitration agreement against Ramos.

“‘Generally speaking, one must be a party to an arbitration agreement to be bound by it or invoke it.’¿ [Citations.]¿ ‘There are exceptions to the general rule that a nonsignatory to an agreement cannot be compelled to arbitrate and cannot invoke an agreement to arbitrate, without being a party to the arbitration agreement.’”¿ (JSM Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236-1237 [internal citations omitted].)¿ Such exceptions include the doctrine of equitable estoppel and the agency exception.  (Id. at p. 1237; Garcia v. Pexco, LLC (2017) 11 Cal.App.5th 782, 788.)

Here, Plaintiffs have alleged (1) that Defendants are joint employers, and (2) that both Defendants did not comply with the Labor Code by, inter alia, failing to furnish Plaintiffs and other of their employees with accurate wage statements, failing to pay the rates of pay and overtime rates of pay applicable to their employment, and failing to pay minimum wages to Plaintiffs and other employees.  (Compl., ¶¶ 38-40, 45, 51, 60.)  The court finds that, as joint employers, CitiStaff and California Farms “were agents of each other in their dealings with” plaintiff Ramos and, therefore, California Farms has shown that it is entitled to compel arbitration of her claims against it pursuant to the arbitration clause in Ramos’s agreement with CitiStaff.  (Garcia, supra, 11 Cal.App.5th at p. 788.)

Fourth, the court finds that plaintiff Ramos has not met her burden (1) to challenge the authenticity of the arbitration agreement, (2) to establish a defense to the enforcement of the arbitration agreement, or (3) to establish that California Farms is not entitled to compel arbitration of her claims against it pursuant to the agency exception.  (Gamboa, supra, 72 Cal.App.5th at p. 165; Beco, supra, 86 Cal.App.5th at p. 302.)  In opposition, plaintiff Ramos did not present evidence or argument disputing that she signed the agreement or otherwise arguing that the arbitration agreement as to her individual PAGA claims is unenforceable for any other reason.  Further, plaintiff Ramos did not oppose California Farms’ joinder to CitiStaff’s motion.  Instead, Plaintiffs’ opposition appears to be limited only to the issue as to whether their nonindividual claims should proceed in court.

Thus, the court finds that Defendants have shown that they are entitled to compel plaintiff Ramos to submit her individual PAGA claims to binding arbitration.

B.    Arbitration Agreement Between Plaintiff Nava and Defendants

First, the court finds that Defendants have shown that the FAA governs the interpretation and enforcement of the arbitration agreement signed by plaintiff Nava because (1) the arbitration agreement signed by plaintiff Nava expressly states that it “shall be enforceable under and subject to the Federal Arbitration Act[;]” (2) Defendants have presented evidence showing that they are engaged in interstate commerce, as set forth above; and (3) Plaintiffs have not disputed that the FAA applies.  (Mot., Ex. 4, Nava Arbitration Agreement, ¶ 17; Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46 Cal.App.5th 337, 346 [“when an agreement provides that its ‘enforcement’ shall be governed by the FAA, the FAA governs a party’s motion to compel arbitration”].)

Second, the court finds that Defendants have met their burden to show the existence of a written agreement to arbitrate the controversy between defendant CitiStaff and plaintiff Nava.

Defendants have submitted the “Arbitration Agreement” dated February 2, 2020, which purports to bear the signatures of plaintiff Nava and a representative for CitiStaff.  (Cerdas Decl., ¶ 7; Mot., Exs. 3 [arbitration agreement], 4 [Certified Translation of arbitration agreement and arbitration agreement].)  The agreement provides that CitiStaff and plaintiff Nava agreed “to submit exclusively to final and binding Arbitration any and all disputes, claims, or controversies (‘claims’) that they may have against each other, and against the Employer’s customers, including its agents, owners, officers, directors, or current and former employees arising out of the employment relationship between the Employee and Employer or the termination of such relationship.”  (Mot., Ex. 4, Nava Arbitration Agreement, ¶ 3.)  Specifically encompassed by the agreement are claims under the Labor Code, including any claims relating to wages, meal and rest breaks, and notices for disclosure of compensation.  (Id., ¶ 4.) 

Thus, the court finds that Defendants have shown that defendant CitiStaff and plaintiff Nava entered into an agreement to arbitrate this controversy.  The court also finds that plaintiff Nava’s claims, which arise out of her employment relationship with Defendants and are alleged under the Labor Code, are encompassed by the agreement.

Third, the court finds that defendant California Farms has met its burden to show that it may enforce the arbitration agreement against plaintiff Nava pursuant to the agency exception for the same reasons set forth in connection with the discussion regarding the motion to compel arbitration as to plaintiff Ramos.  (Garcia, supra, 11 Cal.App.5th at p. 788.)

Fourth, the court finds that plaintiff Nava has not met her burden (1) to challenge the authenticity of the arbitration agreement, (2) to establish a defense to the enforcement of the arbitration agreement, or (3) to establish that California Farms is not entitled to compel arbitration of her claims against it pursuant to the agency exception.  (Gamboa, supra, 72 Cal.App.5th at p. 165; Beco, supra, 86 Cal.App.5th at p. 302.)  Plaintiff Nava did not present evidence or argument (1) disputing that she signed the arbitration agreement, (2) arguing that the arbitration agreement is invalid or unenforceable, or (3) arguing that defendant California Farms is not permitted to compel arbitration of her claims pursuant to the agency exception.

Thus, the court finds that Defendants have shown that they are entitled to compel plaintiff Nava to submit her individual PAGA claims to binding arbitration.

2.     Request to Dismiss Non-Individual Claims

Defendants request that the court dismiss Plaintiffs’ nonindividual, representative PAGA claims pursuant to the representative action waivers in the arbitration agreements and the United States Supreme Court’s decision in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906.  (Mot., Ex. 2, Ramos Arbitration Agreement, ¶ 7 [“Employee agrees to waive his or her right to file wage and hour, discrimination, Labor Code violation and other types of claims as a representative or class action against the company”]; Mot., Ex. 4, Nava Arbitration Agreement, ¶ 7 [“Employee agrees to waive his or her right to bring a wage and hour, discrimination, Labor Code violation, and other types of claims as a representative of a class action or as a representative of an action against the Company”].)  The court denies this request.

First, as to plaintiff Nava, the arbitration agreement expressly states that “[t]he Parties agree that any representation claim that is determined not to be subject to arbitration or that has not been waived will be resolved in court but will be stayed pending the outcome of all remaining claims subject to arbitration.”  (Mot., Ex. 4, Nava Arbitration Agreement, ¶ 7 [emphasis added].)

Second, waivers of representative claims brought under PAGA are unenforceable as a matter of California law.  (Viking River Cruises, Inc., supra, 142 S.Ct. at pp. 1924-1925; Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1117 [“In Iskanian, we held that a predispute categorical waiver of the right to bring a PAGA action is unenforceable [citation] – a rule that Viking River left undisturbed [citation]”] [internal citations omitted], 1118; Nickson v. Shemran, Inc. (2023) 90 Cal.App.5th 121, 129 [“even after Viking River, a contractual waiver of the right to prosecute PAGA claims is unenforceable as against California public policy”].)

Third, Defendants also request dismissal of Plaintiffs’ nonindividual claims on the ground that, since Plaintiffs’ individual claims will be compelled to arbitration, they will lose standing to bring an action pursuant to PAGA.  (CitiStaff Mot., p. 13:20-22.)  The court disagrees.  “[W]here a plaintiff has filed a PAGA action comprised of individual and non-individual claims, an order compelling arbitration of individual claims does not strip the plaintiff of standing to litigate non-individual claims in court.”  (Adolph, supra, 14 Cal.4th at p. 1123.)  

The court denies Plaintiffs’ request, in opposition, that the court permit their nonindividual PAGA claims to proceed in court concurrently with the arbitration of their individual claims.

The court therefore (1) denies Defendants’ request to dismiss Plaintiffs’ nonindividual PAGA claims, and (2) exercises its discretion to stay the action as to the nonindividual PAGA claims pending completion of arbitration.  (9 U.S.C., § 3.)

ORDER

The court grants defendant CitiStaff Solutions, Inc.’s motion to compel arbitration and dismiss nonindividual PAGA claims, joined by defendant California Farms Meat Company, as follows.

The court orders (1) plaintiffs Nubia Nava and Aida Ramos, on the one hand, and defendants CitiStaff Solutions Inc. and California Farms Meat Company, on the other hand, to arbitrate all of the individual claims alleged in their Complaint to arbitration, and (2) plaintiffs Nubia Nava and Aida Ramos’s nonindividual, representative claims under the Private Attorneys General Act of 2004 (Labor Code § 2698, et seq.) are stayed until arbitration is completed.

The court sets an Order to Show Cause re: completion of arbitration for hearing on May 7, 2024, at 8:30 a.m., in Department 53.

The court orders defendants CitiStaff Solutions Inc. and California Farms Meat Company to give notice of this ruling.

IT IS SO ORDERED.

DATED:  October 18, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court