Judge: Serena R. Murillo, Case: BC719410, Date: 2023-09-19 Tentative Ruling
Case Number: BC719410 Hearing Date: September 19, 2023 Dept: 31
TENTATIVE
Defendants’
motion to compel arbitration is GRANTED in part. The parties are ordered to
arbitrate Plaintiff’s individual PAGA claims. The action is STAYED as to
Plaintiff’s representative PAGA claims.
Legal
Standard
The Federal
Arbitration Act (“FAA”) applies to contracts that involve interstate commerce
(9 U.S.C. §§ 1, 2), but since arbitration is a matter of contract, the FAA also
applies if it is so stated in the agreement.
(See Victrola 89, LLC v. Jaman Properties 8 LLC (2020) 46
Cal.App.5th 337, 355 (“[T]he presence of interstate commerce is not the only
manner under which the FAA may apply. … [T]he parties may also voluntarily
elect to have the FAA govern enforcement of the Agreement”].)
Under the FAA,
“any doubts concerning the scope of arbitrable issues should be resolved in
favor of arbitration …”. (Moses H.
Cone Memorial Hospital v. Mercury Constr. Corp. (1983) 460 U.S. 1, 24–25.)
This federal policy favoring arbitration preempts any state law impediments to
the policy’s fulfillment. If a state law
interferes with the FAA’s purpose of enforcing arbitration agreements according
to their terms, the FAA preempts the state law provision, no matter how
laudable the state law’s objectives. (AT&T Mobility LLC v. Concepcion
(2011) 563 U.S. 333, 352.) Under the
supremacy clause of the United States Constitution (art. VI, cl. 2), the FAA
requires any conflicting state law to give way. (Nitro-Lift Technologies, L. L.
C. v. Howard (2012) 133 S.Ct. 500, 504).
However, while the
arbitration agreement is governed by the FAA, the agreement may be enforced via
the summary procedures provided by California arbitration law. (Rosenthal v. Great Western Financial
Securities Corp. (1996) 14 Cal. 4th 394, 409-410.) It is a “general and unassailable proposition
. . . that States may establish the rules of procedure governing litigation in
their own courts,” even though the controversy is governed by substantive
federal law. (Felder v. Casey
(1988) 487 U.S. 131, 138.) By the same
token, however, a state procedural rule must give way “if it impedes the
uniform application of the federal statute essential to effectuate its purpose,
even though the procedure would apply to similar actions arising under state
law.” (McCarroll v. L.A. County etc. Carpenters (1957) 49 Cal. 2d 45,
61, 62.)
As with federal
law, under California law, public policy favors arbitration as an efficient and
less expensive means of resolving private disputes. (Moncharsh v. Heily & Blase (1992)
3 Cal.4th 1, 8-9; AT&T Mobility LLC v. Concepcion, supra 563
U.S. at 339.) To further that policy,
Code Civ. Proc. §1281.2 requires a trial court to enforce a written arbitration
agreement unless it finds (1) no written agreement to arbitrate exists, (2) the
right to compel arbitration has been waived, (3) grounds exist for rescission
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 a 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.) The trial court then weighs all the evidence
submitted and uses its discretion to make a final determination. (Id.)
If the court
orders arbitration, then the court shall stay the action until arbitration is
completed. (See Code Civ. Proc., §
1281.4.)
Discussion
Existence of Arbitration
Agreement
Plaintiff was an employee of Defendant American
Fruits and Flavors (“AFF”) from July 2013 to January 2018. Booth Decl. ¶ 3. As
part of his new hire paperwork, Plaintiff executed an arbitration agreement.
Booth Decl. ¶ 3. In 2016, AFF was acquired by Monster Energy Company. In
connection with that change in ownership, Plaintiff executed a new Agreement to
Arbitrate Disputes (the “Arbitration Agreement”) on April 4, 2016. Booth Decl.
¶ 3 & Ex. 1. The Arbitration Agreement provides, in relevant part:
Any controversy or claim arising out of
or relating to Employee’s employment or other relationship with Company or any
agents of Company shall be settled by binding arbitration…
(Id.) The Arbitration Agreement
further reflects the Parties understanding that the Agreement is governed by
the Federal Arbitration Act. (Id.)
An entity seeking to compel arbitration must
generally establish it was a party to an arbitration agreement. (DMS
Services LLC v. Superior Court (2012) 205 Cal.App.4th 1346, 1352–1353; JSM
Tuscany, LLC v. Superior Court (2011) 193 Cal.App.4th 1222, 1236.) Only in limited circumstances may an
arbitration agreement be enforced by non-signatories.
One exception provides that when a plaintiff alleges a
defendant acted as an agent of a party to an arbitration agreement, the
defendant may enforce the agreement even though the defendant is not a party
thereto. (See e.g., Dryer v.
Los Angeles Rams (1985) 40 Cal.3d 406, 418; RN Solution, Inc. v. Catholic Healthcare West (2008)
165 Cal.App.4th 1511, 1520; 24 Hour Fitness, Inc. v. Superior Court (1998) 66
Cal.App.4th 1199, 1210.) Here, the complaint
alleges that Defendants were each other’s agents.
Plaintiff has not filed an
opposition to dispute a valid arbitration exists, which encompasses his
individual claims against Defendants. Accordingly, Defendants have met their
burden to establish the existence of an arbitration agreement.
Standing
Defendants contend that Plaintiff’s
representative PAGA claims should be dismissed due to lack of standing per Viking
River.
The U.S.
Supreme Court in Viking River held that a plaintiff loses standing to
assert a PAGA claim on behalf of other employees once plaintiff’s own
individual claims are compelled to arbitration.
(Viking River Cruises, Inc.
v. Moriana (2022) 142 S.Ct. 1918, 1925.)
However, the California Supreme Court has
recently made clear that a PAGA plaintiff does not lose standing to pursue
representative claims in court merely because the plaintiff’s individual claims
were compelled to arbitration. (Adolph
v. Uber Technologies, Inc. (2023)
14 Cal.5th 1104, 1114.) Where a plaintiff has brought a PAGA action
comprising individual and non-individual claims, an order compelling
arbitration of the individual claims does not strip the plaintiff of standing
as an aggrieved employee to litigate claims on behalf of other employees under
PAGA.” (Id.) The State of California cannot be compelled to
arbitrate a representative PAGA claim. (Betancourt v. Prudential Overall
Supply (2017) 9 Cal.App.5th 439, 446.)
Therefore, the Court finds Plaintiff has
standing to pursue his representative PAGA claims against Defendants in this
Court and declines to dismiss Plaintiff’s claims.
Staying
Plaintiff’s Representative Claims Pending Completion of Arbitration
Given the Court’s decision to compel
arbitration of Plaintiff’s individual PAGA claims, the Court will stay the
litigation of Plaintiff’s representative PAGA claims in this Court pending
completion of the arbitration.
Conclusion
The
Court GRANTS the motion to compel arbitration in part. The parties are ordered
to arbitrate Plaintiff’s individual PAGA claims. The action is STAYED as to
Plaintiff’s representative PAGA claims.
The
Court sets a Status Conference re Arbitration for March 27 2023 at 9:00 a.m. Defendant is ordered to file and serve a further arbitration report detailing the status of the arbitration five court days before the next hearing.
Moving
party is ordered to give notice.