Judge Ronald F. Frank, Case Number: 24TRCV02824, Date: 2024-12-03 Tentative Ruling

Judge: Ronald F. Frank, Case: 24TRCV02824, Date: 2024-12-03 Tentative Ruling

Case Number: 24TRCV02824 Hearing Date: December 3, 2024 Dept: 8

Tentative Ruling

HEARING DATE: December 3, 2024

CASE NUMBER: 24TRCV02824

CASE NAME: Aldo Rodriguez, et al. v. Immunity Bio, Inc., et al.

MOVING PARTY: Defendant, ImmunityBio, Inc.

RESPONDING PARTY: Plaintiff, Aldo Rodriguez, on behalf of all other Aggrieved Employees only

TRIAL DATE: Not Set

MOTION: (1) Motion to Compel Arbitration

Tentative Rulings: (1) DENIED.

I. BACKGROUND

A. Factual¿

On August 22, 2024, Plaintiff, Aldo Rodriguez (“Plaintiff”) filed a complaint against Defendant, ImmunityBio, Inc., and DOES 1 through 50. The complaint alleges a cause of action for: (1) Violation of Labor Code section 2698, et seq.

Defendant, ImmuityBio, Inc. (“Defendant”) now wishes to enforce an arbitration clause Plaintiff allegedly signed in connection with his employment with the Defendant’s company.

B. Procedural

On September 30, 2024, Defendant file a Motion to Compel Arbitration. On November 18, 2024, Plaintiff filed an opposition. On November 22, 2024, Defendant filed a reply brief.

II. REQUEST FOR JUDICIAL NOTICE

With Plaintiff’s opposition brief, he filed a request for judicial notice of the following documents:

1. Exhibit A – Los Angeles Superior Court Minute Order dated June 6, 2024 in Case No. 23STCV18291, entitled Dameta Afeni O’Brien v. One Medical Group, Inc., et al.,.

2. Exhibit B – Los Angeles Superior Court Minute Order dated June 12, 2024 in Case No. 23STCV26824, entitled David Sanchez v. Douglas Emmett, Inc., et al.,

3. Exhibit C – Los Angeles Superior Court Minute Order dated June 12, 2024 in Case No. 23STCV25426, entitled Alvarado v. Henley Pacific LA LLC, et al.,

4. Exhibit D – Ventura Superior Court Minute Order dated July 11, 2024 in Case No. 2024CUOE020845, entitled Ahuatzi v. Saticoy Berry Farms, et al.

Pursuant to Evidence Code section 452 and 453, this court takes judicial notice of the above.

Additionally, along with Defendant’s reply brief, it also requested this court take judicial notice of the following:

1. Exhibit A: A true and correct copy of an order issued on August 21, 2024 in the matter of Ontiveros v. Benihana Downey Corp., Case No. 23STCV29662 before Department 1 of the Superior Court of Los Angeles County.

The court DENIES this request as it comes with the reply brief and gives Plaintiff no meaningful opportunity to respond to.

III. ANALYSIS

A. Legal Standard

The Federal Arbitration Act (“FAA”) states that “[a] written provision in any . . . contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction . . . 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.) California law incorporates many of the basic policy objectives contained in the Federal Arbitration Act, including a presumption in favor of arbitrability. (Engalla v. Permanente Medical Group, Inc. (1997) 15 Cal.4th 951, 971-72.)

California law states that “[o]n petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party to the agreement refuses to arbitrate that controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists….” (Code Civ. Proc, § 1281.2.) “The party seeking arbitration bears the burden of proving the existence of an arbitration agreement, and the party opposing arbitration bears the burden of proving any defense, such as unconscionability.” (Pinnacle Museum Tower Assn. v. Pinnacle Market Development (US), LLC (2012) 55 Cal.4th 223, 236.)

Pursuant to Code of Civil Procedure §1281.2, generally, on a petition to compel arbitration, the court must grant the petition unless it finds either (1) no written agreement to arbitrate exists; (2)¿the right to compel arbitration has been waived; (3) grounds exist for revocation of the agreement; or (4) litigation is pending that may render the arbitration unnecessary or create conflicting¿rulings on common issues.

When seeking to compel arbitration, the initial burden lies with the moving party to demonstrate the existence of a valid arbitration agreement by preponderance of evidence. (Ruiz v. Moss Bros. Auto Group (2014) 232 Cal.App.4th 836, 841-42; Gamboa v. Northeast Community Clinic (2021), 72 Cal.App.5th 158, 164-65.) It is sufficient for the moving party to

produce a copy of the arbitration agreement or set forth the agreement’s provisions. (Gamboa, 72 Cal.App.5th at 165.) The burden then shifts to the opposing party to prove by a preponderance of evidence any defense to enforcement of the contract or the arbitration clause. (Ruiz, 232 Cal.App.4th at 842; Gamboa, 72 Cal.App.5th at 165.) Subsequently, the moving party must establish with the preponderance of admissible evidence a valid arbitration agreement between the parties. (Ibid.) The trial court then weighs all the evidence submitted and uses its discretion to make a final determination. (Ibid.) “California law, ‘like [federal law], reflects a strong policy favoring arbitration agreements and requires close judicial scrutiny of waiver claims.’” (Wagner Const. Co. v. Pacific Mechanical Corp. (2007) 41 Cal.4th 19, 31.)

If the court orders arbitration, then the court shall stay the action until arbitration is completed. (See Code Civ. Proc., § 1281.4.)

B. Discussion

Here, the parties do not disagree that Plaintiff signed an agreement with Defendant to arbitrate issues between the parties. However, Plaintiff does argue that the arbitration agreement cannot be enforced because the parties expressly agreed that PAGA claims could be brought in court. Thus, Plaintiff contends that because he did not bring any individual claims that may be subject to arbitration as there was no meeting of the minds, a stay is not warranted, and because the agreement is both procedurally and substantively unconscionable, the agreement should not be enforced by this court.

On January 18, 2022, Plaintiff began working for Defendant’s company. With his employment, on January 18, 2022, Plaintiff signed an agreement with ImmunityBio to take any claims arising out of his employment with ImmunityBio to binding arbitration. The arbitration agreement states:

The Company and the undersigned employee agree that, with the exceptions of those claims specified in the section below, any legal claims or controversies including all employment claims (“Claims”) that the undersigned employee or his or her heirs, successors, and assigns (collectively, “Employee”) may have against the Company or any of its supervisors, employees, agents, members, directors, officers, partners, shareholders and any parent, subsidiary, affiliated or successor company (collectively, the “Company”), or that the Company may have had against Employee must be resolved by arbitration instead of the courts, and the parties mutually waive their right to a trial before a judge or jury in federal or state court in favor of arbitration under this Agreement

. . . .

If there is a JAMS office in the state where the undersigned employee works (or worked) for the Company, then Claims shall be resolved through binding arbitration administered by JAMS or other mutually agreed upon arbitrator or alternative dispute resolution (“ADR”) provider such as ADR or Signature Resolution in accordance with the JAMS Employment Arbitration Rules & Procedures (“JAMS RULES”) then in effect, except as otherwise modified herein

. . . .

If there is no JAMS office located in the state where the undersigned employee works (or worked) for the Company, and if the parties cannot mutually agree to an arbitrator then any Claims shall be resolved through binding arbitration to be administered by AAA in accordance with its Employment Arbitration Rules and Mediation Procedures ("AAA Rules") then in effect, except as otherwise modified herein.

(Declaration of Emily Arison (“Arison Decl.”) ¶ 6, Exhibit A.)

In Defendant’s moving papers as well as Plaintiff’s opposition papers, the parties each reference the recent Second District Court of Appeal decision of Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533 (“Balderas”). However, as stressed by Defendant, the Court of Appeal in Balderas dealt with the issue of an employee’s standing to bring a representative PAGA action without filing an individual PAGA claim. The Second Appellate District concluded that an “individual” PAGA claim did not need to be filed in order to have standing to pursue a “non-individual” PAGA claim: “The Adolph court concluded that the Viking River requirement of having to file an individual PAGA cause of action to achieve standing to file a representative PAGA suit was incorrect.” (101 Cal.App.5th at 538.) This is consistent with the holding in Adolph that states only two requirements to have standing to bring a “non-individual” PAGA claim:

There are only two requirements for PAGA standing. “The plaintiff must allege that he or she is (1) ‘someone “who was employed by the alleged violator”’ and (2) someone ‘“against whom one or more of the alleged violations was committed.”’”

(Id. at 538-39, quoting Adolph, 14 Cal.5th at pg. 1120.)

Viking River does not operate to divest Plaintiff of standing to pursue “non-individual” PAGA claims. Adolph rejected that contention under California State law. (Adolph, 14 Cal.5th at pgs. 1119-1120.) While Viking River may stand for the proposition that Plaintiff must arbitrate an “individual” PAGA claim, so long as she chooses to assert one, nothing in Viking River or the FAA gives any Court the authority to force a plaintiff to arbitrate a claim that he or she elects not to pursue in any tribunal, i.e., not in the court system and not in an arbitration forum. Once the United States Supreme Court decided to opine on the nature of a PAGA claim, dividing it into “individual” and “non-individual” claims with assistance from a contractual severance clause, it created two claims, both of which are available to Plaintiff as Plaintiff’s claims, and both of which are under Plaintiff’s control.

Here, Defendant’s moving papers assert that Plaintiff is trying to manufacture a loophole to escape arbitration by asserting that he does not have any individual PAGA claims. However, this court disagrees with Defendant’s argument that the determination of whether Plaintiff is an “aggrieved employee” under PAGA is an employment-related controversy that must be

compelled to arbitration. Such an argument would be inconsistent with the full holding in Adolph. (See Adolph, 14 Cal. 5th at pgs. 1123-1124.) All that Adolph holds, consistent with arbitration procedures generally, is that the elements of a claim that are decided in arbitration serve a res judicata function in any subsequent court proceedings. If there is an individual PAGA claim in arbitration, that is what would occur. But nowhere does Adolph say that an “individual” PAGA claim is a condition precedent to the right to assert a “non-individual” PAGA claim. Nor does Adolph state the question of “aggrieved employee” status should be compelled to arbitration outside of ancillary determination of that question as part of the overall resolution of an individual PAGA claim. To suggest otherwise would impose a logical fallacy. The premise that if Plaintiff’s individual PAGA claim were arbitrated, the “aggrieved employee” status would be determined as part of that individual PAGA claim arbitration, cannot result in the conclusion that Plaintiff must arbitrate the question of “aggrieved employee” status. This would be a flawed syllogism.

Defendant points to Plaintiff’s complaint where he claims that although he “suffered at least one Labor Code violation,” he “does not seek any redress or remedy for any of his individual claims,” but rather the “only recovery Plaintiff seeks in this case are for representative PAGA penalties, attorneys fees and costs.” (Complaint, ¶ 5.) Defendant states that even if Plaintiff is not seeking personal recovery, there is still a legal claim or controversy over whether he is an “aggrieved employee.” Defendant asked this court to follow the guidance set forth in Barrera and uphold the parties’ agreement to arbitrate their individual employment-related controversy. However, Barrera Plaintiffs filed their complaint on behalf of themselves individually and on behalf of other aggrieved individuals.

Instead, this court looks to the complaint filed in Balderas for guidance. There, the Second Appellate District noted that Ms. Balderas’ complaint stated that she was “not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees.” (Balderas, supra, 101 Cal.App.5th at 536.) Although the court recognizes, as it did above, that Balderas discussed a standing issue, and that there is not a standing issue in the case at bar, the court nonetheless finds the decision to be persuasive as this was sufficient for the Balderas Court to find that Ms. Balderas could have standing based on her pleading to bring a non-individual PAGA claim. Here, that is what Plaintiff claims is being brought. Under PAGA actions, representatives are typically entitled to representative PAGA penalties, attorneys fees and costs. Neither party presented a case on point for whether seeking representative PAGA penalties, attorneys fees, and costs takes an action out of being a non-individual PAGA claim versus an individual one.

Here, Plaintiff elects not to pursue an individual PAGA claim, instead seeking to recover only for the “non-individual” PAGA claim. Thus, there would be no claim to refer to arbitration. Moreover, the question of “aggrieved employee” status can be addressed in Court for the first time as an element of the “non-individual” PAGA claim. There is no structural reason why that cannot happen. Adolph states nothing to the contrary.

Tentatively, this Court finds that because Defendant’s concede that non-individual PAGA claims are not bound to its arbitration provision, and Plaintiff has brought forth a non-individual

PAGA claim, that the motion to compel arbitration must be denied. The court will allow oral argument on this issue. However, because the Court does not find that the arbitration agreement is enforceable over any portion of Plaintiff’s complaint, the court tentatively DENIES the motion.

IV. CONCLUSION

For the foregoing reasons, this Court’s tentative ruling is to DENY Defendant’s Motion to Compel Arbitration.

Plaintiff is ordered to give notice.