Judge: William D. Claster, Case: 22-01251761, Date: 2022-07-28 Tentative Ruling
1) Defendant’s Demurrer
2) Case Management Conference
Defendant Prime Healthcare Anaheim, LLC demurs to the complaint of Plaintiff Paz Salvador. The Court rules as follows:
JUDICIAL NOTICE
Both sides ask the Court to take judicial notice of superior court rulings regarding PAGA claims based on the HWHFA. In their papers, the parties cite these rulings for their perceived persuasive value. “Even assuming for the sake of argument that [these cases] involve[] the same issue as the case before [the Court] . . . a written trial court ruling has no precedential value.” (Santa Ana Hospital Medical Center v. Belshe (1997) 56 Cal.App.4th 819, 831.) Accordingly, the Court DENIES notice of the superior court rulings.
Both sides also seek judicial notice of documents relating to this case and Abdelmalak (complaints, LWDA pre-filing letters, etc.) These requests are GRANTED.
GROUNDS FOR RULING
I. Splitting a PAGA Claim for Purposes of Demurrer
Plaintiff’s complaint pleads a sole cause of action for PAGA penalties based on a number of underlying Labor Code violations. As the Court understands the demurrer, Defendant seeks to have its demurrer sustained without leave to amend insofar as the PAGA claim is based on HWHFA violations, and to have the case otherwise stayed pending resolution of Abdelmalak.
Plaintiff objects to this procedure, citing the longstanding rule that “[a] demurrer does not lie to a portion of a cause of action.” (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682.) Defendant responds that the Court retains the discretion to strike allegations insufficient to state a cause of action at any time, even if a motion to strike hasn’t been filed in opposition to a demurrer. (Reply at p. 7 [citing PH II, supra, 33 Cal.App.4th at pp. 1682-1683; Brown v. Ralphs Grocery Co. (2018) 28 Cal.App.5th 824, 844].)
Neither party cites what appears to the Court to be the most relevant precedent on this question: Rojas-Cifuentes v. Superior Court (2020) 58 Cal.App.5th 1051. In Rojas-Cifuentes, the employer moved for summary adjudication of the employee’s PAGA claim. Alternatively, it argued the PAGA claim, based on eight underlying Labor Code violations, was “effectively eight causes of action—one cause of action for each of the eight distinct labor laws allegedly violated,” and each component violation could be separately summarily adjudicated. (Id., at p. 1061.) The Court of Appeal agreed: “Rojas’s PAGA claim can be regarded as multiple causes of action for purposes of summary adjudication,” even though summary adjudication of one violation wouldn’t dispose of the entire PAGA claim. (Ibid.; compare CCP § 437c(f)(1).)
Like a motion for summary adjudication, a demurrer must dispose of an entire cause of action. Rojas-Cifuentes teaches that for summary adjudication purposes, a single PAGA claim can be split into its component violations. Following the reasoning of Rojas-Cifuentes, the Court agrees that Plaintiff’s PAGA claim may be split into its component violations for purposes of demurrer.
II. Interaction of HWHFA and PAGA
In this action, Plaintiff alleges Defendant violated the HWHFA, which mandates paid sick leave for all employees and became effective on January 1, 2015. Specifically, Plaintiff alleges Defendant miscalculated the regular rate of pay for sick leave purposes. Plaintiff also alleges the difference between the rate of sick leave actually paid and the rate that should have been paid is an unpaid wage subjecting Defendant to waiting time penalties under Labor Code § 203. (The waiting time claim is also derivative of other substantive violations alleged in the complaint.)
Labor Code § 248.5 governs the enforcement of the HWHFA. It allows the Labor Commissioner or the Attorney General to bring a civil action against an employer violating the HWHFA and to seek legal or equitable relief on behalf of the aggrieved employees, including reinstatement or injunctive relief, backpay, restitution, liquidated damages, attorney’s fees and costs, and penalties. (Lab. Code § 248.5(e).) There is no private right of action under § 248.5, and the HWHFA is not one of the enumerated statutes under Labor Code § 2699.5 applicable to the notice procedures set forth in Labor Code § 2699.3(a). The HWHFA does, however, contemplate that the law may give an individual the right to sue for its enforcement as a private attorney general. Specifically, § 248.5(e) provides that “any person or entity enforcing [the HWHFA] on behalf of the public as provided for under applicable state law shall, upon prevailing, be entitled only to equitable, injunctive, or restitutionary relief . . . .”
In at least one prior action (in 2018), this Court has held that an employee may not bring a PAGA action to enforce the HWHFA. Intervening developments in case law cause the Court to reach a different conclusion today. In LaFace v. Ralphs Grocery Co. (2022) 75 Cal.App.5th 388, the Court of Appeal held there is no jury trial right in PAGA actions. The Court of Appeal explained that “the nature of the remedy sought is an important . . . factor in determining whether an action is at law or in equity.” (Id., at p. 400.) The appellant argued “PAGA is just another action for a civil penalty and therefore an action at law triable by a jury.” (Ibid.) The Court of Appeal disagreed. “PAGA’s penalty provisions,” it explained, “are subject to a variety of equitable factors which . . . call for ‘the type of qualitative evaluation and weighing of a variety of factors that is typically undertaken by a court and not a jury.’” (Id., at p. 401.) Therefore, “the equitable nature of the penalties permitted by PAGA is a factor—along with others—that we must consider” in determining whether a jury trial right exists. (Ibid.)
Under LaFace, PAGA penalties are equitable. Because § 248.5(e) allows a private plaintiff acting on behalf of the public to seek “equitable . . . relief,” it follows that an employee may enforce the HWHFA through an action seeking PAGA penalties.
Defendant resists this conclusion with several arguments, each unavailing. First, it argues LaFace is inapposite because it doesn’t answer the question of whether the Legislature, when enacting the HWHFA, intended the word “equitable” in § 248.5 to include PAGA penalties. It appears that Defendant asks the wrong question. Under the plain language of the statute, a private plaintiff acting on behalf of the public may pursue equitable relief. The question is whether PAGA penalties are equitable relief, not whether the Legislature intended equitable relief to include PAGA penalties.
Second, Defendant argues that under the law as it existed at the time of HWHFA’s enactment, PAGA penalties were not considered equitable, so PAGA penalties are not “equitable” as that term is used in the HWHFA. But LaFace doesn’t purport to overrule any case holding to the contrary. LaFace may have been the first case to address this question, but in so doing, it interpreted PAGA as originally enacted rather than correcting other cases’ interpretation of PAGA.
Third, Defendant points out that the nature of the remedy is one of several factors to be considered in determining whether a jury right exists, meaning LaFace’s characterization of PAGA remedies as equitable wasn’t dispositive. True enough. But LaFace still characterized PAGA remedies as equitable and held that was “a factor . . . we must consider.” (LaFace, supra, 75 Cal.App.5th at p. 401 [emphasis added].) Even if this wasn’t dispositive, it was still material to the Court of Appeal’s analysis.
Accordingly, the demurrer is overruled insofar as it is based on the argument that the HWHFA may not be enforced with PAGA penalties.
III. Stay of Proceedings
Defendant asks the Court to stay proceedings pending resolution of Abdelmalak, relying on a statutory plea in abatement, the rule of exclusive concurrent jurisdiction, and the Court’s inherent discretion to control proceedings. The Court need consider only the last ground for a stay.
Trial courts “generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.) A stay of this action in favor of Abdelmalak will promote judicial economy. The Court recognizes that three PAGA predicates—sick leave, unlawful deduction, and reimbursement violations—are not at issue in Abdelmalak. But all other PAGA predicates in this action are also PAGA predicates in Abdelmalak, and the aggrieved employee groups are the same. Staying this matter in favor of Abdelmalak will promote judicial economy by avoiding duplicative discovery and simultaneous disputes over the same in two separate courts. A stay will also eliminate the risk of conflicting merits rulings. Nor will Plaintiff or the State be prejudiced by a stay: upon resolution of Abdelmalak, Plaintiff may resume pursuing her PAGA claim to the extent it was not resolved in Abdelmalak.
For these reasons, this case is stayed pending resolution of Abdelmalak.