Judge: William D. Claster, Case: 21-01216978, Date: 2022-10-28 Tentative Ruling
Defendants MAPS SERVICES, INC. and Rick Vivik's Notice of Motion and Motion to Compel Individual Arbitration, Dismiss Representative PAGA Claims, and Stay Proceedings ROA 58
In a prior order, the Court invited supplemental briefing on two issues:
The Court has reviewed the parties’ supplemental briefing. For the reasons set forth in the September 16, 2022 minute order (incorporated here by reference), and for the reasons set forth below:
I. Applicability of FAA
In the supplemental briefing, Plaintiffs argue for the first time that the FAA doesn’t apply to them because they are transportation workers engaged in interstate commerce. (See 9 U.S.C. § 1.) In support of this argument, they cite a Supreme Court case from June 2022 and a Ninth Circuit case from 2020. (See Southwest Airlines Co. v. Saxon (2022) 142 S.Ct. 1783; Rittmann v. Amazon.com, Inc. (9th Cir. 2020) 971 F.3d 904.)
It is too late for Plaintiffs to raise this argument. Defendants raised the applicability of the FAA in their original moving papers. Plaintiffs’ original opposition makes no mention of it. Absent any argument from Plaintiffs on this point, the Court found the FAA applied. (See Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956 [“The absence of cogent legal argument or citation to authority allows this court to treat the contention as waived.”].) If Plaintiffs wanted to contest the applicability of the FAA, the time to do so was in their original opposition.
Furthermore, Plaintiffs’ argument is an untimely and therefore ineffective motion for reconsideration of the Court’s prior order. The prior order was dated September 16. If Plaintiffs wanted to seek reconsideration, they had until September 26. They didn’t raise this argument until October 14. Even if the request for reconsideration were timely, it fails to cite new law as required by CCP § 1008(a). Both Southwest Airlines and Rittman were preexisting rulings that could have been cited in Plaintiffs’ opposition. (This is particularly true of Rittmann, a case from 2020.)
In short, the Court will not revisit its conclusion that the FAA applies.
II. Arbitrability of Derivative Claims
Defendants point out that the arbitration agreement provides: “Notwithstanding any provision in the applicable arbitration rules, a court of law must resolve any dispute concerning the validity and enforceability of the Agreement, and the validity, enforceability or interpretation of the provisions pertaining to class, collective, and representative action waivers. The arbitrator must resolve all other disputes, including the arbitrability of claims pursuant to such other provisions.” (Raj Decl., Ex. 1, at p. 2.)
Both the FAA and California law allow the parties to delegate questions of arbitrability to the arbitrator. (See Henry Schein, Inc. v. Archer and White Sales, Inc. (2019) 139 S. Ct. 524, 529; Malone v. Superior Court (2014) 226 Cal.App.4th 1551, 1559.) Under this agreement, because all questions of arbitrability except those concerning class, collective, and representative action waivers are reserved to the arbitrator, the Court cannot decide whether the derivative claims are arbitrable. All individual claims except Gallegos’ sexual harassment claim (which all parties concede can’t be arbitrated) are ordered to arbitration, where Plaintiffs will be free to renew their arguments about the derivative claims.
III. Further Proceedings
Plaintiffs argue the Court should decline to enforce the arbitration agreement under CCP § 1281(c)(2). This section allows a court to decline to enforce an agreement when “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact.”
Plaintiffs’ argument misses the mark because there is no “third party” not subject to the arbitration agreement. Gallegos’ sexual harassment claim can’t be arbitrated, but based on the delegation clause, her derivative claims must be sent to arbitration. The Court is not faced with a situation where Gallegos has harassment-related claims in court, while Valdez has claims related to Gallegos’ alleged harassment in arbitration. In that case, a court and an arbitrator could reach conflicting rulings on whether Gallegos had been harassed. But here, to the extent Gallegos’ derivative claims are properly before the arbitrator—a question the arbitrator, not the Court, must decide—the arbitrator will have to decide whether Gallegos was harassed in order to reach the merits of the derivative claims.
In this case, unlike the § 1281.2(c) scenario, the proper course is for the Court to stay all proceedings and let the arbitration go forward so as not to intrude upon the jurisdiction of the arbitrator. (See Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947, 966 [“Because the issues subject to litigation under the PAGA might overlap those that are subject to arbitration of Franco’s individual claims, the trial court must order an appropriate stay of trial court proceedings.”].) Should the arbitrator decide the derivative claims belong in Court rather than in arbitration, Plaintiffs may seek to lift the stay and litigate the sexual harassment and derivative claims in court while the individual PAGA and wage-and-hour claims proceed in arbitration.