Judge Virginia Keeny, Case Number: 24STCV25729, Date: 2025-03-12 Tentative Ruling

Judge: Virginia Keeny, Case: 24STCV25729, Date: 2025-03-12 Tentative Ruling

Case Number: 24STCV25729 Hearing Date: March 12, 2025 Dept: 45

DECLOEDT v. Radnet management, inc., et al.

MOTION to STAY PROCEEDINGS

Date of Hearing: March 12, 2025 Trial Date: None set.

Department: 45 Case No.: 24STCV25729

Moving Party: Defendants RadNet Management, Inc., et al.

Responding Party: Plaintiff Trevor Joseph Decloedt

BACKGROUND

This action arises out of an employment relationship between Plaintiff Trevor Joseph Decloedt (“Plaintiff”) and Defendant RadNet Management, Inc. On October 3, 2024, Plaintiff filed a Complaint against Defendants RadNet Management, Inc.; RadNet, Inc.; RadNet Managed Imaging Services, Inc.; Joe Zambrano; Susana Ceballos (collectively, “Defendants”); and DOES 1 to 100, inclusive for: (1) Discrimination in Violation of the Fair Employment and Housing Act (“FEHA”); (2) Hostile Work Environment Harassment in Violation of the FEHA; (3) Sexual Harassment – Gov. Code § 12940; (4) Retaliation in Violation of the FEHA; (5) Failure to Provide Reasonable Accommodation in Violation of the FEHA; (6) Failure to Engage in the Interactive Process in Violation of FEHA; (7) Failure to Prevent Discrimination, Harassment, or Retaliation in Violation of FEHA; (8) Negligent Hiring, Supervision, and Retention; (9) Wrongful Termination of Employment in Violation of Public Policy; (10) Whistleblower Retaliation – Lab. Code § 1102.5; and (11) Intentional Infliction of Emotional Distress.

The Complaint alleges that Plaintiff began working for Defendant RadNet Management, Inc. as a Patient Service Representative in November 2021. (Compl., ¶11.) Plaintiff also alleges that Defendants refused to accommodate him despite having knowledge of his Cerebral Palsy and Attention Deficit Hyperactivity Disorder (“ADHD”) conditions. (Id. at ¶¶12a-12b.) Plaintiff also alleges that he reported harassment related to his sexual orientation and sexual harassment against him to management between mid-2022 through November 2022, leading to his termination in February 2023. (Id. at ¶¶12c-14.)

On January 16, 2025, the Court denied Defendants’ motion to compel arbitration.

Defendants now move for an order staying the proceedings pending appeal of the Court’s denial of their motion to compel arbitration.

[Tentative] Ruling

Defendants RadNet Management, Inc., Joe Zambrano, and Susana Ceballos’s Motion to Stay Proceedings is GRANTED. This matter is stayed pending resolution of the appeal.

ANALYSIS

Defendants seek an order staying the proceedings pending appeal of the Order Denying its motion to compel arbitration. Defendants contend a stay of the proceedings is mandatory under the Federal Arbitration Act (“FAA”) pursuant to the recent U.S. Supreme Court ruling in Coinbase, Inc. v. Bielski (2023) 599 U.S. 736. While an appeal from an order denying a motion to compel arbitration previously required the trial court to stay the action pending the appeal under C.C.P. Section 916 and Section 1281.4, California Senate Bill (“SB”) 365 changed that rule. Senate Bill 365 amended California Code of Civil Procedure section 1294, to eliminate the “automatic” stay in cases where an employer appeals the denial of a motion to compel arbitration. Defendant argues that SB 365 is preempted by the FAA because SB 365’s amendment to the CAA exempt only arbitrability appeals from section 916, and thus discriminates against arbitration. By disfavoring arbitration, defendant argues, SB 365 has a disproportionate impact on arbitration agreements, and thus is prohibited under Federal law interpreting the FAA. See, e.g., Coinbase, 599 U.S. at 746; Chamber of Commerce of the United States v. Bonta, 62 F.4th 473, 483 (9th Cir. 2023); Sonic-Calabasas A, Inc. v. Moreno, 57 Cal. 4th 1109, 1144 (2013); AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 342 (2011). Alternatively, defendants argue SB 365 is applicable because the parties’ arbitration agreement is governed by the FAA, not the CAA.

As a preliminary matter, “The FAA contains no express pre-emptive provision, nor does it reflect a congressional intent to occupy the entire field of arbitration.” (Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. 468, 477.) Furthermore, “[t]here is no federal policy favoring arbitration under a certain set of procedural rules; the federal policy is simply to ensure the enforceability, according to their terms, of private agreements to arbitrate.” (Judge v. Nijjar Realty, Inc. (2014) 232 Cal.App.4th 619, 630.) Thus, “while ‘[t]he FAA's substantive provisions are applicable in state as well as federal court, ... the FAA's procedural provisions apply only to proceedings in federal court.’ [Citation].” (Id.) However, “if a contract involves interstate commerce, the FAA's substantive provision ... applies to the arbitration. But the FAA's procedural provisions ... do not apply unless the contract contains a choice-of-law clause expressly incorporating them.” (Id.)

Here, the parties do not dispute that the arbitration provision contained in the employment agreement between Defendant RadNet and Plaintiff expressly states that it is governed by and enforceable under the FAA. (Mot. to Compel Arb., Weisling Decl., ¶14, Ex. C.) However, Plaintiff contends it does not expressly incorporate the FAA’s procedural rules to the exclusion of California procedural law. (Opp. at 3:19-21.) In Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, the court held that the parties adopted all of the FAA including the procedural rules because there was “no other contract provision suggesting the parties intended to incorporate California arbitration law, nor …any language suggesting the parties intended to arbitrate ‘in conformance to’ some provisions of the FAA but not others.” (Rodriguez v. American Technologies, Inc. (2006) 136 Cal.App.4th 1110, 1122.) This instant case is indistinguishable from Rodriguez because there is no other contractual provision indicating that the parties intended to incorporate California arbitration procedural rules nor that they intended to only incorporate some provisions of the FAA. The arbitration provision only mentions the FAA; thus the FAA procedural rules are expressly incorporated.

While the FAA’s procedural rules do not address a stay during the pendency of an appeal of an order denying a motion to compel arbitration, the U.S. Supreme Court in interpreting the FAA has concluded that an appeal from an order denying a motion to compel arbitration under the act imposes a mandatory stay of the underlying action. (Coinbase, at p. 746.) The court agrees with defendants that under Coinbase, a stay is mandatory in this case.

But even if the court were to apply state procedural rules regarding stays pending arbitration, including Senate Bill 365, the Court has discretionary power to grant the instant motion. The court finds that a stay is appropriate in the instant case. Resolution of the pending appeal will most likely determine the course of these proceedings moving forward, so engaging in discovery and ruling on other dispositive motions without the disposition of the appeal may be a waste of judicial resources and time. Moreover, Plaintiff would not suffer prejudice if the proceedings are stayed because the case is still in the earlier stages of litigation with no trial date having been set, no discovery having begun, and no counterclaims or cross-claims having been filed.

CONCLUSION

Based on the foregoing, Defendants RadNet Management, Inc., Joe Zambrano, and Susana Ceballos’s Motion to Stay Proceedings is GRANTED. This matter is stayed pending resolution of the appeal.