Judge: Yolanda Orozco, Case: 21STCV2061, Date: 2022-10-13 Tentative Ruling
Case Number: 21STCV2061 Hearing Date: October 13, 2022 Dept: 31
MOTION FOR JUDGMENT ON THE PLEADINGS IS DENIED
Background
On January 19, 2021, Maria Arias and Ana Castro Licona (collectively “Plaintiffs”) filed the instant action against Defendant Magic Laundry Services, Inc.; and Does 1 to 100. Plaintiffs initiated the present action, individually, and in a representative capacity pursuant to the Private Attorneys General Act (“PAGA”), for the purposes of recovering damages and civil penalties for Defendant’s alleged violations of the Labor and Government Code.
On May 14, 2021, Plaintiffs and Defendant filed a Stipulation agreeing Plaintiff’s individual (non-PAGA) causes of action would be submitted to arbitration pursuant to an existing arbitration agreement between Plaintiffs and Defendant. Plaintiffs and Defendant further agreed that Plaintiff’s PAGA causes of action would not be submitted to arbitration but would instead proceed. (See Stipulation and Order ¶¶ 2-3 filed on May 14, 2022; see also Min. Or. 01/11/22; Min. Or. 03/11/22.)
On August 04, 2022, Plaintiffs filed a Fourth Amended Complaint alleging:
1. Sexual
Harassment
2. Failure to
Prevent Sexual Harassment and Retaliation
3. Retaliation for
Complaining About Sexual Harassment
4. Whistle-blower
Retaliation (Cal. Labor Code §1102.5)
5. Retaliation for
Exercising a Right Afforded to the Employee [Cal. Labor Code §98.6(a)]
6. Penalties
Pursuant to Cal. Labor Code § 2699 et seq. (Arias)
7. Penalties Pursuant to Cal. Labor Code § 2699 et seq. (Castro-Licona)
On September 07, 2022, Defendant filed a Demurrer to Plaintiff’s Fourth Amended Complaint.
On September 29, 2022, Plaintiffs filed opposing papers.
On October 06, 2022 Defendant filed a reply.
Pursuant to the July 07, 2022 Order, Defendant’s demurrer will be treated as a Judgment on the Pleadings.
“A motion for judgment on the pleadings performs the same
function as a general demurrer, and hence attacks only defects disclosed on the
face of the pleadings or by matters that can be judicially noticed.” (Burnett
v. Chimney Sweep (2004) 123 Cal.App.4th 1057, 1064.) “In deciding or
reviewing a judgment on the pleadings, all properly pleaded material facts are
deemed to be true, as well as all facts that may be implied or inferred from
those expressly alleged.” (Fire Ins. Exchange v. Superior Court
(2004) 116 Cal.App.4th 446, 452.) When considering demurrers and judgment on
the pleadings, courts read the allegations liberally and in context. (Wilson
v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716,
720-21.) A motion for judgment on the pleadings does not lie as to a portion of
a cause of action. (Id.) “In the case of either a demurrer
or a motion for judgment on the pleadings, leave to amend should be granted if
there is any reasonable possibility that the plaintiff can state a good cause
of action.” (Gami v. Mullikin Medical Ctr. (1993) 18 Cal.App.4th
870, 876.) A non-statutory motion for judgment on the pleadings may be made any
time before or during trial. (Stoops v. Abbassi (2002) 100 Cal.App.4th
644, 650.)¿
Discussion
Defendant demurs to Plaintiff’s entire Fourth Amended Complaint on the basis that Plaintiffs lack standing to continue the PAGA case because their individual claims have been compelled to arbitration pursuant to Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906.
The arbitration agreement between the parties states:
“Private attorney general representative actions brought on behalf of the state under the California Labor Code are not arbitrable, are outside the scope of this Agreement, and may be maintained in a court of law. But, to the extent provided by applicable law, any claim by you on your own behalf under the California Private Attorney General Act to recover your unpaid wages must be arbitrated and is covered by this Agreement.” (Shyu Decl. Ex. 3 at p. 2.)
The Parties’ Stipulation and the signed Order state:
“ 2. Plaintiffs shall proceed with
arbitration of all non-PAGA related causes of action pursuant to the parties’
arbitration agreement.
3. The PAGA cause of action shall
proceed before the Court and shall not be stayed. All other non-PAGA causes of
action are hereby stayed.
4. Defendant’s pending Motion to Compel Arbitration is hereby granted, and the case will be compelled to arbitration, except for Plaintiffs’ PAGA causes of action, which are not compelled to arbitration.”
(See Stipulation and Order signed on May 14, 2022.)
Contrary to the May 14, 2022, Stipulation and Order, Defendant asserts that because Plaintiffs seek penalties for violations of Labor Code section 1102.5, and their individual claims under Labor Code section 1102.5 have been compelled to arbitration, Plaintiffs are no longer “aggrieved” parties such that they can maintain the PAGA action. Defendant argues that Plaintiffs now lack standing to bring the PAGA action under Viking.
The Court disagrees. First, the U.S. Supreme Court is not the final
arbitrator of California law. (See Beal v. Missouri Pac. R. R. Corp.¿(1941)
312 U.S. 45, 50 [“The state courts are the final arbiters of their meaning and
appropriate application, subject only to review by this Court if such
construction or application is appropriately challenged on constitutional
grounds.”]; see also Wisconsin v. Mitchell (1993) 508 U.S. 476, 483
[“There is no doubt that we are bound by a state court's construction of a
state statute.”].) Accordingly, the Court finds that California Supreme Court’s
interpretation of PAGA standing is controlling.
In Kim v. Reins International California, Inc.¿(2020)
the California Supreme Court found that an employee who settled or dismissed
their individual claims for Labor Code violations remained an “aggrieved
employee” with standing to bring a PAGA claim: “Settlement of individual claims
does not strip an aggrieved employee of standing, as the state's authorized
representative, to pursue PAGA remedies.” (Kim v. Reins International
California, Inc.¿(2020) 9 Cal.5th 73, 80.) The California Supreme Court further explained that PAGA standing
“has only two requirements . . . The plaintiff
must be an aggrieved employee, that is, someone¿‘who was employed by the
alleged violator’ and ‘against whom¿one or more of the alleged violations was
committed.’”¿
(Kim, supra, 9
Cal.5th at 83-84, citing Labor Code § 2699(c).) Moreover, “[n]othing in the legislative history suggests
the Legislature intended to make PAGA standing dependent on the existence of an
unredressed injury, or the maintenance of a separate, unresolved
claim.”¿¿
(Id. at 90-91.)
Here, even if Plaintiff’s individual PAGA claims are in arbitration, Plaintiffs meet the PAGA standing requirement to bring representative PAGA claims under Kim because they were employed by Defendant – the alleged violator, and they were the persons against whom violations were committed. (Id.) Other courts have found similarly. (See Zuniga v. Alexandria Care Center, LLC¿(2021) 67 Cal.App.5th 871, 883 [holding that even though plaintiff’s individual claims were settled after arbitration was ordered, plaintiff remained an “aggrieved employee” with standing to purse penalties on the state’s behalf.]; ¿Johnson v. Maxim Healthcare Services, Inc. (2021) 66 Cal.App.5th 924, 929-930 [finding that even though plaintiff’s individual PAGA claims were time-barred, plaintiff was an “aggrieved employee” with standing to bring a PAGA claim.];¿Shams v. Revature LLC¿(N.D. Cal., Aug. 17, 2022, No. 22-CV-01745-NC) 2022 WL 3453068, at *4 [“Although the Supreme Court suggests that under PAGA, Moriana lost standing to pursue her non-individual PAGA claims, because the California Supreme Court is the final arbiter of California law, this Court applies¿Kim’s interpretation of PAGA standing to this case and denying dismissal of non-individual PAGA claims.”].)
Conclusion
For the stated reasons, Defendant’s Motion for Judgment on the Pleadings is DENIED.
Moving party to give notice.