Preview
SUPERIORF I L E
UNw COURT 0F Q
Came,ARD
msggjoggm
9. Tinoco v. Vitco Distributors, Inc. et al. JAN 1 1
CIvs32133154 2023
Motion to Compel Arbitration and Stay Proceedings BY
Tentative Ruling: J
A
Les,
Plaintiff’s lawsuit, filed under the Labor Code Private Attorney General Act of
2004, Labor Code section 2698 et seq. (PAGA), seeks penalties for alleged violations of
the California Labor Code suffered by plaintiff and other “aggrievedfleymployees."
Defendant brings this motion to compel arbitration pursuant to Viking River
Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906. Before Viking RiVer, PAGA claims were
not subject to arbitration under any circumstances. (See e. g. Iskanian v. "'CLS Transp.
Los Angeles LLC (2014) 59 Cal. 4th 348. ) In Viking River, however, the Court held,
contrary to Iskanian, that under the Federal Arbitration Act, 9 U. S C. section 1 et seq.
(FAA), a PAGA action is divisible into “individual" and -“non- IndIVIdual components. In
the Viking River lexicon, an “individual" PAGA claim is One based on Labor Code
violations allegedly sufferedby the named plaintiff, whereas “non- IndIVIduaI" PAGA
claims are those based on Labor Code violations allegedly suffered by employees other
than the named plaintiff. Depending on the specific language of the arbitration
agreement, Viking River requires the trial court to order arbitratiOn of the individual
PAGA claim if it is covered by an enforceable arbitration agreement which'Is governed
by the FAA.‘ r
The Court'In Viking RiVer also indicated that the non——individual PAGA claims
should be dismissed when the indiVidual claim is committed to arbitration because, in
the Court’ s view no procedural mechanism remained for the non--individua| claims to go
forward Inon court e i_ndiVidua| claim was committed That Issue,
to arbitration.
however, appearst "he of California law,
and the California Supreme Court has
undertaken t address the ISSUe by granting review in Adolph v. Uber Technologies, Inc.
,
efendanté’move to compel arbitration of plaintiff’ s individual PAGA
n--individual PAGA claims,
and to stay the case pending
completion of arbitration The motion is based on a purported arbitration agreement
between plai ffiand defendant Vitco Distributor’s Inc. Defendant Kostas Vitakis claims
to be a third- party beneficiary who Is also entitled to enforce the agreement.
To compel arbitration under the FAA, the court must find that an agreement
exists for arbitration between the parties and that the agreement covers the dispute.
The Court is preempted when the FAA applies.
did not overrule Iskanian, but merely held that
1
it
(See Volt Info. Sciences, Board of Trustees of Leland Stanford Junior University (1989) 489 U.S.
Inc. v.
468, 477—In situations governed by the FAA, conflicting state law is preempted.) If the FAA does not
apply, Iskanian still precludes division of PAGA claims into individual and non-individual components, and
PAGA claims are not subject to arbitration.
Page 6 of 8
CV526011123
(A T&T Technologies, Inc. v. Communications Workers ofAmerica (1986) 475 U.S. 643,
648-49.) Enforcement of the agreement is a matter of ordinary state—law contract
principles. (AT&TMobi/ity LLC v. Concepcion (2011) 131 S.Ct. 1740, 1745.)
Therefore, arbitration agreements can be declared unenforceable based on state-Iaw
contract defenses such as fraud, duress, or unconscionability. (Id. at p. 1746.) Any
doubt about arbitrability of a dispute under the FAA, however, is resolved in favor of
arbitration. (Id. at p. 650.)
Application of the FAA
argues that defendants have failed to demonstrate that thféf‘arbitration
Plaintiff
agreement proffered by defendant—the Mutual Agreement to Arbit Iaims—affects
L,
interstate commerce. The agreement, however provides'In pertinent part; “Any
arbitration hereunder will be pursuant to the Federal Arbitration Act (the ‘FAA) and
California law unless California law conflicts with the FAA'In which Case the FAA shall
govern.’ ’.(Exh 2 [§V] to Gavidia Decl. ) It Is therefore irrelevant whether the company or
plaintiff'Is engage in interstate commerce. Pla ntiff has contractually agreed to
application of the FAA. (See Cronus Investments, Inc. v. Concierge Services (2005) 35
Cal. 4th 376, 394; Aviation Data, Inc. v American Express TraVel Related Services Co.
Inc. (2007) 152 Cal. App. 4th 1522, 1534-35 ) Additionally, the Gavidia declaration, in
paragraph 3, demonstrates the applicati ofsgingerstate commerce. The FAA therefore
governs. -
The Agreement Excludes
‘
While plaintiff does not recall signing the agreement, he does not dispute that the
signature is his. He also does not dispute that defendant Vitakis would have the right to
enforce it as a third party benefICIary as wéll as direct enforcement by defendant Vitco
distributors Inc Plaintiff hoWever, argues that the agreement specifically excludes
PAGA claims Plaintiff ls correct.
{bsent the exclusmn the agreement provides for broad coverage of
i
i
employment r-elated disputes which would include the individual component of the
PAGA claim. But the agreement also provides.
Nothing is Agreement'Is intended to require arbitration of any Claim
which may not be subject to arbitration in accordance with applicable law.
Specifically, “Covered Disputes” shall not include representative claims or
actions arising under the California Private Attorney General Act of 2004
(“PA GA”) which are not covered by this Agreement.
(Exh. 2 [§II] to Gavidia Decl., italics added.)
Page 7 of 8
CVSZ6011123
Preview
SUPERIORF I L E UNw COURT 0F Q Came,ARD msggjoggm 9. Tinoco v. Vitco Distributors, Inc. et al. JAN 1 1 CIvs32133154 2023 Motion to Compel Arbitration and Stay Proceedings BY Tentative Ruling: J A Les, Plaintiff’s lawsuit, filed under the Labor Code Private Attorney General Act of 2004, Labor Code section 2698 et seq. (PAGA), seeks penalties for alleged violations of the California Labor Code suffered by plaintiff and other “aggrievedfleymployees." Defendant brings this motion to compel arbitration pursuant to Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906. Before Viking RiVer, PAGA claims were not subject to arbitration under any circumstances. (See e. g. Iskanian v. "'CLS Transp. Los Angeles LLC (2014) 59 Cal. 4th 348. ) In Viking River, however, the Court held, contrary to Iskanian, that under the Federal Arbitration Act, 9 U. S C. section 1 et seq. (FAA), a PAGA action is divisible into “individual" and -“non- IndIVIdual components. In the Viking River lexicon, an “individual" PAGA claim is One based on Labor Code violations allegedly sufferedby the named plaintiff, whereas “non- IndIVIduaI" PAGA claims are those based on Labor Code violations allegedly suffered by employees other than the named plaintiff. Depending on the specific language of the arbitration agreement, Viking River requires the trial court to order arbitratiOn of the individual PAGA claim if it is covered by an enforceable arbitration agreement which'Is governed by the FAA.‘ r The Court'In Viking RiVer also indicated that the non——individual PAGA claims should be dismissed when the indiVidual claim is committed to arbitration because, in the Court’ s view no procedural mechanism remained for the non--individua| claims to go forward Inon court e i_ndiVidua| claim was committed That Issue, to arbitration. however, appearst "he of California law, and the California Supreme Court has undertaken t address the ISSUe by granting review in Adolph v. Uber Technologies, Inc. , efendanté’move to compel arbitration of plaintiff’ s individual PAGA n--individual PAGA claims, and to stay the case pending completion of arbitration The motion is based on a purported arbitration agreement between plai ffiand defendant Vitco Distributor’s Inc. Defendant Kostas Vitakis claims to be a third- party beneficiary who Is also entitled to enforce the agreement. To compel arbitration under the FAA, the court must find that an agreement exists for arbitration between the parties and that the agreement covers the dispute. The Court is preempted when the FAA applies. did not overrule Iskanian, but merely held that 1 it (See Volt Info. Sciences, Board of Trustees of Leland Stanford Junior University (1989) 489 U.S. Inc. v. 468, 477—In situations governed by the FAA, conflicting state law is preempted.) If the FAA does not apply, Iskanian still precludes division of PAGA claims into individual and non-individual components, and PAGA claims are not subject to arbitration. Page 6 of 8 CV526011123 (A T&T Technologies, Inc. v. Communications Workers ofAmerica (1986) 475 U.S. 643, 648-49.) Enforcement of the agreement is a matter of ordinary state—law contract principles. (AT&TMobi/ity LLC v. Concepcion (2011) 131 S.Ct. 1740, 1745.) Therefore, arbitration agreements can be declared unenforceable based on state-Iaw contract defenses such as fraud, duress, or unconscionability. (Id. at p. 1746.) Any doubt about arbitrability of a dispute under the FAA, however, is resolved in favor of arbitration. (Id. at p. 650.) Application of the FAA argues that defendants have failed to demonstrate that thféf‘arbitration Plaintiff agreement proffered by defendant—the Mutual Agreement to Arbit Iaims—affects L, interstate commerce. The agreement, however provides'In pertinent part; “Any arbitration hereunder will be pursuant to the Federal Arbitration Act (the ‘FAA) and California law unless California law conflicts with the FAA'In which Case the FAA shall govern.’ ’.(Exh 2 [§V] to Gavidia Decl. ) It Is therefore irrelevant whether the company or plaintiff'Is engage in interstate commerce. Pla ntiff has contractually agreed to application of the FAA. (See Cronus Investments, Inc. v. Concierge Services (2005) 35 Cal. 4th 376, 394; Aviation Data, Inc. v American Express TraVel Related Services Co. Inc. (2007) 152 Cal. App. 4th 1522, 1534-35 ) Additionally, the Gavidia declaration, in paragraph 3, demonstrates the applicati ofsgingerstate commerce. The FAA therefore governs. - The Agreement Excludes ‘ While plaintiff does not recall signing the agreement, he does not dispute that the signature is his. He also does not dispute that defendant Vitakis would have the right to enforce it as a third party benefICIary as wéll as direct enforcement by defendant Vitco distributors Inc Plaintiff hoWever, argues that the agreement specifically excludes PAGA claims Plaintiff ls correct. {bsent the exclusmn the agreement provides for broad coverage of i i employment r-elated disputes which would include the individual component of the PAGA claim. But the agreement also provides. Nothing is Agreement'Is intended to require arbitration of any Claim which may not be subject to arbitration in accordance with applicable law. Specifically, “Covered Disputes” shall not include representative claims or actions arising under the California Private Attorney General Act of 2004 (“PA GA”) which are not covered by this Agreement. (Exh. 2 [§II] to Gavidia Decl., italics added.) Page 7 of 8 CVSZ6011123