Loza, Marisela vs. BH-TC Opco, LLC

Case No.: VCU317716 Date: June 30, 2026 Time: 8:30 A.M.

Dept. 2-The Honorable Bret D. Hillman Motion: Motion to Compel Arbitration Tentative Ruling: To deny the motion without prejudice

Background Facts

In this PAGA matter, Plaintiff sues Defendants BH-TC Opco, LLC, BH Social Rehab Holdings, LLC, BH-SD Social Rehab LM, LLC, BH-TC Opco Visalia, LLC, BH-SD DD Opco, LLC, BH-SD Opco, LLC, BH-SD Parentco, LLC, BH-SD RX, LLC, BH-SD West Coast, LLC, and BH-SD RE 7050, LLC as joint employers of Plaintiff for civil penalties for violations of Labor Code section 2699 ("PAGA") as to violations of the Labor Code, Code of Regulations and associated wage orders. (Complaint P.P. 1, 5-14, 17.)

Plaintiff expressly pleads that "PLAINTIFF is not suing in her individual capacity; she is proceeding herein solely under the PAGA, on behalf of the State of California for all aggrieved employees, including herself and other aggrieved employees. Nothing in this complaint should be construed as PLAINTIFF suing in her individual capacity" (Complaint P.4.)

Defendant BH-TC OPCO, LLC dba Jackson House Tulare moves to compel arbitration of Plaintiff's "individual claims" and to stay this matter as to the "non-individual" claims pending arbitration. In opposition, Plaintiff notes the filing of this matter as a headless PAGA action, that no individual claims are presented, that only "representative" claims are pled and such "representative claims" cannot be compelled to arbitration.

For clarity, the Court will adopt the terminology from Galarsa v. Dolgen California, LLC (2023) 88 Cal.App.5th 639, noting that the term "individual" refers to those claims brought by a plaintiff as a representative of the State and which seek to recover civil penalties under PAGA for Labor Code violations experienced by the plaintiff. (Id. at 648 [referring to these claims as "Type A" claims].)

Further, the term "non-individual" refers to those claims brought by a plaintiff as a representative of the State and which seek to recover civil penalties under PAGA for Labor Code violations experienced by employees other than the plaintiff. (Id. at 649 [referring to these claims as "Type O" claims].)

Headless PAGA Actions

The Court notes first that Plaintiff's complaint attaches notice of violation letters dated October 2, 2024 and that this matter was filed January 31, 2025. Section 2699 was revised effective July 1, 2024 and the revisions, pursuant to subdivision (v)(2), "shall not apply to a civil action with respect to which the notice required by" section 2699.3 "was filed before June 19, 2024."

The appellate court's opinion in Galarsa, supra, 115 Cal.App.5th at 4, appears limited to such pre-amendment matters, stating: "The first question is whether the version of PAGA in effect from mid-2016 to mid-2024 authorized an aggrieved employee to bring a PAGA action that seeks to recover civil penalties imposed for Labor Code violations suffered only by other employees. Such lawsuits are sometimes referred to as "headless" PAGA actions because the plaintiff employee has chosen not to pursue civil penalties for violations he or she suffered personally. (CRST Expedited, Inc. v. Superior Court (2025) 112 Cal.App.5th 872, 882 [334 Cal.Rptr.3d 647] (CRST Expedited), review granted Sept. 17, 2025, S292005.) We again conclude such PAGA actions were allowed. (CRST Expedited, at p. 882.)"

The amendment to section 2699, which appears applicable here, involves subsection (c) and revisions thereto. Prior to the amendment, subsection (c) stated "For purposes of this part, 'aggrieved employee' means any person who was employed by the alleged violator and against whom one or more of the alleged violations was committed" The courts in CRST Expedited, supra, Galarsa, supra, Rodriguez v. Packers Sanitation Servs. LTD., LLC, 109 Cal.App.5th 69, 75, and Balderas v. Fresh Start Harvesting, Inc. (2024) 101 Cal.App.5th 533, 536 all found that, under this pre July 2024 version, no individual claim was necessary and headless PAGA (Type O Only) claims were permitted.

By contrast, Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, 1005, also under the prior version of the PAGA statute, notes "every PAGA action necessarily includes an individual PAGA claim" (that is a Type A and Type O claim) (See also Williams v. Alacrity Solutions Group, LLC, (2025) 110 Cal.App.5th 932, 943 [agreeing with Leeper that "the inclusion of an individual PAGA claim [is] mandated by PAGA's text"].) Those matters all appear to be on appeal pending consideration and disposition of related issues.

However, these decisions, and their pending status, would not appear to impact the analysis in this matter, as, noted above, subdivision (c) was revised, effective July 1, 2024, to state the following: (c) (1) For purposes of this part, "aggrieved employee" means any person who was employed by the alleged violator and personally suffered each of the violations alleged during the period prescribed under Section 340 of the Code of Civil Procedure..."

As such, the Court interprets this version to eliminate headless PAGA claims, like the one before the Court. This applicable version of the PAGA statute requires that an aggrieved employee personally suffered each violations alleged, even if the aggrieved employee does not seek individual claims. In other words, that the revised statute requires a plaintiff to have been employed and to have personally suffered each violation alleged during the requisite statutory period.

Plaintiff's position, that this is a Type O PAGA claim only, impermissible under the current PAGA statute. The Court will not, and cannot, modify Plaintiff's pleading to include a Type A claim and therefore evaluate whether the Type A claim is subject to the arbitration agreement at issue in this matter. The Court also cannot grant the motion to compel a non-existent Type A claim.

While the Court is not faced with a sufficiency of the pleading challenge (that is, via demurrer, motion for judgment on the pleadings, or motion to strike), the Court believes there must be some underlying viable claim to compel to arbitration. Based on the pleadings in this matter and Plaintiff's argument in opposition of this motion, the Court finds no such claim for which to consider compelling arbitration thereto.

The Court, therefore, must deny the motion to compel arbitration without prejudice, on the basis that no PAGA claim has been properly alleged.

If no one requests oral argument, under Code of Civil Procedure section 1019.5(a) and California Rules of Court, rule 3.1312(a), no further written order is necessary. The minute order adopting this tentative ruling will become the order of the court and service by the clerk will constitute notice of the order.

Court reporters are usually not available for law and motion matters in the civil division. The parties and counsel must provide their own reporter if they want a transcript of the proceedings.

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