Judge Teresa A. Beaudet, Case Number: 24STCV06281, Date: 2025-01-16 Tentative Ruling

ERNESTO ARELLANO, as an individual, and on behalf of all others similarly situated,

Plaintiff,

vs.

VALERO SERVICES, INC., et al.

Defendants.

Case No.:

24STCV06281

Hearing Date:

January 16, 2025

Hearing Time: 2:00 p.m.

[TENTATIVE] ORDER RE:

DEFENDANT VALERO SERVICES, INC.’S MOTION TO STAY REPRESENTATIVE ACTION

On March 13, 2024, Plaintiff Ernesto Arellano, as an individual, and on behalf of all others similarly situated (“Plaintiff”) filed this action against Defendant Valero Services, Inc. (“Defendant”). Plaintiff’s “Representative Action Complaint Under the Private Attorneys General Act of 2004” alleges one cause of action for violation of Labor Code section 2698, et seq.

The Court denies Defendant’s request for judicial notice. The Court also denies Plaintiff’s request for judicial notice.

As set forth above, Defendant moves for an order staying the instant action. In his supporting declaration, Defendant’s counsel states that “[o]n April 23, 2024, Plaintiff filed a Demand for Arbitration against Defendant and included an individual PAGA claim.” (Crosner Decl., ¶ 4.) Plaintiff does not appear to dispute that the parties stipulated to arbitrate Plaintiff’s “individual” PAGA claims in this action. Defendant asserts that “[t]he sole dispute here is whether Plaintiff’s representative PAGA claim should be stayed pending individual arbitration.” (Mot. at p. 5:11-12.)

Both parties cite to Adolph v. Uber Technologies, Inc. (2023) 14 Cal.5th 1104, 1114, where the California Supreme Court noted that “[t]he question here is whether an aggrieved employee who has been compelled to arbitrate claims under PAGA that are ‘premised on Labor Code violations actually sustained by’ the plaintiff (Viking River, supra, 596 U.S. at p. 648 [142 S.Ct. at p. 1916]; see §§ 2698, 2699, subd. (a)) maintains statutory standing to pursue ‘PAGA claims arising out of events involving other employees’ (Viking River, at pp. 648–649 [142 S.Ct. at p. 1916]) in court.” The Adolph Court held that “the answer is yes,” and that “[w]here 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.” (Ibid.) The Adolph Court further found as follows:

“Nothing in PAGA or any other relevant statute suggests that arbitrating individual claims effects a severance. When a case includes arbitrable and nonarbitrable issues, the issues may be adjudicated in different forums while remaining part of the same action. Code of Civil Procedure section 1281.4 states that upon ‘order[ing] arbitration of a controversy which is an issue involved in an action,’ the court should ‘stay the action.’ It further provides that ‘[i]f the issue which is the controversy subject to arbitration is severable, the stay may be with respect to that issue only.’ Section 1281.4 does not contemplate that the compelled arbitration of an issue in controversy in the action is a separate action. The statute makes clear that the cause remains one action, parts of which may be stayed pending completion of the arbitration.” ((Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at pp. 1124-1125.)

Defendant asserts that here, “[t]his Court has a compelling interest in granting a stay to avoid unseemly conflicts caused by the potential for inconsistent adjudications, as well as an interest in conserving judicial resources.” (Mot. at p. 10:7-9.) Defendant asserts that “[i]f the requested stay is not granted, it creates the risk that after extensive civil discovery this Court could rule on the same issues that would also be determined in arbitration, and could easily enter rulings that are different from those determined in the arbitration.” (Mot. at p. 10:19-22.)

In the opposition, Plaintiff asserts that the Court should “allow Plaintiff to proceed with the non-individual PAGA claims despite any pending arbitration…there is a distinction between the claims of an individual PAGA plaintiff and the claims of the State of California and the Labor Workforce Development Agency (the ‘LWDA’).” (Opp’n at p. 3:18-21.) Plaintiff cites to Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81, where the California Supreme Court noted that “[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. Every PAGA claim is a dispute between an employer and the state.” (Internal quotations, citation, and emphasis omitted.) But as set forth above, the Adolph Court noted that “[Code of Civil Procedure] Section 1281.4 does not contemplate that the compelled arbitration of an issue in controversy in the action is a separate action. The statute makes clear that the cause remains one action, parts of which may be stayed pending completion of the arbitration.” ((Adolph v. Uber Technologies, Inc., supra, 14 Cal.5th at p. 1125.)

The Court finds that a stay of the “non-individual” PAGA claims is warranted, particularly to avoid inconsistent rulings. Thus, the Court grants Defendant’s request to stay Plaintiff’s non-individual PAGA claims pending completion of arbitration of Plaintiff’s individual PAGA claims.

Based on the foregoing, Defendant’s motion for an order staying this action is granted. The action is stayed pending completion of arbitration of Plaintiff’s individual PAGA claims.

The Court sets an arbitration completion status conference on January 16, 2026, at 10:00 a.m. in Dept. 50. The parties are ordered to file a joint report regarding the status of the arbitration five court days prior to the status conference, with a courtesy copy delivered directly to Department 50.

Superior Court of California

County of Los Angeles

Department 50