David Wulfe v. Valero Refining Company-Calif. , 641 F. App'x 758 ( 2016 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
MAR 01 2016
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
DAVID WULFE, No. 13-57177
Plaintiff - Appellant, D.C. No. 2:12-cv-05971-MWF-E
v.
MEMORANDUM*
VALERO REFINING COMPANY -
CALIFORNIA, et al.,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Michael W. Fitzgerald, District Judge, Presiding
Argued and Submitted February 2, 2016
Pasadena, California
Before: WARDLAW and HURWITZ, Circuit Judges and RICE,** Chief District
Judge.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Thomas O. Rice, Chief United States District Judge
for the Eastern District of Washington, sitting by designation.
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David Wulfe, a refinery operator, filed suit against his former employer,
Valero Refining Co., alleging several employment related claims. Wulfe appeals a
district court order compelling arbitration, confirming an arbitration award, and
denying reconsideration. We have jurisdiction pursuant to 28 U.S.C. § 1291. We
affirm the orders compelling arbitration and denying reconsideration. We also
affirm, in part, the order confirming the arbitration award but remand for the
district court to consider in the first instance the effect of recent case law.
1. Wulfe agreed to arbitrate. Under California law, consent to arbitrate can
either be express or implied. Davis v. Nordstrom, Inc., 755 F.3d 1089, 1093 (9th
Cir. 2014). Here, Wulfe impliedly agreed to arbitrate because the arbitration
agreement was a condition of his employment; Wulfe was aware that if he
continued to work, he would be bound by this condition; and Wulfe continued his
employment with Valero after the arbitration agreement went into effect. See Craig
v. Brown & Root, Inc., 100 Cal. Rptr. 2d 818, 820-21 (Ct. App. 2000).
2. The Federal Arbitration Act (“FAA”), 9 U.S.C. §§ 1-16, applies to
Wulfe’s wage claims. Although wage claims under California Labor Code section
229 are generally not subject to arbitration, the FAA supersedes any contrary state
law. See Perry v. Thomas, 482 U.S. 483, 491 (1987). The FAA “provide[s] for the
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enforcement of arbitration agreements within the full reach of the Commerce
Clause.” Id. at 490. Here, not only does the DRP expressly state that the FAA
applies, Wulfe and Valero’s employment relationship undoubtedly involves
interstate commerce: Wulfe, a citizen of California, was employed by Valero, a
citizen of Texas, as an oil refinery operator at one of Valero’s California facilities.
3. The arbitration agreement is not unconscionable. Although there are
elements of procedural and substantive unconscionability within the arbitration
agreement— “the former focusing on ‘oppression’ or ‘surprise’ due to unequal
bargaining power, the latter on ‘overly harsh’ or ‘one-sided’ results,” Armendariz
v. Found. Health Psychcare Servs., Inc., 6 P.3d 669, 690 (Cal. 2000) (citation
omitted)—neither element, when viewed together, tips the scale toward a finding
of unconscionability. See Sanchez v. Valencia Holding Co., LLC, 353 P.3d 741,
748 (Cal. 2015).
4. The district court did not err in compelling arbitration of Wulfe’s Private
Attorneys General Act (“PAGA”), Cal. Labor Code § 2698, et seq. claim. The
California Supreme Court and we have recently held that pre-dispute agreements to
waive the right to bring a representative PAGA claim are unenforceable and that
this rule is not preempted by the FAA. Sakkab v. Luxottica Retail N. Am., Inc., 803
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F.3d 425 (9th Cir. 2015); Iskanian v. CLS Transp. L.A., LLC, 327 P.3d 129 (Cal.
2014). But the district court’s order compelling arbitration did not run afoul of
Sakkab and Iskanian because the order did not prevent Wulfe from bringing a
representative PAGA claim in arbitration; instead, the district court left the scope
of the agreement to the arbitrator to decide in the first instance.
5. The district court did not abuse its discretion when it found that Wulfe
was judicially estopped from arguing that the arbitrator’s award should be
reviewed de novo. The doctrine of judicial estoppel “generally prevents a party
from prevailing in one phase of a case on an argument and then relying on a
contradictory argument to prevail in another phase.” New Hampshire v. Maine, 532
U.S. 742, 749 (2001) (citation omitted). Here, Wulfe’s position—that the district
court should apply de novo review to the arbitrator’s denial of classwide
arbitration—is “clearly inconsistent” with his earlier position that the arbitrator
should decide whether classwide arbitration is available; the district court relied, at
least in part, on Wulfe’s earlier position when ruling in his favor; and Wulfe would
derive an unfair advantage if not estopped. Milton H. Greene Archives, Inc. v.
Marilyn Monroe LLC, 692 F.3d 983, 992-94 (9th Cir. 2012).
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6. The arbitration award was not procured by fraud or undue means. While
an arbitrator’s award may be vacated if it was “procured by corruption, fraud, or
undue means,” 9 U.S.C. § 10(a)(1), the conduct at issue here was discovered and
brought to the attention of the arbitrator before she issued her decision and had no
effect on the arbitrator’s decision. See A.G. Edwards & Sons, Inc. v. McCollough,
967 F.2d 1401, 1403-04 (9th Cir. 1992).
7. Finally, Wulfe argues that the arbitrator exceeded her powers by allegedly
ordering Wulfe to proceed with his PAGA claim on an individual basis because
such a right cannot be waived. Wulfe’s argument rests on the holdings recently
announced in Iskanian and Sakkab, which were both issued after the arbitrator
issued her award and the district court confirmed the same. We leave to the district
court to consider in the first instance Wulfe’s argument that, in light of those
subsequent decisions, the arbitrator’s award should be vacated because she
“exceeded [her] powers, or so imperfectly executed them that a mutual, final, and
definite award upon the subject matter submitted was not made.” 9 U.S.C. §
10(a)(4).
AFFIRMED IN PART AND REMANDED IN PART.
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