Motion to Stay
Case Number
Case Type Civil Law & Motion Hearing Date / Time Fri, 06/12/2026 - 10:00 Nature of Proceedings CMC; Motion to Stay Tentative Ruling Dulce Fuentes etc. v. California Psychcare, Inc. Case No. 24CV06834 Hearing Date: June 12, 2026 HEARING: Motion to Stay During Appeal ATTORNEYS: For Plaintiff Dulce Fuentes on behalf of employees: Douglas Han, Shunt Tatavos-Gharajeh, Michael Jones, Justice Law Corporation For Defendant California Psychcare, Inc.: Adrienne L. Conrad, Marco A. Garcia, Kimberly R. Ophaso, Jackson Lewis P.C.
TENTATIVE RULING: For all reasons set forth herein, the motion of defendant California Psychcare, Inc., to stay pending appeal is granted. This action is stayed pending a resolution of defendant's appeal of this court's order dated December 12, 2025, denying defendant's motion to compel arbitration.
Background: On December 6, 2024, plaintiff Dulce Fuentes filed the original complaint in this action and set forth one cause of action under the Private Attorneys General Act of 2004 (PAGA). The complaint asserts PAGA claims based upon various violations of the Labor Code. On January 7, 2025, defendant California Psychcare, Inc. (Psychcare) filed its answer to the complaint generally denying the allegations thereof and asserting 23 affirmative defenses.
On June 9, 2025, Psychcare filed a motion for judgment on the pleadings asserting that plaintiff failed to state a cause of action because plaintiff asserts a non-individual PAGA and does not seek to assert any individual PAGA claim against Psychcare. Alternatively, Psychcare sought to stay the action pending disposition of the California Supreme Court's review in Leeper v. Shipt, Inc. (2024) 107 Cal.App.5th 1001, review granted April 16, 2025, S289305 (Leeper).
On August 1, 2025, the court denied Psychcare's motion for judgment on the pleadings or alternatively to stay the action. On August 15, 2025, Psychcare filed a motion to compel arbitration. On December 12, 2025, the court denied Psychcare's motion to compel arbitration, finding that Psychcare had waived its arbitration rights by moving for judgment on the pleadings in court, the representative PAGA claims were not subject to arbitration, and based on other circumstances (December 12 Order).
On January 15, 2026, Psychcare filed a notice of appeal of the court's December 12 Order denying Psychcare's motion to compel arbitration. On February 23, 2026, Psychcare filed a motion to stay this action pending appeal.
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Psychcare argues that SB 365, which added language to Code of Civil Procedure section 1294, subdivision (a), that an appeal of an order denying a motion to compel arbitration does not result in an automatic stay, is preempted by the Federal Arbitration Act (FAA). (See Code Civ. Proc., subd (a), as amended by Stats. 2023, ch. 710 (S.B. 365), Sec. 1, eff. Jan. 1, 2024.) Psychcare argues that SB 365 improperly singles out arbitration agreements for less favorable treatment than non-arbitration contracts and is therefore preempted by the FAA. Psychcare also argues that the court should exercise its discretion to stay this matter pending the outcome of its appeal.
Plaintiff opposes this motion, arguing that there is no federal preemption in this context and that the court should not exercise its discretion to stay this action pending Psychcare's appeal of the December 12 Order. Plaintiff argues that Psychcare is not likely to succeed on the merits of its appeal and the equities do not favor a stay.
Analysis: "An aggrieved party may appeal from ... [a]n order dismissing or denying a petition to compel arbitration. Notwithstanding Section 916, the perfecting of such an appeal shall not automatically stay any proceedings in the trial court during the pendency of the appeal." (Code Civ. Proc., Sec. 1294, subd. (a).)
Although a stay under Code of Civil Procedure section 916 is not "automatic" in this context, [t]he purpose of the ... stay provision of section 916, subdivision (a) 'is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided. The [automatic stay] prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it.' " (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189.)
"[A] court ordinarily has inherent power, in its discretion, to stay proceedings when such a stay will accommodate the ends of justice." (OTO, L.L.C. v. Kho, (2019) 8 Cal.5th 111, 141.) "Trial courts generally have the inherent power to stay proceedings in the interests of justice and to promote judicial efficiency." (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484, 1489.)
Evaluating the relative harm, if a stay is granted, the status quo is maintained. Plaintiff will not be permitted to move forward and pursue PAGA penalties in the interim. However, if the appeal is ultimately denied, plaintiff would be able to pick back up where the litigation was left before appeal. The primary harm to plaintiff if the stay is granted is delay in potentially recovering PAGA penalties.
On the other hand, if the stay is denied, Psychcare could be subjected to representative PAGA proceedings that may not be available in arbitration. Moreover, as noted by Psychcare, whether and under what circumstances a "headless" PAGA claim can move forward is currently at issue before the California Supreme Court. (See Leeper, supra, 107 Cal.App.5th 1001, review granted by Leeper v. Shipt (Cal. 2025) 331 Cal.Rptr.3d 450.)
The court also notes that the State of California is the real party in interest as to these PAGA claims. (See Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 81.) The court also notes that plaintiff is not pursuing any individual claim per his complaint. (See Compl., p. 2, ll. 1-3 ["Plaintiff ... submits this Complaint against Defendant ... as an exclusively representative action ...."].) The court finds that these circumstances mitigate the impact of the requested stay on plaintiff.
Considering all the circumstances, the court will exercise its discretion, grant Psychcare's motion, and stay this matter pending the resolution of Psychcare's appeal of the December 12 Order. Based on this outcome, Psychcare's preemption argument is moot.
Tentative Ruling: Cornelius Case Houweling et al vs Nathan R Homan et al Tentative Ruling: Cornelius Case Houweling et al vs Nathan R Homan et al