Josephson v. Lamon Construction Co., Inc. ( 2024 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 FOR THE EASTERN DISTRICT OF CALIFORNIA 10 11 DAVID JOSEPHSON, No. 2:23-cv-00043-DAD-AC 12 Plaintiff, 13 v. ORDER GRANTING DEFENDANT’S MOTION TO COMPEL ARBITRATION AND 14 LAMON CONSTRUCTION COMPANY, DENYING DEFENDANT’S MOTION TO INC., DISMISS 15 Defendant. (Doc. Nos. 18, 20, 20-1) 16 17 18 This matter is before the court on defendant’s motion to compel arbitration and 19 defendant’s motion to dismiss. (Doc. Nos. 18, 20.) On April 21, 2023, the pending motions were 20 taken under submission on the papers pursuant to Local Rule 230(g). For the reasons explained 21 below, the court will grant defendant’s motion to compel arbitration and deny defendant’s motion 22 to dismiss. 23 BACKGROUND 24 On November 8, 2022, plaintiff David Josephson initiated a putative wage and hour class 25 action against his employer defendant Lamon Construction Company, Inc. in the Sutter County 26 Superior Court. (Doc. No. 1-4 at 5.) On January 9, 2023, defendant removed the class action to 27 this court. (Doc. No. 1.) On January 17, 2023, defendant filed a motion to dismiss. (Doc. No. 4.) 28 Subsequently, plaintiff filed the operative first amended complaint (“FAC”) and defendant 1 withdrew its motion to dismiss. (Doc. Nos. 8, 11.) In his FAC, plaintiff asserts claims under the 2 California Labor Code and the applicable wage orders and alleges that defendant failed to pay 3 minimum wages, provide meal periods, provide rest periods, furnish accurate itemized wage 4 statements, timely pay all wages due upon separation, and reimburse business expenses. (Doc. 5 No. 8 at ¶¶ 63–112.) Plaintiff also asserts a claim under California’s Unfair Competition Law 6 (“UCL”). (Id. at ¶¶ 113–18.) 7 On January 18, 2023, plaintiff filed a separate action in the Sutter County Superior Court 8 under the California Private Attorneys General Act of 2004 (“PAGA Action”). On February 22, 9 2023, defendant removed the PAGA Action to this federal court. On March 3, 2023, this court 10 related and consolidated the cases. (Doc. No. 16.) 11 On April 7, 2023, defendant filed a motion to compel arbitration as to plaintiff’s PAGA 12 Action. (Doc. No. 18 at 6.) In the pending motion, defendant seeks an order compelling 13 arbitration as to plaintiff’s individual PAGA claims pursuant to the terms of the collective 14 bargaining agreement that governed his employment (“CBA”) and staying this action as to 15 plaintiff’s non-individual PAGA claims. (Id. at 14–15.) On the same day, defendant also filed a 16 motion to dismiss plaintiff’s PAGA Action pursuant to Federal Rule of Civil Procedure 12(b)(6), 17 arguing that the action is barred by Labor Code § 2699.6 or alternatively preempted by § 301 of 18 the Labor Management Rights Act (“LMRA”). (Doc. No. 20 at 9, 15–24.) In connection with 19 this brief, defendant filed a request for judicial notice as to the relevant CBA. (Doc. No. 20-1.) 20 On April 21, 2023, plaintiff filed oppositions to defendant’s motion to compel arbitration and 21 motion to dismiss. (Doc. Nos. 26, 27.) In his opposition to defendant’s motion to compel, 22 plaintiff does not contest that his individual PAGA claims must be arbitrated; he argues only that 23 his representative PAGA claims can proceed in this court simultaneously. (Doc. No. 27 at 10.) 24 On May 1, 2023, defendant filed replies in support of its motion to compel arbitration and motion 25 to dismiss. (Doc. Nos. 29, 30.) 26 LEGAL STANDARD 27 A written provision in any contract evidencing a transaction involving commerce to settle 28 a dispute by arbitration is subject to the Federal Arbitration Act (“FAA”). 9 U.S.C. § 2. The 1 FAA confers on the parties involved the right to obtain an order directing that arbitration proceed 2 in the manner provided for in a contract between them. 9 U.S.C. § 4. In considering a motion to 3 compel arbitration, the “court’s role under the Act . . . is limited to determining (1) whether a 4 valid agreement to arbitrate exists and, if it does, (2) whether the agreement encompasses the 5 dispute at issue.” Chiron Corp. v. Ortho Diagnostic Sys., Inc., 207 F.3d 1126, 1130 (9th Cir. 6 2000). The party seeking to compel arbitration bears the burden of proving by a preponderance 7 of the evidence the existence of an agreement to arbitrate. Ashbey v. Archstone Prop. Mgmt., 8 Inc., 785 F.3d 1320, 1323 (9th Cir. 2015); Knutson v. Sirius XM Radio Inc., 771 F.3d 559, 565 9 (9th Cir. 2014) (citing Rosenthal v. Great W. Fin. Sec. Corp., 14 Cal. 4th 394, 413 (1996)). 10 There is an “emphatic federal policy in favor of arbitral dispute resolution.” Mitsubishi 11 Motors Corp. v. Soler Chrysler-Plymouth, 473 U.S. 614, 631 (1985). As such, “any doubts 12 concerning the scope of arbitrable issues should be resolved in favor of arbitration.” Id. at 626 13 (quoting Moses H. Cone Mem’l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 24–25 (1983)). This 14 presumption in favor of arbitration policy is “an acknowledgment of the FAA’s commitment to 15 overrule the judiciary’s longstanding refusal to enforce agreements to arbitrate and to place such 16 agreements upon the same footing as other contracts.” Granite Rock Co. v. Int’l Bhd. of 17 Teamsters, 561 U.S. 287, 302 (2010). 18 DISCUSSION 19 A. Defendant’s Request for Judicial Notice 20 Pursuant to Federal Rule of Evidence 201(b), a court may “judicially notice a fact that is 21 not subject to reasonable dispute because it: (1) is generally known within the trial court’s 22 territorial jurisdiction; or (2) can be accurately and readily determined from sources whose 23 accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b). In ruling on a motion to 24 compel arbitration, “[t]he court may take judicial notice of a CBA . . . [as] such documents 25 properly are considered materials not subject to reasonable dispute because they are capable of 26 accurate and ready determination by resort to sources whose accuracy cannot reasonably be 27 questioned.” Morris v. Pac., No. 2:20-cv-01291-WBS-CKD, 2020 WL 6526248, at *3 (E.D. Cal. 28 Nov. 5, 2020) (internal quotations omitted). Similarly, in ruling on a motion to dismiss under 1 Rule 12(b)(6), the court is permitted to consider materials outside the pleadings if those 2 documents are attached to the complaint, incorporated by reference in the complaint, or are 3 matters of which judicial notice is taken. United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 4 2003) (“Even if a document is not attached to a complaint, it may be incorporated by reference 5 into a complaint if the plaintiff refers extensively to the document or the document forms the 6 basis of the plaintiff’s claim.”). Defendant requests that the court take judicial notice of the CBA 7 entitled “Master Agreement for Northern California Between Signatory Associations and Local 8 Union No. 3 of the International Union of Operating Engineers, AFL-CIO.” (Doc. No. 20-1 at 1.) 9 Plaintiff does not dispute the authenticity of the CBA, that he was a member of the local union, or 10 that he was a covered employee according to the terms of the CBA when the events alleged in his 11 complaint took place. (See Doc. Nos. 26, 27.) Because the CBA is not subject to reasonable 12 dispute and will aid the court in assessing defendant’s motions, the court will grant defendant’s 13 request for judicial notice. See Densmore v. Mission Linen Supply, 164 F. Supp. 3d 1180, 1187 14 (E.D. Cal. 2016) (granting the defendants’ request for judicial notice with respect to three CBAs). 15 B. Defendant’s Motion to Compel 16 Defendant seeks to compel arbitration as to plaintiff’s individual PAGA claims and stay 17 this action as to plaintiff’s representative PAGA claims. (Doc. No. 18.) 18 1. Plaintiff’s Individual PAGA Action 19 The parties agree that plaintiff’s individual PAGA Action must be compelled to 20 arbitration under the terms of their CBA. (See Doc. No. 18 at 11; Doc. No. 27 at 10 (“Plaintiff 21 does not contest that his individual PAGA claims must be arbitrated under the terms of the 22 CBA.”).) Further, the court finds that the parties formed a valid arbitration agreement which 23 encompasses plaintiff’s individual PAGA claims, and no arguments have been made to the 24 contrary. (Doc. No. 18-1 at 73–74; Doc. No. 27.) Therefore, the court will grant defendant’s 25 motion to compel arbitration as to plaintiff’s individual PAGA claims and stay this action as to 26 those claims. See Rubio v. Marriott Resorts Hosp. Corp., No. 8:23-cv-00773-FWS-ADS, 2023 27 WL 8153535, at *2 (C.D. Cal. Oct. 17, 2023) (granting the defendant’s motion to compel 28 ///// 1 arbitration as to the plaintiff’s individual PAGA claims and staying the action as to those claims 2 where the plaintiff “agree[d] that these claims should be arbitrated”). 3 2. Plaintiff’s Representative PAGA Action 4 As to plaintiff’s representative or non-individual PAGA claims, the parties appear to 5 disagree over the proper course of action. Defendant argues that the representative claims should 6 be stayed pending the outcome in Adolph v. Uber Technologies, Inc. (California Supreme Court 7 Case No. S274671), which was at the time under review by the California Supreme Court. (Doc. 8 No. 18 at 12.) It was anticipated that the decision would resolve the question left open by the 9 United States Supreme Court in Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022) 10 regarding what courts should do with representative PAGA claims that cannot be compelled to 11 arbitration, and whether such claims must be dismissed for lack of standing when the associated 12 individual PAGA claims are compelled to arbitration. (Id. at 13.) However, in his opposition to the 13 pending motion to compel arbitration, plaintiff argued that his representative PAGA claims should 14 proceed in this court concurrently with the arbitration of his individual PAGA claims, disagreeing 15 with defendant’s assessment that these claims should be stayed pending the decision in Adolph. (Doc. 16 No. 27 at 10.) Confusingly, plaintiff also stated in his opposition to defendant’s motion to dismiss 17 that not only does he not oppose defendant’s motion to compel arbitration of his individual PAGA 18 claims, but he also joins defendant’s request to stay the representative PAGA claims pending the 19 outcome of Adolph. (Doc. No. 26 at 13.) 20 While these conflicting arguments make plaintiff’s precise position unclear, the court notes 21 that after the pending motions were taken under submission, the California Supreme Court issued its 22 decision in Adolph. In it, the California Supreme Court clarified that “where a plaintiff has filed a 23 PAGA action comprised of individual and non-individual claims, an order compelling arbitration 24 of individual claims does not strip the plaintiff of standing to litigate non-individual claims in 25 court.” Adolph v. Uber Techs., Inc., 14 Cal. 5th 1104, 1125 (2023). Further, the court stated that 26 trial courts could adopt the following procedure: 27 [T]he trial court may exercise its discretion to stay the non-individual claims pending the outcome of the arbitration pursuant to section 28 1281.4 of the Code of Civil Procedure. Following the arbitrator’s 1 decision, any party may petition the court to confirm or vacate the arbitration award under section 1285 of the Code of Civil Procedure. 2 If the arbitrator determines that [the plaintiff] is an aggrieved employee in the process of adjudicating his individual PAGA claim, 3 that determination, if confirmed and reduced to a final judgment (Code Civ. Proc., § 1287.4), would be binding on the court, and [the 4 plaintiff] would continue to have standing to litigate his nonindividual claims. If the arbitrator determines that [the plaintiff] 5 is not an aggrieved employee and the court confirms that determination and reduces it to a final judgment, the court would give 6 effect to that finding, and [the plaintiff] could no longer prosecute his non-individual claims due to lack of standing. 7 8 Id. at 1123–24. 9 Since this decision in Adolph, other district courts in California have concluded that 10 plaintiffs retain standing to pursue non-individual PAGA claims in federal court when their 11 individual PAGA claims have been ordered to arbitration and have adopted the above-described 12 procedure. See Filemon Colores v. Ray Moles Farms, Inc., No. 1:21-cv-00467-JLT-BAM, 2023 13 WL 6215789, at *3 (E.D. Cal. Sept. 25, 2023) (noting that the court found persuasive the 14 defendant’s argument that “this case should be stayed pending the outcome of the arbitration 15 process for the reasons explained in Adolph itself”); Radcliff v. San Diego Gas & Elec. Co., No. 16 20-cv-01555-H-MSB, 2023 WL 8264445, at *1 (S.D. Cal. Nov. 28, 2023) (ordering the parties to 17 arbitrate the plaintiff’s individual PAGA claim and staying the representative PAGA claim 18 pending the outcome of the arbitration); Rubio, 2023 WL 8153535, at *4 (“The court also adopts 19 Adolph’s proposed procedure and stays [the p]laintiff’s non-individual PAGA claims pending the 20 result of arbitration.”). 21 Accordingly, the court will stay plaintiff’s representative PAGA claims in line with the 22 decision of the California Supreme Court in Adolph. 23 C. Defendant’s Motion to Dismiss 24 As noted previously, defendant also filed a motion to dismiss the PAGA claims brought in 25 this case. (Doc. No. 20.) However, because the court will compel arbitration of the individual 26 PAGA claims and stay the non-individual PAGA claims pending the outcome of those arbitration 27 proceedings, the court will also deny defendant’s motion to dismiss as moot. This denial is 28 ///// 1 | without prejudice to its refiling or the filing of a renewed motion to dismiss the representative 2 | PAGA claims if appropriate after the stay is lifted. 3 CONCLUSION 4 For the reasons explained above: 5 1. Defendant’s request for judicial notice (Doc. No. 20-1) is granted; 6 2. Defendant’s motion to compel arbitration of plaintiff's individual PAGA claims 7 (Doc. No. 18) is granted; 8 a. Plaintiffs individual and representative PAGA claims are stayed pending the 9 completion of arbitration; 10 3. Plaintiff and defendant are required to notify the court that arbitration proceedings 11 have concluded within fourteen (14) days of the issuance of the arbitrator’s 12 decision; and 13 4. Defendant’s motion to dismiss (Doc. No. 20) is denied without prejudice as having 14 been rendered moot by this order. 15 IT IS SO ORDERED. '° | Dated: _ January 31,2024 Da A. 2, ye 17 DALE A. DROZD ig UNITED STATES DISTRICT JUDGE 19 20 21 22 23 24 25 26 27 28