Wilkerson, Alexa et al vs. Redwood Family Care Network, Inc. et al

Rules of Court, rule 3.1330; see Condee v. Longwood Mgmt. Corp. (2001) 88 Cal.App.4th 215, 218.) Absent a challenge by the nonmoving party, this burden is met by simply providing a copy of the arbitration agreement. (Baker v. Italian Maple Holdings, LLC (2017) 13 Cal. App. 5th 1152, 1160; Cal. Rules of Court, rule 3.1330.) "For purposes of a petition to compel arbitration, it is not necessary to follow the normal procedures of document authentication." (Condee, supra, 88 Cal.App.4th at 218; Sprunk v.

Prisma LLC (2017) 14 Cal.App.5th 785, 793.)

However, when the opposing party disputes the agreement, then the opposing party must provide evidence to challenge its authenticity. (Gamboa v. Northeast Community Clinic (2021) 72 Cal.App.5th 158, 165.) Under California law, "[t]he burden of persuasion is always on the moving party to prove the existence of an arbitration agreement with the opposing party by a preponderance of the evidence ...." (Gamboa, supra, 72 Cal.App.5th at 164-165.) "However, the burden of production may shift in a three-step process." (Gamboa, supra, 72 Cal.App.5th at. 165.) "First, the moving party bears the burden of producing 'prima facie evidence of a written agreement to arbitrate the controversy.' [Citation.]" (Gamboa, supra, 72 Cal.App.5th at p. 165.) "The moving party 'can meet its initial burden by attaching to the [motion or] petition a copy of the arbitration agreement purporting to bear the [opposing party's] signature.' [Citation.]" (Id.) "For this step, 'it is not necessary to follow the normal procedures of document authentication.' [Citation.]" (Id.)

Here, Defendants have provided copies of the executed MAA as to Plaintiff Wilkerson and the Employee Notice as to Plaintiff Sellers in satisfaction of this requirement. Given no opposition, the Court finds an agreement to arbitrate formed with each Plaintiff.

Facts - Application of FAA Defendant Redwood provides the declaration of its CEO, who states that SAILS Group, Inc. is a wholly owned subsidiary of Redwood Family Care Network, Inc. and SAILS Bakersfield, Inc. is a wholly owned subsidiary of SAILS Group, Inc. (Declaration of Cottrell P.P.1-4.) Further that "Defendants engage in interstate commerce in a number of ways including, without limitation, using interstate communication networks such as the internet, cellular phone, and U.S. Mail to conduct business" and "Defendants purchase or lease numerous products originating from outside California, including, but not limited to, food and cleaning supplies." (Declaration of Cottrell P.P.7, 8.)

Additionally, that Defendants lease vehicles from a company based in Missouri and obtain vehicles regularly used in operations from states outside of California. (Declaration of Cottrell P.9.) Finally, that Defendants use banking institutions and corporate support services based outside of California. (Declaration of Cottrell P.10.)

Authority and Analysis - Application of FAA "A party seeking to enforce an arbitration agreement has the burden of showing FAA preemption. [Citation.] For example, a petitioner seeking an order to compel arbitration must show that the subject matter of the agreement involves interstate commerce." (Lane v. Francis Capital Management LLC (2014) 224 Cal.App.4th 676, 687-688.) "[T]he word 'involving,' ... signals an intent to exercise Congress' commerce power to the full." (Allied-Bruce Terminix Companies, Inc. v.

Dobson (1995) 513 U.S. 265, 277.) The words "involves interstate commerce " "therefore cover more than only persons or activities within the flow of interstate commerce." (Id. at 273.) "Congress' Commerce Clause power 'may be exercised in individual cases without showing any specific effect upon interstate commerce if in the aggregate the economic activity in question would represent a general practice subject to federal control." (Citizens Bank v. Alafabco, Inc. (2003) 539 U.S. 52, 56-57.) In Allied-Bruce, the Supreme Court held that an arbitration clause contained in a residential pest control contract between an Alabama customer and a local Allied-Bruce Terminix franchise "involved interstate commerce " because, in part, "the termite-treating and house-repairing material used by" the defendant "came from outside Alabama." (Allied-Bruce, supra, 513 U.S. at 282.)

Here, Defendants' use of services and products outside the state involve interstate commerce for the purpose of conducting business meet the standard above and therefore the Court finds the FAA applies.

Facts - Scope of Agreement and PAGA Plaintiff Wilkerson's MAA states: "This is a mutual agreement and is binding for claims of either party. For example, such claims include claims under Federal, State, and Local statutory or common law, including, but not limited to, wage and overtime claims under the California Labor Code or Federal Fair Labor Standards Act, claims under the California Fair Employment and Housing Act (Gov. Code Sec. 12940, et seq.), the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, the Americans with Disabilities Act, the law of contract and the law of tort. ...

Unless controlling authority requires otherwise, there shall be no right or authority for any dispute to be heard or arbitrated on a class action basis. Applicant agrees that this Waiver of Class Action applies to all claims of Applicant including claims arising prior to the date of this Agreement. The arbitrator may not consolidate more than one person's claims." Plaintiff Sellers' Employee Notice states that: "any legal dispute...arising from or relating to my employment, wages...will be resolved exclusively through binding arbitration...and that I will participate only in my individual capacity, not as a member or representative of a class or part of a class action or in a consolidated case..."

Authority and Analysis - Scope of Agreement and PAGA Both the MAA and Employee Notice apply to the PAGA claims asserted in this matter. In Viking River, the United States Supreme Court held that, under an agreement permitting such, a PAGA cause of action may be divided into individual and representative claims and that the individual claims may be ordered to arbitration: "PAGA authorizes any 'aggrieved employee' to initiate an action against a former employer 'on behalf of himself or herself and other current and former employees' to obtain civil penalties that previously could have been recovered only by the State in an [Labor Workforce and Development Agency] enforcement action." (Viking River Cruises, Inc. v.

Moriana (2022) 596 U.S. 639, 645.) The "individual PAGA claim" is the claim for the violations suffered by the aggrieved employee and the "representative PAGA claim" is the PAGA claim arising out of events involving other employees. (Id. at 648.)

The Viking River decision "left undisturbed" and "intact" both of the rules from Iskanian, supra, 59 Cal.4th 348 that (1) prohibited categorical waivers of the right to bring a PAGA action in any forum and (2) prohibited waivers of PAGA claims on behalf of other employees, i.e., non-individual or representative claims. (Adolph, supra, 14 Cal.5th at 1117-1118.) However, the United States Supreme Court held that the third rule, which prohibited the "'division of PAGA actions into individual and non-individual claims through an agreement to arbitrate'" was preempted by the FAA. (Id. at 1118.)

Specifically, the Viking River Court stated: "The agreement between Viking and Moriana purported to waive 'representative PAGA claims. Under Iskanian, this provision was invalid if construed as a wholesale waiver of PAGA claims. And under our holding, that aspect of Iskanian is not preempted by the FAA, so the agreement remains invalid insofar as it is interpreted in that manner. But the severability clause in the agreement provides that if the waiver provision is invalid in some respect, any portion that remains valid must still be 'enforced in arbitration.'

Based on this clause, Viking was entitled to enforce the agreement insofar as it mandated arbitration of Moriana's individual PAGA claim." (Id. at 1924-1925.)

As summarized by Adolph: "The high court explained that an anti-splitting rule 'unduly circumscribes the freedom of parties to determine "the issues subject to arbitration" and "the rules by which they will arbitrate," [citation], and does so in a way that violates the fundamental principle that "arbitration is a matter of consent."' (Viking River, at p. 659.) Requiring parties to adjudicate a PAGA action entirely in one proceeding, the high court said, 'compels parties to either go along with an arbitration in which the range of issues under consideration is determined by coercion rather than consent, or else forgo arbitration altogether.

Either way, the parties are coerced into giving up a right they enjoy under the FAA.' (Viking River, at p. 661.) Thus, Viking River requires enforcement of agreements to arbitrate a PAGA plaintiff's individual claims if the agreement is covered by the FAA." (Adolph, supra, 14 Cal.5th at 1118-1119.)

"There is no individual component to a PAGA action because '"every PAGA action . . . is a representative action on behalf of the state."' [Citation.]" (Kim v. Reins International California, Inc. (2020) 9 Cal.5th 73, 87.) 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. (See Galarsa v. Dolgen California, LLC (2023) 88 Cal.App.5th 639, 648 [referring to these claims as "Type A" claims].) 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. (Galarsa, at 649 [referring to these claims as "Type O" claims].)

As summarized by the California Supreme Court in Adolph, an agreement that is covered by the FAA may require arbitration of "alleged Labor Code violations personally sustained by a PAGA plaintiff -- so-called 'individual' claims." (Adolph, supra, 14 Cal.5th at 1114, 1119.) "'[W]hen an appropriate arbitration agreement exists'" and "a plaintiff has filed a PAGA action comprised of individual and non-individual claims," the trial court must "'bifurcate and order [the] individual PAGA claim[] to arbitration.'" (Id. at 1126, 1123.)

In this circumstance, the "order compelling arbitration of [the] individual claim[] does not strip the plaintiff of standing to litigate non-individual claims [i.e., claims on behalf of other employees] in court." (Id. at 1123) Instead, "'the individual PAGA claim[] in arbitration remain[s] part of the same lawsuit as the representative claims remaining in court.'" (Id. at 1126.) The plaintiff would thus be "'pursuing a single PAGA action "on behalf of [himself or herself] and other current or former employees," albeit across two fora.' [Citation.]" (Id.)

As such, the Court, as requested by Defendants, splits the PAGA claim, orders arbitration of the Type A "individual" claims and stays this matter pending the arbitration as to Plaintiffs' Type O "representative" claims.

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. Re: Ogata, Angelina vs. Davidian III, Sarkis