Whalley v. Wet Seal

 

 

 

 

 

 

 

 

Filed 11/15/13  Whalley v. Wet Seal CA4/3

 

 

 

 

 

 

 

 

 

 

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

 

 

California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b).  This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.

 

 

 

 

 

 

IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA

 

FOURTH APPELLATE
DISTRICT

 

DIVISION THREE

 

 
>

LAUREN WHALLEY et al.,         Plaintiffs and Appellants,               v.   THE WET SEAL, INC., et al.,         Defendants and Respondents.

G047406            (Super. Ct. No. 30-2012-00563123)            O P I N I O N

 

                        Appeal from an order of
the Superior Court
of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, Gail Andrea Andler, Judge.  Order affirmed in part and reversed in part
and remanded.  Motion for judicial notice.  Denied. 


                        Law Offices of Sima Fard
and Sima Fard for Plaintiffs and Appellants.

                        Sheppard, Mullin,
Richter & Hamilton, Ryan D. McCortney and Jason M. Guyser for Defendants
and Respondents.

 

*                      *                      *

                        Plaintiffs
Lauren Whalley and Marysol Rosales filed a putative class action for the
alleged failure by defendants The Wet Seal, Inc. and The Wet Seal Retail, Inc.
to timely pay wages upon termination of employment, alleging violations of
Labor Code sections 201 and 202, unfair competition (Bus. & Prof Code,
§ 17200 et seq.; UCL) and, by Rosales in a representative capacity, for
civil penalties under the California Private Attorney General Act (Lab. Code,
§ 2699 et seq.; PAGA).  Upon motion
by defendants, the court ordered plaintiffs to arbitrate their individual
claims and ruled their class and representative claims were barred.

                        On
appeal plaintiffs raise five issues,href="#_ftn1" name="_ftnref1" title="">[1]
i.e., defendants waived their right to compel arbitration, Rosales’s arbitration
agreement is unenforceable for lack of mutuality, the class claims are not
barred because the agreements contained an implied agreement to arbitrate them,
if the order compelling arbitration is affirmed, it must be on a classwide or
representative basis, and the claim for injunctive relief for unfair
competition cannot be arbitrated.

                        We conclude the PAGA
cause of action cannot be arbitrated individually or arbitrated in a
representative capacity and reverse that part of the order.  The remainder of the order is affirmed.

                       

 

 

>FACTS AND PROCEDURAL HISTORY

                        In May 2011 Whalley
filed a putative class action in Alameda Superior Court, alleging defendants
violated the Labor Code by failing to pay wages due employees upon termination
of their employment.  She included an
additional cause of action for violation of the UCL.  Defendants answered the complaint, asserting
as one of their 39 affirmative defenses that the action should be stayed
because there was an agreement requiring the parties to arbitrate the dispute.  Defendants also filed a petition to coordinate
the case with another wage and hour case pending against them in Orange County
Superior Court.  The petition was denied.


                        Less than a week after
the petition for coordination was denied and four months after the complaint
was filed, defendants filed a motion to compel Whalley’s claims to arbitration.  Defendants relied on an arbitration agreement
signed by Whalley that states she and defendants agreed to arbitrate disputes
and specifically agreed “any dispute arising out of or in any way related to
your employment with the [defendants], or its termination, shall be decided
exclusively by final and binding arbitration . . . .”  

                        Before the court ruled
on the motion, Whalley was granted leave to file an amended complaint, which
contained the original two causes of action and added plaintiff Rosales and her
PAGA cause of action.

                        Once Rosales was added
as a plaintiff, defendants were allowed to file a supplemental motion to compel
her to arbitrate her claims.  The basis
for this claim was Rosales’s employment application, the final paragraph of which
stated, “If I am hired, in consideration for my employment . . ., any
dispute arising out of or in any way related to my employment, or its
termination, including, but . . . not limited to, claims
for wages or other compensation due or penalties, breach of contract, violation
of statute, violation of common law or unlawful discrimination or harassment
arising under any local, state or federal law, shall be decided exclusively by
final and binding arbitration . . . .”  Rosales initialed this provision, which was
directly above her signature on the application.

                        During this time, and
before the court ruled on the motion to compel arbitration, plaintiffs filed a
motion to transfer venue to Orange County,
which was granted.  Once the case was
transferred, defendants filed a new motion to compel plaintiffs to arbitrate
their individual causes of action and to dismiss the class and representative claims.  Defendants relied on the same arbitration
provisions as set out above and also argued the court should dismiss the class
claims because the parties never agreed to arbitrate representative or class
disputes.

                        The court granted
defendants’ motion and ordered the parties to arbitrate plaintiffs’ individual
claims; the class and representative claims were barred.   The court stayed the remainder of the
action.  It held the arbitration
agreements executed by the plaintiffs were enforceable.  It further ruled arbitration of class claims
under Whalley’s agreement was barred since the agreement did not provide for it.  In addition, as to Rosales’s PAGA cause of
action, the court found there is no right to bring a claim as a representative
under the PAGA and such right could be waived.  

MOTION FOR JUDICIAL NOTICE

                        Plaintiffs request we
take judicial notice of documents filed in Elizabeth
Montano v. The Wet Seal Retail, Inc., Los Angeles
Superior Court Case No. BC472230 and The Wet Seal’s opening brief in its appeal
of an order in that case.  A motion for
judicial notice must include a statement as to why the subject matter of the
motion is relevant.  (Cal. Rules of
Court, rule 8.252(a)(2).)  Plaintiffs failed
to do so in the motion. 

                        In their reply brief plaintiffs
appear to lay out the basis for their claim as to the relevance of the
documents that are the subject of the motion. 
They assert Montano is a
putative class action matter involving claims under the Labor Code and an
arbitration provision.  Plaintiffs claim >Montano is a related case defendants should
have disclosed.  This does not comport
with court rules. 

                        But even were we to
consider this claim, it is not sufficient. 
The mere fact the two cases might share the same subject matter does not
make Montano relevant to the instant
case.  (Ketchum v. Moses (2001) 24 Cal.4th 1122, 1135, fn. 1 [no judicial
notice of irrelevant documents].)

                        And even were we to take
judicial notice of the documents, we may not take judicial notice of the truth
of their contents.  (Oiye v. Fox (2012) 211 Cal.App.4th 1036, 1055 [“court may take
judicial notice that pleadings were filed containing certain allegations and
arguments [citation], but a court may not take judicial notice of the truth of
the facts alleged”].)

                        Because we decline to
take judicial notice, we do not consider any of plaintiffs’ arguments on this
issue or with respect to these documents as set out in the reply brief.  To the extent the arguments on this issue are
based on documents included in the record, we do not consider them because they
were not raised in the opening brief.  (>Mansur v. Ford Motor Co. (2011) 197
Cal.App.4th 1365, 1387-1388.)

DISCUSSION

>A. 
Waiver

                        Plaintiffs assert
defendants waived their right to arbitrate and dismiss representative and class
claims because they “heavily” litigated the action for a year before filing the
motion, took a contrary position when they moved to compel arbitration of “the
entire case,” and did not file the motion to compel within 30 days.   

                        Plaintiffs failed to
make this argument in the trial court.  A
party may not raise an argument for the first time on appeal.  (Greenwich S.F., LLC v. Wong (2010) 190 Cal.App.4th 739, 767.)  This claim does not fall within the exception
allowing pure questions of law to be raised without first preserving them in
the trial court.  (Ibid.)  Whether a party has
waived the right to compel arbitration is generally a question of fact reserved
for the trial court, whose decision we review for substantial evidence.  (Saint
Agnes Medical Center v. PacifiCare of >California> (2003) 31 Cal.4th 1187, 1196.)  The parties’ disagreements in their briefs on
this issue demonstrate it is not a question of law.  Thus, this issue is forfeited.

>B.  Mutuality of Rosales’s Arbitration Agreement

                        In the opening brief,
plaintiffs list as an issue whether the arbitration provision in Rosales’s
employment application is unenforceable because “substantially [>sic] unconscionable for lack of
mutuality” and argue the court should have a stayed a decision on this issue
until the Supreme Court decided Wisdom v.
AccentCare (2012) 202 Cal.App.4th 591, review granted March 28, 2012,
S200128, review dismissed July 24, 2013.  In Wisdom,
in addition to finding an arbitration provision in an employment application
was procedurally unconscionable, the court held it was substantively
unconscionable because of the lack of mutuality.  To invalidate an arbitration provision based
on unconscionability, there must be a finding it is both substantively and
procedurally unconscionable.  (>Armendariz v. Foundation Health Psychcare
Services, Inc. (2000) 24 Cal.4th 83, 114.)

                        In their brief
defendants did not rely on Wisdom but
argued there was no lack of mutuality, citing Roman v. Superior Court (2009) 172 Cal.App.4th 1462 in
support.  In response, plaintiffs sought
to distinguish Roman and also relied
on Wisdom, despite acknowledging review
had been granted.href="#_ftn2" name="_ftnref2"
title="">[2]  This was the extent of their argument.  They did not develop reasoned legal argument
Rosales’s arbitration provision was unconscionable.  This is consistent with their lack of
argument in the opening brief.  Failure
to do so forfeits this argument on appeal. 
(Evans v. CenterStone Development
Co., supra, 134 Cal.App.4th at p. 165.)         

>C. 
Class and Representative Claims  

                        Plaintiffs contend the
court erred in ruling class arbitration is barred.  The question is whether either of the
arbitration provisions allow class arbitration and whether Rosales’s agreement
allows for representative claims.  We
conclude the arbitration provisions do not contain either an explicit or
implicit agreement to arbitrate on a classwide or representative basis, nor may
such a provision be read into them.  

                        1.  Class Claims

                         In Stolt-Nielsen
S.A. v. Animalfeeds International Corp. (2010) 559 U.S.
662 (Stolt-Nielsen) the court
considered the issue of “whether the parties agreed to authorize class arbitration.”  (Id.
at p. 687.)  The arbitration agreement in
question was silent as to class arbitration and the parties had stipulated they
had not agreed to such a procedure. 
Nevertheless the arbitrators decided class arbitration was permitted
under the agreement.  When the case finally
came to the Supreme Court, it invalidated that decision and in doing so laid
out some basic principles governing the interpretation of arbitration
agreements vis-à-vis class actions, making it the generally authoritative case
on this issue. 

                        Under the Federal
Arbitration Act (9 U.S.C. § 1 et seq.; FAA) a party may not be forced to
engage in class arbitration unless the agreement shows the party agreed to do
so.  (Stolt-Nielsen,
supra, 559 U.S. at p. 684.)  An
arbitration agreement must be construed to “‘give effect to the contractual
rights and expectations of the parties.’ 
[Citation.]”  (>Id. at p. 682.)  “An implicit agreement to authorize
class-action arbitration . . . is not a term
that . . . may [be] infer[red] solely from the fact of the
parties’ agreement to arbitrate. . . .  [C]lass-action
arbitration changes the nature of arbitration to such a degree that it cannot
be presumed the parties consented to it by simply agreeing to submit their
disputes to an arbitrator.”  (>Id. at p. 685.)  “[T]he differences between bilateral and
class-action arbitrations are too great for arbitrators [or courts] to
presume . . . that the parties’ mere silence on the issue
of class-action arbitration constitutes consent to resolve their disputes in
class proceedings.”  (>Id. at p. 687, fn. omitted.)

                        Kinecta Alternative Financial Solutions, Inc. v. Superior Court
(2012) 205 Cal.App.4th 506 (Kinecta) is
in accord.  In Kinecta the court held the plaintiff-employer could not be
compelled to arbitrate class claims because it had never agreed to do so.  The plaintiff and one of its employees signed
an employment agreement containing an arbitration provision.  Although the provision did not expressly
waive class arbitration, the language referred only to the employee and did not
mention any other employees.  The trial
court granted Kinecta’s motion to compel arbitration of her individual wage and
hour claims but denied its motion to dismiss the class claims. 

                        On appeal, citing >Stolt-Nielsen, the court reversed the
trial court’s ruling denying dismissal of the class claims (>Kinecta, supra, 205 Cal.App.4th at p.
519), reasoning the language of the arbitration provision limited arbitration
to the individual parties (id. at pp.
509, 517-518).

                        Stolt-Nielsen specifically did not “decide what contractual basis
may support a finding that the parties agreed to authorize class-action
arbitration.”  (Stolt-Nielsen, supra, 559 U.S. at p. 687, fn. 10.)   Rather, we must rely on traditional
principles of contract interpretation.  (>Id. at p. 681 [“interpretation of an
arbitration agreement is generally a matter of state law”].)

                        “‘The
fundamental rule is that interpretation of . . . any
contract . . . is governed by the mutual intent of the
parties at the time they form the contract.  [Citation.]  The parties’ intent is found, if possible,
solely in the contract’s written provisions.  [Citation.]  â€œThe ‘clear and explicit’ meaning of these
provisions, interpreted in their ‘ordinary and popular sense,’ unless ‘used by
the parties in a technical sense or a special meaning is given to them by usage’
[citation], controls judicial interpretation.”  [Citation.]  If a layperson would give the contract
language an unambiguous meaning, we apply that meaning.’  [Citations.]”  (Nelsen
v. Legacy Partners Residential, Inc. (2012) 207 Cal.App.4th 1115, 1129.)

                        The arbitration
provisions under review are not susceptible to an interpretation class actions
were authorized or agreed upon.  There is
no explicit mention of class arbitration. 
Moreover, the language does not lend itself to a construction authorizing
class arbitration. 

                        In Whalley’s arbitration
agreement she is identified as “You” and defendants are identified as the “Company.”  The agreement provides “you and the Company mutually agree to arbitrate disputes under the
terms and conditions set forth herein”; applies to “any dispute arising out of
or in any way related to your
employment”; applies to disputes “you
may have with the Company”; “shall remain in full force and effect,
notwithstanding any change in your
position, title or any other term condition of your employment with the Company”; “constitutes and contains the
entire agreement between you and the
Company with respect to arbitration and the resolution of disputes”; and “>you and the
Company . . . by this agreement, give up [the right to a
jury trial] and agree to resolve by arbitration any and all
disputes . . . related to your employment . . . .”  (Italics added; capitalization omitted.)

                        The arbitration provision
in Rosales’s employment application contains similar language:  “If I am hired, in consideration for my
employment . . ., any dispute arising out of or in any way
related to my employment, or its
termination, including, but . . . not limited to, claims
for wages or other compensation due or penalties, breach of contract, violation
of statute, violation of common law or unlawful discrimination or harassment
arising under any local, state or federal law, shall be decided exclusively by
final and binding arbitration, in the County where I am last employed. . . .  This agreement
to arbitrate shall remain in full force and effect, notwithstanding any change
in my position, title or any other
term or condition of my employment
with the Company.”   (Italics added.)

                        Both agreements demonstrate
arbitration was limited to disputes between plaintiffs and defendants.  (See Kinecta,
supra, 205 Cal.App.4th at p. 519 [similar language sufficient to support
order dismissing class claims]; see also Nelsen
v. Legacy Partners Residential, Inc., supra, 207 Cal.App.4th at pp. 1129-1130,
fn. omitted [language in arbitration agreement “only covers claims, disputes,
and controversies ‘between myself (the plaintiff) and Legacy Partners’” and “unambiguously
negates any intention by [the defendant] to arbitrate claims or disputes to
which [the plaintiff] was not a party”].)

                        Plaintiffs maintain the
broad language that requires “any dispute” to be arbitrated encompasses class
arbitration.  This argument was rejected
in Kinecta.  The agreement in that case referred to “‘any
claim, dispute, and/or controversy.’”  (>Kinecta, supra, 205 Cal.App.4th at p.
511, fn. 1.)  But the court focused, as
must we, on the language restricting the arbitration to disputes between the
two parties to the agreement.  (>Id. at p. 517.)

                        Likewise the provision
in Whalley’s agreement allowing the arbitrator to award “any form of remedy or
relief . . . that would otherwise be available in court” is
of no avail.  A class action is neither a
remedy nor relief; it is a procedure.  Finally,
plaintiffs mischaracterize Whalley’s agreement as specifically excluding
certain claims, arguing class claims are not listed.  We have found no such exclusions in the
agreement.

                        Alternatively, plaintiffs
contend the arbitration agreement must be analyzed according to >Gentry v. Superior Court (2007) 42
Cal.4th 443 (Gentry).  In Gentry,
the plaintiff filed a putative class action against his employer for alleged
wage and hour violations, some of which were based on Labor Code sections
protecting unwaivable rights.  Although
the arbitration agreement between the plaintiff and the employer expressly
waived the right to a class action, our Supreme Court held that waiver
unenforceable.  (Id. at p. 457.)  It concluded
that “when it is alleged that an employer has systematically denied proper
overtime pay to a class of employees and a class action is requested notwithstanding
an arbitration agreement that contains a class arbitration waiver, the trial
court must consider [four] factors . . . .”  (Id.
at p. 463.)  If these four factors are
shown and the court determines on that basis class arbitration is “likely to be
a significantly more effective practical means of vindicating the rights of
affected employees than individual litigation or arbitration,” and the
applicable statutes would be “less comprehensive[ly] enforce[d]” if a class
action was not allowed, then the class arbitration waiver must be voided.  (Ibid.)
 

                        It is an open question
as to whether Gentry remains good law
after AT&T Mobility v. Concepcion LLC
(2011) __U.S. __ [131 S.Ct. 1740] (Concepcion),
which overruled Discover Bank v. Superior
Court (2005) 36 Cal.4th 148.  >Discover Bank concluded class action
arbitration waivers in most consumer adhesion contracts are unconscionable and
therefore unenforceable.  (>Id. at pp. 162-163.)  Concepcion
held the rule in Discover Bank was
preempted by the FAA “[b]ecause it ‘stands as an obstacle to the accomplishment
and execution of the full purposes and objectives of
Congress . . . .’”  (Concepcion,
supra, __U.S. at p. __ [131 S.Ct. at p. 1753].)  A state “cannot require a
procedure that is inconsistent with the FAA, even if it is desirable for
unrelated reasons” (ibid.) nor can it
“prohibit[] outright the arbitration of a particular type of claim” (>id. at p. __ [131 S.Ct. at p. 1747).

                        Although >Gentry was based on principles similar
to those in Discover Bank, >Concepcion did not address it.  Thus, cases are split as to whether >Gentry remains viable.  (Compare, e.g., Kinecta, supra, 205 Cal.App.4th
at p. 5106 [“Gentry appears to remain
the binding law in California” despite Concepcion;
dicta]; Truly Nolen of America v.
Superior Court (2012) 208 Cal.App.4th 487, 507 [although >Concepcion “implicitly disapproved” >Gentry, court will not “disregard”
decision without “specific guidance” from California Supreme Court] with, e.g.,
Morvant v. P.F. Chang’s China Bistro,
Inc. (N.D.Cal. 2012) 870 F.Supp.2d 831, 840-841 [no distinction between >Discover Bank and Gentry and class action waiver must be enforced under >Concepcion].)  The California Supreme Court is considering
this issue in Iskanian v. CLS
Transportation of Los Angeles LLC
(2012) 206 Cal.App.4th 949, review granted September 19, 2012, S204032.  We need not decide this question because even
if the case remains good law, plaintiffs have not satisfied their burden under >Gentry.

                        To invalidate an express
waiver of the right to file a class action, or, in this case, to read the right
to arbitrate a class action into the arbitration provisions, plaintiffs have
the burden to provide sufficient facts (Gentry,
supra, 42 Cal.4th at p. 463) to show: 
(1) “the modest size of the potential individual recovery”; (2) “the
potential for retaliation against members of the class”; (3) “the fact that
absent members of the class may be ill informed about their rights”; and (4) “other
real world obstacles to the vindication of class members’ rights to [timely
payment of wages upon termination] through individual arbitration” (>ibid.).  In deciding whether plaintiffs have met the
burden, a court has broad discretion.  (>Id. at pp. 463-464.)

                        Plaintiffs failed to
prove factors two through four.  Although
they filed their own declarations and one by their counsel, none of them stated
any facts related to those three elements. 
And in their briefs plaintiffs do not point to any evidence whatsoever
to support those factors.href="#_ftn3"
name="_ftnref3" title="">[3]  Thus, Gentry
does not provide any basis for ordering class arbitration.  (Gentry,
supra, 42 Cal.4th at p. 463; Truly
Nolen, supra, 208 Cal.App.4th at p. 510.)  

                        2.  Representative Claim Under the PAGA

                        Labor Code section 2699,
subdivision (a) provides that, in cases where a civil penalty could be levied
and collected by the Labor and Workforce Development Agency for violation of
the Labor Code, alternatively, the penalty may “be recovered through a civil
action brought by an aggrieved employee on behalf of himself or herself and
other current or former employees pursuant to the procedures specified in
Section 2699.3.”  An employee bringing a
PAGA claim “does so as the proxy or agent of the state’s labor law enforcement
agencies.  The act’s declared purpose is
to supplement enforcement actions by public agencies, which lack adequate
resources to bring all such actions themselves.”  (Arias
v. Superior Court (2009) 46 Cal.4th 969, 986.)  “Restitution is not the primary object of a
PAGA action, as it is in most class actions.” 
(Brown v. Ralphs Grocery Co.
(2011) 197 Cal.App.4th 489, 499 (Brown).)


                        The complaint contains a
cause of action on behalf of Rosales seeking those penalties on behalf of
herself and the PAGA class members.  The
court ruled Rosales had to arbitrate the PAGA claim only on her own behalf and
the representative claim was barred. 
Plaintiffs contend Rosales has the right to arbitrate her PAGA claim on
a representative basis.  To reach this
issue some background is needed.

                        In California there is a
split of authority as to whether the right to arbitrate a PAGA claim can be
waived.  Brown, supra, 197 Cal.App.4th 489 is the case most often cited as
authority for the proposition waivers of the right to arbitrate a PAGA claim may
be held invalid under state law and the FAA does not control. 

                        In Brown the arbitration provisions stated all disputes between
defendant and its employees were required to be arbitrated and the parties had
no right to bring representative claims on as a private attorney general.  Defendant argued this prevented plaintiff
from arbitrating a PAGA representative claim. 
The appellate court disagreed.

                        It held >Concepcion did not address waivers of
the right to bring a representative action under the PAGA.  Nor is California law rendering such waivers
unenforceable preempted by the FAA.  (>Brown, supra, 197 Cal.App.4th at pp.
498-503.)   Concepcion “does not purport to deal with the FAA’s possible
preemption of contractual efforts to eliminate representative private attorney general
actions to enforce the Labor Code.”  (>Id. at p. 500.)  “If the FAA preempted state law as to the
unenforceability of the PAGA representative action waivers, the benefits of
private attorney general actions to enforce state labor laws would, in large
part, be nullified.”  (>Id. at p. 502; see also >Plows v. Rockwell Collins, Inc. (C.D.Cal.
2011) 812 F.Supp.2d 1063, 1070.) 

                        On
the other hand, there are California federal court cases that hold a waiver of
the right to arbitrate a PAGA representative claim is enforceable.  Quevedo
v. Macy’s, Inc. (C.D. Cal. 2011) 798 F.Supp.2d 1122 explained that “requiring
arbitration agreements to allow for representative the PAGA claims on behalf of
other employees would be inconsistent with the FAA.”  (Id.
at p. 1142.)  It would slow down the
process and make it more expensive.  In
addition, an erroneous decision would not have the benefit of an appeal.  (Ibid.)  The court concluded the plaintiff’s
individual PAGA claim was arbitrable and the provision precluding a
representative PAGA claim could be enforced. 
(Ibid.; see also >Velazquez v. Sears, Roebuck & Co.
(S.D.Cal. Aug. 26, 2013, No. 13cv680-WQH-DHB) 2013 WL 4525581, *1-*3 [under FAA
PAGA waiver enforceable]; Grabowski v. C.H.
Robinson Co. (S.D.Cal. 2011) 817 F.Supp.2d 1159, 1180-1181 [PAGA claim was
arbitrable and waiver of representative action in arbitration agreement
enforceable; Quevedo’s reasoning more
persuasive than that of Brown].)

                        In the agreement before
us, there is no waiver of the right to bring a PAGA claim.  In fact, the agreement allows for disputes
regarding wage claims and for compensation and penalties.  Nor is there an express waiver of the right to
arbitrate a representative claim.  But,
as discussed above, the language of the arbitration agreement limits the
proceedings to disputes between plaintiffs and defendants only.  Thus, the issue is whether the PAGA provides
for an individual right of action or is representative only.href="#_ftn4" name="_ftnref4" title="">[4]

                        The majority view is a
PAGA claim can be brought as a representative action only.  In Arias
v. Superior Court, supra, 46 Cal.4th 969, the court instructed that a
plaintiff bringing a PAGA action is acting “as the proxy or agent of the state’s
labor law enforcement agencies.”  (>Id. at p. 986.)  Brown,
supra, 197 Cal.App.4th 489 amplified “[t]he purpose of the PAGA is not to
recover damages or restitution, but to create a means of ‘deputizing’ citizens
as private attorneys general to enforce the Labor Code.  [Citation.] 
[T]he relief is in large part ‘for the benefit of the general public
rather than the party bringing the action.’” 
(Id. at p. 501.)

                        In Machado v. M.A.T. & Sons Landscape, Inc. (E.D.Cal. July 23, 2009,
No. 2:09-cv-00459 JAMJFM) 2009 WL 2230788 the court reviewed the language of
the statute and held that common use of the word “and” in the provision that an
employee could sue “on behalf of himself or herself and other current or former employees” (Lab. Code, § 2699,
subd. (a), italics added) clearly and unambiguously meant a PAGA claim was a
representative action.  (>Machado v. M.A.T. & Sons Landscape, Inc., supra, 2009 WL at p. *2; see >Reyes v. Macy’s, Inc. (2011) 202
Cal.App.4th 1119, 1123 [plaintiff may not bring individual PAGA claim].)

                        In Grabowski v. C.H. Robinson, Inc., supra, 817 F.Supp.2d

 1159, the court, without addressing the
language of Labor Code section 2699, subdivision (a), by default decided a
PAGA claim could be litigated individually when it held that the plaintiff’s
PAGA claim was arbitrable and the arbitration agreement’s provision prohibiting
a representative action was enforceable. 
(Grabowski v. C.H. Robinson, Inc.,
supra, 817 F.Supp.2d at p. 1181; see Valle
v. Lowe’s HIW, Inc. (N.D.Cal. Aug. 22, 2011, No. 11-14895C) 2011 WL
3667441, *6 [without analysis of statutory language, held PAGA claim arbitrable
even if agreement interpreted to prohibit representative claims].)

                        We think the better view
is the PAGA provides for a representative, not an individual, action.  The statutory language is plain and not
ambiguous.  This controls our
interpretation of the provision.  (>Elk Hills Power, LLC v. Board of
Equalization (2013) 57 Cal.4th 593, 609-610.)

                        Thus,
even though under the arbitration agreement Rosales agreed to arbitrate “claims
for wages or other compensation due or
penalties . . . [and] violation of statute,” she cannot be
compelled to litigate her PAGA claim as an individual, as the court
ordered.  On the other hand, because the
arbitration provision limits arbitration to Rosales and defendants, defendants
cannot be compelled to arbitrate the PAGA claim as a representative action.

                        In short, the
representative PAGA claim is not barred but cannot be ordered to
arbitration.  It follows, then, the only
conclusion to be reached is the PAGA claim should be severed from the remainder
of the complaint.  (RN Solution, Inc. v. Catholic Healthcare West (2008) 165
Cal.App.4th 1511, 1521-1522 [courts may sever nonarbitrable claims from
arbitrable claims].)  We reverse those
portions of the order that compel Rosales to arbitrate her PAGA claim on an
individual basis and that bar her representative PAGA claim but we exclude that
claim from the arbitration. 

>D.  Arbitrability of UCL and Injunction Claims

                        Plaintiffs assert their
request for an injunction under the UCL to prevent defendants’ alleged wage and
hour violations cannot be arbitrated under Cruz
v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303.href="#_ftn5" name="_ftnref5" title="">[5]  Cruz
held a request for injunctive relief in a UCL claim for the benefit of the
public or third parties is not arbitrable. 
(Id. at pp. 315-316.)

                        Whether >Cruz would apply here is a question of
fact, i.e., would the injunction plaintiffs seek “more than incidentally
benefit the public.”  (>Nelsen v. Legacy Partners Residential, Inc.,
supra, 207 Cal.App.4th at p. 1136.)  Plaintiffs failed to make this argument in
their opposition to the motion to compel arbitration, denying defendants the
opportunity to contest it and the trial court the ability to rule on it.  This forfeits the claim on appeal.  (Ibid.;
see also Greenwich S.F., LLC v. Wong,
supra, 190 Cal.App.4th at p. 767.)

                        Plaintiffs assert they
raised this issue, but cite only to their oppositions in the Alameda County
proceedings.  They claim, without any
record references, they attached copies of “papers previously filed” to their
opposition filed in the Orange County Superior Court.  But plaintiffs did not argue the issue in
their Memorandum of Points and Authorities or at the hearing on the motion.  Merely attaching documents is not the
equivalent of presenting an issue for the court to decide.

                        Finally, we reject
plaintiffs’ conclusion there is nothing in the order specifically compelling
these claims be arbitrated.  The minute
order plainly states the parties must arbitrate the individual claims, and it
bars representative claims.  Thus, the
request for injunctive relief under the UCL must be arbitrated on an individual
basis.  (Nelsen v. Legacy Partners Residential, Inc., supra, 207 Cal.App.4th
at p. 1136.)  

 

 

 

 

 

 

 

 

 

>DISPOSITION

                        That portion of the order
compelling Rosales to arbitrate her PAGA claim individually and prohibiting her
representative claim is reversed.  Her
PAGA claim shall not be arbitrated.  The
parties shall bear their own respective costs on appeal.

 

 

                                                                                   

                                                                                    THOMPSON,
J.

 

WE CONCUR:

 

 

 

BEDSWORTH,
ACTING P. J.

 

 

 

MOORE, J.