Centers, LLC (Lowe’s), under the Private Attorneys General Act of 2004 (PAGA).
(Lab. Code, § 2698 et seq.) The trial court granted a petition to coordinate her action
with a number of other PAGA actions against Lowe’s. Lowe’s then moved to stay the
coordinated actions under section 1281.4. Lowe’s based the motion on over 50
arbitration proceedings against it, but Leenay and the other plaintiffs in the coordinated
actions are not parties in any of those arbitration proceedings. The trial court granted the
motion to stay, and Leenay filed a petition for writ of mandate asking us to vacate the
order.
We conclude that the trial court erred by granting the motion to stay. Section
1281.4 does not authorize the court to stay a plaintiff’s action on the basis of a pending
arbitration to which the plaintiff is not a party. Rather, section 1281.4 applies only when
a court has ordered parties to arbitration, the arbitrable issue arises in the pending court
action, and the parties in the arbitration are also parties to the court action. Under those
circumstances, the court must stay the action (or enter a stay with respect to the arbitrable
issue, if the issue is severable). (§ 1281.4.) Those circumstances do not exist in this case.
We therefore grant Leenay’s writ petition.
2
BACKGROUND
I. Leenay’s Complaint
In September 2019, Leenay filed her PAGA complaint against Lowe’s in Los
Angeles County Superior Court. She brought the lawsuit on behalf of current and former
commissioned employees of Lowe’s, alleging that Lowe’s miscalculated the employees’
premium pay when compensating them for missed meal periods and overtime hours.
More specifically, she alleged that (1) Lowe’s failed to include employees’ sales
commissions when calculating their regular rate of compensation for missed meal period
premiums, and (2) Lowe’s used an erroneous formula for calculating the commission
component of the overtime premium. Leenay further alleged that the commissioned
employees’ wage statements did not disclose information necessary to determine how
Lowe’s was calculating the overtime premium. In addition, she alleged that Lowe’s
failed to provide timely and uninterrupted meal periods for commissioned employees.
On the basis of the foregoing allegations, Leenay alleged causes of action for
failure to pay overtime wages (Lab. Code, § 510), failure to provide meal periods
(Lab. Code, §§ 226.7, subd. (b), 512), failure to pay missed meal period premiums
(Lab. Code, § 226.7, subd. (c)), failure to timely pay wages (Lab. Code, § 204), failure to
pay wages due upon discharge or resignation (Lab. Code, §§ 201, 202), and failure to
provide accurate itemized wage statements (Lab. Code, § 226, subd. (a)).
II. The Petition for Coordination
In May 2020, the plaintiffs in Ceniceros, et al. v. Lowe’s Home Centers, LLC
(Ceniceros) (San Diego Super. Ct. No. 37-2020-00010047-CU-OE-CTL) submitted a
3
petition for coordination of eight PAGA actions against Lowe’s. The Ceniceros plaintiffs
sought to coordinate their own action, Leenay’s action, and six other actions pending
across the state. They asserted that the eight PAGA actions involved parallel, though not
identical, claims regarding the alleged unlawful practices of Lowe’s, including failure to
provide meal or rest periods, failure to pay all wages or overtime wages, failure to
provide accurate itemized wage statements, and unlawful deductions from wages. The
Ceniceros plaintiffs argued that coordination would prevent costly and duplicative
discovery and potentially inconsistent rulings. Leenay opposed the petition for
coordination, arguing that her action was not factually or legally similar to the other
actions in the coordination petition.
The petition was assigned to a coordination motion judge in San Bernardino
County Superior Court. In August 2020, the court granted the petition in part and denied
it in part. The court ruled that six of the eight actions, including Leenay’s action, should
be coordinated. 1 The coordinated actions were assigned to the same court that ruled on
the petition for coordination.
1 In addition to Leenay’s action and the Ceniceros action, the court ordered the following actions coordinated: Morales v. Lowe’s Home Centers, LLC (San Bernardino Super. Ct. No. CIVDS1827964); Kalivas v. Lowe’s Home Centers, LLC (San Diego Super. Ct. No. 37-2019-00001954); Ayala v. Lowe’s Home Centers, LLC (Ventura Super. Ct. No. 56-2018-00521531-CU-OE-VTA); and Alvarado v. Lowe’s Home Centers, LLC (San Mateo Super. Ct. No. 18CIV05927). At some later date, the court added two more cases to the group of coordinated actions: Andrade v. Lowe’s Home Centers, LLC (San Diego Super. Ct. No. 37-2020-00022729-CU-OE-CTL) and Jenkins v. Lowe’s Home Centers, LLC (Monterey Super. Ct. No. 20CV002277).
4
III. The Motion to Stay the Coordinated Actions
In March 2021, Lowe’s moved to stay the coordinated PAGA actions pending
resolution of over 50 arbitration proceedings against Lowe’s. The arbitration claimants
were current or former employees at various Lowe’s locations in California, and they
brought their claims on an individual basis. They alleged numerous wage and hour
violations under the Labor Code, including failure to pay overtime wages, failure to pay
minimum wages, failure to provide meal and rest periods, failure to reimburse for
required expenses, failure to provide accurate itemized wage statements, and failure to
pay wages due upon discharge or resignation. The group of arbitration claimants did not
include Leenay or any of the other plaintiffs in the coordinated actions.
Lowe’s argued that section 1281.4 mandated a stay of the coordinated actions.
According to Lowe’s, the arbitrations and the coordinated actions involved overlapping
legal and factual issues, because the coordinated actions and the arbitration demands
alleged many of the same Labor Code violations, and the plaintiffs in the coordinated
actions sought to recover PAGA penalties on behalf of aggrieved employees, including
the arbitration claimants. Lowe’s argued that a stay of the coordinated actions was
necessary to preserve the jurisdiction of the arbitrator and protect against inconsistent
determinations by the court and arbitrator.
Leenay opposed the motion to stay. She argued that section 1281.4 did not
authorize the court to stay a case when a third party litigant in a separate case had been
ordered to arbitration. She further argued that her action and the arbitrations did not
involve overlapping issues—none of the arbitration demands alleged the miscalculation
5
of commissioned employees’ premium pay—so there was no risk of inconsistent rulings.
At oral argument, Leenay also argued that granting the motion would effect a perpetual
stay of the coordinated PAGA actions, because a large employer like Lowe’s, which
required employees to sign arbitration agreements, would always be defending
arbitrations alleging wage and hour violations.
In April 2021, the trial court granted the motion to stay all the coordinated actions.
The court acknowledged that the arbitration claimants were not plaintiffs in the
coordinated actions. But the court ruled that section 1281.4 “focuses on the issue rather
than the parties,” and the statute does not specify “that any of the parties subject to
arbitration must also be parties to the litigation.” The court concluded that the arbitration
claimants were in the group of aggrieved employees that the plaintiffs sought to represent
in their PAGA actions, and the proceedings would present the same issues—whether
Lowe’s violated provisions of the Labor Code. The court determined that section 1281.4
mandated a stay under those circumstances.
The court noted the perpetual stay issue identified by Leenay, describing the issue
as “[t]he best argument against a stay.” But the court nevertheless rejected the argument
and concluded that the coordinated actions should be stayed pending the outcome of the
50-plus arbitrations. The court reasoned that once those arbitrations are resolved, the
court and the parties can determine whether Leenay’s concern about perpetual
arbitrations is “real.” The court set a status conference for January 31, 2022, to assess the
status of the arbitrations and determine whether the court should continue or lift the stay.
6
Leenay petitioned this court for a writ of mandate directing the trial court to vacate
its order granting the motion to stay. We issued an order to show cause why the
requested relief should not be granted.
STANDARD OF REVIEW
Ordinarily, we review a trial court’s decision to stay an action pending arbitration
for abuse of discretion. (Jarboe v. Hanlees Auto Group (2020) 53 Cal.App.5th 539, 547
(Jarboe).) But when, as here, the court’s decision rests on the interpretation of a statute
and its application to undisputed facts, the case presents a question of law that we review
de novo. (Cal-Western Business Services, Inc. v. Corning Capital Group (2013) 221
Cal.App.4th 304, 309.)
DISCUSSION
Leenay argues that the court erred by staying the coordinated actions. We agree.
The plaintiffs in the coordinated actions are not parties to the arbitrations. Section 1281.4
does not authorize the court to stay an action on the basis of an arbitration to which the
plaintiff is not a party.
In interpreting section 1281.4, our goal “‘is to determine the Legislature’s intent so
as to effectuate the law’s purpose.’ [Citation.] ‘We begin by examining the statutory
language, giving it a plain and commonsense meaning. [Citation.] We do not, however,
consider the statutory language in isolation . . . .’” (Skidgel v. California Unemployment
Ins. Appeals Bd. (2021) 12 Cal.5th 1, 14.) Instead, we must harmonize the various parts
of a statutory scheme “‘by considering them in the context of the statutory [framework]
as a whole. [Citation.] If the statutory language is unambiguous, then its plain meaning
7
controls. If, however, the language supports more than one reasonable construction, then
we may look to extrinsic aids, including the ostensible objects to be achieved and the
legislative history.’” (Ibid.)
I. The Language of the Statutory Scheme
Section 1281.4 is part of the California Arbitration Act (CAA) (§ 1280 et seq.), “‘a
comprehensive statutory scheme regulating private arbitration in this state.’” (Haworth v.
Superior Court (2010) 50 Cal.4th 372, 380.) Section 1281.4 states: “If a court of
competent jurisdiction, whether in this State or not, has ordered arbitration of a
controversy which is an issue involved in an action or proceeding pending before a court
of this State, the court in which such action or proceeding is pending shall, upon motion
of a party to such action or proceeding, stay the action or proceeding until an arbitration
is had in accordance with the order to arbitrate or until such earlier time as the court
specifies.” (§ 1281.4.) “If the issue which is the controversy subject to arbitration is
severable, the stay may be with respect to that issue only.” (Ibid.)
“Controversy” is a defined term under the CAA. Under section 1280, subdivision
(d), it “means any question arising between parties to an agreement whether the question
is one of law or of fact or both.” The CAA is concerned with agreements to arbitrate in
particular. (See, e.g., §§ 1281 [“A written agreement to submit to arbitration an existing
controversy or a controversy thereafter arising is valid, enforceable and revocable . . .”],
1281.2 [authorizing an order to arbitrate when there is “a written agreement to arbitrate a
controversy and . . . a party to the agreement refuses to arbitrate that controversy”].) For
purposes of the CAA, an “‘[a]greement’ includes, but is not limited to, agreements
8
providing for valuations, appraisals, and similar proceedings and agreements between
employers and employees or between their respective representatives.” (§ 1280, subd.
(a).) The act thus provides a nonexclusive list of the types of agreements that may
contain arbitration provisions and fall within the act’s scope.
Incorporating the statutory definition of controversy, section 1281.4 means that if
(1) a court has ordered arbitration of a question arising between parties to an agreement,
and (2) the same question arises between those parties in a pending action, then (3) the
court “shall” stay the action (or enter a stay with respect to the arbitrable issue, if the
issue is severable). (§ 1281.4.) In other words, section 1281.4 requires that the pending
action involve both the arbitrable question and the parties in the arbitration. The plain
language of sections 1281.4 and 1280, subdivision (d), compels this conclusion.
The trial court here ruled that section 1281.4 “focuses on the issue rather than the
parties,” and the statute does not specify “that any of the parties subject to arbitration
must also be parties to the litigation.” But the principle that the parties to the arbitration
must be parties in the pending action inheres in the statutory definition of controversy.
The “controversy which is an issue” (§ 1281.4) in the action cannot be untethered from
the “parties to an agreement” (§ 1280, subd. (d)) who have been ordered to arbitration.
Lowe’s argues that the plain language of section 1281.4 requires (1) an
overlapping question of law or fact between the arbitration and the court action and (2)
only one party in common between both proceedings. But nothing in the statutory
language supports that interpretation. By definition, a controversy arises between the
9
parties to an agreement—not one party to it and a stranger to the agreement. Both parties
who have agreed to arbitrate the controversy must be parties in the pending court action.
Another section of the CAA, section 1281.2, addresses litigation with a third party
that raises “common issue[s] of law or fact.” (§ 1281.2, subd. (c).) That section governs
the court’s authority when ruling on a petition to compel arbitration. If the court finds
that a valid arbitration agreement exists, it shall order the parties to arbitrate the
controversy, unless it determines that an exception applies. (§ 1281.2, subds. (a)-(d).)
One of the exceptions applies when “[a] party to the arbitration agreement is also a party
to a pending court action or special proceeding with a third party, arising out of the same
transaction or series of related transactions and there is a possibility of conflicting rulings
on a common issue of law or fact.” (§ 1281.2, subd. (c).) In that case, the court has the
discretion to (1) refuse to enforce the arbitration agreement and order intervention or
joinder of all parties in a single action; (2) order intervention or joinder as to some or all
issues; (3) order arbitration among the parties to the arbitration agreement and stay the
pending court action with third parties; or (4) stay the arbitration pending the outcome of
the court action. (§ 1281.2, last par.)
Section 1281.2 does not speak of a “controversy” with respect to third parties for
good reason: The Legislature reserved that term for disputes between the parties to an
agreement (namely, an arbitration agreement). The statute does not, for instance,
describe the third party litigation as “involving the controversy.” Instead, section 1281.2
describes the third party litigation as “arising out of the same transaction or series of
related transactions.” (§ 1281.2, subd. (c).) By choosing materially different language to
10
describe litigation with third parties, the Legislature signaled its intent that section 1281.4
apply to pending actions between parties to an arbitration agreement. (People ex rel.
Lockyer v. R.J. Reynolds Tobacco Co. (2005) 37 Cal.4th 707, 717 [‘“When the
Legislature uses materially different language in statutory provisions addressing the same
subject or related subjects, the normal inference is that the Legislature intended a
difference in meaning”’].)
To summarize, the plain language of section 1281.4 must be read in conjunction
with the CAA’s definition of a controversy. Reading the two together, section 1281.4
authorizes a stay only if a court has ordered arbitration of a question between the parties
to an agreement, and the same question and the same parties are involved in the pending
action. Section 1281.4 is not reasonably susceptible to the trial court’s interpretation or
the one urged by Lowe’s.
II. Legislative History
Even if section 1281.4 were reasonably susceptible to multiple interpretations, the
legislative history would clarify that our interpretation is the correct one. The legislative
history establishes that the Legislature intended section 1281.4 to apply when the pending
action involves the parties to an arbitration agreement and an arbitrable question arising
between them.
Our state’s first “modern” arbitration statutes date back to 1927. (Keating v.
Superior Court (1982) 31 Cal.3d 584, 601, overruled on other grounds by Southland
Corp. v. Keating (1984) 465 U.S. 1, 16-17; Stats. 1927, ch. 225, §§ 1-14, pp. 403-408.)
The 1927 act included former section 1282, which authorized a petition to compel
11
arbitration, and former section 1284, which “provide[d] for a stay of suit pending
pp. 404-405.) The 1927 act did not include a definition of “controversy,” “agreement,”
or any other term used in the act. (Stats. 1927, ch. 225, §§ 1-14, pp. 403-408.) But the
act repeatedly used “controversy” to describe disputes that arose between parties to an
arbitration agreement. (E.g., former § 1280, added by Stats. 1927, ch. 225, § 1, p. 404
[“an agreement in writing to submit an existing controversy to arbitration . . . shall be
valid, enforceable, and irrevocable”]; former § 1281, added by Stats. 1927, ch. 225, § 2,
p. 404 [“Two or more persons may submit in writing to arbitration any controversy
existing between them at the time of the agreement to submit”]; former § 1286, added by
Stats. 1927, ch. 225, § 7, p. 406 [“any arbitration had under authority of an arbitration
clause in any contract, shall be held within the State of California, unless all parties to
such contract, after the controversy arises, agree in writing that the arbitration be held
elsewhere”].)
Section 1281.4 is derived from former section 1284. (Charles J. Rounds Co. v.
Joint Council of Teamsters (1971) 4 Cal.3d 888, 895-898 (Charles J. Rounds Co.)
[discussing how former section 1284 developed into section 1281.4]; Notes, Deering’s
Ann. Code Civ. Proc., foll. § 1281.4.) Former section 1284 stated in full: “If any suit or
proceeding be brought upon any issue arising out of an agreement providing for the
arbitration thereof, the court in which such suit or proceeding is pending, upon being
satisfied that the issue involved in such suit or proceeding is referable to arbitration, shall
stay the action until an arbitration has been had in accordance with the terms of the
12
agreement; provided, that the applicant for the stay is not in default in proceeding with
such arbitration.” (Stats. 1927, ch. 225, § 5, p. 405 (italics in original); Clogston v.
Schiff-Lang Co. (1935) 2 Cal.2d 414, 415.)
Former section 1284 governed stays pending arbitration until the 1960’s, when the
Legislature revised the arbitration statutes and enacted the CAA. (Stats. 1961, ch. 461,
§§ 1-8, pp. 1540-1552; Aguilar v. Lerner (2004) 32 Cal.4th 974, 985.) Before the CAA’s
enactment, the Legislature “authorized the California Law Revision Commission to study
and determine whether the statutory arbitration scheme should be revised.” (Moncharsh
v. Heily & Blase (1992) 3 Cal.4th 1, 24; Recommendation and Study Relating to
Arbitration (Dec. 1960) 3 Cal. Law Revision Com. Rep. (1961) p. G-1 (Arbitration
Study).)
The commission submitted its report to the Legislature in December 1960.
(Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at p. G-1.) The Law Revision
Commission drafted section 1281.4, and the Legislature enacted it without change. The
report of the commission therefore “is entitled to substantial weight in construing the
statute.” (Gaines v. Fidelity National Title Ins. Co. (2016) 62 Cal.4th 1081, 1096, fn. 6;
see also Rojas v. Superior Court (2004) 33 Cal.4th 407, 418-422 [considering the Law
Revision Commission’s report in examining the legislative history of a statute]; Hale v.
Southern Cal. IPA Medical Group, Inc. (2001) 86 Cal.App.4th 919, 927 [“reports and
interpretive opinions of the Law Revision Commission are entitled to great weight”].)
The Law Revision Commission’s report discussed a number of issues with the
then-existing arbitration scheme. One of the commission’s concerns related to former
13
section 1284. (Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at p. G-39.)
Under the heading, “Enforcement of Arbitration Agreements,” the commission’s report
observed that the statutory scheme “should include remedies designed to frustrate the
breach of [arbitration] agreements and to provide relief for the nonbreaching party.” (Id.
at p. G-35, boldface and capitalization omitted.) The report characterized the stay
authorized by former section 1284 as one of those remedies. (Id. at p. G-36.) The
commission observed that, under former section 1284, “[w]hen a party requests a stay in
a civil action on the basis of an agreement to arbitrate, he is using that agreement to
arbitrate as a defense.” (Id. at p. G-39.) But former section 1284 “provide[d] for a stay
of judicial proceedings merely upon a showing that the parties have agreed to arbitrate
the matter involved” (id. at p. G-7), and there was no provision compelling the parties to
arbitrate even though the action was stayed. (Id. at p. G-39.)
The commission reasoned that if a party were going to seek a stay of judicial
proceedings on the basis of an arbitration agreement, that party “should show his [or her]
willingness to proceed with the arbitration as the means of settling the dispute,” and
“[t]he best way for the defendant to demonstrate this willingness is to obtain an order to
compel arbitration.” (Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at p. G-
39.) It therefore recommended that the revised arbitration statutes require “the initiation
of a proceeding to compel arbitration under the agreement” as “a condition precedent for
the granting of a stay.” (Ibid.) The commission explained that such a revision would
clarify the test for determining whether the moving party had “default[ed]” on the
agreement to arbitrate. (Ibid.; see former § 1284, Stats. 1927, ch. 225, § 5, p. 405 [the
14
court shall stay the pending action if “the applicant for the stay is not in default in
proceeding with” the arbitration].)
The commission consequently drafted and proposed section 1281.4. (Arbitration
Study, supra, 3 Cal. Law Revision Com. Rep. at pp. G-11, G-13.) The proposed statute
required a showing that (1) “a court of competent jurisdiction, whether in this State or
not, has ordered arbitration of [the] controversy” or (2) “an application has been made to
a court of competent jurisdiction, whether in this State or not, for an order to arbitrate
[the] controversy.” (Id. at p. G-13.) The Legislature enacted the commission’s proposed
statute verbatim, and the Legislature has not amended section 1281.4 since then. 2
(§ 1281.4, added by Stats. 1961, ch. 461, § 2, pp. 1541-1542.)
The commission also drafted and proposed section 1280, including the
subdivisions defining “controversy” and “agreement.” (Arbitration Study, supra, 3 Cal.
Law Revision Com. Rep. at pp. G-11 to G-12.) Regarding the definition of controversy,
the report observed that California case law treated both questions of law and questions
of fact as arbitrable, whereas other jurisdictions permitted parties to submit questions of
law to a court before completing arbitration. (Id. at pp. G-31 to G-32.) The commission
recommended codifying California case law on this point “in the interest of clarity.”
(Id. at p. G-32; see also id. at p. G-63 [recommending the codification of case law “so as
2 The new section 1284 proposed by the commission and enacted by the Legislature was unrelated to stays of judicial proceedings. (Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at pp. G-11, G-15 to G-16; Stats. 1961, ch. 461, § 2, pp. 1544-1545.) It concerned applications to correct an arbitrator’s award. (§ 1284, added by Stats. 1961, ch. 461, § 2, pp. 1544-1545.)
15
to provide expressly” that “[q]uestions of both law and fact are within the arbitration
statute”].) It thus proposed to define controversy as “any question arising between parties
to an agreement whether such question is one of law or of fact or both.” (Id. at p. G-12.)
As to the definition of agreement, the commission observed that California courts
had historically excluded appraisal and valuation proceedings from the scope of the
arbitration statutes. (Arbitration Study, supra, 3 Cal. Law Revision Com. Rep. at p. G-
34.) The report recommended that the Legislature expressly extend the statutes’ scope to
appraisal and valuation proceedings. (Id. at pp. G-35, G-63.) It also recommended that
the Legislature eliminate an existing statutory exclusion for “‘contracts pertaining to
labor’” (id. at p. G-32) and codify case law holding that “labor-management arbitration
agreements” fell within the scope of the arbitration statutes. (Id. at p. G-34.) The
commission therefore proposed adding the following definition: “‘Agreement’ includes
but is not limited to agreements providing for valuations, appraisals and similar
proceedings and agreements between employers and employees or between their
respective representatives.” (Id. at p. G-12.)
Like section 1281.4, the Legislature enacted the commission’s proposed section
1280 without change. (Stats. 1961, ch. 461, § 2, p. 1540; Arbitration Study, supra, 3 Cal.
Law Revision Com. Rep. at p. G-12.) Since then, the Legislature has made only minor,
nonsubstantive changes to the provisions defining controversy and agreement. (Stats.
2019, ch. 870, § 2.)
The foregoing legislative history demonstrates three things. First, former
section 1284 enforced arbitration agreements by providing a remedy when a party had
16
filed suit on arbitrable issues and thus breached an arbitration agreement. The statute
mandated a stay when the pending lawsuit was “brought upon any issue arising out of an
[arbitration] agreement,” and the court was “satisfied” that the issue was “referable to
arbitration.” (Stats. 1927, ch. 225, § 5, p. 405.) The Law Revision Commission
recognized the remedial purpose of former section 1284, and our Supreme Court has as
well. In Charles J. Rounds Co., the court discussed cases in which the defendants had
asserted the failure to pursue contractual arbitration as an affirmative defense. (Charles
J. Rounds Co., supra, 4 Cal.3d at pp. 894-895.) The trial courts in those cases had
entered judgment for the defendants or dismissed the actions on the basis of the
arbitration defense. (Ibid.) The high court then characterized former section 1284 as
“[a]n alternative remedy for failure to arbitrate.” (Charles J. Rounds Co., at p. 895.) It
noted that the statute “was utilized primarily where plaintiff’s suit involved some issues
that were not covered by or susceptible to arbitration. In such cases the entire case would
not be dismissed for failure to arbitrate.” (Ibid.) Instead, under former section 1284, the
trial court could stay the case pending arbitration of the arbitrable issues between the
parties. (Charles J. Rounds Co., at pp. 895-896.) But former section 1284 was just as
applicable when the action involved arbitrable issues only—the defendant could choose
to seek a stay rather than assert the failure to arbitrate as an affirmative defense. (Charles
J. Rounds Co., at p. 896.) Former section 1284’s function as a remedy for breach of an
arbitration agreement thus was clear.
Second, when the Law Revision Commission proposed section 1281.4 to replace
former section 1284, there was no indication in the commission’s report that the
17
replacement statute was meant to take on a different purpose. That is, the replacement
statute would continue to enforce arbitration agreements by providing a remedy for the
failure to arbitrate. Indeed, the commission discussed and recommended only one
substantive change to former section 1284: Require a showing that a court had ordered
the parties to arbitrate or that an application for such an order was pending. That
recommendation (and the Legislature’s adoption of it) did not change the purpose of the
statute. It made the statue a more effective tool to enforce arbitration agreements and
cure breaches of them. (See MKJA, Inc. v. 123 Fit Franchising, LLC (2011) 191
Cal.App.4th 643, 660 [a stay under § 1281.4 “is essential to the enforceability of an
arbitration agreement since, in the absence of such a stay, a party could simply litigate
claims that it had agreed to arbitrate”].)
Third, even before the CAA, the statutory scheme used the term “controversy” to
describe disputes between parties to an arbitration agreement. And when the Law
Revision Commission proposed the definitions of controversy and agreement, the new
definitions were not intended to change that meaning. The commission merely intended
(1) to clarify that any type of question, whether legal or factual, was arbitrable and (2) to
broaden the range of agreements that would be treated as enforceable arbitration
agreements.
Accordingly, the legislative history establishes that section 1281.4 was meant to
remedy a party’s failure to arbitrate. A stay of an action brought by a party who has not
agreed to arbitrate his or her claims does not achieve that goal. The facts of this case
illustrate the point. Lowe’s does not argue that the coordinated actions are subject to
18
arbitration. Indeed, an employer cannot compel an employee to arbitrate a PAGA action
on the basis of a predispute arbitration agreement. (Collie v. The Icee Co. (2020) 52
Cal.App.5th 477, 480.) Staying the coordinated actions consequently does not enforce
any arbitration agreements between the plaintiffs and Lowe’s or remedy any breach of
such agreements.
For these reasons, the legislative history of section 1281.4 establishes that the
Legislature wanted the statute to apply to actions that raise arbitrable claims between
parties to an arbitration agreement. Along with an order to arbitrate, the stay remedies a
breach of an arbitration agreement and promotes enforcement of it. That is consistent
with our interpretation of the plain language of sections 1281.4 and 1280, subdivision (d).
III. Application to the Motion to Stay
In this case, the trial court erred by granting the motion to stay under section
1281.4. That section applies if a court has ordered arbitration of a question arising
between parties to an agreement, and that question and those parties are involved in the
present action. But Lowe’s presented no evidence that a court has ordered Leenay or the
other plaintiffs in the coordinated actions to arbitrate a question that arises in those
actions. Leenay and the other plaintiffs are not among the arbitration claimants who have
brought arbitration demands against Lowe’s. Nor did Lowe’s offer any evidence that a
court has ordered the state—in whose shoes Leenay and the other PAGA plaintiffs
stand—to arbitrate a question arising in the coordinated actions. (Kim v. Reins
International California, Inc. (2020) 9 Cal.5th 73, 87 (Kim) [“Plaintiffs may bring a
19
PAGA claim only as the state’s designated proxy”].) It follows that section 1281.4 has
no application here.
Moreover, it does not matter whether the arbitration claimants qualify as
“‘aggrieved employee[s]’” in the coordinated PAGA actions. (Lab. Code, § 2699,
subd. (c).) Aggrieved employees are nonparties in PAGA actions. (Arias v. Superior
Court (2009) 46 Cal.4th 969, 986.) Section 1281.4 does not authorize a stay based on a
nonparty’s arbitration claim.
The case law on which Lowe’s relies does not compel a different conclusion. In
one of the cases, Franco v. Arakelian Enterprises, Inc. (2015) 234 Cal.App.4th 947 , the
plaintiff was bound by an arbitration agreement with the sole defendant, her employer.
(Id. at p. 952.) The court compelled the parties to arbitration on most of the claims and
stayed the nonarbitrable PAGA claim. (Id. at pp. 965-966.) Lowe’s contends that
Franco is “directly on point,” but the case is materially distinguishable. The Franco stay
was based on an arbitration between the plaintiff and the defendant in the pending action.
Again, no court has ordered Leenay and the other plaintiffs in the coordinated actions to
arbitrate their claims with Lowe’s, and the plaintiffs have no pending arbitrations with
Lowe’s.
The other cases on which Lowe’s relies are similarly inapposite. In those cases,
the plaintiffs were bound by an arbitration agreement with at least one defendant, but the
plaintiffs had combined their arbitrable claims with claims against third parties. The
courts compelled the plaintiffs to arbitration on the arbitrable claims and stayed their
nonarbitrable claims against the third parties. (Heritage Provider Network, Inc. v.
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Superior Court (2008) 158 Cal.App.4th 1146, 1148-1149, 1151; Federal Ins. Co. v.
Superior Court (1998) 60 Cal.App.4th 1370, 1372, 1375 (Federal Ins. Co.); Marcus v.
Superior Court (1977) 75 Cal.App.3d 204, 207-208; Cook v. Superior Court of Los
Angeles County (1966) 240 Cal.App.2d 880, 884-885.) Thus, while the judicial
proceedings included defendants who were not parties to the arbitration, the stays
nevertheless were based on arbitrations between the plaintiffs and at least one defendant.
None of those cases assists Lowe’s. In each of those cases, both of the parties in
the underlying arbitration were parties in the judicial proceedings, and they had agreed to
arbitrate a question that arose in the judicial proceedings. That is what section 1281.4
requires. None of the cases held that an arbitration proceeding may be used to stay an
action brought by a plaintiff who is not a party to the arbitration. None of the cases even
considered that proposition, so they are not authority for it. (Mercury Ins. Group v.
Superior Court (1998) 19 Cal.4th 332, 348 [“A decision, of course, is not authority for
what it does not consider”]; Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn. 2 [“Language
used in any opinion is of course to be understood in the light of the facts and the issue
then before the court, and an opinion is not authority for a proposition not therein
considered”].)
Finally, we note that the correct interpretation of section 1281.4 resolves the
perpetual stay problem identified by Leenay. Under the erroneous interpretation of the
statute urged by Lowe’s, it would be entitled to stay Leenay’s action any time a nonparty
to that action files an arbitration claim alleging Labor Code violations by Lowe’s,
whether the stay lasts “until an arbitration is had . . . or until such earlier time as the court
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specifies.” (§ 1281.4.) Such a result would repeatedly and indefinitely delay Leenay’s
action. But under a correct interpretation of section 1281.4, the trial court is not
authorized to stay her action on the basis of a nonparty’s arbitration claim. That is the
rule for all actions, but it is important particularly in PAGA actions, which are law
enforcement actions on behalf of the state. (Kim, supra, 9 Cal.5th at p. 86 [“a PAGA
claim is an enforcement action . . . , with the PAGA plaintiff acting on behalf of the
government”].) When an employee chooses to forgo individual claims and brings a
PAGA action on behalf of the state, the “employer should not be able [to] dictate how . . .
the representative action proceeds” by capitalizing on another employee’s decision to
bring arbitrable claims. (Jarboe, supra, 53 Cal.App.5th at p. 557.) That result would
create an unwarranted obstacle to “‘the effective prosecution of representative PAGA
actions’” and undermine the Legislature’s objective to ‘“augment the limited enforcement
capability”’ of the state. (Kim, at pp. 87, 86.)
For all of these reasons, we conclude that the court erred by granting the motion to
stay the coordinated actions. Section 1281.4 does not authorize a stay based on a
nonparty’s arbitration claim. 3
3 In its motion to stay, Lowe’s argued that apart from section 1281.4, the court had discretion to stay the coordinated actions under the court’s “inherent authority to promote judicial efficiency and comity.” The trial court noted that argument, but it did not otherwise discuss the argument in its ruling. Lowe’s does not argue that we should uphold the court’s ruling on this alternative ground. In any event, the alternative argument lacks merit. As to judicial efficiency, the pertinent section of the motion cited only two cases in which courts had stayed an action pending arbitration. Those courts relied on section 1281.4 to stay the actions, not the courts’ inherent authority to promote judicial efficiency. (Federal Ins. Co., supra, 60 Cal.App.4th at pp. 1374-1375 [stayed
22
IV. Motion to Dismiss the Writ Petition as Moot
Lowe’s filed a motion to dismiss Leenay’s writ petition as moot, after the parties
had fully briefed this matter and we issued our tentative opinion. According to Lowe’s,
the trial court has terminated the section 1281.4 stay, so Leenay has obtained the relief
that she seeks from this court. Lowe’s also filed a request for judicial notice in support of
the motion to dismiss. We grant the request for judicial notice but deny the motion to
dismiss.
Lowe’s submitted documentation showing that in April 2022, the trial court held a
hearing on a motion to lift the stay filed by Lowe’s. The minute order states: “Motion to
Lift Current Stay of Proceedings is granted. See the Court’s written tentative ruling for
specifics.” The minute order further states that the court adopted the tentative ruling.
The tentative ruling states: “If all fifty-four arbitrations are completed, the court will lift
the stay . . . . If all the arbitrations are not completed, the court will order that the stay
will be lifted automatically upon completion of all the arbitrations.”
The reporter’s transcript of the hearing discloses no express ruling granting the
motion or lifting the stay. The court asked whether the parties had read the tentative
under section 1281.4]; Coast Plaza Doctors Hospital v. Blue Cross of California (2000) 83 Cal.App.4th 677, 693 [quoting Federal Ins. Co., at p. 1375, as authority for the stay].) As to comity, Lowe’s argued that California courts have discretion to stay an action when an “an action already pending in a court of another jurisdiction” involves “the same parties and the same subject matter.” (Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208, 215.) For that argument, Lowe’s relied on federal multidistrict litigation pending in the Western District of North Carolina. But the plaintiffs in the coordinated actions were not plaintiffs in the multidistrict litigation, and the multidistrict litigation did not allege any violations of California law.
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ruling, and it heard argument. Lowe’s informed the court that it had fully resolved 12
arbitrations and that the remaining 42 arbitrations were stayed pending finalization of a
settlement. The majority of the discussion, however, involved case management issues;
the court reserved hearing dates for various motions and ordered Lowe’s to provide
supplemental discovery responses.
The mootness doctrine permits an appellate court to dismiss proceedings if later
events render it impossible for the appellate court to grant effective relief. (Lockaway
Storage v. County of Alameda (2013) 216 Cal.App.4th 161, 174-175.) But ‘“[i]f an
action involves a matter of continuing public interest and the issue is likely to recur, a
court may exercise an inherent discretion to resolve that issue, even though an event
occurring during its pendency would normally render the matter moot.’” (Morehart v.
County of Santa Barbara (1994) 7 Cal.4th 725, 746-747.) The public interest exception
to the mootness doctrine is well-established. (John A. v. San Bernardino City Unified
School Dist. (1982) 33 Cal.3d 301, 307.)
Here, Lowe’s has not shown that the dispute between the parties is moot. The
minute order adopts the tentative ruling, and the tentative ruling conditions the lifting of
the stay on the completion of all 54 arbitrations. We have no confirmation that all 54
arbitrations have concluded. Consequently, the record before us still does not contain a
court order lifting the section 1281.4 stay. And although the court and the parties appear
to have proceeded on the assumption that the stay was lifted, the court’s statements at the
hearing do not permit us to interpret the court’s written orders to mean something other
than what they state.
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Even if we had a court order lifting the stay, we would exercise our discretion to
resolve the issues in this proceeding under the public interest exception. The proper
interpretation of a statute presents a matter of public interest. (Hamilton v. Town of Los
Moreover, the issues in this case are likely to recur. The record shows that other courts
have misinterpreted section 1281.4 in the same manner as the trial court here. In support
of its motion to stay, Lowe’s submitted orders entered by two departments of the San
Francisco County Superior Court. Both orders applied section 1281.4 to stay actions on
the basis of pending arbitrations to which the plaintiffs were not parties. And the issue
could recur in this action if yet another employee files an arbitration claim against
Lowe’s alleging Labor Code violations. In short, this matter falls squarely within the
public interest exception to the mootness doctrine.
DISPOSITION
The request for judicial notice is granted. The motion to dismiss the petition for
writ of mandate is denied. Let a peremptory writ of mandate issue directing the superior
court to (1) vacate the order of April 23, 2021, granting the motion to stay the
coordinated actions under section 1281.4, and (2) enter an order denying that motion.
Leenay shall recover her costs incurred in this writ proceeding. (Cal. Rules of Court, rule
8.493(a)(1).)
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Leenay shall prepare the peremptory writ of mandate, have the peremptory writ of
mandate issued, serve copies on all of the parties, and file the original with the clerk of
this court, together with proof of service on all parties.
CERTIFIED FOR PUBLICATION
MENETREZ J.
We concur:
RAMIREZ P. J. SLOUGH J.
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AI Brief
AI-generated · verify before citing
Holding. Section 1281.4 of the Code of Civil Procedure does not authorize a court to stay a plaintiff's action based on a pending arbitration to which the plaintiff is not a party. The statute requires that the pending action involve both the arbitrable question and the parties to the arbitration agreement.
Issues
Does Code of Civil Procedure section 1281.4 authorize a court to stay a plaintiff's action based on a pending arbitration to which the plaintiff is not a party?
Disposition. granted
Quotations verified verbatim against the opinion
“Section 1281.4 does not authorize the court to stay a plaintiff’s action on the basis of a pending arbitration to which the plaintiff is not a party.”
“The “controversy which is an issue” (§ 1281.4) in the action cannot be untethered from the “parties to an agreement” (§ 1280, subd. (d)) who have been ordered to arbitration.”