Scheiber v. Shoe Palace CA6

Filed 8/16/16 Scheiber v. Shoe Palace CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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
SIXTH APPELLATE DISTRICT
JUSTIN SCHEIBER, H041495
(Santa Clara County
Plaintiff and Respondent, Super. Ct. No. 113CV254589)
v.
SHOE PALACE CORPORATION,
Defendant and Appellant.
I. INTRODUCTION
Plaintiff Justin Scheiber filed a complaint against his former employer, defendant
Shoe Palace Corporation, for failure to pay all wages owed among other claims. Plaintiff
brought the claims in his individual capacity and also on behalf of a class of current and
former employees. He also alleged a representative claim under the Labor Code Private
Attorneys General Act of 2004 (PAGA) (Lab. Code, § 2698 et seq.).
Defendant filed a motion to dismiss or, in the alternative, to stay proceedings and
compel arbitration. The trial court granted in part the motion to compel arbitration. The
court determined that plaintiff had waived his class claims, that his individual claims had
to be arbitrated, and that his representative PAGA claim would be litigated in court. The
court ordered the arbitration of plaintiff’s individual claims to be stayed pending
litigation of the PAGA claim in court.
On appeal, defendant contends that the trial court erred by staying the arbitration
of plaintiff’s individual claims and allowing plaintiff’s representative PAGA claim to
proceed in court first. Defendant argues that the arbitration of the individual claims
should take place before the court proceedings on the PAGA claim. In response, plaintiff
contends that the appeal is moot because he has dismissed all of his individual claims and
only the PAGA claim remains and, in any event, the appeal lacks merit.
For the reasons stated below, we determine that the appeal is moot. Accordingly,
we will dismiss the appeal without reaching the merits.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. The Complaint
In October 2013, plaintiff filed a complaint alleging that defendant violated the
Labor Code by failing to pay all amounts owed and by failing to provide accurate wage
statements. Plaintiff alleged six causes of action: (1) failure to pay minimum wages;
(2) failure to pay overtime wages; (3) failure to provide meal breaks or pay meal period
premiums; (4) failure to provide accurate wage statements; (5) unfair business practices
(Bus. & Prof. Code, § 17200 et seq.) based on the failure to pay all wages owed, provide
meal breaks, and provide proper and accurate wage statements; and (6) civil penalties
under PAGA. Plaintiff alleged the first five causes of action in his individual capacity
and on behalf of a class of current and former employees, and he alleged the sixth cause
of action under PAGA in a representative capacity.
B. The Motion to Compel Arbitration
In May 2014, defendant filed a motion to dismiss or, in the alternative, to stay
proceedings and compel arbitration. In the motion, defendant contended that it had
instituted an “Employee Dispute Resolution Plan” (EDR) in July 2013, requiring the
arbitration of any employment disputes. According to defendant, plaintiff agreed to be
bound by the EDR, the EDR covered plaintiff’s claims, and the EDR required plaintiff’s
claims to be arbitrated only as individual claims, and not as class or representative claims.
2
Defendant also argued that the EDR required the proceedings to be governed by the
Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.), and that the EDR prohibition on
class or representative claims was enforceable under the FAA. Defendant requested that
plaintiff’s civil complaint be dismissed and that arbitration be compelled on an individual
basis or, in the alternative, that the court proceedings be stayed while plaintiff’s claims
were arbitrated.
In support of the motion, defendant provided a declaration from its director of
retail operations. The director of retail operations stated that defendant had operations in
several states and was engaged in interstate commerce, that plaintiff had been employed
by defendant from March to September 2013, and that plaintiff had signed an agreement
that any employment-related legal dispute would be resolved exclusively through the
EDR. Attached to the declaration was a copy of the EDR and plaintiff’s written
agreement to be bound by the EDR.
C. Opposition to the Motion to Compel Arbitration
In opposition, plaintiff contended that the EDR was unenforceable because it was
unconscionable, among other reasons. He also argued that his Labor Code class claims
and his PAGA claim were not arbitrable, and that the FAA did not apply.
D. Reply in Support of the Motion to Compel Arbitration
In reply, defendant continued to contend that the EDR was enforceable, that it
applied to all of plaintiff’s claims, and that the FAA governed the proceedings.
E. The Trial Court’s Order
The hearing on defendant’s motion was held on July 25, 2014.1 After the hearing
and that same day, the trial court issued an order granting in part defendant’s motion.
The court determined that plaintiff had agreed to the EDR, that the EDR contained an
1
The record on appeal does not include a reporter’s transcript for the hearing.
3
arbitration agreement covering plaintiff’s claims, and that the FAA applied. Regarding
the waiver in the EDR of plaintiff’s right to pursue a class or representative action in
court or in arbitration, the court found that the class waiver was valid, but that the waiver
of a representative PAGA action was unenforceable based on Iskanian v. CLS
Transportation Los Angeles, LLC (2014) 59 Cal. 4th 348 (Iskanian). The court concluded
that plaintiff’s PAGA claim “would remain in court” and his “individual claims would
proceed to arbitration.”
Regarding which matter would proceed first – the individual Labor Code claims in
arbitration or the PAGA claim in court – the trial court observed that “Iskanian left open
for remand various questions on how to deal with a case where individual damages
claims must be arbitrated, but PAGA waivers are found to be unenforceable.” One of the
questions left open in Iskanian was whether the arbitration of the individual claims
should be stayed pursuant to Code of Civil Procedure section 1281.22 while the
representative PAGA claim is litigated in court. Based on section 1281.2, the court in the
instant case “exercise[d] its discretion to stay the arbitration of Plaintiff’s individual
claims pending litigation of the PAGA claim.” The court accordingly granted in part
defendant’s motion to compel arbitration as to plaintiff’s individual claims but stayed the
arbitration pending court litigation of plaintiff’s PAGA claim.
Defendant filed a notice of appeal regarding the July 25, 2014 order.3
2
Code of Civil Procedure section 1281.2 provides in part: “If the court
determines that there are other issues between the petitioner and the respondent which
are not subject to arbitration and which are the subject of a pending action or special
proceeding between the petitioner and the respondent and that a determination of such
issues may make the arbitration unnecessary, the court may delay its order to arbitrate
until the determination of such other issues or until such earlier time as the court
specifies.”
3
Code of Civil Procedure section 1294, subdivision (a) provides that a party may
appeal from an order denying a petition to compel arbitration. However, when a court
stays an arbitration proceeding pending resolution of court litigation, the court’s order “in
(continued)
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III. DISCUSSION
Defendant contends that the trial court erred by staying the arbitration and
allowing the PAGA claim to proceed in court first. Defendant argues that the parties’
agreement provides that the FAA applies rather than the California Arbitration Act
(CAA; Code Civ. Proc., § 1280 et seq.), and that under the FAA, the court lacked the
discretion to stay the arbitration. Defendant contends that the arbitration should proceed
first while the court proceedings are stayed. Defendant further argues that, even if the
CAA applies, the arbitration should take place before court proceedings on the PAGA
claim.
Plaintiff contends that defendant’s appeal is moot because he has dismissed his
individual Labor Code claims, which the trial court ordered to arbitration and then
immediately stayed, and the only remaining claim in the action is the PAGA claim.
Plaintiff further argues that, assuming the appeal is not moot, the FAA does not apply
to his PAGA claim, and the trial court properly exercised its discretion to stay the
arbitration of his individual Labor Code claims under Code of Civil Procedure
section 1281.2, subdivision (c).
In reply, defendant contends that any dismissal of plaintiff’s claims by the trial
court is in violation of the automatic stay that was in place upon the filing of defendant’s
appeal.
We first consider the issue of mootness because we find it dispositive. To
determine whether the appeal is moot, we apply well established rules. The duty of the
effect” denies the petition to compel arbitration and the order has been treated as an
appealable order. (Energy Group v. Liddington (1987) 192 Cal. App. 3d 1520, 1525, fn. 7;
see id. at pp. 1524-1525, 1528-1529 [no meaningful distinction exists between denying a
petition to compel arbitration and staying the arbitration pending resolution of the
litigation], disapproved on other grounds in Cronus Investments, Inc. v. Concierge
Services (2005) 35 Cal. 4th 376, 393, fn. 8; Sanders v. Kinko’s, Inc. (2002) 99
Cal. App. 4th 1106, 1109-1110.)
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court “ ‘ “is to decide actual controversies by a judgment which can be carried into effect,
and not to give opinions upon moot questions or abstract propositions, or to declare
principles or rules of law which cannot affect the matter in issue in the case before it.” ’
[Citation.]” (Eye Dog Foundation v. State Board of Guide Dogs for the Blind (1967)
67 Cal. 2d 536, 541.) “A case is moot when the decision of the reviewing court ‘can have
no practical impact or provide the parties effectual relief. [Citation.]’ [Citation.] ‘When
no effective relief can be granted, an appeal is moot and will be dismissed.’ [Citations.]”
(MHC Operating Limited Partnership v. City of San Jose (2003) 106 Cal. App. 4th 204,
214 (MHC Operating Limited Partnership).)
Generally, “an appellate court will consider only matters which were part of the
record at the time the judgment was entered. [Citation.]” (Reserve Insurance Co. v.
Pisciotta (1982) 30 Cal. 3d 800, 813.) However, “courts have not hesitated to consider
postjudgment events . . . when subsequent events have caused issues to become moot
[citation].” (Ibid.) In this case, we gave the parties notice that we proposed to take
judicial notice of the following: (1) plaintiff’s request for dismissal, dated August 28,
2015, in the trial court requesting dismissal of the first through fifth causes of action of
the complaint without prejudice; (2) the trial court’s entry of dismissal on August 28,
2015, as requested, and (3) the trial court’s August 28, 2015 proof of service indicating
that plaintiff and defendant were electronically served with the dismissal. (Evid. Code,
§§ 459, 455.) We now take judicial notice of these records. (Id., § 452, subd. (d).)
In supplemental briefing, defendant continues to argue that the trial court was
without jurisdiction to act on plaintiff’s request for dismissal because the proceedings
were stayed in the trial court upon the filing of defendant’s notice of appeal. In his own
supplemental brief, plaintiff states that the individual, non-PAGA claims have been
dismissed and that, “even if for some reason the non-PAGA claims have not yet been
dismissed, they will be dismissed before they are ever arbitrated.”
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We determine that the appeal is moot. Regardless of whether the trial court had
jurisdiction to dismiss plaintiff’s individual claims while the appeal was pending, in view
of (a) plaintiff’s conduct in the trial court in actually seeking dismissal of those claims
and (b) plaintiff’s representation to this court that if the claims have not been dismissed
he will dismiss those claims “before they are ever arbitrated,” plaintiff has clearly
abandoned those individual claims. Therefore, the only claim at issue in the litigation is
the PAGA claim. Defendant’s appeal, however, is limited to challenging the trial court’s
decision to stay the arbitration of the individual claims. Under the circumstances, an
opinion by this court regarding the propriety of the trial court staying an arbitration of the
individual claims “ ‘can have no practical impact or provide the parties effectual relief’ ”
as those claims have been abandoned by the plaintiff. (MHC Operating Limited
Partnership, supra, 106 Cal.App.4th at p. 214.) We will accordingly dismiss the appeal
as moot. To the extent the parties continue to dispute below whether the individual
claims were properly dismissed while the appeal was pending, the trial court will
undisputedly have jurisdiction to consider a request for dismissal of claims upon issuance
of the remittitur.
IV. DISPOSITION
The appeal is dismissed as moot. The parties shall bear their own costs on appeal.
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___________________________________________
BAMATTRE-MANOUKIAN, J.
WE CONCUR:
__________________________
ELIA, ACTING P.J.
__________________________
MIHARA, J.