Case Number: 21STCV22158    Hearing Date: September 1, 2022    Dept: 31

MOTION TO COMPEL ARBITRATION AND STAY COURT ACTION IS GRANTED

Background 

This is a wage and hour action brought by plaintiff Cassondra Hollman (“Plaintiff”) under California’s Private Attorneys General Act (“PAGA”). On June 11, 2021, Plaintiff filed the  complaint and on August 17, 2021, filed the First Amended Complaint (“FAC”) against defendants AYA Healthcare, Inc. d/b/a AYA Healthcare Staffing, Inc. (“AYA”), Pacific Gardens Medical Center, LLC, (“Pacific Gardens”), Pacifica of the Valley Corporation d/b/a PHV Pacifica Hospital of the Valley (“Pacifica Hospital”), and Does 1 to 100, inclusive (collectively, the “Defendants”).

The FAC asserts two causes of action against the Defendants for (1) penalties pursuant to Labor Code, Section 2699(a), and (2) penalties pursuant to Labor Code, Section 2699(f).

On February 24, 2022, Defendant Aya Healthcare, Inc. filed this Motion seeking to Compel Arbitration and stay the Action. An Amended Notice and Motion was filed on August 01, 2022.

Defendant Aya Healthcare’s Ex Parte Application for an Order Staying Case and Continuing Hearing on Motion to Compel Arbitration was granted on March 3, 2022. (Min. Or. 03/03/22.)

Defendants Gardens Medical Centers and Pacifica of the Valley Corporation filed a Joinder to Aya Healthcare, Inc.’s motion on June 28, 2022.

Plaintiff filed Opposition Papers on August 10, 2022.

Aya Healthcare filed a Reply on August 16, 2022.  

Legal Standard 

Parties may be compelled to arbitrate a dispute upon the court finding that: (1) there was a valid agreement to arbitrate between the parties; and (2) said agreement covers the controversy or controversies in the parties’ dispute.¿ (CCP § 1281.2; see also Omar v. Ralphs Grocery Co. (2004)¿118 Cal.App.4th 955, 961.)¿¿ ¿

A party petitioning to compel arbitration has the burden of establishing the existence of a valid agreement to arbitrate and the party opposing the petition has the burden of proving, by a preponderance of the evidence, any fact necessary to its defense. (Banner Entertainment, Inc. v. Superior Court¿(1998) 62 Cal.App.4th 348, 356-57.)¿¿“If a court of competent jurisdiction . . . has ordered arbitration of a controversy which is an issue involved in an action or proceeding pending before a court of this State, the court in which such action or proceeding is pending shall, upon motion of a party to such action or proceeding, stay the action or proceeding until an arbitration is had in accordance with the order to arbitrate or until such earlier time as the court specifies.” (CCP § 1281.4.)¿ 

Request for Judicial Notice 

Defendant Aya Healthcare, Inc. requests Judicial Notice of: 

  1. Docket No. 20-1573, Viking River Cruises, Inc., v. Angie Moriana, Question Presented, https://www.supremecourt.gov/docket/docketfiles/html/qp/20-01573qp.pdf, attached as Exhibit 5 to Defendant’s Notice of Lodgment (“NOL”).
  2. Docket No. 20-1573, Viking River Cruises, Inc., v. Angie Moriana https://www.supremecourt.gov/docket/docketfiles/html/public/20-1573.html, attached as Exhibit 6 to Defendant’s NOL.
  3. The United States Supreme Court’s General Procedures, “The Court and Its Procedures”, https://www.supremecourt.gov/about/procedures.aspx, attached as Exhibit 7 to Defendant’s NOL.
  4. The United States Supreme Court’s General Procedures for Oral Argument, “Visitor’s Guide to Oral Argument”, https://www.supremecourt.gov/visiting/visitorsguidetooralargument.aspx, attached as Exhibit 8 to Defendant’s NOL.

Defendant Aya notes that courts may take judicial notice of information published on official government websites as the content on the website is not reasonably subject to dispute and the facts contained on the websites are capable of immediate and accurate determination. (Evid. Code § 452; People v. Morales (2018) 25 Cal. App. 5th 502, 512, n.7; Daniels-Hall v. National Educ. Ass’n (9th Cir. 2010) 629 F. 3d 992, 998-999.

Defendant Aya Healthcare Inc’s request for Judicial Notice is GRANTED.

Plaintiff Cassondra Hollman requests Judicial Notice of the following: 

Exhibit 1: A true and correct copy of the Respondent’s Petition for Rehearing in Viking River Cruises Inc. v. Angie Moriana, U.S. Supreme Court Case No. 20-1573;

Exhibit 2: A true and correct copy of the July 13, 2022 Minute Order in Singh v. West Covina Motor Group LLC, Los Angeles Superior Court, Case No. 21STCV41713;

Exhibit 3: A true and correct copy of the July 13, 2022 Order in Gozzi v. Acadia Malibu, Inc., Los Angeles Superior Court, Case No. 19STCV39861;

Exhibit 4: A true and correct copy of the July 21, 2022 Minute Order in Taylor v. In-N-Out Burgers, Los Angeles Superior Court, Case No. 21STCV18259;

Exhibit 5: A true and correct copy of the July 27, 2022 Minute Order in Adams v. Pacific Villa, Inc., A California Corporation, et al., Los Angeles Superior Court, Case No. 20STCV37260;

Exhibit 6: A true and correct copy of the July 29, 2022 Minute Order in Maldonado v. FS Hotels LA, Inc., A California Corporation, Los Angeles Superior Court, Case No. 20STCV13849; and

Exhibit 7: A true and correct copy of the July 1, 2022 Amicus Curiae Letter Supporting Limited Review in Adolph v. Uber Technologies, Inc., California Supreme Court Case No. S274671.

The Court may take judicial notice of records of any court of this state or any court of record of the United States or of any state in the United States. (Cal. Evid. Code § 452(d).)

Plaintiff’s request for Judicial Notice is GRANTED. 

Discussion

  1. Existence of a Valid Arbitration Agreement 

Plaintiff does not dispute that she signed a binding arbitration agreement (“Agreement”) with Defendant Aya Healthcare, Inc. (“Aya”), executed January 18, 2022. (See Defendant Aya’s Notice of Lodging, Ex 3) The Agreement provides in relevant part:

“…YOU AND AYA AGREE THAT NO CLAIM COVERED BY THIS AGREEMENT MAY BE PURSUED AS A CLASS, COLLECTIVE, OR REPRESENTATIVE ACTION AND ALL SUCH CLAIMS MUST BE PURSUED ONLY ON AN INDIVIDUAL BASIS. Notwithstanding the foregoing, to the extent any Party asserts a representative claim that is determined to be nonwaivable, You and Aya agree that any and all such representative claims may be asserted and determined only by binding arbitration in accordance with this Agreement.”

(Id.)

Furthermore, the Parties expressly stated that the Federal Arbitration Act (FAA) governs the Agreement. (Id.) The Agreement also expressly states that it is enforceable by Aya and its clients, who are intended beneficiaries of the Agreement. (Id. see also Joinder by Defendant Pacifica of the Valley Corporation and Pacific Gardens Medical Center.)

On May 31, 2022, Plaintiff submitted to JAMS a Demand for Arbitration of her individual claims against Aya, Pacific Gardens Medical Center, LLC, and Pacifica of the Valley Corporation. (Kenny Decl. ¶ 3; Exhibit 9.) 

Plaintiff does not challenge the validity of the Agreement nor the requirement that she arbitrate her individual claims per the United States Supreme Court’s holding in Viking River Cruises, Inc. v. Moriana (2022) 142 S.Ct. 1906 (Viking).  Accordingly, the Court accepts that a valid arbitration agreement exists between the Parties requiring the Parties to arbitrate Plaintiff’s individual claims.

  1. Waiver of Class, Collective, or Representative Claims

Plaintiff opposes Aya’s Motion to the extent that it requests the dismissal of her representative PAGA claims. Aya maintains that under the Arbitration Agreement, Plaintiff waived her right to participate in a class, collective, or representative action.

Aya correctly points out that in Viking the U.S. Supreme Court held:

“We hold that the FAA preempts the rule of Iskanian insofar as it precludes division of PAGA actions into individual and non-individual claims through an agreement to arbitrate. This holding compels reversal in this case. The agreement between Viking and Moriana purported to waive ‘representative’ PAGA claims and under our holding, that aspect of Iskanian is not preempted by the FAA, so the agreement remains invalid insofar as it is interpreted in that manner. But the severability clause in the agreement provides that if the waiver provision is invalid in some respect, any ‘portion’ of the waiver that remains valid must still be ‘enforced in arbitration.’”

(Vikingsupra, 142 S.Ct. at 1924-1925.)

Aya does not dispute that if the Class Action Waiver is interpreted as a wholesale waiver of the PAGA, it must be served from the Agreement. Aya does not address this issue further and only asserts that once Plaintiff’s individual claims are compelled to arbitration, her representative PAGA claims must be dismissed under Viking. (See Vikingsupra, 142 S.Ct. at 1925.)

As noted above, under the holding in Viking, the California Supreme Court’s finding in Iskanian v. CLS Transportation Los Angeles, LLC (2014) remains valid as to the rule that prohibits waiver of “representative” PAGA claims. (Iskanian v. CLS Transportation Los Angeles, LLC (2014) 59 Cal.4th 348, 382-383.) Accordingly, the Court severs from the Agreement any requirement that Plaintiff waive her representative PAGA claims per the Agreement’s severability clause which states:

“If any part of this Agreement is construed to be in violation of any law, unenforceable, or void, such part shall be modified to achieve the objective of the Parties to the fullest extent permitted by law, and the balance of this Agreement shall remain in full force and effect.”

(See Defendant Aya’s Notice of Lodging, Ex 3)

Accordingly, the Agreement remains valid, and Plaintiff’s individual claims can and will be compelled to arbitration.

  1. Dismissal of PAGA Claim

Aya maintains that the U.S. Supreme Court holding in Viking compels the dismissal of Plaintiff’s representative PAGA action. Plaintiff asserts that under California law she has standing to maintain her representative PAGA claims. The Court agrees.

Aya erroneously interprets Viking to hold that “California standing law does not allow the employee to maintain their non-individual claims in court.” (Reply at 2:15-16.) Such a proposition ignores the fact that the U.S. Supreme Court is limited in its interpretation of California law. 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, Plaintiff is correct in asserting that the 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 his 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.) In Viking, the U.S. Supreme Court recognized that “PAGA’s standing requirement was meant to be a departure from the ‘general public’ … standing originally allowed’ under other California statutes.” (Vikingsupra, 142 S.Ct. at 1925 [citation omitted.].)

In Kim the California Supreme Court 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.’”

(Kimsupra, 9 Cal.5th at 83-84, citing Labor Code § 2699(c).) The California Supreme Court further explained: “Nothing 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.”

(Idat 90-91.)

Accordingly, Aya’s assertion that Kim is not on point as to an employee’s standing to pursue non-individual PAGA claims once the individual claims are compelled to arbitration, is without merit. Aya has not presented evidence that Plaintiff lacks standing because she is not an “aggrieved employee” who has asserted one or more Labor Code violations against her employer. (See Kimsupra, 9 Cal.5th at 90-91.) Additionally, to find that Plaintiff lacks standing to bring a representative PAGA claim would be contrary to the legislative intent and purpose of PAGA.

“Employers could potentially avoid paying any penalties to the state simply by settling with the individual employees. And these individual settlements would not be subject to the safeguards of PAGA settlements, which require notice to the LWDA and court oversight.”

(Id. at 88.)

Therefore, the Court finds that under Kim, Plaintiff has standing to continue the representative PAGA claim and recover penalties on behalf of the state and other aggrieved employees.(See also 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.”].)

Therefore, Aya’s request that Plaintiff’s non-individual PAGA claims be dismissed is DENIED.

Conclusion

Defendant Aya Healthcare Inc.’s request to Compel Arbitration of Plaintiff’s individual claims is GRANTED. The rest of this case is stayed pending the outcome of the arbitration.

The sets a Status Conference on February 23, 2023, at 9 a.m. The Court expects the parties to act expeditiously in scheduling and completing the arbitration.

Defendant’s request to dismiss Plaintiff’s representative PAGA claims is DENIED.

Defendant to give notice.