Judge: Stuart M. Rice, Case: 23STCV29662, Date: 2024-05-07 Tentative Ruling

Case Number: 23STCV29662    Hearing Date: May 7, 2024    Dept: 1

Moving Party:             Defendants Benihana Downey Corp., Benihana National Corp., Benihana Carson Concession Corp, Benihana Chino Hills Corp, Benihana Encino Corp, Benihana International, Inc., Benihana Marina Corp, Benihana Puente Hills Corp, Benihana Ontario Corp, Benihana San Mateo Corp, Benihana Santa Anita Corp, Benihana Sunrise Corporation, and Benihana Temecula Corp.

Responding Party:      Plaintiff Euriah David Ontiveros

Ruling:                        Motions to compel arbitration granted.  Motion to consolidate denied, but the arbitrations of the PAGA and individual claims are ordered consolidated pursuant to Code Civ. Proc. § 1281.3.

 

This is a wage-and-hour proposed class action (No. 23STCV23334), which is related to a Private Attorney General Act (PAGA) action (No. 23STCV29662).  Plaintiff Euriah David Ontiveros (Plaintiff) alleges that he and others were employed by defendants Benihana Downey Corp., Benihana National Corp., Benihana Carson Concession Corp, Benihana Chino Hills Corp, Benihana Encino Corp, Benihana International, Inc., Benihana Marina Corp, Benihana Puente Hills Corp, Benihana Ontario Corp, Benihana San Mateo Corp, Benihana Santa Anita Corp, Benihana Sunrise Corporation, and Benihana Temecula Corp (Defendants), during which employment Defendants committed various violations of labor law.  Defendants move to compel Plaintiff to submit his claims to binding arbitration pursuant to an arbitration agreement Plaintiff purportedly signed and to consolidate this action with the related PAGA action.  Defendants have made similar motions in the PAGA action.

 

Lack of Opposition/Mootness

 

Plaintiff has not filed oppositions to any of the motions.  Rather, Plaintiff has made a request for dismissal of his class and individual wage claims in the class action, and a request for dismissal of all individual PAGA claims (see Viking River Cruises, Inc. v. Moriana (2022) 596 U.S. 639, 649 [“claims based on code violations suffered by the plaintiff”]) in the PAGA action.  The proposed orders on each request provide that the dismissal, if granted, would moot the motions.  On April 26, 2024, before their reply was due, Defendants filed an opposition to the requests for dismissal to the extent they would moot the motions.  On April 30, 2024, Defendants did not file a reply, but rather a notice of non-receipt of opposition.  On May 3, 2024, two court days before the hearing on the motion, Plaintiff filed a purported reply in support of his request for dismissal, effectively an untimely brief in opposition to the motions arguing that the motions are moot.  The Court disregards this untimely opposition.

 

Because the dismissals are without prejudice, the Court agrees that the dismissals would not moot the motions.  In the interest of avoiding uncertainty and promoting finality of the issues concerning arbitration, the Court will rule on Defendants’ motions first, before addressing the dismissals.

 

Legal Standards

 

1.      Arbitration

 

Code of Civil Procedure section 1281.2 states, in relevant part:¿ 

 

On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such 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….¿ 

 

“California law reflects a strong public policy in favor of arbitration as a relatively quick and inexpensive method for resolving disputes. To further that policy, section 1281.2 requires a trial court to enforce a written arbitration agreement unless one of three limited exceptions applies. Those statutory exceptions arise where (1) a party waives the right to arbitration; (2) grounds exist for revoking the arbitration agreement; and (3) pending litigation with a third party creates the possibility of conflicting rulings on common factual or legal issues.” (Acquire II, Ltd. v. Colton Real Estate Group¿(2013) 213 Cal.App.4th 959, 967, citations omitted.)¿ 

 

“There is no public policy favoring arbitration of disputes which the parties have not agreed to arbitrate.” (Engineers & Architects Assn. v. Community Development Dept.¿(1994) 30 Cal.App.4th 644, 653.) Nevertheless, the strong public policy promoting private arbitration of civil disputes gives rise to a presumption in favor of arbitrability and compels the Court to construe liberally the terms of the arbitration agreement. (Vianna v. Doctors’ Management Co.¿(1994) 27 Cal.App.4th 1186, 1189).¿ ¿¿ 

 

“The petitioner bears the burden of proving the existence of a valid arbitration agreement by the preponderance of the evidence, and a party opposing the petition bears the burden of proving by a preponderance of the evidence any fact necessary to its defense. In these summary proceedings, the trial court sits as a trier of fact, weighing all the affidavits, declarations, and other documentary evidence, as well as oral testimony received at the court's discretion, to reach a final determination.” (Giuliano v. Inland Empire Personnel, Inc.¿(2007) 149 Cal.App.4th 1276, 1284.)¿¿ The movant may bear this initial burden “by attaching a copy of the arbitration agreement purportedly bearing the opposing party's signature.” (Iyere v. Wise Auto Group (2023) 87 Cal.App.5th 747, 755 (Iyere); Espejo v. Southern California Permanente Medical Group (2016) 246 Cal.App.4th 1047, 1060.)  “At this step, a movant need not ‘follow the normal procedures of document authentication’ and need only ‘allege the existence of an agreement and support the allegation as provided in [Rules of Court, Rule 3.1330].’”  (Iyere, supra, 87 Cal.App.5th at 755; Condee v. Longwood Management Corp. (2001) 88 Cal.App.4th 215, 219 (Condee).) 

 

“The party opposing arbitration has the burden of demonstrating that an arbitration clause cannot be interpreted to require arbitration of the dispute. Nonetheless, this policy does not override ordinary principles of contract interpretation. The contractual terms themselves must be carefully examined before the parties to the contract can be ordered to arbitration: Although [t]he law favors contracts for arbitration of disputes between parties, there is no policy compelling persons to accept arbitration of controversies which they have not agreed to arbitrate.” (Rice v. Downs¿(2016) 247 Cal.App.4th 1213, 1223, citations and quotations omitted.)¿¿¿ 

 

“A party seeking to enforce an arbitration agreement has the burden of showing FAA preemption.”  (Lane v. Francis Capital Management, LLC (2014) 224 Cal.App.4th 676, 687; see also Nixon v. AmeriHome Mortgage Company, LLC (2021) 67 Cal.App.5th 934, 946 [“The party seeking to enforce the arbitration agreement also bears the burden of establishing the FAA applies and preempts otherwise governing provisions of state law or the parties’ agreement.”].)

 

2.      Consolidation

 

“When actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.”  (Code Civ. Proc. § 1048(a).) 

 

Discussion

 

1.      Arbitration

 

As Exhibit 2 to the declaration of Crystal Thompson, Defendants present an arbitration agreement appearing to bear Plaintiff’s signature, fulfilling their initial burden.  (Iyere, supra, 87 Cal.App.5th at 755.)  The Agreement provides:

 

Except as it otherwise provides, this Agreement is intended to apply to the resolution of disputes that would be resolved in a court of law or before a forum other than arbitration, including without limitation, to disputes arising out of or relating to the application for employment, background checks, privacy, employment relationship, or the termination of that relationship (including post-employment defamation or retaliation), trade secrets, unfair competition, contracts, compensation, classification, minimum wage, expense reimbursement, overtime, meal periods and rest breaks, or retaliation, discrimination, or harassment and claims arising under the Fair Credit Reporting Act, Defend Trade Secrets Act, Civil Rights Act of 1964, 42 U.S.C. § 1981, Rehabilitation Act, Civil Rights Acts of 1866 and 1871, Civil Rights Act of 1991, 8 U.S.C. § 1324b (unfair immigration related practices), 41 U.S.C. § 4712, Pregnancy Discrimination Act, Equal Pay Act, Americans With Disabilities Act, Age Discrimination in Employment Act, Older Workers Benefit Protection Act, Occupational Safety and Health Act, Family and Medical Leave Act, Fair Labor Standards Act, Employee Retirement Income Security Act (except for claims for employee benefits under any benefit plan sponsored by the Company and covered by the Employee Retirement Income Security Act of 1974 or funded by insurance), Affordable Care Act, Genetic Information Non-Discrimination Act, Uniformed Services Employment and Reemployment Rights Act, Worker Adjustment and Retraining Notification Act, Consolidated Omnibus Budget Reconciliation Act of 1985, the False Claims Act, and state statutes or regulations, if any, addressing the same or similar subject matters, and all other federal or state legal claims (including without limitation torts) arising out of or relating to your application, selection, employment, or the termination of employment by the Company.

(Thompson Decl., Ex. 2, pp. 1-2.)

 

This would appear to include all of Plaintiff’s claims in this and the related PAGA action, except for Plaintiff’s non-individual PAGA claims, which can neither be arbitrated nor waived.  (See Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1118-1119.)  The Court will stay those claims.  The Agreement also contains a class action waiver.  (Thompson Decl., Ex. 2, p. 4.)  Plaintiff offers no argument why it should not apply.  The Court will therefore strike Plaintiff’s class claims. 

 

2.      Consolidation

 

The Court sees no reason to consolidate these cases at this time.  Although they contain significant overlap in that they both relate to Defendants’ employment practices, they do not contain the same claims.  As the parties well know,

 

[a] PAGA claim is legally and conceptually different from an employee's own suit for damages and statutory penalties. An employee suing under PAGA “does so as the proxy or agent of the state's labor law enforcement agencies.” [Citation.] Every PAGA claim is “a dispute between an employer and the state.” [Citations.]  Moreover, the civil penalties a PAGA plaintiff may recover on the state's behalf are distinct from the statutory damages or penalties that may be available to employees suing for individual violations. [Citation.] Relief under PAGA is designed primarily to benefit the general public, not the party bringing the action. [Citations.] “A PAGA representative action is therefore a type of qui tam action,” conforming to all “traditional criteria, except that a portion of the penalty goes not only to the citizen bringing the suit but to all employees affected by the Labor Code violation.” [Citation.] The “government entity on whose behalf the plaintiff files suit is always the real party in interest.”

(Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.) 

 

The class action is a suit for damages and penalties for individual employees brought as a class action, while the PAGA action is a suit for penalties that could ordinarily only be sought by the State of California.  They are two different primary rights, brought by the same plaintiff acting in two distinct capacities.  (See Gavriiloglou v. Prime Healthcare Management, Inc. (2022) 83 Cal.App.5th 595, 603.) 

 

Because the litigation has hardly begun in this forum, there is no danger of duplication of resources.  As discussed above, much of the case is going to arbitration or will be dismissed.  Arbitration, on the other hand, will likely proceed quicker, and there is a likelihood of wasted effort if the arbitrations were to go forward separately.  The Court will therefore order that the arbitrations be consolidated pursuant to Code Civ. Proc. § 1281.3.

 

3.      Dismissals

 

The parties should be prepared to discuss next steps in this case at the hearing on these motions, which will include a discussion of the dismissals.

 

Conclusion

 

For the foregoing reasons, the motions to compel arbitration are granted.  Plaintiff is required to arbitrate his individual claims, including his individual PAGA claims, pursuant to the Agreement.  His class claims are dismissed.  His non-individual PAGA claims will remain stayed in this Court.  The motion to consolidate is denied but the arbitrations of both claims are consolidated pursuant to CCP Section 1281.3.  Defendants to give notice.