Justia Arbitration & Mediation Opinion Summaries

Mone Yvette Sanders filed a class and representative action against her former employer, Edward D. Jones & Co., L.P., alleging wage and hour claims under the Labor Code and a cause of action under the Private Attorneys General Act of 2004 (PAGA). The trial court granted Edward Jones’s motions to compel arbitration of Sanders’s individual Labor Code and PAGA claims and stayed the representative PAGA cause of action pending arbitration. Sanders initiated arbitration, but Edward Jones failed to pay $54,000 in fees within 30 days as required by Code of Civil Procedure section 1281.98. Sanders then moved to vacate the order compelling arbitration and proceed in court.The trial court initially granted Sanders’s motion, finding section 1281.98 was not preempted by the Federal Arbitration Act (FAA). However, after Edward Jones submitted new authority, the court reconsidered and denied Sanders’s motion, concluding section 1281.98 was preempted by the FAA. Sanders filed a petition for writ of mandate.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court held that section 1281.98, which allows an employee to withdraw from arbitration if the employer fails to pay fees within 30 days, is not preempted by the FAA. The court found that section 1281.98 furthers the FAA’s goal of expeditious arbitration and does not undermine the FAA’s objectives. The court also determined that the trial court, not the arbitrator, should decide whether there has been a default under section 1281.98.The Court of Appeal granted Sanders’s petition for writ of mandate, directing the trial court to vacate its order denying Sanders’s motion to withdraw from arbitration and allowing her to pursue her claims in court. The trial court was also instructed to consider Sanders’s motion for sanctions under section 1281.99. View "Sanders v. Superior Court" on Justia Law

Stephen Hofer, a licensed attorney and founder of Aerlex Law Group, hired Vicky Boladian as a part-time contract attorney in 2008. In 2013, they formed Aerlex Tax Services, LLC (tax LLC) to provide tax-related services. Hofer held a 55% equity interest, and Boladian held 45%. Their relationship deteriorated in 2017-2018, leading to litigation. In 2020, they settled by executing three agreements, each containing arbitration clauses. In 2023, they dissolved the tax LLC and transferred its assets to Aerlex Tax Services, LLP (tax LLP). Boladian later withdrew, forming her own firm and taking clients and assets.The plaintiffs, including Hofer and the tax LLP, filed a lawsuit against Boladian and her new firm, alleging 13 causes of action and seeking various damages and relief. They did not mention arbitration in their complaint. They sought a temporary restraining order and a preliminary injunction, both of which were denied. They also engaged in extensive discovery and demanded a jury trial. Boladian and her firm filed a cross-complaint, and three days later, the plaintiffs moved to compel arbitration.The Superior Court of Los Angeles County denied the motion to compel arbitration, finding that the plaintiffs had waived their right to arbitration by substantially litigating the case in court for over six months. The court applied the waiver standard from St. Agnes Medical Center v. PacifiCare of California, which was later overruled by the California Supreme Court in Quach v. California Commerce Club, Inc.The California Court of Appeal, Second Appellate District, reviewed the case de novo under the new standard set by Quach. The court concluded that the plaintiffs had waived their right to compel arbitration by engaging in extensive litigation conduct inconsistent with an intent to arbitrate. The order denying the motion to compel arbitration was affirmed. View "Hofer v. Boladian" on Justia Law

Mone Yvette Sanders filed a class and representative action against her former employer, Edward D. Jones & Co., L.P., alleging wage and hour claims under the Labor Code and a cause of action under the Private Attorneys General Act (PAGA). The trial court granted Edward Jones's motions to compel arbitration of Sanders's individual claims and stayed the representative PAGA cause of action. Sanders initiated arbitration, but Edward Jones failed to pay $54,000 in fees within 30 days as required by California Code of Civil Procedure section 1281.98. Sanders then moved to vacate the order compelling arbitration and proceed in court.The trial court denied Sanders's motion, finding section 1281.98 preempted by the Federal Arbitration Act (FAA). Sanders filed a petition for writ of mandate, and the Court of Appeal issued an order to show cause.The California Court of Appeal, Second Appellate District, Division Seven, reviewed the case. The court held that section 1281.98 is not preempted by the FAA, as it furthers the goal of expeditious arbitration. The court also rejected Edward Jones's contention that the arbitration agreement required the arbitrator to decide whether Edward Jones was in default. The court found that section 1281.98 vests the employee with the unilateral right to withdraw from arbitration and proceed in court upon the drafting party's failure to timely pay fees. The court concluded that the trial court erred in denying Sanders's motion to vacate the order compelling arbitration and granted the petition for writ of mandate. The case was remanded for further proceedings consistent with this opinion, including consideration of Sanders's request for monetary sanctions. View "Sanders v. Superior Court" on Justia Law

The Los Angeles College Faculty Guild, AFT Local 1521, sought to reverse the trial court’s denial of its motion to compel arbitration of three grievances against the Los Angeles Community College District. The grievances involved safety-related construction projects at Los Angeles City College, the termination of a faculty member at Pierce College, and the miscalculation of retirement benefits for a faculty member at Los Angeles Trade-Technical College.The Superior Court of Los Angeles County partially granted the motion to compel arbitration for the grievance related to backpay for the retirement benefits issue but denied the motion for the other grievances. The court found that the grievances were beyond the scope of the collective bargaining agreement and were preempted by the Education Code and other statutory requirements.The Court of Appeal of the State of California, Second Appellate District, Division Eight, affirmed the trial court’s decision. The appellate court held that the grievances related to construction projects and employment termination were not arbitrable because they were preempted by the Education Code and the Construction Bonds Act. The court also found that the grievance related to retirement benefits was partially arbitrable only concerning the backpay issue, as the Public Employees’ Retirement Law governed the reporting of service credits to CalPERS, and the arbitrator could not order injunctive relief beyond the scope of the collective bargaining agreement.The appellate court concluded that the Guild failed to demonstrate that the grievances were within the scope of representation as enumerated by the Educational Employment Relations Act and affirmed the trial court’s mixed ruling. View "L.A. College Faculty Guild v. L.A. Community College District" on Justia Law

Billy Ford worked as a full-time security guard for Parkwest Casino Lotus from September 2018 to December 2021. Upon hiring, Ford signed an arbitration agreement that excluded claims for workers' compensation, unemployment compensation, certain administrative complaints, ERISA claims, and "representative claims under [PAGA]." In February 2022, Ford filed a complaint against Parkwest under PAGA, alleging Labor Code violations, including mandatory off-the-clock health screenings and inaccurate wage statements. Parkwest moved to compel arbitration of Ford's individual PAGA claims and to dismiss the representative PAGA claims, citing Viking River Cruises, Inc. v. Moriana.The Superior Court of Sacramento County denied Parkwest's motion to compel arbitration, finding that the arbitration agreement specifically excluded all PAGA claims. Parkwest appealed, arguing that the agreement was ambiguous regarding the exclusion of individual PAGA claims and that such ambiguity should be resolved in favor of arbitration.The Court of Appeal of the State of California, Third Appellate District, reviewed the case. The court concluded that the arbitration agreement unambiguously excluded all PAGA claims, including individual claims. The court reasoned that the language of the agreement and the circumstances under which it was executed indicated that the parties intended to exclude all PAGA claims from arbitration. The court affirmed the trial court's order denying Parkwest's motion to compel arbitration. View "Ford v. The Silver F" on Justia Law

Brian Prahl filed a petition to compel arbitration of an uninsured motorist claim, alleging he was involved in a multiple vehicle accident in March 2016 while insured by Allstate Northbrook Indemnity Company. The insurance proceeds from the at-fault drivers were insufficient to cover his damages, leading him to seek arbitration for his underinsured motorist claim. Allstate agreed to arbitration in May 2018, but the arbitration was delayed and not concluded within the five-year deadline set by Insurance Code section 11580.2, subdivision (i). Prahl argued that Judicial Council Emergency Rule 10 extended this deadline by six months due to the COVID-19 pandemic.The Superior Court of Sacramento County denied Prahl's petition, concluding that the five-year deadline had expired and that Emergency Rule 10 did not apply to extend the deadline for arbitration. Prahl also contended that the court should have granted his petition because Allstate's opposition was not filed timely. However, the court found good cause to consider the late opposition, noting that Prahl had filed a reply on the merits.The California Court of Appeal, Third Appellate District, reviewed the case de novo and affirmed the lower court's decision. The appellate court held that Emergency Rule 10, which extends the time to bring a civil action to trial by six months, did not apply to arbitration proceedings. The court reasoned that the term "civil action" refers to court actions and does not include arbitration, which is an alternative to a civil action. Consequently, Prahl's failure to conclude the arbitration within the statutory five-year period resulted in the loss of his right to compel arbitration. The appellate court also upheld the lower court's decision to consider Allstate's late opposition, finding no undue prejudice to Prahl. View "Prahl v. Allstate Northbrook Indemnity Co." on Justia Law

Armando Ballesteros purchased a new car from Fairview Ford Sales, Inc. (Fairview) under a retail installment contract. The contract included an arbitration provision applicable to disputes between Ballesteros and Fairview. After discovering defects in the car that were not repaired, Ballesteros sued Fairview and Ford Motor Company (Ford), the car manufacturer, under the Song-Beverly Consumer Warranty Act. Both defendants moved to compel arbitration based on the contract's arbitration provision, but the trial court compelled arbitration only as to Fairview, denying the motion as to Ford.The trial court, San Bernardino County Superior Court, ruled that Ford, as a nonsignatory to the contract, could not compel arbitration. Ford appealed, arguing that Ballesteros's claims against it were intertwined with the contract and that equitable estoppel should apply to compel arbitration.The California Court of Appeal, First Appellate District, Division Five, reviewed the case. The court affirmed the trial court's decision, rejecting Ford's arguments. The appellate court concluded that Ballesteros's statutory claims against Ford were based on warranties that fell outside the contract with Fairview. The court emphasized that Ford, not being a party to the contract, could not invoke the arbitration provision. The court also noted that equitable estoppel did not apply because Ballesteros's claims did not rely on the contract's terms but on independent warranties recognized by the Song-Beverly Act. The court joined other appellate courts in disagreeing with the precedent set by Felisilda v. FCA US LLC, which had allowed a nonsignatory manufacturer to compel arbitration under similar circumstances. The court highlighted broader equitable concerns, stating that arbitration cannot be imposed on a signatory plaintiff’s claims against a nonsignatory without a clear showing of inequity, which Ford failed to demonstrate. View "Ballesteros v. Ford Motor Co." on Justia Law

Packers Sanitation Services Ltd., LLC (Packers) employed Jose A. Parra Rodriguez (Parra) in California from April 2019 to July 2021. In February 2022, Parra filed a complaint against Packers under the Labor Code Private Attorneys General Act of 2004 (PAGA), seeking civil penalties for alleged violations of the Labor Code and California Code of Regulations. Packers moved to compel arbitration based on an agreement Parra allegedly signed, which included a clause for binding individual arbitration. Parra opposed the motion, arguing he did not recall signing the agreement, his PAGA claims lacked an individual component, and the claims fell under exceptions to arbitration.The Superior Court of Imperial County held an evidentiary hearing and found Parra had signed the agreement. However, the court denied the motion to compel arbitration, interpreting "current law" to mean the law as it stood in 2019, when Iskanian v. CLS Transportation Los Angeles, LLC held PAGA claims were not subject to arbitration. The court concluded the parties had not agreed to arbitrate PAGA claims at all.The Court of Appeal, Fourth Appellate District, Division One, State of California, reviewed the case. Packers argued that under Viking River Cruises, Inc. v. Moriana, Parra’s individual PAGA claim should be compelled to arbitration, and non-individual claims should be dismissed. Parra contended his complaint did not include individual PAGA claims, citing Balderas v. Fresh Start Harvesting, Inc., which held a plaintiff could forgo individual relief and bring a representative PAGA action.The Court of Appeal affirmed the lower court's decision, agreeing with Parra that his complaint did not assert individual PAGA claims. The court found that Parra had not sought individual PAGA relief and thus, there were no individual claims to compel to arbitration. The court did not address whether a PAGA action must include an individual claim, as this issue was not ripe for consideration in this appeal. View "Rodriguez v. Packers Sanitation Services" on Justia Law

Angelica Ramirez sued her former employer, Charter Communications, Inc., under the California Fair Employment and Housing Act (FEHA) for discrimination, harassment, retaliation, and wrongful discharge. Charter moved to compel arbitration based on an arbitration agreement signed by Ramirez during her onboarding process. The trial court found the agreement contained unconscionable provisions and refused to enforce it.The Superior Court of Los Angeles County found the arbitration agreement to be a contract of adhesion and identified several substantively unconscionable provisions, including shortened filing periods for claims, improper allocation of attorney fees, and lack of mutuality in claims subject to arbitration. The court denied Charter's motion to compel arbitration. Charter appealed, and a different panel of the Court of Appeal affirmed the trial court's decision, agreeing that the agreement contained multiple unconscionable provisions.The California Supreme Court reviewed the case and concurred that three provisions were substantively unconscionable but remanded the matter to the Court of Appeal to reconsider whether the unconscionable provisions could be severed from the agreement. On remand, the Court of Appeal concluded that severing the unconscionable provisions would not further the interests of justice. The court found that the agreement's central purpose was tainted with illegality and that the multiple unconscionable provisions indicated a systematic effort by Charter to impose arbitration in a manner that favored the employer. Therefore, the Court of Appeal affirmed the trial court's refusal to enforce the arbitration agreement. View "Ramirez v. Charter Communications, Inc." on Justia Law

In this wage-and-hour class action, the plaintiffs, employees of ACE American Insurance Company (ACE), alleged that ACE misclassified them as exempt employees and failed to provide benefits required for nonexempt employees under state law. The plaintiffs also added claims under the Private Attorneys General Act of 2004 (PAGA) for the same alleged violations. The plaintiffs had signed arbitration agreements as a condition of their employment, which required them to submit employment-related legal claims to arbitration.The Superior Court of Los Angeles County initially granted ACE's motion to compel arbitration and stayed the case pending arbitration. However, neither party initiated arbitration. The plaintiffs then moved to lift the stay, arguing that ACE was required to initiate arbitration and had waived its right to arbitrate by failing to do so. The trial court agreed with the plaintiffs, finding that ACE's inaction was inconsistent with its right to arbitrate and lifted the stay.The Court of Appeal of the State of California, Second Appellate District, reviewed the case. The court held that the plaintiffs, not ACE, were required to initiate arbitration under the terms of the arbitration agreements. The agreements specified that the party wanting to start the arbitration procedure should submit a demand, and in this context, it referred to the plaintiffs who had employment-related legal claims. The court concluded that ACE did not breach the arbitration agreements or waive its right to arbitration by failing to initiate the process. Consequently, the trial court's order lifting the stay was reversed, and ACE was awarded its costs on appeal. View "Arzate v. ACE American Insurance Company" on Justia Law