Young v. REMX, Inc. CA1/3 ( 2016 )

Filed 7/26/16 Young v. REMX, Inc. CA1/3
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION FIVE
VANESSA YOUNG,
Plaintiff and Appellant,
A143786
v.
REMX, INC., et al., (San Francisco County
Super. Ct. No. CGC-14-538409)
Defendants and Respondents.
In this wage and hour lawsuit, plaintiff Vanessa Young appeals from the trial
court’s order compelling arbitration of her individual claims, dismissing her class claims,
bifurcating her representative claim pursuant to the Labor Code Private Attorneys
General Act of 2004 (PAGA; Lab. Code, § 2698 et seq.), and staying the PAGA claim
pending completion of the arbitration on her individual claims. We conclude the order is
nonappealable, and dismiss the appeal.
BACKGROUND
Plaintiff’s operative first amended complaint (complaint) alleges that, after her
employment with defendants terminated, defendants failed to timely pay her all of her
final wages. The complaint asserts, on behalf of plaintiff and a putative class, a cause of
action for this failure under Labor Code sections 201 through 203. The complaint also
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asserts a representative PAGA claim seeking civil penalties on behalf of plaintiff and
other aggrieved employees.1
Defendants filed a motion to compel individual arbitration, dismiss plaintiff’s
class claims, and bifurcate and stay the PAGA claim. In support of the motion,
defendants submitted an arbitration agreement signed by plaintiff. The arbitration
agreement provided any disputes “arising out of or relating to my employment or the
termination of my employment” will be submitted to arbitration. The agreement further
provided “[a]ny such claims must be submitted on an individual basis only and I hereby
waive the right to bring or join any type of collective or class claim in arbitration, in any
court, or in any other forum.” Defendants conceded in their motion that under Iskanian v.
CLS Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348, the arbitration agreement
cannot require plaintiff to waive her representative PAGA claim, and therefore asked the
court to bifurcate and stay that claim.
Plaintiff opposed the motion, arguing (1) the arbitration agreement only identifies
a nonparty entity called RXOS, and therefore does not extend to disputes with
defendants; (2) the agreement is unenforceable; and (3) the agreement is unconscionable.
In reply, defendants noted the arbitration agreement, by its terms, applies to plaintiff and
her “Employer.” Although Employer is not defined in the agreement, defendants argued
it is undisputed that they were plaintiff’s employer and, in any event, RXOS is a division
of defendants. Defendants also argued the agreement was enforceable and not
unconscionable.
The trial court granted defendants’ motion. The order compelled arbitration of
plaintiff’s individual claim, dismissed the class claims, bifurcated the representative
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“Under PAGA, ‘an “aggrieved employee” may bring a civil action personally and on
behalf of other current or former employees to recover civil penalties for Labor Code
violations. [Citation.] Of the civil penalties recovered, 75 percent goes to the Labor and
Workforce Development Agency, leaving the remaining 25 percent for the “aggrieved
employees.” ’ ” (Miranda v. Anderson Enterprises, Inc. (2015) 241 Cal. App. 4th 196,
199, fn. 1 (Miranda).)
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PAGA claim, and stayed the PAGA claim pending the completion of arbitration. This
appeal followed.
DISCUSSION
“ ‘Orders granting motions to compel arbitration are generally not immediately
appealable.’ ” (Miranda, supra, 241 Cal.App.4th at p. 200.) Plaintiff argues the
appealed-from order is nonetheless directly appealable under the “death knell” doctrine.
This doctrine “ ‘provides that an order which allows a plaintiff to pursue individual
claims, but prevents the plaintiff from maintaining the claims as a class action, . . . is
immediately appealable because it “effectively r[ings] the death knell for the class
claims.” ’ [Citations.] Appealability under the death knell doctrine requires ‘an order
that (1) amounts to a de facto final judgment for absent plaintiffs, under circumstances
where (2) the persistence of viable but perhaps de minimis individual plaintiff claims
creates a risk no formal final judgment will ever be entered.’ ” (Ibid.) In Franco v.
Athens Disposal Co., Inc. (2009) 171 Cal. App. 4th 1277, 1288, the Court of Appeal
concluded that an order upholding a class arbitration waiver and compelling arbitration of
individual claims constitutes the death knell of the class litigation.
Although the death knell doctrine is usually discussed in the context of class
claims, both class claims and representative PAGA claims “are forms of representative
actions, whereby one or more plaintiffs seek recovery on behalf of nonparties. [Citation.]
In both types of action, the potential recovery is greater if the claim is brought as a class
or representative action than it would be if the plaintiff sought only individual relief.
[Citations.] In both, the represented nonparties are bound by any final judgment.”
(Miranda, supra, 241 Cal.App.4th at pp. 200–201.) “The rationale underlying the death
knell doctrine—‘ “that without the incentive of a possible group recovery the individual
plaintiff may find it economically imprudent to pursue his lawsuit to a final judgment and
then seek appellate review of an adverse class determination,” ’ thereby rendering the
order ‘effectively immunized by circumstance from appellate review’ [citation]—applies
equally to representative PAGA claims.” (Id. at p. 201.)
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We conclude plaintiff’s appeal does not fall within the death knell doctrine. As an
initial matter, in light of the remaining representative PAGA claim, it appears the order
does not “ ‘amount[] to a de facto final judgment for absent plaintiffs.’ ” (Miranda,
supra, 241 Cal.App.4th at p. 200.) Our Supreme Court has “emphasized that orders that
only limit the scope of a class or the number of claims available to it are not similarly
tantamount to dismissal and do not qualify for immediate appeal under the death knell
doctrine; only an order that entirely terminates class claims is appealable.” (In re Baycol
Cases I & II (2011) 51 Cal. 4th 751, 757-758 (In re Baycol Cases).) Although the only
class claim has been dismissed, the representative PAGA claim remains and plaintiff
does not contend there are any putative class members who are not also aggrieved
employees for purposes of the PAGA claim. Accordingly, the order does not appear to
constitute a de facto final judgment for absent plaintiffs—the putative class
members/aggrieved employees under PAGA—because their PAGA claims remain
pending.
In any event, because of the remaining PAGA claim, plaintiff has not established
the second rationale for the death knell doctrine: that “ ‘the persistence of viable but
perhaps de minimis individual plaintiff claims creates a risk no formal final judgment
will ever be entered.’ ” (Miranda, supra, at p. 200.) Munoz v. Chipotle Mexican Grill,
Inc. (2015) 238 Cal. App. 4th 291 (Munoz), is instructive. In Munoz, the trial court denied
class certification in a lawsuit alleging class claims and a representative PAGA claim.
(Id. at p. 294.) The Court of Appeal found the continued presence of the PAGA claim
precluded application of the death knell doctrine: “Given the potential for recovery of
significant civil penalties if the PAGA claims are successful, as well as attorney fees and
costs, plaintiffs have ample financial incentive to pursue the remaining representative
claims under the PAGA and, thereafter, pursue their appeal from the trial court’s order
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denying class certification. Denial of class certification where the PAGA claims remain
in the trial court would not have the ‘legal effect’ of a final judgment.” (Id. at p. 311.)2
Plaintiff argues Munoz is distinguishable because she must arbitrate her individual
claim before she can pursue her PAGA claim. The focus of the death knell doctrine is
whether plaintiff has a sufficient incentive to proceed and here, as in Munoz, the PAGA
claim provides that incentive. Plaintiff contends the arbitrator may rule against her on
her individual claim and her “incentive to pursue PAGA claims [will be] exterminated if
the arbitrator decides that [plaintiff’s] individual claims have no merit” in light of the
narrow scope of review for an arbitration award. Our inquiry, however, looks at the
impact of the appealed-from interlocutory order. That a possible outcome in a
subsequent order might eliminate plaintiff’s incentive to pursue the PAGA claim does not
render the current order appealable.3
In her reply brief, plaintiff urges us to treat the appeal as a petition for writ of
mandate. “ ‘The rationale behind the rule making an order compelling arbitration
nonappealable is that inasmuch as the order does not resolve all of the issues in
controversy, to permit an appeal would delay and defeat the purposes of the arbitration
statute.’ [Citation.] Thus, writ review of orders directing parties to arbitrate is available
only in ‘unusual circumstances’ or in ‘exceptional situations.’ [Citations.] [¶]
Nevertheless, California courts have held that writ review of orders compelling
arbitration is proper in at least two circumstances: (1) if the matters ordered arbitrated fall
clearly outside the scope of the arbitration agreement or (2) if the arbitration would
2
In contrast, in Miranda, supra, the trial court’s order compelling arbitration of the
plaintiff’s individual PAGA claim and dismissing his representative PAGA claim fell
within the death knell doctrine. (Miranda, supra, 241 Cal.App.4th at pp. 200–203.)
3
In any event, if the arbitrator does rule against plaintiff and the ruling has preclusive
effect that will defeat plaintiff’s PAGA claim, plaintiff could concede or stipulate to this
in the trial court and thereby quickly obtain an appealable final judgment. (See In re
Baycol Cases, supra, 51 Cal.4th at p. 760 [death knell doctrine does not apply where
“[n]o risk arose that the named plaintiff . . . might fail to press on until the entry of an
appealable final judgment”].)
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appear to be unduly time consuming or expensive.” (Zembsch v. Superior Court (2006)
146 Cal. App. 4th 153, 160 (Zembsch).)
Plaintiff argues the first circumstance is present here because the challenged order
compels plaintiff “to arbitrate her issues with parties not even identified in the [arbitration
agreement].” While expressing no opinion on the ultimate merits of plaintiff’s challenge,
we do not find plaintiff’s claims “fall clearly outside the scope of the arbitration
agreement.” (Zembsch, at p. 160, italics added.) Plaintiff next contends the second
circumstance applies because of “the high cost of arbitrating . . . and the amount of time
necessary to complete arbitration.” Plaintiff has provided no support for her claim that
she will be subject to undue expense in the arbitration.4 Plaintiff has also failed to
explain why the arbitration would be unduly time consuming. As writ relief is available
only in extraordinary circumstances, the fact that the arbitration will take time is not
sufficient. We find no extraordinary circumstances warranting writ review.
DISPOSITION
The appeal is dismissed. Defendants are awarded their costs on appeal.
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Indeed, as defendants argued below, it appears that under the arbitration rules specified
in the arbitration agreement, the employer pays the arbitrator’s fees and expenses and the
employee pays only a $200 filing fee.
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SIMONS, J.
We concur.
JONES, P.J.
NEEDHAM, J.
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