Judge: Theresa M. Traber, Case: 22STCV34289, Date: 2023-12-04 Tentative Ruling
Case Number: 22STCV34289 Hearing Date: December 4, 2023 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: December 4, 2023 TRIAL
DATE: NOT SET
CASE: Keilani Todd v. Whaler, LLC
CASE NO.: 22STCV34289 
MOTION
TO COMPEL ARBITRATION AND STAY ACTION PENDING RESOLUTION OF ARBITRATION
MOVING PARTY: Defendant Whaler, LLC
RESPONDING PARTY(S): Plaintiff Keilani
Todd
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is a PAGA action that was filed on October 25, 2022. Plaintiff
alleges that Defendant engaged in numerous wage and hour violations against
various employees.
Defendant moves to compel
Plaintiff’s individual claims to arbitration and to dismiss her representative
claims.
TENTATIVE RULING:
Defendant’s Motion to Compel
Arbitration is GRANTED IN PART with respect to Plaintiff’s individual claims as
an aggrieved party under PAGA. Plaintiff’s claims as a representative of other
aggrieved parties under PAGA are STAYED pending resolution of the arbitration.
DISCUSSION:
Defendant moves to compel
Plaintiff’s individual claims to arbitration and to dismiss her representative
claims.
Existence of an Arbitration Agreement
Under California law, arbitration
agreements are valid, irrevocable, and enforceable, save upon such grounds as
exist at law or in equity for the revocation of any contract. (Blake v. Ecker (2001) 93 Cal.App.4th
728, 741 (overruled on other grounds by
Le Francois v. Goel (2005) 35 Cal.4th 1094).) A party petitioning to compel
arbitration has the burden of establishing the existence of a valid agreement
to arbitrate, and the party opposing the petition has the burden of proving, by
a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court
(1998) 62 Cal.App.4th 348, 356-57.)
However, as to the burden of production,
rather than persuasion, courts have articulated a three-step burden shifting
process:
First, the moving party bears the
burden of producing “prima facie evidence of a written agreement to arbitrate
the controversy.” [citation] The moving party “can meet its initial burden by
attaching to the [motion or] petition a copy of the arbitration agreement
purporting to bear the [opposing party’s] signature.” [citation] Alternatively,
the moving party can meet its burden by setting forth the agreement’s
provisions in the motion. [citations] For this step, “it is not necessary to
follow the normal procedures of document authentication.” [citation] If the
moving party meets its initial prima facie burden and the opposing party does
not dispute the existence of the arbitration agreement, then nothing more is
required for the moving party to meet its burden of persuasion.
If the moving party meets its initial
prima facie burden and the opposing party disputes the agreement, then in the
second step, the opposing party bears the burden of producing evidence to
challenge the authenticity of the agreement. [citation] The opposing party can
do this in several ways. For example, the opposing party may testify under oath
or declare under penalty of perjury that the party never saw or does not
remember seeing the agreement, or that the party never signed or does not
remember signing the agreement. [citations]
If the opposing party meets its burden
of producing evidence, then in the third step, the moving party must establish
with admissible evidence a valid arbitration agreement between the parties. The
burden of proving the agreement by a preponderance of the evidence remains with
the moving party. [citation].
(Gamboa v. Northeast Community Clinic (2021) 72
Cal.App.5th 158, 165-66.) An electronic record or signature is attributable to
a person if it was the act of the person. (Civ. Code § 1633.9(a).) The act of
the person may be shown in any manner. (Id.) As described by the Court
of Appeal, “the burden of authenticating an electronic signature is not great.”
(Ruiz v. Moss Bros. Auto Group, Inc. (2014) 232 Cal.App.4th 836, 844.)
Defendant
has provided a copy of an Arbitration Agreement dated April 14, 2021, bearing
Plaintiff’s signature and the signature of Defendant’s Director of Human
Resources, Deisy Moreno. (Declaration of Deisy Moreno ISO Mot. Exh. A.) Section
1 of this agreement states that the parties agree to arbitrate:
any claim, dispute
and/or controversy that is justiciable and/or arguably justiciable under any
federal, state, or local law, including regarding the terms of this Agreement
or any other agreement between the parties, or any alleged breach thereof, as
well as any claim, dispute, and/or controversy that in any way relates to or
arises from Employee's employment or application for employment, or separation
from employment with the Company, whether based on common law, statutory law,
regulation, or any other federal, state, or local law which encompasses but is
not limited to discrimination or harassment on the basis of race, sex, age,
religion, color, national origin, sexual orientation, disability, and veteran
status (including all claims based on Title VII of the Civil Rights Act of
1964, as amended, as well as all other state or federal laws or regulations
concerning employment or employment discrimination) and any claim, dispute,
and/or controversy against individuals or entities employed by, acting on behalf
of, or affiliated with the Company, any of which would otherwise require or
allow resort to any court or other governmental dispute resolution forum
between Employee and the Company (or its parent entity, owners, directors,
officers, managers, employees, and agents) (''Covered Claims''), shall be
submitted to and determined exclusively by final and binding arbitration with
the American Arbitration Association ("AAA'') in accordance with AAA's
then-current employment dispute rules, a copy of which may be found at http:///www.adr.org/rules.
The matter shall proceed in the AAA office closest to the place where Employee
most recently worked for Company.
(Moreno Decl. Exh. A.) Plaintiff does not dispute that she
signed the arbitration agreement, nor does she challenge its enforceability as
to her individual claims.
Applicability of the FAA
The
Arbitration Agreement states that “The arbitration shall be governed by the
state law or federal law applicable to each specific claim brought and
conducted in accordance with the AAA Employment Arbitration Rules (to the
extent applicable), in primary conformity with the Federal Arbitration Act, 9
U.S.C. § 1 et seq. and, secondly, any state arbitration act. To the extent that
the AAA Employment Arbitration Rules are inconsistent with this Agreement, this
Agreement shall govern.” (Moreno Decl. Exh. A.) Plaintiff does not dispute that
the FAA governs the arbitration agreement.
Scope of the Arbitration Agreements
Defendant
contends that the scope of the Arbitration Agreements covers Plaintiff’s
individual PAGA claims. As Plaintiff expressly concedes this issue, the Court
finds that the arbitration agreement covers Plaintiff’s individual PAGA claims.
//
Disposition of Representative Claims
Defendant contends that, in light
of the United States Supreme Court’s holding in Viking River Cruises v.
Moriana (2022) 142 S. Ct. 1906 (“Moriana”), Plaintiff’s
representative PAGA claims should be dismissed for lack of standing upon
ordering her individual claims to arbitration.
The California Supreme Court held
in its landmark decision in Iskanian v. CLS Transportation Los Angeles, LLC
(2014) 58 Cal.4th 380 (“Iskanian”) that where “an employment agreement
compels the waiver of representative claims under the PAGA, it is contrary to
public policy and unenforceable as a matter of state law.” (Id., at pp. 383-384.) The Court also ruled
that an agreement that permitted the employee to bring only “individual” PAGA
claims does not permit its enforcement because splitting the individual and
representative claims in this manner “does not serve the purpose of the
PAGA.” (Id., at p. 384.) In addition, the Iskanian Court held
that a PAGA claim lies outside the FAA’s coverage because it is an action held
by the State, rather than a dispute between an employee and employer. (Id., at p. 388.) Based on this reasoning, the Court concluded
that “California's public policy prohibiting waiver of PAGA claims, whose sole
purpose is to vindicate the Labor and Workforce Development Agency's interest in
enforcing the Labor Code, does not interfere with the FAA's goal of promoting
arbitration as a forum for private dispute resolution.” (Id., at pp. 388-389.)
In Moriana, the U.S. Supreme
Court approved the Iskanian rule that private arbitration agreements
cannot effectuate “a wholesale waiver of PAGA claims,” holding that such a
state rule is not preempted by the FAA.
(Moriana, at p. 1925.) In
so doing, the U.S. Supreme Court held that “the FAA does not require courts to
enforce contractual waivers of substantive rights and remedies.” (Id., at p. 1919.) It also resisted the employer’s contention
that a state rule invalidating contractual bans on representative PAGA actions
should be treated the same as state nullifications of class-action
prohibitions, which the high court had held to be preempted by the FAA in AT&T
Mobility LLC v. Concepcion (2011) 131 S. Ct. 1740. Instead, the Moriana Court held that a
representative PAGA action litigated by an aggrieved employee on behalf of the
State was significantly different from a class action where a plaintiff
prosecuted the individual claims of absent class members. (Id., at pp. 1920-1921.) It also dismissed the notion that allowing
arbitration of representative actions was necessarily contrary to the
“bi-lateral” nature of arbitrations and, thus, incompatible with the FAA. (Id., at pp. 1921-1923.) Accordingly,
the Court ruled that the FAA does not preempt state laws, like the holding in Iskanian,
that invalidate contractual prohibitions on arbitrating PAGA representative
claims. (Id.)
The Moriana Court next
addressed what it described as the secondary Iskanian rule and found it
to be preempted by FAA “insofar as it precludes the division of PAGA actions
into individual and non-individual claims through an agreement to
arbitration.” (Moriana, at p.
1924.) The Court’s analysis was based
principally on its interpretation of PAGA’s standing and claim joinder rules. (Id.
at pp. 1923-1924.) The Court observed that PAGA “permits ‘aggrieved employees’
to use the Labor Code violations they personally suffered as a basis to join to
the action any claims that could have been raised by the State in an
enforcement proceeding.” (Id., at p. 1923.) The Moriana Court
concluded that “Iskanian’s secondary rule prohibits parties from
contracting around this joinder device because it invalidates agreements to
arbitrate only ‘individual PAGA claims for Labor Code violations that an
employee suffered.’” (Id.) It
reasoned that Iskanian’s “prohibition on contractual division of PAGA
actions into constituent claims unduly circumscribes the freedom of parties to
determine ‘the issues subject to arbitration’ and ‘the rules by which they will
arbitrate,’ and does so in a way that violates the fundamental principle that
‘arbitration is a matter of consent.’” (Id.) Therefore, the Moriana Court
concluded, “state law cannot condition the enforceability of an arbitration
agreement on the availability of a procedural mechanism that would permit a
party to expand the scope of the arbitration by introducing claims that the parties
did not jointly agree to arbitrate.” (Id.)
As a bottom line, then, Moriana holds
that an employee who has entered into an enforceable arbitration agreement may
be compelled to arbitrate his “individual” PAGA claims, that is, those arising
from Labor Code violations suffered by the employee, rather than other
aggrieved parties. Although the high court in Moriana dismissed the
representative claims for lack of standing, that portion of the ruling was
based on the court’s interpretation of California law. (Id., at p.
1925.) Because “[t]he highest court of each State . . . remains the final
arbiter of what is state law” (Montana v. Wyoming (2011) 563 U.S. 368,
378 fn. 5) the Court is not bound by the high court’s interpretation in the
face of a contrary ruling from the California Supreme Court. Indeed, our
Supreme Court reached just such a conclusion in the recent opinion Adolph v.
Uber Technologies, Inc., holding that an order compelling arbitration of
individual PAGA claims does not strip the plaintiff of standing as an aggrieved
employee to litigate the representative claims. (Adolph v. Uber
Technologies, Inc. (2023) 14 Cal.5th 1104, 1114.) Defendant is therefore
not entitled to an order dismissing Plaintiff’s representative claims.
Defendant argues in the alternative
that the Court should stay this action pending resolution of Plaintiff’s
individual claims. The decision whether to stay litigation of the
representative claims while the individual claims are arbitrated is within the
discretion of the trial court. (Adolph, supra, 14 Cal.5th at 1124-25.) Plaintiff
argues the representative claims should not be stayed but provides no real
justification for why the Court should not do so. In the Court’s view, a stay
of proceedings pending resolution of Plaintiff’s individual claims is prudent
since the issue of whether Plaintiff herself is an aggrieved party should
logically be decided before permitting Plaintiff to pursue claims as a
representative of others.
Thus, for the foregoing reasons,
the Court finds that Plaintiff’s individual claims should be compelled to
arbitration and the representative claims stayed pending resolution of the
arbitration.
//
//
CONCLUSION:
Accordingly,
Defendant’s Motion to Compel Arbitration is GRANTED IN PART with respect to
Plaintiff’s individual claims as an aggrieved party under PAGA. Plaintiff’s
claims as a representative of other aggrieved parties under PAGA are STAYED
pending resolution of the arbitration.
Moving
Party to give notice.
IT IS SO ORDERED.
Dated: December 4,
2023 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day
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order which modifies the tentative ruling in whole or in part.